cssi/SciSciGPT-SciSciNet huggingface dataset:
A test of the market's mispricing of domestic and foreign earnings

Abstract This study investigates whether abnormal returns can be earned using public information about firms’ domestic and foreign earnings. The results indicate that the market understates foreign earnings’ persistence. As a result, it is possible to construct a zero-investment hedge portfolio that consistently earns positive returns across years. A disproportionate fraction of the positive abnormal returns to the long position is concentrated in the few days surrounding the subsequent year's quarterly earnings announcement dates. Furthermore, the abnormal returns do not appear to persist beyond the subsequent year. The results are consistent with market mispricing, and not mis-estimated risk.
The asymptotic value of the Mahler measure of the Rudin-Shapiro polynomials

In signal processing the Rudin–Shapiro polynomials have good autocorrelation properties and their values on the unit circle are small. Binary sequences with low autocorrelation coefficients are of interest in radar, sonar, and communication systems. In this paper we show that the Mahler measure of the Rudin–Shapiro polynomials of degree n − 1 with n = 2k is asymptotically (2n/e)1/2, as it was conjectured by B. Saffari in 1985. Our approach is based heavily on the Saffari and Montgomery conjectures proved recently by B. Rodgers.
Saving and investing for early retirement: A theoretical analysis ☆

We study optimal consumption and portfolio choice in a framework where investors adjust their labor supply through an irreversible choice of their retirement time. We show that investing for early retirement tends to increase savings and reduce an agent's effective relative risk aversion, thus increasing her stock market exposure. Contrary to common intuition, an investor might find it optimal to increase the proportion of financial wealth held in stocks as she ages and accumulates assets, even when her income and the investment opportunity set are constant. The model predicts a decrease in risk aversion following strong market gains like those observed in the nineties.
SOCIAL CAPITAL OF YOUNG TECHNOLOGY FIRMS AND THEIR IPO VALUES: THE COMPLEMENTARY ROLE OF RELEVANT ABSORPTIVE CAPACITY

Abstract The strategic importance of business-to-business (B2B) relationships is well recognized, but their financial impact remains equivocal. This study links social capital from three types of B2B networks of young technology firms with their initial public offering (IPO) value. The authors identify three relevant types of absorptive capacity that facilitate the transformation of B2B social capital into IPO value. For the transformation to occur, the authors find that young firms need not only the opportunity to access the resources provided by B2B relationships but also the ability to leverage them through the complementary capability—namely, absorptive capacity. They test the hypotheses on a sample of 177 IPOs, and the results are robust to endogeneity concerns and alternative measures. As one of the first studies in marketing–finance interface to focus on young firms, the findings provide novel insights, such as the deleterious financial consequence of having marketing and research-and-development B...
The value of the floor

Existing theoretical literature suggests that floor trading has discernable benefits over electronic trading. In particular floor relationships lead to a reduction in asymmetric information and hence lower spreads. The ability of floor brokers to participate in incoming order flow without revealing their supply and demand curves increases total liquidity and dampens liquidity shocks leading to lower volatility. We develop hypotheses and test them on a sample of stocks that switch from floor trading to an electronic system with fairly identical rules and pre-trade transparency. We find strong support for existing theory and our hypotheses. In particular asymmetric information and volatility are significantly higher on the electronic system. This leads to an increase in investor transaction costs which dwarfs the operational cost advantages of the electronic systems. Our results are robust to tests involving samples that control for company specific factors and market wide trends.
Free Speech vs. Information Privacy: Eugene Volokh's First Amendment Jurisprudence

Eugene Volokh's masterful contribution to this symposium examines caselaw, doctrine, and theory to reach the conclusion that "information privacy rules are not easily defensible under existing free speech law.", Although permitting a narrow exception for privacy protection through contract, Volokh casts doubt on the constitutionality of the common law privacy tort of invasion of privacy and most governmental statutes, existing or potential, that impose information privacy on the private sector.2 His chief worry, as he claims at a number of junctures, is less the legal protection of personal information per se than its accompanying twisting and stretching of the First Amendment. Volokh argues that the government's safeguarding of information privacy endangers a wide range of speech unrelated to personal data.3
Do authoritarians vote for authoritarians? Evidence from Latin America

