cssi/SciSciGPT-SciSciNet huggingface dataset:
Power, Exit Costs, and Renegotiation in International Law

Scholars have long understood that the instability of power has ramifications for compliance with international law. Scholars have not, however, focused on how states’ expectations about shifting power affect the initial design of international agreements. In this paper, I integrate shifting power into an analysis of the initial design of both the formal and substantive aspects of agreements. I argue that a state expecting to become more powerful over time incurs an opportunity cost by agreeing to formal provisions that raise the cost of exiting an agreement. Exit costs—which promote the stability of legal rules—have distributional implications. Before joining an agreement, an “ascendant” state will therefore often require either a greater share of the benefits from cooperation, or a reduction in exit costs through the use of formal provisions such as withdrawal clauses, sunset clauses, and provisions affecting the legality of an agreement. I analyze how states determine which concessions to make in order to reach agreement with an ascendant state. This analysis helps explain a number of puzzles in the international legal literature, such as why states with poor compliance rates are sometimes observed to join international agreements at the same or higher rates than states with good compliance rates; why weak agreements often evolve into more constraining agreements; and why multilateral agreements are more likely to have low exit costs than bilateral agreements.
‘Insulting’ first offers: Why lawyers make them, and how to respond

Remember that shocked-and-appalled feeling of disbelief? Dwight Golann, of Boston, explains why insulting first offers are a pervasive part of settlement practice— and then tells us when and how we should use them.
Electronic Trace Data and Legal Outcomes: The Effect of Electronic Medical Records on Malpractice Claim Resolution Time

Information systems generate copious trace data about what individuals do and when they do it. Trace data may affect the resolution of lawsuits by, for example, changing the time needed for legal d...
Blockchain without Waste: Proof-of-Stake

Permissionless blockchains require a protocol to generate consensus. Many prominent permissionless blockchains employ Proof-of-Work (PoW) for that purpose, but PoW possesses significant shortcomings. Various alternatives have been proposed. This paper provides the first formal economic model of the most famous alternative, Proof-of-Stake (PoS), and establishes conditions under which PoS generates consensus. A sufficiently modest reward schedule not only implies the existence of an equilibrium in which consensus obtains as soon as possible but also precludes a persistent forking equilibrium. The latter result arises because PoS, unlike PoW, requires that validators are also stakeholders.
A Bridle, a Prod, and a Big Stick: An Evaluation of Class Actions, Shareholder Proposals, and the Ultra Vires Doctrine as Methods for Controlling Corporate Behavior

Follow this and additional works at: http://lawdigitalcommons.bc.edu/lsfp Part of the Administrative Law Commons, Agency Commons, Banking and Finance Commons, Commercial Law Commons, Contracts Commons, Corporation and Enterprise Law Commons, Dispute Resolution and Arbitration Commons, Economics Commons, Ethics and Professional Responsibility Commons, Government Contracts Commons, Labor and Employment Law Commons, Law and Economics Commons, Law and Society Commons, Legal Writing and Research Commons, Legislation Commons, Medical Jurisprudence Commons, Organizations Commons, Partnerships Commons, Politics Commons, and the Social Welfare Law Commons
Turnover: Liquidity or Uncertainty?

I show that turnover is unrelated to several alternative measures of liquidity risk and in most cases negatively, not positively, related to liquidity. Consequently, neither liquidity nor liquidity risk explains why higher turnover predicts lower future returns. I find that the aggregate volatility risk factor explains why higher turnover predicts lower future returns. This paper shows that the negative relation between turnover and future returns is stronger for firms with option-like equity, and this regularity is also explained by the aggregate volatility risk factor. This paper was accepted by Wei Jiang, finance.
Testing for the Economic Impact of the U.S. Constitution: Purchasing Power Parity Across the Colonies versus Across the States, 1748–1811

The U.S. Constitution removed real and monetary trade barriers between the states. By contrast, these states when they were British colonies exercised considerable real and monetary sovereignty over their borders. Purchasing power parity is used to measure how much economic integration between the states was gained in the decades after the Constitution's adoption compared with what existed among the same locations during the late colonial period. Using this measure, the short-run effect of the Constitution on economic integration was minimal. This may have been because the Constitution did not eliminate all the institutional barriers to interstate trade before 1812. “No idea is more firmly planted in American history than the idea that one of the most difficult problems during the Confederation was that of barriers to trade between state and state. There had been such barriers in colonial times …”Merrill Jensen1“The ‘secret’ of American economic growth, English legal scholar Sir Henry Maine wrote in 1886, lay in ‘the [constitutional] prohibition against levying duties on commodities passing from State to State … . It secures to the producer the command of a free market over an enormous territory of vast natural wealth …’”Charles W. McCurdy2
A Fourth Amendment Theory for Arrestee DNA and Other Biometric Databases

