incentives productivity and labor contracts the relationship between age earnings profiles and worker incentives is examined by contrasting wage and salary workers with the self employed it is argued that the steepness of wage and salary workers age earnings profiles reflects the desire to provide work incentives to those workers since self employed workers do not face this agency problem they are used as a benchmark to gauge productivity empirical support of the proposition is provided and the effects of human capital accumulation are separated empirically from incentive effects the most important conclusion is that under some strong assumptions most of the slope in age earnings profiles is accounted for by the desire to provide incentives rather than by on the job training

high frequency analysis of foreign exchange interventions what do we learn abstract the high frequency analysis of foreign exchange dynamics is helpful in order to better identify the impact of central bank interventions evidence robustly shows that interventions do indeed move the exchange rate level in the desired direction interventions increase volatility in the short run as they are regarded as information but they can reduce volatility overall ways of transmission may reach beyond the signalling channel and also include the portfolio balance and a damping channel finally interventions are more successful if they obey certain conditions such as being coordinated among central banks and going with the market and fundamentals

central bank interventions and exchange rate band regimes abstract this paper presents an endogenous switching regression model for the exchange rate process where the switch is defined by the central bank criteria functions for intervening we study the signal effect of interventions on the exchange rate using norwegian daily data on official interventions we first find that interventions seemed to have been more effective in moving the exchange rate in the expected desired direction in the regime when the exchange rate was kept away from the edges of the band this type of intervention regime also reduces significantly the conditional volatility of the exchange rate thus when the exchange rate was near the weakest edge of the currency band its conditional variance was significantly larger than when it was moving around its central parity finally we show that in order to obtain consistent estimates intervention variables cannot enter as exogenous variables in the conditional mean or conditional variance of the exchange rate

daily effects of foreign exchange intervention evidence from official bank of canada data abstract this paper analyzes the effects of official daily bank of canada intervention in the cad usd exchange rate over the 1995 1998 period using an event study methodology and different criteria for effectiveness some evidence that intervention was systematically associated with both a change in the direction and a smoothing of the exchange rate is presented the results of the analysis however do not suggest that bank of canada intervention succeeded in reducing the volatility of the cad usd exchange rate furthermore the paper shows that the effects of intervention are weakened when adjusting for general currency co movements against the usd

how do exchange rates co move a study on the currencies of five inflation targeting countries abstract this paper does three things first it explores the type of asymmetry in exchange rate correlation for five inflation targeting countries we show their currencies co move more closely with the currencies of some influential foreign countries during joint appreciations than joint depreciations against a world currency second it establishes empirically the linkage between interest rate differentials and exchange rate correlation we find evidence that both widening and narrowing interest rate differentials will reduce the correlation third it proposes a new version of the asymmetric dynamic conditional correlation model the model proves to be capable of providing great insight into the two issues investigated

uneasy alliances lessons learned from partnerships between businesses and ngos in the context of csr interest in corporate social responsibility csr has proliferated in academic and business circles alike in the context of csr the spotlight has traditionally focused on the role of the private sector particularly in view of its wealth and global reach other actors have recently begun to assume more visible roles in the context of csr including non governmental organizations ngos which have acquired increasing prominence on the socio economic landscape this article examines five partnerships between businesses and ngos in a developing country context that fall in the realm of csr the article starts with a literature review delineating foundational underpinnings that have to be carefully designed and crafted to promote the success of collaborative ventures an empirical study of five selected partnerships between businesses and ngos in lebanon is then presented allowing to derive interesting insights into types of existing alliances their relational characteristics as well as salient factors considered most determinant of success or failure in this regard

a friction model of daily bundesbank and federal reserve intervention abstract this paper takes a novel approach to derive a central bank intervention reaction function a garch model for exchange rates is amended to allow interventions to have an effect on both the mean and the variance of exchange rate returns an intervention reaction function is obtained by combining the model with a loss function for the central bank estimation results for the implied friction model reproduce the familiar leaning against the wind policy by the bundesbank and the federal reserve furthermore the central banks appear to have reacted to increases in the conditional variance of daily dm returns

estimating a firm s age productivity profile using the present value of workers earnings in hiring new workers risk neutral employers equate the present expected value of each worker s compensation to the present expected value of his her productivity data detailing how present expected compensation varies with the age of hire embed therefore information about how productivity varies with age this paper infers age productivity profiles using data on the present expected value of earnings of new hires of a fortune 1000 firm for each of the five occupation sex groups considered productivity falls with age with productivity exceeding earnings for young workers and vice versa for older workers

