The future of the dollar–euro exchange rate

Monetary unification in Europe is expected to produce a major new international currency, which may compete with the U.S. dollar as the currency of choice in foreign exchange transactions, financial asset markets and central bank reserves. This study considers two important issues regarding the euro: its global role as medium of exchange, unit of account, and store of value and its position relative to the U.S. dollar. Among the main considerations are differences in cyclical behavior, inflation differentials, trade patterns and capital flows, and risk-return assessments. External diversification of private portfolios and of central banks’ reserve holdings will play a key role in determining the euro’s exchange rate. Overall, despite its rough start, we argue that the euro may emerge as a challenger to the U.S. dollar.     

Impact of China's currency valuation and labour cost on the US in a trade and exchange rate model

Ricardian dynamic general equilibrium analyses show that under free trade arrangements a low income country with lower wage cost and large endowment of labour has comparative advantage in trade. Efficiency gains from this enhance economic growth and welfare of households simultaneously in both low income and advanced economies. Theoretical predictions are empirically validated here with structural VAR analysis based on quarterly data over the time period 1995:1 to 2009:1 on China's relative wage cost, interest rate differential, real effective exchange rate (REER), relative GDP and the US current account balance. It is shown how the relative prices of labour, capital and the currency affect the economic activity in China and current account balance in the US. With free capital inflows and outflows and restrictions on labour mobility, comparative advantage of China and the trade deficit of the US will both be minimised if China allows real appreciation of the Yuan and complete adjustment in prices. Higher production cost and prices in China could reduce welfare of Chinese households and the trade imbalance of the US, while higher relative GDP of China lowers the current account balance for the US.     

A Real‐Assets Model of Economic Crises: Will China Crash in 2015?

Loosely derived from Henry George's theory that land speculation creates boom‐bust cycles, a real‐assets model of economic crises is developed. In this model, land prices play a central role, and three hypothesized mechanisms are proposed by which swings of land prices affect the entire economy: construction on marginal sites, partial displacement of circulating capital by fixed capital investment, and the over‐leveraging of bank assets. The crisis of 2008 is analyzed in these terms along with other examples of sudden economic contractions in U.S. history, recent European experience, and global examples over the past 20 years. Conditions in China in 2014 are examined and shown to indicate a likely recession in that country in 2015 because its banks are over‐leveraged with large‐scale, under‐performing real estate loans. Finally, alternative methods of preventing similar crises in the future are explored.     

Modeling and forecasting U.S. public construction

This paper extends Lin's flexible accelerator model of dynamic investment behavior of U.S. public construction by relaxing two of the underlying basic assumptions: (1) the coefficient of adjustment is allowed to vary with the level of government expenditure and (2) the regression coefficients are treated as randomly changing over time rather than being viewed as fixed. The new models afford a better explanation of the behavior of U.S. public construction. Importantly, the forecasting ability of the variable-coefficient-of-adjustment model is tested for the three-year period beyond the sample period and compared to both the Lin's original and ARIMA models. It is found that this new model gives better forecasts of public construction for ten quarters ahead. On the basis of the chi-square test of model stability and the mean squared error, it is concluded that the model with variable adjustment coefficients is a better abstraction of economic reality and improves forecasting accuracy.     

THE IMPACT OF ETHNIC HETEROGENEITY ON EDUCATION SPENDING: A SPATIAL ECONOMETRIC ANALYSIS OF UNITED STATES SCHOOL DISTRICTS

In the public finance literature it is well understood that a community's spending can be affected by neighboring communities’ spending. It is relatively straightforward to see why these spillovers exist. For example, if a school district increases its spending on public education, this could affect the spending level of neighboring school districts. This paper uses spatial analysis to test the hypothesis that a school district's ethnic heterogeneity affects support for public education. Using a Spatial Lag Model and a national panel of U.S. school districts, I find that spatial dependence does exist in the data and that ethnic heterogeneity is negatively related to school district spending.     

Deficits,expected deficits,financial markets,and the economy

This paper assesses the implications of U.S. budget and current account deficits for financial and economic stability. The primary focus is on the behavior of interest rates in response to deficits, then effects on the economy through the financial system. The paper argues, and shows with empirical evidence, including from a large-scale econometric model, that expected, but not realized, budget deficits affect interest rates. Under certain circumstances, particularly near full employment, sustained budget and current account deficits can lead to financial disarray and a severely constrained economy.     

Housing market dynamics

The purpose of this paper is to consider the dynamic behavior of housing markets. I first set out a model in which interest rates affect the implicit rental value of housing and indicate how the latter is related to the stock demand for housing and new construction. Using this model and the actual values of U.S. mortgage interest rates in the late 60's and 70's I then find those values of the model's parameters most consistent with fluctuations in new construction in that period. Finally, I simulate the effects of various shocks to the model.     