Routine DNA sampling following a custodial arrest process is now the norm in many jurisdictions, but is it consistent with the Fourth Amendment? The few courts that have addressed the question have disagreed on the answer, but all of them seem to agree on two points: (1) the reasonableness of the practice turns on a direct form of balancing of individual and governmental interests; and (2) individuals who are convicted — and even those who are merely arrested — have a greatly diminished expectation of privacy in their identities. This Article disputes these propositions and offers an improved framework for analyzing the constitutionality of databases of biometric data. It demonstrates that the opinions on DNA collection before conviction have lost sight of the foundations of balancing tests in Fourth Amendment analysis. It argues that balancing is acceptable only for “special needs” or “administrative search” cases, for defining new exceptions to the warrant requirement of the Fourth Amendment, or for applying fact-intensive standards such as probable cause, reasonable suspicion, or excessive force. The Article examines how DNA collection before conviction might be brought under the traditional special-needs doctrine and how it might fit within a new, but coherent exception for certain forms of biometric data. This framework permits the courts to analyze DNA databases without diluting the protections guaranteed by the Fourth Amendment, and it provides a sound rationale for the current law on arrestee fingerprinting.
U.S. Food Aid Reform through Alternative Dispute Resolution

The United States is the single largest provider of international food aid, yet maintains some of the most controversial food aid policies. Public and political critique of these policies — primarily concerning fiscal and humanitarian efficiency — has been strong since early 2005; however, these critics and the movements for reform they have spurred have been largely unsuccessful. This Note examines the recent pushes for U.S. food aid reform, beginning with those of the Bush administration, and continuing up to the recent reforms proposed in President Obama’s FY2014 budget proposal, and the Food Aid Reform Act (H.R. 1938). This Note aims specifically to highlight the key stakeholders on each side of the reform debate: the bipartisan alliances vying for reform, and the agricultural, maritime, and international development industries opposing reform. Through an examination of the divergent stakeholder interests and goals, as well as of the tactics used to achieve reform, this Note concludes that the success of reform could have been improved with the use of key alternative dispute resolution (ADR) tactics; namely, multi-stakeholder negotiations moderated by a facilitative mediator.
Liberalized Portfolio Capital Inflows in Emerging Markets: Sterilization, Expectations, and the Incompleteness of Interest Rate Convergence

This paper examines interest rates in nine Latin American and East Asian countries during the period 1987–1994. The goal is to discover why interest rates remained high, failing to converge to US levels, despite capital market liberalization and a resurgence of portfolio capital inflows during the second half of this sample period. Related questions are whether portfolio capital flows are strong enough to equalize expected returns between these ‘emerging markets’ and the US, and whether there is any scope left for the authorities to sterilize inflows. The conclusion of the study is that the largest single component of the gap in interest rates is expectations of depreciation of the local currencies against the dollar. The key to the analysis is the use of survey data on exchange rate forecasts by market participants. Indicative of integrated financial markets, we also find a big effect of US interest rates on local interest rates, and a highly significant degree of capital flow offset to monetary policy.
Four Land Use Vignettes from Unzoned Houston

Houston has been called "the hair shirt of city planners." The profession's discomfort stems from the city's repeated rejection of land use zoning – the essential tool of their craft. The unrepentant city touts itself as a model of enlightened differentness: a public-private combination that provides a better formula for managing growth in a modern city. But beneath that Chamber of Commerce gloss, Houston's land use is a far cry from free enterprise in action.What this article calls "The Houston Way" combines: (1) An adamant refusal to use government power prospectively to guide growth and protect existing investment; with (2) A willingness to respond to specific developer-citizen conflicts with ad hoc solutions that assign the City Planning Commission a unique role in mediating the constant battle between homeowners and developers. Rejection of traditional land use solutions oftentimes places the city at the borderline between legal and not-so-legal regulation.
Speaking Against Norms: Public Discourse and the Economy of Racialization in the Workplace

