The impact of jump risks on nominal interest rates and foreign exchange rates

This article investigates the relationship between the nominal interest rate and inflation and also the forward exchange rate under a general specification of the underlying processes govering the foreign exchange rate. There are three distinct risks that affect the relation between the real rate of interest and the nominal rate namely, consumption risk, diffusion risk, and the existence of jump risks of inflation. Jump risks lower the nominal interest rate because of jump hedging of a nominal bond. The forward exchange rate depends on the expected depreciation of the domestic currency as well as these three risks. As the domestic jump risks increase, the domestic nominal interest rate decreases and the forward exchange rate decreases.     

Interest and reaction time analysis of credit card offers: Managerial implications of high level research procedures

This paper presents a new approach to the optimisation of direct mail offers. Conjoint measurement will be used to identify two aspects of an offer: the degree of interest; and the speed at which an individual processes the information. The approach allows the marketer to create offers that are simultaneously attractive to customers and easy to understand. The approach is illustrated by a credit card case study.     

Capital as Embodied Knowledge: Some Implications for the Theory of Economic Growth

Capital goods are embodied knowledge of how to produce. Therefore, capital development is a learning process, through which knowledge gets embodied in new capital goods. Because the necessary knowledge is dispersed among many people who must interact to communicate their particular, often tacit knowledge, capital development is a social process. Because this interaction takes time and continually changes the capital structure, capital development is an on-going process. Capital development is a social learning process. Neither traditional nor new growth theory illuminates how the capital structure evolves. Traditional growth theory, by modeling capital as single variable in the production function, ignores the heterogeneity of capital goods and their varied structural relationships of complementarity, substitutability, feedback, and feed-forward. New growth theory, while accounting for technological change, still treats capital as aggregable and thus implicitly homogeneous. That capital development is a learning process suggests that growth rates can increase. What prevents exponential growth is neither diminishing returns nor upper bounds to human capital, as growth models assume. It is the constant challenge of maintaining capital complementarities in a world of incomplete and rapidly changing knowledge.     

Agriculture in the EEC taking stock

The focus of this assessment is the European Community's ‘Stocktaking of the Common Agricultural Policy’. While the CAP has attracted considerable scrutiny and controversy, the Stocktaking represents the most authoritative review of agricultural policy from within the EEC bureaucracy. The authors evaluate first the extent to which the Stocktaking's own analysis is a fair reflection of achievements under the objectives which the CAP has set for itself. Second, they ask whether the proposals for policy reform advocated in the Stocktaking are appropriate. They conclude that the Stocktaking's proposals — and their subsequent interpretation within the EEC — are not adequate to tackle the problems facing EEC agriculture.     

Towards regional food security in southern Africa: a (new) policy framework for the agricultural sector

In the southern African Region (SAR) large populations, mainly concentrated in rural areas, face food insecurity and poverty. Food insecurity is intensified by adverse weather conditions and droughts which impact negatively on farm level food production throughout the region. Agriculture constitutes an important economic sector in the majority of countries in the region. This is measured as share of agricultural value added to the GDP and as agriculture's share in employment. Based on these facts alone, it must be obvious that sustained agricultural performance will play a significant role in the improvement of food security and livelihoods in the region. However, food security is not only attained in rural areas and by the consumption of home produced food stuffs. Urbanisation is expected to increase dramatically over the next few decades and feeding the urban masses, at affordable prices, must be considered to be a high future priority for governments in the region. Food security must not be viewed as an agricultural issue per se. The drive to food self sufficiency through domestic agriculture production in many countries in the region did not enable these countries to feed their own population. Food security should rather be defined as the acquirement of sufficient and nutritious quantities of food (Sen, 1981, Poverty and Famines: An essay on Entitlement and Deprivation). An approach, whereby attention is given to the macro level availability of food, access to income streams as well as improved production capacity to acquire food at a household level and the utilisation of nutritious food, should therefore be guiding food security policies (SADC: FSTAU, 1997, A Strategic Framework for Food Security in the Region). This broader view emphasises household level poverty reduction, economic development and growth as important components of a food security strategy (World Food Summit, Rome, 1996). An important issue which therefore needs to be explored is whether agriculture does have the potential to contribute to economic processes, which will support broad based development and food security. This paper is intended to argue the importance of agricultural development for food security in the region and to develop a diverse policy framework to strengthen this new, more comprehensive role of agriculture in the region.     

