"Men, it has been well said, think in herds; it will be seen that they go mad in herds, while the... more "Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one." Charles Mackay
... While much of the focus is necessarily on the role of hedge funds in the recent Asian currenc... more ... While much of the focus is necessarily on the role of hedge funds in the recent Asian currency and financial crisis, the paper considers also the role of other international investors in 1997 and in previous episodes of financial market turbulence. ...
Evolution of strategic management has been like a swinging pendulum. Theoretically it has oscilla... more Evolution of strategic management has been like a swinging pendulum. Theoretically it has oscillated between perspective external to the firm and internal firm characteristics and methodologically between quantitative and qualitative methods. The rise of resource based view and associated knowledge based view has highlighted the critical need for firms to manage organizational knowledge to achieve competitive success. Strategic management's singular concern has been the explanation of performance of a firm. Yet its preoccupation with formulation and content of strategies and neglect of implementation has resulted in its inability to satisfactorily explain why certain firms consistently achieve good performance. The knowledge based view offered a promising avenue to address this issue. Yet, even today the role knowledge plays in determining the performance of a firm is not clear. This paper attempts to bridge these gaps. It aims to show that learning is the instrument which firms use to achieve strategic alignment representing strategic change necessitated by changing environment and business opportunities. Firms which manage successfully the learning process, maintain a consistent attention towards identification of strategic capabilities needed and show a consistent allocation of resources towards the processes which generate and maintain them. These include mechanisms of exchange of knowledge across and within firms and a proactive involvement of customers in determining needs. The paper maps the cognitive architecture and its linkages to strategy process in the firm and attempts to create an operational framework of implementation. Using a case study that documents practices followed by a state public health system to achieve public health goals in advance of other states, the paper contributes to the resolution of the linkage between learning and firm performance. This paper addresses the key but much neglected question of strategy implementation by integrating the resource allocation process model, learning and capabilities. It has considerable value for practicing managers as it suggests a solution to achieve successful implementation of strategies.
This paper develops a constant, data-coherent, equilibrium correction model for broad money deman... more This paper develops a constant, data-coherent, equilibrium correction model for broad money demand (M3) in Greece over 1976±1994. The aggregate M3 was targeted until recently, and current monetary policy still uses such aggregates as guidelines. In spite of ®nancial innovation, ®nancial liberalization, and large ¯uctuations in the in¯ation rate, the estimated model is remarkably stable. Dynamics are important, with price and income elasticities being much smaller in the short run than in the long run. The model provides a better understanding of the portfolio consequences of ®nancial innovation and the e¨ects of monetary policy in Greece.
Good regulation can only come from having a vigorous public conversation on regulatory issues dur... more Good regulation can only come from having a vigorous public conversation on regulatory issues during normal times. Such an ongoing public exchange between regulators, the financial industry, and politicians would increase the probability of identifying emerging problems and the build-up of risks, and may also help forge a consensus in favor of preemptive remedial actions and interventions before stress on the financial system leads to crises. A few institutional changes that make the regulatory agencies financially and intellectually independent would help transform the current regulatory cycle and lead to a new type of engagement that would significantly raise the quality of supervision, regulation, and enforcement.
This paper develops a constant, data-coherent, equilibrium correction model for broad money deman... more This paper develops a constant, data-coherent, equilibrium correction model for broad money demand (M3) in Greece over 1976±1994. The aggregate M3 was targeted until recently, and current monetary policy still uses such aggregates as guidelines. In spite of ®nancial innovation, ®nancial liberalization, and large ¯uctuations in the in¯ation rate, the estimated model is remarkably stable. Dynamics are important, with price and income elasticities being much smaller in the short run than in the long run. The model provides a better understanding of the portfolio consequences of ®nancial innovation and the e¨ects of monetary policy in Greece.
The paper makes an assessment of the progress made in developing local debt markets in emerging A... more The paper makes an assessment of the progress made in developing local debt markets in emerging Asia. Market development has been limited by hurdles confronting borrowers and lenders, current and potential liquidity providers, and insufficient support from government policies and regulations. Besides fostering a credit culture to deepen local debt markets, the issue of critical size can be addressed through an integrated regional market for local currency bonds that provides greater scale, efficiency, and access. With rapid economic growth in Asia, a key challenge is to generate financial assets that can provide the underlying collateral for expanding fixed-income markets, and hence domestic and regional investment opportunities. JEL Classification Numbers: E44; F36; G18; H63; O16.
