The Relationships Between Mortgage Rates and Capital-Market Rates Under Alternative Market Conditions

Mortgage interest rates have become more integrated with other capital-market interest rates over recent decades, apparently as a result of the deregulation of financial markets. The link is both imperfect and time-varying. Mortgage rates during some time periods appear to be sticky with respect to their adjustment to changes in capital-market rates. We examine the relationship between weekly conventional mortgage rates and the interest rates on treasury and corporate securities under differing market conditions. We draw three conclusions based on the analysis. First, deregulation changed the link between mortgage rates and riskless interest rates, which confirms the findings of Goebel and Ma (1993). Second, mortgage rates were cointegrated with risky interest rates even before deregulation. Third, the link between mortgage rates and the risky bond rate can be associated with the behavior of the risk premium in the bond rate. The observed relationship is consistent with the stickiness observed by Haney (1988) and causes a more pronounced stickiness when rates are falling than when they are rising.     

Defining inventory control points in multiproduct stochastic pull systems

Multistage pull production systems have been widely implemented in recent years and constitute a significant aspect of lean manufacturing. One of the important considerations in such systems is identifying the control points, i.e. where in the multistage sequence to locate the output buffers. Allowable container/batch sizes, optimal inventory levels, and ability of systems to automatically adjust to stochastic demand depend on the location of these control points yet the issue of optimal location has not been widely addressed. This paper considers a multiproduct pull setting where part types compete with each other for common production resources. In this environment it is important to consider factors such as lead time variability and to include the corresponding queuing aspects into the model. Each workstation is modeled as a GI/G/1 queue. Waiting times spent by parts at workstations are approximated using a decomposition/recomposition algorithm. Necessary and sufficient conditions are provided for the optimality of a single control point. Conditions under which multiple control points are optimal are investigated along with the impact of product mix and utilization parameters on the number of control points. Analytical model results are validated by simulation.     

How gender and financial self‐efficacy influence investment risk taking

Evidence shows alarming numbers of US workers nearing retirement insufficiently save for this next life stage. Moreover, many women invest too conservatively. This finding is of particular concern as women typically live longer than men do, and thus, rely on accumulated savings for longer periods of time. This study extends work in the psychology of investing by examining the relationship between gender and investment risk and the role financial self‐efficacy (FSE) plays. Data collected from 182 US student subjects tested the hypotheses that women make less risky investments than men do and that FSE is positively related to the level of risk taken within investment portfolios. The results not only supported the hypotheses but also the analysis shows that FSE might account for the frequently observed gender difference associated with greater financial risk taking.     

Beschäftigungspolitik in Deutschland: Fine-Tuning statt Globalsteuerung

Until 2005 unemployment rates in Germany jumped after every recession to ever-higher levels. Neoclassical micro-economists interpreted this trend as market failure and consequently narrowed the debate to labour market policies intended to improve the assumed malfunctioning of labour markets. Macroeconomic relations were largely ignored or even negated, which also characterises the current approach of the federal German government towards European economic policy. This approach has contributed to high unemployment in the eurozone. The economic trends in the US show that monetary and fiscal policies that do not exclusively focus on low inflation but that also aim to improve growth and employment will be much more promising for Germany and Europe.     

Nach welchen Regeln werden Arbeitsleistungen vergütet?

Die aktuelle Diskussion über zu hohe Managergeh?lter am oberen und zu niedrige L?hne am unteren Ende der Gehaltsskala führt zu den Grundregeln der Lohnbildung. In der ?konomischen Theorie stehen dabei vor allem individuelle Produktivit?tsunterschiede als Ursache von Lohnunterschieden im Vordergrund. Wenig — wie einige ?konomen finden zu wenig — wird dabei auf die Machtstrukturen auf dem Arbeitsmarkt geachtet.     

Monopsonistic competition,low-wage labour markets,and minimum wages – An empirical analysis

This article investigates the degree of monopsony power of employers in different industries against the background of a statutory minimum wage introduction in Germany in January 2015. A semi-structural estimation approach is employed based on a dynamic model of monopsonistic competition. The empirical analysis relies on a linked employer–employee data set which allows to control for observed heterogeneity both on the worker and on the firm side. The results show important differences in monopsonistic competition among low-wage industries: While retailing, the hotel and restaurant industry as well as agriculture can be described as monopsonistic labour markets, this is not true for other services and manufacturing of food products. From a policy point of view, the introduction of a uniform minimum wage may therefore lead to different employment reactions in industries with a similar minimum wage bite.     

Development prospects and policy for Africa: Structural adjustment and beyond

Conclusion Africa’s economic recovery in the 1990s, though somewhat fragile, is very encouraging. Policy reforms, primarily in the form of SAPs, have led to improved economic performance. However, as we approach the post-SAPs era of the 21st century, African countries need to intensify efforts in the pursuit of sound policies and further structural reforms. Much higher growth rates, exceeding 7 percent annually, are deemed as necessary to be attained and maintained over a longer period for there to be meaningful reductions in poverty. This paper has advocated a set of policy areas which need to be given priority in Africa as the 21st century approaches. African countries are in a better position now, than anytime since the crisis of the 1980s, to build a path toward sustainable development. In that regard, maintaining market-oriented policy reforms remains the imperative for the immediate future and beyond. It is now up to Africa’s leaders to provide the requisite leadership for a home-grown, rather than donor driven, attempt at sustainable socio-economic development.     

Organizational Ethical Standards and Organizational Commitment

Organizations interested in employee ethics compliance face the problem of conflict between employee and organizational ethical standards. Socializing new employees is one way of assuring compliance. Important for longer term employees as well as new ones, however, is making those standards visible and then operable in the daily life of an organization. This study, conducted in one large organization, found that, depending on organizational level, awareness of an organization's ethical standards is predicted by managerial adherence to and organizational compliance with those standards and/or discussions with peers. Regardless of level, organizational commitment was predicted most strongly by managerial adherence to organizational standards. These findings have theoretical implications for the fields of business ethics, organizational identity and organizational socialization and practical implications for the implementation of ethics policies.     

Information distortion and competitive remedies in government transfer programs: The case of ethanol

This paper reconsiders the analogy between competitive markets and the political process that is central to much of the literature on the efficiency of government transfers. The key problem is that property rights in politics are much less well defined than they are in competitive markets. As the paper outlines, obtaining accurate information about the benefits and costs of transfers is likely to be much more difficult than envisioned in the literature. Investigators, as well as general voters, often must rely on the government and competing parties for provision of information about underlying program parameters and functional relationships. We argue that politicians and the affected interest groups have incentives to limit and distort the information that is released to voters and that political competition is unlikely to be an effective counter. In developing the argument, a theoretical framework is provided and applied in a case study of the ethanol transfer. The documented efforts to disguise the actual costs and benefits of the program are important for gaining a broader understanding of the functioning and costs of government transfers in the economy.