cssi/SciSciGPT-SciSciNet huggingface dataset:
Foreclosures and local government budgets

Abstract Foreclosures have been shown to have a negative financial impact on borrowers, lenders, and neighbors. It has also been argued that they have important negative effects on the budgets of local governments, but the only econometric evidence on this is provided by Alm, Buschman and Sjoquist (2014) foreclosures in this journal. They limit their analysis to the revenue side of the budget and find important effects. As a complement to their work, we argue and demonstrate using a unique 15-year panel of Florida counties that foreclosures also have important effects on local governments' expenditures.
Automatic Annotation of Semantic Fields for Political Science Research

ABSTRACT This article discusses methods for automatic annotation of political texts for semantic fields—groups of words with related meanings. This type of annotation is useful when studying political communication, such as legislative debate or political speeches. We present three types of automatic annotation: unsupervised clustering, dictionary-based approaches, and a method based on relevant experimental data. All methods are applied to analyzing Margaret Thatcher's political rhetoric. For this data, we find that unsupervised clustering is most useful for tracing topics; dictionary-based methods are most effective in a comparative setting; whereas the last method is the most promising for detecting off-topic, singular uses of semantic domains, which are often rhetorical tools used to achieve a political end. Applicability, strengths, and weaknesses of each method and of their combinations are addressed in detail.
The Essential and Growing Role of Legal Education in Achieving Sustainability

1. Public Papers of the Presidents, John F. Kennedy, Jan. 1 to Nov. 22, 1963, 503 (1964) (remarks in Bonn at the Signing of a Charter Establishing the German Peace Corps, June 24, 1963). In Dante’s Inferno, from which the statement is taken, they are actually just outside the real Hell. The guide explains: This wretched measure is kept by the miserable souls who lived without infamy and without praise. They are mixed with that cowardly chorus of angels who were not rebels yet were not faithful to God, but were for themselves. The heavens reject them so as not to be less beautiful, nor does deep Hell receive them, for the wicked would have some glory from them. The Divine Comedy of Dante Alighieri: Inferno, Canto III, 34–42 (Robert M. Durling ed. & trans., Oxford Univ. Press 1996). The guide also describes them as “the grieving peoples who have lost the good of the intellect.” Id. at 16–18.
Family Planning and Government Regulation – Jewish Law Perspectives

Jewish law highly prizes human life. It strongly promotes human reproduction and the protection of human health. For these reasons, Jewish law generally opposes abortion. Governmental measures that would require Jews or Jewish organizations to assist or enable conduct that violates Jewish law, such as religiously impermissible abortions, would impinge on their religious freedom. In addition Jewish law usually encourages humankind’s creative use of intellect and technology to accomplish desired objectives, such as curing and preventing physical infirmities and even more so with respect to saving human life.Jewish law authorities have manifested a much more ambivalent attitude regarding the use of modern reproductive technologies. There is a consensus that Jewish law does not require extraordinary measures be used to create human life. However, authorities are acutely sensitive to the fact that many people unable to reproduce in the traditional manner yearn to have children. Moreover, some Jewish law authorities believe that by using certain modern reproductive technologies, a person may fulfill a religious duty to procreate. Nevertheless, other authorities argue that some such technologies actually violate Jewish law. Furthermore, even if the use of particular technologies is permitted, their use, or their possible misuse, could cause considerable societal harm. This paper, which emerged from a conference held by the DePaul University Health Law Institute, examines these complicated issues in a way that makes the relevant Jewish precepts readily accessible.
The costs of a (nearly) fully independent board

Abstract A significant and growing percentage of U.S. firms now have boards where the CEO is the only employee director (hereinafter fully independent boards). This paper studies whether and how this practice impacts board effectiveness. I find that fully independent boards are associated with a significant reduction in firm performance. Further tests suggest two channels for this effect. First, full independence deprives the board of spontaneous and regular access to the firm-specific information of other senior executives. Second, full independence eliminates the first-hand exposure of future CEOs to board-level discussions of strategy, which steepens the learning curve for eventually promoted candidates.
Death of Conflicts

This article is about choice of law. It is about making choices of law fit the policies of the underlying substantive law and about why that fit is important both to the choice of law and to the substantive law. The author critiques choice law approaches and also explores choice law in multiple settings. The author argues that courts must shape the law from policy using the analytical tools available in the whole of the law.
Computer-aided evaluation of racial representation in jury selection

