THE EUROPEAN PERSPECTIVE ON THE COMPOSITION AND VARIABILITY OF THE ECU

In 1979 the Ecu was established as a currency basket including the currencies of the nine EC-member countries at that time. Its composition was modified in 1984 and again in 1989 by increasing the number of currencies in the basket to 10 and 12 respectively. The results of our analysis show that the Ecu has become consistently less variable with each change in its composition, when expressed in terms of the Greek drachma, Italian lira, Portuguese escudo, Spanish peseta, and to a lesser extent the British pound. However, the Ecu has become consistently less stable with respect to the German mark and the Dutch guilder. The results were mixed for the Belgian/Luxembourg franc, French franc, Irish punt and Danish krone.     

Time inconsistency as a rationale for public unemployment insurance

A role for public unemployment insurance is developed based on the inability of the government to commit to a future rate of unemployment. This is illustrated using a model in which a minimum wage policy combined with unemployment insurance is welfare-improving. Unemployment insurance could be decentralized to the private sector if the government could commit to a minimum wage. However, if not, a government that acts in the interest of the workers will have an incentive to increase the minimum wage to exploit private insurers. In the absence of commitment, an equilibrium with private unemployment insurance will not exist.     

Child Poverty in Wealthy Countries

Review of Child Well-Being, Child Poverty and Child Policy in Modern Nations by Koen Vleminckx and Timothy M. Smeeding and The Dynamics of Child Poverty in Industrialized Countries by Bruce Bradbury, Stephen P. Jenkins, and John Micklewright     

Experiential Education In New Product Design And Business Development

We describe an experiential approach to teaching new product design and business development in a year‐long course that combines intensive project work with classroom education. Our course puts together up to six teams of graduate students from management and engineering who work on projects sponsored by individual companies. Student teams work with faculty from multiple disciplines and personnel from the sponsoring companies. The year‐long format and involvement with company personnel provide opportunities for students to gain hands‐on experience in a real product development project. Time constraints, coupled with students' determination to demonstrate what they can accomplish, stimulate teams to learn how to compress the design and development cycle. To help students generalize from their own projects to a wider universe of product design and business development phenomena, students participate continuously in constructive critiques of others' projects; and in presentations, case discussions and workshops that help them learn about the product and business development process itself. This article describes course objectives, syllabus, projects, sponsors, faculty, students and our course administration. In an effort to move towards a “paperless” course, we have put as much of the course material as possible on the World Wide Web; relevant websites are referred to in the article. At the end of the course each team presents a prototype and a protoplan to the sponsoring company in a final report, which in many cases includes suggestions for the sponsor on how to improve its design and development process. Students' positive evaluations, along with their comments, indicate that they are attaining their educational goals. Course projects have resulted in commercialized products, patents, continuing development projects in sponsoring companies, and placements for students. The course has generated public relations value for the units involved and for the university as a whole. © 2002 Elsevier Science Inc. All rights reserved.     

Currency Quandary: The Choice of Invoicing Currency under Exchange-Rate Uncertainty

Recent studies have derived optimal invoicing strategies for an exporting firm when exchange rates are uncertain. However, these studies fail to explain trade transacted in a third currency (vehicle currency). In this study, we extend existing models to include the possibility that trade occurs in a vehicle currency. We find that under conditions stipulated by existing models, vehicle-currency invoicing is not preferred. The presence of a competing exporter under imperfect competition, however, can induce vehicle-currency pricing. This is consistent with trade in many primary commodities dominated by few exporters with many importers but where commodities are not perfectly homogeneous.     

Creating whole life value proxemics in construction projects

Whole life value is introduced as a concept for evaluating construction projects, which extends beyond the more typical use of optimized (equilibrium) utility preferences. By linking value and sustainability the concept allows for the consideration of ‘price‐less’ evaluations within the construction project process. As an industry exposed perhaps more than any other to issues of public space and environmental impact, construction is being driven towards the use of complex, multi‐issue consultations with stakeholders within which whole life value can operate as a contextual limit. By investigating traditional cost–benefit analysis routes, and then what are called ‘aspects of sustainability’, an argument is advanced for these consultations to be ongoing rather than one‐off events. As such, they are to concern themselves with the framework of relationships (proxemics) by which distinct evaluations might be articulated and understood through the project process, rather than just how one arrives at a consensus of opinion. It is argued that the concept of value can only be applied fully to any project if consideration has been given to the ambience and context of stakeholder relations and attitudes as opposed to just the prevailing opinions. The virtue of such stakeholder involvement lies not in its ‘rubber stamping’ a separate process of activity, but in ensuring value is realized across asset life through a focus on attaining and sustaining conditions for the reflective articulation of need. Copyright © 2001 John Wiley & Sons, Ltd. and ERP Environment     

Courts and Relational Contracts

Post-communist countries offer new evidence on the relativeimportance of courts and relationships in enforcing contracts.Belief in the effectiveness of courts has a significant positiveeffect on the level of trust shown in new relationships betweenfirms and their customers. Well-functioning courts also encourageentrepreneurs to try out new suppliers. Courts are particularlyimportant when specific investments are needed for a relationshipto develop. While relationships can sustain existing interactions,workable courts help new interactions to start and develop.     

Corruption,regulation, and growth: an empirical study of the United States

This paper investigates whether the costs of corruption are conditional on the extent of government intervention in the economy. We use data on corruption convictions and economic growth between 1975 and 2007 across the US states to test this hypothesis. Although no state approaches the level of government intervention found in many developing countries, we still find evidence for the “weak” form of the grease-the-wheels hypothesis. While corruption is never good for growth, its harmful effects are smaller in states with more regulation.     

The long-term performance following dividend initiations and resumptions revisited

Previous studies have documented that an announcement of dividend initiation and resumption is associated with an increase in stock price, while Boehme and Sorescu (J Finance 47:871–900, 2002) argue that the dividend anomaly only occurs by chance. However, their sample contains firms listed within 3 and/or 5 years of their respective initial public offering (IPO) dates, as well as regulated firms. We conjecture that the confounding effects of IPOs and regulated firms may interfere with the increase in stock prices due to dividend initiations and resumptions and bias their results. We thus reexamine the long-term stock performance following dividend initiations and resumptions by excluding newly IPO firms and regulated firms. We find no evidence that the non-robust positive price drifts for firms, which initiate or resume cash dividends, is due to the confounding effects of IPOs and regulated firms. Therefore the price drifts after dividend initiation and resumption announcements may be a sample-specific result of chance, even after controlling for possible sample selection biases.