cssi/SciSciGPT-SciSciNet huggingface dataset:
Stare Decisis: A Universally Misunderstood Idea

Abstract'Stare Decisis' or ‘stay with what has been decided’ has long been understood as a fundamental principle of common law. In the absence of statutory language, it is supposed to provide stability by binding courts to follow earlier case-law of courts at equal or higher levels. By contrast, the continental European or civil law courts have traditionally seen themselves as not bound by case-law at all. In this article, the author argues that both understandings are ultimately wrong. Nowadays, courts all over the world are constantly challenged to find a course between Scylla and Charybdis – between the Empire of Mechanical Jurisprudence on the one side and the Empire of Arbitrary Jurisprudence on the other. The courts in both systems have to ensure that their decisions are objectively correct and subjectively perceived as just and fair. This can mean for a common law court having to deviate from earlier case-law in the name of objective justice although it would seem to fall under stare decisis. And i...
How Does Outsourcing Affect Performance Dynamics? Evidence from the Automobile Industry

This paper examines the impact of vertical integration on the dynamics of performance over the automobile product development life cycle. Building on recent work in organizational economics and strategy, we evaluate the relationship between vertical integration and different dimensions of product performance. Outsourcing facilitates access to cutting-edge technology and the use of high-powered performance contracts. Vertical integration allows firms to adapt to unforeseen contingencies and customer feedback, maintain balanced incentives over the life cycle, and develop firm-specific capabilities over time. Together, these effects highlight a crucial trade-off: while outsourcing is associated with higher levels of initial performance, vertical integration will be associated with performance improvement over the product life cycle. We test these ideas using detailed data from the luxury automobile segment, establishing three key results. First, initial performance is declining in the level of vertical integ...
A Matter of Principle: Accounting Reports Convey Both Cash-Flow News and Discount-Rate News

This paper modifies the standard returns-earnings regression in accounting research to show that financial reports convey both cash-flow news and discount-rate (expected-return) news. The paper poi...
Three Views of Tax

Traditional tax policy has been locked in a seemingly all-or-nothing debate between two apparent extremes, income and consumption taxation. But there are three choices of a comprehensive tax system, not two. This is because, under progressive rates, the two canonical types of consumption tax (prepaid and postpaid) are not equivalent, as the traditional view of tax would have them be. Adding in a distinct third view of tax makes clear that the best system for effecting liberal redistribution is not an income tax at all but a specific form of a consumption tax, a consistent progressive postpaid one. And this is, in large part, because such a consumption tax best gets at the yield to capital, in just the way ordinary moral intuitions want to get at it. Three Views of Tax Edward J. McCaffery
Do Automated Trading Systems Dream of Manipulating the Price of Futures Contracts? Policing Markets for Improper Trading Practices by Algorithmic Robots

I. BACKGROUND 236 A. Regulatory Framework for Futures and Other Derivatives 236 B. Derivatives Markets Today: Algo Bots, Black Boxes, and HFT 242 C. The CFTC’s Concept Release 246
Intelligence, human capital, and economic growth: A Bayesian Averaging of Classical Estimates (BACE) approach

Human capital plays an important role in the theory of economic growth, but it has been difficult to measure this abstract concept. We survey the psychological literature on cross-cultural IQ tests and conclude that intelligence tests provide one useful measure of human capital. Using a new database of national average IQ, we show that in growth regressions that include only robust control variables, IQ is statistically significant in 99.8% of these 1330 regressions, easily passing a Bayesian model-averaging robustness test. A 1 point increase in a nation’s average IQ is associated with a persistent 0.11% annual increase in GDP per capita.
Rare event risk and emerging market debt with heterogeneous beliefs

Abstract In a setting where the lender and the borrower have heterogeneous beliefs about the likelihood of a disastrous shock to the borrower's economy, we study the debt contract that defaults at the occurrence of that shock, as proposed by Barro (2006) . We find that a higher belief by the lender compared to the borrower can lead to countercyclical interest rates and credit spreads in non-default times, and to an increase in the borrower's indebtedness in default times, as often observed in emerging market economies. When calibrating the model to prices in the credit default swap market, we show that heterogeneous beliefs can account for more than 40% of the variation in CDS spreads associated with shocks to the borrower's economy in non-default times.
Bribes and Firm Value

I exploit the passage of the UK Bribery Act 2010 as an exogenous shock to UK firms’ cost of using bribes to study whether the ability to use bribes c reates firm value. First, I find that UK firms oper ating in high corruption regions of the world display negati ve abnormal returns upon passage of the Act. A firm operating exclusively in the most corrupt regions s uffers a 6.2% drop in value compared to a firm operating exclusively in the least corrupt regions. The effect is stronger for firms that are not alre ady subject to US anti-bribery regulation, are not part of corporate social responsibility indices, operat e in concentrated industries, and have better governance . Foreign firms subject to the Act because they hav e a UK subsidiary also exhibit negative abnormal return s. Second, I identify real effects of the Act. Rela tive to comparable continental European firms, UK firms expand their subsidiary network less into high corruption regions and their sales in these regions grow six percentage points more slowly.
A Fast, Easy, and Efficient Estimator for Multiparty Electoral Data

