Efficient forecast tests for conditional policy forecasts

Central Banks regularly make forecasts, such as the Fed’s Greenbook forecast, that are conditioned on hypothetical paths for the policy interest rate. While there are good public policy reasons to evaluate the quality of such forecasts, up until now, the most common approach has been to ignore their conditional nature and apply standard forecast efficiency tests. In this paper we derive tests for the efficiency of conditional forecasts. Intuitively, these tests involve implicit estimates of the degree to which the conditioning path is counterfactual and the magnitude of the policy feedback over the forecast horizon. We apply the tests to the Greenbook forecast and the Bank of England’s inflation report forecast, finding some evidence of forecast inefficiency. Nonetheless, we argue that the conditional nature of the forecasts made by central banks represents a substantial impediment to the analysis of their quality—stronger assumptions are needed and forecast inefficiency may go undetected for longer than would be the case if central banks were instead to report unconditional forecasts.     

Analysing enterprise architecture maturity models: a learning perspective

In order to aid organisations in the adoption of enterprise architecture (EA) best practices, maturity models have been proposed in the literature. These models offer organisational roadmaps and assessment frameworks for increasing EA maturity. However, key questions concerning the implied meaning of the term maturity in the context of these models have been left unexplored by previous research. This research, aided by the field of organisational learning, offers new insights into the implied assumptions of current EA maturity models and offers initial concepts and constructs to guide the conceptualisation, construction and refinement of enterprise maturity models.     

Social networks,mass media and public opinions

Our opinions and ideas are shaped by what our friends said and what we read or watched on mass media. In this paper, we propose a concise and analyzable model to study the effects of mass media modeled as an applied external field, and social networks on public opinions based on the multi-state voter model, and a tuned parameter can control the relative intensity of the effects of mass media and social networks. We consider a generalized scenario where there exist committed or stubborn agents in the networks whose opinions are not affected by their friends or mass media. We find that the fraction of each opinion will converge to a value which only relates to the fractions and degrees of stubborn agents, and the relative intensity between media and network effects. The final agents with media opinion, except the stubborn agents, also include the increment produced by the internal impact of social networks and that caused by the external impact of media. Interestingly the second increment is composed of two parts, one is from the media effect when there are no interactions between agents and the other is from the influence of media on agent opinions caused by social network structure. That is the interactions among agents within social networks can amplify media influence. Finally we also discuss several extensions to the dynamics model which consider more realistic scenarios.     

Offshore Outsourcing: Implications for International Business and Strategic Management Theory and Practice

abstract    In this essay, I discuss the implications of the debate over offshoring for our collective understanding of international business and management theories. I review several core theories in international business expansion and management strategy to assess which elements of these theories may need to be re-specified in light of the offshoring phenomenon and which aspects remain relevant. I then present normative implications and recommendations for public policy and corporate strategy, drawing from emerging insights regarding the global responsibilities of corporations. I suggest that international labour and environmental standards and corporate codes of conduct could mitigate some of the most intense concerns raised about offshoring but conclude that offshoring is likely to present challenges to societies, corporations, and stakeholders for many decades.     

When haste makes sense: Cracking down on street markets for illicit drugs

This paper presents an analytical approach to the tactical question: ‘What level of enforcement over time allows one to eliminate a street market for illicit drugs while expanding the least possible total effort?’ The analysis is done in the context of Caulkins' model [6] which predicts the rate of change of dealers as a function of enforcement level and several market parameters. Our analysis suggests that the simple strategy of using the maximum available enforcement intensity until the market has been eliminated minimizes the total enforcement effort required.     

Contestability in bus markets – evidence from the British de-regulated market

Following the 1985 Transport Act in Great Britain, reforms in the provision of bus services continue across Europe and other parts of the world to this day. The British experience, however, remains a key point of study in informing these continuing developments. This article looks at the issue of contestability in bus markets, and tests for the existence of the contestable market in Britain through an examination of fare levels, profit margins and technical efficiencies in 90 identifiable bus markets. The main conclusion is that there is evidence of the contestable market in Britain, however it can hardly be described as widespread, only found to be present in 15 of the 90 markets identified in the sample. The real issue however, particularly with regard to continuing reforms elsewhere in Europe, is the ability of regulatory authorities to maintain competitive and contestable (free) markets and the research suggests that in the face of market forces this is simply not possible. The only conclusion therefore is that contestability in the free market is not sustainable, and thus can only be introduced directly through franchising.     

Signalling,Disclosure And The Implications Of Financial Structure For Uk Corporate R&D ∗

This paper investigates the impact of R&D disclosure and finance variables on the level of R&D expenditures. The question addressed is: what is the impact of changes in disclosure requirements on the relationship between R&D expenditure and the financing of firms? The question is motivated by the possible signalling role that elective disclosure may have had prior to changes in accounting practices to ensure R&D disclosure.     

Forecasting VoWLAN technology for the Taiwan mobile telecommunication industry

Disruptive innovation is always a great challenge to the management of incumbent firms, especially in fast-changing industries. In this study, scenarios were developed to facilitate strategic decision-making by incumbent mobile telecommunications firms that confront the threats of disruptive technology of voice over wireless local area network (VoWLAN). Combining various possible outcomes of uncertain conditions and strategic alternatives available to the incumbent firms, six scenarios were developed: incremental evolution, disruptive evolution, cost deterrence, fierce competition, market pre-emption and market convergence. The results show that a passive ‘do-nothing’ strategy by incumbent firms leads to failure if the disruptive technology is inevitable. However, firms can slow the pace of disruptive technology by applying a price-cut strategy and enjoy several years of profits in the process. Industrial insights and strategic implications obtained from all the scenarios are discussed.