cssi/SciSciGPT-SciSciNet huggingface dataset:
Conflict of Laws Structure and Vision: Updating a Venerable Discipline

Conflict of Laws has guided nations, individual lawmakers, lawyers, and scholars for centuries. The discipline’s rigorous analytical doctrines assist in resolving power clashes among governments and facilitate deep reflection on modes of legal regulation, governmental structure, and the nature of law itself. While traditional Conflicts thinking may have at one time satisfied these tasks, it now fails. As a result, many perceive the field as arcane and possibly even irrelevant. Conflict of Laws is none of these things. Conflict of Laws doctrines control some of the most compelling issues of our time: same-sex marriage, internet regulation, and mass tort litigation, to name just a few. Equally importantly, Conflict of Laws presents a vehicle for studying issues related to federalism in the United States, globalism, world governance, and the changing nature of law practice. After all, if various jurisdictions bring clashing regulations to a legal problem, this signals that the problem is not only difficult, but important. Yet existing texts and scholarship do not sufficiently highlight the discipline’s significance and sometimes ignore how its influence controls contemporary issues. In short, the discipline needs reinvigorating, and this article undertakes that task. The article shows how Conflict of Laws brings out core concepts pertaining to the nature of law, federalism, and globalism. Deployed in this way, the discipline is more likely to guide resolution of domestic and international power struggles and to gain broad-based appeal. The article grapples in detail with the following topics: intuition as legal analysis, formalism, functionalism, the rules/standards debate, framing effects in legal argumentation, the propensity of Conflict of Laws to promote analytical complexity, Lex Fori as a Conflict of Laws approach, race to the bottom effects of Conflict of Laws doctrine, the cult of “judicial power” in contemporary American judicial systems, forum shopping, the distinction between the disciplines of Conflict of Laws and International Law, and conceptions of sovereignty.
Equity in climate change: an analytical review

How global emissions reduction targets can be achieved equitably is a key issue in climate change discussions. This paper presents an analytical framework to encompass contributions to the literature on equity in climate change, and highlights the consequences -- in terms of future emissions allocations -- of different approaches to equity. Progressive cuts relative to historic levels -- for example, 80 percent by industrial countries and 20 percent by developing countries -- in effect accord primacy to adjustment costs and favor large current emitters such as the United States, Canada, Australia, oil exporters, and China. In contrast, principles of equal per capita emissions, historic responsibility, and ability to pay favor some large and poor developing countries such as India, Indonesia, and the Philippines, but hurt industrial countries as well as many other developing countries. The principle of preserving future development opportunities has the appeal that it does not constrain developing countries in the future by a problem that they did not largely cause in the past, but it shifts the burden of meeting climate change goals entirely to industrial countries. Given the strong conflicts of interest in defining equity in emission allocations, it may be desirable to shift the emphasis of international cooperation toward generating a low-carbon technology revolution. Equity considerations would then play a role not in allocating a shrinking emissions pie but in informing the relative contributions of countries to generating such a pie-enlarging revolution.
A productivity model of city crowdedness

Abstract Population density varies widely across US cities. A simple, static general equilibrium model suggests that moderate-sized differences in cities' total factor productivity can account for such variation. Nevertheless, the productivity required to sustain above-average population densities considerably exceeds estimates of the increase in productivity caused by such high density. In contrast, increasing returns to scale may be able to sustain multiple equilibria at below-average population densities.
Sources of exchange rate fluctuations: Are they real or nominal?

Abstract I analyze the role of real and monetary shocks on exchange rate behavior using a structural vector autoregressive model of the US vis-a-vis the rest of the world. The shocks are identified using sign restrictions on the responses of the variables to orthogonal disturbances. These restrictions are derived from the predictions of a two-country DSGE model. I find that monetary shocks are unimportant in explaining exchange rate fluctuations. By contrast, demand shocks explain between 21% and 37% of exchange rate variance at 4-quarter and 20-quarter horizons, respectively. The contribution of demand shocks plays an important role but not of the order of magnitude sometimes found in earlier studies. My results, however, support the recent focus of the literature on real shocks to match the empirical properties of real exchange rates.
Interactions of Informal and Formal Agents in South Asian Rural Credit Markets

The paper provides a realistic explanation for the persistently large loan costs in the informal and formal credit markets of South Asia. In the presence of the adverse selection problems that arise from information asymmetries and discrepancies in credit services, price competition in somewhat differentiated products is sufficient to generate the high interest rate convergence observed in Nepalese credit markets. Most prior literature emphasizes collusion as the cause and leads to ineffective entry-oriented policy prescriptions. The new interpretation stresses the need to reduce information asymmetries, product differentiation, and moral hazard risks, while widening the spatial orbits of agent competition.
The Effects of Uncertainty on the Informativeness of Earnings: Evidence from the Insurance Industry in the Wake of Catastrophic Events

