The Fiction of Neutral Inflation

Though less frequent with the years, intermittent calls for 'reflation' to stimulate the economy can occasionally still be heard from Keynesian economists and politicians. Eli Schwartz, Professor of Economics at Leghigh University, Pennsylvania, examines the effects of inflation, anticipated and unanticipated, on participants in the economy. Professor Schwartz argues that, in spite of the short-term political benefits, the longer-term costs are so high that less myopic politicians may perceive the electoral advantages in tackling inflation.     

Real Wages and Employment: Four Great Economists: Pigou, Simons, Keynes and Hansen

Professor Eli Schwartz of Lehigh University reviews the theories of Pigou, Simons, Keynes and Hansen concerning unemployment. He concludes that we are in a'Pigovian'world where unemployment is due to defects in the labour market.     

Minimum wages in Spain

In Spain the minimum wage appears to have no significant employment-reducing effect for workers over 18. For the under 18s, however, minimum wages and employment are negatively related. The government should consider lowering the minimum wage for younger workers.     

Strategy in motion: Using motion pictures to illustrate strategic management concepts

A company is more likely to enjoy excellent organizational performance if its employees understand the importance of strategic management and are actively engaged in helping the company pursue its strategies. Many employees view strategy as disconnected from their jobs, however, and getting them to embrace strategy can be challenging. Using a series of vivid examples, we describe how motion pictures can bring strategic management concepts to life for employees. By making strategic management concepts more relevant and less abstract, movies can lead employees to enjoy thinking about and discussing strategy.     

Input specificity and global sourcing

This paper identifies a new industry-equilibrium channel through which a firm’s productivity affects its organizational choice. In a two-country model with firm heterogeneity and incomplete contracts, we show that the degree of input specificity and the hold-up friction in an outsourcing relation become a function of the final good firm’s productivity when inputs are not completely specific. We examine the implications for the equilibrium international sorting pattern of firms.     

Relying on the heuristic of trust: a case study

This study examines the reliance on trust as a heuristic by individuals when making personal financial decisions, using a qualitative case study. We show that in the face of complexity and choice, individual investors predominantly resorted to the heuristic of trust to make financial decisions. This demonstrates the need for industry and public policy‐makers to be aware that individuals can and will resort to simplified heuristics as a basis for financial decision‐making, particularly within an environment where substantial complexity and choice exist.