Abstract This paper examines a computer-aided evaluation of racial representation injury selection. The main thrust of the paper is to present a technical comparison of two methods of selecting jury panels utilizing both spatial analyses and covariance structural modelings (LISREL). The computer-aided geographic analysis of racial representation in jury selection is further illustrated by the use of both spatial display of racially segregated residential patterns and inferential statistical methods in substantiating disproportionate racial representation in jury panels. The research site is the Long Beach Superior Court District, Los Angeles County, CA. The spatial analysis demonstrates that if representative jury panels are to be obtained, court officials must recognize the existence of racial residential segregation. Minority and ethnic groups are unequally distributed in neighborhoods and consequently within the area served by the court. Thus, the selection process must incorporate racial and socioeconomic patterns affecting residential segregation into the selection process.
Boundary First Flattening

A conformal flattening maps a curved surface to the plane without distorting angles—such maps have become a fundamental building block for problems in geometry processing, numerical simulation, and computational design. Yet existing methods provide little direct control over the shape of the flattened domain, or else demand expensive nonlinear optimization. Boundary first flattening (BFF) is a linear method for conformal parameterization that is faster than traditional linear methods, yet provides control and quality comparable to sophisticated nonlinear schemes. The key insight is that the boundary data for many conformal mapping problems can be efficiently constructed via the Cherrier formula together with a pair of Poincare-Steklov operators; once the boundary is known, the map can be easily extended over the rest of the domain. Since computation demands only a single factorization of the real Laplace matrix, the amortized cost is about 50× less than any previously published technique for boundary-controlled conformal flattening. As a result, BFF opens the door to real-time editing or fast optimization of high-resolution maps, with direct control over boundary length or angle. We show how this method can be used to construct maps with sharp corners, cone singularities, minimal area distortion, and uniformization over the unit disk; we also demonstrate for the first time how a surface can be conformally flattened directly onto any given target shape.
Challenges of fiscal policy in emerging and developing economies

This paper presents a systematic analysis of the availability and use of fiscal space in emerging and developing economies. These economies built fiscal space in the run-up to the Great Recession of 2008-09, which was then used for stimulus. This reflects a more general trend over the past three decades, where availability of fiscal space has been associated with increasingly countercyclical (or less procyclical) fiscal policy. However, fiscal space has shrunk since the Great Recession and has not returned to pre-crisis levels. Emerging and developing economies face downside risks to growth and prospects of rising financing costs. In the event that these cause a sharp cyclical slowdown, policy makers may need to employ fiscal policy as a possible tool for stimulus. An important prerequisite for fiscal policy to be effective is that these economies have the necessary fiscal space to employ countercyclical policies. Over the medium-term, credible and well-designed institutional arrangements, such as fiscal rules, stabilization funds, and medium-term expenditure frameworks, can help build fiscal space and strengthen policy outcomes.
Institutions versus Policies: A Tale of Two Islands

Recent work emphasizes the primacy of differences in countries’ colonially-bequeathed property rights and legal systems for explaining differences in their subsequent economic development. Barbados and Jamaica provide a striking counter example to this long-run view of income determination. Both countries inherited property rights and legal institutions from their English colonial masters yet experienced starkly different growth trajectories in the aftermath of independence. From 1960 to 2002, Barbados’ GDP per capita grew roughly three times as fast as Jamaica’s. Consequently, the income gap between Barbados and Jamaica is now almost five times larger than at the time of independence. Since their property rights and legal systems are virtually identical, recent theories of development cannot explain the divergence between Barbados and Jamaica. Differences in macroeconomic policy choices, not differences in institutions, account for the heterogeneous growth experiences of these two Caribbean nations.
The Political Infrastructure of Economic Development

The collapse of the Soviet model for economic develop­ ment questions the meaning of the distinction between the First, Second, and Third World. Instead, the classical social scientific distinction between developed and underdevel­ oped, capitalist and non-capitalist world, appears more ap­ propriate. The problem of development then is one of un­ derstanding the causal determinants of progress. A com­ parative historical political economy research program forces scholars to pay attention to the institutional infra­ structure of society, the impact of alternative institutional environments on human action, and the consequences in terms of social and economic progress. Neither old nor new neo-classical economic theory can address these institu­ tional questions, and as such they do not advance our understanding of the causal determinants of economic development. To understand economic development, what is needed is not more elaborate formal models of growth or better techniques for measurement, but more detailed historical studies of the pattern of development across countries and periods. The conjecture that emerges from such a study is that the source of development can be found in the political and legal institutions, and the indige­ nous cultural practices that combine to form the institutional infrastructure of any society. An appendix applies the ar­ gument to developments in Russia.
Environmental Risk and Uncertainty: Insights from Yucca Mountain