Katz and King have previously developed a model for predicting or explaining aggregate electoral results in multiparty democracies. Their model is, in principle, analogous to what least‐squares regression provides American political researchers in that two‐party system. Katz and King applied their model to three‐party elections in England and revealed a variety of new features of incumbency advantage and sources of party support. Although the mathematics of their statistical model covers any number of political parties, it is computationally demanding, and hence slow and numerically imprecise, with more than three parties. In this paper we produce an approximate method that works in practice with many parties without making too many theoretical compromises. Our approach is to treat the problem as one of missing data. This allows us to use a modification of the fast EMis algorithm of King, Honaker, Joseph, and Scheve and to provide easy‐to‐use software, while retaining the attractive features of the Katz and King model, such as the t distribution and explicit models for uncontested seats.
Beyond Categorical Label Representations for Image Classification

We find that the way we choose to represent data labels can have a profound effect on the quality of trained models. For example, training an image classifier to regress audio labels rather than traditional categorical probabilities produces a more reliable classification. This result is surprising, considering that audio labels are more complex than simpler numerical probabilities or text. We hypothesize that high dimensional, high entropy label representations are generally more useful because they provide a stronger error signal. We support this hypothesis with evidence from various label representations including constant matrices, spectrograms, shuffled spectrograms, Gaussian mixtures, and uniform random matrices of various dimensionalities. Our experiments reveal that high dimensional, high entropy labels achieve comparable accuracy to text (categorical) labels on standard image classification tasks, but features learned through our label representations exhibit more robustness under various adversarial attacks and better effectiveness with a limited amount of training data. These results suggest that label representation may play a more important role than previously thought.
Cyrius: accurate CYP2D6 genotyping using whole-genome sequencing data.

Responsible for the metabolism of ~21% of clinically used drugs, CYP2D6 is a critical component of personalized medicine initiatives. Genotyping CYP2D6 is challenging due to sequence similarity with its pseudogene paralog CYP2D7 and a high number and variety of common structural variants (SVs). Here we describe a novel bioinformatics method, Cyrius, that accurately genotypes CYP2D6 using whole-genome sequencing (WGS) data. We show that Cyrius has superior performance (96.5% concordance with truth genotypes) compared to existing methods (84–86.8%). After implementing the improvements identified from the comparison against the truth data, Cyrius’s accuracy has since been improved to 99.3%. Using Cyrius, we built a haplotype frequency database from 2504 ethnically diverse samples and estimate that SV-containing star alleles are more frequent than previously reported. Cyrius will be an important tool to incorporate pharmacogenomics in WGS-based precision medicine initiatives.
Firm Heterogeneity, Internal Finance, and `Credit Rationing'

This paper assesses the role of internal net worth (holding constant investment opportunities) in the allocation of credit in the presence of asymmetric information in the capital market. The authors consider an economy in which both "symmetric-information" and "information-intensive" entrepreneurs seek funds from the capital market, and they develop a simple general equilibrium model of credit allocation. Their emphasis is on shocks to borrower net worth. Depending on levels of net worth, the symmetric-information allocation, a "credit collapse," or intermediate allocations are possible. The model yields predictions corresponding to accelerator effects on investment and output, as well as real effects of collateral redistributions. Copyright 1990 by Royal Economic Society.
Keeping up Appearances: Reputational Threat and Impression Management after Social Movement Boycotts

This paper explores the extent to which firms targeted by consumer boycotts strategically react to defend their public image by using prosocial claims: expressions of the organization’s commitment ...
The innovation work environment of high–tech SMEs in the USA and Canada

This study examined the climate for innovation and creativity, and related outcome measures, in 31 Canadian and 11 US small– and medium–sized enterprises (SMEs), as assessed by 120 R&D engineers in those firms. Prior studies on the innovativeness of countries have been critical of Canadian firms compared to those in other industrialized countries. Our study tested whether differences existed between perceived climates, creativity and productivity of US and Canadian SMEs. The results indicated that the innovative climates and the perceptions of creativity and productivity of US and Canadian firms are very similar. Furthermore, the most important factors relating to creativity (Challenging Work and Organizational Encouragement) were the same for both the USA and Canada. Our conclusion is that support for innovation in Canadian SMEs is comparable with that of US SMEs. Differences in innovation measured at the national level can probably be attributed to other factors, such as industry structure and the degree of innovation in large firms.
Toxic Torts, Public Interest Law, and Environmental Justice: Evidence from Louisiana*

