Output collapses and productivity destruction

In this paper we analyze the long-run relationship between output collapses—defined as GDP falling substantially below trend—and total factor productivity (TFP). We use a panel of 76 developed and developing countries during the period 1960–2004 to identify episodes of output collapse and estimate counterfactual post-collapse TFP trends. Collapses are concentrated in developing countries, especially Africa and Latin America, and were particularly widespread in the 1980s in Latin America. Overall, output collapses are systematically associated with long-lasting declines in TFP. We explore the conditions under which collapses are least or most damaging, as well as the type of shocks that make collapses more likely or severe. Furthermore, we provide a quantification of the associated welfare loss with output collapses.     

Business Strategy at the Base of the Pyramid

The design and implementation of base of the pyramid (BoP) solutions or products require multinational companies to make adjustments to their business strategies and processes. While this strategic opportunity has been argued for in BoP related publications, a 'traditional' strategic management perspective has not been applied. This paper aims towards using the strategic management process as an analytic framework for case studies at the BoP, allowing analysis of which aspects are particularly critical for achieving respective solutions. This includes reaching sustainability related objectives. A total of seven cases covering both products and services have been researched, allowing a contribution towards the applicability of strategic management in respective situations. Further, the importance of specific strategy process elements is assessed. While it seems obvious that strategic management thought can be applied, the analytic criteria put forward (i.e. company, initial need, motivation, external analysis, stakeholder, product/service, strategic choice, organizational implementation, supply chain, economic outcome, effects on sustainable development) are particularly geared towards the BoP solutions. While previous literature centres on analysing needs, the case based research provides the insight that aspects of internal organization, supply chain management and sustainability outcomes are of equal importance. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

Das zweite Rettungspaket für Griechenland

Ende Juli haben die Euro-Regierungschefs ein zus?tzliches sehr umfangreiches Rettungspaket für Griechenland beschlossen. Der EU-Gipfel konnte die M?rkte allerdings nicht beruhigen. Diese entt?uschende Reaktion heizt die Diskussion auf politischer Ebene, aber auch in der Wirtschaftswissenschaft weiter an. Wie ist die Beteiligung des Privatsektors an der Krisenbew?ltigung zu bewerten? Wie stark wird der Steuerzahler belastet? Was ist von Eurobonds oder einer europ?ischen Wirtschaftsregierung mit weitreichenden Kompetenzen zu halten? Mit diesen Fragen besch?ftigen sich die Autoren der folgenden Aufs?tze.     

Wege zwischen beruflicher und hochschulischer Bildung in den deutschsprachigen Ländern

Der neue europ?ische Regulierungsrahmen für Telekommunikation, der bis Mitte 2011 in deutsches Recht umgesetzt werden muss, bietet M?glichkeiten zur Neuausrichtung der Regulierungsziele. Die Autoren diskutieren in diesem Beitrag die M?glichkeiten und potentiellen Probleme der vorgeschlagenen Instrumente sowie weiterer politischer Initiativen der Bundesregierung und der Europ?ischen Kommission in Hinblick auf die ambitionierten Ziele einer fl?chendeckenden Versorgung mit schnellen Internetzug?ngen.     

TRUE UPPER BOUNDS FOR BERMUDAN PRODUCTS VIA NON-NESTED MONTE CARLO

We present a generic non-nested Monte Carlo procedure for computing true upper bounds for Bermudan products, given an approximation of the Snell envelope. The pleonastic "true" stresses that, by construction, the estimator is biased above the Snell envelope. The key idea is a regression estimator for the Doob martingale part of the approximative Snell envelope, which preserves the martingale property. The so constructed martingale can be employed for computing tight dual upper bounds without nested simulation. In general, this martingale can also be used as a control variate for simulation of conditional expectations. In this context, we develop a variance reduced version of the nested primal-dual estimator. Numerical experiments indicate the efficiency of the proposed algorithms.     

Assessing the profitability of intraday opening range breakout strategies

Is it possible to beat the market by mechanical trading rules based on historical and publicly known information? Such rules have long been used by investors and in this paper, we test the success rate of trades and profitability of the Open Range Breakout (ORB) strategy. An investor that trades on the ORB strategy seeks to identify large intraday price movements and trades only when the price moves beyond some predetermined threshold. We present an ORB strategy based on normally distributed returns to identify such days and find that our ORB trading strategy result in significantly higher returns than zero as well as an increased success rate in relation to a fair game. The characteristics of such an approach over conventional statistical tests is that it involves the joint distribution of low, high, open and close over a given time horizon.     

Profit taxes and financing constraints

Without financing frictions, profit taxes reduce investment by their effect on the user cost of capital. With financing constraints, investment becomes sensitive to cash-flow. In this situation, even small taxes impose first order welfare losses, and ACE and cash-flow tax systems are no longer neutral. When banks become active and provide monitoring services in addition to finance, an ACE tax yields larger investment and welfare than an equal yield cash-flow tax.     

Corporate Fraud and Managers’ Behavior: Evidence from the Press

Government-sponsored enterprises (GSEs) and quasi-autonomous non-governmental organizations (quangos) comprise a powerful organizational sector that has been criticized for its lack of accountability to governments and their citizens. These organizations are established to serve the public as a whole by targeting the needs of particular groups or fulfilling specific functions. Often they use practices adopted from the business sector, and sometimes they enter the marketplace as profit-making enterprises. In light of the contribution of GSE Fannie Mae to the 2008 world economic crisis, the impact of this sector on effective democratic government bears further examination. In this article, I present a systems model that suggests how researchers might comprehensively assess the accountability of organizations in this sector, here termed the “gray sector,” with respect to their government missions. I focus on four systems dimensions: mission, organizational design, organizational outcomes, and the information feedback process. Organizational design and the nature of the sector population are cited as emerging issues of particular importance.     

Properties of foreign exchange risk premiums

We study the properties of foreign exchange risk premiums that can explain the forward bias puzzle, defined as the tendency of high-interest rate currencies to appreciate rather than depreciate. These risk premiums arise endogenously from the no-arbitrage condition relating the term structure of interest rates and exchange rates. Estimating affine (multi-currency) term structure models reveals a noticeable tradeoff between matching depreciation rates and accuracy in pricing bonds. Risk premiums implied by our global affine model generate unbiased predictions for currency excess returns and are closely related to global risk aversion, the business cycle, and traditional exchange rate fundamentals.