cssi/SciSciGPT-SciSciNet huggingface dataset:
MATERIALS PRICES AND PRODUCTIVITY

There is substantial within-industry variation in the prices that plants pay for their material inputs. Using plant-level data from the U.S. Census Bureau, I explore the consequences and sources of this variation in materials prices. For a sample of industries with relatively homogeneous products, the standard deviation of plant-level productivity would be 7% smaller if all plants faced the same materials prices. Moreover, plant-level materials prices are persistent, spatially correlated, and positively associated with the probability of exit. The contribution of entry and exit to aggregate productivity growth is smaller for productivity measures that are purged of materials price variation. After documenting these patterns, I discuss three potential sources of materials price variation: geography, differences in suppliers’ marginal costs, and within-supplier markup differences. Together, these variables explain 15% of the variation of materials prices. (JEL: E23, L16, L60)
Linear Demand Systems are Inconsistent with Discrete Choice

We show that with more than two options, a discrete choice model cannot generate linear demand. In doing so, we demonstrate a prediction of such discrete choice models that is falsifiable based on local second-order properties of demand.
Two-sided altruism, Lindahl equilibrium, and Pareto optimality in overlapping generations models

This paper extends the Samuelsonian overlapping generations general equilibrium framework to encompass a variety of altruistic preferences by recasting it into a Lindahl equilibrium framework. The First and the Second Welfare theorems hold for Lindahl equilibrium with respect to the Malinvaud optimality criterion but not with respect to the Pareto optimality criterion. A complete characterization of Pareto optimal allocations is provided using the Lindahl equilibrium prices.
A New Look at Simple Inhomogeneous Chemical Evolution

A rudimentary, one-zone, closed-box model for inhomogeneous chemical evolution is offered as an alternative reference model, distinct from the Simple Model, in the limit of no mixing. The metallicity distribution functions (MDFs) of Galactic halo and bulge stars can be matched by varying a single evolutionary parameter, nQ. Q is the filling factor of contaminating regions, and n is the number of star-forming generations. Therefore, Q and n have equivalent roles, and combinations of n and Q yield systems with different metallicities at any given age. The model also revises the interpretation of observed MDFs. Unevolved systems probe the metallicity distribution f(z) of parent enrichment events; for example, the high-metallicity tail of the halo distribution agrees with a power-law f(z).
THE SUPPLY OF QUALITY IN CHILD CARE CENTERS

We use data from a sample of child care centers to estimate the relationships between cost and child care quality, and between revenue and quality. We use a measure of child care quality, designed by developmental psychologists, that is positively associated with child development. Taking the estimated cost-quality and revenue-quality relationships as given, we estimate the objective functions of firms and compute the quality supply function. The results indicate that the supply of quality is moderately elastic with respect to price and the wages of child care center workers. Implications of the results for child care policy are discussed.
The Moving Target of Tax Reform

In 2000, Professor William Turnier proposed a package of three reforms to make the estate tax more “equitable” and “taxpayerfriendly.” All of his proposals—allowing a surviving spouse to inherit a deceased spouse’s unused exemption, replacing the state death tax credit with a deduction, and indexing the exemption for inflation—were eventually enacted. Today, the estate tax remains on the books, but changes in rates and exemptions have severely curtailed its role in the larger federal tax system. Income tax rate reductions for capital gains and dividends have further lightened the tax burden on capital income, and international pressure to reduce the corporate tax burden threatens to accelerate the increasingly unequal distribution of income and wealth. This Article argues that the trend of shifting tax burdens from capital to labor is neither desirable nor sustainable and suggests a deathtime capital gains tax and an accrual-based tax on unrealized appreciation in publicly traded stock as possible measures to make the federal tax system more equitable (though perhaps less taxpayer-friendly).
How NFIB v. Sebelius Affects the Constitutional Gestalt

The thesis of this essay is that the most important legal effects of the Supreme Court's decision in NFIB v. Sebelius are likely to be indirect. Sebelius marks a possible shift in what we can call the “constitutional gestalt” regarding the meaning and implications of the so-called “New Deal Settlement.” Before Sebelius, the consensus understanding was that New Deal and Warren Court cases had established a constitutional regime of plenary and virtually unlimited national legislative power under the Commerce Clause (which might be subject to narrow and limited carve outs protective of the core of state sovereignty).After Sebelius, the constitutional gestalt is unsettled. In Sebelius, five justices of the Supreme Court endorsed a view of the commerce clause that is inconsistent with the constitutional gestalt associated with the New Deal Settlement. A fissure has opened in constitutional politics, creating space for an alternative constitutional gestalt. The core idea of the alternative view is that the New Deal Settlement did not create plenary and virtually unlimited legislative power; instead, proponents of the New Federalism argue that New Deal and Warren Court cases establish only the constitutionality of particular federal programs and specific zones of federal power. The most important indirect effect of Sebelius is that it enables constitutional contestation over the content of the constitutional gestalt and the meaning of the New Deal Settlement.This is a revised draft and replaces the draft of October 16, 2012, which is now on file with the author.
The Real Effects of the Euro: Evidence from Corporate Investments