During the 2016 presidential election campaign in the United States, scholars argued that authoritarian visions of the family are associated with support for Donald Trump, a candidate also noted to exhibit authoritarian or illiberal tendencies. Though it is plausible that “authoritarian” citizens (defined by parenting attitudes) vote for “authoritarian” candidates (defined by disrespect for democratic institutions), past research provides relatively little guide regarding this relationship. One reason is that few US candidates announce overtly authoritarian views. Latin America, by contrast, has had many such candidates. We take advantage of this variation using the 2012 AmericasBarometer, which applied a battery of authoritarian parenting attitudes. We first describe mass authoritarianism across Latin America, showing it is associated with many social attitudes. We then examine authoritarians’ voting behavior, distinguishing between support for “mano dura” (“strong arm”) candidates, who are usually right...
Marriage as Partnership

In this essay honoring Professor Mary Ann Glendon, the author discusses the contract of partnerships concept of marriage as it applies to antenuptial agreements, cohabitation contracts, and property settlement agreements, the three contexts about which Professor Glendon has written in her books The New Family and the New Property (1981) and The Transformation of Family Law (1996).
Public pensions and labor supply over the life cycle

In order to remain fiscally solvent, governments of many countries have reformed their public pension schemes to encourage labor supply at older ages. These reforms include reductions in the generosity of public pensions and reduced penalties for working past the normal retirement age. In this paper, we consider how reforms to public pension systems affect labor supply over the life cycle. We put the recent empirical evidence on the effect of government pensions on labor supply in a life cycle context, and we present evidence on the effectiveness of tax reforms for stimulating labor supply over the life cycle. Our main conclusion is that the labor supply of older workers is responsive to changes in retirement incentives. The labor supply of younger workers is less responsive. Thus the trend towards lower taxes on older workers in many developed countries should continue to fuel their trend towards later retirement.
The First Accounting Course: An Outcomes Assessment Approach Project

This paper discusses a class project that can be used in an introductory accounting class as an outcomes assessment tool. The project is done in groups of four to five students. Each student analyzes one company’s ratios for a two year period and compares their firm’s ratios with their firm’s industry’s ratios. When this is complete, the group then uses the individual firm data to make an investment decision. The investment decision must be based on the data from the individual firm ratios. Once the group has decided which firm to invest in, they then have to complete a pro-forma income statement for the firm assuming a $2 billion expansion. Overall, the project is done in steps that help the students build their final project throughout the semester. The project is submitted at the beginning of the 13 th week of classes so that the instructor can grade it and hand it back to the students at the beginning of the 14 th week of classes. The groups present their projects during the last two class periods of the semester.
A note on common infections and the non-antibiotic treatment option

Recently, Batabyal and Nijkamp (Environ Econ Policy Stud 7:39–51, 2005) have used a theoretical model of antibiotic use to study the relative merits of interventionist (antibiotics) and non-interventionist (no antibiotics) treatment options. A key assumption in their paper is that the default treatment option is the interventionist option. Because there are several instances in which this assumption is invalid, in this paper, we suppose that the default treatment option is the non-interventionist option. Specifically, we first derive the long run average cost of treating a common infection such as acute otitis media (AOM). Next, we show that there is a particular tolerance level and that when a physician uses this tolerance level to determine when to administer the non-antibiotic medicine, the long run average cost of treating the common infection under study is minimized.
Credit derivatives and bank credit supply

Abstract Credit derivatives are the latest in a series of innovations that have had a significant impact on credit markets. Using a micro data set of individual corporate loans, this paper explores whether use of credit derivatives is associated with an increase in bank credit supply. We find only limited evidence that greater use of credit derivatives is associated with greater supply of bank credit. The strongest effect is for large term loans—newly negotiated loan extensions to large corporate borrowers, with a largely negative impact on (previously negotiated) commitment lending. Even for large term borrowers, increases in the volume of credit are offset by higher spreads. These findings suggest that the benefits of the growth of credit derivatives may be narrow, accruing mainly to large firms that are likely to be “named credits” in these transactions. Finally, use of credit derivatives appears to be complementary to other forms of hedging by banks, though the banks most active in hedging appear to charge more for additional amounts of credit.
Professional Overcharging in Large Bankruptcy Reorganization Cases

