On the relationship between Dutch and German interest rates

Summary In this paper the relationship between Dutch and German short-term and long-term interest rates is examined. Using cointegration techniques, it is found that the covered interest parity hypothesis holds for short-term interest rates. This evidence supports the recent shift of emphasis of Dutch monetary policy. It appears that the uncovered short-term interest differential is stationary. The long-term interest differential is stationary with a shift in mean. This does not imply that the uncovered interest parity (UIP) holds. Using the indirect approach suggested by Fama (1984), we show that a risk premium exists and that, therefore, UIP does not hold.The authors would like to thank H. Garretsen, L.H. Hoogduin, J. Jacobs, C.A. de Kam and two anonymous referees for their helpful comments on a previous version of this paper.Economic Bureau NMB-Postbank.     

The impact of government deficits on money growth in developing countries

This paper investigates the relationship between government budget deficits and money growth in the developing countries for which reliabile data exist. It is sometimes suggested that it is more likely that money growth follows debt growth in developing countries, due to the embryonic state of capital markets and because the central bank generally comes under direct control of the minister of finance. Our results provide only mixed support for this contention, however. In the majority of countries in our sample there is no evidence that government deficits affect money growth. For high-inflation years there seems to be more support for a relationship between deficits and money growth.     

Determinants of long-term growth: New results applying robust estimation and extreme bounds analysis

Two important problems exist in cross-country growth studies: outliers and model uncertainty. Employing Sala-i-Martin’s (1997a,b) data set, we first use robust estimation and analyze to what extent outliers influence OLS regressions. We then use both OLS and robust estimation techniques in applying the Extreme Bounds Analysis (EBA) to deal with the problem of model uncertainty. We find that the use of robust estimation affects the list of variables that are significant determinants of economic growth. Also the magnitude of the impact of these variables differs sometimes under the various approaches.First version received: March 2003 / Final version received: June 2004We like to thank two referees for their very helpful comments on a previous version of this paper. The usual disclaimer applies.     

Leading Indicators of Currency Crises: Are They the Same in Different Exchange Rate Regimes?

We investigate whether leading indicators of currency crises differ across exchange rate regimes using data for 88 countries in the period 1981–2010. Our estimates suggest that in fixed exchange rate regimes external indicators, such as deviations of the real exchange rate from trend and the growth of international reserves, have the strongest predictive power. In contrast, in floating exchange rate regimes monetary policy and credibility indicators, such as domestic credit growth and inflation, are the best leading indicators of currency crises. Both credibility and external economic indicators have predictive power in intermediate exchange rate regimes.     

Person-environment fit and emotional control: Assigned expatriates vs. self-initiated expatriates

Studies exploring the difference of assigned expatriates (AEs) and self-initiated expatriates (SIEs) have recently started to emerge. However, so far few results have been connected to theory developed in this area. In the current study, we use responses from 324 business expatriates in China and take departure in the two elements of the person-environment fit theory, supplementary fit and complementary fit. We use the supplementary fit element of this theory to explain why emotional control (low dispositional anger and high self-control) increases performance and satisfaction in China. We rely on the complementary element of person-environment fit theory for understanding why this effect may vary between AEs and SIEs. Our argument is that as opposed to SIEs, AEs could add contact and knowledge from the parent company to the local organization thus complementing it. Our findings, with regard to supplementary fit, show that self-control has a positive association with both job performance and job satisfaction while trait anger has a negative effect on job satisfaction. In relation to complementary fit, also as expected, we found a buffering moderation effect of being AE, meaning that the negative effect of their trait anger on job satisfaction was diminished for this group.     

Women's work and wages in the sixteenth century and Sweden's position in the ‘little divergence’

We use a unique source from the Swedish royal demesnes to examine the work and relative wages of women in sixteenth-century Sweden, an economic laggard in the early modern period. The source pertains to workers hired on yearly contracts, a type more representative of historical labour markets than day labour on large construction sites, and this allows us to observe directly the food consumed by workers. We speak to the debate on the ‘little divergence’ within Europe, as women's work and gender differentials in pay is a key indicator of women's relative autonomy and seen as a cause for the economic ascendency of the North Sea region during the period. We find small gender differentials among both unskilled and skilled workers, indicating that Sweden was a part of the ‘golden age’ for women. We argue that despite superficial equality, women's economic outlooks were restrained in many other ways – including their access to higher-skilled work and jobs in the expanding parts of the economy – adding important nuance to the discussion about the relationship between women's social position and economic growth in the early modern period.