We study how the adoption of the euro as the common currency in Europe has affected firms' investment rates. Using corporate data from the eleven countries that adopted the euro in January 1999, as well as from a control sample of five other European countries, our paper shows that: (i) the euro has increased investments for firms from countries that previously had weak currencies, (ii) the euro has had a positive impact on financially constrained firms' investments, and (iii) the euro has decreased investments for financially unconstrained firms from countries that previously had strong currencies.
Incentive Contracts, Market Risk, and Cost of Capital

Should incentive contracts expose the agent to market-wide shocks? Counterintuitively, I show that market risk cannot be filtered out from the compensation and managed independently by the agent. Under plausible risk preferences, the principal should offer a contract in which performance pay increases following a favorable market shock. In the aggregate, however, the effect of market risk on individual contracts diversifies away and the agency problem does not directly affect the cost of capital. The analysis suggests caution in interpreting changes in cost of capital in terms of the stewardship role of accounting information.
Journalists and the Stock Market

We use exogenous scheduling of Wall Street Journal columnists to identify a causal relation between financial reporting and stock market performance. To measure the media's unconditional effect, we add columnist fixed effects to a daily regression of excess Dow Jones Industrial Average returns. Relative to standard control variables, these fixed effects increase the R-super-2 by about 35%, indicating each columnist's average persistent "bullishness" or "bearishness." To measure the media's conditional effect, we interact columnist fixed effects with lagged returns. This increases explanatory power by yet another one-third, and identifies amplification or attenuation of prevailing sentiment as a tool used by financial journalists. The Author 2012. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oup.com., Oxford University Press.
Double limit analysis of optimal personal income taxation

A double limit analysis is developed to determine the optimal personal income tax based on the principle that moving a marginal dollar of tax revenue from one income interval to another should not raise social welfare. The first order condition can be differentiated with respect to an interval boundary to yield a second order differential equation for the optimal income tax that can be solved to yield specific solutions. Application of an optimal income tax to a broader income range in general reduces tax revenues and requires greater subsidies at low-income levels. Optimal solutions are provided assuming Cobb-Douglas or Constant Elasticity of Substitution (CES) utility and lognormal or Pareto productivity distributions.
A Real Options Model of Real Estate Development with Entitlement Risk

Traditional real option theory model real estate development as a solely investor-controlled process. In reality, entitlement process is highly risky and out of control of the investors. Moreover, the real estate market in the U.S. has shown a trend towards more stringent entitlement regulation. We model entitlement process as a separate stage in development process where the investor has little control over the entitlement cost. In particular, we model the entitlement stage as a European style real option with a stochastic entitlement cost. We solved the model analytically. Our result implies interesting interaction between the entitlement risk and the developer’s investment decision.
Why Copperweld Was Actually Kind of Dumb: Sound, Fury and the Once and Still Missing Antitrust Theory of the Firm

Since even before Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984), it has been thought that antitrust needs some "theory of the firm" to inform its application of a "single-entity" defense in Sherman Act section 1 litigation. Not only is that sense mistaken, it is emblematic of the deep misdirection of contemporary antitrust. It shows just how far antitrust has forgotten that it is a law, a practical tool to implement policy choices made through our system of government. Much too much of the time, it seems to fancy itself rather an abstract policy seminar to be dabbled in by the federal bench and its academic support staff. The point to be made specifically in this paper is one small part of that argument. Copperweld has generally been thought of as a watershed, a decision so obviously right and so reasonable in its analysis that it is not thought about very critically. But if it was so wise, one might have thought that single-entity decisions in the lower courts would become more principled and more coherently linked to clearly stated goals than they had been before. At the very least, they should seem different than the pre-Copperweld cases. And yet, they do not. Single-entity cases before and after Copperweld are largely indistinguishable, setting out the same ad hoc, subjective, and usually pretty shallow reasoning, with no obvious connection drawn to specified goals. The paper takes this fact as evidence that engaging in this sort of complex institutional analysis at such an early stage -- often enough at some point of early summary disposal, with little or no discovery -- is unwise.
Scholars and Security

