Global economy gathering strength

Encouraged by a highly expansionary economic policy, the global economy is enjoying a rapid upturn. Utilisation of capacity is high in many sectors, particularly in the growth centres of the USA and East Asia, where China leads the field. With inflationary risks on the increase, most countries are now shifting the focus of economic policy. Fiscal policy in particular can be expected to provide little in the way of further stimulus. In addition, there has been a turnaround in interest rates in many countries. Yet how quickly can the monetary reins be tightened without jeopardising growth or endangering price stability?     

On the Ethics Behind “Business Ethics”

Ethics in business and economics is often attacked for being too superficial. By elaborating the conclusions of two such critics of business ethics and welfare economics respectively, this article will draw the attention to the “ethics behind” these apparently well-intended, but not always convincing constructions, by help of the “fundamental ethics” of Emmanuel Levinas. To Levinas, responsibility is more basic than language, and thus also more basic than all social constructions. Co-operation relations in organizations, markets and value networks are generated from personal relations and personal responsibilities. It is not sufficient to integrate ethics in an impersonal, rational system, neither in business organizations nor in the world economy. Ethics has its source not in rationality, but in the personal.     

LOGISTICS SALIENCE IN A CHANGING ENVIRONMENT

The primary purpose of this paper was to empirically explore some of the reasons that logistics has become more important, or salient, in comparison to other functions within the firm. A survey of 296 managers across multiple industries in the U.S. found logistics becomes more important within the firm when the industry increases in uncertainty, when there is an emphasis on time‐based competition, when there is greater adoption of information technology, and when there is an emphasis on cross‐functional integration.     

THE SQUARED ORNSTEIN-UHLENBECK MARKET

We study a complete market containing J assets, each asset contributing to the production of a single commodity at a rate that is a solution to the squared Ornstein-Uhlenbeck (Cox-Ingersoll-Ross) SDE. The assets are owned by K agents with CRRA utility functions, who follow feasible consumption/investment regimes so as to maximize their expected time-additive utility from consumption. We compute the equilibrium for this economy and determine the state-price density process from market clearing. Reducing to a single (representative) agent, and exploiting the relation between the squared-OU and squared-Bessel SDEs, we obtain closed-form expressions for the values of bonds, assets, and options on the total asset value. Typical model parameters are estimated by fitting bond price data, and we use these parameters to price the assets and options numerically. Implications for the total asset price itself as a diffusion are discussed. We also estimate implied volatility surfaces for options and bond yields.     

International briefing 16: training and development in the Republic of Ireland

This paper explores the landscape of training and development in the Republic of Ireland, a country with an impressive economic record in recent years. Both the Irish economic context and business context are explored. The national system for training and development and the surrounding policy and strategy context are set down. Survey data are drawn upon to examine the nature of training and development at organizational level. Here influence on training and development, levels of expenditure, the number of days per employee category and the dominant methods employed training and development are all discussed. Finally the academic study of training and development in the Republic of Ireland is examined.     

Explaining Differences in Economic Performance Among Racial and Ethnic Groups in the USA

A bstract . By utilizing self-reported race and ancestry in the 1980 and 1990 USA censuses and the Blinder-Oaxaca decomposition technique, the extent of wage discrimination experienced by women and by men is examined across 50 ethnic/racial groups. Systematic evidence of negative discrimination is revealed in both census years for Asian, Indian, black (African-American), Vietnamese, Cuban, Mexican, Puerto Rican , and Native American males. To assess the charge that the Blinder-Oaxaca decomposition indicates cultural rather than discriminatory differentials, two additional data experiments are performed—one that controls for color and varies culture, and one that controls for culture and varies color. Race appears to matter.     

The in-depth testing of survey questions: A critical appraisal of methods

It has become increasingly apparent that the conventional piloting, or pre-testing, of survey questions does not ensure that questions are understood by respondents as researchers intend them to be understood. This has led survey methodologists to advocate the use of indepth testing procedures. While some of the procedures used to identify comprehension problems appear to be reasonably effective, almost all of the procedures used to identify other kinds of problems have not proved to be very useful. Two reasons stand out as explanations for this general lack of success. First, the probes used are themselves not likely to be interpreted in the same way by different respondents. Second, the cognitive psychological assumptions that have suggested many of the procedures may not adequately reflect the processes that underlie the way questions are answered. A number of suggestions are made with the view to making the in-depth testing of survey questions a more profitable exercise.     

Institutional design and the closure of public facilities in transition economies

As part of the reforms of their systems for financing and delivering health care, many transition economies, particularly in central and eastern Europe, have adopted national insurance funds that are institutionally separate from ministries of health. Most of these countries have also grappled with the problem of restructuring the delivery system, especially the need to reduce hospital capacity. Although improving the performance of medical care providers through a shift from passive budgeting to explicitly incentive mechanisms is important, why this change in financial relations between the government and providers could not be implemented simply by reforming the role of health ministries is not obvious. This paper presents an explicit rationale for the separation of powers between the regulator (the ministry of health) and the financing body (the insurance fund), based on the inability of a single agency to commit to closing hospitals. JEL classification: L51, P20, P35, I18.