The monetary approach to the balance of payments: A nontechnical guide

The monetary approach uses monetary rather than multiplier and market stability tools. It differs from the `elasticities,' `Keynesian multiplier,' `absorption,' and `economic policy' approaches in introducing stocks as well as current expenditure flows into the adjustment process so that payments disequilibria are transitory and conditional on domestic monetary policy. The development of the approach is sketched, and some policy implications briefly discussed.     

Effects of agency risks and procedural justice on board processes in venture capital-backed firms

This paper builds a model of the effects of agency risk and procedural justice in the boards of directors of venture capital-backed firms. Such boards are unique in that they consist of managers and outside owners with significant power and incentive to be highly involved in venture governance. The authors integrate agency theory and procedural justice perspectives to develop propositions regarding the effects of agency risk and board processes on the responses to poor performance and conflicts of interest. This integrated perspective suggests that factors that increase perceived agency risks will increase outsiders' tendency to focus efforts on monitoring and controlling board decisions and their propensity to resort to formal means to resolve conflicts. However, the authors suggest that through their effects on trust and positive attributions, fair procedures and interactions will reduce these tendencies. A discussion of the practical and theoretical implications of the proposed model concludes the paper.     

Product risk reduction using consensus theory

Product analytics is a blend of computational methods with the express purpose of facilitating the multifaceted process of decision-making based on demographic and consumer preferences. This complex subject is derived from consensus theory and includes structured analytics, categories, and the combination of evidence. The methodology is applicable to a wide range of business, economic, social, political, and strategic decisions. The paper describes a product allocation application to demonstrate the conceots.     

The Welfare Economics of a Biofuel Tax Credit and the Interaction Effects with Price Contingent Farm Subsidies

A framework is developed to analyze the effects of a biofuel consumer tax exemption and the interaction effects with a price contingent farm subsidy. Ethanol prices rise above the gasoline price by the amount of the tax credit. Corn farmers gain directly while gasoline consumers only gain from any reduction in world oil prices due to the extra ethanol production. Domestic oil producers lose. Historically, the intercept of the ethanol supply curve is above the gasoline price. Hence, part of the tax credit is redundant and represents "rectangular" deadweight costs that dwarf triangular deadweight cost measures of traditional farm subsidies.     

Piece Rates, Fixed Wages, and Incentive Effects: Statistical Evidence from Payroll Records

We develop and estimate an agency model of worker behavior under piece rates and fixed wages. The model implies optimal decision rules for the firm's choice of a compensation system as a function of working conditions. Our model also implies an upper and lower bound to the incentive effect (the productivity gain realized by paying workers piece rates rather than fixed wages) that can be estimated using regression methods. Using daily productivity data collected from the payroll records of a British Columbia tree-planting firm, we estimate these bounds to be an 8.8 and a 60.4 percent increase in productivity. Structural estimation, which accounts for the firm's optimal choice of a compensation system, suggests that incentives caused a 22.6 percent increase in productivity. However, only part of this increase represents valuable output because workers respond to incentives, in part, by reducing quality.     

Reform of China's Foreign Exchange Regime and its Implications in the Light of the Asian Financial Crisis

MOCT-MOST: Economic Policy in Transitional Economies -