Business Commons^™

What Should We Teach In Intermediate Macroeconomics?, Dean D. Croushore

Economics Faculty Publications

The major focus of a course in Intermediate Macroeconomics is building and understanding macroeconomic models and how they work. The course is the most analytical course in the curriculum and should lead students to embark on deep thinking about models and equilibrium. Students learn the essentials of a model and develop the concept of how to simplify a model to understand key concepts. Once the core of a model is developed, additional model features can be added to increase realism. Perhaps the most important macroeconomic concept in the course is that of general equilibrium—students learn to go beyond examining initial …

50 Years Of Economic Instruction In The Journal Of Economic Education, Gail M. Hoyt, Kimmarie Mcgoldrick

Economics Faculty Publications

With 2019 marking the fiftieth year of publication of the Journal of Economic Education (JEE), it seems fitting to examine the evolution of economic instruction as portrayed in the Journal. Born of the American Economic Association (AEA), and first edited by members of the AEA’s Committee on Economic Education (Saunders 2012), it is not surprising that the Journal’s focus as chronicler, proponent, and outlet for economic education activity reflects the educational component of the American Economic Association’s mission. The creation of the Journal signaled a self-awareness in the discipline that we needed to be more deliberate in …

How Applying Instrumental Stakeholder Theory Can Provide Sustainable Competitive Advantage, Thomas M. Jones, Jeffrey S. Harrison, Will Felps

Management Faculty Publications

Instrumental stakeholder theory considers the performance consequences for firms of highly ethical relationships with stakeholders, characterized by high levels of trust, cooperation, and information sharing. While research suggests performance benefits, an obvious question remains: If instrumental stakeholder theory–based stakeholder treatment is so valuable, why isn’t it the dominant mode of relating to stakeholders? We argue that the existing instrumental stakeholder theory literature has three shortcomings that limit its ability to explain variance in performance. (1) Little theory exists around how instrumental stakeholder theory–based stakeholder management could provide sustainable competitive advantage. (2) The literature has largely neglected the potential downsides (i.e., …

Offshoring, Outsourcing, And Strategy In The Global Firm, Stephen Tallman

Management Faculty Publications

Offshore outsourcing of many of the activities of the firm has become a major issue of concern in welfare economics, politics, business management, and international business scholarship. From both practical and scholarly perspectives, though, we must recognize that this is not a new phenomenon, and that neither outsourcing nor offshoring is necessarily the problem that has been represented in the popular and scholarly press (Contractor et al., 2010: Engardio, 2006). The production of goods in locations other than those in which they are sold has been an established strategy of multinational firms for decades--as has the subset of situations in …

Agglomeration Effects And Strategic Orientations: Evidence From The U.S. Lodging Industry, Linda Canina, Cathy A. Enz, Jeffrey S. Harrison

Management Faculty Publications

This study provides evidence regarding the strategic dynamics of competitive clusters. Firms that agglomerate (co-locate) may benefit from the differentiation of competitors without making similar differentiating investments themselves. Alternatively, co-locating with a high percentage of firms with low-cost strategic orientations reduces performance for firms pursuing high levels of differentiation. Further, the lowest-cost providers with the greatest strategic distance from the norm of the competitive cluster reap the greatest benefit from co-location with differentiated firms. We find empirical support for these ideas using a sample of 14,995 U.S. lodging establishments, and controlling for a number of key demand-shaping factors.

Adam Smith And Greed, Jonathan B. Wight

Economics Faculty Publications

The virtues of greed have been widely promoted by some economists in the 20th century. Allegedly it is Adam Smith who provides this new dignity to greed (Lerner, 1937, ix). Kenneth Arrow and Frank Hahn in the General Equilibrium Analysis (1971), for example, implicitly assume that Adam Smith's self-interest is the greed that promotes economic efficiency (quoted in Evensky, 1993, 203). Walter Williams (1999), a devoted follower of Smith, writes in his column that, "Free markets, private property rights, voluntary exchange, and greed produce preferable outcomes most times and under most conditions." These pronouncements have become part of the cultural …

Is Fed Policy Still Relevant For Investors?, C. Mitchell Conover, Gerald R. Jensen, Robert R. Johnson, Jeffrey M. Mercer

Finance Faculty Publications

Using 38 years of data, we show that U.S. monetary policy has had, and continues to have, a strong relationship with security returns. Specifically, we find that U.S. stock returns are consistently higher and less volatile during periods when the Federal Reserve is following an expansive monetary policy. Further, firms considered to be more sensitive to changes in monetary conditions, such as small firms and cyclicals, exhibit monetary-policy-related return patterns that are much more pronounced than average. Lastly, the influence of U.S. monetary policy is shown to be a global phenomenon, as international indices have return patterns similar to those …

Campbell Soup Company In 2004 (A), Roger R. Schnorbus

Robins School of Business White Paper Series, 1980-2022

As fiscal 2004[1] began, Doug Conant, the President and CEO of the Campbell Soup Company could take pride in the results of his 3-year transformation plan instituted in fiscal 2001 to revitalize the company. The key initiatives of the plan were to restore revenue and profitability growth and stimulate shareholder wealth.

