cssi/SciSciGPT-SciSciNet huggingface dataset:
The Behavior of Real Interest Rates in Exchange‐Rate‐Based Stabilization Programs

This paper examines the behavior of real interest rates at the inception of exchange-rate-based stabilization programs. The analysis is based on an optimizing model of a small open economy facing imperfect world capital markets. A reduction in the devaluation rate is shown to have a positive impact on real interest rates. By contrast, a program characterized by an initial reduction in the devaluation rate and a perceived future increase in government spending has an ambiguous effect—which depends in particular on the degree of credibility of the fiscal policy stance. Few analytical models have been proposed to account for the divergence in the behavior of real interest rates across the exchange-rate-based disinflation programs of the 1970s and 1980s. In particular, models aimed at explaining the boom-recession cycles that have often accompanied these programs have been unable to provide a convincing rationale. In the model developed by Rodriguez (1982), for instance, an unanticipated, permanent reduction in the devaluation rate leads to an immediate fall in real interest rates, because price expectations are predetermined at any moment in time. 2 Similarly, in the perfect-foresight framework developed by Calvo and Vegh (1993), an imperfectly credible exchange-rate-based stabilization—modeled as an initial reduction in the devaluation rate coupled with an increase of the same magni- tude at a well-defined date in the future—leads to an initial fall in domestic real inter- est rates. There is, however, no initial movement in real interest rates under full credibility, because in this case their model possesses no transitional dynamics. In an extension of their analysis, Calvo and Vegh suggest that the use of money as an addi- tional nominal anchor—resulting from the imposition of capital controls and/or the adoption of a credit target—in the exchange-rate-based programs implemented in the 1980s may explain the existence of initially high real interest rates. If, for instance, capital controls are in place, the money stock becomes predetermined; the initial increase in domestic money demand associated with a reduction in the devaluation
How Much Do Firms Hedge With Derivatives

Abstract For 234 large non-financial corporations using derivatives, we report the magnitude of their risk exposure hedged by financial derivatives. If interest rates, currency exchange rates, and commodity prices change simultaneously by three standard deviations, the median firm's derivatives portfolio, at most, generates $15 million in cash and $31 million in value. These amounts are modest relative to firm size, and operating and investing cash flows, and other benchmarks. Corporate derivatives use appears to be a small piece of non-financial firms’ overall risk profile. This suggests a need to rethink past empirical research documenting the importance of firms’ derivative use.
From Edison to the Broadcast Flag: Mechanisms of Consent and Refusal and the Propertization of Copyright

Encryption propertizes copyright. Prior to the rise of encryption, intellectual property wasn’t really property. Instead, these rights consisted of rights to sue to block use or seek damages for after-the-fact use. Encryption makes possible before-the-fact limits on use of the sort that we associate with physical property. Copyrighted works are becoming real property in a way that will never happen for trademarks or patents. This essay traces the role of consent and refusal for copyrighted works in the context of mass media entertainment. Early phonograph and movie projector manufacturers sought to limit the use of the equipment to specified music or films, almost certainly in an effort at price discrimination. With the rise of radio, we see similar use restrictions imposed by the record companies, but these restrictions should be seen first as a form of raising rival’s costs. The fight over home-taping use of the VCR should be seen in consent terms as well, where entry was clearly facilitated by the absence of any requirement of advance consent from copyright holders. Now with the current dispute over a possible broadcast flag for digital TV, we may complete the path started by Edison and his contemporaries. In considering the extent to which we should embrace full propertization of copyrighted works through encryption, we should expect transaction forms to vary with transaction costs and technological possibilities and should not somehow privilege a
A New Monthly Index of Industrial Production, 1884–1940

The article derives a new monthly index of industrial production for the United States for 1884 to 1940. This index improves upon existing measures of industrial production by excluding indirect proxies for industrial activity, using only component series that are consistent over time, and not making ad hoc adjustments to the data. Analysis of the new index shows that it has more within-year volatility than conventional indexes, has relatively unimportant seasonal fluctuations, and has cyclical turning points that are grossly similar to but subtly different from existing series.
The Affective Impact of Financial Skewness on Neural Activity and Choice