对比美国资本市场,完善我国投、融资渠道

论文指出在当前全球性金融危机背景下,我国中小企业融资是一关系到其生存和发展的重要问题,随着我国市场经济的完善和民间资本规模的不断扩大,发展我国资本市场已迫在眉睫。本文应用对比分析法,借鉴美国资本市场建设,分析如何健全和完善我国资本市场体系。     

ANALYZING CULTURAL STEREOTYPES IN MULTINATIONAL BUSINESS: UNITED STATES AND AUSTRALIA

As U.S. business becomes more international, so does U.S. management education. Executive development programmes offer courses in the U.S. and abroad to managers from many nations. As part of the transfer of U.S. management methods, the concepts, techniques and beliefs taught in these programmes may not be easily accepted, especially by foreign managers. Careful examination of cultural differences in attitudes and opinions is a necessary step in the successful transfer of management technology. This paper compares U.S. and Australian managers' values, attitudes, beliefs and opinions on a wide range of topics using a modified version of Schein's Public Opinion Questionnaire. Our findings suggest that there are common business management views as well as national differences among managers in the U.S. and Australia.     

The US current account,sustainability, and the international monetary system

In this paper, we examine the sources of the US current account imbalances and discuss the role of the international monetary system in enabling the US in carrying such external deficits. There is evidence that the stochastic properties of the US current account are not compatible with the intertemporal national budget constraint. We argue that this is likely to be related to the dominant role of the U.S. dollar as an international reserve asset, which allows the US to meet international demand for safe assets and allows borrowing at very low interest rates. Results from a structural VAR model indicate that temporary shocks dominate the current account in the short run, whereas domestic permanent supply shocks and preference shocks contribute significantly to US current account movements in the long run. To the extent that temporary shocks stem from aggregate demand, stabilizing aggregate demand is important in achieving long-term sustainability in the current account. Finally, the paper discusses the role of the international financial system and the international role of the U.S. dollar in contributing to US external imbalances.     

Investor sentiment and country exchange traded funds: Does economic freedom matter?

Using unbalanced panel data of 27 iShares MSCI country-specific exchange traded funds (ETFs) over the period 1996–2014, this paper applies quantile regression to examine the impacts of global, foreign, and U.S. investor sentiments on the returns of the ETFs traded in the U.S. markets. We further investigate whether a country’s economic freedom affects the relationship between investor sentiments and ETF returns. We find that ETF returns are strongly determined by investor sentiments and the ETF expense ratio. The quantile regression approach reveals that high-return ETFs are positively sensitive to changes in global sentiment (measured by market turnover, VIX, U.S. federal funds rate), foreign sentiment (measured by current account balance, inflation, market turnover, public debt), U.S. sentiment, currency exchange ratio, and expense ratio, while negatively influenced by economic freedom and Asian proxy. The effects of VIX and foreign inflation are a reversal; that is, returns from lower (higher) quantiles have a negative (positive) relation with VIX and foreign inflation. Not all components of economic freedom affect returns equally.     

Do Unions Affect Labor's Share of Income: Evidence Using Panel Data

There have been a number of studies analyzing the impact of unions on labor's share of income. Most have relied on either time series or cross‐section data. The purpose of this paper is to determine the impact of unions on labor's share of income in the U.S. This study adds to the understanding of this topic by developing an analytical model of imperfect competition and estimating the model using panel data for the manufacturing sector. This study finds that unions have a positive impact on labor's share of income. Specifically, this paper finds that labor's share declined 17.9 percent between 1997 and 2006 whereas, if unionization density had remained at its 1997 level, labor's share would have declined only 13.9 percent. Thus, the decline in unionization explains about 29 percent of the decline in labor's share of income. This paper is important for three reasons. First, this paper sheds light on whether social and institutional forces play an important role in determining the distribution of income between labor and capital. Second, it helps to explain recent increases in wage inequality. Third, it has implications for understanding the potential impact of legislation, such as the Employee Free Choice Act, that would make it easier for workers in the U.S. to unionize.     

Management Accounting Practices in the U.S. and Japan: Comparative Survey Findings and Research Implications*

In recent years, the success of Japanese firms in the global market has prompted efforts to understand the sources of their competitive advantage. It has been suggested that one such source is the Japanese firms' management accounting systems, and a number of articles have claimed that important differences do exist between U.S. and Japanese firms in this area. However, these claims have tended to be supported by anecdotal, rather than systematic, evidence. The objective of this article is to contribute further insights into similarities and differences between U.S. and Japanese firms' management accounting practices. Exhaustive searches of published surveys in the U.S. and Japanese literatures (much of which is in Japanese) provided the basis for U.S.-Japan comparisons on six aspects of management accounting practices. In turn, these comparisons were used for deriving implications for future research. Two major limitations of extant research and, thus, directions for future research are identified. First, future research needs to go beyond the simple use or non-use of techniques to investigate more detailed aspects of technique use. Second, since management accounting is only one component of a firm's total management system, attention also needs to be devoted to the organizational context, process, and goals of a firm's management accounting practices.     

