A note on introducing a "zero‐line" of welfare as an escape route from Arrow's theorem

Since Sen's insightful analysis of Arrow's Impossibility Theorem, Arrow's theorem is often interpreted as a consequence of the exclusion of interpersonal information from Arrow's framework. Interpersonal comparability of either welfare levels or welfare units is known to be sufficient for circumventing Arrow's impossibility result. But it is less well known whether one of these types of comparability is also necessary or whether Arrow's conditions can already be satisfied in much narrower informational frameworks. This note explores such a framework: the assumption of (ONC + 0), ordinal measurability of welfare with the additional measurability of a "zero‐line", is shown to point towards new, albeit limited, escape routes from Arrow's theorem. Some existence and classification results are established, using the condition that social orderings be transitive as well as the condition that social orderings be quasi‐transitive.     

Mehrwert für die Marke durch Kommunikation schaffen

Marken ohne Mehrwert haben keine Existenzberechtigung. Nicht immer liegt der Mehrwert jedoch im Produkt oder der Dienstleistung selbst. Vielmehr kann die Kommunikation selbst einen Mehrwert für Marken schaffen. Deshalb wird im folgenden Beitrag gezeigt, wie man den Markenmehrwert einerseits klar kommunizieren und andererseits durch die Kommunikation selbst Mehrwert zum Nutzen für den Kunden und für das Unternehmen schaffen kann.     

CSR 2.0 — Die Kommunikation von Nachhaltigkeit in Sozialen Medien

Das Soziale Internet (Web 2.0) macht jeden potenziell zum Kommunikator — die Agenda-Setting-Funktion verlagert sich von den Massenmedien zu den Teilnehmern Sozialer Netze. Damit sehen sich Unternehmen einer zunehmend vielf?ltigen, selbstbewussten und kritischen ?ffentlichkeit gegenüber. Um Nachhaltigkeit glaubhaft zu kommunizieren, sollten Unternehmen sich daher als dialogbereiter Gespr?chspartner in Sozialen Netzen etablieren. Der vorliegende Beitrag leitet aus aktuellen Beispielen vier Spielregeln für die CSR-Kommunikation im Web 2.0 ab.     

Exchange rate determination: a theory of the decisive role of central bank cooperation and conflict

Economists’ faith that variable exchange rates benevolently equilibrate has been empirically disconfirmed. That faith is here tackled at its theoretical core with an exchange rate model that although ultra abstract, includes the undeniable fundamentals of market power and differential goals of central bankers and large-scale private players. It permits a game theoretic analysis under the assumption that all agents maximize their payoffs. The paper then relaxes the assumption of maximising agents, allowing for a more complex and thus realistic second version of the model that is interpretable within SKAT, the Stages of Knowledge Ahead Theory of risk and uncertainty. In an experimental setting, this second version of the model points to: a) the inability of agents in central banks, governments and the private real and financial sectors to operate in maximising ways; b) destructive central bank conflict; and c) the widely discrepant outcomes arising from the dynamics of individual personality differences. The paper’s theoretical and empirical findings thus both point to the merits of a single world currency.     

The changing sensitivity of realized portfolio betas to U.S. output growth: An analysis based on real-time data

Our results shed light on the sensitivity of the betas of portfolios formed on market capitalization (“size”) and book-to-market value (“value”) to output growth in the United States. We estimate a state-space model to analyze the sensitivity of portfolio betas to output growth. We measure output growth using real-time and revised data. Output growth has a significant effect on portfolio betas when size and value are high. Such portfolio betas exhibit countercyclical dynamics. They are more sensitive, in absolute terms, to output growth when the latter is measured using real-time data. Their sensitivity to output growth has grown over time. Portfolio betas with respect to output growth have become smaller over time, in contrast, when size is large but value is low.     

One Money,One Market: A Revised Benchmark

The introduction of the euro generated substantial interest in the impact of currency unions (CUs) on trade flows. Initial estimates suggested a tripling of trade, which gave rise to a literature in search of “more reasonable” CU effects. Theoretical derivations of the gravity model highlight, however that the CU literature neglects to control simultaneously for general equilibrium effects (multilateral resistance) and unobserved bilateral heterogeneity among trade partners. Once we introduce the appropriate controls, CU trade effects are shown to range around 50%. We also highlight that the practice of reporting average CU effects generates misleading results. The average effect is shown to be a composite of disparate individual CU effects ranging from 40% (euro) to about 100% (Central African franc).     

Ramifications of debt restructuring on the euro area

The Greek government budget situation plays a central role in the debt crisis in the euro area. Strong consolidation measures need to be implemented, with potential adverse effects on the Greek economy and further credit requirements. Debt conversion might therefore become a reasonable alternative. The following paper provides some simulation-based calculations of the expected fiscal costs for the governments in the large European countries, Germany, France, Spain and Italy, arising from different policy options — among them a second Greek rescue package.     

REPRODUCTION AND TEMPORARY DISEQUILIBRIUM: A CLASSICAL APPROACH

We build a bisector reproduction model with Classical features in which the capitalists aim at maximizing accumulation. At variance with gravitation models, it is assumed that they invest their profits in their own industry. Their plans are based on actual productions and expected prices. Effective prices and effective allocations of resources are determined by a market‐clearing mechanism. A law on the formation of expectations allows us to define the dynamics of disequilibria, which let appear endogenous self‐sustained fluctuations around a long‐run path. The long‐run rate of growth and the amplitude of the fluctuations depend on the initial conditions.