Michael Mosser's essay presents a strong brief for a constructive relationship between the academy and military and security institutions. Unless scholars join the security debate they won't have much of a voice in it. Much of the concern in the academy about being used or corrupted by the military is based on a misconception. Let's call it by its name: a prejudice. Too many academics think that senior military people are hawks, and not particularly smart or thoughtful ones. But this stereotype more often fits the civilians in the national security institutions than the military. And it's exactly those civilians who will dominate the idea market of national security and international order if academics withdraw from it.
War, peace, and the size of countries

This paper studies the relationship between international con‡ict and the size distribution of countries in a model in which both peaceful bargaining and non-peaceful confrontations are possible. We show how the size distribution of countries depends on the likelihood, bene…ts and costs of con‡ict and war. We also study the role of international law and show how better de…ned international ’property rights’ may lead to country breakup and more numerous local con‡icts.
Monetary policy, bank leverage, and financial stability

Abstract This paper shows that with limited liability banks lever up excessively to finance new loans. Lower monetary policy rates can worsen or reduce these incentives depending on the size of the shock when equity financing is ruled out. When this constrained is relaxed but the bank faces costly dividend adjustment, lower monetary policy rates always worsen risk-taking incentives and the effect is persistent. The reason is that costly dividend adjustment lowers the opportunity cost of lending. In this model, capital requirements are closer to the source of the distortion and thus work better than loan-to-value caps in reducing excessive risk taking.
On the Likely Magnitude, Extent, and Duration of an Iraq-UN War:

Results from this study conducted in November 1990 at the Long-Range Analysis of War Project, University of Colorado, predict that the magnitude μ of a war between Iraq and the United Nations collective security coalition will be between 5 (hundred thousand combatant fatalities) and 6- (low million). War magnitude is defined as the common logarithm of total combatant fatalities. This falsifiable forecast (“an event 5 ≤μ≤ 6- will occur”) was derived using mathematical models for fatalities, extent, and duration, estimated on historical populations of Correlates of War Project data on interstate wars involving great powers. The forecast will be wrong if and only if 5 > μ > 6-. However, failure is scientifically unlikely in this case, because the models are parsimonious, they show strong empirical fit, and extensive tests prove that they are largely insensitive to historical evolution - unlike Lanchester-type models.
Escaping from the Standard Story: Why the Conventional Wisdom on Prison Growth is Wrong, and Where We Can Go from Here

Whether as a result of low crime rates, the financial pressures of the 2008 credit crunch, or other factors, policymakers on both sides of the aisle are trying to rein or even reduce the US incarceration rate after an unprecedented forty-year expansion. Unfortunately, reforms are hampered by the fact that we do not have a solid empirical understanding of what caused the explosion in the first place. In fact, the “Standard Story” of prison growth generally overemphasizes less important factors and overlooks more important ones. This essay thus does two things. First, it points out the flaws in five key aspects of the Standard Story: its argument that the War on Drugs is of central importance, that trends in violent and property crimes are relatively unimportant, that longer sentence lengths drive growth, that the “criminal justice system” is a fairly coherent entity advancing specific goals, and that the “politics of crime control” is uniquely dysfunctional. And second, it argues that an increased willingness of the part of prosecutors to file charges—a causal factor almost completely overlooked by the Standard Story—is likely the most important force behind prison growth, at least for the past two decades.
Do Hostile Takeovers Stifle Innovation? Evidence from Antitakeover Legislation and Corporate Patenting

I examine how strong corporate governance proxied by the threat of hostile takeovers affects innovation and firm value. I find a significant decline in the number of patents and citations per patent for firms incorporated in states that pass antitakeover laws relative to firms incorporated in states that do not. Most of the impact of antitakeover laws on innovation occurs 2 or more years after they are passed, indicating a causal effect. The negative effect of antitakeover laws is mitigated by the presence of alternative governance mechanisms such as large shareholders, pension fund ownership, leverage, and product market competition.
Uncovering audience preferences for concert features from single-ticket sales with a factor-analytic random-coefficients model