Free speech controversies erupt from reactions to outlier voices, and these voices are often those of subordinated citizens such as racial minorities. Employing the tools of narrative, interviews with litigants and subjects, and interdisciplinary analysis of case law, Professor Terry Smith probes whether the social inequality of government employees of color affects the rigor of the First Amendment protection afforded their speech. Professor Smith argues that all public sector employees lack sufficient protection because their speech typically does not receive the highest constitutional scrutiny and because of the Supreme Court's recent decision in Garcetti v. Ceballos, which stripped public sector employees of much constitutional recourse when their speech is made pursuant to their official duties. Yet when this already porous protection is applied in cases involving workers of color who may speak from the vantage point of their social inequality, the interaction of subordinate status and outsider speech distorts the proper application of extant-albeit still inadequate-First Amendment doctrine. Rather than repair to advocating a change in the level of constitutional scrutiny accorded public employee speech, Professor Smith draws on the Supreme Court's recent decision in Burlington Northern & Santa Fe Ry. Co. v. White, involving retaliation under Title VII, to demonstrate how First Amendment public employee plaintiffs, including employees of color, can fortify the First Amendment's protections within the framework of existing law.
The Boundaries of the Moral (and Legal) Community

Over the last 250 years both moral philosophy and ordinary moral opinion have witnessed a remarkable expansion of their conception of the “moral” community, that is, the community of creatures that are thought entitled to basic moral (and ultimately legal) consideration – whatever the precise details of what such consideration requires. “Being human” is what matters now in terms of membership in the moral community, not race, gender, religion, or, increasingly, sexual orientation. (Species membership – hence the “being human” – remains a barrier to entry, however.) How to explain these developments? According to “Whig Histories,” this is really a story of expanding moral knowledge. Just as we discovered that the movement of mid-size physical objects is governed by the laws of Newtonian mechanics, and that those same laws do not describe the behavior of quantum particles, so too we have discovered that chattel slavery is a grave moral wrong and that women have as much moral claim on the electoral vote as men. I argue against the Whig Histories in favor of non-Whig Histories that explain the expanding moral community in terms of biological, psychological, and economic developments, not increased moral knowledge. If the non-Whig Histories are correct, should we expect the “species barrier” to membership in the moral community to fall? I argue for a skeptical answer.
Cloud Implications on Software Network Structure and Security Risks

By software vendors offering, via the cloud, software-as-a-service SaaS versions of traditionally on-premises application software, security risks associated with usage become more diversified. This can greatly increase the value associated with the software. In an environment where negative security externalities are present and users make complex consumption and patching decisions, we construct a model that clarifies whether and how SaaS versions should be offered by vendors. We find that the existence of version-specific security externalities is sufficient to warrant a versioned outcome, which has been shown to be suboptimal in the absence of security risks. In high security-loss environments, we find that SaaS should be geared to the middle tier of the consumer market if patching costs and the quality of the SaaS offering are high, and geared to the lower tier otherwise. In the former case, when security risk associated with each version is endogenously determined by consumption choices, strategic interactions between the vendor and consumers may cause a higher tier consumer segment to prefer a lower inherent quality product. Relative to on-premises benchmarks, we find that software diversification leads to lower average security losses for users when patching costs are high. However, when patching costs are low, surprisingly, average security losses can increase as a result of SaaS offerings and lead to lower consumer surplus. We also investigate the vendor's security investment decision and establish that, as the market becomes riskier, the vendor tends to increase investments in an on-premises version and decrease investments in a SaaS version. On the other hand, in low security-loss environments, we find that SaaS is optimally targeted to a lower tier of the consumer market, average security losses decrease, and consumer surplus increases as a result. Security investments increase for both software versions as risk increases in these environments.
The Effects of Traditional and Social Earned Media on Sales: A Study of a Microlending Marketplace

Abstract Marketers distinguish three types of media: paid (e.g., advertising), owned (e.g., company website), and earned (e.g., publicity). The effects of paid media on sales have been extensively covered in the marketing literature. The effects of earned media, however, have received limited attention. The authors examine how two types of earned media, traditional (e.g., publicity and press mentions) and social (e.g., blog and online community posts), affect sales and activity in each other. They analyze 14 months of daily sales and media activity data from a microlending marketplace website using a multivariate autoregressive time-series model. They find that (1) both traditional and social earned media affect sales; (2) the per-event sales impact of traditional earned media activity is larger than for social earned media; (3) because of the greater frequency of social earned media activity, after adjusting for event frequency, social earned media's sales elasticity is significantly greater than traditi...
As a Last Resort, Ask the Students: What They Say Makes Someone an Effective Law Teacher

