Recall of autobiographical memory: A longitudinal analysis of franchisee experts

In this longitudinal study, we investigate whether franchisees in their role as experts exhibit consistent recall of their perceptions of franchise value after a 3-year interval when a strong autobiographical instance association (i.e., the multiunit decision) is created. Paired-sample t tests and correlation analysis are used to examine recall accuracy. While the analysis reveals stability of recall for typical franchisee experts over both the recent and the distant past, the individual level data indicate that the precision of recall deteriorates over time. Implications for future research involving retrospective data are offered.     

Linear transformations of vector ARMA processes

Linear transformations of stochastic processes are used in many ways in economic analyses, for example when linear aggregates or subprocesses are considered. It is demonstrated that a linear transformation of a vector ARMA process is again an ARMA process and conditions for stationarity are given. Three different predictors for a linearly transformed process are compared. Forecasting the original process and transforming the predictions is superior to forecasting the transformed process directly and to transforming univariate predictions of the components of the original process. Conditions for equality of the three different forecasts are provided.     

Households’ foreign currency borrowing in Central and Eastern Europe

Foreign currency loans represent an important feature of recent financial developments in CEECs. This might pose a serious challenge for macroeconomic stability. Against this background, we study the determinants of foreign currency loans of households, using data on the behavior of households in nine CEECs. Our results reveal that foreign currency loans are driven by households’ lack of trust in the stability of the local currency and in domestic financial institutions. Moreover, special factors including remittances and expectations of euro adoption play an important role in selected regions. The financial crisis reduced foreign currency borrowing, but there is some indication this effect might be only temporary.     

Testing for random effects in panel models with spatially correlated disturbances

In the empirical analysis of panel data the Breusch–Pagan (BP) statistic has become a standard tool to infer on unobserved heterogeneity over the cross-section. Put differently, the test statistic is central to discriminate between the pooled regression and the random effects model. Conditional versions of the test statistic have been provided to immunize inference on unobserved heterogeneity against random time effects or patterns of spatial error correlation. Panel data models with spatially correlated error terms are typically set out under the presumption of some known adjacency matrix parameterizing the correlation structure up to a scaling factor. This paper delivers a bootstrap scheme to generate critical values for the BP statistic allowing robust inference under misspecification of the adjacency matrix. Moreover, asymptotic results are derived for the case of a finite cross-section and infinite time dimension. Finite sample simulations show that misspecification of spatial covariance features could lead to large size distortions, while the robust bootstrap procedure retains asymptotic validity.     

Quantifying the CO2 Permit Price Sensitivity

Equilibrium models have been widely used in the literature with the aim of showing theoretical properties of emissions trading schemes. This paper applies equilibrium models to empirically study permit prices and to quantify the permit price sensitivity. In particular, we demonstrate that emission trading schemes both with and without banking are inherently prone to price jumps.