Abstract To better plan their programs, producers of performing arts events require forecasting models that relate ticket sales to the multiple features of a program. The framework we develop, test and implement uncovers audience preferences for the features of an event program from single-ticket sales while accounting for interactions among program features and for preference heterogeneity across markets. We develop a factor-analytic random-coefficients model that overcomes four major methodological challenges. First, the historical data available from each market is limited, preventing the estimation of models at the market level and requiring some form of shrinkage estimator that also takes into account the diversity in preferences across markets as well as the fact that preferences for the many (26 in our application) program features are correlated across markets, requiring the estimation of a large covariance matrix for these preferences across markets. Our proposed factor-analytic regression formulation parsimoniously captures the principal components of the correlated preferences and provides shrinkage estimates at the individual market level. The second challenge we face is the fact that orchestras differ on how they sell season subscriptions, leading to substantial unobserved effects on ticket sales across orchestras; an added benefit of our random-coefficients approach is that it incorporates a random effect that captures any shift in the dependent variable caused by unobservable factors across all events in each individual market, such as the unobservable effect of season subscriptions on single-ticket sales. The third methodological challenge is that program features are likely to interact requiring the estimation of a large set of pair-wise interactions. We solve this problem by mapping the interactions on a reduced space, arriving at a more parsimonious model formulation. The fourth methodological challenge relates to implementation of the model results beyond the relatively small sample of markets for which historical data were available. To overcome this limitation, we demonstrate how our model can be applied to markets not included in our sample, first using only managerial insight regarding the similarity between the focal market and the ones in our sample and by updating this subjective prior as ticket sales data become available.
The Human Capital Stock: A Generalized Approach

This paper presents a new framework for human capital measurement. The generalized framework can (i) substantially amplify the role of human capital in accounting for cross-country income dierences and (ii) reconcile the existing con‡ict between regression and accounting evidence in assessing the wealth and poverty of nations. One natural interpretation emphasizes dierences across economies in the acquisition of advanced knowledge by skilled workers.
Can Candidates Activate or Deactivate the Economic Vote? Evidence from Two Mexican Elections

Do electoral campaigns affect the strength of the economic vote? Against the conventional expectation that candidates have little influence over when and to what extent economic voting occurs, I argue that political communications systematically condition voters’ willingness to hold candidates responsible for past economic performance. I test this priming-based approach against extant economic voting theory using data from Mexico’s 2000 and 2006 presidential elections, in which economic messages were absent and dominant respectively. The results show that candidates, by choosing to emphasize or deemphasize economic issues in their televised campaign ads, can activate and even deactivate economic considerations in the minds of voters. By bringing the priming approach to economic voting theory, I highlight the importance of communication strategy and demonstrate the power of campaigns to overcome structural conditions thought to hamstring electoral candidates
Constitutional aspects of physician-assisted suicide after Lee v. Oregon.

Dying is personal. And it is profound. For many, the thought of an ignoble end, steeped in decay, is abhorrent. A quiet, proud death, bodily integrity intact, is a matter of extreme consequence. —Justice William Brennan Two recent circuit court decisions have reinvigorated the debate over the constitutional, practical and ethical ramifications of physician-assisted suicide. In Compassion in Dying v. Washington, the Ninth Circuit Court of Appeals held that a liberty interest exists in choosing the time and manner of one’s death. The court found this right to outweigh all asserted state interests, and concluded that, with respect to competent, terminally ill adults, Washington’s prohibition of assisted suicide violates the Due Process Clause of the U.S. Constitution. The ruling effectively strikes down laws against assisted suicide in all of the states in the Ninth Circuit. In April 1996, in Quill v. Vacco, the Second Circuit Court of Appeals held that New York’s prohibition of assisted suicide violates the U.S. Constitution’s Equal Protection Clause.
Bringing to Heel the Elephants in the Economy: The Case for Ending “Too Big To Fail”

Financial institutions labeled Too Big To Fail (TBTF) are those whose insolvency could shake the foundations of our economy. This paper presents a history of the government bailout doctrine which has become a blank check for economic giants. Eight recent examples of the doctrine’s invocation are compared with three recent examples of government refusal to follow TBTF. Nineteen financial conglomerates that recently participated in “stress testing” can easily be identified as eligible for TBTF. Recognizing the cost of TBTF, reviewing the FDICIA fix in federal legislation that did not fix the problem of TBTF, analyzing the role of systemic risk and economic bubbles in TBTF, reconsidering the desirability of financial industry consolidation, and recommending steps to address the moral hazard issues arising from market expectations regarding TBTF lead to the conclusion that with vision and resolve, Congress can end TBTF and protect our financial system from key mistakes of the past. This article makes the case for ending TBTF bailouts by reducing the size and interconnectedness of large financial conglomerates. Potential mechanisms to accomplish that end include: (1) Imposing size caps that limit continued expansion of financial conglomerates through internal growth and acquisitions; (2) Ending government-assisted acquisitions that allow the largest institutions to grow even larger – at public expense; (3) Reinstating true fire-walls between banking and commerce; (4) Returning to meaningful anti-trust enforcement; (5) Immediately initiating reform measures such as increased capital for large institutions, subordinated debt requirements that enhance market discipline, enhanced systemic risk monitoring and regulation, and better advance planning for liquidating large complex financial institutions; and (6) As a longer term measure, commissioning a carefully researched report on how to most effectively divide the existing conglomerates into manageable component parts that will no longer be Too Big To Fail. Ending TBTF will be no easy task. Yet, the costs of doing nothing to address the problem have proven to be devastating.
Privacy and the New Virtualism

