how do daily changes in oil prices affect us monthly industrial output detecting asymmetry has become increasingly difficult using single frequency data this paper goes beyond the prevailing use of aggregate averaged data in order to provide a more in depth treatment of the dynamic effects of the price of crude oil on industrial output growth to do so we propose an asymmetric mixed data sampling amidas model to examine if there is any concealed evidence of asymmetry arising from daily effects of the price of crude oil on monthly changes in industrial output in the united states us we find that this model is able to detect dynamic asymmetric impacts of a high frequency independent variable on a low frequency dependent variable more effectively than when the high frequency variable is aggregated up at the time interval of the low frequency variable we find that in comparison with the marginal lagged effects of a rise in the daily price of crude oil the effects of a fall in the daily price of crude oil are more sluggish as it takes longer for the effects of the oil price drop to die off over time this finding implies that a fall in the price of crude oil shifts the supply curve rightward less and at a much slower pace than an equivalent price rise shifts it to the left

measuring entrepreneurship over time abstract this article is a review of three measurement issues that impact the study of entrepreneurship over time 1 level of analysis difference between firms and individuals 2 differences between rate and stock measures and 3 the effects of choosing particular time frames on subsequent analytical results based on theory that views entrepreneurship as depending on ownership rights hawley 1907 this article develops a longitudinal measure of entrepreneurship in the united states the number of organizations per capita the problems and advantages of using a measure based on organizations per capita as an indicator of entrepreneurship is examined understanding how and what is being measured in studies of changes in entrepreneurship over time is an important issue for academic researchers and public policy makers measurement of changes in entrepreneurship over time can shed light on important research questions and public policy issues about entrepreneurship for example is entrepreneurship increasing in the united states if entrepreneurship is increasing is this trend comparable to any previous time periods or is the current increase in entrepreneurship a new or unique social phenomenon what influences changes in entrepreneurship over time the choice of certain measures of entrepreneurship is likely to influence the answers to these questions for example the measures used in an entrepreneurship study are an implicit specification of one s views of entrepreneurship e g entrepreneurship as self employment or firm creation and few measures of entrepreneurship reflect critical changes in important environmental influences e g technological change because of short measurement time frames therefore determining the contribution of entrepreneurship to the well being of an economy is dependent on understanding what measures of entrepreneurship are utilized for making these evaluations and the time frame used for these measures we review three measurement issues that impact the study of entrepreneurship over time 1 level of analysis differences between firms and individuals 2 differences between rate and stock measures and 3 the effects of choosing particular time frames on subsequent analytical results based on theory that views entrepreneurship as depending on ownership rights hawley 1907 this article develops a longitudinal measure of entrepreneurship in the united states the number of organizations per capita studies of entrepreneurship focus on either individual level activity e g self employment or on firm level activity e g new incorporations self employment research focuses on individuals who employ themselves that is individuals who report wages but not wages paid to them by other individuals or organizations in most studies of the self employed firm founders would therefore be classified as wage earners and not as entrepreneurs new firm research focuses on the rate of new firm entrants typically measured as new incorporations so such businesses as proprietorships or partnerships will not be counted a rate is a change from one state to another e g the number of people who become self employed for a specific year or the number of new firms created for a specific year whereas a stock specifies a particular level e g much like a stock of inventory such as the number of self employed or a particular number of firms for a specific time period it is important to recognize that entry into business does not necessarily guarantee remaining in business for example although the number of people who become self employed may increase for a specific year the number of people who remain self employed may actually decrease if more of the self employed fail to remain in business than those that enter the stock of the self employed can decrease if the outflow of self employed is greater than the inflow for those persons interested in whether entrepreneurial activity results in wealth creation either individually or societally the realization that entry into business may not lead to a sustainable business and therefore no creation of wealth should be a signal that measuring rates of business formation and rates of self employment may not be appropriate for this type of research the factors that drive changes in the rate of entrepreneurship are not likely to be manifest over short timeperiods changes in values attitudes technology government regulations and world economic and social changes have a significant influence on changes in entrepreneurship over time studies that have measured entrepreneurship over recent time periods are therefore likely to miss the influence of these variables we introduce a measure of entrepreneurship organizations per capita based on a theory of entrepreneurship as ownership this measure shows the stock of organizations in the u s economy over time from 1857 to 1992 the problems and advantages of using a measure based on organizations per capita as an indicator of entrepreneurship is examined we conclude with some suggestions for improving entrepreneurship research by recognizing the limitations of particular longitudinal entrepreneurship measures and by challenging the field to seek convergent validity among measures

