Monetary policy inertia: More a fiction than a fact?

Empirical estimates of monetary policy reaction functions feature a very high estimated degree of monetary policy inertia. This evidence is very hard of reconcile with the alternative evidence of low predictability of monetary policy rates. In this paper we examine the potential relevance of the problem of weak instruments to correctly identify the degree of monetary policy inertia in forward-looking monetary policy reaction function of the type originally proposed by Taylor [1993. Discretion versus policy rules in practice. Canergie-Rochester Conference Series on Public Policy, 39, 195–214]. After appropriately diagnosing and taking care of the weak instruments problem, we find an estimated degree of policy inertia which is significantly lower than the common value in the empirical literature on monetary policy rules.     

The effect of the 150-hour requirement on new accountants’ professional commitment,Ethical orientation,and Professionalism

This study examines the professional commitment, ethical orientation, and professionalism of 414 accountants beginning their careers at two Big 5 public accounting firms. After comparing the accountants possessing 5-year degrees with those possessing four-year degrees, we find insufficient evidence to conclude that the 150-hour requirement affects new accountants’ professional commitment, ethical orientation, or professionalism.     

Financial structure and economic development: Evidence on the view of ‘new structuralism’

This paper examines the relationship between financial structure and economic development for Germany, the USA, France and Turkey between 1989 and 2012. Nonlinear Autoregressive Distributed Lags (NARDL) is employed to investigate whether a dynamic change exists in the financial structure of these countries in response to a change in their stage of economic development as suggested by the view of ‘new structuralism’. Partly in line with the previous literature, which classified the financial systems of Germany as bank-based, the USA as market-based and France and Turkey as in an intermediate position between these two profiles, the findings presented in this work also give credence to ‘new structuralism’ theory on the linkages between financial structure and the stage of development for these four economies.     

Estimating the risk–return profile of new venture investments using a risk-neutral framework and ‘thick’ models

This study proposes cascade neural networks to estimate the model parameters of the Cox–Ross–Rubinstein risk-neutral approach, which, in turn, explain the risk–return profile of firms at venture capital and initial public offering (IPO)financing rounds. Combining the two methods provides better estimation accuracy than risk-adjusted valuation approaches, conventional neural networks, and linear benchmark models. The findings are persistent across in-sample and out-of-sample tests using 3926 venture capital and 1360 US IPO financing rounds between January 1989 and December 2008. More accurate estimates of the risk–return profile are due to less heterogeneous risk-free rates of return from the risk-neutral framework. Cascade neural networks nest both the linear and nonlinear functional estimation form in addition to taking account of variable interaction effects. Better estimation accuracy of the risk–return profile is desirable for investors so they can make a more informed judgement before committing capital at different stages of development and various financing rounds.     

‘Payment by Results’ in the English NHS: the continuing challenges

The article discusses the objectives of the prospective payment system—‘Payment by Results’ (PbR)—being introduced into the English National Health Service and how it fits into the broader reform programme of health services in England. The continuing challenges for PbR are discussed and some suggestions made about how matters could be improved.     

Leadership through action learning: a bottom-up approach to ‘best practice’ in ‘infection prevention and control’ in a UK NHS trust

This article reports on the outcomes of an action learning leadership intervention in a National Health Service (NHS) acute trust in partnership with a UK business school. This contribution provides an empirical example of the potential benefits of non-hierarchical leadership. Over a three-year period, 45 nurses took part in an initiative designed to reduce the number of health care associated infections (HCAI) in a large NHS acute trust. By 2010, serious reportable infections were reduced by around 300, providing an efficiency benefit in the region of £3 million and improved patient safety. The turnaround is significant, and although not exclusively attributable to this initiative, the trust is convinced that the intervention has been pivotal.     

‘Passionate and professional’: reconciling logics in public service accounting

In order to deliver public value, the UK government sought to build relationships and connect ‘the public’ with public servants (including back-office workers), but with what effect? Drawing on interviews with public service accountants, the authors found that how these accountants conceptualized ‘the public’—as society or people—shaped whether public value was considered as a monetary or moral concept. Accountants who regarded the public as people spoke of an improper level of involvement and struggled to maintain their professionalism.     

‘Absent fear’: Re-envisioning a future geography

This paper explores the significance fear plays, or does not play, in the practice of envisioning. Envisioning is seen as a powerful tool in the delivery of education for sustainable development, for it seeks to engage people in imagining and creating a better future. However, drawing on work undertaken with undergraduate students at the University of Glamorgan, South Wales, we argue that envisioning relies upon ‘absent fear’: it works to suppress, or make absent, fear as a valid response to present and future development. The presence of ‘absent fear’, we suggest, poses a barrier to fully engaging with the challenges and opportunities of a sustainable future, for it is difficult to conceive of a positive vision without first acknowledging and confronting our fears. It is in articulating fear, we observe, that people are more able to respond to the challenges of the future in hopeful and creative ways. Utilising work undertaken with our students this paper revisits envisioning and suggests the need to understand envisioning as a broader process of reflection and action.     

