Effects of individual resources and team-member exchange on service quality

While workplace resources are generally viewed as positively affecting performance, some studies indicate that not all resources increase performance. This study addresses the controversial disparate effects of workplace resources on performance by exploring functionally classified workplace resources in self-managing service teams and their relative impacts on team service quality. Considering membership dynamics and consequences between members, a field experiment was conducted in a cafeteria, with data collected through a working diary for workplace resources and a customer survey to evaluate service quality. Results suggest that efficacy-resources in self-managing teams should be controlled with caution as they may adversely affect team service quality. Supporting the person–situation interactionism perspective, workplace resources interact dynamically with individual employees and with situations. Esteem-resources were found to increase team service quality, while team-member exchange not only improved team service quality but also moderated the impact of esteem-resources on team service quality.     

A New Framework to Estimate the Near-Term Path of the Fed Funds Rate

We propose a forward-looking method to estimate the path for the federal funds target rate. We utilize six-month out probabilities of inflationary and disinflationary pressures, along with a labor market index, to estimate the fed funds rate. We further suggest that due to the changing nature of economies and impending risks to the economic outlook, a time-varying method (consistent with the nature of risks) would help decision makers to improve effective decision making. Our econometric results suggest disinflation (or disinflationary pressure), not inflationary pressure, best explains fed funds rate movements from the 1990s forward. Based on June 2016 data, there is a 55 percent chance that the inflation rate would stay below 1.5 percent during the next six months. The recent higher disinflationary pressure probability may be one reason the FOMC has repeatedly lowered its path for the fed funds rate. Unfortunately, the low-inflation zombie is real.     

Are yield-curve/monetary cycles’ approaches enough to predict recessions?

Business Economics - This paper proposes a new framework that identifies a threshold between the fed funds rate and the 10-year Treasury yield and, when the threshold is breached, the risk of a...     

R-star wars: the phantom menace

The natural real rate of interest has been on a declining path for the past 30 years. I present a regime-switching analysis of the natural rate, which suggests that the current low levels are likely to persist in the near future. I identify a high global demand for safe assets as the most important factor in keeping the natural rate low. I conclude that the current low levels of the policy rate are generally appropriate, with some upside risk, and that forward guidance should be characterized by a flat policy rate path.     

Impact of airport green atmospherics on mental health value,image, and loyalty among visitors and workers

Nature‐based solutions (NBS) are becoming increasingly crucial as NBS brings diverse health‐related benefits to travelers and workers in the tourism business sector. This research explored the influence of green atmospherics as NBS on airport occupants' mental health value, image, and loyalty generation processes. A quantitative approach with a field survey method was employed. A structural equation modeling and metric invariance test were used as data analysis technique. Our empirical result revealed that green atmospherics as NBS significantly improve the occupants' mental health value and image of the airport, and these variables contribute to their loyalty enhancement for the airport. The effect of green spaces and natural surroundings on loyalty was maximized through mental health value and image. In addition, the linkages from natural surroundings to mental health value and image were stronger in the visitor group whereas the mental health value—loyalty relation was stronger in the worker group.     

Estimating the economic cost of the COVID-19 pandemic

Business Economics - Our study presents a framework to estimate economic costs of the COVID-19 pandemic for the U.S. economy. We characterize whether the pandemic-related damages are short-lived or...     

LEARNING AND THE GREAT MODERATION*

We study a stylized theory of the volatility reduction in the U.S. after 1984—the Great Moderation—which attributes part of the stabilization to less volatile shocks and another part to more difficult inference on the part of Bayesian households attempting to learn the latent state of the economy. We use a standard equilibrium business cycle model with technology following an unobserved regime‐switching process. After 1984, according to Kim and Nelson (1999a), the variance of U.S. macroeconomic aggregates declined because boom and recession regimes moved closer together, keeping conditional variance unchanged. In our model this makes the signal extraction problem more difficult for Bayesian households, and in response they moderate their behavior, reinforcing the effect of the less volatile stochastic technology and contributing an extra measure of moderation to the economy. We construct example economies in which this learning effect accounts for about 30% of a volatility reduction of the magnitude observed in the postwar U.S. data.     

A Two-Headed Dragon for Monetary Policy

The current financial crisis has been the key global economic event since it unfolded in earnest in early August 2007. The Federal Reserve has taken aggressive actions—both conventional and unconventional—to counteract the economic and financial fallout. Among these actions have been a number of new special lending programs created under section 13(3) of the Federal Reserve Act, which had not been employed since the 1930s. Academics, policymakers, and the general public have shown great interest in the Federal Reserve's new programs. In this paper, I emphasize two medium-term risks that the Federal Reserve now faces as it continues to confront financial market turmoil and recession. The two medium-term risks are opposites of each other, a “two-headed dragon.” One is a Japanese-style deflation trap, and the other is a breakout of inflation like that seen during the 1970s. An explicit inflation target would help mitigate these very real risks.     

The Transition from Stagnation to Growth: An Adaptive Learning Approach

This article develops the first model in which, consistentwith the empirical evidence, the transition from stagnation toeconomic growth is a very long endogenous process. The modelhas one steady state with a low and stagnant level of incomeper capita and another steady state with a high and growing levelof income per capita. Both of these steady states are locallystable under the perfect foresight assumption. We relax the perfectforesight assumption and introduce adaptive learning into thisenvironment. Learning acts as an equilibrium selection criterionand provides an interesting transition dynamic between steadystates. We find that for sufficiently low initial values of humancapital—values that would tend to characterize preindustrialeconomies—the system under learning spends a long periodof time (an epoch) in the neighborhood of the low-income steadystate before finally transitioning to a neighborhood of the high-incomesteady state. We argue that this type of transition dynamic providesa good characterization of the economic growth and developmentpatterns that have been observed across countries.     

Intermediaries and payments instruments

We study an economy in which intermediaries have incentives to issue circulating liabilities as part of an equilibrium. We show that, with arbitrarily small transactions costs, only the liabilities of intermediaries will circulate, and not those of other private sector agents. Therefore, our model connects intermediation activity with the issuance of payments media, a connection that has not been made in earlier literature. We use our model to suggest a resolution of the “ banknote underissue puzzle” of Cagan (in: D. Carson (Ed.), Banking and Monetary Studies, Richard D. Irwin Publishing, Homewood, IL, 1963).