R/S analysis of foreign exchange rates under two international monetary regimes

The purpose of this study is to examine empirically the behavior of foreign exchange markets during the most recent experiences with fixed and flexible rates. Specifically, this study explores the possibility that long-term dependence is present in the exchange rate series for the British pound, French franc, and German mark in terms of the U.S. dollar. Using R/S analysis, positive long-term dependence is uncovered for each exchange rate during the flexible regime but negative dependence is found in the fixed period.     

WORLD OUTLOOK

The world economic recovery, which began in the late summer of 1980, can now be seen as premature, in as much as 1980's short, sharp recession had achieved only a limited reduction in the rate of inflation. Economic policy, particularly in the United States, is once more geared to a reduction in the inflation rate even if this imposes costs in terms of lost output and higher unemployment. The consequent appreciation of the US dollar against the European currencies has - in spite of weakening oil and non-oil commodity prices in dollar terms - produced a further boost to European inflation and a subsequent tightening of policy in some countries, notably West Germany. In these circumstances we expect little or no growth in output in the world economy until the summer of 1982.     

Strategy and your stronger hand

There are two kinds of businesses in the world, says the author. Knowing what they are--and which one your company is--will guide you to the right strategic moves. One kind includes businesses that compete on a complex-systems model. These companies have large enterprises as their primary customers. They seek to grow a customer base in the thousands, with no more than a handful of transactions per customer per year (indeed, in some years there may be none), and the average price per transaction ranges from six to seven figures. In this model, 1,000 enterprises each paying dollar 1 million per year would generate dollar 1 billion in annual revenue. The other kind of business competes on a volume-operations model. Here, vendors seek to acquire millions of customers, with tens or even hundreds of transactions per customer per year, at an average price of relatively few dollars per transaction. Under this model, it would take 10 million customers each spending dollar 8 per month to generate nearly dollar 1 billion in revenue. An examination of both models shows that they could not be further apart in their approach to every step along the classic value chain. The problem, though, is that companies in one camp often attempt to create new value by venturing into the other. In doing so, they fail to realize how their managerial habits have been shaped by the model they've grown up with. By analogy, they have a "handedness"--the equivalent of a person's right- or left-hand dominance--that makes them as adroit in one mode as they are awkward in the other. Unless you are in an industry whose structure forces you to attempt ambidexterity (in which case, special efforts are required to manage the inevitable dropped balls), you'll be far more successful making moves that favor your stronger hand.     

The Investment Incentive Effects of Land Use Regulations

This paper provides an overview and synthesis of the results from recent studies of how different types of land use regulations affect land development incentives. The presentation is nontechnical and focuses on uncovering general principles for the dynamic effects of such policies. It explains why the risk of regulation leads to faster development of unregulated land and how the effect on structural densities reflects the underlying pattern of growth in the demand for land by competing uses. It also discusses how the general pattern of timing and density responses for regulated property reflect the same growth patterns in demand.     

Changing ethics of distribution

The households which in Britain form the basic units of consumption, derive their entitlement to share in the stream of production largely from employment by organisations and from membership of the political community. These two systems of distribution increasingly conflict. In both the allocative decisions are increasingly made by what are essentially political negotiations. In both, the underlying ethical assumptions are confused, conflicting and in rapid change. Neither better economic controls nor (still less) improved technology can solve present distributive problems. These demand radically revised distributive ethics to meet the mounting demands of the physical and social environment and to distribute the shrinking balance acceptably between consumers.     

Size of organisation,attitudes to work and job satisfaction

It is widely believed that large size creates problems for industrial relations and, conversely, that small size is beneficial. There has been little research relating size and workers' attitudes—this article reports the findings from a study in 24 factories in British manufacturing industry.