Poor and minority communities facing environmental hazards have increasingly turned to legal strategies to seek redress but a divide has emerged in these cases and their outcomes. Some aggrieved communities turn to private injury lawyers, while others secure representation by public interest groups, such as Earthjustice, the Southern Environmental Law Center, or university law clinics. Is justice being equally served in these cases? We analyze the impact of toxic tort versus legal aid approaches in determining the outcome of environmental justice struggles using four landmark cases from Louisiana in the context of other factors that appeared important in determining how these cases resolved.
Parental Employment and Child Cognitive Development

Maternal employment during the first three years of the child’s life has a small deleterious effect on estimated verbal ability of three- and four year- olds and a larger negative impact on reading and mathematics achievement of five- and six-year-olds. This study provides a more pessimistic assessment than most prior research for two reasons. First, previous analyses often control crudely for differences in child and household characteristics. Second, the negative relationships are more pronounced for the reading and mathematics performance of ? ve- and six-year-old children than for the verbal scores of three- and four-year-olds.
Trading speed for accuracy? Managing goal conflict and accommodation in the U.S. Unemployment Insurance Program

Public managers must often cope with competing and conflicting goals. The common formulation is to assume that managers must trade-off goals against each other. But is this always true? An alternative hypothesis is that sometimes managers may instead be able to improve outcomes on multiple goals simultaneously—by altering management practices. We test this “trade-off” notion using a panel of state-level administrative data from the U.S. unemployment insurance (UI) system from 1997 to 2004 and qualitative interviews from selected states. The trade-off examined is timeliness of UI benefit payments versus the quality of UI determinations. In general, we find that state administrators often adopt management practices that facilitate improved outcomes for both timeliness and quality, indicating no trade-off but instead a synergy between outcomes. We also find evidence of a feedback effect linking higher performance on timeliness to better quality determinations.
Financial Innovation, the Discovery of Risk, and the U.S. Credit Crisis ⁄

Abstract Financial innovation and overconfidence about the risk of new financial products were key factors behind the 2008 U.S. credit crisis. We show that a model with a collateral constraint in which learning about the risk of a new financial environment interacts with Fisherian amplification produces a boom–bust cycle in debt, asset prices and consumption. Early realizations of a high-borrowing-ability regime turn agents optimistic about the persistence probability of this regime. Conversely, the first realization of a low-borrowing-ability regime turns agents unduly pessimistic. The model predicts large increases in household debt, land prices and excess returns during 1998–2006 followed by a collapse.
"Dangerous Government": Info-Liberalism, Active Citizenship, and the Open Government Directive

There has been much debate about the change Barack Obama represents. This article considers this question by using Michel Foucault’s concept of governmentality to explore the underlying governmenta...
Self-Incrimination's Covert Federalism

One might infer from such plaudits that the privilege enjoys even more judicial protection than newer rights of speech and religion. Indeed, the U.S. Supreme Court may unwittingly lend support to that view by means of the contrasting ways it analyzes First and Fifth Amendment rights. The Court analyzes First Amendment rights of speech and religion by weighing individual speech and religion interests against governmental interests, and by allowing governmental interests to override individual interests whenever governmental interests are "compelling." 7 In contrast, when the Court analyzes Fifth Amendment claims of privilege, the Court does not engage in balancing, at least not overtly. Although the Court occasionally finds that interests being asserted are not ones that the privilege safeguards8 or that if they are, defendants waived them,9 once the Court
A conforming discontinuous Galerkin finite element method for the Stokes problem on polytopal meshes

A new discontinuous Galerkin finite element method for the Stokes equations is developed in the primary velocity-pressure formulation. This method employs discontinuous polynomials for both velocity and pressure on general polygonal/polyhedral meshes. Most finite element methods with discontinuous approximation have one or more stabilizing terms for velocity and for pressure to guarantee stability and convergence. This new finite element method has the standard conforming finite element formulation, without any velocity or pressure stabilizers. Optimal-order error estimates are established for the corresponding numerical approximation in various norms. The numerical examples are tested for low and high order elements up to the degree four in 2D and 3D spaces.
Computing HF by factoring mapping classes

Bordered Heegaard Floer homology is an invariant for 3–manifolds with boundary. In particular, this invariant associates to a handle decomposition of a surface F a differential graded algebra, and to an arc-slide between two handle decompositions, a bimodule over the two algebras. In this paper, we describe these bimodules for arc-slides explicitly, and then use them to give a combinatorial description of HF of a closed 3–manifold, as well as the bordered Floer homology of any 3–manifold with boundary.
Functoriality for the su(3) Khovanov Homology