Few finance theories consider the influence of “skewness” (or large and asymmetric but unlikely outcomes) on financial choice. We investigated the impact of skewed gambles on subjects' neural activity, self-reported affective responses, and subsequent preferences using functional magnetic resonance imaging (FMRI). Neurally, skewed gambles elicited more anterior insula activation than symmetric gambles equated for expected value and variance, and positively skewed gambles also specifically elicited more nucleus accumbens (NAcc) activation than negatively skewed gambles. Affectively, positively skewed gambles elicited more positive arousal and negatively skewed gambles elicited more negative arousal than symmetric gambles equated for expected value and variance. Subjects also preferred positively skewed gambles more, but negatively skewed gambles less than symmetric gambles of equal expected value. Individual differences in both NAcc activity and positive arousal predicted preferences for positively skewed gambles. These findings support an anticipatory affect account in which statistical properties of gambles—including skewness—can influence neural activity, affective responses, and ultimately, choice.
Religion and New Constitutions: Recent Trends of Harmony and Divergence

The explicit incorporation of Islamic principles in the constitutions of Iraq and Afghanistan has highlighted concern over the past decade that theocratic constitutionalism has become a rival to traditional liberal constitutionalism. Whereas liberal constitutionalism ascribes religion special value but places it in the sphere of the private through guarantees of religious freedom, equal protection of religion, and non-establishment, the emerging ideology of theocratic constitutionalism holds the potential to redefine all rights through the lens of a particular religion. This Article is an empirical study of whether, and to what degree, liberal constitutionalism has been supplanted by theocratic constitutionalism. Every constitution enacted since the year 2000 has been examined, and its provisions relating to religion sorted into the following categories: Preambular, Ceremonial Deism, Established Religion, Freedom of Religion, Equal Protection of Religion, and (non-)Establishment Clause. Analysis of the prevalence of these categories in new constitutions demonstrates that most new constitutions display some evidence of both liberal and theocratic constitutionalism.
The Economics of Public Nuisance Law and the New Enforcement Actions

In contrast to the traditional legal commentary, I find nuisance law to be a coherent body of rules that serves an explainable function. Nuisance optimally regulates activity levels. Nuisance law induces actors to choose socially optimal activity levels by imposing liability when externalized costs are far in excess of externalized benefits or far in excess of background external costs. The new enforcement actions for lead paint abatement or gun control purposes have an arguable theoretical basis in nuisance law. However, as currently framed, the lawsuits are inconsistent with significant parts of the doctrine and the theory.
Household Income, Demand, and Saving: Deriving Macro Data With Micro Data Concepts

We develop adjustments to align the NIPA measures of key household variables with cash flow concepts that reflect household budgets and actual demand generated by households. The adjusted variables have substantially different behaviors across time than NIPA measures of household spending and saving. Furthermore, household income aggregated from micro data sets like the CPS, SCF, and PSID differs significantly from NIPA personal income. But the micro survey data likely reflect cash flow concepts rather than NIPA definitions. Indeed the adjusted cash flow measure of income eliminates much of the gap between micro data income variables and NIPA household income.
Understanding State Agency Independence

Conflicts about the independence of executive-branch officials are brewing across the states. Governors vie with separately elected executive officials for policy control; attorneys general and governors spar over who speaks for the state in litigation; and legislatures seek to alter governors’ influence over independent state commissions. These disputes over intra-state authority have weighty policy implications both within states and beyond them, on topics from election administration and energy markets to healthcare and welfare. The disputes also reveal a blind spot. At the federal level, scholars have long analyzed the meaning and effects of agency independence—a dialogue that has deepened under the Trump Administration. In contrast, there is virtually no systematic scholarly attention to the theory or practice of agency independence in the states. This Article begins that study. Surveying historical developments, judicial decisions, and legislative enactments across the country, it shows that state agency independence is an inexact, unstable, and variegated concept. Whereas federal courts treat independent agencies as a distinct legal category, state courts eschew categorization in favor of contextual holdings. Moreover, despite the common notion that states’ plural-executive structure cements independence, these rulings just as frequently undermine it. State legislatures, for their part, revisit independence frequently, often in the wake of partisan realignments. And their creations are diverse, combining a range of vectors of insulation in different arrangements. The result is that there is no single meaning of state agency independence even within a state, and rarely a strong norm surrounding it. States’ legislatively driven, bespoke approach to independence offers insights for scholars of both state and federal institutional design. The state approach may yield better-tailored and more democratic arrangements. But it also displays raw partisanship, and the combination of weak norms with strong governors may stack the deck against independence. The state approach also raises deeper questions for public law: What are the costs and benefits of allowing the rules of the game to be consistently up for grabs? There is no formula for weighing these considerations beyond the context of any individual dispute, but this Article provides a launching pad for their sustained exploration.
Political Corruption in the United States: A Design Draft

