‘Double dipping’: the combined effects of social security and civil service pensions on employee retirement

How do macro variables such as aggregate consumption, aggregate money demand, prices, and interest rates vary in response to government attempts to redistribute income across agents through selective tax-transfer policies? This question is investigated for an overlapping generations model consisting of heterogeneously endowed three-period lived agents. In the presumably most favorable case for invariance (identical log-linear utility functions), it is shown that positive interest rate macro equilibria are invariant with respect to redistributions in social security benefits if and only if all agents initially exhibit qualitatively identical liquidity preference behavior, i.e. positive money holding only in youth, only in middle-age, or never.     

Testing the conflict-performance assumption in business-to-business relationships

There is little empirical research published testing the interdependency between conflict in business-to-business relationships and commercial performance. The “conflict-performance assumption”—all other factors being equal, relationships where conflict is low will outperform relationships where conflict levels are higher—remains central in the marketing channels' literature despite insufficient and contradictory empirical evidence. There are several explanations for the lack of a clear relationship between conflict and performance. Rosenbloom [J. Mark. 37 (1973) 26] theorises that the relationship between conflict and channel performance follows an inverted U-shaped curve, where conflict is most productive at moderate levels and least productive at very low or high levels. Others have argued for a simpler, linear relationship between conflict and performance, usually negative in nature. Various theories about the conflict-performance relationship are empirically tested in a large marketing channel, using a number of dyadic and monadic measures of conflict (latent, perceived, and affective) and two objective measures of performance (effectiveness and efficiency). A linear model (performance declining as conflict increases) is adequate to explain the relationship between dyadic measures of both perceived and affective conflict and channel effectiveness. A threshold model is found to be superior to a linear model in explaining the relationship between dyadic measures of perceived and affective conflict and efficiency. Conflict increases slowly as efficiency falls until a threshold is reached when conflict escalates. Practical implications include that companies need to consider whether performance criteria affecting efficiency are as important to their business partners as those affecting effectiveness. If they are not, then business partners should be rewarded for meeting any such criteria that are more important to the one side of a relationship dyad than to the other.     

IPO anomalies and innovation capital

Innovation capital are typically expensed and/or unrecognized as assets under current generally accepted accounting principles. This results in accounting-related information asymmetry. This paper examines the association of innovation capital (as measured here by the proxies of R&D expenditures and granted patents) and initial public offerings (IPO) anomalies. These anomalies include initial IPO underpricing, duration of honeymoon (a distinct feature of the Taiwanese IPO environment), and long-term performance. The theoretical model underlying this research is a signaling model. The results indicate that more innovative firms are more likely to be underpriced, and have longer honeymoon periods than less innovative firms. Further, the more innovative firms have positive and growing long-term market-adjusted returns. This stands in contrast to the declining long-term stock performance of initial public offering firms that is evidenced in the literature. We conclude that pre-IPO research and development expenditures disclosed in the IPO prospectus, official monthly reports of newly developed patents released to the public, and the frequency of patent citations significantly signal both underpricing and future market performance of IPO firms in Taiwan.     

Bank panics and the endogeneity of central banking

Central banking is intimately related to liquidity provision to banks during times of crisis, the lender-of-last-resort function. This activity arose endogenously in certain banking systems. Depositors lack full information about the value of bank assets, so that during macroeconomic downturns they monitor their banks by withdrawing in a banking panic. The likelihood of panics depends on the industrial organization of the banking system. Banking systems with well-diversified big banks are less prone to inefficient bank runs because diversification alleviates the information asymmetry. In addition, big banks can self-monitor through publicly observable branch closure. Systems of many small banks form incentive-compatible bank coalitions to emulate the big banks during times of crisis. Such coalitions improve efficiency by monitoring member banks and issuing money that is a kind of deposit insurance—a precursor of central banking.     