First generation cyberlaw scholars were deeply influenced by the uniqueness of cyberspace, and believed its technology and scope meant it could not be controlled by any government. Few still ascribe to this utopian vision. However, there is now a growing body of second generation cyberlaw scholarship that speaks not only to the differential character of cyberspace, but also analyzes legal norms within virtual spaces while drawing connections to our experience in real space. I call this the New Virtualism. Situated within this emerging scholarship, this article offers a new approach to privacy in cyberspace by drawing on what Orin Kerr calls the internalist or virtualist perspective. The virtualist approach to privacy in cyberspace shifts the focus away from the concept of privacy itself, which has been over theorized and categorized by privacy theorists, to analyzing and theorizing persons in cyberspace and how they ought to be understood. It focuses on virtual persons and the distinct privacy concerns they raise, and reconnects ideas about informational and data privacy to traditional normative justifications for privacy based on personhood. Adopting a virtualist approach to privacy in cyberspace has conceptual, normative, constitutional, and public policy benefits.
Taxing Investors on a Mark-to-Market Basis

Recognizing that mark-to-market accounting, with its close approximation of Haig-Simons income, represents a better measure of a taxpayer’s income than realization accounting - the historical basis for the federal income tax - Congress enacted section 475(f) of the Internal Revenue Code. This section permits certain taxpayers to elect out of the realization accounting regime and instead mark their investments to market. Congress limited the availability of this election to taxpayers who were engaged in the trade or business of trading securities. Although the election must be made early in a taxpayer’s taxable year, the test for determining whether a taxpayer is engaged in the trade or business of trading securities during a taxable year can only be performed after the year ends. As the rules for making a mark-to-market election are currently written, in order to determine whether she qualifies to make the election, a taxpayer must know no later than April 15 what the extent of her trading activities will be for the rest of the year, as well as for all future years. There is no compelling tax policy reason to limit the availability of the mark-to-market election. Rather, the superiority of mark-to-market accounting over the current realization regime supports a policy of allowing (and encouraging) taxpayers to determine their tax liability on a mark-to-market basis and outweighs any objections to liberalizing the election’s availability. Alternatively, in the event that Congress decides that denying non-traders the ability to elect mark-to-market treatment is justified, Congress or the Treasury Department should adopt a proposed safe-harbor provision that approximates the criteria courts consider when determining whether a taxpayer is a trader, but that, unlike the current trade-or-business test, can be applied in advance of the taxable year. Although providing a safe harbor solely to traders is, from a policy perspective, worse than making the mark-to-market election available to all taxpayers, it is nonetheless better than the current unworkable criteria because it provides certainty to taxpayers at the time they must make the election.
E-Elections: Law in Asia & Online Political Activities

The Internet has had a profound influence on our global society. Widespread and affordable access to the Internet has facilitated a proliferation of “netizens” around the world. The Internet is accessible through a broad range of conduits including desktop computers, laptops, mobile phones, smart phones, televisions, and even game consoles. Easy access to the Internet and World Wide Web has generated a wide-sweeping societal transformation across the globe. In fact, the Internet has altered the way people exchange information, communicate, socially network, transact business, and seek entertainment. Electronic mail, texting, instant messaging, and online chatting have become staples in the realm of societal interaction. In addition, technological innovation increasingly focuses on new and useful applications of the Internet and World Wide Web. The impact of online interaction, however, extends beyond social functions. Increased reliance upon the Internet has given rise to a plethora of legal and ethical issues in both domestic and international contexts as well. Legal issues in the online world involve commercial relationships, personal rights, criminal acts, and nearly every area of the law. This essay focuses on one particular important legal issue involving the Internet — namely, the clash between online electioneering restrictions and freedom of expression in select countries in Asia, particularly in China, Taiwan, Singapore, South Korea, and Japan. It also suggests that the democratic countries of South Korea and Japan need to relax their strict restrictions regarding online campaigning activities and fully recognize the importance of freedom of expression.This essay is an edited version of a speech given by Professor Matthew J. Wilson at the Second East Asian Law and Society Conference, Dialects and Dialectics: East Asian Dialogues in Law and Society, at Yonsei University in Seoul, South Korea on October 1, 2011.
Restoring trust after fraud: Does corporate governance matter?

