Learning competitive market balance

Summary We exhibit a quite natural, adaptive process generated by price-taking, noncooperative firms, supplying the same market. Under rather mild conditions, that process, being driven by marginal profits, converges to a market clearing, Cournot-Nash equilibrium. Namely, it suffices for convergence that cost functions be strictly convex and that the law of demand holds. Randomness in revenues and costs is accommodated.Support from Ruhrgas is gratefully acknowledged.     

Do measurement-related fair value disclosures affect information asymmetry?

Using a sample of European real estate firms over the 2007–2010 period, this study provides some evidence that measurement-related fair value disclosures reduce information asymmetry. We find a negative association between the extent of fair value disclosures and the bid-ask spread, but no association with two additional measures of information asymmetry (zero returns and price impact). Contrary to our expectation, we fail to find evidence that firms using model estimates exclusively benefit the most from such additional disclosure. Analysing measurement errors (the absolute difference between the selling price of an asset and its fair value prior to sale), we find that firms that use model estimates exclusively and provide more measurement-related disclosures have lower errors and more accurate fair value estimates. In other words, if our lack of results is due to investors not using this additional disclosure this is to their detriment.     

Multi-product firms,product mix changes and upgrading: Evidence from China's state-owned forest areas

Product selection matters for a firm's productivity and long-run growth. Recent theoretical and empirical studies indicate that an important margin of adjustment to policy reforms is the reallocation of output within firms through changes in product mix decisions. This paper examines the frequency, pervasiveness and determinants of product-switching and upgrading activities in firms located in China's state-owned forest areas during a period of gradual institutional and managerial reforms (2004–2008). We find that changes to the product mix are pervasive and characterized by adding or churning products rather than only shedding products. Moreover, changes in firms’ product mix have made a significant contribution to the aggregate output growth during our sample period. We also find that firms with different characteristics, human capital and market conditions differ in their propensity to diversify and upgrade product mix.     

An examination of consumers’ cross-shopping behaviour

This study addresses antecedents of cross-shopping behaviour. Five theory-driven hypotheses are derived and tested. The results indicate that impulse buying tendency and perceived time pressure have a statistically significant negative effect on supermarket patronage. Product assortment and price consciousness have a statistically significant negative effect on speciality store patronage, while impulse buying tendency and convenience orientation have a statistically significant positive effect on speciality store patronage. Perceived time pressure has a statistically significant positive effect on meat store patronage. This effect is, however, not statistically significant on seafood store patronage. The findings have managerial implications for both supermarkets and speciality stores.     

Competition Makes Inspectors More Lenient: Evidence from the Motor Vehicle Inspection Market

Review of Industrial Organization - We investigate whether increased competition among inspection firms leads to an increase in the inspection pass rate in the Swedish car inspection market, which...     

Estimating the natural rates in a simple New Keynesian framework

The time-varying natural rate of interest and output and the implied medium-term inflation target for the US economy are estimated over the period 1983–2005. The estimation is conducted within the New Keynesian framework using Bayesian and Kalman-filter estimation techniques. With the model-consistent estimate of the output gap, we get a small weight on the backward-looking component of the New Keynesian Phillips curve—similar to what is obtained in studies which use labor share of income as a driver for inflation (e.g., Galí, Eur Econ Rev 45(7):1237–1270, 2001; Eur Econ Rev 47(4):759–760, 2003). The turning points of the business cycle are nevertheless broadly consistent with those of CBO/NBER. We find considerable variation in the natural rate of interest while the inflation target has been close to 2% over the last decade.     

TFP change and its components for Swedish manufacturing firms during the 2008–2009 financial crisis

Journal of Productivity Analysis - A driving force of economic development is growth in total factor productivity (TFP). Manufactured goods are, to a large extent, exports, and represent an...     

Leader‐Member Exchange Relationships and Follower Outcomes: The Mediating Role of Perceiving Goals as Invariable

In the present study, we investigated whether perceiving goals as invariable mediated the link between leader‐member exchange (LMX) relationships and role overload, turnover intention, and work performance. Perceiving goals as invariable refers to the extent to which followers believe that the goals in a performance management system represent the absolute standards that they must meet without exception, even if they think other factors are more important (e.g., situational factors or factors that are not associated with goals). In Study 1, perceiving goals as invariable mediated the relationships between LMX and role overload and turnover intention, such that a high‐quality LMX relationship was negatively associated with perceiving goals as invariable, which in turn was positively related to both role overload and turnover intention. In Study 2, social LMX was negatively associated and economic LMX was positively associated with perceiving goals as invariable, which in turn was negatively related to work performance. Furthermore, perceiving goals as invariable mediated the relationship between social LMX relationships and work performance. Theoretical and practical implications and directions for future research are discussed. © 2017 Wiley Periodicals, Inc.     

Forecasting inflation with an uncertain output gap

The output gap is a crucial concept in the monetary policy framework, indicating demand pressure that generates inflation. However, its definition and estimation raise a number of theoretical and empirical questions. This paper evaluates a series of univariate and multivariate methods for extracting the output gap in Norway, and compares their value added in predicting inflation. We find that models including the output gap have better predictive power than models based on alternative indicators, and they forecast significantly better than simple benchmark models. Furthermore multivariate measures of the output gap perform better than the univariate gaps. Comments from two anonymous referees, Q. Farooq Akram, Tommy Sveen, Ken West, Fredrik Wulfsberg and seminar participants in Norges Bank are gratefully acknowledged. All mistakes remain our own. The views expressed are those of the authors and do not necessarily represent those of Norges Bank.     

Exchange rate volatility and export performance: a cointegrated VAR approach

During the last decades Norwegian exporters have–despite various forms of exchange rate targeting–faced a rather volatile exchange rate which may have influenced their behaviour. Recently, the shift to inflation targeting and a freely floating exchange rate has brought about an even more volatile exchange rate. We examine the causal link between export performance and exchange rate volatility across different monetary policy regimes within the cointegrated Vector Autoregression (VAR) framework using the implied conditional variance from a Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model as a measure of volatility. Although treating the volatility measure as either a stationary or a nonstationary variable in the VAR, we are not able to find any evidence suggesting that export performance has been significantly affected by exchange rate uncertainty. We find, however, that volatility changes proxied by blip dummies related to the monetary policy change from a fixed to a managed floating exchange rate and the Asian financial crises during the 1990s enter significantly in a dynamic model for export growth–in which the level of relative prices and world market demand together with the level of exports constitute a significant cointegration relationship. A forecasting exercise on the dynamic model rejects the hypothesis that increased exchange rate volatility in the wake of inflation targeting in the monetary policy has had a significant impact on export performance.