This study examines the effects of uncertainty associated with large-scale catastrophes on the informativeness of earnings announcements by property and casualty insurers. It contributes to the literature on the effects of uncertainty on the informativeness of earnings announcements by distinguishing between: (1) uncertainty due to exogenous events that obscure the firm’s future prospects, and (2) uncertainty due to noise in earnings. Results suggest that heightened uncertainty associated with exposure to catastrophe losses is significantly positively associated with the market’s response to earnings reports, even after controlling for uncertainty due to noise in earnings. This implies that during periods of high uncertainty, investors find earnings information more useful in assessing the future prospects of the firm.
Dominant shareholders, corporate boards, and corporate value: A cross-country analysis

Abstract We investigate the relation between corporate value and the proportion of the board made up of independent directors in 799 firms with a dominant shareholder across 22 countries. We find a positive relation, especially in countries with weak legal protection for shareholders. The findings suggest that a dominant shareholder, were he so inclined, could offset, at least in part, the documented value discount associated with weak country-level shareholder protection by appointing an ‘independent’ board. The cost to the dominant shareholder of doing so is the loss in perquisites associated with being a dominant shareholder. Thus, not all dominant shareholders choose independent boards.
Why Does Gasoline Cost so Much? A Joint Model of the Global Crude Oil Market and the U.S. Retail Gasoline Market

There is an important distinction between the price of gasoline in the U.S. and the price of crude oil in global markets that is often ignored in discussions of the impact of higher energy prices. This paper makes explicit the relationship between demand and supply shocks in these two markets. Building on a recently proposed structural VAR model of the global crude oil market, it explores the implications of a joint VAR model of the global market for crude oil and the U.S. market for motor gasoline. It is shown that it is essential to understand the origins of a given gasoline price shock, before predicting the likely path of the price of gasoline or of gasoline consumption, since each demand and supply shock is associated with responses of different magnitude, pattern and persistence. The paper assesses the overall importance of these shocks in explaining the variation in U.S. gasoline prices and consumption growth, as well as their relative contribution to the surge in U.S. gasoline prices since 2002. The findings have important implications for the future evolution of the real price of gasoline. Although there is considerable uncertainty about the determinants of the price of gasoline, this paper makes the case that the real price of gasoline is likely to remain high for several years.
Capital Structure under Heterogeneous Beliefs

We develop a dynamic structural model to examine the eects of diering beliefs of the manager and outsider investors regarding the pro…tability of a …rm's projects and manager- shareholder agency con‡icts on its capital structure. The manager receives dynamic incentives through explicit contracts with shareholders. The implementation of the contracts through …- nancial securities leads to a dynamic capital structure consisting of inside equity, outside equity, long-term debt, and short-term debt. The analysis of the model generates novel testable impli- cations for the eects of project characteristics on dierent components of capital structure: (i) Long-term debt declines with managerial optimism, while the manager's inside equity stake and short-term debt increase. (ii) Long-term debt and the manager's inside equity stake decline with the …rm's transient risk, that is, the degree of uncertainty about the pro…tability of the …rm's projects. (iii) Long-term debt increases with the …rm's intrinsic risk— the component of the …rm's risk that is invariant through time— while short-term debt and the manager's inside equity stake decline. (iv) Long-term and short-term debt increase with the …rm's expected pro…tability. We calibrate our structural model to a sample of general …rms as well as a sample of IPO …rms, and show the quantitative impact of asymmetric beliefs on capital structure. The calibrated parameter values corresponding to the two sets of …rms suggest that managers/entrepreneurs of IPO …rms are, indeed, signi…cantly more optimistic than general managers, and the degree of uncertainty about the pro…tability of IPO …rms is substantially higher. Overall, our …ndings show that imperfect information and asymmetric beliefs are important determinants of …rms' …nancial policies.
Explaining the Favorite-Longshot Bias: Is it Risk-Love or Misperceptions?

