cssi/SciSciGPT-SciSciNet huggingface dataset:
The impact of central clearing on counterparty risk, liquidity, and trading: Evidence from the credit default swap market.

Abstract This paper examines the impact of central clearing on the credit default swap (CDS) market using a sample of voluntarily cleared single-name contracts. Consistent with central clearing reducing counterparty risk, CDS spreads increase around the commencement of central clearing and are lower than settlement spreads published by the central clearinghouse. Furthermore, the relation between CDS spreads and dealer credit risk weakens after central clearing begins, suggesting a lowering of systemic risk. These findings are robust to controls for frictions in both CDS and bond markets. Finally, matched sample analysis reveals that the increased post-trade transparency following central clearing is associated with an improvement in liquidity and trading activity.
The Value of Foreclosed Property

This paper examines the expected price appreciation of distressed property and compares it to the prevailing metropolitan area appreciation rate. Whether due to individual property or local area he...
Police Interrogation and Social Control

This article analyzes contemporary interrogation practices as one example of the changing character of formal control in policing. The article examines how police employ techniques of influence to generate compliance with their requests. The author argues that police power is exercised affirmatively to control behavior during interrogation. Rather than relying on force or the threat of punishment, police commonly use subtle and sophisticated psychological methods of influence (conditioning, persuasion, deception, neutralization, and normalization) to elicit inculpatory admissions.
Human dignity, bioethics, and human rights

Commitment to human dignity is a widely shared value. Human dignity also serves as the grounding for human rights. In recent years, protection of human dignity has also emerged as a central criterion for the evaluation of controversial technologies, like cloning and embryonic stem cells. This article addresses the question as to whether human dignity is or could be a useful concept for bioethics and human rights. It begins with a discussion of the under-conceptualisation of human dignity. The next two sections identify the diversity in conceptual approaches to human dignity in bioethics and human rights. The following section considers some of the problems with using human dignity as an evaluative standard. The article then proposes initial developmental steps to enable the concept to be applied in a more precise and meaningful way, based on Martha Nussbaum’s capabilities approach.
More Evidence of Bias in the Differential Timeliness Measure of Conditional Conservatism

ABSTRACT Despite the conceptual appeal and popularity of the differential timeliness (DT) measure of conditional conservatism proposed in Basu (1997), Dietrich et al. (2007) and Givoly et al. (2007...
Wilkes v. Springside Nursing Home, Inc.:The Backstory

As it appears in most casebooks, the Wilkes v. Springside Nursing Home, Inc. case tells the story of a falling-out among the shareholders in a closely-held corporation and the resulting freeze-out of one of the owners, Mr. Stanley Wilkes. The opinion indicates that the heart of the dispute arose out of Mr. Wilkes’s refusal to allow the sale of a piece of corporate property (the “Annex” at 793 North Street) to one of the other shareholders, Dr. Quinn, at a discount. In real life, that transaction did indeed cause a significant rift in the shareholders’ relationship, but, as this article discusses, it was really more like the straw that broke the camel’s back than the primary cause of their altercation. The seeds of the dispute were planted well before the Annex was sold to Dr. Quinn. The unhealthy dynamic that had developed among the shareholders and which eventually resulted in Stanley Wilkes being frozen out of the business had been festering for a long time. The complicated relationship among the shareholders was informed by the somewhat unsavory reputation of Dr. Quinn, the country club “get along” attitude of Messrs, Riche and Connor, and the moral rectitude of Mr. Wilkes. To appreciate how it all came about, the Author sketches out the backgrounds of the players in this drama and describes the plot in more detail.
Helene Cixous's The Perjured City: Nonprosecution Alternatives to Collective Violence

