The determination and consequences of international liquidity

Summary In the 20 years since 1969, international reserves have shown considerable increases, that seem to be far in excess of any long-term global need. This was a consequence of the prominent role that the dollar continued to play in the monetary system, which made it easy for the United States to finance balance of payments deficits in its own currency, increasing the amount of dollars in reserves. In addition the Eurodollar market made international reserves to some extent demand/determined: there was a very elastic supply of liquidity in this market. These developments in international reserves have inflationary consequences. To prevent such consequences in the future, central banks should set up a systematic surveillance system for international liquidity together with the IMF and BIS. An essential instrument in this context would be for the United States to finance its balance of payments deficits in foreign currencies in world capital markets.Keynote speech for the Foundation Robert Triffin Szirak on 17 November 1994 in Brussels.     

Key Factors that Influence Consumer Preferences for Natural-Hyped Products

Natural-hyped products are receiving greater attention from and acceptance by consumers worldwide. Environmental factors that foster the demand for natural-hyped products, specifically hemp-based products include the deregulation of the cannabis industry and greater consumer desire for natural foods. Adding to this, the strategic use of stimulant type of cues (e.g., a cannabis leaf) included in product logos, ads, and packaging, seems to create hype associations when evaluating hemp-based products. In this context, this study presents empirical evidence (three experiments and two qualitative studies) that illustrates consumer preference for hemp-based products over ones that do not include hemp as an ingredient (hemp-free). The research focuses on identifying the psychological determinant that orients consumers towards hemp-based products. Findings suggest that the perceived naturalness is the psychological mechanism behind consumers positive evaluation of hemp-based products. Moreover, this study presents evidence that this evaluation is enhanced by the consumer's need for stimulation. Implications of the findings for the role of perceived naturalness and the need for stimulation in marketing strategies are discussed.     

Inductive research in last-mile delivery routing: Introducing the Re-Gifting heuristic

The last-mile problem presents a daunting challenge for many logistics service providers, especially some 7000 small, localized operations for whom the cost of complex software solutions is often prohibitive. As a result, last-mile dispatchers rely on simple heuristics to ensure adequate customer service at an acceptable cost. This research effort extends prior qualitative work by developing and testing a simple vehicle routing heuristic, based on behaviors observed in practice, that prioritizes customer service over cost against other simple vehicle routing heuristics across a variety of environments using simulation. The results support the inclusion of a customer service focus in vehicle routing and the addition of such heuristics to existing algorithm portfolios, specifically in urban areas with well-developed highway systems.     

Model-free portfolio theory: A rough path approach

Based on a rough path foundation, we develop a model-free approach to stochastic portfolio theory (SPT). Our approach allows to handle significantly more general portfolios compared to previous model-free approaches based on Föllmer integration. Without the assumption of any underlying probabilistic model, we prove a pathwise formula for the relative wealth process, which reduces in the special case of functionally generated portfolios to a pathwise version of the so-called master formula of classical SPT. We show that the appropriately scaled asymptotic growth rate of a far reaching generalization of Cover's universal portfolio based on controlled paths coincides with that of the best retrospectively chosen portfolio within this class. We provide several novel results concerning rough integration, and highlight the advantages of the rough path approach by showing that (nonfunctionally generated) log-optimal portfolios in an ergodic Itô diffusion setting have the same asymptotic growth rate as Cover's universal portfolio and the best retrospectively chosen one.     

The effects of a plant closure on the stress levels and health of workers' wives — A preliminary analysis

In recent years an increasing amount of information leaves no doubt that the costs to the victims of plant closures are more than economic. The stress occasioned by job loss often results in ill health. These findings aside, little systematic research has been done of the consequences of unemployment for the spouses of the unemployed. In this article, a comparison is made between the effects of a closure on unemployed male employees and their wives. It is found that both groups suffer a high degree of anxiety over future job prospects and both experience a high level of stress as a result of the closure. However, for wives, anxiety, but not general stress, leads to ill health. For men, neither appears to have health implications: post-closure illness is related to illness prior to the shutdown. In one sense, two months after the closure, it can be argued that the impact of the shutdown was greater on wives than unemployed former employees.     

Improving the effectiveness of persuasive communications: Matching message with functional profile

The functional approach to improving communication strategy has received little attention. This research attempts to partially correct this oversight by experimentally verifying the major functional hypothesis: matching message with functional profile brings about attitude change. Working adults were integrated into an experiment which was a before-after with control. The major functional hypothesis was confirmed at the 0.10 level. An associated hypothesis regarding the relative ease of changing value- expressive attitudes compared to utilitarian attitudes was confirmed at the 0.10 level. The results show the importance of matching message with functional profile and highlight the potential inherent in the functional approach.     

A framework for analyzing money stock control under the Monetary Control Act

This paper analyzes the money stock effects of the Monetary Control Act (MCA) under a nonborrowed reserve (NBR) operating procedure. Prior to the passage of the MCA, policy was conducted under an interest rate operating target where reserve requirement reforms such as those introduced by the MCA had little influence on money stock variability. Under an NBR procedure however, the structure of reserve requirements may have a significant impact on monetary control. Our analysis indicates that the relative improvement in monetary control greatly depends on the degree of tightness exercised by the Federal Reserve over total reserves in an MCA regime. The tighter the control, the more significant the estimated monetary control benefits of the MCA under an NBR procedure.     

On Being Consumer Educators in the 1980's

Consumerism as a force in our society is maturing. Consumer education as a field of study is also growing up. It is beginning to be recognized as a positive and constructive force in the economy. In the decade of the 80's we can probably place less emphasis on the adversarial and protective issues and more on the rights and responsibilities of consumers in a market economy. A second or “hidden” agenda should be to encourage improvement in the production and delivery system itself. Consumer education belongs to no single discipline. Even economics cannot provide the whole story for a consumer education program. However, consumer education that does not require solid economic understanding is indeed misnamed. Although the primary focus of our efforts should be on the decision making of the individual and the household, our teaching must clearly articulate with the larger economy. We are living in a different economic climate than prevailed a decade or so ago. We must keep abreast of rapidly changing social institutions and market arrangements if our teaching is to be relevant and meet the challenges of the coming decade.