The favorite–long shot bias describes the long-standing empirical regularity that betting odds provide biased estimates of the probability of a horse winning: long shots are overbet whereas favorites are underbet. Neoclassical explanations of this phenomenon focus on rational gamblers who overbet long shots because of risk-love. The competing behavioral explanations emphasize the role of misperceptions of probabilities. We provide novel empirical tests that can discriminate between these competing theories by assessing whether the models that explain gamblers’ choices in one part of their choice set (betting to win) can also rationalize decisions over a wider choice set, including compound bets in the exacta, quinella, or trifecta pools. Using a new, large-scale data set ideally suited to implement these tests, we find evidence in favor of the view that misperceptions of probability drive the favorite–long shot bias, as suggested by prospect theory.
Are foreign investors really beneficial? Evidence from South Korea

Abstract We examine whether foreign investors impact corporate governance by analyzing the relation between foreign share ownership and pay-performance sensitivity. While the extant literature has examined the impact of foreign ownership, the evidence for emerging markets is limited. We test our hypotheses using a sample of Korean firms, an emerging market with unique characteristics. We find that firms with higher foreign share ownership demonstrate significant pay-performance sensitivity while their low foreign share counterparts do not, suggesting that foreign investors may be good monitors. We control for the potential self-selection bias that foreign investors may only invest in firms that have already exhibited good governance practices, and our results are unchanged. Our results suggest that foreign shareholders are able to promote improved corporate governance in an emerging market.
How do massive black holes get their gas

We use multiscale smoothed particle hydrodynamic simulations to study the inflow of gas from galactic scales (∼10 kpc) down to ≲ 0.1 pc, at which point the gas begins to resemble a traditional, Keplerian accretion disc. The key ingredients of the simulations are gas, stars, black holes (BHs), self-gravity, star formation and stellar feedback (via a subgrid model); BH feedback is not included. We use ∼100 simulations to survey a large parameter space of galaxy properties and subgrid models for the interstellar medium physics. We generate initial conditions for our simulations of galactic nuclei (≲ 300 pc) using galaxy-scale simulations, including both major galaxy mergers and isolated bar-(un)stable disc galaxies. For sufficiently gas-rich, disc-dominated systems, we find that a series of gravitational instabilities generates large accretion rates of up to ∼ 1–10 M⊙ yr−1 on to the BH (i.e. at ≲ 0.1 pc); this is comparable to what is needed to fuel the most luminous quasars. The BH accretion rate is highly time variable for a given set of conditions in the galaxy at ∼kpc. At radii of >rsim 10 pc, our simulations resemble the ‘bars-within-bars’ model of Shlosman et al., but we show that the gas can have a diverse array of morphologies, including spirals, rings, clumps and bars; the duty cycle of these features is modest, complicating attempts to correlate BH accretion with the morphology of gas in galactic nuclei. At ∼ 1–10 pc, the gravitational potential becomes dominated by the BH and bar-like modes are no longer present. However, we show that the gas can become unstable to a standing, eccentric disc or a single-armed spiral mode (m= 1), in which the stars and gas precess at different rates, driving the gas to sub-pc scales (again for sufficiently gas-rich, disc-dominated systems). A proper treatment of this mode requires including star formation and the self-gravity of both the stars and gas (which has not been the case in many previous calculations). Our simulations predict a correlation between the BH accretion rate and the star formation rate at different galactic radii. We find that nuclear star formation is more tightly coupled to active galactic nucleus activity than the global star formation rate of a galaxy, but a reasonable correlation remains even for the latter.
Entity and Identity

The function, indeed the very existence, of nonprofit corporations is under-theorized. Recent literature suggests that only preferential tax treatment adequately explains the persistence of the nonprofit form. This answer is incomplete. Drawing on psychology’s social identity theory, this Article posits that the nonprofit form can create a special "warm-glow" identity that cannot be replicated by the for-profit form. For example, a local nonprofit food cooperative is selling more than the free-range eggs or organic strawberries that Whole Foods and other for-profits market so effectively. The co-op offers community participation and an investment in local farms, a distinctive ethos that is incompatible with the profit motive. Ascribing a special meaning to the nonprofit form allows us to view afresh a variety of issues regarding the appropriate legal treatment of nonprofits.
Fitting dwarf galaxy rotation curves with conformal gravity

We continue our study of the application of the conformal gravity theory to galactic rotation curves. Previously we had studied a varied 111 spiral galaxy sample consisting of high surface brightness galaxies, low surface brightness galaxies and dwarf galaxies. With no free parameters other than galactic mass-to-light ratios, we had found that the theory is able to account for the systematics that are observed in the entire set of galactic rotation curves without the need for any dark matter whatsoever. In this paper, we extend our study to an additional set of 27 galaxies of which 25 are dwarf galaxies, and provide updated studies of three additional galaxies that had been in the original sample, and again without dark matter find fully acceptable fits, save only for just a few galaxies that we find to be somewhat troublesome. Our current study brings to 138 the number of rotation curves of galaxies that have been accounted for by the conformal gravity theory. Since one of the primary ingredients in the theory is a universal contribution to galactic motions coming from matter exterior to the galaxies, and thus independent of them, our study reinforces one of the central concepts of the conformal gravity studies, namely that invoking dark matter should be viewed as being nothing more than an attempt to describe global physics contributions in purely local galactic terms.
Factor prices and the factor content of trade revisited: What's the use?