To establish the scope and level of corruption in the contemporary United States, a collaborative project of political scientists is needed. Such a study should start with explicating the definition of corruption various scholars use. Three are noted here: using public goods for personal gains, deflecting public goods to private groups, and making such moves when these are legal although they are still illicit. To assess corruption on these levels, we must consider that various forms that “capture” takes beyond the corruption of the laws themselves. A study of the major differences in the level of corruption among the three branches of government may improve our understanding of the prevalence and causes of corruption. A study of “rent” may help predict that future course of corruption. Other topics whose study warrants collaborative investigation are listed.
School Choice and States' Duty to Support Public Schools

The education clauses of state constitutions require states to support schools that not only educate children adequately and equitably, but that are “public” or “common.” This Article argues that state-supported school choice can be consistent with these latter requirements. Individual choices, about where to live and whether to educate children privately, have long shaped traditional “public” schooling arrangements. The more direct role choice plays in school voucher and charter programs is also consistent with the requirement that schools be “public.” Such programs must ensure, however, that parents’ choices among schools are “genuine and independent.” This criterion, developed by the U.S. Supreme Court to test the constitutionality of school vouchers under the Federal Establishment Clause, also guarantees publicness. It does so by requiring that parents’ options in the educational marketplace be determined by market demand, minimally biased by government preferences.
The Causal Effect of Mortgage Refinancing on Interest Rate Volatility: Empirical Evidence and Theoretical Implications

This article investigates the effects of mortgage-backed security (MBS) hedging activity on interest rate volatility and proposes a model that takes these effects into account. An empirical examination suggests that the inclusion of information about MBSs considerably improves model performance in pricing interest rate options and in forecasting future interest rate volatility. The empirical results are consistent with the hypothesis that MBS hedging affects the interest rate volatility implied by both options and the actual interest rate volatility. The results also indicate that the inclusion of information about the MBS universe may result in models that better describe the price of fixed-income securities.
Does disclosure deter or trigger litigation

Abstract Securities litigation poses large costs to firms. The risk of litigation is heightened when firms have unexpectedly large earnings disappointments. Previous literature presents mixed evidence on whether voluntary disclosure of the bad news prior to scheduled earnings announcements deters or triggers litigation. We show that the counterintuitive finding in prior literature that disclosure triggers litigation could be driven by the endogeneity between disclosure and litigation. Using a simultaneous equations methodology, we find no evidence that disclosure triggers litigation. In fact, consistent with economic arguments, our evidence suggests that disclosure potentially deters certain types of litigation.
Dynamical embodiments of computation in cognitive processes

Dynamics is not enough for cognition, nor it is a substitute for information-processing aspects of brain behavior. Moreover, dynamics and computation are not at odds, but are quite compatible. They can be synthesized so that any dynamical system can be analyzed in terms of its intrinsic computational components.
Precedent in International Courts: A Network Analysis of Case Citations by the European Court of Human Rights

Why and how do international courts justify decisions with citations to their own case law? We argue that, like domestic review courts, international courts use precedent at least in part to convince ‘lower’ (domestic) courts of the legitimacy of judgements. Several empirical observations are consistent with this view, which are examined through a network analysis of European Court of Human Rights (ECtHR) citations. First, the Court cites precedent based on the legal issues in the case, not the country of origin. Second, the Court is more careful to embed judgements in its existing case law when the expected value of persuading domestic judges is highest. These findings contribute to a developing literature that suggests international and domestic review courts develop their authority in similar ways. Why and how do international courts justify their rulings with citations to their own case law? Formally, the legal effect of an international court ruling is limited to the specific dispute it resolves. Yet, international courts frequently treat their past decisions as if they set precedents for new ones. A straightforward explanation for this divergence between formal rule and judicial practice is that relying on past decisions improves efficiency in the internal workings of the court. While this is undoubtedly part of the story, we argue that international courts also strategically use case citations to enhance the degree to which their decisions are perceived as legitimate by external audiences. International courts depend on domestic actors for compliance. While political actors are unlikely to be persuaded by legal justifications, domestic judges may well be more inclined to implement decisions that demonstrate legal consistency across time and place. We suggest that an international court adjusts the choice of case citations to the demands of domestic legal audiences and exerts more effort on embedding decisions in case law when the expected impact of persuading these audiences is highest. Importantly, this implies that an international court maximizes its legitimacy by avoiding fragmentation in its case law along lines of legal culture or other country-specific factors. This article examines whether case citation patterns in the most prolific international court, the European Court of Human Rights (ECtHR), fit these theoretical expectations.
Empirical evidence on the impact of external monitoring on book–tax differences