Author(s): Clark, David Alan | Abstract: We prove that Morrison and Nieh's categorification of the su(3) quantum link invariant is functorial with respect to tangle cobordisms. This is in contrast to the categorified su₂ theory [Kho00, BN05], which was not functorial as originally defined [Jac04, CMW]. We use methods of Bar- Natan [BN07] to construct explicit chain maps for each variation of the third Reidemeister move. Then, to show functoriality, we modify arguments used by Clark, Morrison, and Walker [CMW] to show that induced chain maps are invariant under Carter and Saito's movie moves [CS93, CRS97]
Why do private firms hold less cash than public firms? International evidence on cash holdings and borrowing costs

Abstract We contend that high borrowing costs can overwhelm precautionary motives and induce low cash holdings in private firms. Supportive of our hypothesis, we find European private firms hold less cash than public firms and this differential relates to borrowing costs. Results are robust to endogeneity concerns and reveal private firms use cash flow to pay-down existing debt instead of building cash reserves. Further, stronger creditor rights and debt market development lead to convergence in cash policies of private and public firms.
Causation in Context

Causation in Context examines and critiques the Supreme Court’s January 2014 decision in Burrage v. United States and the false equivalency drawn between factual causation standards in criminal law and employment discrimination law. In nearly all of its opinions on factual causation, the Court has looked to the “ordinary meaning” of statutory language, cautioning, in some form or another, that “text may not be divorced from its context.” Nonetheless, the Court continues to do just that, applying linguistic meaning across statutes without consideration of its context, the type of statute in which the language is found, the policy goals at issue in its creation, and the overall functioning of causation in the relevant area of law. That was certainly the case in Gross v. FBL Financial Services, Inc. and University of Texas Southwestern Medical Center v. Nassar, the Court’s recent factual causation employment cases. In Burrage, however, the Court takes this acontextual approach one step further by drawing an equivalency between criminal law and employment discrimination that is not only illogical but also potentially detrimental to future employment discrimination jurisprudence.This article draws on the existing scholarly critique of “but-for” causation in disparate treatment cases and argues that the Burrage Court’s false equivalency between criminal law and employment discrimination law is as damaging as the Court’s decisions in Gross and Nassar. Causation in Context examines the history of “but-for” causation in employment cases, explores the four major problems with the Burrage approach, and details the ways in which it is likely to negatively impact discrimination doctrine into the future.
Taxes, Financing Decisions, and Firm Value

We use cross-sectional regressions to study how a firm's value is related to dividends and debt. With a good control for profitability, the regressions can measure how the taxation of dividends and debt affects firm value. Simple tax hypotheses say that value is negatively related to dividends and positively related to debt. We find the opposite. We infer that dividends and debt convey information about profitability (expected net cash flows) missed by a wide range of control variables. This information about profitability obscures any tax effects of financing decisions.
From Bards to Search Engines: Finding What Readers Want from Ancient Times to the World Wide Web

Copyright theorists often ask how incentives can be designed to create better books, movies, and art. But this is not the whole story. As the Roman satirist Martial pointed out two thousand years ago, markets routinely ignore good and even excellent works. The insight reminds us that incentives to find content are just as necessary as incentives to make it. Recent social science research explains why markets fail and how timely interventions can save deserving titles from oblivion. This article reviews society’s long struggle to fix the vagaries of search since the invention of literature. We build on this history to suggest policies for the emerging world of online media. Homeric literature was produced and disseminated through direct interactions between audiences and authors. Though appealing in many ways, the process was agonizingly slow. By the 1st Century AD commercial publishers had moved to the modern model of charging readers above-cost prices to pay for search and marketing. Crucially, the new model was only sustainable so long as firms could suppress copying. We argue that Roman and early modern publishers developed remarkably successful self-help strategies to do this. However, their methods did little to suppress copying after the first edition. This seemingly modest defect made publishers profoundly risk averse. Ancient best-seller lists were invariably dominated by authors who had been dead for centuries. Publishers’ self-help systems collapsed under a wave of piracy in the mid-17th Century. This led to the first modern copyright statutes. Crucially, the new laws extended protection beyond the first edition. This encouraged modern business models in which publishers gamble on a dozen titles for each that succeeds. The ensuing proliferation of titles helped fuel the Enlightenment. It also promoted a rich new ecosystem of search institutions including libraries, newspaper critics, and editors. The Digital Age has changed everything. As copyright fades, the old institutions for finding titles are drying up. We explore several possible responses. First, society can shore up current publishing models by expanding copyright and technical protections. We argue that these methods cannot save book search but might be adequate for music and movies. Second, search engines could pay for editors. We argue that an on-line Digital Bookstore can suppress copyists long enough to fund reasonable search efforts. Finally, society can return to the Homeric pattern of harvesting advice directly from audiences. We explore various commercial and open source institutions for organizing the work.
Bayesian analysis of random coefficient logit models using aggregate data