Abstract This paper examines and extends a result of Deardorff and Staiger (An interpretation of the factor content of trade. Journal of International Economics 1988;24:93–107) (D–S), who showed how the factor content of trade may indicate the factor price adjustments that can be attributed to that trade. It elaborates on what this means, and also extends it beyond several of the assumptions that D–S used. The strongest result, in D–S only for Cobb–Douglas technology, is extended to common constant elasticities of substitution and, for small changes, more general technologies. Also, the assumption of nonspecialization is shown to be unnecessary with Cobb–Douglas technology. More generally, noncompeting imports equate with Hicks-neutral technological improvements.
Unintended effects of illegal economic activities: Illegal gold mining and malaria

Abstract Illegal economic activities are not only associated with higher levels of violent crime, they may also increase unforeseen risks and cause other negative unintended consequences for populations. This paper investigates the causal effects of illegal gold mining on malaria incidence. For this purpose, I employ unique Colombian satellite data with the location of illegal gold mines matched to municipal governmental health reports on the number of malaria cases. To identify causal effects, I use preexisting geochemical gold anomalies as an instrumental variable for illegal gold production. I find positive and large effects of illegal gold mining on malaria incidence. My estimates suggest that when an area containing illegal gold mines increases by 1 hectare, the annual parasite index for malaria increases by 1.04 cases per 100,000 inhabitants.
Optimal capital structure under corporate and personal taxation

In this paper, a model of corporate leverage choice is formulated in which corporate and differential personal taxes exist and supply side adjustments by firms enter into the determination of equilibrium relative prices of debt and equity. The presence of corporate tax shield substitutes for debt such as accounting depreciation, depletion allowances, and investment tax credits is shown to imply a market equilibrium in which each firm has a unique interior optimum leverage decision (with or without leverage-related costs). The optimal leverage model yields a number of interesting predictions regarding cross-sectional and time-series properties of firms' capital structures. Extant evidence bearing on these predictions is examined.
The Role of Race in End-of-Life Care

This Article focuses on one important aspect of racial disparities that has received comparatively little attention in the legal literature -- the existence and causes of racial differences in end-of-life decision making and in the utilization of palliative and hospice care. African Americans and other racial minorities in the United States utilize palliative care and hospice less frequently than white Americans. These minority populations also tend to resist advance care planning and instead opt to receive more life-prolonging care at the end of life, even when quality of life and prognosis are poor. After a lifetime of limited access to health care compared with whites and, in some cases limited treatment options (because of lack of insurance coverage or biased clinical judgment by physicians), African Americans and other racial and ethnic minorities utilize strikingly higher levels of aggressive, life-prolonging care at the end of life. Much of the explanation for these disparities in end-of-life care appears to lie in problems with communication and trust between physician and patient, although broader influences of culture and religious belief also play a role. The complexities of communication between minority patients and their physicians run in two directions, creating a destructive synergy that can dampen empathy in the relationship and negatively impact care at the end of life. Although many cultural factors play a role in the decision making of African American patients regarding end-of-life care, this Article focuses primarily on issues of trust and communication and suggests changes to address these factors in order to improve care at the end of life for all patients.
Penalties for Unexpected Behavior: Double Standards for Women in Finance

We present 179 investment professionals with a scenario that manipulates whether a male or female analyst persists in pitching a stock pick after it has been voted down. Respondents evaluate analys...
The Dynamics of Alliance Conditions in the Alliance Development Process

One of the key issues in understanding the developmental processes of strategic alliances is how the alliance conditions change over the different stages of alliance development. A related question concerns the nature of the co-evolutionary dynamics of alliances in terms of their constituent partner firms. In this article we propose an integrated process model of alliances that is based on alliance conditions, allianc developmental stages, and an alliance system comprising co-evolutionary elements. We suggest that alliance conditions, or the key characteristics of an alliance at any given moment, link the alliance environment (firm characteristics) and the alliance development process. We also explore how specific patterns of alliance conditions have differential impacts on the interactive elements of the alliance co-evolutionary system.
Auditor Actions and the Deterrence of Manager Opportunism: The Importance of Communication to the Board and Consistency with Peer Behavior