In an empirical study of professional fees and expenses in 74 large public company bankruptcies concluded 1998–2003, we found that (1) controlling for the trend over time and the geographical location of the cases, company size (measured by assets), case duration (measured in days), and the number of parties (measured by the number of professional firms working) explain nearly 87 percent of the case-to-case variation in professional fees, (2) fees and expenses increased about 10.4 percent per year over the six-year period covered by our study, (3) five of six predictors of fees and expenses exhibited a strong scale effect, (4) the scale effect for company size is so severe that reporting fees as a simple percentage of assets is misleading, (5) using the same model we used with court file data, our variables explain 86 percent of the case-to-case variance in the amounts of professional fees and expenses reported in SEC filing data, and (6) fees and expenses reported in SEC filing data are highly correlated with those reported in court file data, but are 58 percent higher. The principal determinants of fees and expenses—assets, days in bankruptcy, and the number of professional firms working—appear to us to measure not only the need for professional services, but also the opportunity for professionals to bill. In an attempt to statistically isolate this “billing opportunity” component of fees and expenses, we compiled a second set of variables—employees, docket length, and reorganization plan classes—that we believe measures case complexity without measuring billing opportunity. When those variables are substituted for the principal determinants, the regression explains substantially the same percentage of variance in fees and expenses. This second, complexity-only model predicts fees that, controlling for scale, are significantly lower for companies with assets greater than about $770 million. We theorize that this systematic difference in the two models' predictions measures the billing opportunity component of fees and expenses in large public company bankruptcies. That component is an overcharge because it is not warranted by the complexity of the cases, including complexity resulting from company size.
Moocs and Legal Education: Valuable Innovation or Looming Disaster?

Massive open online courses (MOOCs) have spread across the landscape of higher education like an invasive plant species. Although few people had heard of MOOCs before 2012, these internet-based courses, taught by university professors, are now routinely offered simultaneously to tens of thousands or in some cases, hundreds of thousands of people. Most MOOCs are still provided free of charge, but the two companies and one non-profit entity that promote MOOCs and provide the software have recently created partnerships with institutions of higher education in order to realize substantial revenues by offering MOOCs for academic credit to tuition-paying students at colleges and universities. Despite resistance from professors at some institutions, MOOCs for credit are proliferating rapidly. This development has great significance for the future of legal education, because most law schools are experiencing an economic crisis and are searching for ways to cut costs and lower tuition so that they can fill their classes and remain viable. Already, some law schools are offering academic credit for distance learning, within limits permitted by the Section of Legal Education of the American Bar Association — limits that may soon be relaxed. Within ten years, MOOCs could replace traditional law school classes altogether, except at a few elite law schools that produce lawyers to serve large corporations and wealthy individuals. However, most law schools might survive by embracing rather than resisting internet-based learning. They could cut costs by reducing faculty and staff positions, using MOOCs for the delivery of most of the legal information that students need, hiring part-time lawyers to help students with exercises to supplement the MOOCs, and concentrating the remaining full-time faculty on first-semester offerings, writing seminars, and clinics. Sadly, the result will be a watered-down form of legal education compared to the three years of interactive experiences that law schools have offered students for the last century. But it may be the only way in which most law schools can survive.
A Review of War Costs in Iraq and Afghanistan

As of this writing, the wars in Iraq and Afghanistan are in their eighth and tenth years, having accrued nearly a trillion dollars in direct military costs. I review the history of cost forecasts for these ongoing engagements, highlighting the differences across them in scope and accuracy, assessing the methods and practice of cost forecasting, and exploring the implications of the war costs themselves. Besides the unanticipated length and breadth of the military conflicts themselves, a related and equally important component of costs is the life cycle of costs associated with caring for veterans. The forecasts we have of such costs imply high levels of public spending per veteran and very high levels of costs associated with pain and suffering per veteran, as high as 10 to 25 percent of lifetime wealth. I also discuss the methods and motivations associated with war cost forecasts by comparing them with other types of aggregate forecasts, which are prone to similar types of errors. The history of war cost forecasts suggests that increasing their frequency and transparency may improve their usefulness in guiding policy.
Polygamy, Publicity, and Locality: The Place of the Public in Marriage Practice

A detailed reading of the Mormon plural marriage case of Holm v. Utah uncovers the significant role that visual indicators play in modern marriage law and generates a set of initial questions about the relationship between marriage practice and public performance. Traditional publicity requirements, such as endowment at the church door, wedding banns, and wedding announcements, all confirm the historical role and importance of publicity in marriage regulation and wedding ritual. Publicity requirements serve multiple purposes – evidentiary, status-granting, accountability enabling – and also highlight the importance of community, audience and locality to marriage status. The local is particularly important because ceremonies are site-specific, marriage law is state-bound, and status endowment comes from the social network in which a couple's daily lives are embedded. Calls for new legislation supporting forms of virtual marriage, therefore, are unlikely to produce the desired social recognition if those proposals ignore the fact that local audiences are important status-granting communities.
Using S&T foresight to augment organizational tool kits: a Canadian institutional‐entrepreneurial experiment

