Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process.

Business cycles are both less volatile and more synchronized with the world cycle in rich countries than in poor ones. We develop two alternative explanations based on the idea that comparative advantage causes rich countries to specialize in industries that use new technologies operated by skilled workers, while poor countries specialize in industries that use traditional technologies operated by unskilled workers. Since new technologies are difficult to imitate, the industries of rich countries enjoy more market power and face more inelastic product demands than those of poor countries. Since skilled workers are less likely to exit employment as a result of changes in economic conditions, industries in rich countries face more inelastic labour supplies than those of poor countries. We show that either asymmetry in industry characteristics can generate cross-country differences in business cycles that resemble those we observe in the data. We are grateful to Daron Acemoglu and Fabrizio Perri for useful comments. The views expressed here are the authors' and do not necessarily reflect those of The World Bank. Business cycles are not the same in rich and poor countries. A first difference is that fluctuations in per capita income growth are smaller in rich countries than in poor ones, in the top panel of Figure 1 , we plot the standard deviation of per capita income growth against the level of (log) per capita income for a large sample of countries. We refer to this relationship as the volatility graph and note that it slopes downwards. A second difference is that fluctuations in per capita income growth are more synchronized with the world cycle in rich countries than in poor ones. In the bottom panel of Figure 1 , we plot the correlation of per capita income growth rates with world average per capita income growth, excluding the country in question, against the level of (log) per capita income for the same set of countries. We refer to this relationship as the comovement graph and note that it slopes upwards. Table 1 , which is self-explanatory, shows that these facts apply within different sub-samples of countries and years. 1 Why are business cycles less volatile and more synchronized with the world cycle in rich countries than in poor ones? Part of the answer must be that poor countries exhibit more political and policy instability, they are less open or more distant from the geographical center, and they also have a higher share of their economy devoted to the production of agricultural products and the extraction of minerals. Table 1 shows that, in a statistical sense, these factors explain a substantial fraction of the variation in the volatility of income growth, although they do not explain much of the variation in the comovement of income growth. More important for our purposes, the strong relationship between income and the properties of business cycles reported in Table 1 is still present after we control for these variables. In short, there must be other factors behind the strong patterns depicted in Figure 1 beyond differences in political instability, remoteness and the importance of natural resources. With the exception that the comovement graph seems to be driven by differences between rich and poor countries and not within each group. Acemoglu and Zilibotti (1997) also present the volatility graph. They provide an explanation for it based on the observation that rich countries have more diversified production structures. We are unaware of any previous reference to the comovement graph. In this paper, we develop two alternative but non-competing explanations for why business cycles are less volatile and more synchronized with the world in rich countries than in poor ones. Both explanations rely on the idea that comparative advantage causes rich countries to specialize in industries that require new technologies operated by skilled workers, while poor countries specialize in industries that require traditional technologies operated by unskilled workers. This pattern of specialization opens up the possibility that cross-country differences in business cycles are the result of asymmetries between these types of industries. In particular, both of the explanations advanced here predict that industries that use traditional technologies operated by unskilled workers will be more sensitive to country-specific shocks. Ceteris paribus, these industries will not only be more volatile but also less synchronized with the world cycle since the relative importance of global shocks is lower. To the extent that the business cycles of countries reflect those of their industries, differences in industrial structure could potentially explain the patterns in Figure 1 . One explanation of why industries react differently to shocks is based on the idea that firms using new technologies face more inelastic product demands than those using traditional technologies. New technologies are