Abstract This study investigates whether institutional ownership levels are associated with levels of and time-series variability in book–tax differences (BTDs). Firm and year fixed-effects regression results suggest that institutional ownership is negatively associated with total, permanent, and temporary BTDs. This effect is driven primarily by permanent BTDs in the pre-SOX era but is consistently present for both permanent and temporary BTDs post-SOX. Further, this negative association is present regardless of firms' classification as “tax planners” and/or “earnings managers.” Finally, the results provide some evidence that stronger monitoring by the board and audit committee (i.e., a smaller and more independent board and a larger audit committee) is associated with lower permanent BTDs but is not consistently related with total or temporary BTDs. Overall, these findings are consistent with higher levels of institutional ownership equating to more effective monitoring of management, resulting in lower BTDs (in terms of both levels and time-series variability).
How does labor market size affect firm capital structure? Evidence from large plant openings

Abstract I examine how the labor market in which firms operate affects their capital structure decisions. Based on US Census Bureau data and information on companies’ decisions to locate their new operations, I use a large plant opening as an abrupt increase in the size of a local labor market. I find that a new plant opening leads to an increase of 2.5–3.9 percentage points in the debt-to-capital ratio of existing firms in the “winner” county relative to the “runner-up” choice. This result is consistent with the argument that larger labor markets make job loss less costly, which in turn reduces the indirect costs of financial distress. Notably, this spillover effect is larger for firms that employ the same type of workers as the new plant in the affected county.
Economics of the Independent Invention Defense under Incomplete Information

Patents lead to ex post deadweight loss arising from a noncompetitive market structure for the invention. Many have argued that introducing independent invention as a defense (IID) to patent infringement can increase social welfare by decreasing such deadweight loss at the price of a modest decrease in the number of inventions. This paper considers the effects of IID in a setting where RD (ii) IID's effects on welfare are ambiguous; (iii) IID is more likely to increase welfare if gains from competition in the product market are high; and (iv) determining precise conditions under which IID performs better than the current regime requires access to data that are extremely hard to find and quantify.
Primum Non Nocere: The Impact of Dodd-Frank on Silicon Valley

The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in 2010 in response to the systemic credit crisis of 2008-2009, wisely did not attempt to sweep Silicon Valley venture capital financing activity into its regulatory net. The nature of the investing activities conducted by VC funds were unrelated to the types of financial market activity which gave rise to the credit crisis. Dodd-Frank’s exemption for VC funds from its otherwise universal private fund adviser registration requirement was therefore entirely appropriate.However, SEC implementing regulations under Dodd-Frank contemplated both an affirmative reporting obligation under the Advisers Act on VC funds, and SEC examination authority with respect to VC fund books and records, which the Article argues would impose greater cost and burden on those funds than justified by the nature of their investing activities.As a separate matter, the Dodd-Frank Act mandated that the SEC exclude the value of an individual’s principal place of residence from their net worth for purposes of determining whether the individual qualifies as an “accredited investor.” The Article discusses the implications of this change, arguing that a deleterious impact might perhaps in future be observed with respect to the availability of pre-VC “friends and family” financing for early, seed-stage startups.The Article’s observations and arguments are made on the basis of the Author’s many years of direct experience as a former full equity partner at Silicon Valley’s largest law firm.
Private Equity Performance: Returns, Persistence, and Capital Flows

This paper investigates the performance and capital inflows of private equity partnerships. Average fund returns (net of fees) approximately equal the SP however, established funds are less sensitive to cycles than new entrants. Several of these results differ markedly from those for mutual funds. THE PRIVATE EQUITY INDUSTRY, primarily venture capital (VC) and buyout (LBO)
A Theory and Definition of Public Health Law

Statutes, regulations, and litigation are pivotal tools for creating the conditions for people to lead healthier and safer lives. Law can educate, create incentives, or deter; mandate safer product design and use of property; and alter the informational, physical, or economic environment. This chapter defines public health law as the power and duty of the state to assure the conditions for people to be healthy and the limitations on the state's power to constrain autonomy, privacy, liberty, and proprietary interests of individuals and businesses. It suggests five essential characteristics of public health law: (1) government's responsibility to defend against health risks and promote the public's health; (2) the population-based perspective of public health, emphasizing prevention; (3) the relationship between the government and the populace; (4) the mission, core functions, and services of the public health system; and (5) the power to coerce individuals, professionals, and businesses for the community's protection. The complex tradeoffs between the common good and private interests pose intellectual challenges, both theoretical and essential to the body politic.
Revisiting Mutual Fund Portfolio Disclosure

