Welfare Measurement and Measurement Error

The approximate effects of measurement error on a variety of measures of inequality and poverty are derived. They are shown to depend on the measurement error variance and functionals of the error–contaminated income distribution, but not on the form of the measurement error distribution, and to be accurate within a rich class of error–free income distributions and measurement error distributions. The functionals of the error–contaminated income distribution that approximate the measurement error induced distortions can be estimated. So it is possible to investigate the sensitivity of welfare measures to alternative amounts of measurement error and, when an estimate of the measurement error variance is available, to calculate corrected welfare measures. The methods are illustrated in an application using Indonesian household expenditure data.     

Some unfamiliar dynamics of a familiar macro model a note

The idea that for small disturbances the full employment equilibrium is stable while for large disturbances it is unstable was coined by Leijonhufvud in the notion of a corridor. We discuss the existence of a corridor in the standard Keynesian-monetarist textbook macro-model. It turns out that though the full employment steady state of this model may be locally stable — which is the case when the well-known Cagan condition holds — the model is never globally stable. This is due to the inherent non-linearity in the demand for money function, arising from non-negativity of the nominal rate of interest. Thus, perhaps surprisingly, the Cagan condition is both necessary and sufficient for the existence of a corridor in the Keynesian-monetarist model.This note is adapted from a paper presented at the European Meeting of the Econometric Society, Bologna, August 1988. I would like to thank Søren Bo Nielsen and Peter Birch Sørensen (Copenhagen Business School), Thomas Lux (University of Bamberg), and two anonymous referees for helpful comments and suggestions. Remaining errors and shortcomings are mine.     

Impacts of e-Commerce and Enhanced Information Endowments on Financial Services: A Quantitative Analysis of Transparency, Differential Pricing, and Disintermediation

Some implications of e-Commerce financial services firms are becoming clear. The web drives transparency, and increases the information endowment of all market participants. It is harder to manipulate customers' behavior, or to overcharge them. Transparency drives differential pricing. Not all customers can or should be charged the same prices. Transparency reduces the viability of cross-subsidies between customers can or between products. The differential pricing enabled by the web transforms distribution channels, and enables direct distribution and alternative forms of distribution. Some intermediateraries may be bypassed altogether, while others may rapidly lose their best, most profitable, and previously most loyal customers.     

Kursprognose mit Hilfe der Technischen Analyse — Eine empirische Untersuchung

Ohne Zusammenfassung     

Migrants' Savings, Purchasing Power Parity, and the Optimal Duration of Migration

If some of the returns to migration accrue from returnmigration, the optimal duration of migration may be shorter thanthe feasible duration of migration. We develop a model that providesand highlights conditions under which return migration takesplace even though a reversal of the inter-country wage differentialdoes not occur. In particular, we consider the higher purchasingpower of savings (generated from work abroad) at home than abroadas a motive for return migration. Inter alia, our model producesa negative relationship between the optimal duration of migrationand the purchasing power differential and in some (but not all)cases, a negative relationship between the optimal duration ofmigration and the wage abroad. In addition, and contrary to ourprior anticipation, our utility maximization analysis suggeststhat East-West migration will tend to be temporary while inter-EuropeanCommunity (or intra-West European) migration will likely be permanent.     

Voluntary disclosure and information asymmetry in Denmark

This paper examines if the level of voluntary disclosure affects information asymmetry for industrial companies listed on the Copenhagen Stock Exchange. Economic theory suggests that disclosing more information should lower the information asymmetry component of a firm's cost of capital [Leuz, C., & Verrecchia, R. E. (2000)]. The results indicate that voluntary disclosure is negatively associated with proxies for information asymmetry. The results are robust even after controlling for various firm characteristics introduced in related literature. Despite differences in institutional settings the findings in our paper are similar to the ones based on US data.     

New MII Circular on Telecom and Internet Firms

On July 13, 2006, the Min istry of Information Indus try of the People＇s Repub lic of China （＂MII＂） issued a new notice concerning foreign-invested telecom and internet companies in China. MII＇s ＂Notice on Strengthening Regulation of Foreign Investment in and Operations of Value-Added Telecom Services＂ （the ＂MII Circular＂）, further clarifies the existing regulatory framework governing foreign investment in internet and other value-added telecommunications （＂ VATS ＂） businesses in China.     

An Empirical Study of Firm Size and Competitiveness in German Life Insurance

Based on a purely rank-oriented approach, this empirical study analyzes to what extent superior firm size in German life industry generally translates into corporate advantages for the companies concerned. It turns out that while modest advantages with some criteria are measurable, any such benefits are usually outweighed by unquantifiable factors unrelated to firm size. Confining the study to a highly homogeneous subgroup of life insurers, however, reveals substantial corporate advantages in a number of areas, thereby confirming well-established theoretical reasoning.     

Simple Identification and Specification of Cointegrated Varma Models

We bring together some recent advances in the literature on vector autoregressive moving‐average models, creating a simple specification and estimation strategy for the cointegrated case. We show that in this case with fixed initial values there exists a so‐called final moving‐average representation. We prove that the specification strategy is consistent. The performance of the proposed method is investigated via a Monte Carlo study and a forecasting exercise for US interest rates. We find that our method performs well relative to alternative approaches for cointegrated series and methods which do not allow for moving‐average terms. Copyright © 2014 John Wiley & Sons, Ltd.