Portfolio Capital Flows: Hot or Cold?

A distinction is often made between short-term and long-termcapital flows: the former are deemed unstable hot money andthe latter are deemed stable cold money. Using time-series analysisof balance of payments data for five industrial and five developingcountries, we find that in most cases the labels "short-term"and "long-term" do not provide any information about the time-seriesproperties of the flow. In particular, long-term flows are oftenas volatile as short-term flows, and the time it takes for anunexpected shock to a flow to die out is similar across flows.long-term flows are also at least as unpredictable as short-termflows, and knowledge of the type of flow does not improve theability to forecast the aggregate capital account.     

Why are REITS Currently So Expensive?

Over the last several years, the price of listed real estate stocks has been unusually high relative to dividends. I find that neither low interest rates nor low risk premia can account for the high valuation ratios. Lower interest rates have been offset by rising risk premia to keep expected returns close to average. Instead, the market has priced in future income growth on commercial properties far above the growth rates seen in the data. High implied growth rates are less extreme for nontraditional REIT sectors. Income growth expectations are also less extreme for international listed real estate.     

Standing by Your Organization: The Impact of Organizational Identification and Abusive Supervision on Followers’ Perceived Cohesion and Tendency to Gossip

Abusive supervision has been shown to have significant negative consequences for employees’ well-being, attitudes, and behavior. However, despite the devastating impact, it might well be that employees do not always react negatively toward a leader’s abusive behavior. In the present study, we show that employees’ organizational identification and abusive supervision interact for employees’ perceived cohesion with their work group and their tendency to gossip about their leader. Employees confronted with a highly abusive supervisor had a stronger perceived cohesion and engaged in less gossiping behavior when they identified more strongly with their organization. Our findings illustrate that organizational identification functions as a buffer for those confronted with an abusive supervisor.