Author(s): Schwarz, CG; Potter, ME | Abstract: We document that CRSP and Thomson contain many voluntarily reported mutual fund portfolios that are not in SEC filings while, additionally, CRSP and Thomson are missing many SEC mandated portfolios available in SEC filings. We document that the voluntary disclosures are likely driven by convenience rather than duplicity. Although mandated portfolios contain securities with more return momentum, we find use of SEC or Thomson data lead to similar empirical findings. CRSP, however, contains inaccurate position information prior to 2008. Our findings have important implications, such as highlighting a 35% increase in observed manager trading by combining data sources.
Regioselective lithium–halogen exchange and palladium-catalyzed cross-coupling reactions of 2,4-dihaloquinolines

Abstract Lithium–halogen exchange of 2,4-dibromoquinolines proceeds regioselectively at C-4 and affords 4-substituted quinolines on quenching with electrophiles. Palladium-catalyzed cross-coupling reactions of 2-bromo-4-iodoquinoline provide 4-substituted 2-bromoquinoline derivatives.
Trends in Social Media: Persistence and Decay

Social media generates a prodigious wealth of real-time content at an incessant rate. From all the content that people create and share, only a few topics manage to attract enough attention to rise to the top and become temporal trends which are displayed to users.The question of what factors cause the formation and persistence of trends is an important one that has not been answered yet. In this paper, we conduct an intensive study of trending topics on Twitter and provide a theoretical basis for the formation, persistence and decay of trends. We find that the resonance of the content with the users of the social network plays a major role in causing trends. Also, we observe that a majority of the content propagated to cause trends arise from traditional media sources with social media acting as a selective amplifier for them.
Reply to Festenstein

This brief paper responds to Matthew Festenstein's 'Pragmatism, Inquiry, and Political Liberalism.'
Assured Water Supply Laws in the Sustainability Context

One of the foremost examples of the emerging field of “sustainability law” is assured water supply requirements: state and local mandates that compel developers to prove they have sufficient water before new construction can go forward. Despite, however, the growing emergence of these laws, the question of whether assured supply laws actually — rather than only conceptually — advance sustainability remains. Juxtaposing five western states’ assured supply laws, this article takes an initial run at that question. It reaches three principal conclusions: first, that assured supply laws in fact promote sustainability; second, that the extent to which assured supply laws promote sustainability varies by state; and finally, that additional work is needed to concretely assess how effective assured supply laws are, both in general and in the sustainability context.
Fundamentals of Accounting Losses

This paper examines accounting and nonaccounting factors behind accounting losses over a 50‐year period. Using multivariate time‐series analysis, we report evidence that the annual percentage of losses for U.S. firms is significantly related to accounting conservatism, Compustat coverage of small firms, real firm performance as measured by cash flows from operations, and business cycle factors. We further find that nonaccounting factors tend to play the dominant role in explaining accounting losses over our sample period. Our results are robust to alternative definitions of macroeconomic productivity, as well as to varying model specifications. Our findings contribute to the literature on accounting losses and accounting conservatism and have implications for the use of accounting loss information in numerous settings.
Deviations from Expected Stakeholder Management, Firm Value, and Corporate Governance

We propose that high-quality corporate governance may mitigate agency costs related to value-destroying investments in stakeholder management (SM). Using an unbalanced panel of 9,051 firm-year observations for 1,631 firms, we find that deviations from expected stakeholder management (ESM) are increasing in chief executive officer (CEO) portfolio delta. We find, however, that deviations from ESM are negatively related to proxies for effective board monitoring. We also document that the effect of governance mechanisms varies by industry (consumer or industrial orientation) and SM dimension. The results indicate that corporations with good governance pursue shareholder value maximization while constraining unnecessary investment in stakeholders.
Chandler and Global Business History