Informed by Perceptual Deterrence Theory, we conduct multiple experiments to investigate when and how auditor actions can help deter manager opportunism. In Study 1, we conduct two experiments in which managers can use real earnings management (REM) to report more favorable earnings. Study 1A results indicate that REM can be deterred when managers expect auditors to increase scrutiny and communicate their observations with the board. However, this effect occurs only when managers’ operational decisions are inconsistent (as opposed to consistent) with peer behavior. Study 1B results suggest that without communication to the board, auditor scrutiny is not likely to deter REM, irrespective of consistency with peers. In Study 2, we conduct an experiment in which managers can choose to use either accruals-based earnings management (AEM) or REM that is inconsistent with peer behavior to report more favorable earnings. We find that increased auditor scrutiny with communication to the board effectively deters both AEM and REM, reducing the total level of manager opportunism. However, auditor scrutiny alone (i.e., without communication to the board) deters AEM, but also induces more REM, leaving the total level of manager opportunism unchanged. Our findings highlight the importance of auditor-board communication and demonstrate when and how auditor actions can contribute to the deterrence of both AEM and REM.
An Alternative Perspective on Supreme Court Agenda Setting in a System of Shared Powers

This study builds on existing empirical separation-of-powers work to determine whether legislative and executive preferences constrain the Supreme Court's agenda. Its contribution comes in the form of a different modeling perspective—namely, whether judicial improvements over the status quo might avoid legislative overrides. The location of the status quo vis-a-vis key pivots does not appear to factor in to the Court's agenda calculations. Regardless of whether the Court was improving the status quo policy or making it worse for Congress and the president, the Court does not appear to consider legislative overrides.
Supporting irrational suicide.

In this essay, we present three case studies which suggest that sometimes we are better off supporting a so–called irrational suicide, and that emotional or psychological distress – even if medically controllable – might justify a suicide. We underscore how complicated these decisions are and how murky a physician's moral role can be. We advocate a more individualized route to end–of–life care, eschewing well–meaning, principled, generalizations in favor of a highly contextualized, patient–centered, approach. We conclude that our Western traditions of promoting reasoned behavior and life themselves may at times be counter–productive.
Comparative political process theory

What, if anything, do recent constitutional court decisions requiring a legislature to create a customized presidential impeachment procedure, invalidating a government’s prorogation of parliament, rejecting the disbanding of an independent anticorruption unit, and striking down legislation for inadequate deliberation have in common? They are all examples of courts protecting the political processes of representative democracy against threats or failures. Yet none of these various types of failure appear in the work that is synonymous with a political process theory of judicial review: John Hart Ely’s Democracy and Distrust. This article argues that when we look beyond the United States and at the comparative context generally, a political process theory has a great deal of relevance and application to constitutional law and courts around the world, both descriptively and normatively. Especially now when the structures and processes of representative democracy are under assault in so many places. However, for comparative purposes, Ely’s account takes too narrow a view of what types of political process failures exist and are of concern, and what types of judicial review or other protective mechanisms they may call for. It is also an interpretive theory of one system, but what is needed in the comparative context is a broader, normative theory of the role of courts and other actors in protecting democratic politics. Accordingly, suitably expanded and adapted, a comparative political process theory can make a valuable contribution to the field of comparative constitutional law. This article seeks to explore and further develop such a theory.
The More You Know: Information Effects on Job Application Rates in a Large Field Experiment

This paper presents the results from a 2.3-million-person field experiment that varies whether or not a job seeker sees the number of applicants for a job posting on a large job-posting website, LinkedIn. This intervention increases the likelihood that a person will finish an application by 3.5%. Women have a larger increase in their likelihood of finishing an application than men. Overall, adding this information to a job posting may offer a light-touch way to both increase application rates and alter the diversity of the applicant pool. The online appendix is available at https://doi.org/10.1287/mnsc.2017.2994. This paper was accepted by John List, behavioral economics.
Aggregate Margin Debt and the Divergence of Price from Accounting Fundamentals

We examine whether, in the aggregate, margin debt is associated with the divergence of price from accounting fundamentals. We find that investors increase their margin debt following upward price movements away from accounting fundamentals, consistent with these investors being extrapolative in aggregate. We also find evidence that margin debt appears to be linked to temporary overpricing in recent periods, as the aggregate ratio of margin debt to price is reliably associated with negative future returns since at least 1992. Our results are consistent with the theoretical literature that predicts extrapolative traders have a destabilizing effect on market prices, and helps explain why prices diverge from accounting fundamentals. This article is protected by copyright. All rights reserved.
The Admissibility of Expert Testimony in North Carolina after Howerton: Reconciling the Ruling with the Rules of Evidence