This study examines the effects of the risk from transporting high–level radioactive waste to the proposed Yucca Mountain repository on housing location decisions in Southern Nevada. Using data from a survey of southern Nevada households, we develop a model–based subjective risk estimate for each household. We then explore different factors that may influence the household's location decisions if the proposed transportation route is ultimately chosen for nuclear waste transport. We extend the conventional expected utility model to allow for uncertainty surrounding the actual risks borne by the household. Finally, we examine the impact of federal government compensation on households’ location decisions. The findings indicate that residents currently living near the proposed transportation route express subjective risk estimates much larger than those reported by the Department of Energy. In general, households that are uncertain about the future risks are more likely to relocate than those expressing certainty. When everything is considered, the model predicts that between one and three percent of households living near the transportation route are likely to relocate. Compensation can influence some households to remain at their present location and bear the transport risk.
Exact Maximum Likelihood Estimation of an ARMA(1, 1) Model with Incomplete Data

For a first-order autoregressive and first-order moving average model with nonconsecutively observed or missing data, the closed form of the exact likelihood function is obtained, and the exact maximum likelihood estimation of parameters is derived in the stationary case.
CEO wage dynamics: Estimates from a learning model

Abstract The level of Chief Executive Officer (CEO) pay responds asymmetrically to good and bad news about the CEO's ability. The average CEO captures approximately half of the surpluses from good news, implying CEOs and shareholders have roughly equal bargaining power. In contrast, the average CEO bears none of the negative surplus from bad news, implying CEOs have downward rigid pay. These estimates are consistent with the optimal contracting benchmark of Harris and Holmstrom (1982) and do not appear to be driven by weak governance. Risk-averse CEOs accept significantly lower compensation in return for the insurance provided by downward rigid pay.
Trade Strategy, Investment and Exports: Another Look at East Asia

The export booms in South Korea and Taiwan starting in the early 1960s are anomalous when compared with later export booms in non-East Asian countries such as Chile and Turkey. First, these booms have taken place in the context of comparatively small changes in relative prices in favor of exportables. Second, they have been associated from the start with booms in investment. This paper offers evidence and a formal model to suggest that exports in East Asia may have been driven by an increase in the profitability of investment, with outward orientation a consequence of the investment boom rather than its instigator.
Economic Integration and Convergence: U.S. Regions, 1840–1987

Despite the recent inroads made by models of interregional trade based on external" economies, the analysis of the long-run trends in U.S. regional specialization in agriculture manufacturing, wholesale trade, retail trade, services, and all economic activities indicate that" these trends are more consistent with explanations based on the neoclassical Heckscher-Ohlin" model. Furthermore, while the long-run trends in U.S. regional industrial structures do not" explain all the variations in regional income per capita, they played an important role in causing" U.S. regional incomes to diverge and then converge between the nineteenth and the twentieth" centuries.
SCALE, AGGLOMERATION, AND REGIONAL INEQUALITY IN PROVINCIAL CHINA

This study analyses regional development in provincial China through a case study of Jiangsu following the multi-scale and multi-mechanism framework. We have revealed a trend of increasing regional inequality and find it is mainly a result of the rapid development of Sunan (Southern Jiangsu), which also results in rising rural inter-county inequality. Subei (northern Jiangsu) faces more challenges due to the strong effects of self-reinforcing agglomeration and the constraints of geographical barriers. The spatial Markov chain analysis reveals that the development status of neighbouring counties has a strong influence on a county's development dynamics; a poor county neighbouring relatively richer counties has a higher possibility to move upwards, and vice versa. The geographically weighted regression analysis reveals that development mechanisms have strong local characteristics and the same mechanism affects regional development differently. Finally, our study confirms that the multi-scale and multi-mechanism framework helps the understanding of regional development in Jiangsu.
Do Peso Problems Explain the Returns to the Carry Trade

We study the properties of the carry trade, a currency speculation strategy in which an investor borrows low-interest-rate currencies and lends high-interest-rate currencies. This strategy generates payoffs that are on average large and uncorrelated with traditional risk factors. We argue that these payoffs reflect a peso problem. The underlying peso event features high values of the stochastic discount factor rather than very large negative payoffs.
Efficient Trees for CIR and CEV Short Rate Models

This article presents truncated-tree transforms for generating binomial and trinomial trees under the Cox, Ingersoll, and Ross (CIR) and constant-elasticity-of-variance (CEV) models of the short rate. The authors correct an error in the original square root transform of Nelson and Ramaswamy [1990], and modify their transform by truncating the tree exactly at the zero-boundary. This not only allows for the creation of more efficient trees for the CIR square-root process, but also for the entire class of CEV models of the short rate. The simulations in this article show fast convergence and significantly improved performance of the truncated-tree approach over the Nelson-Ramaswamy approach.
Real Options and Investment Mode: Evidence from Corporate Venture Capital and Acquisition