Abstract We present a Bayesian approach for analyzing aggregate level sales data in a market with differentiated products. We consider the aggregate share model proposed by Berry et al. [Berry, Steven, Levinsohn, James, Pakes, Ariel, 1995. Automobile prices in market equilibrium. Econometrica. 63 (4), 841–890], which introduces a common demand shock into an aggregated random coefficient logit model. A full likelihood approach is possible with a specification of the distribution of the common demand shock. We introduce a reparameterization of the covariance matrix to improve the performance of the random walk Metropolis for covariance parameters. We illustrate the usefulness of our approach with both actual and simulated data. Sampling experiments show that our approach performs well relative to the GMM estimator even in the presence of a mis-specified shock distribution. We view our approach as useful for those who are willing to trade off one additional distributional assumption for increased efficiency in estimation.
You Are Living in a Gold Rush

This article argues that our times, characterized as they are by dreams of vast wealth, environmental destruction, and growing social inequality, resemble nothing so much as earlier get-rich-quick periods like the Gilded Age and the Califor-
Using First Name Information to Improve Race and Ethnicity Classification

This article uses a recent first name list to develop an improvement to an existing Bayesian classifier, namely the Bayesian Improved Surname Geocoding (BISG) method, which combines surname and geo...
The Article II Safeguards of Federal Jurisdiction

Jurisdiction stripping has long been treated as a battle between Congress and the federal judiciary. Scholars have thus overlooked the important (and surprising) role that the executive branch has played in these jurisdictional struggles. I seek to fill that void. Drawing on two strands of social science research, I argue that the executive branch has a strong incentive to use its constitutional authority over the enactment and enforcement of federal law to oppose jurisdiction-stripping measures. Notably, this structural argument has considerable historical support. The executive branch has repeatedly opposed jurisdiction-stripping proposals in Congress. That has been true even when the President was otherwise deeply critical of the federal courts’ constitutional jurisprudence (such as during the Franklin Roosevelt and Reagan Administrations). Furthermore, even when jurisdiction-stripping measures do become law, the executive branch controls the enforcement of that law. The Department of Justice has repeatedly used this enforcement authority to urge the courts to interpret jurisdictional restrictions narrowly in order to preserve jurisdiction over constitutional claims. This executive branch practice has important implications for the Obama Justice Department, as it litigates cases brought by current and former detainees in the war on terror. One provision of the Military Commissions Act of 2006 appears to preclude any court from examining a detainee’s challenge to his “conditions of confinement” during his detention. The executive branch could substantially limit the impact of this law by conceding (as it has in prior administrations) that the federal courts retain jurisdiction over constitutional claims. ∗ Assistant Professor, Florida State University College of Law. I also served as an attorney in the U.S. Department of Justice, Civil Division, Appellate Staff from 2003-2007. Many thanks, for comments and suggestions, to Jack Beermann, Neal Devins, Barry Friedman, Ron Krotoszynski, David Landau, Gary Lawson, John Manning, Henry Monaghan, Jim Pfander, Marty Redish, Lori Ringhand, Mark Seidenfeld, and David Shapiro. This paper was selected for presentation at the Junior Faculty Federal Courts Workshop, University of Illinois College of Law (October 2010). I am grateful for the suggestions made at that workshop and at the workshop at Northwestern University School of Law (February 2011) and at the Southeast Regional Junior Faculty Working Papers Conference, University of Florida (December 2010).
THE FEDERAL COMMON LAW OF VICARIOUS FIDUCIARY LIABILITY UNDER ERISA

The Employee Retirement Income Security Act of 1974 (“ERISA”), the federal law that regulates employer-sponsored benefit plans, has a rich history of judicially-created federal common law. This Article explores the theoretical, policy, statutory, and stare decisis grounds for the development of another area of federal common law under ERISA – the incorporation of respondeat superior liability principles to impose ERISA fiduciary liability (“vicarious fiduciary liability”) upon a corporation for the fiduciary activities of its employees or agents. The Article proposes that the federal courts should adopt a federal common law rule of vicarious fiduciary liability under ERISA based on the traditional scope of employment approach. Under such a rule, a corporate principal whose own internal employees or agents perform fiduciary functions during the course and within the scope of their employment or agency relationship would be strictly liable under ERISA for any breach of fiduciary duty by the employee or agent. Vicarious fiduciary liability should be limited, however, so that a nonfiduciary corporate principal would not be subject to damages claims under ERISA for the rogue fiduciary activities of its employees or agents, but would be subject to restitution as necessary to prevent unjust enrichment of the principal. A federal common law rule of vicarious fiduciary liability under ERISA is necessary for two reasons. First, a rule of vicarious fiduciary liability is essential to maintaining and enforcing ERISA’s comprehensive system of fiduciary regulation. Second, vicarious fiduciary liability is needed to prevent employer overreaching under the judicially-created settlor function defense to breach of fiduciary duty claims. Absent a federal common law rule of vicarious fiduciary liability, a corporate employer, in its nonfiduciary capacity as the settlor of its ERISA plan, may design the documents that govern the employer’s plan as a shield against fiduciary responsibility for the actions of the employer’s own internal fiduciary employees. This misuse of nonfiduciary settlor powers, which is contrary to both the letter and the spirit of ERISA, would be prevented by a federal common law rule of vicarious fiduciary liability.
Insuring Floods: The Most Common and Devastating Natural Catastrophes in America