The Globe Sustained: Shakespeare’s allegory for sustainable development

Sustainability theory shows that the sustainability problem is a value orientation problem. In a recent study, Klaas van Egmond identified an underlying pattern of a crossed circle, representing affirmative and adversative value orientations, whose disintegration engenders unsustainable tendencies. This article explicates how Shakespeare’s allegories invite to quests for ‘values worthy of pursuit’, grounded upon a similar immanent cyclical pattern of value orientations, moving from and to the centre of Shakespeare’s works. Holding up the allegorical mirror to contemporary sustainability challenges, Shakespeare’s works anticipate sustainability narratives for society at large and its individual actors. The results of this research are highly relevant in the contemporary debates on the ‘erosion’ of European values, as it demonstrates how to identify sustained European value patterns and how to build on these patterns in relation with contemporary questions of sustainability.     

New development: Parliamentary ‘watchdogs’ taking a higher profile on government programme performance and accountability?

The ‘Holy Grail’ of decades of public sector reform has been the public availability of readily-understandable, reliable and meaningful performance information about government activities and programmes. Maps have been drawn; processes have been developed; some actual progress has been made in a number of countries; but the end is not in sight. Put simply, particularly in Westminster government-type systems, it remains the case, at least in broad terms, that the government is responsible for policy; the public service for administration and service delivery; and the parliament for oversight and review. In reality, the situation has become more complicated with the growth of the ‘information economy’, internationalization, the greater involvement of the private sector in government activities generally and changing public views and expectations of government, not least in respect of trust and confidence in politicians and public institutions. At the very least, it is still a situation of ‘work-in-progress’ trying to catch up with the changing national and international environment.     

Accounting based valuation: a simultaneous equations model for forecasting earnings to proxy for ‘other information’

This paper develops and tests a simultaneous equations model (SEM) for extending accounting based valuation models used in empirical studies. Rather than using analysts’ forecasts, we derive forecasts of operating income from the SEM to calculate the ‘other information’ variable in the Ohlson (Contemp Account Res 11:661–687, 1995) model. The SEM forecasts are based on observable data contained in the firms’ reporting, like order backlog, and other publicly available information. The SEM produces more accurate out-of-sample forecasts of operating income compared to simple benchmark models particularly in years around economic changes and instability, like the years 2001 and 2009. Integrating the SEM forecast as ‘other information’ in market value regressions significantly increases the explanatory power compared to simpler versions without or with single information proxies for ‘other information’. Finally, we find that the SEM forecast is able to explain a major portion of the information advantage of analysts relevant for explaining market values.     

Sports betting as a new asset class—current market organization and options for development

New asset classes are originally distributed via over the counter channels; mostly negotiated, traded, and settled on a bilateral and ad-hoc basis. Subsequently, the demand for organized market services grows alongside trading volumes, number of market participants, and distribution reach. This paper focuses on sports betting as a new asset class and uses the analogies between the development of traditional and new asset classes as a framework to extend market organization. The first section motivates sports betting as a new asset class based on its economic relevance. In Sect. 2, the European market is described by product design, distribution platforms, and regulatory environment. In Sect. 3, we discuss the dimensions of market model, technology, and regulation as prerequisites to develop organized markets. Against this background, we compare the value chain in financial and sports betting markets to identify and describe three options for development: a regulated market environment, an inter-bookmaker platform, and central counterparty clearing services.

Board liability for cyberattacks: The effects of a prior attack and implementing the AICPA’s cybersecurity framework

A significant litigation trend is the rise in lawsuits filed against boards of directors following cybersecurity incidents. We perform an experiment to examine factors we predict will influence directors’ litigation risk. We examine whether jurors are more likely to hold directors liable when a company previously experienced an immaterial cyberattack, and whether subsequently implementing the American Institute of Certified Public Accountants’ cybersecurity risk management reporting and assurance framework (the “Framework”) can mitigate the effects of a prior attack. Consistent with counterfactual reasoning theory, we find jurors are more likely to hold directors liable for a cyberattack when a company previously experienced an attack. Importantly, we also find that directors can reduce this liability risk after a prior cyberattack by subsequently implementing the Framework, especially when they obtain external assurance. Our results have important implications for research, boards, regulators and public policymakers, audit firms, and attorneys who handle cybersecurity-related cases.     

New development: Alternative reporting formats: a panacea for accountability dilemmas?

ABSTRACT

The need for accountability has given rise to new formats of reporting for public sector organizations. This article discusses the relative strengths and weaknesses of the main formats and concludes with a proposal for the adoption of an ‘Integrated Popular Report’ (IPR) to connect public sector organizations with ordinary people and encourage democratic participation in decision-making.     

New development: Leveraging ‘big data’ analytics in the public sector

This article examines the opportunities presented by effectively harnessing big data in the public sector context. The article is exploratory and reviews both academic- and practitioner–oriented literature related to big data developments. The findings suggest that big data will have an impact on the future role of public sector organizations in functional areas. However, the author also reveals that there are challenges to be addressed by governments in adopting big data applications. To realize the benefits of big data, policy-makers need to: invest in research; create incentives for private and public sector entities to share data; and set up programmes to develop appropriate skills.