The Inflation Hedging Characteristics of US and UK Investments: A Multi-Factor Error Correction Approach

Historic analysis of the inflation hedging properties of stocks has produced anomalous results, with stocks often appearing to offer a perverse hedge. This has been attributed to the impact of real and monetary shocks to the economy, which influence both inflation and asset returns. It has been argued that real estate should provide a better hedge: however, empirical results have been mixed. This paper explores the relationship between commercial real estate returns and economic, fiscal and monetary factors and inflation for US and UK markets. Comparative analysis of general equity and small capitalization stock returns is carried out with inflation divided into expected and unexpected components. The analyses are undertaken using an error correction approach. In the long run, once real and monetary variables are included, asset returns are positively linked to anticipated inflation but not to inflation shocks. Adjustment processes are, however, gradual and not within period. Real estate returns, particularly private market returns, exhibit characteristics that differ from those of stocks.

Ownership and Control of German Corporations

In a study of the ownership of German corporations, we finda strong relation between board turnover and corporate performance,little association of concentrations of ownership with managerialdisciplining, and only limited evidence that pyramid structurescan be used for control purposes. The static relationship ofownership to control in Germany is therefore similar to theUnited Kingdom and the United States. However, there are markeddifferences in dynamic relations involving transfers of ownership.There is an active market in share blocks giving rise to changesin control, but the gains are limited and accrue solely to theholders of large blocks, not to minority investors. We provideevidence of low overall benefits to control changes and theexploitation of private benefits of control.     

Don't Forget the Gravy! Are Bonuses Just Added on Top of Salaries?

The press often depicts bonuses as extra payments to the already well compensated and calls for reform. Yet, these calls typically ignore the efficiency argument that bonuses are potentially risky performance pay that substitute for salary compensation. This paper uses representative UK data to estimate that bonuses appear not to substitute for salary in cross‐sectional estimates. Yet, when controlling for time‐invariant characteristics in panel data, bonuses emerge as partial substitutes. Each pound of bonus comes at a cost of 40 pence in other earnings. The degree of substitution is far larger at the bottom of the earnings distribution and far smaller at the top of the earnings distribution where, indeed, bonuses look more like gravy.     

Modelling the Performance of Irish Credit Unions, 2002 to 2010

This study undertakes a modeling based performance assessment of all Irish credit unions between 2002 and 2010, a particularly turbulent period in their history. The analysis explicitly addresses the current challenges faced by credit unions in that the modeling approach used rewards credit unions for reducing undesirable outputs (impaired loans and investments) as well as for increasing desirable outputs (loans, earning assets and members’ funds) and decreasing inputs (labour expenditure, capital expenditure and fund expenses). The main findings are: credit unions are subject to increasing returns to scale; technical regression occurred in the years after 2007; there is significant scope for an improvement in efficiency through expansion of desirable outputs and contraction of undesirable outputs and inputs; and that larger credit unions, that are better capitalised and pay a higher dividend to members are more efficient than their smaller, less capitalised, and lower dividend paying counterparts.     

The pathfinder process in Northern Ireland

Government has many customers — not just the individual citizen, but also corporate customers from the private sector. Getting close to those customers will require changes in the nature of public sector culture. Below are two examples — the first from Northern Ireland and the second from Whitehall — of government departments which have tried to change the way in which they do things.     

Determining the Optimum Guarantee Period for a One-Life Retirement Annuity

Abstract

We consider a risk averse retiree from a defined contribution plan who decides to purchase a onelife annuity with a guarantee period. Given the retiree has a bequest motive, we focus on the problem of determining the optimum length of the guarantee period. Assuming the retiree’s bequest function is proportional to his or her utility function, we determine necessary and/or sufficient conditions under which the retiree would choose an annuity with (i) no guarantee period, (ii) the maximum guarantee period, or (iii) an intermediate guarantee period.     

Developing a critical view on e‐learning trend reports: trend watching or trend setting?

Trend watching reports are an indispensable resource in the e‐learning domain. Many HRD departments consider these reports as essential cornerstones for the development of their e‐learning strategy. But what is the quality of the forecasts made in these reports? In this article, several methods of forecasting trends are discussed, resulting in a checklist to evaluate the quality of trend studies. Next, this checklist is applied to evaluate some significant trend studies. The evaluation results show that the reports do not meet basic quality criteria, such as ‘sound methodology’ and ‘objectivity’. The article concludes with some critical remarks on the role trend watching reports play in the domain of e‐learning.     

Opening of China's Trade,Labour Market Reform and Impact on Rural Wages

Government policy in China supports urban wages at the expense of returns to farm labour. A model is developed to estimate how WTO accession and complementary labour market reform will influence factor returns in China. With WTO membership, a larger cut in manufacturing tariffs compared to agriculture will improve agriculture's terms of trade and will raise the agricultural wage. Complementary labour market reforms will further boost farm wages as labour exits agriculture in large numbers. We estimate that WTO membership and complementary labour market reforms will result in a decline in the agricultural labour force by about 25 per cent.