International business standards: The competitive imperative

The global marketplace is a reality, and standards for business behavior should be as well. Isolated laws and sanctions do not allow for a level playing field. We believe that adoption of international business standards would provide a better and truly competitive business environment. Unifying the efforts of multinational businesses would intensify the potential impact and hopefully reduce the need for government mandates. © 1999 John Wiley & Sons, Inc.     

Agricultural land use in the era of climate change: The challenge of finding ‘Fit for Purpose’ data

The paper examines drivers of change in agricultural land use in order to identify data requirements and assess data suitability. In order to assess the fitness for purpose of available data, the paper provides an overview of the sources of data for agriculture and land use in the UK, in both a contemporary and historical context. It provides a brief assessment of the state of scientific knowledge on the analysis of land use change, combined with a consideration of some of the possible advances promised by the new land use science.     

Early-Life Circumstances Predict Measures of Trust among Adults: Evidence from Hunger Episodes in Post-War Germany

Can a major shock in childhood permanently shape trust? We consider a hunger episode in Germany after World War II, and we construct a measure of hunger exposure from official data on caloric rations set monthly by the occupying forces, providing regional and temporal variations. We correlate hunger exposure with measures of trust using data from a nationally representative sample of the German population. We show that individuals exposed to low caloric rations in childhood have significantly lower levels of trust as adults. This finding highlights that early-life experiences can have long-term effects in domains other than health, where such effects are well documented.     

Baumol's Law and Verdoorn's Regularity

This paper tests the laws of Verdoorn and Baumol for the Netherlands in order to assess whether these laws provide an appropriate framework to interpret developments of output, employment, and wages and prices in the manufacturing industry and the services sector. The empirical evidence is not conclusive with respect to Verdoorn's law, but strongly supportive of Baumol's law.     

Combinatorial agency

We study a combinatorial variant of the classical principal-agent model. In our setting a principal wishes to incentivize a team of strategic agents to exert costly effort on his behalf. Agents? actions are hidden and the principal observes only the outcome of the team, which depends stochastically on the complex combinations of the efforts by the agents. The principal seeks the mechanism that maximizes the principal?s net revenue given an equilibrium behavior of the agents. We investigate the structure of the optimal mechanism for various production technologies as the principal?s value from the project varies. In doing so we quantify the gap between the first-best and second-best solutions. Our results highlight the qualitative and quantitative differences between production technologies that exhibit complementarities and substitutabilities between the agents? actions. In comparing the first best with the second best we highlight the role of effort monitoring by the principal. As we shall see, the benefit from monitoring crucially depends on the underlying technology, with the two polar cases being perfect substitution and perfect complementarity.     

The choice of a foreign price measure in a Bayesian estimated new-Keynesian model for Israel

We estimate a small DSGE model by full information Bayesian techniques on the basis of Israeli data from 1995 to 2006. The model was first developed and estimated by means of classical GMM in Argov and Elkayam (2010), and since then it has been used at the Bank of Israel for monetary policy analysis. It is widely believed that in 2007 (out of sample year) as elsewhere worldwide, inflation rose in Israel due to high commodity prices in global markets. However, our baseline model attributes most of the high inflation in 2007 to supply shocks. One conjecture is that this model's result derives from the inappropriate original use of the unit value of imported consumer goods (which do not include unprocessed food and energy) as the main foreign price measure. We test this conjecture by re-estimating the model with various other foreign price measures that typically do reflect the global rise in commodity prices and compare the log-marginal likelihoods. We find that no other price measure outperforms the original choice in the sample period. Only the foreign trade-weighted CPI equals the performance of the original choice while improving the 2007 interpretation of inflation, and should therefore be considered the main foreign price measure. The proposed methodology for comparing the suitability of alternative measures for observable variables can be applied to any model with exogenous variables that are characterized by univariate equations.