Middlemen: the good,the bad,and the ugly

We examine the role of a middleman as an expert in markets. A seller's effort determines the quality of the good. Buyers observe neither the seller's effort nor the good's quality. A middleman, after observing a signal about the good's quality, decides whether to purchase it and then to sell it. We show that the presence of a middleman may either reduce or exacerbate the seller's moral hazard problem. We also consider a model with multiple middlemen. We find that the seller's effort is minimized if either the middleman's signal is perfect or the number of middlemen is large.     

Incumbency advantage and its value

Markets with network effects are typically concentrated. The aim of this paper is to discuss some recent work on “incumbency advantage.” That is, the fact that firms already installed generate higher profits than entrants even if the latter offer identical or even better terms (in terms of price and quality) to consumers. In particular, we review recently known sources of the advantage and potential mitigating factors and point to a number of open issues.     

Power Relations and Social Mix in Metropolitan Neighbourhoods in North America and Europe: Moving Beyond Gentrification?

Research on spatial segregation has suggested that social mix may be a temporary phase in class displacement, where relations between different groups are at best divided or ‘tectonic’, for instance in England. Political and policy discourses, by contrast, tend to uncritically valorize social mix as a means to breaking up concentrations of poverty and providing neighbourhoods with a middle‐class voice. In the literature, little attention has been paid to power dynamics in socially mixed neighbourhoods and the implications this may have for understanding theory and policy. The five articles that make up this symposium address the ways in which social and ethnic groups interact in major cities in Europe and North America and, as the title suggests, this involves taking into account power relations, domination and negotiation between the different groups. There is a need to connect the experience of the deployment of power within neighbourhoods (and between them) with the discussions of power mechanisms at work in wider urban processes.     

Inflation and the Exchange Rate: The Role of Aggregate Demand Elasticity

This paper examines the effect of aggregate demand elasticity on the exchange rate when inflation occurs. We discover that both the source of the inflation, whether demand-pull or cost-push, and the elasticity of aggregate demand with respect to the price level, are of consequence for the exchange rate. We obtain two primary conclusions. First, the effect on the exchange rate of cost push inflation is ambiguous and is partially determined by the price level elasticity of aggregate demand. In particular, and assuming that the two examined countries have equivalent aggregate supply elasticities, we conclude that the nation with the less elastic aggregate demand function will see its currency appreciate relative to the other. Second, demand-pull inflation results in an unambiguous increase in the exchange rate but the size of that increase is partially a function of aggregate demand elasticity. Assuming again that two countries have equivalent aggregate supply elasticities, that country with the more elastic aggregate demand will experience currency appreciation.     

Employment and absenteeism in working-age persons with multiple sclerosis

Aims: To better understand the impact of the clinical course of multiple sclerosis (MS) and disability on employment, absenteeism, and related factors.

Materials and methods: This study included respondents to the North American Research Committee on Multiple Sclerosis Registry spring 2015 update survey who were US or Canadian residents, aged 18–65 years and reported having relapsing-remitting MS (RRMS), secondary progressive MS (SPMS), or primary progressive MS (PPMS). The RRMS and SPMS participants were combined to form the relapsing-onset MS (RMS) group and compared with the PPMS group regarding employment status, absenteeism, and disability. Multivariable logistic regression was used to examine the relationship between employment-related outcomes and factors that may affect these relationships.

Results: Of the 8004 survey respondents, 5887 (73.6%) were 18–65 years of age. The PPMS group (n?=?344) had a higher proportion of males and older mean age at the time of the survey and at time of diagnosis than the RMS group (n?=?4829). Female sex, age, age at diagnosis, cognitive and hand function impairment, fatigue, higher disability levels, ≥3 comorbidities, and a diagnosis of PPMS were associated with not working. After adjustment for disability, the employed PPMS sub-group reported similar levels of absenteeism to the employed RMS sub-group.

Limitations: Limitations of the study include self-report of information and the possibility that participants may not fully represent the working-age MS population.

Conclusions: In MS, employment status and absenteeism are negatively affected by disability, cognitive impairment, and fatigue. These findings underscore the need for therapies that prevent disability progression and other symptoms that negatively affect productivity in persons with MS to enable them to persist in the workforce.