On the empirics of risk-sharing across MENA countries

In this article, we compute the potential welfare gains and the realized gains from risk-sharing among Middle East and North African (MENA) countries, including the oil-rich Gulf region and the resource-scarce economies. We find that the overall potential welfare gains across MENA countries are positive for all countries under the assumption of full risk-sharing. The potential welfare gains among the six Gulf Cooperation Council (GCC) countries are positive even though the magnitudes are smaller compared to those of the rest of the MENA region. We also quantify the extent of risk-sharing for the MENA region and show that it is significant for the MENA region and its subgroups; however, we could not find any sign of inter-temporal smoothing across the same groups. Decomposing the aggregate output shocks shows that the extent of risk-sharing is significant when only positive output shocks exist across the resource-scarce MENA economies. However, we observe that GCC countries share output risks with each other even under negative output shocks.     

Oil Price and Stock Market Synchronization in Gulf Cooperation Council Countries

Knowing that the Gulf Cooperation Council (GCC) economies are dichotomous in nature, and growth in the non-oil sector is tributary to the oil sector, we document the extent of synchronization between crude oil prices and stock markets for each of the GCC markets and for the GCC as an economic bloc. We use both the bivariate and multivariate nonparametric synchronicity measures proposed by Mink et al. (2007) to assess that linkage. We find a low to mild (mild to strong) degree of synchronization between oil price and stock market returns (volatilities). In a very few instances, we find very strong (above 80 percent) associations between these variables. These results hold irrespective of whether we assume that stock market participants form adaptive or rational expectations about the price of oil. Dynamic factor results confirm that shocks to volatility are more important than shocks to oil price returns for the GCC stock markets.     

Income and consumption smoothing and welfare gains across Pacific Island Countries: The role of remittances and foreign aid

We examine the potential welfare gains and channels of income smoothing for Pacific Island Countries (PICs) and find that, under full risk sharing overall welfare gains across all PICs (particularly, Kiribati, Palau, and Papua New Guinea) are at desirable levels. However, for Australia, the potential welfare gain from risk sharing is almost similar to the gain it obtains if Australia attains full risk sharing with the rest of the OECD countries or with New Zealand alone. We also break down output using the framework of Sørensen and Yosha (1998) to quantify the extent and channels of risk sharing across PICs. For PICs, income-smoothing channels (net factor income and current transfers) play a significant role in buffering the output shock compared to the performance of those channels on smoothing the output shock for OECD countries. Domestic savings also smooth a fair portion of shocks to output, but the extent is much lower compared to that of OECD countries. Further, we analyze the effect of remittances and foreign aid on income smoothing for the PICs excluding Australia and New Zealand. Income smoothing via remittances is highly volatile and significant in recent years, while foreign aid seems to be a stronger and more stable channel for smoothing domestic output shocks for PICs.     

The Revealed Preference Theory of Changing Tastes

We analyse preferences over finite decision problems in order to model decision-makers with „changing tastes”. We provide conditions on these preferences that identify the Strotz model of consistent planning. Building on an example given by Peleg and Yaari (1973) , we show that for problems with infinitely many choices, Strotz's representation of preferences may not be well defined. For that case, we propose a well-defined approximation which is empirically indistinguishable from the Strotz preference that is being approximated.     

Planning perceptions and planning results

The need for planning in business organizations operating in today's complex environment is widely accepted. Implied is an assumption that planning improves performance. However, the empirical evidence for such a claim is thin. Since planning is an integral part of strategy formulation, the facts to confirm or refute an assumed connection between planning and performance invite attention. Our research focuses on new data from 61 companies which test this linkage and, in addition, reviews the conclusions of prior empirical studies.     

The impact of group-oriented values on choice of conflict management styles and outcomes: an empirical study in Turkey

Globalization has led to increased attention to cultural diversity in workforces and its influences on organizational practice. This study examines group-oriented values and their impact on choice of conflict management styles as well as on conflict resolution outcomes in Turkey. Using a sample of 315 managerial personnel from various public and private organizations, this study shows that norms of subordination of personal needs to group interests and beliefs about the effects of personal pursuit on group productivity are the most important predictors of choice of conflict management styles in Turkey. In addition, dominating and obliging styles are associated with individual profits in actual conflict resolution process and integrating style is the primary determinant of satisfaction and relationship building in conflict management. Managerial implications are then discussed on diversity and conflict management training for effective international human resources management.     

Collective Action and the Institutionalist Approach to Financial Regulation

Drawing on the institutionalist approach to a capitalist economy as a money economy, I regard financial regulation and supervision as a collective action problem. I argue that, given the basic characteristics of such an economy, a financial system may be considered as a public utility and financial stability as a public good. I then maintain that the provision of the latter could not rely on private market mechanisms, such as self-regulation and price-directed incentives. As capitalism develops through more financialized forms, new institutions and regulatory rules must be designed to reframe the market’s boundaries in order to consolidate systemic stability, which is a basic condition for continuous and sustainable economic relations in society. I then suggest a precautionary-principle-based macro-prudential approach to financial regulation in order to ensure a sustainable provision of finance and financial stability that is consistent with the characteristics of a money economy.     

Bond market integration of emerging economies and bilateral linkages

Although there are numerous studies that have looked at the spillover effects in equity markets, little attention has been paid to explore the integration of bond markets of developed and emerging economies. Our paper is an attempt to fill this void by quantifying the spillovers from developed countries on the bond markets of 25 emerging economies. We apply volatility and return spillover models to quantify the extent of the spillovers from developed markets (i.e. the United States, UK and Japan) into emerging bond markets. We find that the extent of the return spillovers and volatility spillovers has not been symmetric across emerging markets. We explain these differences using bilateral factors such as trade volume, portfolio investment, cultural and geographical factors. The bilateral trade volume turns out to be the leading explanation for the extent of spillovers between our set of countries.     

Determinants of Fresh and Frozen Fruit and Vegetable Expenditures in Turkish Households: A Bivariate Tobit Model Approach

In this study, we have identified the effects of socio-demographic and economic factors of household heads and households on monthly expenditures of fresh and frozen fruit and vegetable in Turkey using the bivariate Tobit model. The results show that both the probability and monthly spending levels of household fruit and vegetable consumption increase with increasing in age of household heads, educational levels of household heads, married household heads, household income, and the number of adults in a family, while male-headed households, working household heads, the households that receive in-kind help from the government or private sector, and the use of internet at home decrease both the likelihood and spending levels of fruit and vegetable consumption in Turkey. The results in the study may contribute to the stakeholders to identify and implement effective marketing strategies and also develop more effective policies for the government to improve nutritional levels for certain dwellings for which the government include them in the certain state-initiated benefit program.     

Monotonicity and envyfree assignments

Summary Given any problem involving assignment of indivisible objects and a sum of money among individuals, there is an efficient envyfree allocation (namely the minmax money allocation) which can be extended monotonically to a new efficient envyfree allocation for any object added or individual removed, and another (the maximin value allocation) extendable similarly for any object removed or person added. Still, the efficient envyfree solution is largely incompatible with the resource and population monotonicity axioms: The minmax money and maxmin value allocations are unique in being extendable.I wish to thank William Thomson, David Gale, Ehud Kalai and a referee for valuable suggestions. Previous versions have appeared in the discussion paper series of CORE, Universite Catholique de Louvain, and CEME, Universite Libre de Brussels; to both of these centers I extend my thanks for the visit I enjoyed in 1992. I also gratefully acknowledge support from the Bogaziçi University Research Fund.