The Decline in the Natural Rate of Interest

With the Federal Reserve widely expected to begin normalization of monetary policy in the wake of the Great Recession—perhaps in 2015—an important question for public policy and private-sector planning is what the “new normal” for interest rates is likely to be. In particular, are real interest rates likely to be lower in the future than in recent decades? An investigation through the use of the Kalman filter shows that the natural rate of interest—the real federal funds rate consistent with the economy operating at its full potential—has declined since 1980, especially after the Great Recession. This will have important implications for monetary policy and for the private sector, including recognition that the natural rate of interest is not fixed.     

Women on Corporate Boards of Directors and their Influence on Corporate Philanthropy

This study examined the relationship between the proportion of women serving on firms' boards of directors and the extent to which these same firms engaged in charitable giving activities. Using a sample of 185 Fortune500 firms for the 1991–1994 time period, the results provide strong support for the notion that firms having a higher proportion of women serving on their boards do engage in charitable giving to a greater extent than firms having a lower proportion of women serving on their boards. Further, the results suggest a link between the percentage of women on boards and firm philanthropy in the areas of community service and the arts, but found no link between women boardmembers and firm giving to support education or public policy issues. The implications of the findings and some areas for future research are discussed.     

The Face of Fairness: Self-Awareness as a Means to Promote Fairness among Managers with Low Empathy

Although managing fairness is a critical concern for organizations, not all managers are predisposed to enact high levels of fairness. Emerging empirical evidence suggests that personality characteristics can be an important antecedent of managers’ fair behavior. However, relatively little attention has been devoted to understand how to promote fairness among managers who are naturally predisposed to engage in lower levels of fairness. Building upon self-awareness theory, we argue that increasing managers’ self-awareness can motivate managers with low trait empathy to engage in greater levels of justice. We test the interactive effects of trait empathy and state self-awareness using an experimental study (N = 76) in which individuals were asked to communicate negative news. In support of our hypothesis, our results indicate that increasing self-awareness through self-focusing situations can help promote interactional justice when communicating negative news for individuals with low trait empathy. The theoretical and practical implications of these findings are discussed.     

Social marketing to eliminate leprosy in Sri Lanka

Leprosy is a chronic infectious disease which, if untreated, can lead to permanent and progressive nerve damage and thus to deformities of the limbs, eyes, and face. People with leprosy have long been ostracized by society. The clinical signs of leprosy include insensitive skin lesions and thickened peripheral nerves. Untreated infectious leprosy cases are the main source of infection, transmitting the disease through nasal secretions. People with low cell-mediated immunity are at risk of developing clinically active leprosy irrespective of gender, age, or social class. The World Health Organization (WHO) has, since 1982, recommended multiple drug therapy (MDT) against leprosy, an approach capable of curing the disease within 1 year and interrupting its transmission. According to WHO, leprosy is currently a public health problem in 55 countries and more than 20% of the estimated 1.15 million cases of leprosy worldwide remain undetected. Although Sri Lanka was the first country in South Asia to provide MDT to all registered leprosy patients, first making it available in 1984, the disease continues to be transmitted due to the large number of undetected cases in the country. An ongoing social marketing program was therefore launched in 1990 by the local health ministry and the Novartis Foundation for Sustainable Development to eliminate leprosy from Sri Lanka. The program encourages people with suspicious skin lesions to seek diagnosis and care, teaches health care providers to recognize leprosy and refer cases for treatment, and helps the general public to understand that leprosy is just a normal disease. The socially marketed product is MDT, provided free-of-charge by the Novartis Foundation to all leprosy patients.     

An evaluation of consumer participation in hospital breast services

Community expectations and research demonstrate that consumers play an important role in shaping services for women with breast cancer. Consumer contribution has been mandated recently in Victoria, Australia, to ensure the inclusion of consumer involvement in the planning and decision‐making processes within health organizations. As part of the redevelopment of breast services in Victoria, Southern Health has been funded to plan local improvements to care co‐ordination for women diagnosed with breast cancer in the southern metropolitan area of Melbourne. The establishment of effective consumer participation in breast services is an integral aspect of this project and a range of initiatives has been undertaken to achieve meaningful consumer involvement including the appointment of a consumer advisor; appointment of staff with extensive knowledge in women's health and community development to the project; establishment of a consumer reference group; and plans made to improve the receptivity of health service systems to consumer input. A preliminary evaluation of this ongoing project has indicated that a productive role for consumers in service practice review and policy and planning activities has been established and some change and engagement of staff has occurred. There is still work to be done to promote the involvement of a wider range of health professionals and to increase the level of trust between consumers and staff.     

The United Nations Global Compact: What Did It Promise?

Sethi and Schepers (J Bus Ethics, 2014, in this Thematic Symposium) have identified an important issue for the global economy: Providing some mechanism for requiring assurance that environmental, social, and corporate governance information provided by a business is accurate and objective. Where they have gone wrong is in trying to change the mission of the United Nations Global Compact (UNGC). From its inception, the UNGC has been clear that its mission is not to provide such assurance. This article first outlines the background for the historic announcement of the UNGC by the then Secretary-General of the UN, Kofi Annan. Then a summary of the major criticisms of the initiative is provided with a focus on the Sethi–Schepers article. Finally, I argue that the mission of the UNGC, to gain consensus in the global community on the shared values and moral norms that will guide the global economy, is being accomplished, although it is a work in progress.     

Does multimarket contact facilitate tacit collusion? Inference on conduct parameters in the airline industry

We provide empirical evidence that multimarket contact facilitates tacit collusion among airlines using a flexible model of oligopolistic behavior, where conduct parameters are modelled as functions of multimarket contact. We find (i) carriers with little multimarket contact do not cooperate in setting fares, whereas carriers serving many markets simultaneously sustain almost perfect coordination; (ii) cross‐price elasticities play a crucial role in determining the impact of multimarket contact on equilibrium fares; (iii) marginal changes in multimarket contact matter only at low or moderate levels of contact; (iv) assuming firms behave as Bertrand‐Nash competitors leads to biased estimates of marginal costs.     

The Purpose and Process of Science: Contrasting Understandings in UK Research Establishments

This paper is based on an ESRC-funded study into scientists' perceptions of management. Changes in the organisation, purpose and process of science were heralded with the publication of the White Paper (Cm2250 1993). However, to date there has been little empirical work into how research scientists understand such issues. Our research, based on qualitative interviews conducted with scientist/managers in seven government-funded research establishments, found that scientists' notions of scientific purpose varied, not just according to the nature of their work, but also evolved as careers progressed and the contexts within which they worked changed (in particular as the need to generate income through commissioned work has increased). The data also reveal a diversity in scientists' understanding of the relationship between discovery and applied science. Of central importance to R&D managers is the extent to which these scientists saw their aspirations as achievable within the changing context of public sector science. From the data we generate an Ideal Type model of approaches that may be taken to reconcile the imperatives of applied and fundamental research and develop an understanding of the key role of senior management in creating an effective interface with external stakeholders and the development of culture and vision within the laboratory that will enable effective synergy.