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The closure of Fagor Electrodomésticos in October 2013, the most iconic cooperative in the Mondragon Group, not only cast doubt on the economic and social management of the cooperative itself but also called into question the very viability of the overall cooperative model. In addition to describing the evolution of this cooperative in its last years in business, this chapter offers a comprehensive review of the mechanisms of inter-cooperation in the Mondragon Group and the way in which they were applied in the crisis at Fagor Electrodomésticos.

The methodology applied is a qualitative research methodology mainly based on semi-structured interviews.

The main conclusion of the chapter is that the closure of the cooperative was largely caused by market conditions. The chapter also highlights the validity of the mechanisms of inter-cooperation applied in managing employment which contributed to a rapid resumption of the employment situation of surplus personnel from Fagor Electrodomésticos.

The main contribution of this chapter comprises a detailed description of the methods used by the Mondragon Group to manage employment adjustment at the time of closure of its largest industrial cooperative during the recent general economic crisis (2008–2014), and thus avoid large-scale unemployment, its concommitant problems, and deeper deterioration of social capital in the Mondragon area. Further research is needed to compare this process with other international experiences based on cooperation.

This chapter investigates the impact of policy interest rate news from the U.S. Federal Reserve (Fed) and the European Central Bank (ECB) on stock returns and volatilities of U.S. NYSE and German DAX listed commercial banks. We find that Fed news has the most influence on both U.S. and German listed bank stocks and an unexpected policy rate increase (decrease) lowers (raises) returns and raises volatility in the majority of cases. On the other hand, ECB news generally increases bank stock volatility in the United States but has little impact within its own domestic banking industry. While our results for the U.S. listed banks confirm that their stock prices are more responsive in bad economic times and also during periods of monetary tightening, we find disparities for German banks suggesting that U.S. and European banking industries respond heterogeneously to monetary policy news but the Global Financial Crisis increased the sensitivity of all banks to monetary policy news.

The Taylor Rule’s Zero Lower Bound problem can be solved by pegging interest rates on longer-maturity loans than the 6 weeks implicit in the Fed’s current operating procedures. However, the Fed’s policy since 2008 of reducing the opportunity cost of excess reserves to zero (or even negative) has neutralized the stimulative effect of the Fed’s low interest rate policy. Eliminating interest on excess reserves would restore the effectiveness of monetary policy, but would require promptly unwinding the Fed’s “Quantatitve Easing” acquisitions.

It is argued that the Fed’s reaction function should contain no pure inertial terms, and that the “output gap” as originally conceived by Taylor is a statistical illusion. Although the unemployment gap is statistically meaningful, it is not clear that it should be directly included in the Taylor Rule unless it serves as a proxy for the equilibrium real interest rate.

This study evaluates the Federal Reserve (Fed) initial and final forecasts of the unemployment rate for 1983Q1-2018Q4. The Fed initial forecasts in a typical quarter are made in the first month (or immediately after), and the final forecasts are made in the third month of the quarter. The analysis also includes the private forecasts, which are made close to the end of the second month of the quarter.

In evaluating the multi-period forecasts, the study tests for systematic bias, directional accuracy, symmetric loss, equal forecast accuracy, encompassing and orthogonality. For every test equation, it employs the Newey–West procedure in order to obtain the standard errors corrected for both heteroscedasticity and inherent serial correlation.

Both Fed and private forecasts beat the naïve benchmark and predict directional change under symmetric loss. Fed final forecasts are more accurate than initial forecasts, meaning that predictive accuracy improves as more information becomes available. The private and Fed final forecasts contain distinct predictive information, but the latter produces significantly lower mean squared errors. The results are mixed when the study compares the private with the Fed initial forecasts. Additional results indicate that Fed (private) forecast errors are (are not) orthogonal to changes in consumer expectations about future unemployment. As such, consumer expectations can potentially help improve the accuracy of private forecasts.

Unlike many other studies, this study focuses on the unemployment rate, since it is an important indicator of the social cost of business cycles, and thus its forecasts are of special interest to policymakers, politicians and social scientists. Accurate unemployment rate forecasts, in particular, are essential for policymakers to design an optimal macroeconomic policy.

This paper examines the performance of smallholder rice farms established using improved planting technologies – broadcasting, dibbling and transplanting – under different production systems – rain-fed and irrigation – in Ghana.

Using recent cross-sectional data of 200 smallholder rice farmers from the upper east region of Ghana, this study employed multinomial logit model and descriptive and inferential statistics for the analysis.

The results revealed that rice production under irrigation system contributes significantly to increasing farm productivity and profitability. Rice farmers who adopted dibbling and transplanting technologies under both irrigation and rain-fed production system obtained higher productivity and profitability than those who used broadcasting technology. Adoption of improved rice planting technologies by smallholder farmers is significantly influenced by education, farm size, improved rice varieties, sales outlets, hired labour and percentage of paddy sold.

The sample size is relatively small, even though findings are still very important in terms of policy formulation for improved smallholder farm performance in a developing country like Ghana.

This study calls for collaborative efforts by government, donor agencies and NGOs to establish irrigation facilities and/or expand existing ones, increase sensitization and dissemination of improved planting technologies, as well as intensify the input subsidy programme in Ghana.

To the best of the authors knowledge, this is the first study that focuses on farmers' choice of rice planting technologies under irrigation and rain-fed production systems, and how these technologies impact on smallholder farm performance in Ghana.

This paper aims to examine the controversial issue of the extent to which Federal Reserve monetary policy may have contributed to the recent housing crisis and subsequent adverse macroeconomic developments.

The authors develop a small model that facilitates OLS and VAR estimates of the critical period.

The empirical results support the claim of John B. Taylor and others who held that monetary policy was excessively stimulative in terms of the low fed funds rate 2002‐2005, but also support the view of Alan Greenspan and others that the linkages between short‐term rates, long‐term rates, and the housing market deteriorated during that decade.

The model includes the Taylor Rule, a housing equation, and a mechanism linking the two relationships. The empirical results support elements of the camp that blames monetary policy for the recent housing crisis, and elements of the opposing camp which limits policy culpability. Specifically, it suggests excessive monetary ease and a structural change (for which the Fed cannot be blamed) in the monetary policy‐housing market linkage that occurred prior to the crisis. The results also support long‐term, prior crisis, channels of influence that run from the state of the economy to fed funds rates to mortgage interest rates to housing prices. A return to normalcy in the housing market should be accompanied by the re‐establishment of these channels.

John Taylor devised a simple monetary policy rule that links the Federal Reserve's policy interest rate with inflation and output targets. This paper compares actual policy rates with the rates that would have been recommended by the basic Taylor Rule for three long periods in U.S. economic history: 1875–1913 (“Pre Fed”), 1914–1951 (“Early Fed”), and 1952–1998 (“Modern Fed”). In addition, the authors develop a more complex version of the Rule to facilitate a comparison of the way in which each monetary authority would have reacted to the economic challenges presented outside its own time period. The empirical evidence suggests that Modern Fed would have reacted more promptly and appropriately to inflation and output problems outside its time period than either Early Fed or Pre Fed, and that the movement of interest rates in the Pre Fed period came closer to the corrective policies of Modern Fed than did those of Early Fed.

We would like to thank C. Y. Chen, Wenchih Lee, two anonymous referees and the seminar participants at the 2000 FMA annual meeting for their helpful comments and encouragement. All of the remaining errors are our responsibility.