This paper will explore recent Canadian federal experience in developing S&T foresight and creating knowledge sharing networks aimed at creating integrative capacities and convergent domains that involve fusions of several disciplines. More specifically, the paper will report on the experience of the Office of Technology Foresight (OTF) at the National Research Council of Canada (NRC) and its federal partners (science based departments and agencies – SBDAs) as they carried out a major S&T Foresight Pilot Project (STFPP) to elaborate prospective R&D opportunities and challenges in preparation for contingencies that may have to be confronted in the 10–20 year time horizon of 2015–2025. STFPP reports are posted at: http://www.techforesight.ca
To beat or not to beat? The importance of analysts’ cash flow forecasts

We investigate the implications of firms’ benchmark-beating patterns with respect to analysts’ quarterly cash flow forecasts for firms’ current capital market valuation and their future performance. We hypothesize that nonnegative earnings surprises are more likely to be supported by real operating performance and signal higher earnings quality if they are achieved via higher than expected cash flows or lower than expected accruals. We show that firms beating analyst earnings forecasts have larger positive capital market reactions and larger earnings response coefficients if they beat analyst cash flow forecasts or report lower than expected accruals. We also demonstrate that these firms’ superior future performance may provide an economic justification for their more favorable market response. Our findings suggest that firms’ ability to beat analyst cash flow forecasts is informative regarding the quality of their earnings surprises.
Managing audits to manage earnings: The impact of diversions on an auditor’s detection of earnings management

This study examines an aspect of earnings management that we refer to as audit management. We define audit management as a client’s strategic use of diversions to decrease the likelihood that auditors will discover earnings management during the audit. Specifically, we examine whether diverting auditors’ attention to either clean financial statement accounts or accounts that contain other errors affect an auditor’s ability to uncover earnings management. Auditors performed analytical review, searching financial statements for unusual fluctuations suggestive of errors. Following prior studies, we seeded an intentional accounting error which created an unusual fluctuation that allowed the client to meet an earnings target. We manipulated whether management provided a diversionary statement that explicitly identified risk in other areas of the audit, and whether those areas were clean or contained other detected errors that had no impact on earnings. We find that auditors’ earnings management detection is worst when they are diverted to clean accounts and best when auditors are diverted to accounts that contain other errors. Our results suggest that managers can potentially exploit an audit management tactic as simple as a diversion to a clean area to reduce auditors’ effectiveness at detecting earnings management. The implications of these findings for audit and decision making research are discussed.
Two-period cycles in a three-period overlapping generations model

Abstract We study the properties of two-period monetary cycles in simple pure exchange overlapping generations economies in which the households live for three periods. We demonstrate that these economies can support cycles under a much broader—and, arguably, more plausible—range of assumptions than the analogous two-period economies. We show that economies that fail the well-known Grandmont (Econometrica 53 (1985) 995) condition can have cycles, and that economies that satisfy the condition can fail to have cycles. In addition, we show that economies can have monetary cycles when they do not have conventional monetary steady states, and when aggregate demand for assets is not decreasing in the real return rate at a gross real rate of unity.
Parameter optimization for differential equations in asset price forecasting

A system of nonlinear asset flow differential equations (AFDE) gives rise to an inverse problem involving optimization of parameters that characterize an investor population. The optimization procedure is used in conjunction with daily market prices (MPs) and net asset values to determine the parameters for which the AFDE yield the best fit for the previous n days. Using these optimal parameters, the equations are computed and solved to render a forecast for MPs for the following days. For a number of closed-end funds, the results are statistically closer to the ensuing MPs than the default prediction of random walk (RW). In particular, we perform this optimization by a nonlinear computational algorithm that combines a quasi-Newton weak line search with the Broyden-Fletcher-Goldfarb-Shanno formula. We develop a nonlinear least-square technique with an initial value problem (IVP) approach for arbitrary stream data by focusing on the MP variable P since any real data for the other three variables B, ζ1, and ζ2 in the dynamical system is not available explicitly. We minimize the sum of exponentially weighted squared differences F[K˜] between the true trading prices from Day i to Day i+n-1, and the corresponding computed MPs obtained from the first row vector of the numerical solution U of the IVP with AFDE for ith optimal parameter vector, where K˜ is an initial parameter vector. Here, the gradient (∇ F(x)) is approximated by using the central difference formula, and step length s is determined by the backtracking line search. One of the novel components of the proposed asset flow optimization forecast algorithm is a dynamic initial parameter pool that contains most recently used successful parameters, besides the various fixed parameters from a set of grid points in a hyper-box.
The political economy of sectoral exchange rate preferences and lobbying: Germany from 1960–2008, and beyond

