Desire to be ethical or ability to self‐control: Which is more crucial for ethical behavior?

Promoting ethical decisions and behaviors is challenging for any organization. Yet managers are still required to make ethical decisions under conditions which deplete their self‐control resources, such as high stress and long hours. This study examines the relationships among symbolic and internal moral identity, self‐control, and ethical behavior, and investigates whether self‐control acts as the mechanism through which moral identity leads to ethical behavior. Findings indicate that internal moral identity overrides symbolic moral identity in the relationship with self‐control and that self‐control fully mediates the relationship between internal moral identity and ethical behavior. The implications for organizations is that while rules, procedures, and ethics training are useful, managers with a strong moral compass will be more likely to practice self‐control leading to more ethical behaviors.     

Inflation (mis)perceptions in the euro area

There has been a growing interest on inflation perceptions in the euro area, in particular, following the euro cash changeover. It has been pointed out that a gap emerged between observed and perceived inflation since the introduction of the euro notes and coins. Such a statement relies on the fact that inflation perceptions, measured by the well-known balance statistic from the European Commission’s consumer survey, hiked after January 2002 and remained high thereafter, as opposed to the observed inflation, which has remained fairly stable. In this paper, we discuss the measurement of inflation perceptions, by comparing the balance statistic with a refined alternative measure, which is computed using the probability method. We argue that the balance statistic should be used carefully, as it can lead to misleading conclusions. In fact, we find no evidence, both for euro area and individual countries, of the breakdown in the relationship between observed and perceived inflation, as measured by the proposed alternative measure, at the time of the euro cash changeover.     

Consumption Externalities,Coordination, and Advertising*

The aim of this article is to demonstrate that advertising can have an important function in markets with consumption externalities apart from its persuasive and informative roles. We show that advertising may function as a device to coordinate consumer expectations of the purchasing decisions of other consumers in markets with consumption externalities. The implications of advertising as a coordinating device are examined in the pricing and advertising decisions of firms interacting strategically. Although, at times, the one‐period advertising expense can exceed the one‐period monopoly profit, in equilibrium, consumers will pay a premium for the more heavily advertised brand.     

Forecasting inflation through a bottom-up approach: How bottom is bottom?

The aim of this paper is to assess inflation forecast accuracy over the short-term horizon, using Consumer Price Index (CPI) disaggregated data, through a bottom-up approach. That is, aggregating forecasts is compared with aggregate forecasting. A new dimension to the question of to bottom-up or not is introduced by considering different levels of data disaggregation, namely a higher disaggregation level than the one considered up to now. This raises modelling issues that one has to cope with. In particular, it is suggested the use of a new strand of models, the Factor-Augmented SARIMA models. Considering as case-study the Portuguese one, we find an inverse relationship between the forecast horizon and the amount of information underlying the forecast, when minimizing the RMSFE.     

Migration,intermediate inputs and real wages

To examine the effects of immigration on real wages it is important to focus on the interaction between the labour and intermediate input markets. Immigration can lead to more extensive exploitation of external and internal efficiencies in other input markets, resulting in higher real wages in the destination country.     

Money Growth and Inflation in the Euro Area: A Time‐Frequency View

This article provides new insights on the relationship between money growth and inflation in the euro area over the last 40 years. This highly relevant link for the European Central Bank monetary policy strategy is assessed using wavelet analysis. The findings indicate a stronger link between inflation and money growth at low frequencies over the whole sample period. At the typical business cycle frequency range the link is only present until the beginning of the 1980s. Moreover, there seems to be a recent deterioration of the leading properties of money growth with respect to inflation in the euro area.     

A wavelet-based assessment of market risk: The emerging markets case

The measurement of market risk poses major challenges to researchers and different economic agents. On one hand, it is by now widely recognized that risk varies over time. On the other hand, the risk profile of an investor, in terms of investment horizon, makes it crucial to also assess risk at the frequency level. We propose a novel approach to measuring market risk based on the continuous wavelet transform. Risk is allowed to vary both through time and at the frequency level within a unified framework. In particular, we derive the wavelet counterparts of well-known measures of risk. One is thereby able to assess total risk, systematic risk and the importance of systematic risk to total risk in the time-frequency space. To illustrate the method we consider the emerging markets case over the last twenty years, finding noteworthy heterogeneity across frequencies and over time, which highlights the usefulness of the wavelet approach.     

Hidden influences in international negotiations: The interactive role of insecure cultural attachment,risk perception,and risk regulation for sellers versus buyers

This research examines the previously unstudied role of cultural attachment in international negotiations. Specifically focusing on the fearful attachment style, this article reveals the intricate interaction of cultural attachment, risk perception, and risk regulation on negotiators' ability to claim value in international negotiation. Supporting our theorizing based on cultural attachment and prospect theory, findings show that risk‐averse sellers with fearful attachment to their national culture perceive greater risk and in turn are more motivated to regulate risk through relationship‐building with their counterpart (Study 1). Moreover, these individuals achieve lower economic gains when they regulate relational risk by making fewer threats to walk away (Study 2). We discuss the implications and the importance of understanding one's attachment to own national culture as its interplay with role and risk mechanisms impacts effectiveness in international negotiations.     

Inflation expectations in the euro area: are consumers rational?

In this paper, we propose a quantitative measure for inflation expectations based on consumer survey data. Thereafter, we proceed to testing the rationality assumption. This issue is of noteworthy interest in its own as it is commonly assumed in the theoretical modelling literature that the rational expectations hypothesis holds. This analysis is conducted for the euro area as a whole, as well as for several member countries, using a sample covering the last two decades. Moreover, we also assess if the conclusions hold when one focuses on the post-euro introduction period.