The debt brake: business cycle and welfare consequences of Germany’s new fiscal policy rule

In a New Keynesian DSGE model with non-Ricardian consumers, we show that automatic stabilization according to a countercyclical spending rule following the idea of the debt brake is well suited both to steer the economy and in terms of welfare. In particular, the adjustment account set up to record public deficits and surpluses serves well to keep the level of government debt stable. However, it is essential to design its feedback to government spending correctly, where discretionary lapses should be corrected faster than lapses due to estimation errors.     

A framework for the study of firms as constitutional orders

Much of the literature on corporate performance focuses on institutional restructuring, and implicitly assumes that constitutional factors are determined exogenously. Existing theories of the firm—whether a “goal paradigm” or an “exchange paradigm”—provide useful insights; but we find them incomplete because they miss the extent to which companies build unique and meaningful constitutional orders. Building on Vanberg (Const Polit Econ 3(2):223–253, 1992), we investigate the extent to which the field of constitutional political economy (CPE) can improve our understanding of organisations, by providing a typology of CPE that can be applied to a study of firms. We make a distinction among (1) operational; (2) institutional; and (3) constitutional levels of management, and based on the CPE literature argue that “constitutional” considerations help us to define the boundaries of a firm and its operational environment.     

RECENT DEVELOPMENTS IN QUANTITATIVE MODELS OF SOVEREIGN DEFAULT

The current crisis and discussions, in the euro area in particular, show that sovereign debt crises/defaults are no longer confined to developing economies. Following crises in many Latin American countries, the literature on quantitative dynamic macro models of sovereign default has been advancing rapidly. Current debate should take note of the findings of this literature – an extensive overview of which has been provided in this paper. This paper also discusses the inherent difficulties as well as possibilities of integrating this type of model into standard business cycle models (RBC and DSGE models). This is likely to be particularly helpful when using models to analyse upcoming issues in the euro area, such as a suitable sovereign insolvency law or the assumption of joint liability.     

Who is educating today's accountants? Some observations

The accounting profession has been characterized as one in which a lack of congruence exists among its practitioner, research, and education functions. This paper presents evidence that, especially among junior accounting faculty, accounting researchers and educators may be isolated from the realities of accounting practice, and from contact with users of accounting data.     

Thoughts on a Fiscal Union in EMU

Using an estimated large‐scale New Keynesian model, we assess the consequences of introducing a fiscal union within EMU. We differentiate between three different scenarios: public revenue equalisation, tax harmonisation and a centralised fiscal authority. Our results indicate that no country would significantly benefit from introducing any form of fiscal union. Comparing long‐term, that is, steady state, effects we have winners and losers depending on the scenario. Differences in terms of business cycle statistics as well as in terms of risk sharing of asymmetric shocks are minor. This also explains why welfare differences are small across the fiscal union scenarios. A counterfactual exercise indicates that with a fiscal union regime already installed at the start of EMU, key macroeconomic variables would have reacted very similarly while debt dynamics would have changed notably.     

Communication concerns across different accounting constituencies

The literature in accounting education has consistently called for more courses emphasizing instruction in oral communication for accounting students. This paper reports on an exploratory investigation of the communication concerns of three distinct constituencies in accounting: undergraduate students majoring in accounting, graduate students pursuing advanced degrees in accounting, and practicing professional accountants from the midwestern offices of two international public accounting firms. The communication concerns model suggests that the locus of communicators' anxieties or frustrations about communication centers on self-, task-, or impact-related issues, and that these concerns may define areas in which communication instruction is required for individuals to achieve appropriate levels of competency. The results of this study provide support for the predictions of the concerns model and point to its efficacy as a tool for curriculum design.     

Disrupting the European Crisis: A Critical Political Economy of Contestation,Subversion and Escape

Central to much of the critical political economy (CPE) literature is a declared focus on emancipation. Yet, rather than highlight sources and instances of activity that might result in emancipatory outcomes, much of the CPE literature focuses on relations of domination and the way in which these are sustained and (re)produced. In contrast, and drawing on autonomist Marxism, we argue that an emancipation-oriented approach needs to focus upon the ways in which processes of domination are contested, disrupted and as a result remain incomplete. In doing so, we present an analysis of the European political and economic crisis that contrasts starkly with prevailing accounts. Whilst many observers have considered the European crisis in terms that signal the death knell of labour's prolonged post-1970s defeat, the paper instead renders visible the ongoing disruptive effects of the European populace's obstinate, subversive and creative capacity to escape those attempts to achieve domination and subjugation which existing accounts tend to identify.     

A FIRST‐ORDER BSPDE FOR SWING OPTION PRICING

We study an optimal control problem related to swing option pricing in a general non‐Markovian setting in continuous time. As a main result we uniquely characterize the value process in terms of a first‐order nonlinear backward stochastic partial differential equation and a differential inclusion. Based on this result we also determine the set of optimal controls and derive a dual minimization problem.