difficult to imitate quickly for technical reasons and also because of legal patents. This difficulty confers a cost advantage on technological leaders that shelters them from potential entrants and gives them monopoly power in world markets. Traditional technologies are easier to imitate because enough time has passed since their adoption and also because patents have expired or have been circumvented. This implies that incumbent firms face tough competition from potential entrants and enjoy little or no monopoly power in world markets. The price-elasticity of product demand affects how industries react to shocks. Consider, for instance, the effects of country-specific shocks that encourage production in all industries. In industries that use new technologies, firms have monopoly power and face inelastic demands for their products. As a result, fluctuations in supply lead to opposing changes in prices that tend to stabilize industry income. In industries that use traditional technologies, firms face stiff competition from abroad and therefore face elastic demands for their products. As a result, fluctuations in supply have little or no effect on their prices and industry income is more volatile. To the extent that this asymmetry in the degree of product-market competition is important, incomes of industries that use new technologies are likely to be less sensitive to country-specific shocks than those of industries that use traditional technologies. Another explanation for why industries react differently to shocks is based on the idea that the supply of unskilled workers is more elastic than the supply of skilled workers. A first reason for this asymmetry is that non-market activities are relatively more attractive to unskilled workers whose market wage is lower than that of skilled ones. Changes in labour demand might induce some unskilled workers to enter or abandon the labour force, but are not likely to affect the participation of skilled workers. A second reason for the asymmetry in labour supply across skill categories is the imposition of a minimum wage. Changes in labour demand might force some unskilled workers in and out of unemployment, but are not likely to affect the employment of skilled workers. The wage-elasticity of the labour supply also has implications for how industries react to shocks. Consider again the effects of country-specific shocks that encourage production in all industries and therefore raise the labour demand. Since the supply of unskilled workers is elastic, these shocks lead to large fluctuations in employment of unskilled workers. In industries that use them, fluctuations in supply are therefore magnified by increases in employment that make industry income more volatile. Since the supply of skilled workers is inelastic, the same shocks have little or no effects on the employment of skilled workers. In industries that use them, fluctuations in supply are not magnified and industry income is less volatile. To the extent that this asymmetry in the elasticity of labour supply is important, incomes of industries that use unskilled workers are likely to be more sensitive to country-specific shocks than those of industries that use skilled workers To study these hypotheses we construct a stylized world equilibrium model of the cross-section of business cycles. Inspired by the work of Davis (1995), we consider in section one a world in which differences in both factor endowments a la Heckscher-Ohlin and industry technologies a la Ricardo combine to determine a country's comparative advantage and, therefore, the patterns of specialization and trade. To generate business cycles, we subject this world economy to the sort of productivity fluctuations that have been emphasized by Kydland and Prescott (1982). 2 In section two, we characterize the cross-section of business cycles and show how asymmetries in the elasticity of product demand and/or labour supply can be used to explain the evidence in Figure 1 . Using available microeconomic estimates of the key parameters, we calibrate the model and find that: (i) The model exhibits slightly less than two-thirds and one-third of the observed cross-country variation in volatility and comovement, respectively; and (ii) The asymmetry in the elasticity of product demand seems to have a quantitatively stronger effect on the slopes of the volatility and comovement graphs, than the elasticity in the labour supply. We explore these results further in sections three and four. In section three, we extend the model to allow for monetary shocks that have real effects since firms face cash-in-advance constraints. We use the model to study how cross-country variation in monetary policy and financial development affect the cross-section of business cycles. Once these factors are considered, the calibrated version of the model exhibits roughly the same cross-country variation in volatility and about 40 percent of the variation in comovement as the data. In section four, we show th

