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Byline: Franklin R. Edwards (1), Xin Zhang (2) Abstract: The unprecedented growth of mutual funds has raised questions about the impact of mutual fund flows on stock and bond prices. Many believe that the equity bull market of the 1990s is attributable to the huge flows of funds into equity mutual funds during this period and that a withdrawal of those funds could send stock prices plummeting. This article investigates the relationship between aggregate monthly mutual fund flows (sales, redemptions, and net sales) and stock and bond monthly returns during a 30-year period beginning January 1961 utilizing Granger causality and instrumental variables analysis. With one exception, flows into stock and bond funds have not affected either stock and bond returns. The exception is 1971--1981, when widespread redemptions from equity mutual funds significantly depressed stock returns. In contrast, the magnitude of flows into both stock and bond funds are affected significantly by stock and bond returns. Author Affiliation: (1) Graduate School of Business, Columbia University, New York (2) The World Bank, Washington, DC Article History: Registration Date: 13/10/2004

Market economics can overreach and reduce all human activities to market-governed activities. More than a market-inspired explanation for human activities, it offers a normative account of how all goods and services should be distributed by private parties negotiating mutually agreeable terms. This paper argues that market values and practices are constrained by other fundamental values and practices. Liberal values are generally consistent with, though they are not reducible to, market values. Democratic and egalitarian values often contrast with market values. The distribution of market benefits should accommodate those democratic and egalitarian values which constitute a polity's core commitments (and those core commitments need to be reasserted regularly). Indeed, market stability depends upon a general distribution of its benefits. Incentives to productive activity entail inequalities, but the terms of those inequalities are subject to review. Internal refinements to specific markets can reduce inequalities by promoting the fairness of market operations and by increasing the number of effective participants. KEY WORDS: democratic and egalitarian values, market economics, market values and practices

Byline: Chonawee Supatgiat (1), Rachel Q. Zhang (1), John R. Birge (1) Keywords: bidding; Nash equilibrium; electric power Abstract: We consider an open electricity market with demand uncertainty.In this market, the generators each decide on a bidding price tomaximize profit. Units are dispatched in order of the bid from lowestto highest until demand is satisfied. The market clearing price isthe highest bid among the dispatched units.All dispatched units are then sold at this market clearing price.Under a market stability assumption, we derive Nashequilibrium solutions, i.e., bidders' optimal bidding strategiesand the resulting market clearing price. Author Affiliation: (1) Department of Industrial and Operations Engineering, University of Michigan, Ann Arbor, U.S.A. Article History: Registration Date: 09/10/2004

The market stability of a product can be threatened by stockouts. However, the level of danger may be easy to interpret. Manufacturers and retailers do not have to be very concerned about the extended negative effects caused by temporary retail stockouts. An analysis of potato chip brands' availability verifies these observations.

Abstract Commercial real estate investors prefer coastal, gateway, markets for liquidity, demand density, and durable returns. Yet, these areas are more vulnerable to the effects of climate change from more [...]

To help clients understand the Federal Reserve (hereafter, Fed), I have often said that if you had a chance encounter with a 'typical' Fed employee on the street in DC [...]

In the aftermath of the 2008 financial and economic crisis, governments developed plans to steer fiscal policies back to a sustainable path. Austria is no exception, since the latest 2012 consolidation package aimed to balance the budget by 2016. For the success of consolidation policies, however, it is of great importance which fiscal policy strategies are pursued. For instance, should the deficit be reduced by reducing expenditure, by increasing revenue, or by a mixed coordinated policy? Empirical evidence from the mid-1990s indicated that Austria's policy makers followed a path according to the spend-tax hypothesis, deciding on expenditure and then caring about the funding of public tasks. Since 1995, the year of Austria's accession to the European Union, fiscal policy frameworks have changed (e.g., Maastricht Treaty, Fiscal Pact), and thus budgetary policies might have changed as well. The current paper provides new econometric evidence for a stable spend-tax fiscal policy decision process in Austria for the last 60 years. Therefore, it seems that the importance of reducing expenditure (about 72 % of the total consolidation volume in the current package) accounts for this principal approach in Austrian fiscal policy making. However, left open is whether the envisioned increase in revenues (about 28 % of the total consolidation volume) might be counterproductive for sustainably balancing the budget. Keywords Public debt * Public revenue/expenditure * Tax-spend debate (revenue-expenditure nexus) * Budgetary policies JEL Classification H6 * E6, Introduction The latest macroeconomic developments significantly influenced Austrian budgetary policies. The last five years of recessions and austerity packages also left their marks on Austrian public debt. The Austrian Ministry [...]

In his fascinating and thought-provoking book, The End of Alchemy, Mervyn King recounts a post-dinner conversation with a Chinese central banker during a visit to Beijing in 2011. The central [...]

Abstract In this study, the interrelationship between major exchange rate returns (namely EUR/USD, GBP/USD, JPY/USD) and precious metal returns (gold and silver) is examined using a vector autoregressive model in [...]

Abstract The theory of optimum currency areas, suggesting the redrawing of currency areas across countries or splitting of national money into several currencies, is at odds with the one-money-one-country pattern [...]

In the middle third of the 18th century, the factory system and mechanization began to transform the economy of the Midlands of England. Accelerated by James Watt's rotary steam engine, [...]

As managers and academics increasingly raise issues about the real value of CRM, the authors question its direct and unconditional performance effect. The study advances research on CRM by investigating the role of critical mechanisms underlying the CRM-performance link. Drawing from the sources--positions--performance framework, the authors build a research model in which two strategic postures of firms--differentiation and cost leadership--mediate the effect of CRM on firm performance. This investigation also contributes to the literature by drawing attention to the differential impact of CRM in diverse industry environments. The study analyzes data from in-depth field interviews and a large-scale, cross-industry survey, and results reveal that CRM does not affect firm performance directly. Rather, the CRM-performance link is fully mediated by differentiation and cost leadership. In addition, CRM's impact on differentiation is greater when industry commoditization is high. Keywords CRM * Customer relationship management * Business strategy * Structural equation modeling * Mediation * Industry commoditization, Introduction Understanding how firms can profit from their customer relationships is highly important for both marketing practitioners and academics (Boulding et al. 2005; Payne and Frow 2005). Prior research has [...]

Abstract The subprime mortgage crisis has negatively affected individuals, investors, lenders, and economies worldwide. This paper first examines contributing factors of the crisis: predatory lending, predatory borrowing and mortgage fraud, [...]

Good afternoon. I am pleased to have once again the opportunity to address the National Association for Business Economics. My remarks today will focus on recent developments in the financial [...]

The U.S. economic recovery is now one of the longest on record, entering its eighth year, and the unemployment rate has moved down to a level many would associate with [...]

By Stephen S. Roach, 2009. Hoboken, NJ: John Wiley & Sons Inc. Pp. 414, $39.95 hardcover Business Economics (2010) 45, 296-297. doi:10.1057/be.2010.27 For Stephen Roach, Asia Chairman for Morgan Stanley [...]