“Imaginary” or “Real” Moneys of Account in Medieval Europe? An Econometric Analysis of the Basle Pound, 1365–1429

During the Middle Ages, the medium of exchange function of money was separate from the unit of account function. This has given rise to the misconception that the medieval pound was an “abstract” or “imaginary” unit of account whose purchasing power was independent of that of gold and silver coins. The joint behavior of the pound price of gold, the pound price of silver, and the silver–gold ratio in Basle between 1365 and 1429 cannot be reconciled with the notion that nominal values were autonomous. Instead, the monetary system was based on a silver standard, supplemented by gold coins whose money of account values were determined by this silver standard.     

Energy demand in the transportation sector of Mexico

This paper report results of an analysis of the demand for energy in the Mexican transport sectors, focusing on the railroad, air transport and motor vehicle modes. The approach is an econometric one with emphasis placed on the structure for each mode. For two of the modes a two-stage approach is employed where in the first stage demands for services from the particular mode are modeled, and in the second stage demand is treated as a derived demand from these transport services. For the motor vehicle mode, gasoline demand is considered as the product of gasoline consumption per vehicle times the total number of vehicles, and then these components are related to economic and structural variables. Diesel demand of motor vehicles is modeled in a more reduced from approach. The principal finding is that changes in income play a more important role in affecting energy demand than do changes in energy prices, especially in the railroad and air transport sectors. For the gasoline and diesel fuel demand in the monitor vehicle sector, however, price is of substantial importance.     

Österreichs Wirtschaftsstruktur und ihre Entwicklung

Ohne Zusammenfassung     

Money illusion and coordination failure

Economists long considered money illusion to be largely irrelevant. Here we show, however, that money illusion has powerful effects on equilibrium selection. If we represent payoffs in nominal terms, choices converge to the Pareto inferior equilibrium; however, if we lift the veil of money by representing payoffs in real terms, the Pareto efficient equilibrium is selected. We also show that strategic uncertainty about the other players' behavior is key for the equilibrium selection effects of money illusion: even though money illusion vanishes over time if subjects are given learning opportunities in the context of an individual optimization problem, powerful and persistent effects of money illusion are found when strategic uncertainty prevails.     

Jump-robust volatility estimation using nearest neighbor truncation

We propose two new jump-robust estimators of integrated variance that allow for an asymptotic limit theory in the presence of jumps. Specifically, our MedRV estimator has better efficiency properties than the tripower variation measure and displays better finite-sample robustness to jumps and small (“zero”) returns. We stress the benefits of local volatility measures using short return blocks, as this greatly alleviates the downward biases stemming from rapid fluctuations in volatility, including diurnal (intraday) U-shape patterns. An empirical investigation of the Dow Jones 30 stocks and extensive simulations corroborate the robustness and efficiency properties of our nearest neighbor truncation estimators.     

The way to win in cross-border alliances

Global competition has paved the way to new corporate combinations--and opened up new pitfalls along the way. In "The Way to Win in Cross-Border Alliances," Joel Bleeke and David Ernst offer the unconventional lessons of their study of 49 cross-border alliances. For example, alliances between a weak and a strong company usually don't work; but fifty-fifty ownership of joint ventures actually improves decision making.     

Design and implementation of a survey of people parking at curbside meters

A practical procedure for planning and implementing a survey of the public to obtain relevant information for municipal decision-makers is illustrated with a study of motor vehicle parking at curbside meters. Principal components are: the definition of the problem; the development of a questionnaire in consultation with the politicians and their advisors; the design of a sampling plan to reflect the breadth of potential responses from the public, and the cost of obtaining interviews; the use of machine-readable forms to reduce the sources of error, and to facilitate the monitoring of interviewer performance; and the application of statistical analysis, using standard computer programs to obtain quickly and accurately the results that are most meaningful to the ultimate decision-makers. The conclusions and recommendations from the survey may be applicable to other cities.     

Wage bargaining and shock sensitivity of a small open economy

This paper analyzes the effects of centralized bargaining over a nominal wage (indexation) rule on a small open economy with fixed exchange rates. It is shown that the relative bargaining power of the confederation of employers and the union, respectively, affects not only the level of the endogenous variables but also their reaction to exogenous disturbances. If the union's power exceeds a critical value, positive aggregate demand shocks increase unemployment since the actual nominal wage rises more than the market clearing one. Moreover, if the union's power is sufficiently close to its upper bound, the overreaction of wages becomes so large that positive aggregate demand shocks even lead to a decrease in output and employment, i.e., the multipliers become negative.