Existing research has used real options theory to study corporate venture capital (CVC) investment, yet little work has empirically examined such investment in a comparative setting. In this paper, we begin to address this gap by investigating firms' investment mode choice between CVC and acquisition, which are alternative modes for pursuing external business development and corporate growth. We propose that when exogenous uncertainty elevates the value of real options, firms are more likely to undertake CVC investments rather than acquisitions. Furthermore, we suggest that the value of real options under uncertainty is contingent upon several factors, which may also shape firms' choice between CVC and acquisition. The results indicate that market uncertainty is positively related to firms' choice of CVC versus acquisition. In addition, investment irreversibility strengthens the effect of uncertainty, whereas growth opportunities surrounding the investment weaken the effect. Our empirical findings and the comparative approach we adopt to studying CVC investments and acquisitions have important implications for theory and research.
Inflation targeting or fear of floating in disguise? A broader perspective

Abstract Calvo and Reinhart [Calvo, G., Reinhart, C., 2002. Fear of floating. Quarterly Journal of Economics 117, 379–408] argue that many countries claim to float but actually display a “fear of floating” (FF) and that credible inflation targeting (IT) and FF are identical regimes. We analyze exchange rates, reserves, interest rates and inflation across 88 exchange rate regimes for 20 countries. We find IT is empirically distinguishable from fixed, floating, managed floating, and FF regimes. Credible IT appears to be more similar to floating and managed floating than to fixing or FF. Being able to identify these regimes accurately allows one to distinguish between cases where countries claim to IT but actually FF.
Occupying the Constitutional Right to Housing

The United States does not recognize a formal legal right to housing. Yet, the right to housing is alive in America. Using qualitative interviews and case studies, this Article is the first to argue that recent American housing rights movements, such as the Occupy Movements, Take Back the Land movements, and Home Defenders’ League, give legal meaning to an American constitutional right to housing. These social movements represent the right to housing in American law when they occupy and retain vacant and real estate–owned homes, defend home owners and renters from illegal evictions and foreclosures, encourage municipalities to use eminent domain for principal reduction and property acquisition, and create micro-homes for the homeless. These movements’ legal successes reformulate local property and land use laws, create legal arrangements that embody the human right to housing in American law, and associate the human right to housing with well-accepted American constitutional norms. In so doing, these movements occupy the legal meaning of an American constitutional right to housing, even in the absence of a formal legal right. This Article contributes to popular constitutionalism scholarship by highlighting how private ordering and local law reforms can create constitutional meanings before those rights are associated with the actual text of the Constitution. Further, it enhances property scholarship by demonstrating how occupations can lead to more equitable property arrangements. This Article also advances the law-and-social-movement literature by outlining how the Internet and social media help social movements avoid some of the pitfalls of legal mobilization. Lastly, this Article demonstrates new ways social movements can advance American social and economic rights in the technological age.
Capacity Choice Counters the Coase Conjecture

The Coase conjecture (1972) is the proposition that a durable goods monopolist, who sells over time and can quickly reduce prices as sales are made, will price at marginal cost. Subsequent work has shown that in some plausible cases that conjecture does not hold. We show that the Coase conjecture does not hold in any plausible case. In particular, we examine that conjecture in a model where there is a vanishingly small cost for production capacity, and the seller may augment capacity in every period. In the "gap case," any positive capacity cost ensures that in the limit, as the size of the gap and the time between sales periods shrink, the monopolist obtains profits identical to those that would prevail when she could commit ex ante to a fixed capacity, given a standard condition on demand. Those profits are at least 29.8% of the full static monopoly optimum.
American Tire Tariffs against China: What We can Learn from Poor Policy

Facing a significant decline in domestic tire manufacturing jobs, President Obama imposed tariffs on tires made in China for a three year period beginning in 2009. With domestic employment in the tire manufacturing industry in decline and Chinese tire imports rapidly rising, President Obama yielded to industry pressure. The tariffs significantly decreased the sale of Chinese made tires, however, tires made in other countries such as Mexico, Indonesia and Thailand rose as Chinese tires became more expensive. This paper explores the effectiveness of this trade policy and proposes there are lessons to be learned when pondering further such protectionist trade policies. JEL Classifications Code: F13
Supreme Guidance for Wet Growth: Lessons from the High Court on the Powers and Responsibilities of Local Governments

