The Austrian current account deficit: Driven by twin deficits or by intertemporal expenditure allocation?

The evidence presented in the paper rejects the twin deficit hypothesis for the Austrian current account balance during the last two decades. The results are based on an estimate of a vector error correction model including quarterly data for the current account balance and potentially relevant variables driving its dynamics. We compute the variance decomposition of the current account's forecast error and its generalized impulse responses to shocks in the innovations of the system. The results in favor of intertemporal expenditure reallocation cannot be reproduced within a second analysis including the current account and a measure of net output, however. The estimated implicit current account balance, interpreted as the discounted expected change in future net output, does not follow the actual behaviour of the current account. First version received: June 1999/Final version received: March 2001     

Forecasting Housing Approvals in Australia: Do Forecasters Herd?

Price trends in housing markets may reflect herding of market participants. A natural question is whether such herding, to the extent that it occurred, reflects herding in forecasts of professional forecasters. Using more than 6,000 forecasts of housing approvals for Australia, we did not find evidence of forecaster herding. On the contrary, forecasters anti‐herd and, thereby, tend to intentionally scatter their forecasts around the consensus forecast. The extent of anti‐herding seems to vary over time. We also found that more pronounced anti‐herding leads to less accurate forecasts.     

Information Cascades in the Labor Market

A model of herding behavior in the labor market is presented where employers receive signals with limited precision about the workers types, and can observe previous employers decisions. Both the employer and the worker can influence the signal probabilities. In particular, the employer tries to increase the precision of the signal about the workers type whereas the worker wants to get a good signal, independent of her type. In a two-period model, we derive conditions for an equilibrium in which only down-cascades occur, i.e., the second employer does not hire a worker with a bad history even if he receives a favorable private signal about the workers type, but he follows his own signal if the workers history is good.     

Leadership in Organizational Knowledge Creation: A Review and Framework

Organizational knowledge creation integrates context, knowledge assets, and knowledge creation processes throughout the organization. Using organizational knowledge creation theory as an organizing framework, we conduct a literature review that shows prior work has focused on the role of central, upper‐echelon, leadership in knowledge creation processes, without devoting much attention to context and knowledge assets. To remedy these weaknesses, we develop a new framework for situational leadership in organizational knowledge creation. The framework is based on a continuum that ranges from centralized to distributed leadership at three layers of activity: a core layer of local knowledge creation; a conditional layer that provides the resources and context for knowledge creation; and a structural layer that forms the overall frame and direction for knowledge creation in the organization. We discuss the implications of this framework for theory and practice.     

Walking and Talking Corporate Social Responsibility: Implications of Firm Size and Organizational Cost

In this paper we address two interrelated research gaps in the Corporate Social Responsibility (CSR) literature. The first results from a lack of understanding of different patterns of CSR engagement with respect to CSR talk (impression management and the creation of symbolic images and documentation) and CSR walk (substantive implementation of CSR policies, structures and procedures). Related to this, the second gap concerns limited knowledge about the influence of firm size on CSR engagement. We develop a conceptual model that explains differences in CSR talk versus walk based on organizational cost and firm size. This allows us to theorize the antecedents of what we call the large firm implementation gap (large firms tend to focus on communicating CSR symbolically but do less to implement it into their core structures and procedures) and vice versa the small firm communication gap (less active communication and more emphasis on implementation). Our model expands a new theoretical understanding of CSR engagement based on as yet underemphasized firm‐level antecedents of CSR, and opens up several new avenues for future, and in particular comparative, research.     

Leader Emergence in Nascent Venture Teams: The Critical Roles of Individual Emotion Regulation and Team Emotions

This study advances a theory of how different aspects of emotion regulation influence individual leader emergence in the intensely emotional context of nascent venture teams. Despite the growing amount of research on the role of leadership in the entrepreneurial process, the emergence of leaders in nascent venture teams has rarely been explored. Drawing on theories and research on leadership emergence and emotion regulation, we argue that the two aspects of emotion regulation (i.e., reappraisal and suppression) exert opposite effects on the degree to which nascent venture team members come to perceive an individual as a leader. We also theorize that team emotions arising from affective events moderate the relationship between reappraisal and leader emergence in such teams. Data from 103 nascent venture teams without prior leaders show a negative relationship between individuals’ trait disposition to suppress emotions and their emergence as leaders, and a positive relationship between their trait disposition to reappraise emotions and their emergence as leaders. Moreover, we find that negative team emotions magnify the positive association between reappraisal and leader emergence, while positive team emotions mitigate it. We discuss the implications of our findings for the literature on entrepreneurial leadership, entrepreneurial emotions, and leadership in general.     

Corporate foresight: Its three roles in enhancing the innovation capacity of a firm

In the last three decades much knowledge has been produced on how best to conduct foresight exercises, but little is known on how foresight should be integrated with the innovation effort of a company. Drawing on empirical evidence from 19 case studies and 107 interviews, we identify three roles that corporate foresight should play to maximize the innovation capacity of a firm: (1) the strategist role, which explores new business fields; (2) the initiator role, which increases the number of innovation concepts and ideas; and (3) the opponent role, which challenges innovation projects to increase the quality of their output.     

DOES THE ECB HAVE A TIME‐INCONSISTENCY PROBLEM? A NOTE

A standard time‐inconsistency model of monetary policy, extended to include a time‐varying natural rate of unemployment, implies cointegration between the inflation rate and the unemployment rate. An application of the model to data for the EMU countries does not yield strong evidence of cointegration. In addition, the sign of the estimated coefficient of cointegration is not in line with a sign restriction imposed by the time‐inconsistency model.     

Analysing tax evasion dynamics via the Ising model

We develop a model of tax evasion based on the Ising model. We augment the model using an appropriate enforcement mechanism that may allow policy makers to curb tax evasion. With a certain probability tax evaders are subject to an audit. If they get caught they behave honestly for a certain number of periods. Simulating the model for a range of parameter combinations, we show that tax evasion may be controlled effectively by using punishment as an enforcement mechanism.