The effects of need for cognition and trait anxiety on price acceptability

This research explored the effects of two personality variables, the need for cognition and trait anxiety, on consumers' price acceptability. The study used 124 subjects to determine support for the predicted relationships between the two personality variables and price acceptability. The results showed that the low need for cognition individuals had significantly lower price acceptability than the high need for cognition individuals. On the other hand, price acceptability showed a U‐shaped relationship with trait anxiety. Price acceptability for both high‐ and low‐anxiety individuals was higher than that for individuals with moderate levels of anxiety. © 2001 John Wiley & Sons, Inc.     

Fiscal sustainability across government tiers

This paper analyses how fiscal adjustment comes about when both central and sub-national governments are involved in consolidation. We test sustainability of public debt with a fiscal rule for both federal and regional government. Results for the German Länder show that lower tier governments bear a relatively smaller part of the burden of debt consolidation, if they consolidate at all. Most of the fiscal adjustment occurs via central government debt. In contrast, both the US federal and state levels contribute to consolidation of public finances.     

Multinational Enterprises,Development and Globalization: Some Clarifications and a Research Agenda

This paper considers how economic globalization has affected opportunities and challenges for developing countries in following a multinational enterprise (MNE)-assisted development strategy, revisiting an earlier article by the authors. The growing share of industrial activity owned and/or controlled by MNEs has not—by and large—led to a proportional increase in sustainable domestic industrial growth. Particular attention is paid to how MNEs have responded proactively to globalization by modifying their strategies, spatial organization and the modalities by which they interact with host economic actors, and how these changes alter our understanding of MNEs and development. What has been learnt over the last decade about embeddedness, institutions, inertia, absorptive capacity, spillovers and linkages, and how they can explain the success of some countries (or regions) in promoting growth, and the failure of others, is examined. The need to link MNE and industrial policies systematically is highlighted. Attracting the “right kinds” of MNE activity remains important, but greater heterogeneity of MNE activity and host locations requires greater customization of policy tools.     

Interaction of Government Tiers and Central Banks in a Federation: An Empirical Test

Fiscal rules are necessary to protect monetary policy from the consequences of unsustainable or active fiscal policy for inflation. Monetary unions, such as the Economic and Monetary Union (EMU), require even stronger fiscal rules to avoid free riding by regional fiscal authorities on the common monetary policy. By contrast, in a fiscal federation, the federal government internalises the effect of active regional policies on the overall price level. Federal fiscal policy contributes to price stability either by enforcing fiscal rules or by adjusting its own stance. Following Canzoneri, Cumby and Diba (2001), we test whether federal and regional governments in Germany behave in an active or passive way. We find evidence of a spillover effect of unsustainable policies on other regions. The German federal government offsets the effect on the price level by running passive policies. The Bundesbank's prime objective of price stability is therefore endorsed by fiscal policy. The results have implications for the regulation of fiscal policies in the EMU.