ABSTRACT Do the observable preferences and behavior of economic actors correspond to microeconomic models? I address this question by examining the microfoundations of firms' exchange rate preferences and lobbying activity between 1960 and 2008 in Germany, one of the most internationally exposed and export-oriented economies. The phenomena to be explained are twofold. First, lobbying activity appears to have declined over time. Archival sources provide evidence of strong preference articulation and exchange rate lobbying during the 1960s and 1970s. In recent years, by contrast, the intensity of firms' lobbying activity has gone down, despite greater exchange rate fluctuations and currency appreciations, which are costly and potentially ruinous for producers of tradable goods. Second, there is substantial variation in the propensity of tradables producers to lobby over exchange rate levels. I argue that the extent of firms' internationalization is key for explaining both of these observations and the polit...
Resource Dependence, Alternative Supply Sources, and the Design of Formal Contracts

Employing a resource dependence theoretical framework, the authors analyze a set of recently awarded contracts between the Environmental Protection Agency and its suppliers to determine how joint dependence, supplier dependence, and government dependence affect contract design—specifically, the decision to use a cost-plus (flexible) contract. Findings provide evidence that organizations choose contract designs that will reduce uncertainty related to securing critical resources. However, different dimensions of dependence have different effects: (1) higher levels of joint dependence lead to more flexible governance forms; (2) the lack of alternative suppliers is a more important factor than high levels of financial dependence; and (3) the parties involved in government procurement are likely to perceive government as a unique type of organization, which, in turn, has implications for contract design choices. The authors conclude with managerial strategies for restructuring power/dependence relationships to achieve the contract design most likely to yield a surplus in the exchange.
Analysis of non-stationary dynamics in the financial system

Abstract Novel data-driven analyses, appropriate for detecting economic instability in non-stationary time series, are developed using functional principal component analysis (fPCA) and Synchrosqueezing. fPCA is applied in a new way, aggregating multiple financial time series to identify periods of macroeconomic instability. Synchrosqueezing, a technique which generates a time-series’ time-dependent spectral decomposition, is modified to develop a new quantitative measure of local dynamical changes and structural breaks. The merit of this integrated technique is demonstrated by analyzing financial data from 1986 to 2012 that includes equity indices, securities and commodities, and foreign exchange. Both procedures successfully detect key historic periods of instability. Moreover, the results reveal distinctions between periods of long-term gradual change in addition to structural breaks. These tools offer new insights into the analysis of financial instability.
Proposals to Expel Palestinians from the Occupied Territories as Catalyst for a Civil Adjudication Campaign

I begin in Part II with a brief sketch of the history of stated policies to expel Palestinians from what is now Israel and the Occupied Territories, and then examine recent proposals that have been made and actions that have been taken to implement modern re-articulations of those historic policies. In Part III, I then review the grounds on which international law proscribes mass expulsions of indigenous and occupied peoples. While international law governing this issue is clear in its application and has been overwhelmingly endorsed by the larger international community, international law seems to have little influence on Israel's conduct. For this reason, my primary focus in this Essay will not be to analyze the international law issues, which have been exhaustively discussed elsewhere. I focus instead, in Part IV, on the enforcement of this well-established international law through private law suits. I review both civil adjudication's promise as an enforcement mechanism and the many obstacles that stand in the way of its success. I cannot in the space of this Essay analyze or resolve all obstacles, but I hope to outline the various benefits and limitations of adjudication as a response to human rights violations in this context, and to proffer a checklist of some of the important practical considerations entailed in launching an international civil litigation campaign on behalf of Palestinians.
Theories of Overindebtedness: Interaction of Structure and Culture

Consumer bankruptcy scholars typically stress either a structural or a cultural account of individuals’ problems with debt. Drawing on the history of poverty research, this article argues that research on consumer overindebtedness and bankruptcy should avoid the pitfall of seeing structural and cultural factors as opposing explanations. Deregulation of the credit industry and an incomplete social safety net are key structural conditions that lead to a culture hospitable to overindebtedness. Furthermore, the interaction of structure and culture has practical policy implications. Structural changes such as interest-rate deregulation inevitably transform both business and consumer culture. Policies designed to create a different consumer culture will have a hard time when pitted against strong structural causes of overindebtedness. At a minimum, efforts to create a culture of personal financial responsibility need a strong structural base, such as public education starting at a young age, and could easily require a generation or more to take hold.
Federal Jurisdiction According to Professor Frankfurter