My article discusses the results of a 300+ law student survey that asked them to describe the personality traits, classroom behaviors and personal characteristics that they believe makes someone an effective law teacher. The survey shows that law students at all levels desire a teacher who sets high standards, is an expert in her field, projects confidence in her knowledge of the subject matter, and has a passion for teaching. Students disfavor teachers who allow class discussion to stray, who engage them in activities outside of school and who treat them with disrespect.
Formal models of coherence and legal epistemology

This paper argues that formal models of coherence are useful for constructing a legal epistemology. Two main formal approaches to coherence are examined: coherence-based models of belief revision and the theory of coherence as constraint satisfaction. It is shown that these approaches shed light on central aspects of a coherentist legal epistemology, such as the concept of coherence, the dynamics of coherentist justification in law, and the mechanisms whereby coherence may be built in the course of legal decision-making.
Credibility and exchange rate management in developing countries

Abstract The paper discusses the role of credibility factors in the conduct of exchange rate policy in developing countries. The analysis is based on a simple framework in which policymakers are concerned about inflation and external competitiveness. Price setters in the nontradable sector of the economy engage in a strategic game against the authorities. The model generates a ‘devaluation bias’ which undermines the credibility of a fixed exchange rate. The role of reputational factors, signaling considerations, and joining a currency union as possible solutions to this bias is examined.
Internet Usage Within B2B Relationships and Its Impact on Value Creation: A Conceptual Model and Research Propositions

ABSTRACT The Internet has been described as a major disruptive technology that has changed the face of B2B exchange relationships. This paper considers the Internet and its inherent ability to support value creation within business-to-business relationships. The paper outlines four key characteristics that describe the Internet's attributes relative to value creation and proposes that the Internet's effect depends upon properly aligning these attributes with the economic and relational factors driving value creation. In particular, the paper proposes a contextual relationship between Internet usage, joint action, and the resources shared between exchange partners.
Higher risk, lower returns: What hedge fund investors really earn $

Abstract The returns of hedge fund investors depend not only on the returns of the funds they hold but also on the timing and magnitude of their capital flows in and out of these funds. We use dollar-weighted returns (a form of Internal Rate of Return (IRR)) to assess the properties of actual investor returns on hedge funds and compare them to buy-and-hold fund returns. Our main finding is that annualized dollar-weighted returns are on the magnitude of 3% to 7% lower than corresponding buy-and-hold fund returns. Using factor models of risk and the estimated dollar-weighted performance gap, we find that the real alpha of hedge fund investors is close to zero. In absolute terms, dollar-weighted returns are reliably lower than the return on the Standard & Poor's (S&P) 500 index, and are only marginally higher than the risk-free rate as of the end of 2008. The combined impression from these results is that the return experience of hedge fund investors is much worse than previously thought.
The Forgotten History of Foreign Official Immunity

The immunity of foreign officials from legal proceedings in U.S. courts has drawn significant attention from scholars, advocates, and judges in the wake of the Supreme Court’s decision in Samantar v. Yousuf, 130 S.Ct. 2278 (2010), which held that foreign official immunity is governed by the common law rather than the Foreign Sovereign Immunities Act (FSIA). The common law of foreign official immunity, which the Samantar Court did not define, operates at the intersection of international law and domestic law, and it implicates the constitutional separation of powers between the executive and judicial branches. Conflicting visions of the substance and process of common law immunity have already emerged in the wake of the Samantar opinion, and will continue to compete until the Supreme Court revisits this issue in a future case. At stake is not only the ability of suits to proceed against foreign officials, but also the relationship between the executive branch and the judiciary in matters affecting foreign affairs. The original research presented in this Article yields two striking observations. First, a claim that the defendant acted in his official capacity did not operate as an automatic barrier to adjudication on the merits; foreign officials who were neither diplomatic officials nor heads of state were “on the same footing” as any other foreigner with respect to their “suability.” Second, the Executive believed that it did not have constitutional authority to instruct a court to dismiss a private suit on immunity grounds. Although twenty-first century advocates might make policy arguments for blanket immunity or absolute Executive discretion, such choices are not consistent with — let alone compelled by — the eighteenth-century practices and understandings recovered here. A draft of this paper received Honorable Mention in the 2012 AALS Scholarly Papers Competition.
Is Color Blind Justice Also Culturally Blind? The Cultural Blindness in Justice

This Article discusses cultural competency in the justice system, by emphasizing the need that each level of the system take the time to understand cultural differences involved between the dominant societal group and a defendant. The ability of an officer, judge or legislator to take the time to learn cultural differences without preconceptions, consciously dispelling bias and other preconceptions that they may have, is a necessary part to achieving justice. While culturally competent programs have been a staple in the medical and clinical social science-related professions, it has received little attention in legal academia.
Real options, irreversible investment and firm uncertainty: New evidence from U.S. firms

