Virtual Currencies,the Money Market,and Monetary Policy

Virtual currencies are in vogue mainly due to two factors. First, as a protest against authority-driven monetary policy decisions and second, as alternatives to deficits in some monetary systems arising out of political instability or other causes. Assuming that virtual currencies indeed (partially) replace national currencies as payment vehicles, we attempt, in this article, to integrate the virtual currency supply and demand into the Keynesian money market framework. This article presents a few results for the central banks and outlines problems that may result for monetary policy formulation. Since this is the first such attempt to model a national money market as a combination of nationally-issued currency and globally-issued virtual currency, certain simplistic assumptions have been made. Nevertheless, the model offers directions on the impact of virtual currencies on the monetary system and the national money market. Additionally, the paper integrates the official standpoints of the European Central Bank and the Bank of England on this topic.     

Cultural Dimension of Corruption: A Cross-Country Survey

This study investigates whether culture plays a major role in determining the corruption levels of countries. The cultural dimensions of Hofstede’s model and the worldwide level of corruption provided by the Corruption Perceptions Index were used. A cross-country survey of 98 countries was conducted using ordinary least squares (OLS) regression. Three of the six main components of Hofstede’s model were found to have a significant influence on corruption, namely power distance, individualism-collectivism, and long- versus short-term orientation. National culture may explain the level of corruption in each of the countries. About half of the level of corruption in countries is explained by the national culture. Governments must acknowledge the role of culture in order to adopt the most appropriate policy decisions to fight corruption.     

Ownership Unbundling in Electricity Distribution: Empirical Evidence from New Zealand

New Zealand is the only country to date to have implemented forced ownership unbundling of electricity distribution from the rest of the electricity supply industry (in 1998). This paper examines the impact of this policy on electricity prices, quality of service and costs. We find that ownership unbundling did not achieve its objectives of facilitating greater competition in the electricity supply industry but that it did lead to lower costs and higher quality of service. We suggest that this experience indicates the potential benefits of ownership unbundling in Europe but also the danger of unintended consequences.     

The Price Effects of Using Firewalls as an Antitrust Remedy

Antitrust authorities have imposed firewalls between the previously separate divisions of newly vertically integrated firms in several industries, to address concerns that access to horizontal rivals’ proprietary information may reduce competition. This paper evaluates a specific antitrust concern by modeling the price effect of one seller’s learning its rival’s production costs before bidding in a duopoly procurement contest. The results show that imposing a firewall as a condition for permitting a vertical merger actually can lead to higher prices than if the flow of information were unimpeded, and they provide guidance as to when this unintended outcome occurs.     

Does Big Drive Out Small?

This paper measures the impact of the entry of large supermarkets on incumbents of various sizes. Contrary to the conventional notion that big stores drive small rivals out of the market, data from Tokyo in the 1990s show that large supermarkets’ entry induces the exit of existing large and medium-size competitors, but improves the survival rate of small supermarkets. These findings highlight the role of store size as an important dimension of product differentiation. Size-based entry regulations would appear to protect big incumbents, at the expense of small incumbents and potential entrants.     

“If I was going to design a chair,the last thing I would look at is a chair”: product analysis and the causes of fixation in students’ design work 11–16 years

Creativity is acknowledged to be important for economic growth and as an everyday life-skill, however several influential reports have suggested that education could do more to harness creative talent. Creative cognition literature suggests the lack of creativity is at least partly the result of ‘fixation’ (difficulty in generating novel ideas due to imagination being ‘structured’ by existing knowledge). This paper focuses on the secondary (students aged 11–16 years) design and technology (D&T) context in the UK. Here we examine whether teacher practice can contribute to fixation by focusing on one specific facet of teacher practice in D&T; the use of product analysis to inform the generation of creative design ideas. Data is drawn from the preliminary phase of a research and intervention project from interviews with D&T teachers (N = 14), students (N = 126) and lesson observations (N = 10) and an analysis of documents and student work. Product analysis is widely used at different points in design projects but, as is shown, in all cases current practice can lead to fixation, as thinking is constrained down specific paths and tasks are at best at procedural rather than comprehension level. The implications of these findings and tentative ways forward for practitioners are discussed.