In Howerton v. Arai Helmet, Ltd., 597 S.E.2d 674 (N.C. 2004), the North Carolina Supreme Court rejected the federal Daubert standard for determining the admissibility of expert testimony. Relying upon case law pre-dating North Carolina's adoption of an evidence code based on the Federal Rules, the court explained the test for admitting expert testimony in state court was less rigorous and less exacting than the federal standard and was grounded, primarily, on factors commonly considered by juries in weighing the credibility of expert witnesses. In spite of the rejection of the Daubert substantive standard, the court retained the Daubert procedural mechanism of determining admissibility under Rule 104(a). This article argues that replacing the substance of Daubert but retaining the Daubert procedure is inconsistent with the structure and text of the North Carolina Rules of Evidence and it reflects an inherent distrust of the jury. The doctrine of conditional relevancy and the procedural mechanism envisioned by Rule 104(b) should have been adopted to make the new admissibility standard consistent with the Rules of Evidence.
The Economics of Branchless Banking

if you are a day laborer who is not sure what employment opportunities there may be tomorrow; if you are a street hawker making $2 a day and know you will have to come up with $20 to send your children to school in September; if you are the family’s breadwinner but have no medical insurance—can you afford not to engage in finance? Finance is essential to help people escape a hand-to-mouth existence, yet the reality today is that if you are poor or low income, your financial world is disconnected from the rest of the world. In all likelihood, you rely on informal solutions: stashing small amounts of cash in a jar; relying on friends and family members to help out with occasional loans or favors; belonging to an informal community savings group; or using the services of trusted money guards or moneylenders. Financial markets are quite simply failing to meet the needs of a vast swath of society—those who are poor, and especially the poor living in rural areas—in a way that is affordable, convenient, and safe. It doesn’t have to be this way. It is not that markets are inherently incapable of meeting this need; our current financial system simply has not organized itself to meet it. This paper offers a vision for how to construct a banking infrastructure that is (1) commercially viable, (2) safe and trusted, and (3) accessible to all. At the very least, this requires that each player in the value chain have a clear financial incentive to participate in and actively promote the service. Moreover, each transaction must be profitable on a stand-alone basis so that customer profitability can always be assumed, which makes a true mass-market approach possible, with no incentive for providers to deny service based on minimum balances or intensity of use. It is analogous to prepaid airtime for mobile operators: a card bought is profit booked, regardless of who bought the prepaid card. This suggests the central importance of keeping fixed per-customer costs extremely small and of reducing unit transaction costs, which will fully commoditize (and hence democratize) the banking product. The starting point of building this system is to take banking transactions out of bank branches and into retail stores in every neighborhood and in every village.
Is There an Energy Efficiency Gap

Many analysts have argued that energy efficiency investments offer an enormous “win-win” opportunity to both reduce negative externalities and save money. This overview paper presents a simple model of investment in energy-using capital stock with two types of market failures: first, uninternalized externalities from energy consumption, and second, forces such as imperfect information that cause consumers and firms not to exploit privately-profitable energy efficiency investments. The model clarifies that only if the second type of market failure cannot be addressed directly through mechanisms such as information provision, energy efficiency subsidies and standards may be merited. This chapter therefore reviews the empirical work on the magnitude of profitable unexploited energy efficiency investments, a literature which frequently does not meet modern standards for credibly estimating the net present value of energy cost savings and often leaves other benefits and costs unmeasured. These problems notwithstanding, recent empirical work in a variety of contexts implies that on average the magnitude of profitable unexploited investment opportunities is much smaller than engineering-accounting studies suggest. Finally, there is tremendous opportunity and need for policy-relevant research that utilizes randomized controlled trials and quasi-experimental techniques to estimate the returns to energy efficiency investments and the welfare effects of energy efficiency programs.
Endogenous Events and Long-Run Returns

We analyze event abnormal returns when returns predict events. In fixed samples, we show that the expected abnormal return is negative and becomes more negative as the holding period increases. Asymptotically, abnormal returns converge to zero provided that the process of the number of events is stationary. Nonstationarity in the process of the number of events is needed to generate a large negative bias. We present theory and simulations for the specific case of a lognormal model to characterize the magnitude of the small-sample bias. We illustrate the theory by analyzing long-term returns after initial public offerings (IPOs) and seasoned equity offerings (SEOs). (JEL G14, G32)
The Institutional Sources of State Success in Federalism Litigation before the Supreme Court

The Supreme Court's recent federalism decisions are the clearest example of the states’ improving legal fortunes in litigation against the federal government. Reducing the dramatic shift in the Court's federalism jurisprudence to the attitudinal voting of individual justices ignores the influence on the Court's decision making from broader institutional developments in American politics and domestic policy. These developments include: (1) the diminishing effectiveness of the states’ lobbying power in the federal policymaking arena; (2) the increasing effectiveness of litigation by states’ attorneys general in the federal judicial arena; and (3) the convergence of these developments resulting in a pro-state Supreme Court agenda.
Roundaboutness is Not a Mysterious Concept: A Financial Application to Capital Theory

