Errors expected: the culture of credit in rural New England, 1750–1800

This article uses farm diaries from eighteenth‐century New England recast as account books in order to describe more accurately the rules of exchange and the culture of credit that prevailed in early America. This culture, which was post‐medieval yet pre‐modern, derived its fundamental characteristics from the fact that it connected participants who dealt with one another as formal equals before the law. It employed strategies inside and outside the market, and, rather than embracing or rejecting commercial activity, aimed to use whatever means necessary to achieve for householders the goal of comfortable independence.     

DETERRENCE: CREDIBILITY AND PROPORTIONALITY

This paper extends the analysis of deterrence to examine terrorism, nuclear proliferation, and rogue nations. Such situations are characterized by differential pre-emptive and response capacity, in contrast to the traditional deterrence literature on nuclear superpowers, where such factors are absent. We focus on the credibility of deterrence responses to pre-emption and show that credible (subgame-perfect) responses are rarely proportional. The analysis is also extended to asymmetric deterrence scenarios whereby credibility and proportionality depend on the potential aggressor's access to conflict technology and the responder's preferences for indirect conflict vs. the status quo.     

The Skewness of the Price Change Distribution: A New Touchstone for Sticky Price Models

We present a new way of empirically evaluating various sticky price models that are used to assess the degree of monetary nonneutrality. While menu cost models uniformly predict that price change skewness and dispersion fall with inflation, in the Calvo model, both rise. However, the U.S. Consumer Price Index (CPI) data from the late 1970s onward show that skewness does not fall with inflation, while dispersion does. We present a random menu cost model that, with a menu cost distribution that has a strong Calvo flavor, can match the empirical patterns. The model exhibits much more monetary nonneutrality than existing menu cost models.     

Macroeconomic Conditons and HRM-IR Practice

Although macroeconomic developments may seem removed from the world of micro-level HRM-IR practices, such practices are heavily influenced by the macro economy. Wage and price inflation, for example, are closely related, and the general state of the economy influences decisions on hiring, layoffs, and hours. The labor market's tendency toward periods of extended labor surplus or shortage condition the nature of the employer-employee relationship. Economic circumstances affect the labor relations climate and that climate has a bearing on national productivity trends. Government policy in the future may seek to encourage certain kinds of compensation systems, such as profit sharing, for macro reasons. HRM-IR practitioners, too, may benefit by reconsidering policies which make wages relatively inflexible.     

Partial Revelation of Information in Experimental Asset Markets

We develop a model of market efficiency assuming private information is partially revealed to uninformed traders via the behavior of those who are informed. This partial revelation of information (PRE) model is tested in fourteen computerized double auction laboratory markets. It explains the market value and allocation of purchased information, and asset allocations, better than either a fully revealing information model (FRE strong-form efficiency) or a nonrevealing expectations model; but it takes second place to FRE in explaining asset prices. We conjecture that refined versions of PRE may provide insight into “technical analysis” and minibubbles in securities markets.