http://link.springer.com/content/pdf/10.1007/BF01322868.pdf

Business cycles: A methodological approach

Participation, Achievement and Involvement on the Job:

Organizational Fit and Acquisition Performance: Effects of Post-acquisition Integration

Mergers, acquisitions and corporate restructuring

This study aimed to measure the effect of psychological capital and individual creativity on employee individual innovation behavior of the female employees of a manufacturing industry in Tangerang. In this study, individual creativity is mediating variable. Data was collected from 277 returned questionnaire of samples taken by random sampling. Data was analyzed using SEM method with SmartPLS 3.0 software. The results of this study showed that psychological capital had a significant effect on individual creativity, psychological capital and individual creativity have a significant effect on individual innovation behavior, individual creativity have a positive and significant effect on the relationship between psychological capital and individual innovation behavior. Individual creativity functioned as a partial mediator. This new research proposed a model for managing the individual innovation behavior among the female employees of the manufacturing industry in Tangerang through developing psychological capital with individual creativity as a mediator. This research could pave the way to improve employee readiness in facing the era of industrial revolution 4.0.

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From Creativity to Innovation: The Role of Female Employees’ Psychological Capital

This paper aims to analyze the statements of Bass & Riggio (2006) regarding criticisms of the transformational leadership style which is often considered elitist and anti-democratic. Is the Transformational Leadership style still relevant to today's increasingly dynamic era with the increasing complexity of the organizational environment. With the analysis model using literature study methods from several relevant journals, the results of the analysis show that there is still a strong relevance between transformational leadership patterns and the company's desire to innovate. Transformational leadership is able to maintain continuous and sustainable organizational innovation. Making organizations more agile is also discussed in this article as an antecedent of organizational innovation.

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Elitical And Antidemocratic Transformational Leadership Critics: Is It Still Relevant ? ( A Literature Study)

Penelitian ini bertujuan untuk menguji pengaruh managerial coaching terhadap kinerja dan komitmen tim serta untuk menyelidiki efek mediasi moda lpsikologis pada populasi guru dari Sembilan SMP Swasta di Tangerang. Penelitian ini mengadopsi metode simple random sampling dengan 61 sampel guru. Hasil penelitian ini menunjukkan bahwa managerial coachingmemilikipengaruhyangpositif dan signifikanterhadap kinerja dan komitmen tim. Hasil penelitian juga menunjukkan bahwa hubungan antara managerial coaching dan kinerja dan antara managerial coaching dan komitmen tim secara signifikan di mediasi oleh modal psikologis. Penelitian ini dapat membuka jalan untuk meningkatkan kesiapan guru dalam menghadapi era education 4.0.

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Managerial Coaching: Rahasia Membangun Kinerja, Komitmen Tim dan Modal Psikologis Guru

In this study we aim to explore and determine whether transformational leadership is elitist and anti-democratic. The purpose of writing this article is to conduct a systematic literature review on 6 (six) articles of leadership models from reputable international journals. The method used is a systematic literature review of 6 articles published in reputable international journals that discuss leadership models in secondary and higher education institutions in education 4.0 era. The results of the systematic literature review show that the leadership models of transformational that have a positive and significant effect on the performance of educational institutions. In order to see the link with transformational leadership, organize a literature review to locate relevant literature and extract knowledge about elitism and democratic leadership. Transformational leadership is not elitist and anti-democratic. It’s empowering the employee to encouraging inspiration, idealized power, intellectual stimulation and individual judgment. It engages workers through participatory, support for new ideas and a substantial degree of flexibility and autonomy for be pro-active and take risks, also rely heavily on communication and relationships. This research only to find out whether transformational leadership is indeed elitist and anti-democratic based on a literature review and for empirical evidence further study is needed. The relation between transformational leadership and member responses to organizational change has been empirically validated by numerous studies

/pdf/did-transformational-leadership-elitist-and-antidemocratic-a-2avs8msih8.pdf

Did Transformational Leadership Elitist and Antidemocratic? A Literature Review

In this study we aim to explore and determine whether transformational leadership is elitist and anti-democratic. In order to see the link with transformational leadership, we organize a literature review to locate relevant literature and extract knowledge about elitism and democratic leadership. Researcher found transformational leadership is not elitist and anti-democratic. It’s empowering the employee to encouraging inspiration, idealized power, intellectual stimulation and individual judgment. It engages workers through participatory, support for new ideas and a substantial degree of flexibility and autonomy for be pro-active and take risks, also rely heavily on communication and relationships. This research only to find out whether transformational leadership is indeed elitist and anti-democratic based on a literature review and for empirical evidence further study is needed. The relation between transformational leadership and member responses to organizational change has been empirically validated by numerous studies.

/pdf/a-literature-review-is-transformational-leadership-elitist-2p05za9z47.pdf

Agustian Budi Prasetya

Papers

From Creativity to Innovation: The Role of Female Employees’ Psychological Capital

Elitical And Antidemocratic Transformational Leadership Critics: Is It Still Relevant ? ( A Literature Study)

Managerial Coaching: Rahasia Membangun Kinerja, Komitmen Tim dan Modal Psikologis Guru

Did Transformational Leadership Elitist and Antidemocratic? A Literature Review

A Literature Review: Is Transformational Leadership Elitist and Antidemocratic?