AbstractWe apply the EVA terminology to the concepts of roundaboutness and average period of production in capital theory. By doing this we show that these terms have a clear and well understood financial interpretation. A financial application to capital theory helps to clarify obscure and controversial economic terms.
Family Constitutions and the (New) Constitution of the Family

By creating and living by a mission statement, families are gradually able to build moral authority in the family itself. In other words, principles get built right into the very structure and culture of the family, and everyone comes to realize that principles are at the center of the family and are the key to keeping the family strong, together, and committed to its destination. Then the mission statement becomes like the Constitution of the United States—the ultimate arbiter of every law and statute. The principles upon which it is based and the value systems that flow out of those principles create a social will that is filled with moral or ethical authority.
Salience and Sin: Designing Taxes in the New Sin Era

Tax salience reflects the extent to which consumers take into account the after-tax cost of a good or service prior to making their consumption decision. Recent empirical work on tax salience has revealed something that is perhaps intuitive, but nevertheless important to the design of sin taxes. Taxpayers are more likely to make consumption decisions based on pre-tax rather than post-tax prices when the salience, or visibility, of a tax is diminished. Thus, consumers are less likely to change their demand for a particular product if shelf prices are tax-exclusive rather than tax-inclusive. Economically, this makes low salience taxes mimic some of the benefits of taxes on inelastically demanded goods. Because a taxpayer’s demand change in response to a tax increase is diminished, the deadweight loss generated by the imposition of the tax can be reduced. Notwithstanding the potential for efficiency gains, politicians and academics alike have expressed various fairness, distributional, and normative concerns regarding the use of low salience taxes. In fact, a number of countries already require tax-inclusive pricing for consumer products in order to purportedly preserve consumer awareness and transparency.In contrast, I argue that lawmakers should not rush to reject tax-exclusive pricing outright and should continue to explore the benefits of low salience taxes in select situations. To the extent lawmakers are able to minimize economic distortions the concerns that have been expressed are not always fatal. I develop a new analytical rubric for tax salience, and determine that the appropriate use of salience for any particular tax is dependent on a number of factors. These factors include the price elasticity of demand, the potential for countervailing income effects, and whether the tax is intended to raise revenue or modify taxpayer behavior. As a normative matter, I find that selectively implemented low salience taxes can be beneficial. However, I do not believe they should be universally implemented in sin tax design. In fact, in another expansion on the current literature, I argue that in certain situations lawmakers may best benefit from high salience taxes. I propose that these taxes may have efficiency benefits when lawmakers are seeking to influence taxpayer behavior. Ultimately, while it is difficult to draw definitive conclusions regarding the optimal use of tax salience given that many empirical and theoretical aspects of salience have yet to be developed, the empirical work done to-date suggests that the impact of tax salience on tax design may be significant and is worth exploring.
Economic and Financial Approaches to Valuing Pension Liabilities

Financial economics holds that payment streams should be valued using discount rates that reflect the cash flows’ risks. In the case of pension liabilities, the appropriate discount rate for a pension fund's liabilities is the expected rate of return on a portfolio that would be held under a liability-driven investment policy. The valuation of defined benefit pension obligations involves choices revolving around deciding: (1) what future benefit payments to recognize today (i.e., which liability concept to use); and (2) from whose point of view to value the liabilities. Moving towards modeling, the distribution of future liabilities using a ‘risk-neutral’ framework, would allow for calculating the present value of the future liabilities more accurately. This would provide policymakers with information more relevant for the decision-making, and it would also permit easier communication of the risks facing the Pension Benefit Guaranty Corporation's PIMS model via a single univariate statistic.
Access to private equity and real firm activity: Evidence from PIPEs

Abstract We study how access to private equity financing affects real firm activities using a broad panel of publicly traded U.S. firms that raise external equity through private placements (PIPEs) between 1995 and 2008. The public firms relying on PIPEs are generally small, high-tech firms that cannot finance investment internally and likely face severe external financing constraints; PIPEs are by far the most important source of finance for these firms. We show that firms use PIPE inflows to maintain extremely high R&D investment ratios and to build substantial cash reserves. We also use GMM techniques that control for firm-specific effects and the endogeneity of the decision to raise private equity and find that PIPE funding has a substantial impact on corporate investment in cash reserves and R&D, and a smaller but significant impact on investment in non-cash working capital, but little impact on fixed investment or acquisitions. Our estimates indicate that R&D investment initially increases by $0.20–$0.25 for each dollar of private equity flowing into the firm, and that PIPE funds initially invested in cash ultimately go to R&D. These findings offer direct evidence that access to private equity finance has an important effect on the key input that drives innovation at the firm- and economy-wide levels.
A Specialized Inventory Problem in Banks: Optimizing Retail Sweeps