macroeconomic forecasting in the euro area country specific versus area wide information abstract this paper compares several time series methods for short run forecasting of euro wide inflation and real activity using data from 1982 to 1997 forecasts are constructed from univariate autoregressions vector autoregressions single equation models that include euro wide and us aggregates and large model methods in which forecasts are based on estimates of common dynamic factors aggregate euro wide forecasts are constructed from models that utilize only aggregate euro wide variables and by aggregating country specific models the results suggest that forecasts constructed by aggregating the country specific models are more accurate than forecasts constructed using the aggregate data

improving real time estimates of output and inflation gaps with multiple vintage models real time estimates of output gaps and inflation gaps differ from the values that are obtained using data available long after the event part of the problem is that the data on which the real time estimates are based is subsequently revised we show that vector autoregressive models of data vintages provide forecasts of post revision values of future observations and of already released observations capable of improving estimates of output and inflation gaps in real time our findings indicate that annual revisions to output and inflation data are in part predictable based on their past vintages this article has online supplementary materials

fiscal policy in real time in this paper i estimate the ex ante or intentional cyclical stance of fiscal policy in oecd countries i use the fiscal plans reported at the time of budgeting together with other information available to fiscal policy makers in real time indeed fiscal plans might be significantly different from ex post outcomes because governments do not have complete control over their implementation which is influenced by several exogenous factors when fiscal policy rules are estimated using real time data i show in this paper that oecd countries have often planned a counter cyclical fiscal stance especially during economic expansions this contrasts with conventional findings based on actual data which tend to point towards a cyclicality or pro cyclicality forecast errors for the government structural balance and the output gap play a central role in explaining the differences between estimates based on ex ante and ex post data

businesses without glamour an analysis of resources on performance by size and age in small service and retail firms abstract research on factors influencing performance in new and small companies is extensive earlier work found that strategies e g cost quality differentiation etc affected performance contingent on industry conditions the environment and the entrepreneur s background although this work provides a solid basis for understanding differences in entrepreneurial performance some firms are limited in their choices of strategy due to size age or industry often these firms are in industries where entry barriers are low and competitive advantages are easily imitated small service and retail businesses operate in sectors where these conditions are apparent comprising more than 50 of all small firms they require minimal start up investments but face intense competition lacking the glamour of high innovation high growth firms service and retail companies are at the end of the value chain their fortunes rising and falling as a result of the direct influence of the owner founder hence performance variation may be better explained by the capabilities of the firm or individual competencies of the owner founder that is the resource base and resource combinations rather than strategy the strategic importance of an organization s resources and capabilities is the foundation of resource based theory resources are tangible and intangible assets tied to the firm in a relatively permanent fashion their combinations are heterogeneous and form the basis for product market strategies studies of resources strategies and performance are emerging in the entrepreneurial area research shows that various resources in concert with different strategy types can lead to above average performance over the business life cycle and that combinations of resources are related to survival yet the vast majority of work focuses on high growth high tech or manufacturing businesses less is known about the relationships of resources to performance in less glamorous sectors in these small service and retail businesses we speculate that resources in particular human and organizational resources may play a greater role in explaining performance than strategy further as other authors have suggested it is expected that the combinations of these resources will vary across age and size this study examines the influence of human and organizational resources on performance in a sample of 195 service and retail firms operating in central new jersey using a structured questionnaire all companies utilized a focus strategy either focused cost or focused differentiation and employed a minimum of 3 to a maximum of 100 employees all measures had theoretical and or empirical precedent and were tested statistically for reliability we used factor analysis to reduce the independent variables to two human resource variables owner resources and commitment one organizational resource variable comprised of planning systems and staff skills and one strategy variable focused cost and focused differentiation control variables were business age business size environmental benignness and industry growth the dependent variable performance was measured in two ways net cash flow and log of growth in employees over 3 years the study first examined whether strategy or resources had a greater influence on performance results showed that strategy influenced performance less than human and organizational resources both individually and interactively the influence of owner resources background and attitudes on net cash flow was stronger than on growth where the only significant variable was industry market growth to analyze effects of resources on performance by size we divided the sample by size groupings selecting the smallest maximum five employees and largest quartiles minimum 16 employees which were comprised of 55 and 50 companies respectively these analyses showed that owner resources commitment and organizational resources contributed positively to net cash flow in very small firms however interactive effects of these resource combinations were negative for instance owner resources and organizational resources together and organizational resources and commitment together resulted in less positive cash flow than when analyzed separately this implies that different resource combinations can have negative influences in these very small firms we examined age effects in the same manner as size dividing the sample into age group quartiles and conducting an analysis only for very young fewer than 5 years and very old minimum 19 years groups which comprised 54 and 52 companies respectively these analyses showed that although growth was more rapid among the youngest firms there were no distinctive resource based correlates to growth in either age group substantive increases in formalized systems and procedures were not apparent among the oldest of these companies compared with the youngest contrary to previous work showing the evolution of these over business life cycles results of this study are applicable only in the context of service and retail firms and readers should note this sample was nonrandom and geographically concentrated our purpose was not to predict but describe associations between resources and performance this study shows that for firms in competitive industries at the end of the value chain type of strategy is less important than resource combinations for certain types of performance human and organizational resources are associated with more positive cash flow whereas industry and market factors are related to growth these results imply that firms seeking growth are best served by selecting and entering growth markets and industries on the other hand if strong positive cash flows are the primary objective attention to combinations of resources is more important for instance owner founders having a strong business and managerial background and industry experience will need less formalized systems whereas those owner founders with weaker managerial resources might benefit from more formalized procedures and skilled staff