If the way flood losses are insured (or uninsured) in America is not working, is there a better way? This Essay maintains that the answer is “yes.” The simple, but underappreciated, solution offered in this Essay is the elimination of the flood exclusion that is found in standard form “all risk” homeowners insurance policies.
Confrontation, Experts, and Rule 703

The United States Supreme Court has decided several cases concerning expert testimony and the Confrontation Clause. This essay argues that confrontation issues are complicated by Federal Evidence Rules 703 and 705, which changed the common law rules. Altering the common law made sense in civil cases because civil rules of procedure provide extensive discovery, which ensures basic fairness. In contrast, discovery in criminal cases is quite limited, which undercuts an accused’s ability to meaningfully confront prosecution experts at trial.
Education finance reform and investment in human capital: lessons from California

Abstract This paper examines the effect of different education financing systems on the level and distribution of resources devoted to public education. We focus on California, which in the 1970’s was transformed from a foundation system of mixed local and state financing to one of effectively pure state finance and subsequently saw its funding of public education fall between 10 and 15% relative to the rest of the US. We show that a simple political economy model of public finance can account for the bulk of this drop. We find that while the distribution of spending became more equal, this was mainly at the cost of a large reduction in spending in the wealthier communities with little increase for the poorer districts. Our calibrated model implies that there is no simple trade-off between equity and resources; we show that if California had moved to the opposite extreme and abolished state aid altogether, funding for public education would also have dropped by almost 10%.
Fund Flows and Underlying Returns: The Case of ETFs

I investigate the relation between exchange-traded fund (ETF) flows and their underlying securities’ returns using a unique database covering U.S. equity ETFs and adjusted for the flow reporting bias. I find a strong positive relation between daily ETF flows and the underlying stocks’ returns, suggesting a price pressure effect related to the flow activity. At an aggregate level, vector autoregressive (VAR) tests show that 38% of the flow shock’s price change is reversed after five days, which lends support to price pressure hypothesis. These results extend the research concerning the price impact of institutional trades to the novel ETF framework. JEL Classification: G12, G14, G23
Victim, Offender, and Situational Characteristics of Violent Crime

The purpose of this study was to examine victim, offender, and situational characteristics of violent and repeat offense behavior in two ways. First, possible differences between one-time offenders and repeat offenders on select victim, offender, and situational characteristics associated with the first victim-related offense were assessed. Second, those characteristics which were the strongest predictors of repeat offense behavior with a victim as compared to victimless repeat offense behavior were pinpointed. One-time offenders were defined as those who engage in no other offenses after their first victim-related offense; repeat offenders engaged in at least one other offense after their first victim-related offense. A considerable amount of research exists on victim and offender characteristics in different kinds of crimes.' More recently,
A reversal of educational fortune? Educational gender gaps in Bangladesh

Historically, educational gender gaps in Bangladesh persisted as households invested more in the education of boys than girls. Recent anecdotal and descriptive reports, however, claim that Bangladesh has achieved gender parity in education. Using advanced empirical methods and nationally representative data, this study finds that urban and rural boys (relative to urban and rural girls) have a 7.4-27.4% lower likelihood of being enrolled in school, 0.4-1.5 fewer years of educational attainment and 9.7-30.8% lower likelihood of being literate. These findings draw attention to the causes of the reversal in the educational gender gap in Bangladesh. Copyright © 2008 John Wiley & Sons, Ltd.
Measuring the True Cost of Government Bailout

