On money and output: Is money redundant?

There is an emerging consensus that money can be largely ignored in making monetary policy decisions. Rudebusch and Svensson [1999, Policy Rules and Inflation Targeting. In Taylor, J.B. (Ed.), Monetary Policy Rules. University of Chicago Press, Chicago, 203-246; 2002, Eurosystem Monetary Targeting: Lessons from US Data. European Economic Review 46, 417-442] provide some empirical support for this view. We reconsider the role of money and find that money is not redundant. More specifically, there is a significant statistical relationship between lagged values of money and the output gap, even when lagged values of real interest rates and lagged values of the output gap are accounted for. We also find that inside and outside money provide significant information in predicting movements in the output gap.     

Intraday volume and volatility relations with and without public news

This paper reexamines the dynamic relation between intraday trading volume and return volatility of large and small NYSE stocks in two partitioned samples, with and without identifiable public news. We argue that the sequential information arrival hypothesis (SIAH) can be tested only in periods containing public news. After partitioning the sample into periods with and without public news, we find bi-directional Granger-causality between volume and volatility in the presence of public information as hypothesized by the SIAH. Our analysis further suggests that return volatility is higher in the periods with public news, while trading volume is significantly higher in the no-news period; perhaps owing to the importance of private information for trading stocks. Using the sample without public news, we find evidence that volume Granger-causes volatility without feedback. These results are broadly consistent with behavioral models like the overconfidence and biased self-attribution model of [Daniel, K., Hirshleifer, D., Subrahmanyam, A., 1998. Investor psychology and security market under- and over-reactions. Journal of Finance 53, 1839–1885]. It appears that overconfident investors overrate the precision of their private news signals and therefore trade too aggressively in the absence of public news; when public news arrives, investors’ biased self-attribution triggers excessive return volatility.     

Accounting for distress in bank mergers

Most bank merger studies do not control for hidden bailouts, which may lead to biased results. In this study we employ a unique data set of approximately 1000 mergers to analyze the determinants of bank mergers. We use undisclosed information on banks’ regulatory intervention history to distinguish between distressed and non-distressed mergers. Among merging banks, we find that improving financial profiles lower the likelihood of distressed mergers more than the likelihood of non-distressed mergers. The likelihood to acquire a bank is also reduced but less than the probability to be acquired. Both distressed and non-distressed mergers have worse CAMEL profiles than non-merging banks. Hence, non-distressed mergers may be motivated by the desire to forestall serious future financial distress and prevent regulatory intervention.     

Mittlerer quadratischer Prognosefehler bei der Prognose des Abwicklungsergebnisses mittels der Chain-Ladder-Methode

Often in non-life insurance claims reserves are the largest position on the liability side of the balance sheet. The determination of adequate claims reserves in two consecutive accounting years leads to the so-called development result, which is defined as the difference of two successive predictors for the claims reserves. If the predictors for the claims reserves are unbiased the expected development result is equal to zero. However, since in claims reserving one predicts future payments the observed development result will in general deviate from the expected value. In the present paper we analyze this deviation. In an example we discuss the results.     

Long‐run price competition

We generalize the standard repeated‐games model of dynamic oligopolistic competition to allow for consumers who are long‐lived and forward looking. Each period leaves some residual demand to future periods and pricing in one period affects consumers' expectations about future prices. We analyze this setting for an indivisible durable good with price‐setting firms and overlapping cohorts of consumers. The model nests the repeated‐game model and the Coasian durable‐goods model as its two extreme cases. The analysis is mostly focused on constant‐price collusion but conditions for collusive recurrent sales are also identified.     

A panel data analysis of code-sharing,antitrust immunity,and open skies treaties in international aviation markets

This paper estimates the effects of code-sharing, antitrust immunity, and Open Skies treaties on prices, output, and capacity using an eleven-year panel of U.S.-Europe data. Code-sharing and immunized alliances are found to have significantly lower prices than does traditional interline (multi-carrier) service, but the effects are smaller in magnitude than those found in previous results that rely on cross-sectional data. Statistical tests that prices for immunized alliance service are equal to online (single carrier) service often cannot be rejected, providing additional evidence that immunity grants allow immunized carriers to internalize a double marginalization problem. Estimated output effects, consistent with the price effects, show that alliances are associated with large increases in passenger volumes. Lastly, estimates suggest that capacity expansions associated with “Open Skies” treaties are due entirely to expansion by immunized carriers on routes between their hubs. I would like to thank the editor and an anonymous referee for their helpful comments. The views expressed in this paper do not reflect those of the US Department of Justice. All errors are my own     

Sales channel integration after mergers and acquisitions: A methodological approach for avoiding common pitfalls

This article addresses the integration of sales channels after mergers and acquisitions (M&A) by appraising the strengths, weaknesses, and biases associated with the four most common frameworks for evaluating sales channels (sales management, historical performance, strategic fit, and customer choice) for their appropriateness in a post-M&A context. The authors develop a methodological approach that uses a balanced-scorecard framework to guide managers through the sales channel integration process, and then apply this approach to the merger of two industrial firms' sales organizations across 21 territories. In so doing, they reveal various pitfalls and propose and test some analytical corrections. Longitudinal performance data support comparisons across the different evaluative frameworks; in particular, the sales management and customer choice frameworks provide the most insight into channel partners' post-integration performance. The results support the premise that channel integration can be improved by accounting for factors unique to the M&A context and using an approach that triangulates multiple perspectives.     

Relationships in the purchasing of business to business professional services: The role of personal relationships

There has been a shift from transactional to relational exchange and relationship marketing both in the business to business and professional services contexts. This paper seeks to explore the manner in which personal relationships affect the process and outcomes of purchasing of professional business services. Specifically, it focuses on the role of the professional service providers as boundary spanners in the formation of personal relationships. These personal relationships constitute the underlying basis of long-term relationships between the purchasing and provider organizations in such complex service settings. The findings of this study demonstrate that the manner in which the boundary spanners cultivate relationships support the concept of relationship specific tasks. It extends this conception by use of the data to outline the chronological process over time Understanding the roles, function, and ultimately importance, of these relationships facilitates the identification and development of appropriate strategies to manage these relationships.     

Intended and unintended termination of international joint ventures

This study proposes that international joint ventures (IJVs) are terminated either when the initial purposes of the formation of the IJV have been achieved (intended termination), or when unanticipated contingencies that emerge in the external, internal, or inter‐partner conditions after the establishment of the IJV impede the continuation of its operation (unintended termination). Our study examines the factors that affect intended and unintended termination and the longevity of IJVs. The findings show that approximately 90 percent of all IJV terminations are unintended and 10 percent intended, and that the frequency of intended termination and unintended termination varies noticeably depending on the initial purposes of formation. This suggests that the termination of IJVs is significantly contingent on their formation. The findings also show that the longevity of IJVs varies according to the initial purposes of formation, the initial conditions under which the IJV is formed, and the types of unanticipated contingencies that it encounters. The key theoretical issues and practical implications of the distinction between the intended and unintended termination of IJVs are also discussed. Copyright © 2007 John Wiley & Sons, Ltd.     

金融中介理论的发展及其对中国金融业的启示

本文对金融中介理论的发展作了简要阐述，并在分析金融中介理论的基础上提出了有关构建中国金融中介机构体系的看法和对中国国有商业银行实现市场化改革的意见。