Corporate strategy and information disclosure

We examine voluntary disclosures of information about corporate strategies. We develop a model in which managers choose whether to reveal their strategic plans only to some partners of the firm or also to the outside world. We show that managers face a tradeoff when deciding whether to disclose their private information to outsiders. On the one hand, by disclosing their intentions, managers become reluctant to change their minds in the future. This may lead them to make inefficient project implementation decisions. On the other hand, information disclosure about corporate strategy provides strong incentives for partners of the firm to undertake strategy‐specific investments.     

纽约大学商学院 5亿人的潜在客户群

在经济衰退时期，既有消费激情又未被充分开发的客户群是什么？他们在哪？请留意遍布全球的2亿移民以及他们家乡的亲属，这是一个规模高达5亿人的潜在客户群。2007年全球移民对其亲属的汇款总额达3500亿美元，这个数字是同年OECD富裕国家对发展中国家援助总金额的3倍。在美国，拉丁裔作为最大的移民群体，购买力已经超过8000亿美元。     

Investigating exchange rate shocks on agricultural trade balance: The case of Tunisia

The paper studies the impact of changes in Tunisia's exchange rate on the net external position of the agricultural sector. It shows that substitutability on production and consumption among domestically produced goods leads to an ambiguous impact for reasons that go beyond the Marshall-Lerner condition. Using cointegration techniques to disentangle the long and short-run impact of changes in the exchange rate on the net agricultural trade balance, we find that the depreciation of the domestic currency leads to a deterioration of the net external position of Tunisia's agricultural sector in the long-run.     

Information and strategic voting

We theoretically and experimentally study voter behavior in a setting characterized by plurality rule and mandatory voting. Voters choose from three options. We are interested in the occurrence of strategic voting in an environment where Condorcet cycles may occur and focus on how information about the preference distribution affects strategic behavior. We also vary the relative importance of the second preferred option. Quantal response equilibrium analysis is used to analyze the game and derive predictions. Our results indeed show that strategic voting arises. Its extent depends on (i) information availability; (ii) the relative importance of the intermediate candidate; (iii) the electorate’s relative support for one’s preferred candidate; (iv) the relative position of the plurality-supported candidate in one’s preference ordering. Our results show that information serves as a coordination device where strategic voting does not harm the plurality-preferred candidate’s chances of winning.     

Wage restraint and monetary union

Existing work on wage bargaining predicts more aggressive wage setting under monetary union. This is exemplified by Cukierman and Lippi (2001) who postulate that wages are set having area-wide prices in mind. The insight of aggressive wage behaviour has not been confirmed by the EMU experience, which has been characterised by wage moderation. The present paper investigates the possibility of wage restraint using a monetary union model which, realistically, assumes that trade unions set wages with national prices in mind. Drawing on plausible ranges for all parameter values (and macroeconomic shocks), our simulations show that a monetary union elicits real wages that are broadly comparable to those obtained under monetary autonomy. The confidence bounds around these results are rather wide, in particular including scenarios of wage restraint.     

Congestion pricing,transit subsidies and dedicated bus lanes: Efficient and practical solutions to congestion

We analyze urban congestion management policies through numerical analysis of a simple model that: allows users to choose between car, bus or an outside option (biking); consider congestion interactions between cars and buses; and allow for optimization of frequency, vehicle size, spacing between stops and percentage of capacity to be dedicated to bus lanes. We compare resulting service levels, social welfare and consumer surplus for a number of different policies and find that: (i) dedicated bus lanes is a better stand-alone policy than transit subsidization or congestion pricing. The latter is marginally better than subsidization but has a negative impact in consumer surplus. (ii) Efficient transit subsidies are quite large since in many cases first-best transit price is negative; establishing dedicated bus lanes or implementing congestion pricing render subsidies unnecessary for high demand levels. (iii) Both subsidization and dedicated bus lanes would count with public support while congestion pricing would probably encounter opposition. (iv) Transit subsidies and/or congestion pricing do not induce large changes on optimal bus size, frequency, circulation speeds and spacing between stops in mixed-traffic conditions: dedicated bus lanes do. (v) In all cases analyzed, revenues from congestion pricing are enough to cover transit subsidies; the optimal percentage of capacity that should be devoted for bus traffic is around one third.     

FORECASTING REALIZED VOLATILITY WITH LINEAR AND NONLINEAR UNIVARIATE MODELS

Abstract In this paper, we consider a nonlinear model based on neural networks as well as linear models to forecast the daily volatility of the S&P 500 and FTSE 100 futures. As a proxy for daily volatility, we consider a consistent and unbiased estimator of the integrated volatility that is computed from high‐frequency intraday returns. We also consider a simple algorithm based on bagging (bootstrap aggregation) in order to specify the models analysed in this paper.     

Informality,Size and Regulation: Theory and an Application to Egypt

The paper shows how, when the enforceability of regulationsis size-sensitive, price competition can lock firms into informality and,thus, smallness, depending on the form of the production function. In thatcontext, exogenous "help" packages targeted to informal firms "promote"micro and small enterprises (i.e., increase their numbers) but do not"develop" them (i.e., foster their growth). The "help" only generates ashort-term span of abnormal profits for existing informal firms, and a long-term income transfer toward informal-market consumers. The model istested in the context of Egypt's micro and small enterprise sector.     

LOBBYING COMPETITION OVER TRADE POLICY*

Competition between opposing lobbies is an important factor in the endogenous determination of trade policy. This article investigates the consequences of lobbying competition between upstream and downstream producers. The theoretical structure underlying the empirical analysis is the well‐known Grossman–Helpman model of trade policy determination, modified to account for the cross‐sectoral use of inputs (itself a quantitatively significant phenomenon, with around 50% of manufacturing output being used by other sectors rather than in final consumption). Our empirical results validate the theoretical predictions. Importantly, accounting for lobbying competition also alters substantially estimates of the “welfare‐mindedness” of governments in setting trade policy.