Conant, who became President and CEO in January of 2001, called the plan, “the single most comprehensive commitment to revitalization ever undertaken in the 132-year history of Campbell Soup Company.”

The financial results achieved in fiscal 2002, the first year of the plan, were a mixed bag. Although net …

The Importance Of The Tax System In Determining The Marginal Cost Of Funds, Shaghil Ahmed, Dean D. Croushore

Economics Faculty Publications

Examines the effect on the marginal cost of public funds of 2 alternative ways in which the tax schedule can be altered: one that maintains the progressivity of the tax schedule and another that rotates the tax schedule. Calculates values of these marginal-cost-of-funds concepts for plausible ranges of key parameters.

The Economics Of Higher Education In Virginia, Phillip A. Jones, Clarence R. Jung Jr.

Robins School of Business White Paper Series, 1980-2022

This study is based primarily on financial data from colleges and universities in Virginia for the two academic years 1986-1987 and 1987-1988. The database stems from detailed data submitted by virtually all colleges and universities to the federal and state governments and reported in the Integrated Postsecondary Education Data survey (IPEDS). The data were accessed by Professor Jones from the State Council of Higher Education using the Bitnet computer program.

The aim of the study is to gain an understanding of the matrix of financial, economic and academic factors which determine the nature of a college or university; and to …

Economic Status Of The Property And Casualty Insurance Industry With Special Reference To Virginia, Clarence R. Jung Jr.

Robins School of Business White Paper Series, 1980-2022

Conditions in the property and casualty insurance industry in the past several years have caused great concern to both the insureds and the insurers. Premium rates for some lines, particularly certain liability coverages, have increased significantly (some observers would say catastrophically). For some businesses and governmental units insurance coverages have either been cancelled or are not available.

The situation in the industry has often been referred to as a crisis. And reactions to this crisis have included calls for investigations of the industry and an increased degree of government regulation. Private citizens and business firms have blamed insurance companies; insurance …

Combining The Learning Curve Concept With Economic Lot Sizing, James C. Goodwin Jr., Jack S. Goodwin

Robins School of Business White Paper Series, 1980-2022

Simple concepts familiar to most operations management students are frequently not integrated as a result of the complexity generated by their combination. This expository note demonstrates a method for combining the economic lot size concept with the learning curve and using a simple computer algorithm for solution purposes. It avoids the traditional trade-off of reality and accuracy for expediency.

Issues And Implications Of Implementing Surcharges To Improve The U.S. Balance Of Trade, J. Patrick Raines, Lewis A. Litteral

Robins School of Business White Paper Series, 1980-2022

Throughout the 1970s and early 1980s, increasing positive balances on the services account provided a substantial offset to negative balances in merchandise trade, and, consequently, the cumulative current balance was a positive $3.8 billion for the period 1970-80. Since 1981, the progressively smaller balances in services have been insufficient to offset the increasingly negative merchandise trade balances. Table 1-1 shows the deterioration in U.S. international accounts during this period.

The Neglected Institutionalism Of Schumpeter's And Knight's Views Of Rationality, J. Patrick Raines, Clarence R. Jung Jr.

Robins School of Business White Paper Series, 1980-2022

The concept of rationality is both the origination point and the Achilles' heel of the study of human behavior in economics. The rationalist view of human nature is arguably the most pressing issue facing contemporary economics. Fields of knowledge other than economics have developed alternative theories of human activity to the neoclassical's pure economic man. They include Abraham Maslow's hierarchy of needs, Kenneth Boulding's "grants economy," and John Rawls' original position doctrine. Within economics, the Institutionalists have been the leading critics of the assumption that behavior in the economic sphere is rationally directed.

A consensus view of rationality does not …

Long Run Targets And Fomc Policy Decisions, Susan B. Peterson

Robins School of Business White Paper Series, 1980-2022

Monetarists have long been advising policy makers to conform policy decisions to a rule which would set the long-run monetary growth at a rate consistent with real economic growth. The contention is that variability in the rate of growth of the money supply, combined with excessive rates of growth, result in economic havoc accompanied by high rates of inflation and that attempts to employ discretionary counter-cyclical monetary policy are destabilizing.

This paper analyzes monetary policy decisions in the years 1980-83 in an attempt to determine the weight given to meeting the announced long-run targets recognizing that departures from that goal …

Economic Foundations For The Competition Policy Implemented By The Eec, J. Patrick Raines

Robins School of Business White Paper Series, 1980-2022

The purpose of this study is to provide a theoretical economic framework for the analysis of the competition policy implemented by the European Economic Community (EEC). The fundamental objective is to demonstrate that the EEC's actual approach to regulating restrictive business practices can be related to a concept of competition that is relevant and adequate for the analysis and explanation of competition policy in the EEC. The thesis is that a strong theoretical relationship can be shown to exist between EEC business regulation and the conceptual parallels in the theories on competition of J.A. Schumpeter and J.M. Clark.