Does the term spread play a role in the fed funds rate reaction function? An empirical investigation

Using US data for the period 1967:5-2002:4 this paper empirically investigates the performance of a Fed funds rate reaction function (from now on, FRF) that (i) allows for the presence of switching regimes; (ii) considers the long–short term spread in addition to the typical variables; and (iii) uses an alternative monthly indicator of general economic activity suggested by Stock and Watson (J Monet Econ 44:293–335, 1999). The estimation results show the existence of three switching regimes, two characterized by low volatility and the third by high volatility. Moreover, the scale of the responses of the Federal funds rate to movements in the rate of inflation and the economic activity index depends on the regime. The estimation results also show robust empirical evidence that the importance of the term spread in the FRF has increased over the sample period and the FRF was more stable during the term of office of Chairman Greenspan than in the pre-Greenspan period.      

Agrobiodiversity,farm profits and land fragmentation: Evidence from Bulgaria

This paper presents an empirical analysis of the role of land fragmentation, crop biodiversity and their interplay with farm profitability. Original primary data are drawn from a survey conducted in the Plodiv region of Bulgaria. The econometric results stress the ambiguous role of land fragmentation on farm profitability. On one hand, land fragmentation reduces farm profitability. On the other hand, land fragmentation fosters crop diversification. We also find that crop biodiversity plays a beneficial role in farm profitability. Policies that aim to increase land consolidation and reduce fragmentation may overlook the positive link between diversity and plot heterogeneity. Policies that encourage land consolidation should, therefore, consider the crucial role that this has on other variables such as farm biodiversity.     

Functional and productive dependence: new characteristics for the analysis of enterprises from a macroeconomic view

This article introduce two new characteristics of firms, which are important, from a macroeconomic view, to evaluate the roll of entrepreneurial tissue in the territorial economic growth: functional dependence and productive dependence. An empirical analysis has been formulated in order to contrast the importance of these entrepreneurial characteristics, and try to show its relation with territorial economic growth.     

Inventory policies for humanitarian aid during hurricanes

In this work we present a stochastic programming model minimizing costs, to support the decision process of inventory policy which best satisfies the demand for food in shelters when hurricane winds are about to impact a town. In this model we consider perishable products as well as the first in first out (FIFO) system for their consumption. In order to make the model closer to reality ordering cost is time-varying and we add a penalty cost in case the shortage exceeds a known limit for two days in a row. Finally the cost to dispose of expired food is greater than the purchase cost of the product since throwing away food has ethical implications. Starting from a stochastic programming model, we present a procedure to transform it to a deterministic mixed integer programming model (MIP) with non-convex objective function over its entire domain, which closely states the situation in reality. Preliminary computational results and discussion are presented.     

Managing strategic change through TQM: learning from failure

This article argues that the study of total quality management (TQM) failure is a valuable vehicle to extend our knowledge of strategic change management. The article reviews the literature on TQM and, after reporting the findings from an in-depth case study concludes by discussing the meaning of 'failure' and the lessons for managing strategic change that can be learnt from the study of TQM decline.     

The property rights game: Discovering the meaning of private property

In this paper we discuss the results of an educational game we have developed. This game deals with the acquisition, use, and transfer of private property rights in land and shows participants the importance of property rights in market economies. While our findings are not scientific, they do show that production in a society with solely communal property collapses while production in a society with private property flourishes. We hope that these results encourage others to use this exercise as an educational experience for students.     

Variable neighborhood search heuristic for nonconvex portfolio optimization

Abstract

In this article we consider a portfolio optimization problem under multiple real-world constraints, such as: cardinality constraints, tracking error, active share, and turnover. We propose a heuristic based on variable neighborhood search (VNS) that effectively addresses additional constraints that introduce non-convexities. In the VNS-based heuristic, several neighborhood structures are introduced and fast local search is implemented. We develop a VNS portfolio rebalancing framework (VNS-PRF) with two rebalance strategies. Data sets provided by a financial investment firm are used to evaluate the validity and reliability of the proposed VNS-PRF. Computational experiments and different portfolio performance measures indicate that our approach is able to obtain solutions with competitive quality and can be applied on large-scale data sets.     

Exchange or Covenant? The Nature of the Member-Union Relationship

Drawing on a study of members of the U.K. National Union of Teachers, this article considers the extent to which economic exchange, social exchange, and covenantal considerations underpin union members' willingness to continue membership and to participate actively in their union through union citizenship behaviors (UCB). Findings suggest that the more activist forms of UCB were motivated primarily by a perceived covenantal relationship with the union. In contrast, exchange, particularly social exchange, motivations played more of a role in motivating less demanding "rank and file" UCB and intent to quit the union. Union instrumentality appeared to be a necessary but insufficient condition for union viability, having an indirect effect on UCB and intent to quit the union and also moderating the effects of pro-union attitudes. Implications for union strategy are considered.     

A model of rational bias in self-assessments

Summary. A body of empirical work documents that most people believe they are above average in a variety of skills and abilities. This paper argues that such evidence does not necessarily imply that people process information in an irrational way. I build a model in which people can learn about their abilities at a cost of foregone production. Individuals in this model keep testing their abilities until their self-assessments become favorable enough, at which point they stop. This way, a disproportionately large share of the population ends up with a high opinion about their abilities.Received: 22 August 2001, Revised: 20 March 2003, JEL Classification Numbers: D81, D83, J22, J29.I would like to thank an anonymous referee, Herbert Dawid, Tom Gilligan, Eric Van den Steen, Ruqu Wang, and especially Patrick Francois for helpful comments and suggestions. I have also benefited from comments of seminar participants at Queen's University and from conversations with Frank Milne and Ivo Welch.