Do external political pressures affect the Renminbi exchange rate?

This paper investigates whether external political pressure for faster Renminbi appreciation affects both the daily returns and the conditional volatility of the Renminbi central parity rate. We construct several political pressure indicators pertaining to the Renminbi exchange rate, with a special emphasis on the US pressure, to test the hypothesis. After controlling for Chinese macroeconomic surprise news, we find that US and non-US political pressure does not have a significant influence on Renminbi's daily returns. However, evidence suggests that political pressures, and especially those from the US, have statistically significant impacts on the conditional volatility of the Renminbi. Furthermore, we conduct the same exercise on the 12-month Renminbi non-deliverable forward rate. We find that the non-deliverable forward market is highly responsive to macroeconomic surprise news and there is some evidence that Sino-US bilateral meetings affect the conditional volatility of the Renminbi non-deliverable forward rate.     

Time-varying Integration and International diversification strategies

This paper investigates the impact of globalization and integration on the relative benefits of country and industry diversification. Unlike previous models, our factor model allows asset exposures and volatilities to vary with both structural changes and temporary fluctuations in the economic and financial environment. First, we find that globalization and integration have lead to a gradual convergence of country to industry betas, especially in Europe. Second, the structurally-driven increase in market betas is accompanied by a gradual decrease in country-specific risk. Third, even though the edge has structurally decreased, geographical diversification continues being superior to industry diversification.     

On the static and dynamic costs of trade restrictions for small developing countries

We analyze the costs of trade restrictions for a small developing economy (LDC). Intermediate goods invented elsewhere are only introduced on the LDC market if it is profitable to do so. The LDC economy evolves to a balanced growth path in which income, welfare, and the share of available goods increase if trade restrictions fall. The adjustment path is asymmetric: an increase in trade restrictions leads to a slow-down of economic growth, while a decrease may lead to a rapid catch-up process. The dynamic costs of trade restrictions are in general substantially larger than the static costs.     

Is there any scope for corporatism in macroeconomic policies?

This paper studies corporatism as the outcome of bargaining between the government and a representative labor union. We show that if negotiations between these two parties only relate to macroeconomic policies and unions are not assumed to be inflation-averse, corporatism can never be beneficial to both parties. As corporatist policies are nevertheless commonly observed in this context, we discuss possible explanations that reconcile the theory with actual observations. The policy implications of these explanations are also discussed.     

Sexual Harassments: Criteria for difining hostile enviorment

Sexual harassment in the workplace continues to be one of the most controversial and complex legal and ethical issues facing empolyers. The U.S. Supreme Court's June 1986 decisiion inMeitor Savings Bank v. Vinson, which applied Title VII of the Civil Reights Act to situations involving sexual harassment, is discussed. The Court's definition of hostile environment is reviwed, and federal court cases interpreting the Supreme Court's pronousncements are examined. The cases provide guidance on the kinds of situations that result in employer liability for sexual harassment. A primanry conclusion is that employers may easily avoid liability by exercising learned judgment and sound management practices.     

On the proportionality of EU spatial ex ante coexistence regulations: Reply

Desquilbet and Bullock (2010) criticize some aspects of our analysis of the European Union’s (EU) spatial ex ante coexistence regulations (SEACERs) of genetically modified (GM) and non-GM crops presented in Demont et al. (2009). We argue that, besides misinterpreting some of our original arguments, the authors propose a policy analysis framework which is inconsistent with the main goal of the EU’s SEACERs. Their example incorrectly suggests that SEACERs play an additional role of regulating non-GM crop supply on the market. This would be inefficient from a policy economics perspective, especially in an open economy where global trade is taken into account. Therefore, we argue that analyzing flexibility of SEACERs in a market framework could lead to erroneous conclusions and in that case a simple farm level analysis such as presented in Demont et al. (2009) is preferred.