short term gdp forecasting with a mixed frequency dynamic factor model with stochastic volatility in this article we develop a mixed frequency dynamic factor model in which the disturbances of both the latent common factor and of the idiosyncratic components have time varying stochastic volatilities we use the model to investigate business cycle dynamics in the euro area and present three sets of empirical results first we evaluate the impact of macroeconomic releases on point and density forecast accuracy and on the width of forecast intervals second we show how our setup allows to make a probabilistic assessment of the contribution of releases to forecast revisions third we examine point and density out of sample forecast accuracy we find that introducing stochastic volatility in the model contributes to an improvement in both point and density forecast accuracy supplementary materials for this article are available online

data revisions are not well behaved we document the empirical properties of revisions to major macroeconomic variables in the united states our findings suggest that they do not satisfy simple desirable statistical properties in particular we find that these revisions do not have a zero mean which indicates that the initial announcements by statistical agencies are biased we also find that the revisions are quite large compared to the original variables and they are predictable using the information set at the time of the initial announcement which means that the initial announcements of statistical agencies are not rational forecasts

world steel production a new monthly indicator of global real economic activity this paper proposes world steel production as an indicator of global real economic activity world steel production data is published with only a one month delay thereby providing timely information for world real gdp forecasters we find that world steel production and lutz kilian s 2009 index of global real economic activity generate large gains in forecasting world real gdp relative to an autoregressive benchmark a forecast combination of world steel production kilian s 2009 index of global real economic activity and an index of the industrial production of oecd countries plus six non oecd emerging economies produces significant gains in forecasting world real gdp relative to an autoregressive benchmark

heterogeneity in risky choice behaviour in a broad population we analyse risk preferences using an experiment with real incentives in a representative sample of 1 422 dutch respondents our econometric model incorporates four structural parameters that vary with observed and unobserved characteristics utility curvature loss aversion preferences towards the timing of uncertainty resolution and the propensity to choose randomly rather than on the basis of preferences we find that all four parameters contribute to explaining choice behaviour the structural parameters are significantly associated with socio economic variables but it is essential to incorporate unobserved heterogeneity in each of them to match the rich variety of choice patterns in the data

forecasting oil prices high frequency financial data are indeed useful abstract the paper examines the importance of combining high frequency financial information along with the oil market fundamentals in order to gain incremental forecasting accuracy for oil prices inspired by french et al 1987 and bollerslev et al 1988 who maintain that future asset returns are also influenced by past volatility we use daily volatilities and returns from financial and commodity markets to generate real out of sample forecasts for the monthly oil futures prices our results convincingly show that although the oil market fundamentals are useful for long run forecasting horizons the combination of the latter with high frequency financial data significantly improve oil price forecasts by reducing the rmse of the no change forecast by approximately 68 results are even more impressive during the oil price collapse period of 2014 15 these findings suggest that we cannot ignore the information extracted from the financial markets when forecasting oil prices our results are both statistically and economically significant as suggested by several robustness tests

monetary policy rules based on real time data this paper examines the magnitude of informational problems associated with the implementation and interpretation of simple monetary policy rules using taylor s rule as an example i demonstrate that real time policy recommendations differ considerably from those obtained with ex post revised data further estimated policy reaction functions based on ex post revised data provide misleading descriptions of historical policy and obscure the behavior suggested by information available to the federal reserve in real time these results indicate that reliance on the information actually available to policy makers in real time is essential for the analysis of monetary policy rules

