Energy dependence,oil prices and exchange rates: the Dominican economy since 1990

This paper studies the impact that oil prices have had on the floating exchange rate (ER) of the Dominican peso during the 1990–2008 period. The existing empirical literature has documented a link between these two variables for large developed economies and oil-producing countries, always including the 1970s oil crises in their sample periods. Few authors analyze the case of small open economies dependent on oil imports. Since the acceleration of economic growth in the Dominican Republic during the last decade has greatly increased its degree of external energy dependence, this country’s experience presents an ideal case study. We estimate the influence that changes in international gasoline prices have on the real exchange rate between the Dominican peso and the United States dollar. The cointegrated nature of the gasoline price and ER time series are tested and a vector error correction model is developed. Our results indicate that a 10% rise in the price of gas coincides with a 1.2% depreciation of the peso in the long run and that the causality runs from gas prices to the peso.     

Finance, Banks and the Stability of Emerging Markets

Access to finance and sound banking institutions are two critical elements in any attempt to promote economic development in least-developed countries. Nevertheless, only in recent years have existing relations between financial liberalization, banking practices and the economic performance of emerging market economies been investigated in depth. In this review essay, prompted by a recent book, "Finance for Development" by Barbara Stallings, we discuss some important issues in this promising field of applied research.     

Information disclosure, banking development and knowledge-driven growth

In this study we develop a knowledge-driven growth model which explicitly models the banking sector as monopolistically competitive. The main mechanism through which financial intermediaries affect the real economy is through the evaluation and provision of liquidity to R&D projects. We distinguish two scenarios. In the regime with information disclosure, banks are able to use the stock of information obtained by the banking industry from evaluating R&D projects. This information externality brings about efficiency improvements, thereby leading to a positive entry of banks, more bank-funded research and in turn positive economic growth. By contrast, in the regime with no information disclosure, it is not profitable for new banks to enter the industry. This implies that no more potential R&D projects can be evaluated and hence financed, thus leading the economy to a zero-growth equilibrium.     

Price uncertainty, saving, and welfare

We analyze how commodity price uncertainty affects saving behavior and welfare in a dynamic model with multiple commodities, portfolio hedging, and a preference structure that disentangles ordinal preferences, attitudes towards risk, and attitudes towards intertemporal substitution. We show that the effect of price uncertainty on savings boils down to knowing (1) hf degree of resistance to intertemporal substitution and (2) the effect that uncertainty has on the certainty-equivalent real interest rate. We also show that, if the certainty-equivalent real interest rate is lower with uncertainty, consumers' welfare is also lower.     

Effects of work status congruence and perceived management concern for employees on turnover intentions in a fast casual restaurant chain

The current study examines a proposed turnover intention model on hourly employees in a large fast casual dining restaurant chain located in the United States. High levels of turnover have been a consistent and costly issue in the restaurant industry. The study was developed to help restaurant owners and managers determine how relationships between variables influence the turnover intentions of their employees, in order to overcome the economic hardship that organizations face when their turnover rates are high. Many factors were found to influence employee turnover intentions, including work status congruence, perceived management concern for employees, job satisfaction, and organizational commitment. Hence, it is important for fast casual restaurant operators in the United States to develop their managers' human resource skills, in order to have satisfied and committed hourly employees, who should as a result develop lower turnover intentions. Managerial and academic implications are discussed in detail.     

Customer perceptions of “McService”’: Relationship with return intention

The fast-food restaurant segment has been a dominant player in the restaurant industry since the 1960s. The recent changes in the needs and wants of guests have affected fast-food restaurants' ability to keep up with the trends regarding healthy and high-quality food options served at reasonable prices. The service quality perceptions assessed in this study were divided into the following constructs: overall experience, employees, ordering process, receiving order, and food quality. The results determined that the construct that influenced repeat intention was food quality, specifically the individual items “fresh food” and “food taste.” The study also found that males tended to evaluate employees more positively than females. Moreover, frequent fast-food diners only tended to have favorable perceptions with regard to the overall ordering process. Implications for practitioners and suggestions for future studies are discussed.     

On the continuity of equilibrium and core correspondences in economies with differential information

Summary. We study upper semi-continuity of the private and coarse core and the Walrasian expectations equilibrium correspondences for economies with differential information, with Boylan (1971) topology on agents information fields.Received: 16 January 2004, Revised: 28 October 2004, JEL Classification Numbers: D50, D82, C70. Correspondence to: Ezra EinyWe wish to thank Carlos Herves, Nicholas Yannelis, and an anonymous referee for their helpful comments.     

How much does water consumption drop when each household takes charge of its own consumption? The case of the city of Seville

Making individuals take charge of their own domestic water consumption is one of the measures used to reduce the growing demand for this resource and to achieve sustainable consumption compatible with the goal of equity. The use of individual meters instead of communal meters and fixing tariffs by inhabitant rather than by household are two measures aimed at achieving these objectives. This article assesses the measures put in place in the Seville metropolitan area during the last 20 years with an unobserved component model set up in a state-space framework estimated using maximum likelihood. Water consumption elasticity to individual meters has changed from –0.307 to –1.317 with the introduction of per inhabitant tariffs, which demonstrates that there are water-saving synergies when the two measures are implemented together. The reductions in water consumption achieved with these measures are also longer lasting than the changes in consumption habits during the frequent droughts in Seville.     

Noise and aggregation of information in large markets

We study the relation between noise (liquidity traders, endowment shocks) and the aggregation of information in financial markets with large number of agents. We show that as long as noise increases with the number of agents, the limiting equilibrium is well-defined and leads to non-trivial information acquisition, even when per-capita noise tends to zero. In such equilibrium risk sharing and price revelation play different roles than in the standard limiting economy in which per-capita noise is finite. We apply our model to study information sales by a monopolist, and information acquisition in multi-asset markets, showing that it leads to qualitatively different results with respect to those in the existing literature. Our conditions on noise are shown to be necessary and sufficient to have limiting economies with perfectly competitive behavior consistent with endogenous information acquisition.