Policymakers often express concern that herding by financial market participants destabilizes mar... more Policymakers often express concern that herding by financial market participants destabilizes markets and increases the fragility of the financial system. This paper provides an overview of the recent theoretical and empirical research on herd behavior in financial markets. It addresses the following questions: What precisely do we mean by herding? What could be the causes of herd behavior? What success
This essay considers strategies that developing and emerging-market economies might use when seek... more This essay considers strategies that developing and emerging-market economies might use when seeking to exit from currency pegs. It also considers techniques for completing the move to greater flexibility, as well as the scope for adopting inflation targeting as a nominal ...
This paper develops a constant, data-coherent, equilibrium correction model for broad money deman... more This paper develops a constant, data-coherent, equilibrium correction model for broad money demand (M3) in Greece over 1976±1994. The aggregate M3 was targeted until recently, and current monetary policy still uses such aggregates as guidelines. In spite of ®nancial innovation, ®nancial liberalization, and large ¯uctuations in the in¯ation rate, the estimated model is remarkably stable. Dynamics are important, with price and income elasticities being much smaller in the short run than in the long run. The model provides a better understanding of the portfolio consequences of ®nancial innovation and the e¨ects of monetary policy in Greece.
The sequential search problem, without the assumption that the searcher knows the underlying dist... more The sequential search problem, without the assumption that the searcher knows the underlying distribution, is investigated. Both search with recall and without recall are examined. Sufficient conditions for the existence of optimal stopping rules with the reservation property are provided. Comparative static results with respect to stochastic dominance (appropriately defined) are obtained.
Policymakers often express concern that herding by financial market participants destabilizes mar... more Policymakers often express concern that herding by financial market participants destabilizes markets and increases the fragility of the financial system. This paper provides an overview of the recent theoretical and empirical research on herd behavior in financial markets. It addresses the following questions: What precisely do we mean by herding? What could be the causes of herd behavior? What success
"Men, it has been well said, think in herds; it will be seen that they go mad in herds, while the... more "Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one." Charles Mackay
... While much of the focus is necessarily on the role of hedge funds in the recent Asian currenc... more ... While much of the focus is necessarily on the role of hedge funds in the recent Asian currency and financial crisis, the paper considers also the role of other international investors in 1997 and in previous episodes of financial market turbulence. ...
Evolution of strategic management has been like a swinging pendulum. Theoretically it has oscilla... more Evolution of strategic management has been like a swinging pendulum. Theoretically it has oscillated between perspective external to the firm and internal firm characteristics and methodologically between quantitative and qualitative methods. The rise of resource based view and associated knowledge based view has highlighted the critical need for firms to manage organizational knowledge to achieve competitive success. Strategic management's singular concern has been the explanation of performance of a firm. Yet its preoccupation with formulation and content of strategies and neglect of implementation has resulted in its inability to satisfactorily explain why certain firms consistently achieve good performance. The knowledge based view offered a promising avenue to address this issue. Yet, even today the role knowledge plays in determining the performance of a firm is not clear. This paper attempts to bridge these gaps. It aims to show that learning is the instrument which firms use to achieve strategic alignment representing strategic change necessitated by changing environment and business opportunities. Firms which manage successfully the learning process, maintain a consistent attention towards identification of strategic capabilities needed and show a consistent allocation of resources towards the processes which generate and maintain them. These include mechanisms of exchange of knowledge across and within firms and a proactive involvement of customers in determining needs. The paper maps the cognitive architecture and its linkages to strategy process in the firm and attempts to create an operational framework of implementation. Using a case study that documents practices followed by a state public health system to achieve public health goals in advance of other states, the paper contributes to the resolution of the linkage between learning and firm performance. This paper addresses the key but much neglected question of strategy implementation by integrating the resource allocation process model, learning and capabilities. It has considerable value for practicing managers as it suggests a solution to achieve successful implementation of strategies.
