UNCERTAIN EFFECTS OF MONEY AND THE LINK BETWEEN THE INFLATION RATE AND INFLATION UNCERTAINTY

In the postwar period high rates of inflation are associated with high levels of inflation uncertainty. In this paper I argue that the inflation rate and inflation uncertainty are linked by forecasters' uncertainty about the impact of money growth on the price level, and I present evidence indicating that this has been the case. As long as the impact of money growth on the price level remains unpredictable, then even predictable money growth will cause inflation uncertainty with its accompanying adverse effects on employment and output.     

TAKEOVERS: MANAGERIAL INCOMPETENCE OR MANAGERIAL SHIRKING?

Agency theory identifies managerial shirking as the cause for takeovers, while other explanations focus on low ability managers. This paper formalizes Jensen's free cash flow variant of agency theory by constructing a simple two-period game which captures the distinctive empirical implications of the two theories.
Using data for petroleum firms following the oil price shock of 1979-80, we find that firms undergoing financial restructuring exhibited higher values of Tobin's q. Additionally, evidence of management turnover and workforce cuts emphasizes that takeovers appear primarily designed to address agency concerns.     

THE HAZARDS OF MORAL HAZARD: COMMENT ON GOFF, SHUGHART, AND TOLLISON

Goff et al. [1997] argue that the sharp increase in the number of hit batsmen after the adoption of the designated hitter rule is due to moral hazard. I argue instead that simple changes in the composition of batters faced explains much of the observed effect. Pitchers are bad hitters and therefore are much less likely to be hit than their designated hitters. Furthermore, there is no correlation between the frequency with which individual pitchers hit opposing batsmen and their personal likelihood of being hit by a pitch while batting, contrary to the predictions of the moral hazard model. ( JEL D81, J28)     

RATIONALIZATION OF THE SUPPLIER BASE IN THE PRESENCE OF YIELD UNCERTAINTY

An important aspect of supply chain management is the optimal configuration of the supplier base. We develop a model to determine optimal lot sizes and the optimal number of suppliers when the yield of the product delivered from each supplier is random. While small orders from a large number of suppliers can reduce yield uncertainty, fixed costs associated with each supplier provide a penalty for having too many suppliers. This is the key tradeoff addressed by our model. We look at the cases when the suppliers are identical as well as nonidentical.     

INDUSTRIAL DYNAMICS AND THE NEOCLASSICAL GROWTH MODEL

This paper studies industry-level dynamics and demonstrates the ability of a modified neoclassical growth model to capture a range of empirical facts. The paper begins by using U.S. data to document skilled and unskilled labor trends within industry sector classifications as well as industry sector output trends. Using Current Population Survey data from 1968 to 2004, it is shown that the ratio of skilled workers to unskilled workers employed has risen in all industries. The absolute increase in this ratio was larger in the more skilled industries, while the growth rate was larger in the less skilled industries. Furthermore, using national income account data, it is shown that relatively high-skilled industries have accounted for an increasing share of output over time. A version of the neoclassical growth model is then constructed to match these observations. One important feature of this model is a structure that introduces new goods into the economy at each moment of time. The model is able to capture a rich set of labor market movements between sectors and between skill levels as well as changes in the relative output shares across industries, yet preserves many nice features of the neoclassical growth model. ( JEL E13, J20, 030)     

Challenges Facing Public Sector Management in an Era of Downsizing,Devolution, Dispersion and Empowerment—and Accountability?

Agencies at all levels of government are facing strong ideological pressures to downsize, devolve, dispense, and empower both employees and recipients of services. These ideological pressures provide many performance advantages, but collectively they threaten historic notions of achieving economy, efficiency, and effectiveness, along with accountability. It has been widely assumed in recent years that advancements in information technology and performance measurement provide adequate replacements for the historic notion that accountability flows up-the-hierarchy to elected officials and the sovereignty. These technologies, however, are not yet able to ensure responsible administration or accountability in many areas of domestic government services. Today's public managers can play leading roles in developing alternative approaches for achieving accountability if they are supported by forward-looking human resources management (HRM) agencies.     

INVESTMENT IN SETUP COST,LEAD TIME,AND DEMAND PREDICTABILITY IMPROVEMENT IN THE EOQ MODEL

We study an economic order quantity/reorder point (EOQ/ROP) model with stochastic demand and backorders where options of investing in reducing setup cost, lead time, and variance of demand forecast errors are available. The model is quite comprehensive relative to previous models since it simultaneously addresses the strategic decisions associated with these three investment opportunities as well as the tactical decisions of determining both the lot size and the safety stock. We develop a simple search procedure to obtain the optimal values of setup cost, lead time, variance of demand forecast errors, order quantity, and safety stock multiplier. Computational studies are performed to determine the sensitivity of the optimal solution of the model to changes in the model's parameters.     

AN EXPERIMENTAL MODEL FOR INVESTIGATING THE SENSITIVITY OF JOB SHOP PERFORMANCE TO JOB RELEASE TIME DISTRIBUTION PARAMETERS

Work flows in a job shop are influenced by the load per release and time interval between release factors. We focus on the latter factor, job release times. Building on Elvers' work, this study evaluates the impact of different job release time distributions on shop performance. Using a computer simulation of a random job shop and a full factorial experimental design, we demonstrate that the type of distribution does affect performance–a finding consistent with results from job shops characterized by good shop floor control practices. These findings are explained by examining the shape and variance traits of the underlying job release time distributions.     

EVALUATING THE EFFECTIVENESS OF CHILD SAFETY SEATS AND SEAT BELTS IN PROTECTING CHILDREN FROM INJURY

Young children are required to use child safety seats, and the age threshold at which children can legally graduate to seat belts has steadily increased. This article tests the relative effectiveness of child safety seats, lap‐and‐shoulder seat belts, and lap belts in preventing injuries among motor vehicle passengers aged 2–6 yr. We analyze three large, representative samples of crashes reported to police, as well as linked hospital data. We find no apparent difference in the two most serious injury categories for children in child safety seats versus lap‐and‐shoulder belts. Child safety seats provide a statistically significant 25% reduction in the least serious injury category. Lap belts are somewhat less effective than the two other types of restraints but far superior to riding unrestrained. (JEL I18)