Analysing clusters of skills in R&D — core competencies, metaphors, visualization, and the role of IT

Though it is now universally accepted that companies should try to align their R&D activities with their business objectives, achieving this alignment is notoriously difficult in practice. The rise of the core competence framework has been very helpful in creating, and legitimizing, a language in which issues of technical competence and R&D strengths can be followed through to their consequences for competitive advantage. Companies are starting to express their R&D priorities explicitly in terms of core competencies.
Without effective IT support, core competence concepts are often applied arbitrarily. This has led to accusations that core competence theory can become yet another battlefield upon which companies play out their internal political battles. Computer-based techniques can help counteract this danger by enabling large volumes of relatively objective data to be collected, then making it possible to analyse and draw out patterns from this data, and finally enabling the data to be represented effectively.
It is in this last area of data representation that information technology is now of particular benefit. In order to make the core competence approach sufficiently robust as a basis for decision making, it is necessary to collect and process large volumes of data. However, this data is normally difficult to represent in such a way that managers can assimilate it. In our recent experience, we have come to realize the particular importance of effective representations and metaphors, and have started to shift our own emphasis towards these areas in addition to analysis per se .
The paper shows how core competence approaches can support R&D management decision making by exploring the roles of data collection, analysis and representation. Information technology is an integral part of these approaches, and we draw out some generalized lessons for the successful use of IT in decision support.     

Manumission in nineteenth-century Virginia

Using previously unexploited data, this paper explores the ages at which slaves were manumitted. OLS estimates reveal that mixed-race slaves, slaves in the tobacco-producing Piedmont, and female slaves of female slave owners were manumitted at younger ages. Weibull proportional hazards estimates imply that the same groups were more likely to be manumitted. The results also reveal a markedly diminishing likelihood of manumission after Nat Turner’s 1831 insurrection in south-central Virginia. The results are consistent with a principal–agent model in which slave owners contracted with slaves over consumption and future manumission to elicit effort and control shirking or other unproductive activities.     

The algebra of health concerns: implications of consumer perception of health loss,illness and the breakdown of the health system on anxiety

The current and expected future state of the American health care system creates much concern and anxiety at the national and individual level among Americans. This study is in response to the call of the Institute of Medicine to further study the lack of confidence among Americans about their future ability to receive high‐quality health care. This study compares perceived anxiety and its amelioration as a result of three possible health situations: illness with infectious disease, losing one's health and a breakdown of the health care system. This empirical study was conducted within the framework of conjoint analysis. We conducted an experimental design of ideas, identified attributes that increased or reduced anxiety in each of the three health‐related situations and then segmented consumers on the basis of their patterns of reactions to the attributes. We found that the highest anxiety was attributed to the breakdown of the health care system. The segmentation further suggested that the anxiety emerging from the breakdown of society's health care system generated a different extent of anxiety than that which emerged from one's illness or one's loss of own health. The attributes that drove anxiety across the health situations were, surprisingly, charities, one's company, the local hospital and supplemental insurance. Attributes that reduced anxiety differed among segments. The attributes were found to be: close friends, family, distribution of information by authorities and the belief in God. At a practical level, these data and patterns of response allow health care policy makers to enhance the coping ability of patients by understanding the nature of what reduces the anxiety of individual types of patients. The approach in this study provides a person‐centred system for communication and anxiety reduction that can be implemented as part of a public health policy.