Government intervention to assist individual businesses and industries during the 2008–2009 economic crisis was extraordinary in variety and scope. Despite official protestations of ―no more bailout‖ in the DoddFrank Wall Street Reform and Consumer Protection Act of 2010, future government interventions are inevitable, should economic circumstances become sufficiently dire. Moreover, even if Congress eliminates overt bailout-type interventions, indirect forms of public bailout are likely to continue. Understandably, taxpayers have been concerned about the cost. A simple tally of dollars authorized or disbursed is wholly inadequate to accurately assess the costs of various interventions. This Article addresses the challenges of providing reasonable budgetary information with respect to different types of bailout expenditures. In addition to looking at costs for the more obvious bailout programs, the analysis explores the special cost estimation challenges for other more covert actions, such as special tax breaks or relief from burdensome regulation, that serve a "bailout" function. The Article also takes issue with the fragmentation of intervention efforts among different ―on-budget‖ and ―off-budget‖ entities and with some of the methodologies used by the government to value assets obtained in its bailout efforts, arguing that decision making about the appropriate allocation of aggregate resources is hampered when some expenditures are ―off-budget‖ altogether and when even ―on-budget‖ agencies use different accounting methods. Finally, the Article calls for transparency and budget accounting for public bailouts accomplished more indirectly through the tax system and other regulatory regimes. Adequate and transparent budget accounting for bailout costs requires greater consistency in valuation and accounting methods, and a more unified presentation of aggregate information in the budget with respect to all government bailout-type activities.
FINANCIAL CONTAGION ON THE INTERNATIONAL TRADE NETWORK

We combine data on international trade linkages with a network approach to map the global trading system as an interdependent complex network. This enables us to obtain indicators of how well connected a country is into the global trading system. We use these network-based measures of connectedness to explain stock market returns during recent episodes of financial crisis. We find that a crisis is amplified if the epicenter country is better integrated into the trade network. However, target countries affected by such a shock are in turn better able to dissipate the impact if they are well integrated into the network. A network approach can help explain why the Mexican, Asian, and Russian financial crises were highly contagious, while the crises that originated in Venezuela and Argentina did not have such a virulent effect. We suggest that a network approach incorporating the cascading and diffusion of interdependent ripples when a shock hits a specific part of the global trade network provides us with an improved explanation of financial contagion. (JEL F10, F36, F40, G15)
Share values, inflation, and escalating tax rates

Abstract The interaction of inflation with a progressive tax system has been known to cause tax rates, and thus tax liabilities, to escalate with nominal income. Often blamed for having undesirable effects on investment and wealth, this feature of modern tax systems has not received formal treatment in the literature. The present study examines the impact of this inflation-related phenomenon upon the value of corporate equity within the framework of partial equilibrium. It is shown that the combination of moderate inflation and a mildly progressive rate structure may have a substantial adverse effect on share values, an effect sharply increasing with the firm's real growth rate. These results provide a partial explanation for the apparent conflict between the Fisherian hypothesis and the commonly observed inverse relationship between the rate of inflation and the deflated value of stock price indices. To the extent that occasional adjustment of tax schedules does not prevent taxpayers from being pushed toward higher tax brackets, these results suggest a sizable potential benefit from full indexation of tax rates in an economy suffering from chronic inflation. They also confirm the belief that failure to do so is expecially harmful to economic growth.
A Framework for Research on Corporate Accountability Reporting

SYNOPSIS: This paper provides an accounting-based conceptual framing of the phenomenon of corporate accountability reporting. Such reporting is seen as arising from a delegator’s (e.g., a citizenry) demand to hold a delegate (e.g., shareholders) to account. When effective, corporate accountability reporting can internalize certain externalities into firms’ resource allocation decisions, although doing so will not always serve shareholders’ interests. I leverage the positive accounting literature’s current understanding of properties of financial reports to develop three hypotheses on corporate accountability reporting. I argue that an accountability reporting system is likely to be more useful to a delegator if it: (1) mitigates information advantages across delegates and delegators, (2) reports both stocks and flows in the measures of account, and (3) has a mutually agreeable due process to match across periods the actions of delegates and the outcomes of those actions. I show how the successive incidence of these properties in observed corporate accountability reports can be used to determine whether and how those reports create or destroy value for shareholders and other constituencies.
Investor sentiment and the mean-variance relation

Abstract This study shows the influence of investor sentiment on the market's mean–variance tradeoff. We find that the stock market's expected excess return is positively related to the market's conditional variance in low-sentiment periods but unrelated to variance in high-sentiment periods. These findings are consistent with sentiment traders who, during the high-sentiment periods, undermine an otherwise positive mean–variance tradeoff. We also find that the negative correlation between returns and contemporaneous volatility innovations is much stronger in the low-sentiment periods. The latter result is consistent with the stronger positive ex ante relation during such periods.
Voting and Electoral Politics in the Wisconsin Supreme Court

