The Phillips curve under state-dependent pricing

We derive a Phillips curve equation from the dynamic stochastic general equilibrium (DSGE) model with state-dependent pricing developed by Dotsey et al. [1999. State-dependent pricing and the general equilibrium dynamics of money and output. Quarterly Journal of Economics 114, 655-690]. This state-dependent Phillips curve encompasses the new Keynesian Phillips curve (NKPC) based on Calvo-type price setting as a special case. We analyze the effect of the state-dependent terms (that is, the variations in the distributions of price vintages) on inflation persistence, and we examine whether the hybrid NKPC (that is, the NKPC extended by a lagged inflation term) can adequately describe inflation dynamics generated in a calibrated state-dependent pricing economy.     

Unconscious Processes of Organizing: Intergroup Conflict in Mental Health Care

A critical but overlooked issue in Weick’s seminal work, The Social Psychology of Organizing (1969/1979), concerns ‘the heat’ of organizing processes, namely, the underground emotional processes underpinning the organizing of conflictual work relationships. We present a qualitative case study of psychiatric agencies mandated by public policy to collaborate but instead engaged in persistent conflict despite its deleterious effects on their working relationship and on the wellbeing of the clients they intended to serve. To explain these conflictual features of organizing, we integrate Weick’s organizing theory with systems psychodynamics to deepen the understanding of emotions in organizing, specifically the motivational forces underpinning sensemaking and actions between interacting psychiatric agencies. This integration of theories reveals a critical feature of the relationship between the conscious and unconscious organizing processes: When a threat is involved, sensemaking and action are overtaken by social defences, resulting in dysfunctional organizing of the primary task. Drawing on these findings, we enrich Weick’s seminal work by developing a model that portrays organizing as the ritualized interaction of emotions, sensemaking and behavioural responses.     

Reasserting Institutionalist Insights on the Good Society: 30 Years After Petr’s Call for a Mixed Economy

In this research note, I revisit the issues raised by Jerry Petr (1987) in “The Nature and Necessity of the Mixed Economy.” The institutionalist mixed economy is still a sound model for the good society. However, Western industrialized countries have been losing ground on the goals of the mixed economy. The struggle to defend pragmatism over ideological attachment to neoliberalism, has evolved into a distributional struggle that cannot be resolved without institutional change.     

When should a leader apologize and when not?

When corporate leaders or the organizations they represent mess up, they face the difficult decision of whether or not to apologize publicly. A public apology is a risky move. It's highly political, and every word matters. Refusal to apologize can be smart, or it can be suicidal. Readiness to apologize can be seen as a sign of character or one of weakness. A successful apology can turn enmity into personal and organizational triumph--while an apology that's too little, too late, or too transparently tactical can open the floodgates to individual and institutional ruin. Since the stakes are so high, Kellerman says, leaders should not extend public apologies often or lightly. One or more of the following conditions should apply: The apology is likely to serve an important purpose. The offense is of serious consequence. It's appropriate that the leader assume responsibility for the offense. The leader is the only one who can get the job done. The cost of saying something is likely lower than the cost of staying silent. The author draws her conclusions from hard data and abundant anecdotal evidence, examining notoriously bad apologizers as well as exceptionally good ones. While selectivity is key, good apologies usually do work. What constitutes a good apology? Acknowledgment of the mistake or wrongdoing, acceptance of responsibility, expression of regret, and assurance that the offense will not be repeated.     

Uncertainty and the arbitrage pricing theory

This paper tests the economic importance of income uncertainty in the context of a measured factor arbitrage pricing theory model. This provides a test of the importance of uncertainty using a different methodology and data set than are traditionally used. If income uncertainty affects the investment climate, a statistically significant risk premium will be associated with assets that are affected by uncertainty. The empirical work in this essay finds that a generalized autoregressive conditional heteroskedasticity measure of income uncertainty is a priced factor in a model of the arbitrage pricing theory. The risk premium between a baa-rated 10-year corporate bond and a 10-year government bond, as well as the term structure, also are priced factors.     

Exports,imports and growth: New evidence on Italy: 1863–2004

The nexus between trade and economic growth in Italy has been widely debated by historiography. However, there are no long run analyses on this topic that cover the whole span from Unification to present days. This paper contributes to fill this gap by investigating the relationship between real exports, imports and GDP in Italy from 1863 to 2004 by using cointegration analysis and causality tests. The outcome suggests that these variables comove in the long run but the direction of causality varies across time. In the period prior to the First World War import growth led GDP growth that in turn led export growth. Conversely, in the post-Second World War period we have a strong bidirectionality between imports and exports consequent on the increase in intra-industry trade. We also find a weak support for export-led growth and growth-led imports. This suggests that exports were not the only or the main driver of economic growth. There was probably a multiplicity of factors at work, among which high rates of capital formation and the expansion of internal demand probably stood out.     

Keynes at the periphery: Currency hierarchy and challenges for economic policy in emerging economies

While the post Keynesian literature offers a rather clear concept for growth-oriented policies, it is necessary to adapt them for peripheral emerging economies. We base our analysis of an appropriate Keynesian policy mix for these countries on the concept of currency hierarchy, where the currencies of peripheral emerging economies have a lower liquidity premium than the currencies of advanced economies. The international asymmetry related to the currency hierarchy, amplified by financial globalization, imposes major constraints to the adoption of Keynesian policies for these economies. Under these conditions, we argue that domestic economic policy coordination should lay a major focus on a low policy rate and, especially, a competitive exchange rate for obtaining, at least, a balanced current account, in order to prevent capital flows boom-bust-cycles with subsequent financial crises. We conclude that it is a rather ambitious and long-term goal to climb up the currency hierarchy, especially under the current condition of financial globalization.     

Does different NPD project’s characteristics lead to the establishment of different NPD networks? A knowledge perspective

In today’s highly competitive and globalised marketplace, firms need more and more to develop new knowledge and capabilities to leave behind their competitors, thus gaining market share. Knowledge is fundamental for success because a firm that knows more, often develops more sustainable competitive advantage. Networks, like those oriented to New Product Development, seem to be valuable means of learning, as firms could not achieve alone the same results, or at least not as quickly. Through this integrative systematic review, we are interested in understanding whether different New Product Development projects correspond to different New Product Development networks in terms of knowledge exchanged among the partners involved. Our results highlight the presence of four types of New Product Development networks deriving from the combination of the degree of innovation characterising the project and its mode of development. Implications and future research are also proposed.