In this study, I examine the association between the credibility of the financial reporting system and the quality of governance mechanisms. I use a sample of 87 firms identified by the SEC as fraudulently manipulating their financial statements. Consistent with prior research, results indicate that fraud firms have poor governance relative to a control sample in the year prior to fraud detection. Specifically, fraud firms have fewer numbers and percentages of outside board members, fewer audit committee meetings, fewer financial experts on the audit committee, a smaller percentage of Big 4 auditing firms, and a higher percentage of CEOs who are also chairmen of the board of directors. However, the results indicate that fraud firms take actions to improve their governance, and three years after fraud detection these firms have governance characteristics similar to the control firms in terms of the numbers and percentages of outside members on the board, but exceed the control firms in the number of audit ...
Estimating dynamic macroeconomic models: how informative are the data?

Summary Central banks have long used dynamic stochastic general equilibrium models, which are typically estimated by using Bayesian techniques, to inform key policy decisions. This paper offers an empirical strategy that quantifies the information content of the data relative to that of the prior distribution. Using an off-the-shelf dynamic stochastic general equilibrium model applied to quarterly euro area data from 1970, quarter 3, to 2009, quarter 4, we show how Monte Carlo simulations can reveal parameters for which the model's structure obscures identification. By integrating out components of the likelihood function and conducting a Bayesian sensitivity analysis, we uncover parameters that are weakly informed by the data. The weak identification of some key structural parameters in our comparatively simple model should raise a red flag to researchers trying to draw valid inferences from, and to base policy on, complex large-scale models featuring many parameters.
The scope and governance of international R&D alliances

Participants in research and development alliances face a difficult challenge: how to maintain sufficiently open knowledge exchange to achieve alliance objectives while controlling knowledge flows to avoid unintended leakage of valuable technology. Prior research suggests that choosing an appropriate organizational form or governance structure is an important mechanism in achieving a balance between these potentially competing concerns. This does not exhaust the set of possible mechanisms available to alliance partners, however. In this paper we explore an alternative response to hazards of R&D cooperation: reduction of the ‘scope’ of the alliance. We argue that when partner firms are direct competitors in end product or strategic resource markets even ‘protective’ governance structures such as equity joint ventures may provide insufficient protection to induce extensive knowledge sharing among alliance participants. Rather than abandoning potential gains from cooperation altogether in these circumstances, partners choose to limit the scope of alliance activities to those that can be successfully completed with limited (and carefully regulated) knowledge sharing. Our arguments are supported by empirical analysis of a sample of international R&D alliances involving electronics and telecommunications equipment companies. Copyright © 2004 John Wiley & Sons, Ltd.
A Rationale for the Differential Regulatory Treatment of Imports When Invasive Species are a Potential Problem

The maritime trade related risks from invasive species in a nation depend, inter alia, on the countries from which goods are being imported. In the United States, the USDA's APHIS routinely uses inspections to screen arriving ships at seaports for invasive species. Given this state of affairs, we first use queuing theory to construct a simple model of maritime trade and seaport inspections with one importing nation (Home) and two exporting nations. We then derive a ratio criterion that specifies a condition under which it makes sense for a seaport manager in Home to grant favorable regulatory treatment to the imports from one or the other exporting country. This country of origin rule depends on the mean time it takes to inspect ships from the two exporting countries and on the dollar value of the imports from these two countries.JEL classification: F18, Q56, Q58
The effects of statistically dependent values on equilibrium strategies of bilateral k-double auctions

Abstract This paper describes how introducing statistical dependency among trader values changes the equilibrium bidding strategies in bilateral k-double auctions and uses the special case of affiliation to illustrate the range of equilibrium responses to a change in the value distribution. Consistent with standard intuition, a change from independent to strictly affiliated valuations can result in high-value buyers and low-value sellers bidding closer to their actual values while low-value buyers and high-value sellers distort their bids farther from their true values. However, there also exist equilibria for which either type of trader responds to a change in the distribution of values in the opposite direction. Whether a given trader bids more aggressively or less aggressively can also be non-monotonic with respect to the traderʼs value.
Astrophysical evidence for the non-Hermitian but PT-symmetric Hamiltonian of conformal gravity