macroeconomic forecasting with mixed frequency data forecasting output growth in the united states many macroeconomic series such as u s real output growth are sampled quarterly although potentially useful predictors are often observed at a higher frequency we look at whether a mixed data frequency sampling midas approach can improve forecasts of output growth the midas specification used in the comparison uses a novel way of including an autoregressive term we find that the use of monthly data on the current quarter leads to significant improvement in forecasting current and next quarter output growth and that midas is an effective way to exploit monthly data compared with alternative methods

a comparison of the personality type dimensions of the 1987 inc 500 company founders ceos with those of slower growth firms abstract a popular misconception holds that most new businesses experience similar growth stages of start up rapid growth maturity and decline yet business statistics show that only a small number of firms grow into large organizations a few experience some growth but the majority have such small growth that they provide only a marginal income to the founder while market conditions impact on the growth of the firm they do not explain growth differences when they occur under similar market conditions in this paper the authors have compared psychological type preferences of founders ceos of fast growth firms with those of slow growth firms under the assumption that differences in psychological preferences as they relate to gathering assimilating and processing information would have an impact on the strategic or growth orientation of the firm the results are based on the administration of the myers briggs type indicator to the founders cofounders of 143 firms included in the 1987 inc 500 list of the fastest growing private companies in the united states and the comparison of these results with those of an earlier study of 150 founders ceos of successful yet slower growing firms the primary personality traits under consideration were an individual s preferred method of gathering information from the environment making decisions and drawing conclusions from the information the results indicate that founders of rapid growth firms have psychological preferences that are significantly different from those of their slower growth counterparts growth oriented founders prefer an intuitive approach or consideration of future possibilities when gathering information and a thinking or planned and organized approach to drawing conclusions these preferences represent those facets most frequently used in strategic or growth planning investors in new firms that place importance on the capabilities and orientations of the management team as an evaluation criteria are currently limited to consideration of past experiences an awareness of the management team s experiences can provide an indication of management ability but unless their experience involves management of growth the information related to growth propensities or orientations is limited a measure of a person s preferences in gathering assimilating and processing information can indicate their desires for strategic and or growth planning hence investors may have another tool that can be used in the investment decision making process in addition government policy makers may have the opportunity for increased effectiveness in assistance programs by recognizing that the needs and preferences of founders of rapid growth companies are significantly different from those of their slower growing counterparts and that these differences should be considered in the development of assistance programs

loss aversion in aggregate macroeconomic time series abstract prospect theory has been the focus of increasing attention in many fields of economics however it has scarcely been addressed in macroeconomic growth models neither on theoretical nor on empirical grounds in this paper we use prospect theory in a stochastic optimal growth model thereafter the focus lies on linking the euler equation obtained from a prospect theory growth model of this kind to real macroeconomic data we will use generalized method of moments gmm estimation to test the implications of such a non linear prospect utility euler equation our results indicate that loss aversion can be traced in aggregate macroeconomic time series

are daily financial data useful for forecasting gdp evidence from mexico this article evaluates the use of financial data sampled at high frequencies to improve short term forecasts of quarterly gdp for mexico the model uses both quarterly and daily sampling frequencies while remaining parsimonious in particular the mixed data sampling midas regression model is employed to deal with the multi frequency problem to preserve parsimony factor analysis and forecast combination techniques are used to summarize the information contained in a data set containing 392 daily financial series our findings suggest that the midas model incorporating daily financial data leads to improvements in quarterly forecasts of gdp growth over traditional models that either rely only on quarterly macroeconomic data or average daily frequency data the evidence suggests that this methodology improves the forecasts for the mexican gdp notwithstanding its higher volatility relative to that of developed countries furthermore we explore the ability of the midas model to provide forecast updates for gdp growth nowcasting

prospect theory much ado about nothing prospect theory is a paradigm challenging the expected utility paradigm one of the fundamental components of prospect theory is the s shaped value function the value function is mainly justified by experimental investigation of the certainty equivalents of prospects confined either to the negative or to the positive domain but not of mixed prospects which characterize most actual investments we conduct an experimental study withmixed prospects using for the first time recently developed investment criteria called prospect stochastic dominance psd and markowitz stochastic dominance msd we reject the s shaped value function showing thatat least 62 76 of the subjects cannot be characterized by such preferences we find support for the markowitz utility function which is a reversed s shaped function exactly the opposite of the prospect theory value function it is possible that the previous results supporting the s shaped value function are distorted because the prospects had only positive or only negative outcomes presenting hypothetical situations which individuals do not usually face and which are certainly not common in financial markets