why do central banks intervene abstract intervention by central banks in terms of buying and selling foreign currency has been a major activity in recent years this paper investigates the motivations for such policy and the evidence for its effectiveness we use high quality daily data on the dollar amounts of intervention by the central banks of the us and germany we also use information on agreed g7 target levels for the dm and yen nominal exchange rates daily nominal dollar exchange rate returns are well described as a martingale garch process and we find little evidence that the different types of intervention have had much effect on the conditional mean of exchange rate returns there is some evidence that intervention is associated with slight increases in the volatility of exchange rate returns while little evidence is found for the effectiveness of intervention the motivations are more clear in particular from the application of probit analysis we find that the probability of intervention is determined by the magnitude of the deviation of the nominal exchange rate from the agreed target level and to a lesser extent by the current volatility of exchange rates

portfolio optimization in the presence of dependent financial returns with long memory a copula based approach abstract in this paper we seek to examine the effect of the presence of long memory on the dependence structure between financial returns and on portfolio optimization first we focus on the dependence structure using copulas to select the best copula in addition to the goodness of fit tests we employ a graphical method based on visual comparison of the fitted copula density and the smoothed copula density estimated by wavelets moreover we check the stability of the copula parameter the empirical results show that the long memory affects the dependence structure second we analyze the impact of this dependence structure on the optimal portfolio we propose a new approach based on minimizing the conditional value at risk and assuming that the dependence structure is modeled by the copula parameter the empirical results show that our approach outperforms the traditional minimizing variance approach where the dependence structure is represented by the linear correlation coefficient

conditional covariances and direct central bank interventions in the foreign exchange markets abstract in this paper we investigate the effects of central bank interventions cbis on the ex post correlation and covariance of exchange rates using a multivariate garch model with time varying conditional covariances we estimate the effects of cbis on both the variances and covariance between the yen and the deutsche mark the euro in terms of the us dollar our results suggest that coordinated cbis not only tend to increase the volatility of exchange rates but also explain a significant amount of the covariance between the major currencies we show that this result can be useful for short run currency portfolio management

central bank intervention and foreign exchange rates new evidence from figarch estimations abstract in this paper we investigate the effects of official interventions on the short run evolution and volatility of exchange rates to this aim we rely on a new measure of volatility implied by the figarch model that outperforms the traditionally used garch one it is found that central bank interventions exert an incorrectly signed effect on the levels of exchange rates and tend to increase their volatility in the short run in general our results also show that the traditional garch estimations tend to underestimate the effects in terms of volatility

do wages rise with job seniority many previous studies have found a strong positive effect of job seniority tenure on wages this paper re examines the evidence using a simple instrumental variables scheme to deal with the fact that tenure is likely to be related to unobserved individual and job characteristics that affect the wage we use the variation of tenure over a given job match as the principal instrumental variable for tenure the variation in tenure over the job is uncorrelated by construction with the fixed individual and job match specific components of the error term of the wage equation our main finding is that the partial effect of tenure on wages is small and that general labour market experience and job shopping account for most wage growth over a career the strong cross section relationship between tenure and wages is due primarily to heterogeneity bias prior researchers see mincer and jovanovic 1981 bartel and borjas 1981 borjas 1981 cline 1979 and mellow 1981 and many others have established that job seniority has a strong positive relationship with wage rates in a cross section or a cross section time series of individuals in this paper we re evaluate the evidence concerning the partial effects on wages of job seniority tenure and total labour market experience the extent to which wages rise with tenure is important for several reasons first and foremost the wage tenure profile is a fundamental question about the structure of earnings over careers second the wage tenure profile is a key determinant of the extent to which the earnings power of individuals is tied to specific jobs and it is important for assessment of the losses suffered by displaced workers hamermesh 1984 third evidence that wages rise with job tenure has been used to explain the decline in quits with tenure since the wage growth on the current job lowers the probability that the worker will locate a superior alternative a growing theoretical literature surveyed in parsons 1984 has taken the evidence of a strong wage tenure profile at face value and sought to provide an explanation for the relationship the most prominent explanation is the theory of specific human capital oi 1962 becker 1962 mincer 1974 parsons 1972 kuratani 1973 and hashimoto 1980 in which the growth of wages with tenure holding experience constant is attributed to the worker s share of investments in firm specific skills more recently lazear 1981 has presented a supervision model of wage growth in which firms defer compensation as a means of inducing workers not to shirk freeman 1977 and harris and holmstrom 1982 provide an explanation for wage growth based on an insurance motive salop and salop 1976 nickell 1976 and guasch and weiss 1982 present adverse selection models of wage growth in which firms use a wage tenure profile as a

the market microstructure of central bank intervention abstract how quickly do central bank intervention operations impact the foreign exchange market and do intra daily market conditions influence the effectiveness of central bank interventions this paper uses high frequency intra daily data to examine the relationship between the efficacy of intervention operations and the state of the market at the moment that the operation is made public the results indicate that some traders typically know that the fed is intervening at least 1 h prior to the public release of the information in newswire reports also the evidence suggests that the timing of intervention operations matters interventions that occur during heavy trading volume that are closely timed to scheduled macro announcements and that are coordinated with another central bank are the most likely to have large effects

