Speculative attack against the Hungarian forint

In mid-January 2003 a severe speculative attack was launched against the exchange rate of the Hungarian forint. The attack was very unusual in the history of foreign exchange speculations, since it was aimed at enforcing the appreciation — and not the depreciation — of the currency targeted. The specific nature of this kind of speculation is closely related to Hungary’s accession to the European Union in general and to EMU in particular. Since the other Central and Eastern European acceding countries face similar problems and challenges, the Hungarian experience may involve some instructive lessons on monetary and economic policy for them too.     

Costs and benefits of EU enlargement

While the political benefits of the coming EU enlargement are relatively easy to identify, its economic and financial consequences are less unequivocal. The following article examines the likely costs and benefits of enlargement to both existing and future Members, and in particular how it will affect Germany, one of the few present EU Member States which has direct borders with acceding states. The article expresses the personal opinions of the author.     

The New Economy is dead,long live the information economy

The arrival of the 2001–2003 recession caused many to suppose that the so-called “New Economy” was now defunct. This article addresses a number of related issues, including the question of the durability and viability of business cycles in the face of the technological developments of the information age. It asks what went wrong with the New Economy and examines its characteristics as well as its remaining possibilities and prospects for the future. Finally, it considers the spread of the Information Economy to Europe, especially to Germany, the country that one might expect to be the leading European player, but which is not at present actually a strong competitor for that role.     

Learning across the life cycle: Experimentation and performance among the hollywood studio heads

Guided by notions from the literature on organizational learning, this paper investigates how product line experimentation and organizational performance change across the careers of top managers. Its subjects are the studio heads who ran all the major Hollywood film studios from 1936 to 1965. The study found first, that product line experimentation declines over the course of executive tenures; second, that there is an inverse U‐shaped relationship between top executive tenure and an organization's financial performance; and third, that product line experimentation is more likely to benefit financial performance late in top executives' tenures. These findings are consistent with a three‐stage ‘executive life cycle’. During the early years of their tenures, top managers experiment intensively with their product lines to learn about their business; later on their accumulated knowledge allows them to reduce experimentation and increase performance; finally, in their last years, executives reduce experimentation still further, and performance declines. Copyright © 2001 John Wiley & Sons, Ltd.     

Produktgarantien und Aktienkrise — Implikationen für die Kapitalanlagepolitik von Lebensversicherungsunternehmen

The present contribution analyzes the implications of two central factors influencing the asset allocation decision of (German) life insurance companies, the development of the equity market on one hand and the interest rate guarantees included in traditional life insurance products on the other. The adverse development of share prices in 2000–2002 implies the necessity to consider not only ?normal“ volatility but also worst case-developments for the purpose of risk control. Formally this is done by using the risk measures value-at-risk and conditional value-at-risk. The specific ?myopic“ nature of interest rate guarantees in German life insurance products, which are granted on a yearly basis implies — beyond the general control of the shortfall risk with respect to the guaranteed interest rates — the necessity to per-form the asset allocation on a yearly basis to be in conformity with the time horizon of the liabilities.On the basis of a quantitative approach corresponding model calculations are performed. Thereby not only a pure market valuation is considered but also institutional peculiarities (hidden reserves, accounting norms) of German life insurance companies. The possibility of a riskless one-year investment, either based on market values or on balance sheet values, is revealed to be crucial for giving interest rate guarantees on a yearly basis.