violations of cumulative prospect theory in mixed gambles with moderate probabilities in a classroom choice experiment with mixed gambles and moderate probabilities we find severe violations of cumulative prospect theory cpt and of markowitz stochastic dominance our results shed new light on the exchange between levy and levy 2002 and wakker 2003 in this journal

real time fiscal forecasting using mixed frequency data the sovereign debt crisis has increased the importance of monitoring budgetary execution we employ real time data using a mixed data sampling midas methodology to demonstrate how budgetary slippages can be detected early on we show that in spite of using real time data the year end forecast errors diminish significantly when incorporating intra annual information our results show the benefits of forecasting aggregates via subcomponents in this case total government revenue and expenditure our methodology could significantly improve fiscal surveillance and could therefore be an important part of the european commission s model toolkit

do high frequency stock market data help forecast crude oil prices evidence from the midas models abstract extensive studies have used stock market information to forecast crude oil prices and stock market can more easily derive high frequency data than crude oil market due to no revisions which raises a question that whether high frequency stock market data can improve the forecast performance of crude oil prices therefore this paper employs the midas model and the high frequency data of four stock market indices to forecast wti and brent crude oil prices at lower frequency the results indicate that the high frequency stock market indices have certain advantage over the lower frequency data in forecasting monthly crude oil prices and the midas model using high frequency data proves superior to the ordinary model

violence and risk preference experimental evidence from afghanistan comment in this comment on callen et al 2014 i revisit recent evidence uncovering a preference for certainty in violation of dominant normative and descriptive theories of decision making under risk i show that the empirical findings are potentially confounded by systematic noise i then develop choice lists that allow me to disentangle these different explanations experimental results obtained with these lists reject explanations based on a preference for certainty in favor of explanations based on random choice from a theoretical point of view the levels of risk aversion detected in the choice list involving certainty can be accounted for by prospect theory through reference dependence activated by salient outcomes

the evolution of new technology ventures over 20 years patterns of failure merger and survival abstract relatively few studies of entrepreneurs have examined the evolution of business ventures over a long period of time this paper summarizes the fate of 250 technology based companies founded in northern california during the 1960s the three outcomes studied are failure merger and continued operation in addition interviews with a dozen founders of firms that survived the entire 20 year period shed light on the founders own interpretations of why they succeeded by 1988 50 of the firms in the sample had failed 32 had merged or been acquired and 18 had survived as independent businesses there was a steady and occasionally sharp erosion in the number of survivors throughout the period a striking finding was that fully 78 of the surviving firms in 1988 still had one or more of the original founders in place among the factors predicting failure were product market problems such as product timing difficulties problems of product design or inappropriate distribution channels financial difficulties such as initial undercapitalization or problems with the venture capital relationship and managerial key employee problems such as imbalance in the management team or succumbing to the trappings of success the firms in the data base which were subsequently merged or acquired exhibited a number of macro and micro characteristics from a macro point of view the merger acquisition rates seem to have been lower than the national rate in the late 1960s higher in the later 1970s and similar in the 1980s from a micro point of view discernible patterns existed among acquired firms such as size and year since founding interviews with surviving founders suggested that relations between founders banking and credit problems attempted takeovers and international expansion were among the key crises that had to be overcome by the surviving firms of particular interest was the diversity of motives for founding the business reported by the survivors in addition to the desire to achieve wealth or to be independent we heard mentioned loyalty to a product or technology which would otherwise disappear and commitment to satisfying a customer group also noted were founders who indicated that their career as an entrepreneur came about primarily by accident five themes emerging from the interviews were characterized by the surviving founders as business lessons learned 1 know yourself 2 love your product 3 honor your customer 4 treat your people well and 5 keep your integrity the interviews in conjunction with the data on surviving firms are useful in expanding our understanding of the type of person that starts a business and why some start ups succeed over the long term particularly noteworthy is the number affirms who survived without ever growing larger theories of long term entrepreneurial success may need to take risk aversion into account

real time forecasting of inflation and output growth with autoregressive models in the presence of data revisions we examine how the accuracy of real time forecasts from models that include autoregressive terms can be improved by estimating the models on lightly revised data instead of using data from the latest available vintage the benefits of estimating autoregressive models on lightly revised data are related to the nature of the data revision process and the underlying process for the true values empirically we find improvements in root mean square forecasting error of 2 4 when forecasting output growth and inflation with univariate models and of 8 with multivariate models we show that multiple vintage models which explicitly model data revisions require large estimation samples to deliver competitive forecasts copyright 2012 john wiley sons ltd