Abstract This paper investigates real options behavior in capital budgeting decisions using a firm-level panel data set of U.S. companies in the manufacturing sector. Specifically, this paper looks at the relationship between the firm's investment to capital ratio and total firm uncertainty, measured as the volatility of the firm's equity returns. Total firm uncertainty is decomposed into its market, industry and firm-specific components. Given that the irreversibility of capital is derived from asset-specificity at the industry level, increased industry uncertainty displays a pronounced negative effect on firm investment consistent with real options behavior. Increased firm-specific uncertainty is also found to depress firm investment—a result that can be attributed to real options behavior and not just managerial risk aversion. The results are robust to various specifications that control for the firm's investment opportunities that are captured by Tobin's q, cash flow, marginal profitability of capital and firm leverage.
Peer effects, financial aid and selection of students into colleges and universities: an empirical analysis

This paper develops a model in which colleges seek to maximize the quality of the educational experience provided to their students. We deduce predictions about the hierarchy of schools that emerges in equilibrium, the allocation of students by income and ability among schools, and about the pricing policies that schools adopt. The empirical findings of this paper suggest that there is a hierarchy of school qualities which is characterized by substantial stratification by income and ability. The evidence on pricing by ability is supportive of positive peer effects in educational achievement from high ability at the college level. Copyright © 2003 John Wiley & Sons, Ltd.
Tag Libraries as Fifth Generation Languages

This essay weighs the notion that Web-based tag libraries represent the fifth generation of computer languages. A brief survey of the history of computer languages is provided as is an indication of why it is useful to conventionally categorize computer languages into “generations”. The essay argues that the current conventional ascription of generations is incorrect and that it should be replaced with one based on what the author terms “the principle of abstraction”.
The Administrative State, Front and Center: Studying Law and Administration in Postwar America

More than any other case from the postwar period, Brown v. Board of Education has captured the attention of historians and the public alike. The case itself, and the NAACP's campaign that led to it, have been the subject of books and articles beyond counting. In many history textbooks it is the only court case mentioned between the end of World War II and the early 1960s. It is one of a handful of cases that is recognized by the public at large and is surely the only Supreme Court case that has its own National Historic Site.
Estimating Risk Preferences in the Field

We survey the literature on estimating risk preferences using field data. We concentrate our attention on studies in which risk preferences are the focal object and estimating their structure is the core enterprise. We review a number of models of risk preferences—including both expected utility (EU) theory and non-EU models—that have been estimated using field data, and we highlight issues related to identification and estimation of such models using field data. We then survey the literature, giving separate treatment to research that uses individual-level data (e.g., property-insurance data) and research that uses aggregate data (e.g., betting-market data). We conclude by discussing directions for future research.
The effect of air traffic delays on airline prices

Abstract A legislative change in takeoff and landing restrictions at LaGuardia Airport provides an opportunity to study the effect of an exogenous shock to product quality on prices in the airline industry. I test how the price response varies with the degree of competition in the market. I find that prices fall by $1.42 on average for each additional minute of flight delay, and that the price response is substantially larger in more competitive markets.
Corporate social responsibility and trade credit

Prior studies show that higher corporate social responsibility (CSR) performance lowers firms’ cost of debt and equity financing. Using a sample of 16,463 U.S. firm-year observations that represent more than 2455 individual firms over the 1996–2016 period, we investigate the relation between all aspects of CSR and trade credit. We provide strong and robust evidence that higher overall CSR scores are related to a higher level of trade credit. A further examination reveals positive associations between trade credit and the four CSR individual components (i.e., the environment, employee relations, community, and diversity). Taken together, our results highlight the important signaling role that CSR plays in increasing the suppliers’ willingness to extend trade credit. Our study also has an important supply chain implication that emphasizes the role of CSR in designing contracts between buyers and suppliers and the level of trade credit for buyer firms with CSR investments.
Is the Clean Development Mechanism Sustainable? Some Critical Aspects