The birth of the modern course in “Federal Courts” or “Federal Jurisdiction” is usually traced to the publication in 1953 of Henry M. Hart and Herbert Wechsler’s The Federal Courts and the Federal System. I do not wish to depreciate the magisterial accomplishment of that volume in any way. In this review, however, I examine a casebook that was the intellectual forebear of Hart and Wechsler: Felix Frankfurter and Wilber G. Katz, Cases and Other Authorities on Federal Jurisdiction and Procedure (1931). I hope this look back will provide an interesting perspective on the future of the course.
Undisclosed SEC Investigations

One of the hallmarks of the Security and Exchange Commision's (SEC's) investigative process is that it is shrouded in secrecy—only the SEC staff, high-level managers of the company being investigat...
Impact of International Cross‐listing on Local Exchanges: Evidence from Chile

This article examines the impact of international cross-listings on local stock exchanges by focusing on the experience of Chile. First, we analyse the consequences to the domestically traded shares of a sample of Chilean companies that undertook ADR listings. Our findings show that there is no indication of order-flow migration from the domestic market following cross-listings. There is, however, evidence that in the aftermath of cross-listings trading becomes concentrated in the ADR market. There is also some indication of an increase in the base-level price volatility of the underlying stock series following cross-listings. Second, we study the changes in Chile's local stock market vis-a-vis the ADR market. We observe that the increase in the size and liquidity of the domestic stock exchange is overshadowed by the rapid growth of the ADR market. From a policy perspective, the continued rise in the number of companies undertaking international cross-listings can cause the local stock markets to become secondary role players relative to the major foreign exchanges, thus affecting domestic financial development.
Challenges and Opportunities in Cross-Country Accounting Research

SYNOPSIS: A concurrent session at the 2011 American Accounting Association Annual Meeting featured the panel discussion “Results, Challenges, and Opportunities in Cross-Country Accounting Research.” The panelists summarized major contributions from prior research in international settings, factors a researcher should consider when motivating and designing cross-country studies, and topical areas that could potentially contribute to future international accounting research. This paper summarizes the panelists' prepared remarks, develops a framework for designing cross-country research projects, and provides illustrations of the framework.
The microfoundations of rules vs. discretion

Using anN-person model, I explore the microfoundations of benevolent rules-dominant situations (of which the familiar time inconsistency models are examples). I show that under discretion the citizens confront a prisoner's dilemma, and I discuss the similar dilemmas embedded in the time inconsistency models. I then suggest new solutions to benevolent rules dominance: suboptimality can be avoided by accepting the discretionary regime and applying to the citizen population the standard remedies to the prisoner's dilemma.
Pro Bono Publico Meets Droits de L'homme: Speaking a New Legal Language

In this Article, the author examines ways that legal aid advocacy organizations in the U.S. can utilize international human rights doctrine and procedures to advance the interests of poor and marginalized Americans in domestic and foreign venues. This is a sympathetic account of some of the efforts undertaken by legal services lawyers in this burgeoning field of law. The first section briefly describes the history and structure of the quasi-public legal aid programs funded by the Legal Services Corporation (LSC). Section two details practical reasons why attorneys may want to look to international instruments or forums to achieve their clients' objectives and to satisfy the bureaucratic limitations imposed by the LSC. The third section provides synopses of actual cases in which legal aid attorneys have invoked international human rights law. These include cases filed in U.S. courts and international tribunals concerning protections for immigrants and language minorities, and the right to maternity leave and welfare payments. The last section offers observations on strategy and style, and forum and format, in utilizing unconventional arguments and modes of advocacy. The author recounts successes and challenges faced by practitioners who seek to combine the role of poverty lawyer with that of the international human rights advocate.
Countercyclical Macro Prudential Policies in a Supporting Role to Monetary Policy

This paper explores how prudential regulations can support monetary policy in reducing output fluctuations while maintaining financial stability. It uses a new framework that blends a standard model for monetary policy analysis with a contingent claims model of financial sector vulnerabilities. The results suggest that binding countercyclical prudential regulations can help reduce output fluctuations and lessen the risk of financial instability. More specifically, countercyclical rules such as countercyclical capital adequacy rules, can allow monetary authorities to achieve the same output and inflation objectives but with smaller adjustments in interest rates. The countercyclical rules can help stem swings in asset prices, lean against a financial accelerator process, and thereby help to lower risks of macroeconomic and financial instability. In economies with fixed exchange rates, where countercyclical monetary policy is not possible, prudential regulations can provide a useful mechanism for mitigating a run-up in asset prices and for promoting output stability.
The Surprising Reach of FDA Regulation of Cannabis Even After Descheduling

