The impact of free and exaggerated prices on perceived quality of services

Previous research in the price-quality area has largely limited its focus to the normal price range and has concentrated on physical goods almost entirely. This study examines the effect of offering a service for free and at an exaggerated price on the perception of its quality. Consistent with the theory developed in this paper, the experimental results suggest that when the tested services are offered for free and for exaggerated prices, they are perceived as lower in quality than when they are offered in a normal price range.     

Explaining Foreign Holdings of Asia's Debt Securities: The Feldstein–Horioka Paradox Revisited*

In this paper, we find that home bias is still present in all economies and regions, especially in the case of short‐term debt securities, but that there are substantial variations among economies and regions in the strength of home bias, with the eurozone economies, the USA and developing Asia showing relatively weak home bias and advanced Asia, especially Japan, showing relatively strong home bias. We then examine trends over time in foreign holdings of debt securities and find that capital has been flowing from the USA and the eurozone economies to both advanced Asia (especially Japan) and developing Asia, and that foreign holdings of debt securities have been increasing in advanced as well as developing Asia but for different reasons. The main reason in the case of advanced Asia (especially Japan) appears to be higher risk‐adjusted returns, whereas the main reason in the case of developing Asia appears to be the growth of debt securities markets combined with relatively weak home bias and (in the case of short‐term securities) lower exchange rate volatility. Finally, we find that since the global financial crisis, foreign holdings of debt securities have declined (i.e. that home bias has strengthened) in all economies and regions except developing Asia, where they have increased (except for a temporary decline in 2008) but where their share is still much lower than the optimal share warranted by the capital asset pricing market model.     

Measuring the dynamics of APEC output connectedness

We examine the dynamics of output connectedness of Asian Pacific Economic Cooperation (APEC) economies using time‐varying, region‐specific, generalised connectedness measures. We find that the connectedness of APEC economies with the rest of the world is quite substantial, with the 2008–09 Global Financial Crisis increasing the connectedness measures above their precrisis levels. The USA, China, and Korea are shown to be systemically important and to dominate APEC’s real activities, while outside the APEC region the roles of India and the UK are also non‐negligible. These results suggest that the majority of APEC economies are considerably open to output shocks from the dominant economies such that policymakers in APEC must be continuously conscious of headwinds originating from these sources.     

A Limited Central Bank

The President of the Philadelphia Federal Reserve Bank from 2006–2015 discusses the Fed's essential role as preserver of the currency's purchasing power and how the institution might be improved to better fulfill that role. To that end, the author proposes the imposition of four limits on the central bank that, by restricting its discretion, can be expected to improve outcomes and accountability.

• First, limit the Fed's monetary policy goals to a narrow mandate in which price stability is the sole, or at least the primary, objective;
• Second, limit the types of assets that the Fed can hold on its balance sheet to Treasury securities;
• Third, limit the Fed's discretion in monetary policymaking by requiring a systematic, rule‐like approach; and
• Fourth, limit the boundaries of its lender‐of‐last‐resort credit extension.

These changes, by creating a more limited central bank, would help preserve the central bank's independence, thereby improving the effectiveness of monetary policy. They would also make it easier for the public to hold the Fed accountable for its policy decisions.     

Differences in large and small firm responses to environmental context: strategic implications from a comparative analysis of business formations

Despite growing recognition of some strategic advantages held by small firms, little comparative research has been performed on the advantages and disadvantages accruing to firm size. In order to delineate the differential responses of small and large businesses to their environmental context, we perform a comparative analysis of the impact of industry structural characteristics on the formation of large and small businesses in a large sample of U.S. manufacturing industries from 1977 to 1987. The results suggest that small businesses possess certain resources that allow them to overcome some barriers which create greater difficulties for their larger counterparts, as well as allow small businesses to exploit certain industry opportunities more readily than larger ones. © 1998 John Wiley & Sons, Ltd.     

Black-White Differences in Consumption: An Update and Some Policy Implications

Marcus Alexis, in his Ph. D. dissertation and in later published work, conducted pioneering work in the area of black-white differences in consumption behavior and thereby influenced our understanding of household behavior and significantly impacted the field of marketing. This paper recapitulates his findings and reviews some contemporary work on black-white differences in consumption and some implications for future work on differences in consumption behavior.     

PEOPLING THE VICTORIAN GOLDFIELDS: FROM BOOM TO BUST, 1851–1901

Victoria experienced a surge of migration after the discovery of gold in 1851. I explore the social and geographic background of migrants lured to the colony by opportunities opened up by gold mining. When alluvial gold was exhausted, the skills of migrants enabled them to exploit the more difficult deep lead and quartz reef gold deposits and to establish cities and towns. Urban growth was encouraged by high marriage and birth rates in the 1860s. In the last two decades of the nineteenth century goldfields communities generally suffered economic and demographic declines.