was Alfred D. Chandler's significance in the study of business history throughout the world? How did his views evolve? Why was his approach so influential? How did his thinking contribute to comparative business history and to the history of international business? This essay is designed to answer these questions. Strategy and Structure, Chandler's pathbreaking 1962 volume, had as its subtitle "Chapters in the History of Industrial Enterprise," omitting any mention of the United States. His opening chart, which introduced the multidivisional structure, included product and regional divisions, with no indication of what might constitute a region.1 A glance at the index to the book reveals no entries for any foreign country or region, nor is there a listing for an international or export division, or mention of international business, multinational enterprise, or the like (terms that by 1962 were all in use by students of and practitioners in international business). While Chandler's book was, in fact, confined to U.S. business history, his exposition did not ignore the expansion of U.S. companies over national borders. Had the index been more comprehensive, there would have been numerous entries related to business abroad. These would have included discussions of the international marketing facilities of U.S. companies, international sales and distribution patterns, and other business beyond the boundaries of the United States. Thus, Strategy and Structure did recognize the presence of U.S. business over borders. Indeed, as Chandler was writing Strategy and Structure, U.S. companies were expanding abroad at a rapid clip. Europeans were awed by the reach of American business enterprise. And as Chandler and, later, Christopher D. McKenna have pointed out, management consultants were often the introductory channel for the multidivisional organizational structure, not only in the United States but also abroad. By the
Clostridioides difficile exploits toxin-mediated inflammation to alter the host nutritional landscape and exclude competitors from the gut microbiota

Clostridioides difficile is a bacterial pathogen that causes a range of clinical disease from mild to moderate diarrhea, pseudomembranous colitis, and toxic megacolon. Typically, C. difficile infections (CDIs) occur after antibiotic treatment, which alters the gut microbiota, decreasing colonization resistance against C. difficile. Disease is mediated by two large toxins and the expression of their genes is induced upon nutrient depletion via the alternative sigma factor TcdR. Here, we use tcdR mutants in two strains of C. difficile and omics to investigate how toxin-induced inflammation alters C. difficile metabolism, tissue gene expression and the gut microbiota, and to determine how inflammation by the host may be beneficial to C. difficile. We show that C. difficile metabolism is significantly different in the face of inflammation, with changes in many carbohydrate and amino acid uptake and utilization pathways. Host gene expression signatures suggest that degradation of collagen and other components of the extracellular matrix by matrix metalloproteinases is a major source of peptides and amino acids that supports C. difficile growth in vivo. Lastly, the inflammation induced by C. difficile toxin activity alters the gut microbiota, excluding members from the genus Bacteroides that are able to utilize the same essential nutrients released from collagen degradation.
Delay-Predictability Trade-offs in Reaching a Secret Goal

We formulate a model of sequential decision making, dubbed the Goal Prediction game, to study the extent to which an overseeing adversary can predict the final goal of an agent who tries to reach that goal quickly, through a sequence of intermediate actions. Our formulation is motivated by the increasing ubiquity of large-scale surveillance and data collection infrastructures, which can be used to predict an agent’s intentions and future actions, despite the agent’s desire for privacy.Our main result shows that with a carefully chosen agent strategy, the probability that the agent’s goal is correctly predicted by an adversary can be made inversely proportional to the time that the agent is willing to spend in reaching the goal, but cannot be made any smaller than that. Moreover, this characterization depends on the topology of the agent’s state space only through its diameter.
Worker characteristics, job characteristics, and opportunities for phased retirement

Abstract This paper uses a telephone survey of 950 employers to examine employer-side restrictions on phased retirement. The survey not only collected information on establishment level policies, but it also asked questions about a specific worker's opportunity for phased retirement. The paper uses these data to first establish that employers are selective when offering opportunities for phased retirement. It then examines what worker and job characteristics are particularly important in the selection process.
Opening Hart's Concept of Law

It has been said that philosophy is a quest for the "beginnings" of things. In our psychological age, it may not be surprising to discover that originary images of man confront the philosopher's backward glance. Yet, the changes in such images from classical to modern times are not without a curious irony. For from Aristotle's grounding of ethical theory in the final good embodied in man's transcendent nature, we rudely encounter Hobbes' hard, modern vision. In the Hobbesian psychology, man is riddled by fear of violent death and ruled by an unquenchable passion to dominate his fellows.
The Stock Market and Investment

Changes in stock prices have substantial explanatory power for U.S. investment, especially for long-term samples, and even in the presence of cash flow variables. The stock market dramatically out-performs a standard q-variable because the market-equity component of this variable is only a rough proxy for stock market value. Although the stock market did not predict accurately after the crash of October 1987, the errors were not statistically significant. Parallel relationships for Canada raise the puzzle that Canadian investment appears to react more to the U.S. stock market than to the Canadian market. Article published by Oxford University Press on behalf of the Society for Financial Studies in its journal, The Review of Financial Studies.
Board Composition and Corrective Action: Evidence from Corporate Responses to Bad Acquisition Bids

