Episodes of Exuberance in Housing Markets: In Search of the Smoking Gun

In this paper, we examine changes in the time series properties of three widely used housing market indicators (real house prices, price-to-income ratios, and price-to-rent ratios) for a large set of countries to detect episodes of explosive dynamics. Dating such episodes of exuberance in housing markets provides a timeline as well as empirical content to the narrative connecting housing exuberance to the global 2008 ?09 recession. For our empirical analysis, we employ two recursive univariate unit root tests recently developed by Phillips and Yu (International Economic Review 52(1):201–226, 2011) and Phillips et al. (2015). We also propose a novel extension of the test developed by Phillips et al. (2015) to a panel setting in order to exploit the large cross-sectional dimension of our international dataset. Statistically significant periods of exuberance are found in most countries. Moreover, we find strong evidence of the emergence of an unprecedented period of exuberance in the early 2000s that eventually collapsed around 2006 ?07, preceding the 2008 ?09 global recession. We examine whether macro and financial variables help to predict (in-sample) episodes of exuberance in housing markets. Long-term interest rates, credit growth and global economic conditions are found to be among the best predictors. We conclude that global factors (partly) explain the synchronization of exuberance episodes that we detect in the data in the 2000s.     

Perceptions of service delivery and happiness

An important task for students of development is to monitor progress in bringing basic services to all South Africans, one of the major objectives of the Reconstruction and Development Programme (RDP). This article reports on a subjective indicator study which began in February 1995, nine months after the April 1994 elections. The study, commissioned by Information Update, a Human Sciences Research Council research publication, inquired into personal happiness and assessments of local public services including access to water, education, electricity, health care, roads and transport. Over 5 700 South Africans were polled during 1995 in three nationally representative sample surveys. Secondary data analysis showed that perceived improvements to local services were closely associated with increases in happiness among all sectors of the population, including rural dwellers and the poor. The article discusses the policy implications of this finding for future voting behaviour and efficient local government.     

The effects of market organization on conspiracies in restraint of trade

Mindful of the market structure-conduct-performance paradigm fundamental to industrial organization research, this paper uses laboratory experimental techniques to study the impact of conspiratorial opportunities on market performance. We compare ‘posted-offer’ markets where sellers (but not buyers) are all conspiratorial opportunities with observations from three control groups: (1) posted-offer markets without conspiratorial opportunities, (2) ‘double-auction’ markets with conspiratorial opportunities and (3) posted-offer markets with true single-seller monopolists. The basic conclusions generated by our experimental design are: (1) seller conspiracies in posted-offer markets tend to raise prices (but not profits) relative to similarly organized markets without conspiracies, (2) posted-offer conspiracies tend to generate higher prices (but not profits) than double-auction conspiracies, and (3) posted-offer monopolies tend to generate higher profits (but not prices) then posted-offer conspiracies.     

Is the emergence of new sovereign wealth funds a fashion phenomenon?

The paper deals with the important financial policy issue of the decision for a country to establish a sovereign wealth fund (SWF). Using a large-scale database, we analyze the economic, political and institutional factors that should be considered in such a decision. In particular, we test if the emergence of SWFs and more specifically of a specific type of SWFs can be explained by the following factors: the excess foreign exchange reserves due to natural resources rents or persistent current account surpluses; the volatility of commodity prices; the appreciation of the real exchange rate leading to the “Dutch Disease” effect and the governance of the country. The results suggest that countries with excess foreign exchange reserves, which are dependent on a commodity and which suffer from an appreciation of the real exchange rate are more likely to create a fund. We also find that commodity-based funds tend to be established in low democratic countries. Finally, our results suggest that the factors driving SWFs creation are different depending on the origin of the funding (commodity or non-commodity) and the macroeconomic objective(s) assigned to the fund. Our results may be of interest for policymakers debating whether or not it can be optimal for the country to establish a SWF.     

Mapping Corporate Responsibility and Sustainable Supply Chains: an Exploratory Perspective

Corporate responsibility (CR) in general, and sustainable supply chain management in particular, have been a growing concern for companies and researchers over the past decade. However, in scholarly work, sustainability has often been dealt with in a generic fashion or from an anecdotal point of view. Further, research works examining CR on the one hand and sustainable supply chains on the other have been conducted separately. We undertake the multiple factor analysis of a CR rating database (Innovest) which reports longitudinal scores for both the social and environmental performance of 1198 companies in different countries and distinct industries, to demonstrate a strong relationship between CR and a sustainable supply chain. Our findings from exploratory analysis also illustrate the role of country of origin and industry in shaping CR behaviour, highlighting isomorphic as well as allomorphic trends for CR trough time. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.     

Mentoring: a model for leadership development?

There appears to be a paucity of research on mentoring senior leaders (Hobson & Sharp, 2005) and yet a growing interest in the development of leadership through experience (Abra et al., 2003; McCauley et al., 1998). This paper therefore presents and evaluates a case study of a pilot mentoring scheme and programme for Directors of Finance (DoFs) in the UK National Health Service. The paper reviews DoFs’ leadership needs within the three broad categories of pragmatism, effectiveness and sustainability, and provides a case study detailing the pilot mentoring scheme and programme. Values and challenges posed by this initiative as a model for leadership development are considered, and lead to the identification of eight cross‐cutting tensions connected to mentoring senior leaders. This analysis provides lessons for the ongoing initiative and indicates key learning about managing mentoring and mentoring senior leaders that it is hoped will be of value beyond the scope of this study.     

Too many theories,too few facts? What the data tell us about the link between span of control,compensation and career dynamics

In this paper, we use a unique personnel dataset from a large European firm in an high tech manufacturing industry that provides information about hierarchical relationships. This unusually rare feature allows us to identify the chain of command. We provide a few stylized facts about the link between span of control, compensation and career dynamics and relate our findings to the existing theoretical literature of hierarchies in organizations: the assignment model, the incentives model, the information processing model, the supervision model, and the knowledge-based hierarchy model. We observe an increase in the span, an increase in wage inequality between job levels, and the introduction of a new hierarchical level. We also find that higher spans of control are associated with higher wages. The knowledge-based hierarchy provides the most likely explanation for these results when communication costs are decreasing. However, we also find evidence of learning and reallocation of talent within and across job levels, a finding that can not be explained by a static model of knowledge based hierarchy but rather by dynamic models of careers in organizations. Finally, we provide a few suggestions to enrich the existing theoretical literature and reconcile it with the facts.