Does inflation bias stabilize real growth? Evidence from Pakistan

The motive of a typical discretionary central banker to accommodate excess inflation (inflation bias) is either to stabilize real growth or to spur it beyond natural rate. To what extent inflation bias helps to materialize this intention warrants empirical investigation. A more direct empirical probe into this issue, however, requires observable inflation bias indicators, which we model through desirable and threshold inflation rates as well as their respective society’s preferences. While examining the effects of inflation bias for a typical case of the discretionary monetary policy strategy of Pakistan, we found that contrary to the desired boost/stabilization in real growth, the policy (via. inflation bias) produced counterproductive results. Inflation bias was not merely ineffective in inducing real growth but significantly destabilized it. Moreover, the results, which are robust to different inflation bias indicators and subsample analysis, indicate that the higher the inflation bias, the higher is the intensity (magnitude) of its destabilizing effect and vice versa. This suggests that a policy that would minimize/constrain inflation bias would be a better choice as it would not only help achieve low and stable inflation but also a sustainable real economic growth.     

A possibilistic aggregate production planning model for brass casting industry

This article discusses a possibilistic aggregate production planning (APP) model for blending problem in a brass factory; the problem computing optimal amounts of raw materials for the total production of several types of brass in a planning period. The model basically has a multi-blend model formulation in which demand quantities, percentages of the ingredient in some raw materials, cost coefficients, minimum and maximum procurement amounts are all imprecise and have triangular possibility distributions. A mathematical model and a solution algorithm are proposed for solving this model. In the proposed model, the Lai and Hwang's fuzzy ranking concept is relaxed by using ‘Either-or’ constraints. An application of the brass casting APP model to a brass factory demonstrates that the proposed model successfully solves the multi-blend problem for brass casting and determines the optimal raw material purchasing policies.     

The Historical Situation of Turkish Migrants in Germany

The recruitment of Turkish migrant workers in Germany was originally a temporary measure because of a shortage of manpower, but over time they settled permanently and were joined by their families. This led to changes in lifestyle and many problems of adaptation. This paper examines the complex integration process, their contribution the Germany economy and the changes that the host society has had to make to fulfil the needs of a community now resident in Germany for 40 years.     

Sexual Life of Women with Multiple Sclerosis: A Qualitative Study

Objectives: To define the thoughts, emotions, experiences and perceptions of women with multiple sclerosis (MS) and to determine sexual, physical, and emotional effects of MS on patients. Methods: Twenty-one women were included into this qualitatively designed study. Results: Three baseline themes were defined as “uncertainty” arising from complaints due to numbness in extremities and loss of sense, balance or vision, “alterations in sexual life,” and “inability” as a result of deformities in marital status and gender role. Conclusion: Healthcare providers should evaluate MS patients meticulously as to sexual life and refer such patients to appropriate health centers.     

Implementation of Transitional Justice Initiatives in Bosnia and Herzegovina: The Need for an Inclusive Approach

The main objective of the paper is to examine the relationship between various transitional justice mechanisms established in the aftermath of the Bosnian War from 1992 to 1995 and recent reflections on political and social instability in Bosnia and Herzegovina (BiH). With this objective, the post-conflict peace-building initiatives are analyzed for their crucial role in the establishment of peace and reconciliation, while recognizing that responses to the peace building initiatives have shown difference from one society to another. BiH is the country where transitional justice mechanisms such as the establishment of local courts and ad hoc tribunals, truth and reconciliation commissions, providing reparations for war victims and institutional reform process have been only partially applied. This demonstrates an obvious need for an inclusive approach that brings all four transitional justice mechanisms together, not as opponents but rather components of each other. In this article, transitional justice mechanisms such as local courts and international ad hoc tribunals, truth and reconciliation commissions, reparation initiatives and institutional reform processes are analyzed in the post-war context of BiH and their methods of implementation are comparatively examined. The study also provides a brief overview of the implementation of transitional justice initiatives as peace building efforts in BiH together with possible future developments.     

Unobservable Investment and the Hold‐Up Problem

We study a two‐person bargaining problem in which the buyer may invest and increase his valuation of the object before bargaining. We show that if all offers are made by the seller and the time between offers is small, then the buyer invests efficiently and the seller extracts all of the surplus. Hence, bargaining with frequently repeated offers remedies the hold‐up problem even when the agent who makes the relation‐specific investment has no bargaining power and contracting is not possible. We consider alternative formulations with uncertain gains from trade or two‐sided investment.     

Self‐Control and the Theory of Consumption

To study the behavior of agents who are susceptible to temptation in infinite horizon consumption problems under uncertainty, we define and characterize dynamic self‐control (DSC) preferences. DSC preferences are recursive and separable. In economies with DSC agents, equilibria exist but may be inefficient; in such equilibria, steady state consumption is independent of initial endowments and increases in self‐control. Increasing the preference for commitment while keeping self‐control constant increases the equity premium. Removing nonbinding constraints changes equilibrium allocations and prices. Debt contracts can be sustained even if the only feasible punishment for default is the termination of the contract.     

Erratum to: Equivalence scales,the cost of children and household consumption patterns in Italy

This article deals with the estimation of parametric equivalence scales for Italian households with different demographic characteristics: composition, location and number of employed members in the household. Using a sample of 43,701 observations on monthly current expenditures from 1997 to 2004 we estimate a demand system for ten goods and we tackle the problem of corner solutions for some goods adopting the Two Step estimator proposed by Shonkweiler and Yen (Am J Agric Econ 81:972–982, 1999). The consumption behavior of households is also analyzed calculating compensated, uncompensated and expenditure elasticites for each commodity. By considering households that differ in composition (number of children), geographic location (four-different macro-areas of Italy), and number of employed adults, we allow for a range of useful comparisons.     

Expected Uncertain Utility Theory

We introduce and analyze expected uncertain utility (EUU) theory. A prior and an interval utility characterize an EUU decision maker. The decision maker transforms each uncertain prospect into an interval‐valued prospect that assigns an interval of prizes to each state. She then ranks prospects according to their expected interval utilities. We define uncertainty aversion for EUU, use the EUU model to address the Ellsberg Paradox and other ambiguity evidence, and relate EUU theory to existing models.