Deposits held at Federal Reserve Banks are an essential input to the business activity of most depository institutions in the United States. Managing these deposits is an important and complex inventory problem for two reasons. First, Federal Reserve regulations require that depository institutions hold certain amounts of such deposits at the Federal Reserve Banks to satisfy statutory reserve requirements against customers' transaction accounts (demand deposits and other checkable deposits). Second, some inventory of such deposits is essential for banks to operate one of their core lines of business: furnishing payment services to households and firms. Because the Federal Reserve does not pay interest on such deposits used to satisfy statutory reserve requirements, banks seek to minimize their inventory of such deposits. In 1994, the banking industry introduced a new inventory management tool for such deposits, the retail deposit sweep program, which avoids the statutory requirement by reclassifying transaction deposits as savings deposits. This is an interesting inventory problem for fungible items, where the conversion process is reversible. We examine two methods for operating such sweeps programs within the limits of Federal Reserve regulations, and we develop a stochastic dynamic programming model to implement one such method, the threshold method.
Intersystemic Statutory Interpretation: Methodology as “Law” and the Erie Doctrine

Do the Erie Doctrine and its “reverse-Erie” mirror require state and federal courts to apply one another’s statutory interpretation methodologies when they interpret one another’s statutes? Surprisingly, the courts have no consistent answer to this question—even though state and federal courts constantly interpret one another’s laws. What’s more, exploring this application of Erie reveals that one of the most important jurisprudential questions about statutory interpretation also remains entirely unresolved: namely, are the rules of statutory interpretation “law,” individual judicial philosophy, or something in between? This Article argues that many federal courts are getting the Erie question wrong—or at least that they are unaware that the question exists in the first place. The Erie inquiry also makes clear that federal courts treat both state and federal statutory interpretation methodology as much less “lawlike” than they treat analogous interpretive principles, without acknowledging or justifying the distinction. Federal courts routinely bypass state interpretive principles when they interpret state statutes, but almost always look to other state methodological principles, including state rules of contract interpretation, choice of law, and constitutional interpretation. Further, unlike in those other areas, the U.S. Supreme Court does not treat even its own statements about federal statutory interpretation principles as “law” and does not give them precedential effect. This practice has licensed an interpretive freedom for state and lower federal courts when those courts interpret federal statutes—a freedom that facilitates federal-law disuniformity that the Court generally does not tolerate in other contexts. This Article challenges the notion that statutory interpretation is sufficiently different from other decisionmaking regimes to justify these distinctions. author. Associate Professor of Law, Columbia Law School. Zeke Hill, Mallory Jensen, Dhawal Sharma, Peter Aronoff, Michelle Diamond, Jon Krois, and Richard Geo Sang Lee provided excellent research assistance. Many thanks to Bill Eskridge, Robert Ahdieh, Samuel Bray, Ariela Dubler, Richard Fallon, Meir Feder, Robert Ferguson, Barry Friedman, Katie Hall, Helen Hershkoff, Pam Karlan, Ben Kerschberg, Lance Liebman, Gillian Metzger, Trevor Morrison, Jonathan Remy Nash, Robert Post, Judith Resnik, David Shapiro, Peter Strauss, Adrian Vermeule, and Louise Weinberg; Josh Geltzer, Laura Safdie, Alexander Schwab, Daniel Winik, and the other terrific editors at The Yale Law Journal; participants in workshops at Columbia, Emory, Seton Hall, Stanford, and Yale law schools and the Junior Faculty Federal Courts Workshop; and especially Henry Monaghan. intersystemic statutory interpretation 1899 article contents
Was an Industrial Revolution Inevitable? Economic Growth Over the Very Long Run

This paper studies a growth model that is able to match several key facts of economic history. For thousands of years, the average standard of living seems to have risen very little, despite increases in the level of technology and large increases in the level of the population. Then, after thousands of years of little change, the level of per capita consumption increased dramatically in less than two centuries. Quantitative analysis of the model highlights two factors central to understanding this history. The first is a virtuous circle: more people produce more ideas, which in turn makes additional population growth possible. The second is an improvement in institutions that promote innovation, such as property rights: the simulated economy indicates that arguably the single most important factor in the transition to modern growth has been the increase in the fraction of output paid to compensate inventors for the fruits of their labor.
What a fairer 24 team UEFA Euro could look like

We critically examine a number of flaws in the current knockout bracket of the UEFA Euro 2016 and we suggest two fairer procedures that eliminate group advantage and lack of win incentive and still satisfy the balance and group constraints. The suggested procedures apply to any tournament consisting of a round robin stage made of 6 groups of 4, followed by a knockout stage.