This study investigates the role of corporate boards following large declines in share value surrounding acquisition announcements. The results indicate that firms with independent boards are less likely to complete these value-decreasing bids, suggesting that boards in fluence corporate responses to information in stock prices. Board independence is also as sociated with unusually high frequencies of asset restructuring for bids that are completed, suggesting that independent boards promote restructuring in mergers the market believes are difficult to integrate. These results complement existing evidence on the board's ex ante role in averting bad outcomes by showing that independent boards intervene following value-decreasing events.
The Conundrum of Covered Bonds

Covered bonds, which have been part of European fi nance since the time of Frederick the Great, are now being widely touted as the answer to securitization’s imperfections. There is great confusion, though, about the nature of covered bonds and their relationship to secured bond fi nancing and securitization. This article attempts to demystify covered bonds, examining how they fi t within a larger fi nancing framework, analyzing their legal rights and obligations, and comparing their costs and benefi ts. The benefi ts of covered bonds are similar to those of securitization; both can access low-cost capital market funding with low risk to their investors, and both can be used to regenerate lending markets. The costs of covered bonds may be higher, though, because the “dynamic” collateral pools and “dual” recourse to the issuer that protect covered bonds shift virtually all risk to unsecured creditors. Whether that risk should be allowed to be shifted so asymmetrically is a policy question for any nascent covered bond regime .
Institutionalized bailouts and fiscal policy : the consequences of soft budget constraints

SUMMARY States have soft budget constraints when they can expect a bailout by the federal government in the event of a financial crisis. This gives rise to incentives for unsound state fiscal policy. We test whether states with softer budget constraints have higher debts and deficits, receive more bailout funds, spend funds less efficiently, and are more likely to allocate funds to programs benefiting special interests. Exogenous variation in soft budget constraints across states and over time allows the identification of the effect of budget constraint softness on state fiscal policy. We take advantage of the fact that in Germany the states' political influence per state citizen is exogenous and varies because voting weights differ in the upper chamber of the German parliament. The stronger the political influence per state citizen, the softer the budget constraint. We show that states with softer budget constraint have higher deficits and debts, and receive more bailout funds. Further, overrepresented states are less efficient in spending public funds and are more prone to respond to rent seeking by interest groups.
Belief flipping in a dynamic model of statistical discrimination

Abstract The literature on statistical discrimination shows that ex-ante identical groups may be differentially treated in discriminatory equilibria. This paper constructs a dynamic model of statistical discrimination and explores what happens to the individuals who nonetheless overcome the initial discrimination. If an employer discriminates against a group of workers in her initial hiring, she may actually favor the successful members of that group when she promotes from within the firm. The worker's welfare implications (i.e. who benefits from an employer's discriminatory hiring practices) are unclear. Even though agents face discrimination initially, some may be better off because of it.
New gauge fields from extension of parallel transport of vector spaces to underlying scalar fields

Gauge theories can be described by assigning a vector space ¯V ( x ) to each space time point x . A common set of complex numbers, ¯ C, is usually assumed to be the set of scalars for all the ¯ V x . This is expanded here to assign a separate set of scalars, ¯ C x , to ¯ V x . The freedom of choice of bases, expressed by the action of a gauge group operator on the ¯V x , is expanded here to include the freedom of choice of scale factors, cy , x , as elements of GL(1, C ) that relate ¯ C y to ¯ C x . A gauge field representation of cy,x gives two gauge fields, A ( x ) and i B ( x ). Inclusion of these fields in the covariant derivatives of Lagrangians results in A ( x ) appearing as a gauge boson for which mass is optional and B ( x ) as a massless gauge boson. B ( x ) appears to be the photon field. The nature of A ( x ) is not known at present. One does know that the coupling constant of A ( x ) to matter fields is very small compared to the fine structure constant.
Tinker Gone Viral: Diverging Threshold Tests for Analyzing School Regulation of Off-Campus Digital Student Speech