There is a need for a concept of “wet growth”: integration of concerns about water quality and the availability of water supply into the density, form, pattern, and location of land development. This “wet growth idea”—that growth and land use should be sustainable with respect to aquatic ecosystems and water resources—may simply be an aspect of a broad smart growth agenda (or an even broader sustainability agenda) or may carve out its own identity as a planning and regulatory concept.3
Operational risk: the sting is still in the tail but the poison depends on the dose

This paper investigates the generalized parametric measurement methods of aggregate operational risk in compliance with the regulatory capital standards for operational risk in the New Basel Capital Accord ("Basel II"). Operational risk is commonly defined as the risk of loss resulting from inadequate or failed internal processes and information systems, from misconduct by people or from unforeseen external events. Our analysis informs an integrated assessment of the quantification of operational risk exposure and the consistency of current capital rules on operational risk. Given the heavy-tailed nature of operational risk losses, we employ extreme value theory (EVT) and the g-and-h distribution within a "full data" approach to derive point estimates of a unexpected operational risk at the 99.9th percentile in line with the Advanced Measurement Approaches (AMA). Although such internal risk estimates substantiate a close analytical representation of operational risk exposure, the accuracy and order of magnitude of point estimates vary greatly by percentile level, estimation method, and threshold selection. Since the scarcity of historical loss data defies back-testing at high percentile levels and requires the selection of extremes beyond a threshold level around the desired level of statistical confidence, the quantitative criteria of AMA standards appear overly stringent. A marginally lower regulatory percentile of 99.7% would entail an outsized reduction of the optimal loss threshold and unexpected loss at disproportionately smaller estimation uncertainty.
14-Week quarters

Many firms define their fiscal quarters as 13-week periods. For these firms each fiscal year contains 52 weeks, which leaves out one/two day(s) a year. To compensate, one extra week is added to every fifth/sixth year; consequently, one quarter therein comprises 14 weeks. We find evidence of predictable stock returns and forecast errors in 14-week quarters, which suggests that investors and analysts do not, on average, adjust their expectations for the extra week. The ease with which 14-week quarters can be predicted, and expectations adjusted, suggests a surprising lack of effort on the part of investors and analysts.
The study of law and religion in the United States: an interim report

The study of law and religion has exploded around the world. This article, prepared in celebration of the silver jubilee of the Ecclesiastical Law Society, traces the development of law and religion study in the United States. Despite its long tradition of strict separation of Church and state, and despite its long allegiance to legal positivism and intellectual secularisation, the United States has emerged as a world leader of the new interdisciplinary field of law and religion. Hundreds of American scholars, from different confessions and professions, are now at work in this field, and two dozen major research centres and journals have been established at American law schools. After canvassing some of the main themes and trends in American law and religion scholarship today, this article concludes with a brief reflection on some of the main challenges before Christian scholars who work in the field of ecclesiastical law.1
The role of overlapping-generations models in monetary economics

The main arguments of this paper can be summarized as follows. (1) The overlapping-generations (OG) structure provides a useful framework for the analysis of macroeconomic issues involving intertemporal allocation. (2) As a "model of money," the basic OG setup -- which excludes cash-in-advance or money-in-the-utility-function (MIUF) features -- is inadequate and misleading because it neglects the medium-of-exchange property that is the distinguishing characteristic of money. (3) That this neglect obtains is verified by noting that, in contrast with an axiomatic "traditional presumption," the same aggregate leisure/consumption bundles are available in equilibria in which "money" is valued and valueless. (4) That the model may be misleading is demonstrated by examples in which three of its most striking properties --tenuousness of monetary equilibrium, optimality of zero money growth, and price level invariance to open-market exchanges -- disappear in the presence of modifications designed to reflect the medium-of-exchange property. (5) There is no compelling reason why cash-in-advance, MIUF, or other appendages should not be used in conjunction with the OG framework.
Enforcement of WTO Rulings: An Interest Group Analysis

This essay explains the WTO's enforcement mechanism in terms of interest group theory. Under the Dispute Settlement Understanding, a WTO member that fails to comply with a ruling in a trade dispute is subject to "retaliation" from the complaining member: the complaining member may raise tariffs against the offending member's products. This remedy creates incentives for exporters in the offending country to lobby their government in favor of compliance. As a result, the retaliation remedy promotes compliance without intruding directly on national institutions. It is thus superior to suggested reforms, like direct effect, that would commandeer courts or other national governmental bodies. The retaliation remedy resolves a dilemma at the heart of the world trade regime: how to give the WTO sufficient power to promote global trade without conferring so much power that the organization becomes a threat to sovereignty and representative government.
Differential Hybrid Games

