Smallest Meaningful Pay Increases: Field Test,Constructive Replication,and Extension

The authors extend prior literature by examining, in two distinct field settings, smallest meaningful pay increases (SMPIs) in terms of magnitude, behavioral intention, and affective reactions. In Study 1, a two‐wave study of 177 employees of a university medical center in the United States, the authors find stable thresholds of about 5.0 percent for positive reactions to pay increases (magnitude [5.4 percent], behavioral intentions [4.2 percent], and affective reactions [5.6 percent]). In Study 2, a sample of 495 university employees in Finland, the authors also find stable but slightly higher thresholds of about 8 percent for behavioral intentions (8.4 percent) and positive affective reactions (7.2 percent) to pay increases. They also find threshold effects of ?5.7 percent for behavioral intentions and ?5.8 percent for negative affective reactions in response to restricted future pay increases levied in the transition to a new pay system. Discussion of the results centers on pay raise administration and future research regarding implied and direct pay reductions. © 2015 Wiley Periodicals, Inc.     

Why did the average duration of unemployment become so much longer?

There has been a substantial increase in the average duration of unemployment relative to the unemployment rate in the U.S. over the last 30 years. We evaluate the performance of a standard job-search model in explaining this phenomenon. In particular, we examine whether the increase in within-group wage inequality and the decline in the incidence of unemployment can account for the increase in unemployment duration. The results indicate that these two changes can explain a significant part of the increase over the last 30 years, although the model fails to match the behavior of unemployment duration during 1980s.     

Commonalities in the order book

This paper uses data from one of the most important European stock markets and shows that, in line with predictions from theoretical market microstructure, a small number of latent factors captures most of the variation in stock specific order books. We show that these order book commonalities are much stronger than liquidity commonality across stocks. The result that bid and ask side as well as the visible and hidden parts of the order book exhibit quite specific dynamics is interpreted as evidence that open order book markets attract a heterogeneous trader population in terms of asset valuations and impatience. Quantifying the informational content of the extracted factors with respect to the evolution of the asset price, we find that the factor information shares are highest (about 10%) for less frequently traded stocks. We also show that the informational content of hidden orders is limited.

Managing the paradox of unwanted efficiency: The symbolic legitimation of the hypermarket format in Finland, 1960–1975

Abstract

Occasionally, organisations are forced to adopt new practices that are inconsistent with the expectations of their stakeholders. An immediate adoption of the practices would risk the organisation’s legitimacy, but as previous research has noted, the perceptions of organisational stakeholders can be managed through symbolic actions. In this article, I examine how actors from four retail organisations symbolically legitimated the adoption of the hypermarket format within their individual contexts by means of internal professional magazines. The analysis suggests that the organisations buttressed their legitimacy by reversing Meyer and Rowan’s idea of loose coupling – adopting the new practice but maintaining their formal appearances.     

Changes in Global Trade Patterns and Women's Employment in Manufacturing, 1995–2011

This study investigates the feminization and defeminization trends in manufacturing employment in thirty countries from 1995 to 2011. Utilizing two separate methods, structural decomposition analysis (SDA) and factor content analysis (FCA), the study identifies the major industries and trade partners behind the structural shifts in trade that have induced changes in employment and thus in the rates of women’s employment. The findings highlight that, as a general trend, defeminization in manufacturing has persisted in the Global North, led by a negative trade impact in low-technology industries. In the Global South, feminization and defeminization trends are not as straightforward. Despite positive changes in women’s share of employment in medium-high- and high-technology industries, negative gender bias effects of trade changes are found particularly in high-technology industries, where occupations are notably gendered.     

