What Monetary Policy after the Crisis?

The objective of this paper is to reflect on some of the implications that recent economic experience has for monetary and financial stability policies. We contend that the financial crisis and the upsurge in inflation 2007–08 have shown that the policy model based on the new consensus in macroeconomics, which largely held sway over the past decade or more, is broken. It is argued that inflation targeting cannot deliver low inflation. We argue that fine-tuning through interest rates should not be attempted, but rather a constant real interest rate target based on the output growth rate should be adopted. The key objective of monetary policy should be shifted to financial stability, the independence of central banks should be brought to an end, and their decision making should be coordinated with other macroeconomic policy initiatives.     

Can buy me love: the effect of child welfare expenditures on maltreatment outcomes

I consider the effect of state level child welfare expenditures on child abuse victimization and fatality rates. The main result is that these expenditures are strongly associated with improved child maltreatment outcomes. Further, the well known negative association between income and child abuse is overstated if one fails to control for relevant policy differences that are correlated with economic circumstances. The effect of income diminishes further upon controlling for social attitudes correlated with income. The source of identification is a set of large and explicitly exogenous changes in child welfare expenditures induced by the circa 2000 recession. I show that endogeneity problems are small and tend to work against the result.     

Changing Perceptions of the Role of the Company Auditor, 1840–1940

One advantage of studying history is to explain present practice or at least to help place current phenomena in perspective. This paper seeks to explore two related themes which have proved problematic from the earliest times of company auditing in the UK: the nature of the auditor's responsibility; and the public's perception of his role. The conventional view is that auditors were initially concerned mainly with fraud detection, and that it was not until the 1930s that greater emphasis was devoted to the verification of financial statements. This study suggests that statement verification was the primary audit concern in relation to public companies as early as the 1830s, though we acknowledge that later in the century more emphasis was placed on fraud detection. We therefore see the current debate over the auditor's responsibility as merely the latest movement in a continuing and fluctuating theme. We also show that the profession has encountered great difficulty in reconciling public expectations with the practicalities of auditing. General confusion over the role of the auditor has existed to such an extent that it has been difficult even for the profession to reach agreement on the main purpose of company auditing, and the message to be sent to the investing public. In these endeavours, the accounting profession was at the same time both helped and hindered by legal developments.     

Labour–management relationships in transitional economies: convergence or divergence in Vietnam and Indonesia?

Western labour–management relationships (both formal and informal), their respective rights, obligations and negotiating frameworks, have been well- established, understood, and supported by a complex set of associated legislation for decades. However, in many developing countries, including Vietnam and Indonesia, historical, socio-cultural, ideological or political factors constrained the development of such formalized employee relations until very recent times. This paper explores the different paths taken by Vietnam and Indonesia towards a modern employee relations system, with its concomitant positive and adverse consequences.     

Exploration of the Dimensionality of the Consumer Ethnocentric Tendencies Scale in Mozambique

The objective of the study is to validate the Consumer Ethnocentric Tendencies (CET) scale in Mozambique and to explore its dimensionality. The study was carried out using a questionnaire-based survey to collect data from 273 respondents in Mozambique. A back-translation technique was applied in combination with a pilot study to verify the quality of the instrument in the Portuguese language. The study results showed that Mozambican consumers surveyed were moderately ethnocentric and that the CET scale demonstrated a four-dimensional structure.     

HRM as a predictor of innovation

There is growing evidence available to suggest that HR practice is an important predictor of organisational performance. In this article, we argue that HR practices also have the potential to promote organisational innovation. We describe a longitudinal study of 22 UK manufacturing companies and examine the relationship between such practices and product and technological innovation. Results reveal that training, induction, team working, appraisal and exploratory learning focus are all predictors of innovation. Contingent reward, applied in conjunction with an exploratory learning focus, is positively associated with innovation in technical systems. Furthermore, training, appraisal and induction, combined with exploratory learning focus, explain variation between companies in product and technological innovation above and beyond the main effects observed.     

The WTO Doha Agenda—Progress and Issues for Asia Pacific Developing Economies

Progress in the Doha Round of WTO negotiations has been slow. Frameworks for establishing modalities for agriculture, non-agricultural market access and trade facilitation were agreed upon in July 2004 but key details are still to be negotiated and many commitments remain vague. For developing economies in the Asia Pacific region, the July package contains many potentially positive elements, including a commitment to remove all forms of agricultural export subsidies and a framework for reducing domestic supports and market access restrictions. However, most of the difficult issues are still to be addressed. Already it is apparent the agreements and commitments will be complex, full of exceptions (especially for developing countries due to their insistence on economically damaging forms of special and differential treatment) and difficult to interpret. This will serve to enable all governments to fudge commitments and to undermine the transparency of the multilateral trading system. Latest developments are not encouraging. Critical target dates set in the July package in preparation for the December Hong Kong Ministerial Conference were missed due to negotiations lagging in all key areas. Without a successful outcome in Hong Kong, it is unlikely the Doha Round will be completed by the current deadline of 2007.     

A clarification of the Goodwin model of the growth cycle

We show that there is a difficulty in the original Goodwin model which is also found in some more recent applications. In it both the labour share and the proportion employed can exceed unity, properties which are untenable. However, we show that the underlying dynamic structure of the model can be reformulated to ensure that these variables cannot exceed unity. An illustrative example extends the original model, and we argue it is both plausible and satisfies the necessary unit box restrictions.     

The Euro: Reflections on the first three years

In the first three years of its (virtual) existence, the euro has seen a general decline in its value (notably against the dollar). In this paper we look at this issue and reflect on the implications of the decline for the future of the euro.The paper begins by briefly reviewing some of the explanations that have been put forward for the weakness of the euro, which might be seen as temporary factors or factors that do not arise from the creation of the eurozone per se. These explanations include the decline in the value of the euro as being a reaction to previous rises, interest rate differentials as favouring the dollar and the decline in the euro as being the obverse of a rise in the value of the dollar reflecting the strength of the US economy. These explanations are found to be unconvincing, and the view is advanced that there are serious weaknesses within the eurozone itself and in the construction of the eurosystem, along with its operation, that could be undermining the value of the euro. The divergent euro area may be one of the more significant factors contributing to the euro decline.