This article introduces differential hybrid games, which combine differential games with hybrid games. In both kinds of games, two players interact with continuous dynamics. The difference is that hybrid games also provide all the features of hybrid systems and discrete games, but only deterministic differential equations. Differential games, instead, provide differential equations with continuous-time game input by both players, but not the luxury of hybrid games, such as mode switches and discrete-time or alternating adversarial interaction. This article augments differential game logic with modalities for the combined dynamics of differential hybrid games. It shows how hybrid games subsume differential games and introduces differential game invariants and differential game variants for proving properties of differential games inductively.
Vortices in SU(2) lattice gauge theory

Abstract We investigate some properties of thick vortices and thick monopoles in the SU(2) lattice gauge theory by inserting operators that create these excitations. We measure the derivative of the free energy of the vortex with respect to the coupling and we find that it falls exponentially with the cross sectional area of the vortex. We also study the monopole-monopole potential energy of thick and thin monopoles. Our results suggest that vortices and monopoles of increasing thickness will play an important role in the large β limit.
How Labour Markets affect Trade Policies and Trade: The Case of the Foreign Labour Union

This paper highlights the point that the presence of a foreign union affects significantly the characterization of domestic trade policies, and thus, trade. Specifically, both the objective functions of the foreign union and the nature of interactions between the foreign firm and the foreign union are important determinants of the sign and magnitudes of the domestic trade policies. The importance of the foreign union effect holds regardless of whether the domestic trade policies are politically motivated or whether they are set to maximize national welfare. The foreign union effect is also present with or without a domestic producer.
Politics and Information Technology Investments in the U.S. Federal Government in 2003–2016

Information technologies (IT) act as an enabler for policy implementation in the U.S. federal government. While federal agencies increasingly rely on advanced digital technologies to execute new policy initiatives, many agencies are struggling with maintaining decades old legacy systems. This study investigates how national politics affects IT investment profiles in U.S. federal agencies. Drawing on a range of literature from the political science, public administration, and information systems (IS) disciplines, we hypothesize that a federal agency’s capacity-building IT investments are associated with (i) legislative approval for the chief executive, (ii) government dividedness, and (iii) the agency’s ideological characteristic. With a panel data set from 135 federal agencies and bureaus in 2003–2016, our empirical analyses produce several intriguing findings. For instance, when the U.S. Senate and the House of Representatives are controlled by the President’s ruling party, federal agencies are predicted...
REIT Performance and Lines of Credit

Executive Summary. Using a sample of equity real estate investment trusts (REITs) traded on major exchanges in the United States between 1990 and 2009, this study examines the relationship between ...
Investor Perceptions of Government Deregulation: Evidence from Section 404 of the Sarbanes-Oxley Act

We investigate the stock market’s reaction to events leading up to the Securities and Exchange Commission’s (SEC) and Public Company Accounting Oversight Board’s (PCAOB) 2007 regulatory changes that reduced the scope of and documentation requirements for assessments of firms’ internal controls over financial reporting (ICFR), as required by Section 404 of the Sarbanes-Oxley Act. The stated goal of these regulations was to reduce firms’ and auditors’ compliance costs with mandatory ICFR assessments, while maintaining the effectiveness of these assessments. We examine abnormal returns surrounding key dates leading to the passage of these regulations and offer two main findings. First, investors reacted negatively on key event dates, suggesting that investors viewed the regulations as likely to reduce financial reporting quality rather than to drive firm and audit efficiencies. Second, this negative market reaction is larger when ICFR effectiveness should matter most – when firms are more complex, have higher litigation risk, and greater fraud risk. In additional analysis, we find that restatements increase in the post-regulation time period, consistent with investors’ concerns that the effect of the legislation would be a reduction in ICFR effectiveness. Overall, our results may imply that investors prefer stronger government regulation when it comes to the assessments of a firm’s internal controls over financial reporting.
Left Behind with No “IDEA”: Children with Disabilities Without Means

This Article examines the changes to the Individuals with Disabilities Education Act (“IDEA”), which were intended to reconcile the Act with the No Child Left Behind Act of 2001, and the effect those changes have had on the education of children with disabilities. The Article highlights the important role that parents were given in the original IDEA and the procedures set up to protect that role. It then looks at the manner in which the 2004 amendments to the law and certain U.S. Supreme Court cases have undermined the ability of parents to influence the individualized education plan for their children with disabilities, especially for parents with less financial means. Finally, this Article suggests alterations to the IDEA that would strengthen the role of parents in the education of children with disabilities.
Contagious Adverse Selection

