The international business cycle as intertemporal coordination failure

Where investments are irreversible and the future is uncertain, people in two countries can make investment decisions that turn out to be mutually inconsistent. I argue that this intertemporal coordination failure explains international business cycles in a two-currency-area setting with a floating foreign exchange rate. The sequence of events starts with an expansionary domestic monetary shock, which decreases the domestic real interest rate. Facing low transactions costs, people spend the new money relatively early in the foreign exchange market and in the foreign market for loanable funds. Domestic monetary expansion thereby changes the relative prices of domestic and foreign goods and also of goods of earlier and later stages of production. The relative price changes lead to intertemporal and international coordination failures once the monetary expansion ends and relative prices change. Domestic monetary policy thereby causes the comovement across different currency areas we observe of business cycles.     

LOOKING AT THE “POPULATION PROBLEM” THROUGH THE PRISM OF HETEROGENEITY: WELFARE AND POLICY ANALYSES*

Upon introducing heterogeneity and dynamics into a model of the demand for children, a problem of optimal population is defined and analyzed. It is shown that from the perspective of social welfare, better‐educated individuals produce too few children while less‐educated individuals produce too many children and all individuals invest too little in the education of their children. The impact of several policy tools geared at addressing the “population problem” is investigated, in particular how child allowances and other tax‐subsidy policies can be harnessed to enhance welfare, and how and why early childhood education programs can mitigate the “population problem.”     

Landscape Sensitivity and Tourism Development

The paper argues that carrying capacity is not the most effective way to analyse the relationship between the 'natural' environment and tourism pressure. Rather that concepts embedded within geomorphology, namely 'lag time', 'environmental thresholds' and 'dynamic metastable equilibrium' may provide a better approach to examine feedback between tourism and the environment. This could also provide the conceptual framework for the integration of the natural and social sciences in the study of tourism impacts, and the mechanism for truly sustainable development. The paper contends that the identification and management of threshold events and the use of base-line data on time scales of 10² to 10³ years should be at the centre of the decision-making process. The paper warns against the use of 'limits of acceptable change' as a way of managing the interplay between tourism and the environment. The relationship between shoreline management and tourism development is used to illustrate the arguments presented.     

Competencies of training professionals in the Hong Kong hotel industry

ABSTRACT

This study aims to investigate the competencies of training professionals in the hotel industry in Hong Kong. A survey questionnaire was adopted. Seventeen competencies were derived by factor analysis. Six essential competencies are identified, whereas “people skills and commitment” and “awareness of quality” are the most important competencies, while another 11 competencies are highly preferred. This study provides original criteria for hoteliers and human resources professionals to facilitate the recruitment process and aid training professionals in developing core competencies in hotel industry employees. Theoretical and practical implications of the findings are presented.     

Options pricing under the one-dimensional jump-diffusion model using the radial basis function interpolation scheme

This paper will demonstrate how European and American option prices can be computed under the jump-diffusion model using the radial basis function (RBF) interpolation scheme. The RBF interpolation scheme is demonstrated by solving an option pricing formula, a one-dimensional partial integro-differential equation (PIDE). We select the cubic spline radial basis function and adopt a simple numerical algorithm (Briani et al. in Calcolo 44:33–57, 2007) to establish a finite computational range for the improper integral of the PIDE. This algorithm reduces the truncation error of approximating the improper integral. As a result, we are able to achieve a higher approximation accuracy of the integral with the application of any quadrature. Moreover, we a numerical technique termed cubic spline factorisation (Bos and Salkauskas in J Approx Theory 51:81–88, 1987) to solve the inversion of an ill-conditioned RBF interpolant, which is a well-known research problem in the RBF field. Finally, our numerical experiments show that in the European case, our RBF-interpolation solution is second-order accurate for spatial variables, while in the American case, it is second-order accurate for spatial variables and first-order accurate for time variables.     

Female participation in African labor markets: The role of information and communication technologies

This article investigates the effects of information and communication technologies (ICT) on female labor force participation in a sample of 48 African countries. We specify and estimate linear regression and dynamic panel data models with fixed effects (FE) and system-generalized method of moments (SYS-GMM) estimation over the period 2001–2017. The three main results are that ICT use (mobile phone and internet) significantly stimulates female labor force participation in Africa; this effect is enhanced by financial development and female education; the effect of ICT on female employment in Africa is strongest in the industrial sector. These results remain robust to the provision of social, cultural, and institutional variables.     

Aggregative games and oligopoly theory: short-run and long-run analysis

We compile an IO toolkit for aggregative games with positive and normative comparative statics results for asymmetric oligopoly in the short and long run. We characterize the class of aggregative Bertrand and Cournot oligopoly games, and the subset for which the aggregate is a summary statistic for consumer welfare. We close the model with a monopolistically competitive fringe for long-run analysis. Remarkably, we show strong neutrality properties in the long run across a wide range of market structures. The results elucidate aggregative games as a unifying principle in the literature on merger analysis, privatization, Stackelberg leadership, and cost shocks.     

Target price forecasts: The roles of the 52-week high price and recent investor sentiment

This paper reveals that in addition to fundamental factors, the 52-week high price and recent investor sentiment play an important role in analysts’ target price formation. Analysts’ forecasts of short-term earnings and long-term earnings growth are shown to be important explanatory variables for target prices; equally, the 52-week high price and recent investor sentiment are also shown to explain target price levels and especially target price biases. Our analysis additionally reveals that analysts place greater weight on these two non-fundamental factors in settings with greater task complexity and to some extent in those with greater resource constraints. Conversely, on balance, the results suggest that this increased reliance does not translate into an increased impact per unit of each non-fundamental factor on forecast bias. Finally, our results show that target prices are useful in predicting future stock returns beyond earnings forecasts and commonly used risk proxies. However, in an internally consistent fashion, the informativeness of target prices for future returns is significantly reduced when greater weight is placed on either the 52-week high or recent investor sentiment in the target price formation process.     

For fraud,look under ‘serious and organized crime’

ABSTRACT

The UK government’s response to fraud cannot be disentangled from its broader ‘serious and organized crime’ (SOC) strategy. In order to explore whether fraud should—in public policy, criminal justice and law enforcement terms—be seen primarily as an SOC issue, there is a need to consider questions about whether or not ‘SOC’ is a sensible object of policy-making in the first place. Several arguments in favour of an SOC policy are identified in the paper. However, the notion of an overarching SOC policy is problematic for three reasons. First, SOC is a fundamental misrepresentation of reality, which does not correspond to a real social problem. Second, SOC policy can limit the development of more problem-specific crime strategies, Third, the ‘SOC’ label can negatively transform how social problems are perceived over the long term. If fraud is to be better understood and dealt with, it may therefore be necessary to extract it from its current inclusion within wider SOC strategy.     

Judicial interpretation of the will of the state: A Hegelian perspective in the context of taxation

This paper draws upon Hegelian dialectic theory to understand the nature of the interrelationship between state, taxpayer, and the accounting profession. The paper proposes that this has been reconstructed from one founded upon neo-Kantian liberalism towards one in which components of political and civil society are co-opted by the state to minimize tax avoidance. Empirical evidence in the form of general anti-avoidance rules, court decisions, and judicial statements is provided to illuminate a process of fundamental redefinition of the roles of the judiciary and the accounting profession vis a vis the state. One of the principal functions of critical accounting theory is to question the political legitimacy of regimes of accounting; the implications of this redefinition are hypothesized in terms of this function, critiquing the changing relationship between the state and the taxpayer in the context of tax policy. The paper theorizes the consequences of this process for the accounting profession.