In choosing selection methods for state supreme court justices, states may attempt to balance the conflicting ideals of judicial independence and accountability. Unlike the federal process, which contains no electoral mechanisms in order to maximize judicial independence, the Wisconsin State Constitution requires its judiciary to vie for citizen support in non-partisan elections. Supreme Court vacancies are filled by gubernatorial appointment. This paper questions whether these elections undercut judicial independence by affecting the ways justices vote. In examining all criminal cases decided by the Wisconsin Supreme Court over a fifteen year period, this paper concludes that being appointed versus elected in the initial term is significantly correlated with a justice's voting for a defendant's claim in that initial term. In contrast, looking at the overall Court, proximity to election has no significant impact on judicial voting for a defendant's legal claim. However, some individual justices do to display changes in voting patterns as they near re-election. Research considering other factors, such as political party, other case types, and case notoriety, should be conducted to confirm any such conclusions. Further research should also be conducted comparing voting patterns of judges who have been appointed versus those that have been elected.
The Concept of Special Custom in International Law

There are regrettably few cases in international law that go into the question of the proof necessary to establish a customary rule binding upon the defendant state. And from those few cases, notably those decided by the World Court, most writers have drawn pessimistic conclusions as to the proof needed for custom because of the Court’s apparent insistence, in Professor Palk’s words, upon “some tangible evidence of consent on the part of the state that is bound.” A showing of consent is a very difficult proposition. Many legal disputes arise precisely because neither side has previously consented to the same rule. As Lauterpacht argued, to say that prior consent must be shown in order to reach a legal conclusion in any given international dispute is tantamount to rejecting the possibility of the existence of the vast majority of the rules of international law. But then, how can we explain the World Court’s reasoning in the Asylum, Right of Passage, and Fisheries Cases in which the element of consent on the part of the defendant states seemed to play such a vital role in the Court’s reasoning concerning the existence of binding rules of law?
Lifetime Employment in Japan: Concepts and Measurements

This paper poses three fundamental questions about lifetime employment in Japan: How big is it? How unique is it? And, how is it changing? I examine different concepts and methods for estimating lifetime employment and conclude that it covers roughly 20 percent of the Japanese labor force. Job mobility remains considerably lower in Japan than in other economies (particularly the U.S.). Evidence regarding changes in lifetime employment is mixed. The share of workers in the core, an ex-ante measure of lifetime employment, is declining. But the probability of job separations has remained stable for those who are already in the system. I also find evidence that the incentives among workers, managers and executives are aligned to preserve the lifetime employment system.
Entrepreneurial activity, risk, and the business cycle

Abstract This paper analyzes a model in which the risk associated with entrepreneurial activity implies that the amount of such activity is procyclical and results in amplification and intertemporal propagation of productivity shocks. In the model risk averse agents choose between a riskless project and a risky project with higher expected output (‘the entrepreneurial activity’). Agents who become entrepreneurs need to bear part of the project-specific risk for incentive reasons. More agents become entrepreneurs when productivity is high, because agents are more willing to bear risk and need to bear less risk for incentive reasons. Furthermore, cross-sectional heterogeneity can be countercyclical.
Implementing and interpreting event studies of regulatory changes

Abstract The study of the stock price reaction to an event is a standard tool in economics and finance. The spate of regulatory changes in recent years provides ample opportunity for such studies. However, event studies of regulatory changes present a number of challenges. Analysts must carefully design and interpret tests of hypotheses regarding the effects of regulatory changes because of the nature of the regulatory process and financial markets. I discuss the way to test for the impact of regulatory changes in an event study. I also comment on what event studies can and cannot tell us about the effects of regulatory changes, and on ways to more effectively implement them.
“The Better Part of Valour Is Discretion”: Should the IRS Change or Surrender Its Oversight of Tax-Exempt Organizations?

Recent events have highlighted the difficulties the Internal Revenue Service faces when attempting to ensure that purportedly tax-exempt organizations in fact qualify for that status. The problems in this area go much deeper than a group of IRS employees subjecting certain organizations to greater scrutiny based on their political leanings, however. For decades members of the public, the media, the academy, and Congress have criticized the limited ability of the IRS to ensure that organizations claiming exemption from federal income tax in fact deserve that categorization. Yet examples of IRS failings in this area continue to arise with depressing frequency. This is not surprising given that oversight of exempt organizations is but one of many areas that suffers from major difficulties faced by the IRS as a whole, including shrinking resources, growing responsibilities, and increasing responsibility for determinations that go beyond those necessary for revenue collection. This Article draws on tax compliance literature to explore how the current level and methods of oversight for exempt organizations could be modified to improve compliance even given the existing resource constraints. It concludes that while marginal improvements in oversight are possible, there is no silver bullet to counter the IRS’s growing inability to oversee this area. Part IV of this Article therefore turns to more radical proposals that would move the locus of oversight for exempt and particularly charitable organizations out of the IRS. The proposal that shows the most promise, but also is the most risky, would shift much of this role to a private, self-regulatory body overseen by the IRS. Given the current state of IRS oversight, this proposal deserves serious consideration.