Endogenous business cycles and Harrodian instability in an agent-based model

The article presents an original stock-flow consistent macroeconomic agent-based model with the aim to reexamine Harrod’s instability principle as an explanatory element of macroeconomic dynamics. The main findings are that bottom-up economic models can be subject to Harrodian instability and can produce endogenous cycles without introducing innovation waves, monetary wage spirals, or financial instability. Upward instability is stopped by the ceiling of full employment, and downward instability can be tamed by introducing an autonomous expenditure that feeds aggregate demand.     

A Markov Switching Factor‐Augmented VAR Model for Analyzing US Business Cycles and Monetary Policy

This paper develops a Markov switching factor‐augmented vector autoregression to investigate the transmission mechanisms of monetary policy for distinct stages of the US business cycle. We assume that autoregressive parameters and covariance matrices of the error terms are regime dependent, driven by an unobserved Markov indicator. Endogenously determined transition probabilities are governed by an underlying probit model that features a large set of possible predictors. The empirical findings provide evidence for differences in the transmission of monetary policy shocks that mainly stem from heterogeneity in the responses of financial market quantities.     

Ethical reasoning in business‐to‐business negotiations: evidence from relationships in the chemical industry in Germany

This article explores managers’ ethical reasoning for behaviors in price negotiations using evidence from 15 in‐depth interviews conducted with sales and purchasing representatives in the chemical industry in Germany. Applying transaction cost economics, we find that negotiators in commoditized market‐like exchanges either refer to deontological norms such as not to lie, or they neglect a role for ethics, arguing that distributive negotiation is per se opportunistic. In contrast, exchanges of products with higher asset specificity lead to stronger informational integration which is supported with teleological justifications. Some negotiators use teleological justification to build business on trust rather than on economic safeguards as their firm norms would require. For negotiators, our results suggest considering institutional context and adjusting ethical reasoning to the negotiation situation. Firms need to recognize and find ways to address the potential conflicts of their internal norms with their frontline managers’ attempts to act in the firms’ best economic and ethical interests.     

Cost-utility analysis of alemtuzumab in comparison with interferon beta,fingolimod, and natalizumab treatment for relapsing-remitting multiple sclerosis in Austria

Background: Multiple sclerosis (MS), a chronic progressive, demyelinating, inflammatory disease, affects 2.5 million people worldwide. Approximately 63% of cases are classified as relapsing–remitting MS (RRMS) at the time of diagnosis. The aim of this cost-utility analysis is to evaluate alemtuzumab vs interferon beta (intramuscular [IM] interferon beta-1a, subcutaneous [SC] interferon beta-1a, SC interferon beta-1b, and SC pegylated interferon beta-1a) in previously treated, and vs SC interferon beta-1a, fingolimod, and natalizumab in untreated RRMS patients to determine the incremental cost-effectiveness ratio among the treatment alternatives as prices, the route, and the frequency of administration of considered products vary significantly.

Methods: The primary outcome was the modeled incremental cost-effectiveness ratio (ICER; €/quality-adjusted life-year [QALY] gained). Markov modeling with a 10-year time horizon was carried out. During each 3-month cycle, patients maintained the Expanded Disability Status Scale (EDSS) score or experienced progression, developed secondary progressive MS (SPMS), or showed EDSS progression in SPMS; experienced relapses; suffered from an adverse event (AE); changed treatment; or died. A published network meta-analysis (NMA) was used for indirect comparison. The possibility of a therapy switch was considered. Clinical input data and resource utilization data were derived from the literature. Costs were extracted from price lists published in Austria and were calculated from the payer’s perspective.

Results: In treatment naïve patients, alemtuzumab is associated with costs of €132,663 and 5.25 QALYs in a 10-year time horizon. Costs for SC interferon beta amount to €164,159 and generate 4.85 QALYs. Also, in the pre-treated patients, alemtuzumab dominated comparators by accumulating higher total QALYs (4.88) and lower total costs (€137.409) compared to interferon beta-1a (€200.133), fingolimod (€240.903), and natalizumab (€247.758).

Conclusion: The analysis shows that alemtuzumab is a cost-saving alternative to treat RRMS in pre-treated and therapy naïve patients. From the patient perspective, alemtuzumab improves quality-of-life.     

Optimal Management Under Institutional Constraints: Determining a Total Allowable Catch for Different Fleet Segments in the Northeast Arctic Cod Fishery

Many real world fisheries have an individual vessel quota system with restrictions on transferability of quota or entrance of new vessels into the fishery. While the standard economic reasoning is that these institutional constraints lead to welfare losses, the size of those losses and optimal second-best policies are usually unknown. We develop a dynamic bioeconomic model, in which a scientific body provides an optimal TAC given restrictions on (i) transferability between vessel segments and (ii) entrance of new vessels. Further, we also quantify welfare losses arising from not maximizing economic welfare, but physical yield—which is actually the case in many fisheries. We apply the model to the Northeast Arctic cod fishery, and estimate not only the cost and harvesting functions of the various vessel types, but also the parameters of the biological model as well as those of the demand function. This allows us to determine optimal second-best policies and quantify corresponding welfare effects for our case study fishery.     

The stability of German export demand equations – have German exports suffered from the strength of the euro?

Since its introduction in 1999, the euro has shown pronounced swings against the US dollar and the British pound. In this study, we investigate whether this evolution has affected bilateral German exports to two of its major export destinations: the US and the UK. Applying the autoregressive distributed lags bounds testing approach, we find different elasticities of trade between the two export destinations. Our results show that the export demand equation for the US seems to be more stable than that for the UK. Furthermore, it seems that the short-run dynamics in particular have changed.     

Legitimation of New Ventures: A Review and Research Programme

Research on how new ventures (NVs) achieve legitimacy is fragmented and rests on taken‐for‐granted assumptions that require problematization. Following a systematic literature review, I identify five distinct perspectives on NV legitimation: an institutional perspective, a cultural entrepreneurship perspective, an ecological perspective, an impression management perspective, and a social movement perspective. After comparing and contrasting these perspectives, I synthesize them into a generative and integrative typology. Based on this typology, I develop a new research programme. The programme widens the extant scholarship agenda by challenging its shared assumptions and contributes to further integration of the literature by building bridges between perspectives.     

Where states and markets meet: the financialisation of sovereign debt management

Financial markets play an indispensable role in the management of sovereign debt, that is, the mechanics of how and from whom governments borrow. This paper suggests a novel, two-dimensional concept to measure the financialisation of sovereign debt management (SDM): (1) the reliance on financial markets as a governance mechanism and (2) the adoption of a sense-making framework grounded in financial economics. We split this concept into nine indicators and apply it to data from 23 OECD countries between 1980 and 2010. Our analysis illustrates the predominant commonalities across countries, but at the same time, country-specific differences. We interpret them as two sides of the same coin in the light of an overarching trend of increasing alignment to financial markets. This article is not only one of the first cross-national as well as longitudinal studies of the dynamics in SDM; it also reveals that the relationship between finance and governments in the SDM is by no means one-sided.