Slow Recoveries: A Structural Interpretation

An analysis of the performance of GDP, employment, and other labor market variables following the troughs in postwar U.S. business cycles points to much slower recoveries in the three most recent episodes, but does not reveal any significant change over time in the relation between GDP and employment. This leads us to characterize the last three episodes as slow recoveries, as opposed to jobless recoveries. We use the estimated New Keynesian model in Galí, Smets, and Wouters (2011) to provide a structural interpretation for the slower recoveries since the early nineties.     

Eastern Germany and the conflict between wage adjustment,investment, and employment: A numerical analysis

Eastern Germany and the Conflict between Wage Adjustment, Investment, and Employment: A Numerical Analysis. — In this paper, some light is shed on the dynamics of the adjustment process in eastern Germany by studying the linkages between the dynamics of wage adjustment, investment, and employment. An extended dynamic investment model, which includes adjustment costs for capital and revision costs for investment, is presented. This model is specified according to the east German economy and analyzed numerically by an optimization method based on direct collocation. Results are obtained for the time horizon of adjustment and for the implications of different wage strategies on the path of investment and employment.     

Assessing customer passion,commitment, and word-of-mouth intentions in digital assistant usage: The moderating role of technology anxiety

Consumers develop a passion for the use of innovations, which is a critical determinant of their success. Research has largely examined drivers of initial acceptance of digital assistants (DAs) and has yet to fully understand the factors driving or deterring consumers’ passion towards DAs and the behavioural outcomes. Drawing on the stimulus-organism-response framework, this study examines a unique set of factors (usefulness, ease of use, privacy concern, and localisation) that act as stimuli to drive an organismic state of passion for DAs, and how this produces behavioural responses of word-of-mouth (WOM) intention and commitment to DA use. The study also examines how technology anxiety moderates passion’s impact on WOM intentions and commitment. The findings show that usefulness, ease of use, privacy concern, and localisation are significant explanatory variables of consumers’ passion towards DAs. Furthermore, passion towards DAs results in WOM intentions and commitment to its use. The findings further show that passion’s effect on DAs in explaining WOM intentions and commitment is weakened by technology anxiety. Lastly, passion is the mediating mechanism through which usefulness, ease of use, privacy concern, and localisation impact WOM intentions and commitment. The implications of these findings for theory and practice are highlighted.     

Toward a new business model of retail industry: The role of brand experience and brand authenticity

While the customer-to-manufacturer (C2M) business model has received increasing attention as a new business model for e-commerce and retail industry, little is still known about it and the effect of its approach. This study aims to understand how brand-related stimuli in C2M environments affect customer responses as the worldwide COVID-19 pandemic. The outcomes reveal that the Sensory, affective, and intellectual aspects of brand experience positively influence brand authenticity. Brand authenticity has a positive effect on behavioral intention, such as reuse intention and word-of-mouth. Additionally, this research finds that social presence moderates the association between the sensory aspect of brand experience. Thus, this study can suggest a C2M business model as a means of sustainable operation of the retail industry to both researchers and practitioners in relation to the retail industry.     

U.S.-China trade war and competitive advantage of Vietnam

China has been losing international competitiveness in labor-intensive industries due to various factors, including the trade war with the United States and globalization. Vietnam, however, has rapidly expanded its labor-intensive exports. The paper proposes to explore the future of labor-intensive industries in Vietnam due to the U.S.-China trade war. The paper examines export performance data from United Nation Comtrade for 10 specific labor-intensive industries that serve the U.S. market between 2000 and 2020 to assess the possibility of Vietnam overtaking China's position as the world's largest manufacturer. Using situation analysis, the paper compares the competitive advantage of Vietnam in labor-intensive industries due to the U.S.-China trade war. The paper found that China's competitiveness was negatively impacted for the final two periods, while Vietnam's competitive advantage increased.     

A framework for analyzing money stock control under the Monetary Control Act

This paper analyzes the money stock effects of the Monetary Control Act (MCA) under a nonborrowed reserve (NBR) operating procedure. Prior to the passage of the MCA, policy was conducted under an interest rate operating target where reserve requirement reforms such as those introduced by the MCA had little influence on money stock variability. Under an NBR procedure however, the structure of reserve requirements may have a significant impact on monetary control. Our analysis indicates that the relative improvement in monetary control greatly depends on the degree of tightness exercised by the Federal Reserve over total reserves in an MCA regime. The tighter the control, the more significant the estimated monetary control benefits of the MCA under an NBR procedure.     

Ownership dispersion as a second-best counterstrategy against monopoly

A literature on second-best pricing as counterstrategy against monopoly has evolved in economics. The purpose of this paper is to demonstrate that ownership dispersion through forced divestiture can be more effective in restricting the social damage of monopoly. Economists generally hold an ordinal view of utility. To the extent that the second-best literature suggests the possibility of reducing dead-weight loss through counterpricing, most economics would accept counterpricing as welfare increasing and reject ownership dispersion. The example presented in this paper suggests that this mindset may cause us to overlook promising alternatives.     

Of lessees,lessors, and discount rates and whether pigs have wings

Recent articles on leasing suggest five principles that should aid analysts to understand this durable, much misunderstood financial instrument. The principles are 1) the lessor must be happy too, 2) the operating inflows have nothing to do with the case, 3) financial, like physical, matter tends to be preserved, 4) debt is a function of after-tax flows, and 5) inability to use tax shelters cuts two ways. In this paper we illustrate these principles and use illustrations to demonstrate that each of these principles has merit. We argue as well that the impression, often left by the principles, that leasing seldom benefits all parties to the transaction is incorrect.     

A re-examination of the forward exchange rate unbiasedness hypothesis

A Re-Examination of the Forward Exchange Rate Unbiasedness Hypothesis. — This paper applies the Phillips and Hansen estimation and inference procedures to re-examine the hypothesis that the forward exchange rate is an unbiased predictor of the future spot exchange rate. The results indicate that the 90-day forward exchange rate is not an unbiased predictor. However, the 90-day forward and future spot exchange rates are cointegrated. Only for the U.K. pound/U.S. dollar exchange rate is there an error correction representation. Overall, however, the evidence is consistent with the hypothesis that risk-averse agents in the forward foreign exchange market form expectations rationally.     

Measuring the liquidity part of volume

Based on the concept that the presence of liquidity frictions can increase the daily traded volume, we develop an extended version of the mixture of distribution hypothesis model (MDH) along the lines of Tauchen and Pitts (1983) to measure the liquidity portion of volume. Our approach relies on a structural definition of liquidity frictions arising from the theoretical framework of Grossman and Miller (1988), which explains how liquidity shocks affect the way in which information is incorporated into daily trading characteristics. In addition, we propose an econometric setup exploiting the volatility–volume relationship to filter the liquidity portion of volume and infer the presence of liquidity frictions using daily data. Finally, based on FTSE 100 stocks, we show that the extended MDH model proposed here outperforms that of Andersen (1996) and that the liquidity frictions are priced in the cross-section of stock returns.