In this review we discuss the connection between two seemingly disparate topics, macroscopic gravity on astrophysical scales and Hamiltonians that are not Hermitian but PT symmetric on microscopic ones. In particular we show that the quantum-mechanical unitarity problem of the fourth-order derivative conformal gravity theory is resolved by recognizing that the scalar product appropriate to the theory is not the Dirac norm associated with a Hermitian Hamiltonian but is instead the norm associated with a non-Hermitian but PT-symmetric Hamiltonian. Moreover, the fourth-order theory Hamiltonian is not only not Hermitian, it is not even diagonalizable, being of Jordan-block form. With PT symmetry we establish that conformal gravity is consistent at the quantum-mechanical level. In consequence, we can apply the theory to data, to find that the theory is capable of naturally accounting for the systematics of the rotation curves of a large and varied sample of 138 spiral galaxies without any need for dark matter. The success of the fits provides evidence for the relevance of non-diagonalizable but PT-symmetric Hamiltonians to physics.
STEADY-STATE GROWTH AND DISTRIBUTION WITH AN ENDOGENOUS DIRECTION OF TECHNICAL CHANGE

A model of labor-constrained accumulation and economically directed technical progress has a stable steady state at which the class distribution of income is invariant with respect to population and saving parameters yet sensitive to workers’ stances in wage bargaining and to the tax and transfer policies of a redistributive state.
Identification and Inference in Nonlinear Difference-in-Differences Models

This paper develops an alternative approach to the widely used Difference-In-Difference (DID) method for evaluating the effects of policy changes. In contrast to the standard approach, we introduce a nonlinear model that permits changes over time in the effect of unobservables (e.g., there may be a time trend in the level of wages as well as the returns to skill in the labor market). Further, our assumptions are independent of the scaling of the outcome. Our approach provides an estimate of the entire counterfactual distribution of outcomes that would have been experienced by the treatment group in the absence of the treatment, and likewise for the untreated group in the presence of the treatment. Thus, it enables the evaluation of policy interventions according to criteria such as a mean-variance tradeoff. We provide conditions under which the model is nonparametrically identified and propose an estimator. We consider extensions to allow for covariates and discrete dependent variables. We also analyze inference, showing that our estimator is root-N consistent and asymptotically normal. Finally, we consider an application.
Using MD&A to Improve Earnings Forecasts

In this article, we combine narrative disclosures in the Management Discussion and Analysis (MD&A) Section of 10-K reports with financial variables to generate explicit firm-level forecasts of 1-ye...
"We'll Know It When We Can't Hear It": A Call for a Non-Pornography Test Approach to Recognizing Non-Public Information

Supreme Court Justice Potter Stewart once authored a concurring opinion in which he explained that, while he would not attempt to delineate pornographic materials, he knew pornography when he saw it. That test, which is said to have invited sarcasm among the clerks of the highest bench, nonetheless announced a threshold analysis for obscenity cases that many find appealing to this day. Likewise, in the field of insider trading, the courts and others have embraced such pragmatism, namely, effectively transforming the test for finding insider trading (trading while aware of “material” and “nonpublic” information) to a weighing of such considerations as whether the defendant had access to insiders, betrayed a confidence, and/or captured a profit. Such a pornography test approach—while satisfying on some level of expedience—fails to provide businesses with certainty, the law with clarity, the market with confidence, and the layman with guidance. Meanwhile, the definitional term non-public is reduced to a shibboleth,
Optimal Lojasiewicz-Simon inequalities and Morse-Bott Yang-Mills energy functions

For any compact Lie group $G$ and closed, smooth Riemannian manifold $(X,g)$ of dimension $d\geq 2$, we extend a result due to Uhlenbeck (1985) that gives existence of a flat connection on a principal $G$-bundle over $X$ supporting a connection with $L^p$-small curvature, when $p>d/2$, to the case of a connection with $L^{d/2}$-small curvature. We prove an optimal Lojasiewicz-Simon gradient inequality for abstract Morse-Bott functions on Banach manifolds, generalizing an earlier result due to the author and Maridakis in arXiv:1510.03817. We apply this result to prove the optimal Lojasiewicz-Simon gradient inequality for the self-dual Yang-Mills energy function near regular anti-self-dual connections over closed Riemannian four-manifolds and for the full Yang-Mills energy function over closed Riemannian manifolds of dimension $d \geq 2$, when known to be Morse-Bott at a given Yang-Mills connection. We also prove the optimal Lojasiewicz-Simon gradient inequality by direct analysis near a given flat connection that is a regular point of the curvature map. We also prove the Morse-Bott property for irreducible Yang-Mills $U(n)$ connections over Riemann surfaces and hence a new proof of the optimal Lojasiewicz-Simon gradient inequality for such critical points.
Bearing Witness to Economic Injustices of Undocumented Immigrant Families: A New Class of 'Undeserving' Working Poor

