The Satellite Insurance Market and Underwriting Cycles

This research analyses whether underwriting cycles are present in an important but often overlooked line of insurance, satellite insurance. Unlike previous underwriting cycle studies, this study uses rates-on-line and capacity devoted to satellite insurance as well as loss ratios to determine the applicability of cycles. The sample period encompasses virtually the entire history of the satellite insurance industry, 1968–2010. The results indicate that cycles are present in the minimum and average rates-on-line and in capacity, but not the loss ratio. Regression analysis is carried out on the rate-on-line and capacity variables, and the regression results support the rational expectations/institutional intervention hypothesis and the capacity constraint (capital shock) hypothesis.     

Selecting Your Inflation Targeters: Background and Performance of Monetary Policy Committee Members

Abstract. This paper starts by describing the composition of monetary policy committees (MPCs) in inflation‐targeting and non‐targeting countries. The experience of MPC members on their inflation performance is then compared, opposing inflation targeters with non‐targeters. Our sample covers the major Organization for Economic Cooperation and Development countries, in the period 1999–2008. Our results first show that MPCs are different in inflation‐targeting (versus non‐targeting) countries. They also reveal that policy‐makers' backgrounds influence inflation, and that the influence of MPCs' experience is much greater in inflation‐targeting countries, while size effects are more important for committees that do not target inflation.     

A risk-driven approach to exchange rate modelling

The paper presents a new approach to exchange rate modelling that augments the CHEER model with a sovereign credit default risk as perceived by financial investors making their decisions. In the cointegrated VAR system with nine variables comprised of the short- and long-term interest rates in Poland and the euro area, inflation rates, CDS indices and the zloty/euro exchange rate, four long-run relationships were found. Two of them link term spreads with inflation rates, the third one describes the exchange rate and the fourth one explains the inflation rate in Poland. Transmission of shocks was analysed by common stochastic trends. The estimation results were used to calculate the zloty/euro equilibrium exchange rate.     

The Influence of General Strikes against Government on Stock Market Behavior

Using a sample of 76 countries, this paper examines the impact of major strikes against government and its policies on stock market behavior. An occurrence of a general strike is detrimental to the value of equities, as documented by the ceteris paribus 6.11% fall in dollar-denominated stock market indices of the affected countries. This event is also accompanied by a statistically significant increase in risk, as measured by the standard deviation of returns and Value-at-Risk metrics. Taken together, these results imply that general strikes have serious ramifications for stock market investors.     

REGIONALISM AND FREE-MARKET REFORM: THE CASE OF POLAND

In Poland, there is a widening gap between well-developed core regions and depressed peripheral ones. This article argues, on the one hand, that any EU- or government-funded assistance to less developed areas should be accompanied by nationwide liberalisation and, on the other, that lack of reform and increasing regional disparities might fuel discontent in the worst-off regions, which, in turn, might make politicians adopt a fully-blown interventionist policy.     

A double-edged sword? The moderating effects of control on firm capabilities and institutional distance in explaining foreign affiliate performance

By drawing from the internalisation and institutional theories, as well as the organisational capability perspective, the paper analyses the moderating effects of parent control over foreign affiliates in relation to firm capabilities and institutional distance and their performance effects. These relationships are explored in the context of new MNEs from Poland as a mid-range emerging economy, for which ownership choices constitute critical decisions given their early stage of internationalisation. Our findings show that while firm capabilities drive foreign affiliate performance, the increase of parent control limits this beneficial effect, suggesting the potential occurrence of organisational inertia and reduction of learning in foreign markets. On the contrary, we also find partial evidence that the increase of parent control reduces the negative effect of institutional distance computed based on the Mahalanobis formula. Accordingly, the study suggests a certain ambiguity of parent control in affecting affiliate performance.     

Panel Data Evidence on the Effects of Fiscal Policy Shocks in the EU New Member States

We identify fiscal policy shocks in the EU new member states using four different methods. We use panel data techniques to estimate the output response to these shocks. We find that investment and export growth increase after fiscal consolidation and decelerate after fiscal stimulus when the shocks are expenditure‐based. In contrast, private consumption does not respond to fiscal policy shocks. Expenditure‐based fiscal consolidations reduce wages, supporting the view that fiscal consolidation of such composition enhances the competitiveness and profitability of domestic enterprises. In contrast, we do not find evidence of fiscal shocks affecting households' confidence.     

New development: Corporatization of local authorities in England in the wake of austerity 2010–2016

A key institutional driver of current reforms within English local government is ‘alternative service delivery’. Our review of councils’ annual accounts between 2010/11 and 2016/17 suggests ‘corporatization’—the creation of local authority companies—is a growing phenomenon across the whole of English local government. This represents such a significant and far-reaching development in the governance, performance and efficiency of local public services that it constitutes a major field-level change at the interstices of the institutions of state, market, corporation and community. In this article, the authors briefly sketch ways corporatization could be regarded as a field-level change, before presenting findings and reflecting on their implications.