In the context of students’ free speech rights, courts have traditionally premised school regulatory authority on geography, deferring to school officials on campus and limiting a school’s capacity to discipline students for conduct taking place beyond school hours or property. In the contemporary setting, however, where wireless devices, mobile phones, and other communicative technologies abound, a student may affect the school environment significantly without setting foot on school property. In the absence of guidance from the U.S. Supreme Court, the limits of school authority to regulate such “off-campus” student speech are uncertain. Several courts have permitted school discipline in response to off-campus student speech under the “substantial disruption” test developed by the Supreme Court in Tinker v. Des Moines Independent Community School District. Responding to distinct situations, these courts have fashioned separate threshold tests to determine whether to apply the substantial disruption test to off-campus student speech. These threshold tests are inconsistent and risk either overly burdening students’ First Amendment rights or undermining a school’s ability to carry out its educational mission. This Note argues that the threshold tests that courts have developed neither safeguard the rights of students nor meet the needs of schools adequately. By permitting schools to regulate off-campus student speech that may foreseeably reach school property or which bears a sufficient nexus to a school’s pedagogical interests, the Second and Fourth Circuit’s threshold tests fail to impose a meaningful limit on the kind or amount of speech that schools may regulate. On the other hand, by adopting a stricter threshold test based on identifiable threats of school violence, the Ninth Circuit’s standard may foreclose a school’s ability to protect students from other dangers. By instead redefining “substantial disruption” in accordance with the conception of student-on-student harassment that the Supreme Court has articulated in the Title IX context, courts might better
Slutsky Matrix Norms and the Size of Bounded Rationality

Given any observed demand behavior by means of a demand function, we quantify by how much it departs from rationality. Using a recent elab- oration of the "almost implies near" principle, the measure of the gap is the smallest norm of the correcting matrix that would yield a Slutsky ma- trix with its standard rationality properties (symmetry, singularity, and negative semide niteness). A useful classi cation of departures from ra- tionality is suggested as a result. Variants, examples, and applications are discussed, and illustrations are provided using several bounded rationality models.
Self-fulfilling impressions of criminality: unintentional race profiling

A society divides into a majority and a minority; each group may erroneously believe the other to be more crime prone. An investigating authority that is proportionately composed will tend to investigate the minority disproportionately. Despite unbiased courts, the minority will be overrepresented in the group of the convicted, fostering the false perception. Moreover, the minority, in order to avoid the burden of investigations, may be led to prefer to decriminalize conducts which the majority would punish. Finally, the biased impression of criminality also polarizes the allocation of enforcement or the intensity of minority policing. Normative implications include a discussion of injunctive relief, police hiring, the funding of public defenders, and federal highway policing on the basis of the commerce clause.
Openness and the Optimal Taxation of Foreign Know-How

Developing countries frequently offer tax incentives and even subsidize the entry and operation of foreign firms. I examine the optimality of such policies in an economy where growth is driven by entrepreneurial know-how, a skill that is continuously updated on the basis of the productive ideas implemented in the country. Openness allows foreign ideas to disseminate inside a country and can foster the country's domestic accumulation of know- how. With externalities, however, laissez-faire openness is suboptimal and can be growth-and even welfare-reducing. I examine the gains from openness under an optimal taxation program the self-funding taxes on domestic and foreign firms that maximize the welfare of the recipient country, subject to the equilibrium behavior of national and foreign firms. Under optimal taxation, openness is always welfare enhancing and leads lagging countries to catch up with the world frontier. Yet, a country may want to subsidize the entry of foreign firms only if it can also subsidize the domestic accumulation of know-how. I also consider the optimal tax program under a number of restrictions that developing countries typically face. For instance, a country must not subsidize entry of foreign firms if doing so requires taxing the concurrent cohort of domestic firms. Similarly, an international agreement that requires equal taxation of domestic and foreign firms can be welfare reducing for a country close to the knowledge frontier.
Quantifying the Costs of Intertemporal Taxable Income Shifting: Theory and Evidence from the Property-Casualty Insurance Industry

This paper presents a model of optimal tax-motivated intertemporal in- come shifting given a quadratic cost function that relates the costs associated with shifting income to the amount of income shifted. By formally modeling the income- shifting decision, we: (1) show how parameter estimates of the income-shifting cost function can be extracted from a linear regression where a proxy for income shifted is the dependent variable, (2) provide insight into prior tax-motivated income-shifting re- search, and (3) clarify the interpretation of independent variables that capture the in- teraction between tax incentives and nontax costs. We then provide an empirical ap- plication of our method for quantifying the costs to shift federal taxable income by investigating the income-shifting behavior of firms in the property and casualty (P&C) insurance industry following the Tax Reform Act of 1986. Our results suggest that the parameters of the cost function are negatively related to firm size, the cost to shift a significant amount of income is nontrivial, and the marginal cost to shift income in- creases as more income is shifted.