As more states legalize cannabis, the push to "deschedule" it from the Controlled Substances Act is gaining momentum. At the same time, the Food and Drug Administration (FDA) recently approved the first conventional drug containing a cannabinoid derived from cannabis—cannabidiol (CBD) for two rare seizure disorders. This would all seem to bode well for proponents of full federal legalization of medical cannabis. But some traditional providers are wary of drug companies pulling medical cannabis into the regular small molecule drug development system. The FDA's focus on precise analytical characterization and on individual active and inactive ingredients may be fundamentally inconsistent with the "entourage effects" theory of medical cannabis. Traditional providers may believe that descheduling cannabis would free them to promote and distribute their products free of federal intervention, both locally and nationally. Other producers appear to assume that descheduling would facilitate a robust market in cannabis-based edibles and dietary supplements. In fact, neither of these things is true. If cannabis were descheduled, the FDA's complex and comprehensive regulatory framework governing foods, drugs, and dietary supplements would preclude much of this anticipated commerce. For example, any medical claims about cannabis would require the seller to complete the rigorous new drug approval process, the cost of which will be prohibitive for most current traditional providers. Likely also unexpected to some, there is no pathway forward for conventional foods containing cannabis constituents, with the (probably exclusive) exception of certain hemp seed ingredients, if those foods cross state lines. And it will certainly come as a shock to many that federal law already prohibits the sale of dietary supplements containing CBD--including those already on the market as well as those made from "hemp," which has recently been descheduled under the 2018 Farm Bill. This Article describes in detail the surprising reach of the FDA and then outlines three modest, but legal, pathways forward for cannabis-based products in a world where cannabis has been descheduled.
Lochner v. New York: A Centennial Retrospective

This Article discusses two aspects of Lochner's history that have not yet been adequately addressed by the scholarly literature on the case. Part I of the Article discusses the historical background of the Lochner case. The Article pays particular attention to the competing interest group pressures that led to the passage of the sixty-hour law at issue; the jurisprudential traditions that the parties appealed to in their arguments to the Court; the somewhat anomalous nature of the Court's invalidation of the law; and how to understand the Court's opinion on its own terms, shorn of the baggage of decades of careless and questionable historiography. In short, Part I places the Lochner opinion firmly in its historical context. Part II of this Article explains how Lochner, which existed in relative obscurity for decades, became a leading anti-canonical case. As discussed in Part II, Lochner was initially famous only because of Oliver Wendell Holmes's much-cited dissent. The Lochner cases modern notoriety, however, arose largely because the post-New Deal Supreme Court continued to treat the Lochnerian cases of Meyer v. Nebraska and Pierce v. Society of Sisters as sound precedent. Meyer, in particular, eventually became an important basis for the Warren and Burger Courts' substantive due process jurisprudence in the landmark cases of Griswold and Roe v. Wade. Critics of those opinions attacked the Court for following in Lochner's footsteps, and, with some significant help from Laurence Tribe's 1978 constitutional law treatise, Lochner came to represent an entire era and style of jurisprudence. Recently, the ghost of Lochner has been kept very much alive by Justices Kennedy, O'Connor, and Souter, each of whom has praised Meyer and Pierce as engaging in appropriately aggressive due process review of police power regulations, while straining to distinguish those opinions from Lochner. Meanwhile, a revival of limited government ideology on the legal right, most notably in the Rehnquist Court's federalism opinions has raised (perhaps exaggerated) fears on the legal left that the conservatives seek to return, in spirit if not in letter, to the discredited jurisprudence of the Lochner era. Yet virtually no one, on either the right or the left, challenges what may be the strongest evidence of Lochner's influence on modern jurisprudence: the Supreme Court's use of the Fourteenth Amendment's Due Process Clause to protect both enumerated and unenumerated individual rights against the states.
On the Relation Between the Credit Spread Puzzle and the Equity Premium Puzzle

Structural models of default calibrated to historical default rates, recovery rates, and Sharpe ratios typically generate Baa-Aaa credit spreads that are significantly below historical values. However, this "credit spread puzzle" can be resolved if one accounts for the fact that default rates and Sharpe ratios strongly covary; both are high during recessions and low during booms. As a specific example, we investigate credit spread implications of the Campbell and Cochrane (1999) pricing kernel calibrated to equity returns and aggregate consumption data. Identifying the historical surplus consumption ratio from aggregate consumption data, we find that the implied level and time variation of spreads match historical levels well.
On the Writing and the Interpretation of Contracts

