The Need to Return to a Monetary Framework

This paper examines the 100-fold increase in reserve balances at the Federal Reserve during 2008. By looking at the balance sheet of the Federal Reserve and factors influencing the supply and demand for reserves, the paper shows that the increase was due to large purchases of securities and loans to certain sectors and institutions. Such actions constitute a combination of monetary policy and industrial policy, or a mondustrial policy. This characterization raises questions about the future of the Federal Reserve and suggests the need to return to a monetary framework that controls the money supply while the interest rate is zero and establishes rules for setting the interest rate.     

The impact of title event sponsorship announcements on shareholder wealth

Title sponsorships are often considered the crown jewels of sports sponsorship programs. Garnering top media coverage, title sponsorships are prized for both generating brand/product awareness and building image for their sponsors. Not surprisingly, the rising cost of title sponsorships has led some managers to question their underlying value. Accordingly, this study presents an analysis of the impact of 114 title sponsorship announcements of professional tennis and golf tournaments (both men’s and women’s), auto racing (NASCAR), and college bowl games on the stock prices of sponsoring firms. Overall, the results of the study suggest that title sponsorships are generally signed at market-clearing prices. Thus, companies undertaking title sponsorships typically receive exactly what they pay for—except in the case of NASCAR races (which show evidence of increases in share prices). Splitting the sample into new and renewing sponsorships generates results which differ dramatically by sport. Finally, a cross-sectional regression finds congruence of sport and sponsor, sponsorship by high tech firms and sponsorships by large firms all correlated with perceived sponsorship success.     

Electronic Computers – The Challenge to Management

The potentialities of computers have not been fully exploited in the U.S. because management has underestimated the task of putting them to proper use. Management has believed that computers themselves are automation. But automation places a premium on good management. Without careful management planning, business resources are wasted in terms of managerial and technical time and abilities. Since computers are capable of handling many tasks simultaneously, it is only by casting aside the departmental concept and substituting the integrated systems approach that the true value of these machines begins to be appreciated. Automatic data processing provides for the tighter control that is important in competitive markets. The key to the whole problem of putting automation to work is education of personnel. Knowledge of equipment and techniques is not enough. Automation, by permitting handling of many jobs simultaneously, is in direct conflict with the concept of division of labor. The businessman, faced with wholesale reorganization of work, must train more basically and broadly. Current training for this field is largely dependent upon specialized courses offered by the manufactures of computers. The responsibility for training these people is largely that of private business, and it is a larger task than most managers realize. If a businessman is to feel confident that his company’s data processing is not just a gamble, he must accept this new challenge to management. Reprint of a paper from elektronische datenverarbeitung 1(1)1959:20–23. This article is also available in German in print and via http://www.wirtschaftsinformatik.de: Diebold J (2008) Elektronische Computer – Eine Herausforderung für die Unternehmensleitung. WIRTSCHAFTSINFORMATIK. doi: .

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Determinacy in the Linear Model: Gauss to Bose and Koopmans

Gauss showed that least squares fails to produce a unique solution only when the problem is indeterminate. This note considers his argument and the notion of indeterminacy underlying it. It also relates the argument to twentieth-century discussions of estimability and identifiability.     

Predicting future purchases with the Poisson log-normal model

The negative binomial distribution (NBD) has been widely used in marketing for modeling purchase frequency counts, particularly in packaged goods contexts. A key managerially relevant use of this model is Conditional Trend Analysis (CTA)—a method of benchmarking future sales utilizing the NBD conditional expectation. CTA allows brand managers to identify whether the sales change in a second period is accounted for by previous non-, light, or heavy buyers of the brand. Although a useful tool, the conditional prediction of the NBD suffers from a bias: it under predicts what the period-one non-buyer class will do in period two and over predicts the sales contribution of existing buyers. In addition, the NBD's assumption of a gamma-distributed mean purchase rate lacks theoretical support—it is not possible to explain why a gamma distribution should hold. This paper therefore proposes an alternative model using a log-normal distribution in place of the gamma distribution, hence creating a Poisson log-normal (PLN) distribution. The PLN distribution has a stronger theoretical grounding than the NBD as it has a natural interpretation relying on the central limit theorem. Empirical analysis of brands in multiple categories shows that the PLN distribution gives better predictions than the NBD.     

Transferability of computer technology across asian cultures

Though somewhat handicapped by relatively late entry into the computer age, serious attempts are now being made by several Asian countries to take a more active role in the development and export of computer technology, long dominated by the United States and West European countries. Japan, for one, embarked on all-out efforts in the early 1980s to develop the powerful fifth generation computer; it ranks second in the world in the number of computers in use, and has accumulated considerable knowledge and knowhow in the design and use of computer-based Management Information Systems (MIS).This article presents findings from a study conducted in Japan and Hong Kong on the transferability of computer technology, specifically its behavioural aspect, across Oriental cultures.     

Best-performing US mutual fund families from 1993 to 2008: Evidence from a novel two-stage DEA model for efficiency decomposition

When analyzing relative performance, especially at the institutional level, the traditional data envelopment analysis (DEA) models do not recognize vastly different and important activities as separate functions and therefore cannot identify which function may be the main source of inefficiency. We propose a novel two-stage DEA model that decomposes the overall efficiency of a decision-making unit into two components and demonstrate its applicability by assessing the relative performance of 66 large mutual fund families in the US over the period 1993–2008. By decomposing the overall efficiency into operational management efficiency and portfolio management efficiency components, we reveal the best performers, the families that deteriorated in performance, and those that improved in their performance over the sample period. We also make frontier projections for poorly performing mutual fund families and highlight how the portfolio managers have managed their funds relative to the others during financial crisis periods.