Central Bank's interventions and the Fisher hypothesis: a threshold cointegration investigation

The long-run relationship between nominal interest rates and inflation is examined, allowing for structural breaks and asymmetric mean reversion. From a Threshold AutoRegressive (TAR) test applied to the residuals of the cointegration relationship (while allowing for both a break in the mean of the long-run equation and a smooth regime-transition), there is strong evidence for non-linear mean reversion properties for the real interest rates of the US Treasury Bill market. This suggests asymmetric changes to inflation shocks in the Central Bank's reaction function. The existence of different regimes is consistent with some interpretations of the monetary policies run by the Fed, such as credibility and opportunism.     

Transfer Fees in Professional Soccer

International Advances in Economic Research -     

High‐performance work systems and workplace performance in small,medium‐sized and large firms

This article draws on the Organisational Growth and Development (OGD) life cycle model to explore the relationship between high‐performance work systems (HPWS) and performance in firms of different size, thereby extending understanding of congruence or ‘best fit’ theory within strategic HRM debates. With reference to management control theory, economies of scale and the availability of specialist managerial skills, the article hypothesises that while an HPWS–performance relationship might exist in small, medium‐sized and large firms, the relationship will be stronger in large firms than in both small and medium‐sized firms, and stronger in medium‐sized firms than in small firms. Analysis of data from the British Workplace Employment Relations Survey demonstrates, however, that there is no association between HPWS and workplace performance in medium‐sized firms, in contrast to the positive relationship between HPWS and performance found in large firms and between HPWS and labour productivity in small firms.     

Estimating the Competitive Storage Model with Trending Commodity Prices

We present a method to estimate jointly the parameters of a standard commodity storage model and the parameters characterizing the trend in commodity prices. This procedure allows the influence of a possible trend to be removed without restricting the model specification, and allows model and trend selection based on statistical criteria. The trend is modeled deterministically using linear or cubic spline functions of time. The results show that storage models with trend are always preferred to models without trend. They yield more plausible estimates of the structural parameters, with storage costs and demand elasticities that are more consistent with the literature. They imply occasional stockouts, whereas without trend the estimated models predict no stockouts over the sample period for most commodities. Moreover, accounting for a trend in the estimation implies price moments closer to those observed in commodity prices. Our results support the empirical relevance of the speculative storage model, and show that storage model estimations should not neglect the possibility of long‐run price trends. Copyright © 2016 John Wiley & Sons, Ltd.     

The Developmental Impact of Asian Drivers on Kenya with Emphasis on Textiles and Clothing Manufacturing

(1251) Paul Kamau with Dorothy McCormick and Nicolas Pinaud Kenya has enjoyed a relatively diversified economy (at least by SSA standards), with light manufacturing industries in particular playing a significant growing role. The rise of Asian competition (locally, regionally and on third‐country markets), partly due to the erosion of trade preferences for clothing and footwear, has raised fresh policy challenges. The specific relevance of the clothing industry in the analysis of China’s and India’s impact on Africa is manifold: this is a low‐skilled labour‐intensive industry, and hence an avenue for African economies’ diversification; the competition from Asian producers vis‐à‐vis the SSA clothing industry is felt at the local, regional and global level (on third‐country markets): it is therefore direct and indirect; also, the Asian Drivers’ impact on African clothing industries has both a trade and investment dimension while being competitive and complementary.     

On the incidence of commissions in auction markets

We analyze the welfare consequences of an increase in the commissions charged by intermediaries in auction markets. Commissions are similar to taxes imposed on buyers and sellers, and standard economics suggests that both sellers and buyers are made worse off by the tax. However, we show that when the buyers' participation constraint binds and when sellers set optimal reservation prices, the level of commissions correlates to participation and reservation prices in such a way that participating buyers strictly gain from higher commissions.     

Environmental turbulence and the functions of budgetary control

While budgetary control is a potentially significant tool when the economic environment is unstable and unpredictable, the analysis of its development demonstrates that its use has dramatically expanded over the time since companies have been able to run forecasts. In order to help them develop budgetary control, companies have implemented strategies that have reduced risks and hence improved their ability to make accurate forecasts. Such strategies have taken many forms and varied from one firm to another. They materialized as various types of agreement, including cartels, through strategies to effect market leadership, or via policies of nationalization. In those companies where the environment was stable and risk limitation was not important, budgetary control could be used for various internal purposes. In this respect, the analysis of the management of companies helps us to identify the purposes for which budgetary control is utilized. It is found that budgetary control allows for greater expansion opportunities and provides the means to strengthen the control of management within major companies. Our observations highlight a contradictory aspect of budgetary control: while it is relevant within an unstable environment, it performs best in an environment which is highly managed.     

HRM in the SME sector: valuable employees and coercive networks

Although the productivity and survival of small and medium-sized enterprises (SMEs) may be enhanced if they adopt human resource management (HRM) practices, there is a far greater degree of informality in employment practices in SMEs than in larger workplaces. The aim of this paper is to assess the extent to which a range of factors both internal and external to the workplace predict the extent to which HRM practices have been adopted in SMEs. Using data from the 1998 Workplace Employee Relations Survey, the analysis reveals that differences in workforce skill-mix, unionization and the customer base are important influences, with the first of these influences being particularly strong. As such, we suggest SMEs may lack the capability to develop HRM practices, but they are more likely to adopt such practices if they employ highly skilled employees and are networked to other organizations     

Abolishing the Tax‐Free Threshold in Australia: Simulating Alternative Reforms*

This paper examines the role of the tax‐free income tax threshold in a complex tax and transfer system consisting of a range of taxes and benefits, each with its own taper rates and thresholds. Considering a tax and benefit system with benefit taper rates whereby some benefits are received by income groups other than those at the bottom of the distribution, it is suggested that a tax‐free threshold is not a necessary requirement to achieve redistribution. Four alternative policy changes, each involving the elimination of the tax‐free threshold in Australia and designed to achieve approximate revenue neutrality, were examined using the Melbourne Institute Tax and Transfer Simulator. A range of implications were examined, including labour supply responses to tax changes and the effects of policy changes on inequality and social welfare. The results demonstrate that it is possible to eliminate the tax‐free threshold under approximate overall revenue and distribution neutrality, but that it is impossible to improve labour supply incentives at the same time. In order to achieve improved incentives, either revenue or distribution neutrality has to be sacrificed.