Intraday hedging with financial options: the case of electricity

As market intermediaries, electricity suppliers purchase electricity from the wholesale market or self-generate to deliver their customers. However, electricity suppliers are uncertain about how much electricity their residential customers will use at any hour of the day until they actually turn switches on. While demand uncertainty is a common feature of all commodity markets, suppliers generally rely on storage to manage it. Singularly, electricity suppliers are exposed to joint volumetric and price risk on an hourly basis given the physical attributes of electricity. In the literature on electricity markets, few articles compare the efficiency of forward contracts, options and physical assets (i.e. power plants) within intraday hourly hedging portfolios, whereas electricity markets are precisely hourly markets. We analyse portfolios made of forwards, options and/or power plants for specific hourly clusters (9 am, 12 pm, 18 pm, 9 pm) based on electricity market data from 2013 to 2015 from the integrated German–Austrian spot market. Through a VaR model, we prove that intraday hedging with forwards is structurally inefficient compared to financial options and physical assets, no matter the cluster hour. Moreover, our results demonstrate the contribution of ‘out of the money’ options for all hours within volatile spot markets.     

Real interest rates: nonlinearity and structural breaks

Real interest rate is a crucial variable that determines the consumption, investment and saving behavior of individuals and thereby acts as a key policy tool that the central banks use to control the economy. Although many important theoretical models require the real interest rates to be stationary, the empirical evidence accumulated so far has not been able to provide conclusive evidence on the mean reverting dynamics of this variable. To resolve this puzzle we re-investigate the stochastic nature of the real interest rates by developing unit root tests for nonlinear heterogeneous panels where the alternative hypothesis allows for a smooth transition between deterministic linear trends around which stationary asymmetric adjustment may occur. When the newly developed panel unit root tests are applied to the real interest rates of the 17 OECD countries, we were able to uncover overwhelming empirical support in favor of mean reversion in the short-run and long-run real interest rates. Therefore, these results show that the conclusions drawn from a miss-specified test that ignores the presence of either nonlinearity, structural breaks or cross sectional dependence can give quite misleading results about the stochastic behavior of the real interest rates.     

Islamic Economics in the Late Ottoman Empire: Menâpirzâde Nuri Bey's Mebâhis-i İlm-i Servet

The existing literature on Islamic economics suggests that Islamic economics is a twentieth-century phenomenon with its roots in medieval Islamic intellectual and theological history, thereby leaving a centuries-long gap in the history of Islamic economic thinking. This study aims at taking a first step towards filling this gap by examining a nineteenth-century example of Islamic economics in late Ottoman economic literature. Suggesting a broader definition of Islamic economics, this article investigates a prominent Ottoman intellectual's efforts to define, reveal, and revive a tradition of Islamic economics in historical and intellectual context.     

Nominal uniqueness and money non-neutrality in the limit-price exchange process

We define continuous-time dynamics for exchange economies with fiat money. Traders have locally rational expectations, face a cash-in-advance constraint, and continuously adjust their short-run dominant strategy in a monetary strategic market game involving a double-auction with limit-price orders. Money has a positive value except on optimal rest-points where it becomes a ??veil?? and trade vanishes. Typically, there is a piecewise globally unique trade-and-price curve both in real and in nominal variables. Money is not neutral, either in the short-run or long-run and a localized version of the quantity theory of money holds in the short-run. An optimal money growth rate is derived, which enables monetary trade curves to converge towards Pareto optimal rest-points. Below this growth rate, the economy enters a (sub- optimal) liquidity trap where monetary policy is ineffective; above this threshold inflation rises. Finally, market liquidity, measured through the speed of real trades, can be linked to gains-to-trade, households?? expectations, and the quantity of circulating money.     

Weak dependence, models and some applications

The paper is devoted to recall weak dependence conditions from Dedecker et al. (Weak dependence, examples and applications. Lecture Notes in Statistics, vol 190, 2007)’s monograph; the main basic results are recalled here and we go further in some new applications. We develop here several models of weakly dependent processes and random fields. Among them an ARCH(∞) model is considered with statistical applications to ordinary least squares. A last part aims at proving new asymptotic results for weakly dependent random fields. Such applications are indeed the main proof of the interest of this theoretical notion which measures the asymptotic decorrelation of a process.