Business cycle stylized facts and inventory behaviour: New evidence for the Euro area

The purpose of this paper is for the first time to use Business Tendency Survey data, first, to identify new facts that are useful for the interpretation of the decline in the volatility of real activity in the Euro area, and, second, to test the inventory management hypothesis as an explanation for the Great Moderation in Europe. We present stylized facts from the Business Tendency data on series for inventories, current production, current orders, and expected production for the Euro area, emphasizing the decline in the volatility of the series. Further, we investigate whether the decline in inventory volatility can be attributed to an endogenous change in the persistence of shocks to the accumulation dynamics of inventories or to an exogenous change in the shocks hitting the inventory optimisation process. Our results at Euro level generally indicate that there is no evidence of a break in the inventory accumulation process. On the contrary, the impact of exogenous shocks on inventory volatility appears to be steadily declining over time, beginning from the mid-1980s.     

Trust during retail encounters: A touchy proposition

Adopting an interpersonal communication perspective, this study examines the propositions that a salesperson's touch increases trust, which increases product evaluations and purchase intention. These relationships are evaluated in a contact and non-contact culture, with need for touch (NFT) examined as an additional moderator. An exploratory series of in-depth interviews provides an initial understanding of these relationships, followed by a 2 (touch/no touch condition) × 2 (consumers in France/Germany) experiment with wine serving as the example category. The findings indicate that touch does not uniformly instill trust in customers. Instead a salesperson's touch relates to greater trust only when consumers have an inherent NFT or when they are from a culture where personal touching behavior is less prevalent. Trust, in turn, relates positively to evaluations of product attractiveness, quality, and to purchase intention.     

Strategy for Implementation of IFAC International Education Guideline No. 9: "Prequalification Education, Tests of Professional Competence and Practical Experience of Professional Accountants": A Task Force Report of the International Association for Accounting Education and Research (IAAER)

This paper provides strategies for implementing the recommendations of the International Education Guideline No. 9 (hereafter referred to as Guideline), issued by the International Federation of Accountants. The three principal implementation issues addressed in this paper are as follows. (1) How to instill the characteristics of lifelong learning in future professional accountants through accounting education. (2) How to design and implement a program of accounting education that achieves the objectives of the Guideline . (3) How to develop awareness and encourage adoption of the recommendations of the Guideline by communicating and disseminating information through a series of projects within IFAC's constraints and policies.     

The current account as a dynamic portfolio choice problem

The current account can be understood as the outcome of investment decisions made by domestic and foreign investors. These decisions can be decomposed into portfolio rebalancing and portfolio growth components, as highlighted by theoretical models. The empirical literature draws attention to the relative importance of portfolio rebalancing to explain fluctuations in capital flows, although they do not shed light on the mechanisms behind these rebalancing effects. In this paper, we provide empirical evidence of the importance of portfolio rebalancing driven by changes in investment opportunities for the dynamics of the current account. In particular, we evaluate the predictions of a partial-equilibrium model of the current account with dynamic portfolio choices, in which portfolio rebalancing is driven by changes in expected asset returns. Focusing on the dynamics of the current account between Japan and the US, we find evidence supporting innovations in investment opportunities as an important mechanism to explain international capital flows.     

Inheritance patterns in migration-prone communities of the Peruvian Highlands

On the basis of detailed information on inheritance practices collected in the course of an in-depth survey of three Andean communities of Peru, and unlike most empirical studies which rely on remittance functions, we have been able to estimate an inheritance function with a view to identifying the main factors associated with particular patterns of land bequests. A central result is that the positive relationship between caring and a favourable access to land bequest indeed exists, yet is only observed for migrant children (whether urban or rural, long-distance or short-distance migrants). Combined with other findings and observations, this result strengthens the case for an interpretation based on an active role of potential heirs in the determination of inheritance outcomes. It therefore calls into question the strategic bequest theory which presumes that parents are the ultimate decision-makers in this matter. In addition, our study shows that inheritance patterns are complex: besides migration and caring behavior, personal characteristics of potential heirs, such as gender, birth order, and family status (having children or not), do appear to influence division of parental land.     

