The Influence and Policy Signalling Role of FOMC Forecasts

Federal Open Market Committee (FOMC) policymakers have published macroeconomic forecasts since 1979 and we examine the effects of FOMC inflation forecasts using a structural VAR model. First, we assess whether they influence private inflation expectations. Second, we investigate the underlying mechanism at work and whether they convey policy signals. We provide original evidence that FOMC inflation forecasts influence private ones. We also find that the influencing effect of FOMC forecasts does not come through current Fed rate changes, that FOMC forecasts affect private expectations in a different way than current policy decisions, and that FOMC forecasts are informative about future Fed rate movements.     

Capital indivisibility and tax competition: Are there too many business areas when some of them are empty?

In this paper, we propose a model where local jurisdictions must engage a development cost before competing for hosting a firm with uncertain preferences among possible sites. We first show that even an optimizing central planner managing all the jurisdictions develops more sites than there are plants to host. Doing so, he diversifies his supply and has a higher probability of hosting the firm. Then, we show that, if every jurisdiction is managed by a local government, there are more developed sites than with the central planner, which implies excess supply.     

Which HRM practices enhance employee outcomes at work across the life-span?

Abstract

Based on the social exchange theory and on ageing and life-span theories, this paper aims to examine: (1) the relationships between perceived availability and use of HRM practices, and employee outcomes (i.e. work engagement and employability); and (2) how employee age moderates these relationships. Using a sample of Nmaximum = 1589 employees, correlational analyses and multiple hierarchical regression analyses were conducted. First, confirming our hypotheses, results showed predominantly positive relationships between work engagement and both perceived availability and use of development HRM practices, such as HRM practices related to learning, development, and incorporating new tasks. The study outcomes opposed, however, our hypotheses with predominantly negative relationships between work engagement and perceived availability and use of maintenance HRM practices. Predominantly positive relationships were furthermore found, as was hypothesized, between employability and perceived availability and use of development as well as maintenance HRM practices. Generally speaking, these results were not more pronounced for any of the age groups. That is, age appeared to not play any significant moderating role. Research limitations, implications for practice and directions for future work are also discussed.     

Data snooping in equity premium prediction

We analyze the performance of a comprehensive set of equity premium forecasting strategies. All strategies were found to outperform the mean in previous academic publications. However, using a multiple testing framework to account for data snooping, our findings support Welch and Goyal (2008) in that almost all equity premium forecasts fail to beat the mean out-of-sample. Only few forecasting strategies that are based on Ferreira and Santa-Clara’s (2011) sum-of-the-parts approach generate robust and statistically significant economic gains relative to the historical mean even after controlling for data snooping and accounting for transaction costs.     

Who drives climate-relevant policies in the rising powers?

The future of human life on our planet is influenced increasingly by what goes on in the rising powers. This paper provides a political economy analysis of the climate-relevant policies of China, India, Brazil and South Africa. It shows that alliances play a key role in driving such policies. However, most actors who support such policies have priorities other than climate change mitigation. Their support for such policies comes from concerns with securing energy, building competitive green industries, creating jobs or providing a basis for future public revenue. This insight is not just of analytical but also of political importance. It means that climate-relevant policies can draw on support from a wide constituency – not just those with green convictions. Such analysis provides the stepping-stone for understanding the political feasibility of low-carbon transformations.