The Clean Development Mechanism (CDM) is rapidly developing as an important element in international climate policy by providing a cost-effective means of complying with the requirements of the Kyoto Protocol. Defined in Article 12 of the Kyoto Protocol, the CDM provides for Annex I Parties to implement project activities that reduce emissions of greenhouse gases in non-Annex I Parties, in return for certified emission reductions. The CDM is not only an innovative mechanism that builds a bridge over the North/South gap in the Kyoto Scheme, but it also brings together private economic interests and public climate policy by helping to channel private sector investment toward climate-friendly projects that otherwise might not have taken place. Therefore, it is crucial that a CDM project delivers real climate benefits without causing other environmental damages, and therefore upholds environmental integrity. Yet, a legal challenge remains of how to ensure the CDM's environmental integrity. Environmental impacts of the CDM have already led buyers of carbon credits to increasingly try to protect themselves from liability for environmental damage caused by GHG projects. This paper analyses some of the legal and institutional drawbacks of the CDM and seeks to provide some guidance on how to improve the current situation.
The real term structure and consumption growth

Abstract One version of the consumption-based asset pricing model implies a linear relation between expected returns and expected consumption growth. This paper provides evidence that the expected real term structure contains information that can be used to forecast consumption growth. The evidence is strongest for the 1970s and 1980s. The real term structure contains more information than two alternative measures: lagged consumption growth and lagged stock returns. Further, the real term structure appears to have slightly more forecasting power than the leading commercial econemetric models.
Beyond Doha's Promises: Administrative Barriers as an Obstruction to Development

This article articulates the potentially fatal consequences of administrative barriers to the goal of developing poor countries and suggests retooling the current trade norms and policies in a developmentally-friendly manner. The article constructs the concept of administrative barriers centering on domestic regulations, i.e., antidumping measures, regulatory standards, and rules of origin, which have the most potential to obstruct development. It then highlights developmental hazards of these administrative barriers. It observes that both protectionist antidumping duties and the excruciating investigative procedures tend to offset developing countries' comparative advantages in favor of developed countries' domestic producers. It then argues that under-capacitated developing countries suffer from developed countries' high-end regulatory standards which are often disguised protectionism. The article also contends that most preferential trade agreements between developed and developing countries are not a solution but yet another problem to development because of their complicated rules of origin which cancel out most opportunities for development through beneficial trade. The article then suggests retooling the current trade norms and policies to remedy this situation. It proposes that antidumping investigations be suspended or curtailed for low-income developing countries, that regulatory dialogue be pursued between rich importing countries and poor exporting countries in order to streamline standards and build capacity, and that rules of origin be loosened and simplified to offer developing countries expanded access to rich countries' markets. The article concludes that addressing administrative barriers will mainstream the once marginalized world poor in the currents of global commerce and thus help them help themselves, which eventually tends to promote global peace and security.
Medical Marijuana Laws and Teen Marijuana Use

While at least a dozen state legislatures are considering bills to allow the consumption of marijuana for medicinal purposes, the federal government has recently intensified its efforts to close medical marijuana dispensaries. Federal officials contend that the legalization of medical marijuana encourages teenagers to use marijuana and have targeted dispensaries operating within 1,000 feet of schools, parks and playgrounds. Using data from the national and state Youth Risk Behavior Surveys, the National Longitudinal Survey of Youth 1997 and the Treatment Episode Data Set, we estimate the relationship between medical marijuana laws and marijuana use. Our results are not consistent with the hypothesis that legalization leads to increased use of marijuana by teenagers.
Filling Gaps in European Union Securities Law: Contractually Organized Supervision & the College of Euronext Regulators

This paper analyzes the "contractually organized" supervisory mechanism embodied in the Memorandum of Understanding on the Supervision, Regulation, and Oversight of the Euronext Group ("Euronext Regulatory MOU"). The paper describes how the Euronext Regulatory MOU responded to the demands of the increasingly consolidated securities markets in Europe and the lack of harmonized trading markets rules among Euronext jurisdictions. The paper goes on to compare the Euronext Regulatory MOU with other regulatory MOUs, such as those of the U.S. SEC, and evaluates the extent to which the Euronext Regulatory MOU forms part of the corpus of E.U. "soft" law on the harmonization of E.U. member state laws. This paper concludes that the Euronext Regulatory MOU differs substantially from the MOUs of the U.S. SEC specifically because the Euronext Regulatory MOU operates against the backdrop of regulatory harmonization in the E.U. internal market. In light of the merger of the NYSE and Euronext - and in light of joint SEC-E.U. efforts to cooperate in the regulation of the transatlantic exchange - it is increasingly important to understand the scope of such MOUs and the differences between them. Lastly, the paper provides recommendations on measures that E.U. member state regulatory authorities might take to ensure the continued vitality of the harmonization framework of the Euronext Regulatory MOU.
Operating Leases and Credit Assessments

