Bayesian estimation of an open economy DSGE model with incomplete pass-through

In this paper, we develop a dynamic stochastic general equilibrium (DSGE) model for an open economy, and estimate it on Euro area data using Bayesian estimation techniques. The model incorporates several open economy features, as well as a number of nominal and real frictions that have proven to be important for the empirical fit of closed economy models. The paper offers: i) a theoretical development of the standard DSGE model into an open economy setting, ii) Bayesian estimation of the model, including assessments of the relative importance of various shocks and frictions for explaining the dynamic development of an open economy, and iii) an evaluation of the model's empirical properties using standard validation methods.     

Business Groups in 20th‐Century Swedish Political Economy: A Sociological Perspective

Since the interwar period, the Swedish economy has been dominated by a few business groups that control practically all Swedish industry of any importance. This article provides a sociologically informed account of the existence and lasting dominance of business groups in Sweden. In challenging efficiency‐based accounts of business groups in Sweden offered by transaction‐cost economists, I adopt a historical and dynamic approach that understands economic institutions not as efficient responses to external circumstances, such as market conditions, but as “social constructions.” This approach emphasizes the role of contingency as well as agency in the formation and reproduction of institutions. The article demonstrates the historical contingencies of the emergence of the business groups—in the form of economic crises in the interwar period—and how the groups became institutionalized in the postwar period through a process of social exchange among the key actors in the Swedish political economy: the business elite, the trade unions, and the state.     

The Bioeconomics of the Spatial Distribution of an Endangered Species: The Case of the Swedish Wolf Population

Conservation of endangered species often entails significant costs, and, from a social perspective, many species can be characterized as both environmental bads and goods. This paper concerns the management of one such species, the Swedish wolf (Canis lupus). The fact that the wolf tends to disperse over a wide area causes specific management problems. The goal is to choose a harvesting strategy, such that the discounted stream of net benefits from the wolf populations in different geographical regions is maximized. The spatial dimension is involved through emigration and immigration. The solution to the management problem is shown to be a modification of the classical rule of renewable resource exploitation, caused by the migration of wolves between regions. Empirically, this problem is solved by dividing Sweden into 13 geographical regions, and accounting for the existence values, harvesting benefits, and predation costs of the wolf population in each region. The results show that the geographical distribution of wolves, in absolute numbers, is very sensitive to the abundance of prey and to different assumptions regarding the economic parameters of the model. However, the relative distribution of wolves across the country is less sensitive to these assumptions. The highest densities of wolves were found in regions with low marginal costs, due to the abundance of prey in relation to the comparatively low number of human hunters utilizing the same prey as the wolves. The lowest population densities were found in regions with a low carrying capacity for the wolf or with high costs of depredation on reindeer.     

Bayesian point estimation of the cointegration space

A neglected aspect of the otherwise fairly well developed Bayesian analysis of cointegration is point estimation of the cointegration space. It is pointed out here that, due to the well known non-identification of the cointegration vectors, the parameter space is not Euclidean and the loss functions underlying the conventional Bayes estimators are therefore questionable. We present a Bayes estimator of the cointegration space which takes the curved geometry of the parameter space into account. This estimate has the interpretation of being the posterior mean cointegration space and is invariant to the order of the time series, a property not shared with many of the Bayes estimators in the cointegration literature. An overall measure of cointegration space uncertainty is also proposed. Australian interest rate data are used for illustration. A small simulation study shows that the new Bayes estimator compares favorably to the maximum likelihood estimator.     

Experiences of the development and use of scenarios for evaluating Swedish national environmental objectives

The aim of the present paper is to present and evaluate a method for encouraging long-term thinking and considerations of a variety of scenarios in environmental policy processes. The Swedish environmental policy is based on 16 environmental objectives that national authorities are responsible for. They are evaluated annually and also in-depth every fourth year. Here we describe and explore a futures study project for introducing a more long-term thinking in the work with the environmental objectives, tested in the in-depth evaluation 2008. An experience was that it is difficult to design a collective scenario work in a case with a wide variety of objectives and with individuals with different backgrounds. However, this difficulty makes it even more important to incorporate futures studies in authorities work. Scenario work is often subcontracted, leading to a constant lack of futures studies competence and thinking at the authorities. Another experience is that despite the difficulties, experts at the authorities did start thinking more in terms of opportunities with futures studies. A general conclusion from the work was that there is an interest and need for futures studies at the authorities in charge of the environmental objectives. The possibly most important conclusion from this project was that the authorities need to build up their own competences in futures studies.     

Home as a communication hub: the domestic use of ICT

With the rapidly increasing ease of access to the Internet in people’s homes, more and more of our everyday activities are being carried out online. While the home has become what might be called a communication hub, open to question is the impact this virtual mobility is having on our physical mobility. The questions we address in this article concern the extent to which network communication is carried out in our homes and this in relation to (1) activities that demand transport, (2) those of us who utilize these options, and (3) the virtual and physical mobility/communication patterns. Data from a nationwide Norwegian sample are utilized in investigating these questions. The dataset comprises 2700 respondents with access to the Internet at home and who answered questions about daily travel and home-based use of information and communication technology (ICT) for purposes such as information-seeking, shopping, paid work, net-banking, chatting and playing games. The analysis indicates that while use of the Internet for many of these activities is common, it varies between groups. We discuss whether virtual activities have physical equivalents – physical twins - or whether these come in addition to previous equivalent activities. It is shown that the relation between virtual and physical mobility varies depending on type of activity and social group, but, overall, that is not very strong. One possible explanation is that many new ICT services and applications do not have as clear-cut functional equivalents – or physical twins – as many of the earlier ICT technologies had, and, if true, will make it increasingly difficult to track down the interplay between transport and communication.     

Voting on Majority Rules

We analyse an overlapping generations model of voting on "reform projects". These resemble investments in that they first require some investment expenditure and later payoff. Since the time during which old people get the benefit is shorter, or because older people are more wealthy and hence pay more taxes, they are more conservative (against reforms) than young people.
We show that if people vote on which majority should be required in future elections for a bill to become a law, the winning proposal specifies a supermajority. This result is very robust even if age related conflict is only one determinant among others for voting behaviour in the society.     

CEO Succession Mechanisms,Organizational Context,and Performance: A Socio‐Emotional Wealth Perspective on Family‐Controlled Firms

This article extends the literature on CEO succession and financial performance by addressing corporate owners' mixed motives and desires to protect their interest in being in business. We draw on a Socio‐Emotional Wealth (SEW) perspective to investigate how the choice of one of three succession mechanisms – relay succession, ‘horse races’ among internal CEO candidates, and hiring from outside – may effectively balance trade‐offs between corporate owners' non‐financial SEW motives and the firm's financial performance. We find that implementing one of these succession mechanisms reduces the negative impact that typically characterizes CEO transitions in family firms. We also show that family presence on the board of directors offsets the benefits of having selected these balancing succession mechanisms, in either placing too much emphasis on SEW, or creating negative dynamics that make the chosen succession mechanisms less effective.