The no-arbitrage condition and financial markets with heterogeneous information

This paper examines the role of the no-arbitrage condition in financial markets with heterogeneous expectations. We consider a single-period, state-contingent claims model, withM risky securities andS states. There exist two types of heterogeneously informed investors, where the information heterogeneity is defined with respect to either the security payoff matrix, the state probability vector, or state partitions. When the information heterogeneity is defined with respect to either the security payoff matrix or state partitions, the no-arbitrage condition imposes a constraint on the dispersion of information between informed and uninformed investors. Further, the no-arbitrage condition is useful in ascertaining the patterns of heterogeneity among investors that are consistent with equilibrium. However, when the information heterogeneity is defined with respect to state probabilities, the role of the no-arbitrage condition is severely restricted. Finally, the no-arbitrage condition may have important implications for the (necessary and sufficient) conditions for the existence of an equilibrium price vector in financial markets with heterogeneous expectations.     

Urban disamenities and the measure of economic welfare

A labor market model is used to estimate elasticities between various disamenity factors of urban areas and the wage in those areas. The results are used to calculate a correction to the personal income (PI) data for use in the construction of an index to be used as a measure of economic welfare. The labor supply equation of the model includes some population-related variables which Tobin and Nordhaus have hypothesized represent disamenities of urban living. The labor demand equation is derived from a production function which includes a measure of agglomeration economies. A two-stage least-squares regression analysis provides results which indicate that the hypothesized factors are actually amenity factors. The resulting correction to the personal income data is thus an addition: Economic welfare is higher than that indicated by the PI statistics.     

From disruptions to struggles: Theorizing power in ERP implementation projects

Enterprise resource planning (ERP) implementation projects often fail to achieve their objectives. These often problematic projects are frequently the setting for intense and growing power struggles. Existing studies (e.g., Boonstra, 2006; Shepherd, Clegg, & Stride, 2009) have provided researchers with insights about issues of power in these projects. However, existing research has yet to provide a comprehensive picture of power in these projects or insights on how this picture changes with the passage of time. Clegg's (1989) circuits of power framework provides a useful tool for developing this needed comprehensive picture. We use the circuits of power framework as a tool for categorizing existing literature on power in ERP implementations. More importantly, we draw on this framework to provide a comprehensive view of power in the particular context of these projects. Specifically, we analyze the power relations during the implementation of an ERP in an organization. We do so by identifying how disturbances to the circuits of power – power struggles – arise and intensify during the implementation of the ERP. In this way, our work makes both a theoretical and an empirical contribution to the study of power in ERP implementation projects.     

Are remittances good for economic growth? The role of political institutions

Within a sample of 109 developing countries for the period 1975–2014 and controlling for country and time-fixed effects, this article presents evidence that workers’ remittances are more effective in promoting growth in developing countries with strong democratic institutions. The evidence is robust to alternative samples and different measures of democratic institutions.     

Is there an energy paradox in fuel economy? A note on the role of consumer heterogeneity and sorting bias

From the previous literature, it can be found that consumers tend to undervalue discounted future energy costs in their purchase decisions for energy-using durables. We show that this finding could, in part, result from ignoring consumer heterogeneity in empirical analyses as opposed to true undervaluation.     

Harmonizing conflict in husband–wife purchase decision making: perceived fairness and spousal influence dynamics

To market important products to families successfully, salespeople must understand how couples behave in concert to resolve conflict across major decisions. The authors develop a model of spousal fairness and test it with a study of multi-period family purchase decision making. The results show that a spousal sense of fairness serves as a mechanism for contemporary couples to harmonize conflict over time in family decisions. Specifically, spouses’ perceived fairness mediates the relationship between spousal prior influence and spousal decision behavior in subsequent decisions. Spouses also consider their partner’s perceptions of fairness when taking action to restore fairness. Moreover, the effects of perceived fairness are moderated by spousal traits of empathy, egalitarianism, and empowerment in a gendered pattern.

Fiscal Fan Charts: A Tool for Assessing Member States' (Likely?) Compliance with EU Fiscal Rules

This paper sets out a methodology for constructing fan charts for the government deficit and debt ratios over the medium term. It relies on information contained in Stability/Convergence Programme Updates, a model of the relevant stochastic process (for example, that of real GDP) or processes, and a parameter estimate of the sensitivity of the primary budget balance to the output gap for the member state under consideration. A model of the dynamic deficit–debt relationship allows the impact of random output growth to work its way through the fiscal arithmetic in a consistent and traceable way to produce fan charts over a five‐year forecast horizon. The initial set of fiscal fan charts included here for Ireland use the indicative public finance projections set out in its 2011 Update. The methodology makes the standard assumption of no fiscal policy response to any change in the budgetary position over the period such as could arise from changes in growth rates. Governments will, however, generally be in a position to adjust fiscal policy towards meeting a specific target, such as the 3 per cent Maastricht Treaty deficit target. A second set of fan charts is included that indicates how the probabilistic range of fiscal outcomes could be affected by a tightening of fiscal policy in 2013–15.     

Using a dual-frame design to improve phone surveys on political attitudes: developing a weighting strategy for limited external information in Hong Kong

Quality & Quantity - In recent years, rapid increases in mobile phone ownership and decreases in landline users have led to potential biases in landline phone survey estimations. Mobile-only...     

The structuralist theory of imported inflation: an application to South Africa

This study emphasizes the importance of identifying the origin of inflation in the present context of inflation targeting by many emerging market and transition economies. The analysis shows, based on South African data, how structural (supply) and demand inflation can be distinguished. The results indicate that South Africa's inflation experience between 1973q1 and 1998q4 is characterized by two monetary regimes. During the first regime (1973q1–1984q4) the long-run cause of inflation is demand-pull. The second regime (1987q1–1998q4) represents major changes to structural (‘imported’) and cost-push inflation. The two-year period 1985–1986 signifies structural change from the first to the second regime. Moreover, the results in the second regime remain robust when the inflation model is subjected to ‘new’ out-of-sample data until 2001q2. Evidence of structural (‘imported’) inflation in the second regime suggests that inflation should not entirely be squeezed out of the system nor should it necessarily be kept at the lowest possible level, because some inflation may be regarded as the natural by-product of the growth and development process. South Africa's inflation experience points to several lessons for existing (and potential) emerging market and transition economies with some form of inflation targeting.