Undocumented immigrants have little or no recourse for economic injustices they suffer through the U.S. tax system. Despite America's historically strong opposition to taxation without representation, undocumented immigrants have not enjoyed the right to vote on any local, state or federal tax for almost eighty years, except in rare and unusual cases. Furthermore, because of their precarious immigration and economic status undocumented immigrants are vulnerable to deportation and exploitation and are chilled from protesting any injustice. As a result they suffer economic injustices daily, which translate into lower prices for countless goods and services that are an everyday part of privileged life in America. The burden of speaking out loudly and clearly about these injustices therefore is ours. This Essay describes two of too many economic injustices suffered by undocumented immigrant families including their high effective tax rate because they do not qualify for the poorly targeted EITC (even if every member of the family is legally working and present in the United States) and the burden of Social Security and Medicare taxes without the right to receive benefits.
Statutory Foreign Affairs Preemption

This paper examines the problem of statutory foreign affairs preemption. There are two related interpretive issues. One concerns the proper interpretive default presumption. Should preemption analysis indulge a presumption in favor of the federal government's strong national interest in conducting foreign affairs? Should it instead be biased to protect traditional state prerogatives? Or should no presumption attach in either direction? I argue that neither an interpretive canon favoring federal foreign affairs interests, nor one favoring state interests, is warranted in this context. Considered separately, each canon rests on implausible institutional and empirical assumptions. When a foreign relations statute touches on traditional state prerogatives, both canons are implicated, and both lose coherence. The prudent course is for courts to apply "ordinary" principles of preemption without any presumption in favor of state or federal law, even when they think the statute concerns foreign affairs. Of course, courts have an array of "ordinary" preemption doctrines at their disposal even after they have resolved the default presumption issue. The second issue, therefore, is: Which preemption doctrine(s) should they apply in the foreign relations context? When a case involves a state law that appears to implicate foreign relations, options for preemption include express preemption, conflict preemption, obstacle preemption, field preemption, dormant commerce clause preemption, dormant foreign affairs preemption, and the federal common law of foreign relations. These doctrines can be compared along two dimensions: (a) the degree to which the political branches have spoken to the preemption issue, and (b) the extent to which preemption doctrines require courts to engage in an independent assessment of the state law's effect on U.S. foreign relations. I argue that, for reasons of institutional competence and political process, and because of the waning of the domestic-foreign affairs distinction, courts should engage in minimalist statutory foreign affairs preemption. They should eschew independent judicial foreign policy analysis, and preempt state law only on the basis of policy choices traceable to the political branches in enacted law. This, I argue in the last Section of the paper, is precisely what the Supreme Court did in its recent decision in Crosby v. National Foreign Trade Council, 120 S Ct 2298 (2000).
Option contracting in the California water market

Temporary water transfers, as achievable under option contracts, capture gains from trade that would go unrealized if only permanent transfers of water rights were possible. This paper develops a bilateral option contracting model for water which includes the possibility of conveyance losses and random delivery. Seller-optimal and socially optimal option contracts are characterized in terms of relevant base and strike prices, as well as contract volumes, from an ex-ante and an ex-post point of view. Lastly, welfare gains are estimated, and actual contract prices in California are compared to model-predicted prices.
The Cult of Constitutionalism

Constitutionalism compels and constrains all dimensions of our everyday lives in ways large and small that we often do not fully appreciate—perhaps because constitutions take many forms that we do not generally associate with constitutionalism. From the arts, sports, trade, entertainment, politics, and war, constitutionalism is both the point of departure and the port of call. In this Article, I explore whether and how we might distinguish among these seemingly infinite types of constitutions. First, I critique conventional distinctions separating public from private constitutions, and international from national and local constitutions. Then, I build on that deconstructive exercise to propose a theory of constitutionalism that distinguishes between constitutional basics and constitutional virtues. I subsequently undertake a comparative inquiry, applying this new model of constitutionalism to ask on what basis we might distinguish between a constitution of a nation from a constitution of a private organization.
The Association between Auditor Choice, Ownership Retained, and Earnings Disclosure by Firms Making Initial Public Offerings*

Using a system of three simultaneous equations, we test the predictions of Datar, Feltham, and Hughes 1991 and Hughes 1986 between auditor choice, earnings disclosures, and retained ownership in U.S. firms making initial public offerings of securities. Using a sample of initial public offerings between 1990 and 1997, we find that the demand for high-quality auditors increases with firm risk. Additionally, we find that auditor choice, earnings disclosure, and risk are determinants of retained ownership, which is consistent with the predictions of Datar et al. and Hughes that auditor choice and direct disclosure are substitute signals for ownership retention. Further, our results suggest that the signals chosen (i.e., retained ownership, auditor choice, and disclosure) are related through their cost structures and are chosen jointly to minimize the overall cost to the entrepreneur.