Assessing Inertia in Canadian Markets for Table Eggs

Firms may fail to adjust instantaneously to fluctuations in demand, which causes “sticky prices.” Demand can also be “sticky” due to certain types of consumer behavior. We estimate inertia in the market for shell eggs sold in Canadian supermarkets. In the absence of price information, the analysis is performed using only quantities purchased by individual consumers. From a sample of five store brands of shell eggs sold in Alberta and Ontario, we find the egg market in Alberta to show considerable inertia, while little evidence of inertia is found for the Ontario market. Implications for egg production and retail sectors are discussed. Il se peut que les entreprises ne réussissent pas è s'ajuster instantanément aux fluctuations de la demande, entraînant ainsi la rigidité des prix. Certains comportements du consommateur peuvent entraîner la rigidité de la demande. Nous avons estimé l'inertie du marché des ?ufs en coquille vendus dans les supermarchés canadiens. En l'absence d'information sur les prix, nous avons effectué l'analyse en utilisant les quantités d'?ufs achetés par des consommateurs individuels. À partir d'un échantillon de cinq marques d'?ufs en coquille vendus dans des épiceries de l'Alberta et de l'Ontario, nous avons conclu que l'inertie du marché des ?ufs en Alberta était considérable, tandis que l'inertie du marché en Ontario était faible. Nous avons examiné les répercussions de nos résultats sur la production d'?ufs et le secteur du commerce de détail.     

Binary choice models with discrete regressors: Identification and misspecification

This paper explores the inferential question in semiparametric binary response models when the continuous support condition is not satisfied and all regressors have discrete support. I focus mainly on the models under the conditional median restriction, as in Manski (1985). I find sharp bounds on the components of the parameter of interest and outline several applications. The formulas for bounds obtained using a recursive procedure help analyze cases where one regressor’s support becomes increasingly dense. Furthermore, I investigate asymptotic properties of estimators of the identification set. I describe a relation between the maximum score estimation and support vector machines and propose several approaches to address the problem of empty identification sets when the model is misspecified.     

Controlled and uncontrolled communication stimuli and organic food purchases: The mediating role of perceived communication clarity,perceived health benefits,and trust

Despite a growing demand worldwide, organic food remains a niche category, with consumers only purchasing it some of the time. This study examines the mediating effects of consumers’ perceived clarity of organic food-related communication, trust for, and perceived health benefits of organic foods in the relationship between controlled and uncontrolled communication stimuli and organic food purchases. We test our hypotheses on a sample of 1011 Australian organic food consumers using Structural Equation Modeling. We find that all mediators except perceived communication clarity perform as hypothesized, with the latter not mediating the relationship between uncontrolled communications and perceived health benefits of organic foods. The results suggest that marketers should ensure clarity in controlled organic food communications, signal health benefits of organic food and build consumer trust to generate organic purchases.     

Tax progressivity, income distribution and tax non-compliance

This article examines the determinants of tax non-compliance when we recognise the existence of an imperfectly competitive “tax advice” industry supplying schemes which help taxpayers reduce their tax liability. We apply a traditional industrial organisation framework to model the behaviour of this industry. This tells us that an important factor determining the equilibrium price and hence, the level of non-compliance, is the convexity of the demand schedule. We show that in this context, this convexity is affected by the distribution of pre-tax income, the progressivity of the tax-schedule and the way in which monitoring and penalties vary with income. It is shown that lower pre-tax income inequality as well as a less progressive tax code may cause more tax minimisation activities. Therefore, the frequently advocated policy of reducing the highest tax rate may fail as a policy directed at improving tax discipline. One way of offsetting the possible harm to tax compliance from a less progressive tax could be an adjustment of the penalty and monitoring functions.     

The Interactions between Fiscal Policy and Monetary Policy

This paper studies the interactions of fiscal policy and monetarypolicy when they stabilize a single economy against shocks ina dynamic setting. If both policy-makers are benevolent, then,in our model, the best outcome is achieved when monetary policydoes nearly all of the stabilization. If the monetary authoritiesare benevolent, but the fiscal authority discounts the future,or aims for an excessive level of output, then a Nash equilibriumwill result in large welfare losses: after an inflation shockthere will be excessively tight monetary policy, excessive fiscalexpansion, and a rapid accumulation of public debt. However,if, in these circumstances, there is a regime of fiscal leadership,then the outcome will be very nearly as good as when both policy-makersare benevolent. Footnotes ¹ E-mail addresses: t.kirsanova{at}exeter.ac.uk; jari.stehn{at}bnc.ox.ac.uk;david.vines{at}economics.oxford.ac.uk