Corporate Power and Expansive U.S. Military Policy

Military defense is generally treated in economics texts as a “public good” because the benefits are presumed to be shared by all citizens. However, defense spending by the United States cannot legitimately be classified as a public good, since the primary purpose of those expenditures has been to project power in support of private business interests. Throughout the course of the 20^th century, U.S. military spending has been largely devoted to protecting the overseas assets of multinational corporations that are based in the United States or allied nations. Companies extracting oil, mineral ores, timber, and other raw materials are the primary beneficiaries. The U.S. military provides its services by supporting compliant political leaders in developing countries and by punishing or deposing regimes that threaten the interests of U.S.‐based corporations. The companies involved in this process generally have invested only a small amount of their own capital. Instead, the value of their overseas assets largely derives from the appreciation of oil and other raw materials in situ. Companies bought resource‐rich lands cheaply, as early as the 1930s or 1940s, and then waited for decades to develop them. In order to make a profit on this long‐range strategy, they formed cartels to limit global supply and relied on the U.S. military to help them maintain secure title over a period of decades. Those operations have required suppressing democratic impulses in dozens of nations. The global “sprawl” of extractive companies has been the catalyst of U.S. foreign policy for the past century. The U.S. Department of Defense provides a giant subsidy to companies operating overseas, and the cost is borne by the taxpayers of the United States, not by the corporate beneficiaries. Defining military spending as a “public good” has been a mistake with global ramifications, leading to patriotic support for imperialist behavior.     

U.S. Strategic Trade Policy and the Competitiveness of the U.S. Construction Industry in Developing Country Markets

SUMMARY

U.S. government trade policy increasingly reflects “strategic trade” beliefs that, because competition in markets is imperfect, governments can act strategically to affect trade flows and enhance national welfare. The U.S. National Export Strategy targets the infrastructure sector in twelve developing countries as a strategic opportunity for U.S. construction firms. This paper examines whether U.S. government export promotion initiatives effectively implement strategic trade policy by providing appropriate support to these firms in that target market. It concludes that, within limits, they do.     

Academic scholarship,organization prestige,and the earnings of U.S. business school deans

This study models the market for business school deans as an outcome of a differential game between a university's central administration and the job candidates in the market for business school deans. In our model, the ability of a business school dean to advance the organization is enhanced by his or her own scholarly reputation, such that a job candidate chooses an optimal level of scholarship that relates to his or her marketability. In this way, the supply of scholarship (by job candidates) can be seen as the supply of job candidates in the market for business school deans, whereas the demand for scholarship can be seen as the demand for business school deans. The main features of our game‐theoretic model are tested using data from both national and regional business schools and colleges in the U.S. Econometric results indicate that each additional scholarly contribution by a business school dean generates a wage premium ranging from $1,000 to $1,200, whereas in the case of national institutions, each additional student enrolled at the doctoral (master's) level raises the wage by $671 ($56). Lastly, the production of between nine and 10 scholarly contributions is found to be necessary in order to face a 50% probability of holding a business school deanship at a national institution, whereas production of about 37 scholarly contributions leads to a 50% probability of holding a deanship with a named business school at a national institution.     

Merger Premia and National Differences in Accounting for Goodwill

We examine the effects of international accounting diversity on the market for corporate control with particular reference to whether national differences in the treatment of purchased goodwill are associated with differences in premia offered by U.K. as opposed to U.S. acquirers of U.S. targets. We find merger premia associated with U.K. acquisitions to be consistently higher than those for U.S. acquisitions. Moreover, higher premiums offered by U.K. acquirors appear to be associated with not having to amortize goodwill to earnings. The evidence provided here suggests that national differences in accounting impact differentially on managerial behavior.     

美国棕地再开发的融资模式及其对我国的启示

棕地再开发的外部性决定了只有建立合理的融资模式才能有效地推动其开发进程。本文以融资机制和模式比较成熟的美国为例,深入剖析了美国政府的棕地再开发融资模式。结合我国国情,提出政府调控和引导是实现棕地再开发融资的重要动力、适度扩大地方政府的税收管理权限有助于棕地再开发融资方式创新、公私合作可以有效拓宽棕地再开发资金的来源渠道、多元利益方通力协作可以推动棕地再开发的成功实现等启示,希望这些经验和启示为我国棕地再开发融资提供借鉴。     

U.S. Futures Exchanges Face"Mission Impossible"

For U.S. futures exchanges, controlling costs while maintaining market performance is an ongoing, difficult challenge. New market realities have made that challenge even more daunting in recent years as costs have escalated, competition has expanded, and the role of information technology has expanded. It is always difficult for regulatory statutes to keep pace with ever-changing markets. Futures markets are no exception. The basic statutory framework represented by the Commodity Exchange Act (CEA) was enacted in 1922, over seventy years ago. In order to maintain appropriate regulatory balance, periodic review and reform has been essential over the years. Our current federal regulatory systems were built for different markets with different competitive realities than we face today. Reforming the CEA to take into account those new market realities is vital to the survival of U.S. futures exchanges.