We illustrate the corrosive eect of even small amounts of adverse selection in an asset market and show how it can lead to the total breakdown of trade. The problem is the failure of "market con…- dence", de…ned as approximate common knowledge of an upper bound on expected losses. Small probability events can unravel market con- …dence. We discuss the role of contagious adverse selection and the problem of "toxic assets"in the recent …nancial crisis.
Market Economic Systems

Abstract The new comparative economics focuses on individual institutions rather than considering the economic system as an entity. In this essay we argue that economic systems should be defined in terms of clusters of complementary or covarying institutions. A cluster analysis of OECD countries, using data on forty different economic institutions, shows that four economic systems can be used to characterize these countries in 1990. These systems had no significant impact on economic growth or inflation, but they did have an important influence on the distribution of income. An analysis of systemic change suggests that, up to 1990, the differences between economic systems became greater with economic development, while the differences between countries with the same economic system became less. Journal of Comparative Economics 33 (1) (2005) 25–46.
Information in short selling: Comparing Nasdaq and the NYSE

Abstract This study directly compares the level and return predictability of short selling for NYSE stocks to a matched sample of Nasdaq stocks. When considering trading that executes on all exchanges, we document that the Nasdaq has greater levels of short selling, relative to total trading activity, than the NYSE. However, Nasdaq has less relative short activity than the NYSE when considering short selling that executes on the primary exchange. When comparing the contrarian trading behavior and the return predictability of short sellers, we show that Nasdaq short sellers are more contrarian in contemporaneous and past returns and better at predicting negative returns than NYSE short sellers. These results are robust in each trade-size category.
Securities Class Actions and Bankrupt Companies

Though the Enron and WorldCom cases were the focus of much attention, very little is known about the subset of securities class actions involving bankrupt companies. The context of bankruptcy should be interesting to scholars of securities litigation because it includes the cases where shareholders suffer the greatest harm. The resolution of securities class actions where a bankrupt company is the issuer may shed light on the way in which context affects how parties and courts assess the merit of lawsuits. There are two competing views as to the relationship between bankruptcy and securities fraud. Companies approaching bankruptcy have greater incentives to commit fraud in order to save the company or the jobs of managers. There thus might be a causal relationship between bankruptcy and securities fraud. On the other hand, the context of bankruptcy could lead parties and judges to more readily assume that fraud was present in bankrupt companies. This perception could reflect hindsight bias, the tendency to overestimate the predictability of events, leading to the conclusion that management knew of the danger of bankruptcy but failed to disclose it. This study assesses the relationship between bankruptcy and securities fraud by analyzing a data set of 1,466 consolidated class actions filed from 1996 to 2004, of which 234 (approximately 16%) cases involved a company that was in bankruptcy during the pendency of the class action (“bankruptcy cases”). The study tests two hypotheses: (1) bankruptcy cases are more likely to have actual merit than cases where the issuer is not bankrupt (“non-bankruptcy cases”); and (2) bankruptcy cases are more likely to be perceived as having merit than non-bankruptcy cases, even if they do not necessarily have more merit.
Reputation in the presence of noisy exogenous learning

Abstract This note extends Wiseman [6] to more general reputation games with exogenous learning. Using Gossner's [4] relative entropy method, we provide an explicit lower bound on all Nash equilibrium payoffs of the long-lived player. The lower bound shows that when the exogenous signals are sufficiently noisy and the long-lived player is patient, he can be assured of a payoff strictly higher than his minmax payoff.
The life and times of Gordon Tullock

Gordon Tullock is a founding father of public choice. In an academic career that has spanned 50 years, he forged much of the research agenda of the public choice program and he founded and edited Public Choice, the key journal of public choice scholarship. Tullock, however did much more than this. This Special Issue of Public Choice honors Gordon Tullock in precisely the manner that he most values: the creation of new ideas across the vast range of his own scholarly interests.
The Search for Sex Equality: A Perspective from the Podium on Law and Cultural Change

The American population, including its law students, believes in sex equality. This in itself is something new. When I began teaching twenty-five years ago, classroom arguments against sex equality were common, and they no longer are. Change has taken place: both legal change and cultural change. While nearly everybody believes in sex equality, there is little understanding about what sex equality means. Indeed, there is confusion about what is meant by “sex.” The problem is that we know that women are different—they can make babies—but we do not quite know what to make of that difference. American law bases its equality doctrine on “formal equality,” which requires that likes be treated alike, and allows differences to be treated differently. But if women are different from men—and without being an essentialist, that is, one who believes that there is an “essence” to “woman,” I will say that most women are different from most men in some important respects—how can equality between the sexes be achieved?1 Much legal change has occurred since the passage of the Civil Rights Act of 1965, when Congress outlawed, inter alia, sex discrimination in employment.2 Many of the changes have been designed to protect something about women’s differences, but usually only to the extent that these differences can be re-characterized as sameness. For instance, pregnancy is protected in employment by the Pregnancy Disability Act (“PDA”) only to the extent that an employer protects other disabilities,3 while family and medical leave under the Family and Medical Leave
The Effects of Presentation Salience and Measurement Subjectivity on Nonprofessional Investors' Fair Value Judgments

