Forecasting foreign exchange rates: an expert judgment approach

Studies have indicated that forecasts by market experts can be more accurate than time series forecasts. This article describes a process for structuring an expert foreign exchange forecast using Saaty's Analytic Hierarchy Process (AHP). The specific example developed is a forecast of the yen/dollar spot exchange rate from the standpoint of a company considering the desirability of arranging for forward exchange cover.     

Significant Issues for the Future: Some Additional Perspectives

The rational elements of management dominated the questions raised by our Editorial Board members in the previous issue of JPIM when they offered their ideas in, "Significant Issues For the Future of Product Innovation." In this article, the discussion is continued with some other Board members but this time the human side of managements gets its due attention. The issues presented here add to the picture of complexity that is the reality of product innovation but they also may provoke the thinking that can lead to an improvement in management performance.     

Firm-specific information and the efficiency of investment

In the three-year period following stock market liberalizations, the growth rate of the typical firm's capital stock exceeds its pre-liberalization mean by an average of 4.1 percentage points. Cross-sectional changes in investment are significantly correlated with the signals about fundamentals embedded in the stock price changes that occur upon liberalization. Panel-data estimations show that a 10-percentage point increase in a firm's expected future sales growth predicts a 2.9- to 3.5-percentage point increase in the growth rate of its capital stock. Country-specific changes in the cost of capital drive changes in investment but firm-specific changes in the cost of capital do not.     

Relationship, Contribution, and Resource Constrains: Determinants of Distributive Justice in Individual Preferences and Negotiated Agreements

This laboratory study investigated the impact of relationship, relative levels of perceived contribution, and resource constraints on individuals' allocation preferences and dyads' negotiated allocations. Dyads of female undergraduates – either strangers or roommates – were given performance feedback that one member produced the majority of the resources available to the dyad; the members of the dyad faced relatively scarce or abundant resources. Subjects indicated their individual allocation preferences and then negotiated the distribution of resources as a pair. Results indicate that all three factors are important predictors of the norms of distributive justice met by the individually preferred and dyadically negotiated allocations. Results also suggest that the degree of agreement between the norms implied by individually preferred allocations and dyadic agreements affect strangers' satisfaction with outcomes to a greater extent than roommates'.