To investigate how a fixed exchange rate affects monetary policy, this paper classifies countries as pegged or non-pegged and examines whether a pegged country must follow the interest rate changes in the base country. Despite recent research which hints that all countries, not just pegged countries, lack monetary freedom, the evidence shows that pegs follow base country interest rates more than non-pegs. This study uses actual behavior, not declared status, for regime classification; expands the sample including base currencies other than the dollar; examines the impact of capital controls, as well as other control variables; considers the time series properties of the data carefully; and uses cointegration and other levels-relationship analysis to provide additional insights.

This paper uses an empirical dynamic oligopoly model of the commercial aircraft industry to analyse industry pricing, industry performance, and optimal industry policy. A novel feature of the model with respect to the previous literature is that entry, exit, prices, and quantities are endogenously determined in Markov perfect equilibrium (MPE). We find that many unusual aspects of the aircraft data, such as high concentration and persistent pricing below static marginal cost, are explained by this model. We also find that the unconstrained MPE is quite efficient from a social perspective, providing only 10% less welfare on average than a social planner would obtain. Finally, we provide simulation evidence that an anti-trust policy in the form of a concentration restriction would be welfare reducing. Copyright 2004, Wiley-Blackwell.

Expert judgment elicitation is often required in probabilistic decision making and the evaluation of risk. One measure of the quality of probability distributions given by experts is calibration–the faithfulness of the probabilities in an empirically verifiable sense. A method of measuring calibration for continuous probability distributions is presented here. A discussion of the impact of using linear rules for combining such judgments is given and an empirical demonstration is given using data collected from experts participating in a large-scale risk study. It is shown by theoretical argument that combining well-calibrated distributions of individual experts using linear rules can only result in reducing calibration. In contrast, it is demonstrated, both by example and empirically, that an equally weighted linear combination of experts who tend to be “overconfident” can produce distributions that are better calibrated than the experts’ individual distributions. Using data from training exercises, it is shown that the improvement in calibration is rapid as the number of experts is increased from one to five or six, but there is only modest improvement from increasing the number of experts beyond that point.

The article presents a review of the book ?Multiple Commitments in the Workplace: An Integrative Approach,? by Aaron Cohen.

We use a simulation model called ‘SISCO’ to examine the effects in supply chains of stochastic lead times and of information sharing and quality of that information in a periodic order‐up‐to level inventory system. We test the accuracy of the simulation by verifying the results in Chen et al. (2000a) and Dejonckheere et al. (2004). We find that lead‐time variability exacerbates variance amplification in a supply chain, and that information sharing and information quality are highly significant. For example, using the assumptions in Chen et al. (2000a) and Dejonckheere et al. (2004), we find in a numerical experiment of a customer‐retailer‐wholesaler‐distributor‐factory supply chain that variance amplification is attenuated by nearly 50 percent at the factory due to information sharing. Other assumptions we make are based on interviews or conversations with managers at large supply chains.

We investigate the upstream and downstream product-market effects of a large sample of horizontal mergers and acquisitions from 1980 to 1997. We construct a data set that identifies the corporate customers, suppliers, and rivals of the firms initiating horizontal mergers and use this data set to examine announcement-related stock market revaluations and post-merger changes in operating performance. We find little evidence consistent with increased monopolistic collusion. However, we do find evidence consistent with improved productive efficiency and buying power as sources of gains to horizontal mergers. The nature of the buying power gains, i.e., rents from monopsonistic collusion or improved purchasing efficiency, is also investigated.