Operating leases have grown significantly as a source of corporate financing over the last 30 years. Their off-balance sheet treatment, which may in part explain their popularity, raises concern that financial risk may be misjudged and capital misallocated. Prior research evidence on the above issue is mixed. To improve reporting transparency, regulators propose a new accounting concept, right of use, which will add the present value of most leases to the balance sheet. We examine the effect of operating leases on loan pricing by banks, a sophisticated financial statement user. Since leases are a potential debt substitute, we expect them to be important in our setting. With loan spreads as the dependent variable, we test the differential explanatory power and model fit of as-reported financial ratios versus financial ratios adjusted for the capitalization of operating leases. We find that lease-adjusted financial ratios better explain loan spreads, especially for larger lenders. Our results also suggest that retailer leases that are closer in substance to rental agreements than financed asset purchases are less relevant for credit risk assessments. Thus we conclude that banks not only price operating leases, on average, but also make distinctions about which leases should be priced. Second, we explore the role of credit rating agencies and confirm that credit ratings also reflect capitalized operating leases, and find support for an informational role for others’ credit assessments. However, unlike banks, rating agencies appear to capitalize all operating leases mechanically. Overall, our results suggest that banks and rating agencies adjust for the off-balance sheet presentation of operating leases and, at least in the case of banks, attempt to do so to reflect the underlying economics of the leases. This evidence lessens concern over the potential negative consequences of existing operating lease accounting and raises concern over proposed accounting that capitalizes all leases regardless of their economic characteristics.
The (Surprising) Truth About Schiavo: A Defeat for the Cause of Autonomy

A survey of the commentary following the conclusion of the Theresa Marie Schiavo matter leaves one with the impression that the case was a victory for the cause of autonomy and the right of self-determination in the end-of-life context. According to the prevailing account, the case involved a husband (Michael Schiavo) fighting for his right as a spouse to vindicate his profoundly disabled wife's wish to decline artificial nutrition and hydration. To do so, Mr. Schiavo had to overcome the efforts of his wife's parents (the Schindlers), and their religious conservative supporters (including politicians both in Florida and Washington), who fought to keep Ms. Schiavo alive at all costs. This battle of autonomy versus the sanctity of all human life (howsoever diminished) raged throughout literally every branch of government, as well as in the national and international media. In the end, though, it was the judicial branch that settled the matter, finding that Michael Schiavo had the right to implement his wife's wishes, free from any governmental intervention or obstruction. It was a decisive victory for autonomy and privacy, and demonstrated that an individual's desire to be free from unwanted life-sustaining measures can be honored, even after she is silenced by severe cognitive impairment. The foregoing narrative is compelling, easy to understand, and fits perfectly within the overarching paradigm typically used to interpret the cultural, legal, and political conflicts of present
Estimating the education-earnings equation using geographic variation

Abstract We expand on the literature on the causal impact of postsecondary education on earnings by introducing a richer set of location-based measures as instruments for years of education. Utilizing data from the National Longitudinal Study of Youth, 1997, we implement six different sets of instruments based on geographic variation: presence of a four-year or two-year college in the county, inverse log distance to in-state two-year colleges, distance-weighted tuition and distance-weighted enrollment at in-state two-year colleges, and inverse log distance to all colleges. We find that these alternative measures yield differing estimates of the impact of educational attainment on earnings. Using our preferred measure of geographic variation, one additional year of postsecondary attainment results in a 9.7% increase in yearly earnings. We find a larger impact of postsecondary attainment for women, and no measurable impact of postsecondary attainment for men.
Behavioral Economics and Investor Protection: Reasonable Investors, Efficient Markets

The judicial view of a “reasonable investor” plays an important role in federal securities regulation. Courts express great confidence in the reasonable investor’s cognitive abilities, a view not shared by behavioral economists. Similarly, the efficient market hypothesis has exerted a powerful influence in securities regulation, although empirical evidence calls into question some of the basic assumptions underlying it. Unfortunately, to date, courts have acknowledged the discrepancy between legal theory and behavioral economics only in one situation: class certification of federal securities class actions. It is time for courts to address the gap between judicial expectations about the behavior of reasonable investors and behavioral economists’ views of investors’ cognitive shortcomings, consistent with the central purpose of federal securities regulation: protecting investors from fraud.
The Safety Trap