Fair value estimates reported in the financial statements differ in the subjectivity with which the estimates are measured. Mandated supplemental disclosures are intended to enable users to assess the nature of the inputs used to develop the fair value measurements, including their relative reliability, although prior research suggests some investors may have difficulty doing so. We draw on information processing research to predict and find that isolating fair value information in a separate column on the face of the income statement facilitates nonprofessional investors’ ability to incorporate into their perceived reliability and P/E judgments not only the fair value estimates, but also the disclosed measurement differences that underlie those estimates. Our results have implications for standard setters and researchers concerned with the effects of financial statement presentation on nonprofessional investors. Namely, we demonstrate how income statement presentation can improve reliance on mandated supplemental disclosures, thereby resulting in greater financial statement transparency.
Incentives to learn

This brief summarizes the results of a gender impact evaluation study, entitled Incentives to learn, conducted between March 2001 and March 2002 school year in Kenya. The study observed the impact of merit scholarship program on adolescent girls in Kenya on the student level. Girls who were eligible for the scholarships had significantly higher test scores than comparison schoolgirls. The effect size was about 0.2 to 0.3 standard deviations. Teacher attendance also improved significantly in program schools. There were positive externalities on girls who started off with low baseline scores who had little chance of receiving the scholarship. There is evidence that the scholarship program did not reduce intrinsic motivation. Funding for the study derived from the World Bank and the MacArthur Foundation.
Straddle Option Profitability In Corporate Lawsuits

The current study investigates whether abnormal returns may be gained by purchasing a straddle position prior to a verdict or settlement announcement in a lawsuit. The basis for the hypothesis stems from behavioral finance—more specifically, the Overreaction Hypothesis. Using CAPM expected rates of return and comparisons of 31 lawsuit firms’ straddle returns, three new straddle trading strategies are devised. Within the sample of lawsuits, abnormal returns are evident for the three strategies. The results and their implications support behavioral finance and the Overreaction Hypothesis and thus refute the Efficient Markets Hypothesis.
Reliability and validity of forensic science evidence

The rules of evidence both authorize and limit testimony from scientific, medical and other experts. For example, Federal Rule of Evidence 702 allows experts to supply information or opinions to the jury only when “the testimony is . . . the product of reliable principles and methods … reliably applied … to the facts of the case”. The law's use of the word “reliably” to connote probable factual accuracy is potentially confusing, since “reliability” has a distinct meaning in statistical science. The law is concerned with both “reliability” in the statistical sense and “validity” of forensic science methods. This article describes how scientists define and assess the reliability and validity of some commonly encountered types of forensic science evidence. Such assessments are necessary for courts to admit putatively scientific evidence as bona fide and legally “reliable” science. The essay is part of a special issue of Significance, a journal of the Royal Statistical Society and the American Statistical Association.
The U-Shaped Investment Curve: Theory and Evidence

We analyze how the availability of internal funds affects a firm's investment. We show that under fairly standard assumptions, the relation is U-shaped: investment increases monotonically with internal funds if they are large but decreases if they are very low. We discuss the tradeoff that generates the U-shape, and argue that models predicting an always increasing relation are based on restrictive assumptions. Using a large data set, we find strong empirical support for our predictions. Our results qualify conventional wisdom about the effects of financial constraints on investment behavior, and help to explain seemingly conflicting findings in the empirical literature.
THE IMPLICATIONS OF A REVERSE FAVOURITE-LONGSHOT BIAS IN A PREDICTION MARKET

We examine 330,857 trades of prediction market contracts, the values of which are based on against-the-spread outcomes of NFL games, and find the presence of a significant reverse favourite-longshot bias. Surprisingly, the timing of this bias is identical to that observed in traditional casino-style NFL betting markets. That is, late-season away favourites so profoundly underperform expectations that the set of all favourites underperforms on average. Prior research shows that in prediction markets having asset prices ranging from $0 to $100, win rates are below (above) expectations when prices are low (high). However, we show that observed win rates for contracts on late-season away favourites are below expectations across all prices. The presence of a strong RFL bias in a prediction market provides evidence against the theories that this bias is caused by line shading or due to the effects of unpredicted weather variables on team performance.