Monetary Policy Rules for Managing Aid Surges in Africa

This paper examines the properties of alternative monetary policy rules in response to large aid surges in low-income countries characterized by incomplete capital market integration and currency substitution. Using a dynamic stochastic general equilibrium model, it is shown that simple monetary rules that stabilize the path of expected future seigniorage for a given aid flow have attractive properties relative to a range of conventional alternatives, including those involving heavy reliance on bond sterilization or a commitment to a pure exchange rate float. These simple rules, which are shown to be robust across a range of fiscal responses to aid inflows, appear to be consistent with actual responses to recent aid surges in a range of post-stabilization countries in Sub-Saharan Africa.     

Economic Impacts of Multiple Agro-Environmental Policies on New Zealand Land Use

This paper investigates the implications of policy on farm income, land use, and the environment when New Zealand landowners face multiple environmental constraints. It also looks at the interaction between climate and nutrient reduction policy and the extent to which one policy can be used to meet the other’s objectives. We use a non-linear, partial equilibrium mathematical programming model of New Zealand land use to assess the economic impacts of climate and water policies at the New Zealand territorial authority level. The spatially explicit agro-environmental economic model estimates changes in land use, agricultural output, land management, and environmental impacts. The policies investigated include a range of carbon prices on land-based emissions ($0–30/tCO\(_{2\mathrm{e}}\)) as well a range of prices on nitrogen leaching from diffuse sources ($0–30/kgN). We estimate that implementing stand-alone greenhouse gas and nutrient emissions reduction policies for the agricultural and forestry sectors will create environmental benefits outside the scope of the policy. However, not all environmental outputs improve, and net farm revenue declines by between 0 and 11%. Simultaneously implementing the two policies results in the desired goals of reductions in nitrogen and greenhouse gas emissions with a marginal economic burden on landowners (i.e. 1–2% additional loss in farm profit relative to a stand-alone policy).     

Do democracies have higher current account deficits?

In this paper we argue that democracies tend to run (larger) current account deficits than autocracies. Our argument is based on the different incentives faced by democratic and autocratic leaders. The main theoretical hypothesis is tested on a dataset of 121 countries over the period 1980–2012, using 5 year averages and a fixed effects panel data model. Special focus is given on the issue of endogeneity by estimating an IV Fixed Effects model. Relying on the idea of the regional waves of democratization and the special role of the Christian Church on the third wave of democratization, we use as instruments of Democracy the level of democracy in neighboring countries and also the share of Christian adherents in each country. Both instruments turn out to be valid determinants of democracy. The empirical findings suggest that autocracies run lower current account deficits than democracies. These results are found to be robust across alternative empirical specifications.     

PKW-Maut: Für eine verbrauchs-, entfernungs- und zeitabhängige Gebühr

Zur Zeit wird das Stra?ennetz in Deutschland aus den Haushaltsmitteln der ?ffentlichen Kassen finanziert. In den letzten Monaten wurde auf Ministerebene wiederholt die Einführung einer entfernungsunabh?ngigen PKW-Vignette diskutiert. In welcher Form sollten die optimale Bereitstellung und die Finanzierung des Stra?ennetzes aus finanzwissenschaftlicher Perspektive realisiert werden? Dr. Adam Jakubowski, 35, ist Head of Research bei sc-consult GmbH in Münster; Dr. Christian Lorenz, 34, ist Consultant am Centre for International Migration and Development in Frankfurt.     

Practitioners' Corner: Introduction to the Special Issue

This issue of the Journal of Financial Econometrics comprisespapers that were presented at the workshop "New Directions inFinancial Risk Management," held under the aegis of the Centerfor Financial Studies in Frankfurt on November 3–4, 2003.The scientific organizers of the conference were Frank     

The Role of Culture and Meaning in Rational Choice

The Wason card selection and the Tversky &; Kahneman frame anomaly are examined in the context of a probabilistic, constructivist biological model of decision-making. Rational choice requires that decision-makers understand the meaning of the choices they confront. In fact, the determination of meaning and the process of rational choice represent two sides the same coin. Further, perception, cognition and action are ill-posed problems. To solve these problems ‘missing data’ must be supplied by the brain. This data is acquired by both ontogenetic and phylogenetic processes. These evolutionary processes facilitate the determination of meaning and as a product of that process also facilitate the construction of rationality. Two interrelated brain systems involved in this construction process are examined: an emotional system that rapidly and non-consciously assigns reward expectancy values to objects in the environment and a sensory-motor system that participates in the discovery of more general information that facilitates environment/body interactions. Jointly, these systems help a naïve agent to find ‘meaning in an unlabeled world’ and to predict the outcomes of future interactions with that world by supplying ‘background’ information, i.e., by supplying the missing data necessary for rational choice. This ‘background’ represents the imprint of the statistical structure of the world on the brain and, as such, embodies the individual’s Bayesian priors. Lack of sufficient background capacities can result in systematic judgment errors and seemingly irrational decisions. Complex culture is a key aspect of the environment that facilitates the construction of rationality, in part, by becoming internalized as background. Culture facilitates the creation of complex social constructs that contribute to cultural evolution, reduce uncertainty, and increase rationality; however, cultural evolution can get ahead of itself—potentially leading to background failure and errors in judgment and choice. Finally, it is not simply complexity or lack of hands-on experience that lead to error: an additional component that might be called semantic opacity is necessary.     

Corporate Governance Reforms in Developing Countries

Corporate governance reforms are occurring in countries around the globe. In developing countries, such reforms occur in a context that is primarily defined by previous attempts at promoting "development" and recent processes of economic globalization. This context has resulted in the adoption of reforms that move developing countries in the direction of an Anglo-American model of governance. The most basic questions that arise with respect to these governance reforms are what prospects they entail for traditional development goals and whether alternatives should be considered. This paper offers a framework for addressing these basic questions by providing an account of: 1) previous development strategies and efforts; 2) the nature and causes of the reform processes; 3) the development potential of the reforms and concerns associated with them; 4) the (potential) responsibilities of corporate governance, including the (possible) responsibilities to promote development, and; 5) different approaches to promoting governance reforms with an eye to promoting development.     

REDISCOVERING HEGEL: THE 'NEW HISTORICISM' IN ORGANIZATION AND MANAGEMENT STUDIES

This paper advances the argument that a particular form of culturally, rather than materialistically, based historicism dominated organization and management studies in the 1980s. the 1970s were dominated by a materialistically based form of historicism in which economic, technological and organizational imperatives were deemed to drive the evolutionary dynamics, trajectories and outcomes of institutional and organizational transformation. In sharp contrast, the 1980s witnessed the rise of culturally or ideationally based forms of historicist thought and analysis in which the explanatory and political significance of factors located in a society's or organization's 'material base' were substantially downgraded in favour of variables embedded in their 'ideological superstructures'. the paper traces the emergence, progress and implications of this cultural historicism in relation to four distinct, but interrelated discourses - enterprise, flexibility, quality and human resource management. It also suggests that this analysis raises a number of fundamental theoretical and methodological issues concerned with three different approaches to the study of the interconnections between intellectual and institutional change in 'late' or 'post'-modern societies - that is, the history of ideas, the sociology of knowledge, and technologies of government. the paper concludes with the argument that each of these broad approaches needs to be brought into clearer theoretical and methodological alignment in order to develop a more subtle and sophisticated understanding of the dynamics of, and elective affinity between, intellectual and institutional change. It also suggests that this need for a clearer theoretical alignment between these three approaches will become particularly pressing in the 1990s as an alternative discourse of citizenship emerges to challenge the ideological hegemony of the discourse of enterprise with its roots in cultural historicism.