Business Cycles,Core, and Periphery in Monetary Unions: Comparing Europe and North America

Using different levels of regional aggregation, we compare Europe with the USA and Canada as regards business cycle synchronization and core-periphery patterns. A long annual sample (1950–2005) makes it possible to study how these aspects have evolved over time. Results support the economic viability of EMU. Average cyclical correlations among European countries have risen significantly, reaching levels close to those of North American regions. Applying fuzzy clustering to the analysis of core-periphery issues, we find European countries to actually outperform USA Census Regions: the core-periphery divide is milder, and peripheral status seems generally less protracted.     

The Digital Divide in East Asia

The concept of a 'digital divide'—inequality in access to modern information and communication technologies (ICTs) between industrialised and developing countries, and between urban and rural populations—has attracted much attention from policymakers, aid organisations, media and the general public. This paper places discussion of the digital divide in a broader economic context, linking it with the theory of economic growth and technological change. The network effects of diffusion of the Internet are related to the possibility of leap-frogging by latecomers. This is seen as a 'digital opportunity' presented to developing countries by the 'new economy'. This paper discusses the appropriate policy environment for bridging the digital divide, and concludes that the East Asian region has much to gain from the complementarities of its economies, their openness to trade in ICT products, and policy cooperation.     

THE EFFECTS OF BANK CONSOLIDATION ON RISK CAPITAL ALLOCATION AND MARKET LIQUIDITY

We investigate the effects of financial market consolidation on the allocation of risk capital in a financial institution and the implications for market liquidity in dealership markets. An increase in financial market consolidation can increase liquidity in foreign exchange and government securities markets. We assume that financial institutions use risk‐management tools in the allocation of risk capital and that capital is determined at the firm level and allocated among separate business lines or divisions. The ability of market makers to supply liquidity is influenced by their risk‐bearing capacity, which is directly related to the amount of risk capital allocated to this activity.     

Using Buyer-Supplier Networks to Increase Innovation Speed: An Exploratory Study of Thai Textile Exporters

As global competitive pressures require exporters to produce higher value-added products and target their marketing efforts more closely, it is important to understand whether the way exporters interact with their important customers and suppliers is changing. This article explores the choices of large Thai textile exporters to form partnerships with their major customers and suppliers in order to achieve faster innovation. The results from this exploratory study suggest that some Thai exporters may be forming buyer-supplier networks to execute strategies of rapid innovation as they attempt to move away from a low cost focus and provide more value-added to their international customers.     

Chaotic consumption patterns in a simple2-D addiction model

Summary.  Consumption fluctuations in a simple 2-D addiction model are investigated. The behavioural equations of the model are suggested by a related ‘rational addiction’ model of Becker and Murphy [2]. Our model generates erratic, seemingly unpredictable consumption patterns of the addicted persons. The occurence of chaos is proven by locating a so called horseshoe map in the phase space. Received: April 4, 1994; revised version March 25, 1996     

Welcome to the Wet Tropics: the importance of weather in reef tourism resilience1

As one of Australia's iconic tourism attractions and one of the seven natural wonders of the world, the Great Barrier Reef (GBR) is an important economic, social and natural resource for Queensland's Tropical North. However, the long-term prognosis for the health of the reef and by implication, the industries dependent on it, is not positive. So far much attention has focussed on the health and resilience of the reef ecosystem, as a foundation for a resilient tourism industry. In this study we explore how weather conditions have affected the reef experiences of 1000 tourists to the Cairns/Port Douglas region, suggesting that this may also be an important indicator of change on the reef. The results suggest that poor weather has a more pronounced effect on experiences than good weather and reinforce the likelihood that seasickness, cold and wet conditions, reduced water visibility, and difficult snorkelling/diving conditions will reduce overall levels of satisfaction. Poor weather was found to have a direct effect on satisfaction scores, the likelihood that reef and tour expectations were not realised, and lowered perceived value for money. These are important considerations for the reef centred tourism industry that is currently facing strong environment pressures from climate change.     

Exponential discounting bias

We address intertemporal utility maximization under a general discount function that nests the exponential discounting and the quasi-hyperbolic discounting cases as particular specifications. Under the suggested framework, the representative agent adopts, at some initial date, an optimal behavior that shapes her consumption trajectory over time. This agent desires to take a constant discount rate to approach the optimization problem, but bounded rationality, under the form of a present bias, deviates the individual from the intended goal. As a result, decreasing impatience will end up dominating the agent’s behavior. The individual will not be aware of her own time inconsistency and, therefore, she will not revise her plans as time elapses, what makes the problem relatively simple to address from a computational point of view. The general discounting framework is used to approach a standard optimal growth model in discrete time. Transitional dynamics and stability properties of the corresponding dynamic setup are studied. An extension of the standard utility maximization model to the case of habit persistence is also considered.