central bank intervention and exchange rate volatility abstract this paper explores the effects of foreign exchange intervention by central banks on the behavior of exchange rates the g 3 central banks have undertaken an unprecedented number of both coordinated and unilateral intervention operations in the last 10 years existing empirical evidence on the effectiveness of intervention is mixed studies using data from the 1970s suggest that intervention operations that do not affect the monetary base have at most a short lived influence on exchange rates but more recent studies indicate that the intervention operations that followed the plaza agreement influenced both the level and variance of exchange rates this paper examines the effects of us german and japanese monetary and intervention policies on dollar mark and dollar yen exchange rate volatility over the 1977 1994 period the results indicate that intervention operations generally increase exchange rate volatility this is particularly true of secret interventions which are those undertaken by central banks without notification of the public overt interventions in the mid 1980s appear to have reduced exchange rate volatility but in other periods and for the 1977 1994 period as a whole central bank intervention is associated with greater exchange rate volatility

an innovative public private partnership new approach to development abstract this paper is focused on the development of new services by nonprofit organizations for groups of companies within a particular sector in industry it is based on a case study of an actual implementation by united nations industrial development organization unido in collaboration with a number of other organizations to upgrade the capabilities of automotive component suppliers in india to enable them to supply to world class manufacturers we draw upon the traditional literature available on new product and service development for firms introducing new products and services for maximizing profit and contrast those approaches with the approach adopted by nonprofit organizations we also carry out a comparative analysis between unido s partnership model and the traditional model to highlight the innovation aspects and advantages of the former from the developmental perspective an attempt is also made to illustrate the pre formation formation and post formation challenges faced by the new cooperation model that envisages the participation of public and private partners

efficiency wage models of unemployment keynesian economists hold it to be self evident that business cycles are characterized by involuntary unemployment but construction of a model of the cycle with involuntary unemployment faces the obvious difficulty of explaining why the labor market does not clear involuntarily unemployed people by definition want to work at less than the going wage rate why don t firms cut wages thereby increasing profits

a memory based model of bounded rationality in order to investigate the impact of limited memory on human behavior i develop a model of memory grounded in psychological and biological research i assume that people take their memories as accurate and use them to make inferences the resulting model predicts both over and underreaction but provides enough structure to predict when each effect dominates i then use this framework to study the consumption decision the results match empirical work on consumption predictability as well as differences in the marginal propensity to consume from different income streams most importantly because it ties the extent of bias to a measurable aspect of the stochastic process being forecasted the model makes testable empirical predictions

official central bank interventions and exchange rate volatility evidence from a regime switching analysis in this paper we investigate the effect of central bank interventions on the weekly returns and volatility of the dem usd and yen usd exchange rate returns in contrast with previous analyses we allow for regime dependent specifications and investigate whether official interventions can explain the observed volatility regime switches it is found that depending on the prevailing volatility level coordinated central bank interventions can lead to either a stabilizing or a destabilizing effect our results lead us to challenge the usual view that such interventions always imply increases in volatility c 2002 elsevier b v all rights reserved

are forign exchange intervention and monetary policy related and does it really matter the relationship between foreign exchange intervention and monetary policy underlies the question of whether sterilized interventions can affect the exchange rate in this article the author examines this relationship using data on u s foreign exchange interventions from 1985 to 1990 recently made publicly available she examines whether interventions could be viewed as signaling changes in future monetary policy variables the author also considers whether changes in monetary policy may induce interventions in an effort by central bankers to lean against the wind of exchange rate movements interestingly she finds evidence both that interventions help predict monetary policy variables and that monetary variables help predict interventions copyright 1995 by university of chicago press

order flow and exchange rate comovement abstract this paper extends the literature on the linkage between order flows and exchange rates from the univariate to the multivariate framework we examine how order flow differentials drive exchange rate comovements using data on five major exchange rates and at three different intraday frequencies we also control for bid ask spreads and the possible effects of order flow on returns and return volatility and employ alternative order flow measures our results show that the effect of order flow on exchange rate comovements is significantly negative during the tranquil period but can become positive during the turbulet period this negative effect lessens as the intraday frequency lowers generally over the entire sample period exchange rate correlations are stronger during joint appreciations than joint depreciations

is corporate aid targeted to poor and deserving countries a case study of nestle s aid allocation summary empirical evidence on the targeting of private aid is largely lacking even though corporate donors are an increasingly important source of aid we contribute to closing this gap by performing a case study of nestle the allocation of nestle s aid is compared to that of swiss oda and ngo aid testing for both altruistic and selfish aid motivations we conclude that nestle s aid clearly lacks focus in terms of targeting poor countries which appears to be the downside of the strong link between commercial presence and aid moreover according to our tobit estimations nestle grants more aid to recipient countries with stronger democratic but also more corrupt institutions