The major theme of this article is that the interpretation of contracts is in the interests of contracting parties. The general reasons are (a) that interpretation may improve on otherwise imperfect contracts; and (b) that the prospect of interpretation allows parties to write simpler contracts and thus to conserve on contracting effort. A method of interpretation is defined as a function whose argument is the written contract and whose value is another contract, the interpreted contract, which is what actually governs the parties’ joint enterprise. It is shown that interpretation is superior to enforcement of contracts as written, and the optimal method of interpretation is analyzed.
Diversity v. Colorblindness

ABSTRACT There seems to be broad social consensus that racial diversity is generally a good thing. Disagreements tend to focus on the constraints we should observe in bringing such diversity about. Evaluating the justification of such constraints requires understanding the kind of good that racial diversity is supposed to constitute. In this Article, I draw on concepts familiar from philosophical discussions in value theory to analyze the value of racial diversity on the one hand and that of colorblindness on the other. Using several opinions from Parents Involved in Community Schools v. Seattle School District No. 1 to stake out some of the central positions, I argue first that the value of racial diversity is conditional or extrinsic, not intrinsic, but that we have both instrumental and non-instrumental reasons to regard it as something worth caring about. I further argue that the constraint of colorblindness is, strictly speaking, orthogonal to the value of racial diversity, because what colorblindness opposes is selecting for diversity, not diversity itself, but that the two values come into opposition when such selection is required to bring about diversity. I consider the case for adhering to the constraint of colorblindness in such circumstances. I contend that the strongest positive argument for a deontological conception of colorblindness-viz., that it expresses a constitutional principle of equal respect-is obsolete. I further suggest that the strongest negative argument-viz., that selecting for diversity expresses disrespect for persons-ignores the possibility that such selection measures, when adopted in response to unjust social conditions, might more plausibly be regarded as an expression of a commitment to substantive principles of equality. I. INTRODUCTION 1176 II. THRESHOLD ISSUES 1179 III. THE VALUE OF DIVERSITY 1182 A. Categories of Value 1182 B. Racial Diversity as Conditionally and Extrinsically Valuable 1187 C. Conditions on the Value of Racial Diversity 1190 D. The Instrumental Value of Racial Diversity 1191 1. Group and social benefits 1191 2. The evidential value of diversity as a "signal" ........ 1195 E. Non-Instrumental Ways of Valuing Racial Diversity.... 1199 IV. THE IDEAL OF COLORBLINDNESS 1202 A. Eliminativist and Procedural Colorblindness Distinguished 1202 B. Colorblindness as a Deontological Constraint 1205 C. Instrumentalist Considerations 1208 D. Non- Instrumentalist Considerations: Justice Harlan's Argument 1210 E. The "Racial Chits" Objection to Selecting for Diversity 1215 V. CONCLUDING OBSERVATIONS 1218 I. INTRODUCTION Consider the following claim: Other things equal, it is better that a group of people exhibit racial diversity than that the group not exhibit racial diversity. Perhaps the assertion will seem uncontroversial, as far as it goes. If a group can be constituted so that it is racially diverse without making it worse in any other respect, without any undesired side effects, and without need for any special selection procedures - i.e., all else being equal - then why not say that we have reason to prefer that the group exhibit that property? …
The Persistence of the Accruals Anomaly

The accruals anomaly — the negative relationship between accounting accruals and subsequent stock returns — has been well documented in the academic and practitioner literatures for almost a decade. To the extent that this anomaly represents market inefficiency, one would expect sophisticated investors to learn about it and arbitrage the anomaly away. We show that the accruals anomaly still persists and, even more strikingly, its magnitude has not declined over time. How can this be explained? We show that the accruals anomaly is recognized and, indeed, exploited by certain active institutional investors, but the magnitude of this accruals-related trading is rather small. By and large, institutions shy away from extreme accruals firms because their attributes, such as small size, low profitability, and high risk stand in stark contrast to those preferred by most institutions. Individual investors are also, by and large, unable to profit from trading on accruals information due to the high information and transaction costs associated with implementing a consistently profitable accruals strategy. Consequently, the accruals anomaly persists and will probably endure.
Congress, Public Values, and the Financing of Private Choice

This Article examines the financing dimension of private choice, with a focus on Congress’s taxing and spending decision-making processes. The Article begins with an overview of the financing and performance dimensions of privatization decisions, followed by an analysis of how taxation relates to both dimensions. Private choice can be financed individually, that is, paid for by an individual’s own resources, facilitated by general tax reduction. Alternatively, private choice can be financed collectively by using tax revenues (or borrowed funds) to pay for privately provided goods and services. The tendency in political debate to conflate those two forms of financing, as well as the failure to distinguish between financing and performance, obscures important decisions about private choice and the government’s role in managing or monitoring collectively financed activities.