Global economy gathering strength

Encouraged by a highly expansionary economic policy, the global economy is enjoying a rapid upturn. Utilisation of capacity is high in many sectors, particularly in the growth centres of the USA and East Asia, where China leads the field. With inflationary risks on the increase, most countries are now shifting the focus of economic policy. Fiscal policy in particular can be expected to provide little in the way of further stimulus. In addition, there has been a turnaround in interest rates in many countries. Yet how quickly can the monetary reins be tightened without jeopardising growth or endangering price stability?     

New ways of achieving debt sustainability beyond the enhanced HIPC Initiative

In 1996 the Heavily Indebted Poor Countries (HIPC) Initiative was launched by the Bretton Woods institutions to reduce the external debt burden of low-income countries (LICs) to sustainable levels in a reasonably short period of time because debt constitutes an obstacle to sustainable economic growth and poverty reduction. In some HIPCs, however, debt sustainability has been in danger despite debt relief under the HIPC Initiative. Debt relief is a necessary but not a sufficient condition for development. It can do no more than play a catalytic role. The question, then, is how to achieve debt sustainability beyond the HIPC Initiative.     

Airbus versus Boeing revisited: international competition in the aircraft market

This paper examines international competition in the commercial aircraft industry. We estimate a discrete choice, differentiated products demand system for wide-body aircraft and examine the Airbus-Boeing rivalry under various assumptions on firm conduct. We then use this structure to evaluate two trade disputes between the United States and European Union. Our results suggest that aircraft prices increased by about 3.7% after the 1992 US-EU agreement on trade in civil aircraft that limits subsidies. This price hike is consistent with a 5% increase in firms' marginal costs after the subsidy cuts. We also simulate the impact of the future entry of the Airbus A-380 super-jumbo aircraft on the demand for other wide-bodied aircraft, notably the Boeing 747. We find that the A-380 could reduce the market share of the 747 by up to 14.8 percentage points in the long-range wide-body market segment (depending upon the discounts offered on the A-380), but would reduce the market for Airbus's existing wide-bodies by an even greater margin.     

Ethics in Information Technology and Software Use

The emerging concern about software piracy and illegal or unauthorized use of information technology and software has been evident in the media and open literature for the last few years. In the course of conducting their academic assignments, the authors began to compare observations from classroom experiences related to ethics in the use of software and information technology and systems. Qualitatively and anecdotally, it appeared that many if not most, students had misconceptions about what represented ethical and unethical behaviors in these realms. Clearly, one can argue that if college students are uncertain about what constitutes appropriate and inappropriate behavior then this uncertainty will be carried forward into their workplaces upon graduation. Furthermore, if their workplaces don't provide ethics training as a component of a new employee orientation program, one can project a potential for unintentional violations and infringements of copyrights and law in the field. This study was conducted among graduate and undergraduate students to gain insight into their attitudes, perceptions and understanding of some of the relevant ethics issues. A questionnaire of 11 statements was employed that described ubiquitous but most likely unethical (or surely dubious) behaviors in the prevailing business and academic environments. Each respondent was asked to evaluate each statement twice (once for “self” and once for “colleague”) on a five-option highly ethical (5) to neutral (3) to highly unethical (1) scale. The statements were worded such that lower instrument score was associated with higher ethical responses. The questionnaire's two-part structure was designed to solicit honest answers. The encouraging learning from this study was that the overall sample and its various sub-samples did not consider any of the eleven behaviors to be “ethical” or “highly ethical.” It was also encouraging to note that the overall sample and all sub-samples considered “highly unethical” those behaviors associated with personal privacy or property or outright theft. This indicated that moral judgment and probity prevail. The discouraging learning was that behaviors associated with the use of enterprise property were viewed as “neutral” i.e., neither “ethical” nor “unethical.” These findings suggested confusion and lack of clarity and definition around workplace deportment as it regards ethics in software and information technology use. The current study suggests that additional research needs to be conducted to define and clarify the issues, which in turn can form the basis for programs to rectify or at least ameliorate the situation.     

Post-Communist Consumer Ethics: The Case of Romania

In this paper we theorize that cognitive ethical orientations play an influential role in the beliefs of consumers when faced with different ranges of moral dilemmas. We examine this proposition in transitional Eastern Europe and results from a sample of 210 Romanian consumers suggest that Romanians are faced with a moral situation where low levels of Machiavellianism and high levels of idealism appear to relate to a higher ethical concern about passively benefiting at the expense of others.     

Contract modifications and the basis behavior of live cattle futures

The purpose of this study was to assess the basis behavior of the Live Cattle Futures contract at the Chicago Mercantile Exchange (CME) before and after the 1995 contract changes. Additionally, an alternative method of basis calculation utilizing weighted mean futures prices versus settlement futures prices was compared to determine which method provides a better representation of the basis level. Within a regression model with heteroskedascity error framework, we found that the level of nearby basis in the period after June 1995 has shifted lower and the average monthly open interest of net commercial long positions has substantially increased after the contract modifications. These empirical results are consistent with the notion that more long activity entered the market in response to the contract modifications. Additionally, an alternative (new) measure of basis calculation (cash price minus weighted mean futures price) produced similar results to two other commonly used measures. In conclusion, the 1995 contract changes have neither increased nor decreased the volatility of live cattle basis. © 2004 Wiley Periodicals, Inc. Jrl Fut Mark 24:557–590, 2004     

Explaining Firm Employment Growth: Does Location Matter?

This paper addresses the question to what extent the location of a firm can be regarded as having an influence on the performance of a firm as measured by employment growth. While in theory it is widely acknowledged that `location' should be considered as a relevant growth determinant, empirical research has so far mainly focused on firm-internal factors. The question raised in this paper is empirically verified by means of an econometric model based on a data set of circa 35,000 establishments located in the northern part of the Netherlands during the period 1994–1999. The model includes several measurements of location characteristics like the population level and growth, employment growth, spatial specialisation and cluster indicators, type of enterprise zone, and accessibility while controlling for firm-associated factors such as size, age, and business activity. Based on the fact that we find several significant coefficients we conclude that `location matters' but that the effect differs by type of economic activity.