Exchange Rate Pegs, Fiscal Policy and Credibility

In a fixed exchange rate regime, an exchange rate change can be a swift way to change the real exchange rate in the short run. Fiscal policy also affects relative prices, and fiscal policy response to various types of shocks can therefore be crucial for the credibility of an exchange rate peg. We develop a model within which fiscal policy plays a crucial role for ensuring the viability and thus credibility of an exchange rate peg. We use the insights of this model to take a closer look at Denmark, which has successfully pursued a fixed exchange rate policy since 1982.

Effect of the ban on short selling on market prices and volatility

We examine the effects of the short‐selling ban, imposed by Australian regulators in the wake of the global financial crisis, on the trading of financial stocks. Our findings argue against commonly stated reasons for imposing short‐sale bans. We find no evidence that short‐sale restrictions provide support for stock prices or that they reduce volatility. Moreover, stocks subject to the short‐selling ban suffered a severe degradation in market quality. Controlling for the adverse effects of the financial crisis on markets, we show that short‐selling restrictions increase intraday volatility, reduce trading activity and increase bid–ask spreads.     

Block Share Purchases and Corporate Performance

This paper investigates the causes and consequences of activist block share purchases in the 1980s. We find that activist investors were most likely to purchase large blocks of shares in highly diversified firms with poor profitability. Activists were not less likely to purchase blocks in firms with shark repellents and employee stock ownership plans. Activist block purchases were followed by increases in asset divestitures, decreases in mergers and acquisitions, and abnormal share price appreciation. Industry-adjusted operating profitability also rose. This evidence supports the view that the market for partial corporate control plays an important role in limiting agency costs in U.S. corporations.     

The Reallocation of Labour and the Lifecycle of Firms

This paper uses a unique US panel dataset of firms and workers toinvestigate the relationship between the firm's lifecycle and the reallocation of labour. We distinguish labour reallocation associated with job reallocation, and reallocation of workers over a fixed configuration of jobs. We find that firms at the beginning and end of their lifecycles contribute disproportionately to labour market lows, with sorting between firms particularly important among young firms, whereas sorting within firms is moreimportant among mature firms. We also find that high churning lows are associated with a lower probability of a young firm surviving.     

Self‐regulation through Goal Setting*

Goals are an important motivator. But little is known about why and how people set them. We address this issue in a model based on two stylized facts. First, goals serve as reference points for performance. Second, present‐biased preferences create self‐control problems. We show the power and limits of self‐regulation through goals. Goals increase an individual's motivation—but only up to a certain point. Furthermore, they are painful self‐disciplining devices. Thus, greater self‐control problems may result in tougher goals; but for a severe present bias goals either lack a motivating force, or are too painful to be accepted.     

Islam-based legal language and state governance: democracy,strength of the judiciary and human rights

Constitutional Political Economy - States embracing Islam-based laws are frequently seen as struggling with establishing democratic institutions, jeopardizing human rights and encouraging executive...     

Utilizing a Value of Information Framework to Improve Ore Collection and Classification Procedures

This case study utilizes a value of information decision framework to provide mine managers guidance regarding the purchase of ore grade scanners. LKAB's Kiruna mine produces three types of iron ore to meet long-term contractual agreements on a monthly basis. There is a priori uncertainty regarding the ore type in any given mineable section of the orebody. In addition, there is extracted ore type uncertainty that is introduced by the mining process. These uncertainties are better understood by obtaining more precise (real-time) information. In addition, a better understanding of the uncertainties can improve the quality of operational decisions and increase the overall profitability of the mine. This case study provides a framework for measuring the economic impact of information purchases in a mining context and discusses the implications of those findings.     

Fledgling firms offer hope on health costs

Julia Adler-Milstein and Ashish Jha Regional health information organizations--RHIOs--are springing up in the United States to meet a vital need: to connect the nation's disparate patient-health information systems. If RHIOs can find a viable business model, they stand to improve the quality and decrease the cost of U.S. health care dramatically.