This paper develops a constant, data-coherent, equilibrium correction model for broad money deman... more This paper develops a constant, data-coherent, equilibrium correction model for broad money demand (M3) in Greece over 1976±1994. The aggregate M3 was targeted until recently, and current monetary policy still uses such aggregates as guidelines. In spite of ®nancial innovation, ®nancial liberalization, and large ¯uctuations in the in¯ation rate, the estimated model is remarkably stable. Dynamics are important, with price and income elasticities being much smaller in the short run than in the long run. The model provides a better understanding of the portfolio consequences of ®nancial innovation and the e¨ects of monetary policy in Greece.
Good regulation can only come from having a vigorous public conversation on regulatory issues dur... more Good regulation can only come from having a vigorous public conversation on regulatory issues during normal times. Such an ongoing public exchange between regulators, the financial industry, and politicians would increase the probability of identifying emerging problems and the build-up of risks, and may also help forge a consensus in favor of preemptive remedial actions and interventions before stress on the financial system leads to crises. A few institutional changes that make the regulatory agencies financially and intellectually independent would help transform the current regulatory cycle and lead to a new type of engagement that would significantly raise the quality of supervision, regulation, and enforcement.
This paper develops a constant, data-coherent, equilibrium correction model for broad money deman... more This paper develops a constant, data-coherent, equilibrium correction model for broad money demand (M3) in Greece over 1976±1994. The aggregate M3 was targeted until recently, and current monetary policy still uses such aggregates as guidelines. In spite of ®nancial innovation, ®nancial liberalization, and large ¯uctuations in the in¯ation rate, the estimated model is remarkably stable. Dynamics are important, with price and income elasticities being much smaller in the short run than in the long run. The model provides a better understanding of the portfolio consequences of ®nancial innovation and the e¨ects of monetary policy in Greece.
The paper makes an assessment of the progress made in developing local debt markets in emerging A... more The paper makes an assessment of the progress made in developing local debt markets in emerging Asia. Market development has been limited by hurdles confronting borrowers and lenders, current and potential liquidity providers, and insufficient support from government policies and regulations. Besides fostering a credit culture to deepen local debt markets, the issue of critical size can be addressed through an integrated regional market for local currency bonds that provides greater scale, efficiency, and access. With rapid economic growth in Asia, a key challenge is to generate financial assets that can provide the underlying collateral for expanding fixed-income markets, and hence domestic and regional investment opportunities. JEL Classification Numbers: E44; F36; G18; H63; O16.
Policymakers often express concern that herding by financial market participants destabilizes mar... more Policymakers often express concern that herding by financial market participants destabilizes markets and increases the fragility of the financial system. This paper provides an overview of the recent theoretical and empirical research on herd behavior in financial markets. It addresses the following questions: What precisely do we mean by herding? What could be the causes of herd behavior? What success
This essay considers strategies that developing and emerging-market economies might use when seek... more This essay considers strategies that developing and emerging-market economies might use when seeking to exit from currency pegs. It also considers techniques for completing the move to greater flexibility, as well as the scope for adopting inflation targeting as a nominal ...
This paper develops a constant, data-coherent, equilibrium correction model for broad money deman... more This paper develops a constant, data-coherent, equilibrium correction model for broad money demand (M3) in Greece over 1976±1994. The aggregate M3 was targeted until recently, and current monetary policy still uses such aggregates as guidelines. In spite of ®nancial innovation, ®nancial liberalization, and large ¯uctuations in the in¯ation rate, the estimated model is remarkably stable. Dynamics are important, with price and income elasticities being much smaller in the short run than in the long run. The model provides a better understanding of the portfolio consequences of ®nancial innovation and the e¨ects of monetary policy in Greece.
The sequential search problem, without the assumption that the searcher knows the underlying dist... more The sequential search problem, without the assumption that the searcher knows the underlying distribution, is investigated. Both search with recall and without recall are examined. Sufficient conditions for the existence of optimal stopping rules with the reservation property are provided. Comparative static results with respect to stochastic dominance (appropriately defined) are obtained.
Policymakers often express concern that herding by financial market participants destabilizes mar... more Policymakers often express concern that herding by financial market participants destabilizes markets and increases the fragility of the financial system. This paper provides an overview of the recent theoretical and empirical research on herd behavior in financial markets. It addresses the following questions: What precisely do we mean by herding? What could be the causes of herd behavior? What success
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