In this article, we provide a model of the macroeconomic implications of safe asset shortages. In particular, we discuss the emergence of a deflationary safety trap equilibrium with endogenous risk premia. It is an acute form of a liquidity trap, in which the shortage of a specific form of assets, safe assets, as opposed to a general shortage of assets, is the fundamental driving force. At the Zero Lower Bound, our model has a Keynesian cross representation, in which net safe asset supply plays the role of an aggregate demand shifter. Essentially, safety traps correspond to liquidity traps in which the emergence of an endogenous risk premium significantly alters the connection between macroeconomic policy and economic activity. “Helicopter drops” of money, safe public debt issuances, swaps of private risky assets for safe public debt, or increases in the inflation target, stimulate aggregate demand and output, while forward guidance is less effective. The safety trap can be arbitrarily persistent, as in the secular stagnation hypothesis, despite the existence of infinitely lived assets.
Hidden liquidity: An analysis of order exposure strategies in electronic stock markets

Many stock exchanges choose to reduce market transparency by allowing traders to hide some or all of their order size. We study the costs and benefits of order exposure and test hypotheses regarding hidden order usage using a sample of Euronext-Paris stocks, where hidden orders represent 44% of the sample order volume. Our results support the hypothesis that hidden orders are associated with a decreased probability of full execution and increased average time to completion, and fail to support the alternate hypothesis that order exposure causes defensive traders to withdraw from the market. However, exposing rather than hiding order size increases average execution costs. We assess the extent to which non-displayed size is truly hidden and document that the presence and magnitude of hidden orders can be predicted to a significant, but imperfect, degree based on observable order attributes, firm characteristics, and market conditions. Overall, the results indicate that the option to hide order size is valuable, in particular, to patient traders.
Can law avoid creating culture and religion in its own image? The context for diversity, religion and culture in MEC for Education: KwaZulu-Natal and Others v Navaneethum Pillay: Reflections a decade later

This article reviews the important MEC for Education: KwaZulu-Natal and Others v Navaneethum Pillay decision, handed down by the Constitutional Court of South Africa, against reflectionsregarding law and religion in the ten years since that decision was delivered. It places the decision in relation to scholarly debates about the nature of a diverse society and, in particular, how certainstrands of what pass for “liberal” theory do not, in fact, provide for respect for diversity and difference. In particular, the article reviews various ways in which moves towards homogeneity may employ the language of diversity to achieve their ends against the goals of the South African Constitution, which, properly understood, should maximize genuine diversity and accommodation. The article also discusses briefly the recent decision of Organisasie vir Godsdiens Onderrig en Demokrasie v Randhart et al., which interprets sec. 15(2) of the Constitution as allowing religious observances in public schools as long as such observances are not exclusive and exclusionary. The article supports this interpretation and suggests that the goals sought by the applicant in Organisasie vir Godsdiens Onderrig en Demokrasie v Randhart et al. exemplified the kind of “convergence” and “civic totalism”. Also discussed is whether other listed constitutional terms such as ‘culture’, ‘belief’ and ‘conscience’ should attract the same kind of protections as ‘religion’ and whether there is a risk that, by categorizing the protection of other concepts too broadly, important aspects of religion (for example, that it is not simply an individual, but a communitarian right) might be trivialized. Finally, the article reviews certain developments in other countries (France and Canada) to suggest that how the State is understood in the context of accommodation will vary in relation to how the terms ‘secular’ and ‘diversity’ are defined.
Christianity and the Framers: The True Intent of the Establishment Clause

There was a time not long ago and well within the lifetime of a late middle aged American where prayer in school was not uncommon. School plays during the holidays had Christmas music and themes, Christmas trees were called just that, and Good Friday was not just good because school was closed. Nativity scenes were regularly viewed in public locations. Nearby may have stood a Ten Commandment monument, and no one consider “under God” in the pledge, “In God we Trust” on a coin, or the National Day of Prayer to be matters of controversy. Religion, and specifically Christianity, was part and parcel of every day public life. This law review article takes a historical look at the establishment clause from the Framer's viewpoint. The article explores what should be the correct place for religion within the public square in today's modern age. In doing so, the paper reviews the religious views of some of our most influential Founding Fathers. The paper explains how Christianity in particular helped to develop the Framers basic concepts and ideas concerning the development of this republic that culminated in our present form of government. The article also explores who and what influenced our Founding Fathers both as individuals and as a whole. The article goes on to analyzes what was the Framers true intent concerning the establishment clause, and provides an in depth analysis of establishment clause cases since the 1947 Supreme Court's decision in Everson v. Board of Education. The article concludes by making a persuasive case for the Supreme Court to abandon the Lemon analysis in favor of allowing greater religious expression and speech by public institutions and in the public square.