In instances of collective violence — apartheid in South Africa, mass killings in Rwanda, and other crimes against humanity such as slavery — what response provides justice? How can justice be achieved under such a system? Legal justice through prosecution would be unjust. This opens the possibility of nonprosecution alternatives involving forgiveness. Helene Cixous’s play about forgiveness as an alternative to criminal prosecution, The Perjured City: Or, the Awakening of the Furies, was written in response to an actual case of failed justice in France, known as the Bad Blood Scandal. The play provides a model of forgiveness and a forum for public catharsis. Her play addresses the legal system’s failure to hold accountable several French physicians who exposed hemophiliacs to Human Immunodeficiency Virus (HIV). The background of the Bad Blood Scandal is discussed in Part One of this Article. Cixous viewed the scandal as a genocide and responded by writing The Perjured City, a play that exposes the unjustness of the legal system. Part Two analyzes this play, in which the mother of dead hemophiliac children wants to avenge their deaths. The responsible doctors are hounded by the Greek Furies, who have been silently observing the legal system’s injustice since they went underground to be benevolent goddesses after the trial of Orestes in Aeschylus’ play The Eumenides. Cixous’s play calls for the Furies’ return, but her play does not depict simple revenge. Rather, her play depicts a ceremony of confession and forgiveness. Parts Three and Four of this Article summarize the goals and the theoretical debate surrounding nonprosecution alternatives such as the ceremony found in The Perjured City. Typically, nonprosecution alternatives attempt to provide therapeutic goals or restorative justice. Many theoretical questions arise when forgiveness is also sought as part of restorative justice. Should forgiveness be unconditional? Should forgiveness be sought in the public forum? Does forgiveness lead to forgiving? After considering these questions, Part Five of this Article considers an example of nonprosecution alternatives in the South African Truth and Reconciliation Commission (TRC), which was a likely model for Cixous, who had written a book on Nelson Mandela. This Article concludes by arguing that while there is no simple answer to the question of what is just justice, society must remain open to nonprosecution alternatives and restorative justice, especially in the context of extraordinary crimes.
Are Black Holes Elementary Particles

Quantum black holes are the smallest and heaviest conceivable elementary particles. They have a microscopic size but a macroscopic mass. Several fundamental types have been constructed with some remarkable properties. Quantum black holes in the neighborhood of the Galaxy could resolve the paradox of ultra-high energy cosmic rays detected in Earth's atmosphere. They may also play a role as dark matter in cosmology.
The IASB and FASB Stumble over the Annuity Method of Depreciation

AbstractIn their leases ED issued in May 2013, the IASB and FASB used the annuity method of amortization while at the same time disavowing that they were doing so.
Mapping Comparative Judicial Review

This Article explores the questions scholars ask about comparative constitutional judicial review and critically assesses the answers they provide. Scholars ask three, interrelated questions: (i) why has judicial review (almost) conquered democracy; (ii) whether empowering courts to construe constitutions has a democratic pay-off; and (iii) how best to make sense of the variation that judicial review exhibits around the world. The Article makes two principal conclusions. First, our scholarly maps of judicial review have for too long viewed the world through the prism of the exceptional American Supreme Court. Our understanding of judicial review would be improved if our maps were to deemphasize and contextualize the American experience. Second, the questions scholars ask about comparative judicial review implicitly rest on larger questions about democracy that need to be teased out and illuminated. In short, questions about the emergence and maintenance of democracy and the problematic relationship that American constitutionalism bears to other forms of constitutionalism around the globe lie at the root of our understanding of comparative judicial review.
Controlling Agencies with Cost-Benefit Analysis: A Positive Political Theory Perspective

Cost-benefit analysis is analyzed using a model of agency delegation. In this model an agency observes the state of the world and issues a regulation, which the president may approve or reject. Cost-benefit analysis enables the president to observe the state of the world (in one version of the model), or is a signal that an agency may issue (in another version). The roles of the courts, Congress, and interest groups are also considered. It is argued that the introduction of cost-benefit analysis increases the amount of regulation, including the amount of regulation that fails cost-benefit analysis; that the president has no incentive to compel agencies to issue cost-benefit analysis, because agencies will do so when it is in the president’s interest, and otherwise will not do so; that presidents benefit from cost-benefit analysis even when they do not seek efficient policies; that agencies and their supporters ought to endorse cost-benefit analysis, not resist it; and that cost-benefit analysis reduces the influence of interest groups. Evidence for these claims is discussed. Finally, it is argued that courts should force agencies to conduct cost-benefit analyses in ordinary conditions, but that they should not force agencies to comply with them.
When Is a Battered Woman Not a Battered Woman? When She Fights Back

Over the past thirty years, the public, media, and the legal system have coalesced around a stereotypical image of the victim of domestic violence. Before the birth of the battered women's movement, the assumption was that domestic violence happened to "them" - poor African American women who lived in slums. Advocacy by the battered women's movement around the idea that domestic violence is endemic in all races, ethnicities, religions and socioeconomic brackets, coupled with the introduction of "battered woman syndrome" and its reliance on the theory of learned helplessness to explain why battered women remained in abusive relationships, changed the portrait of the victim of intimate partner violence from a low-income woman of color to a passive middle-class white woman cowering in the corner as her enraged husband prepares to beat her again. This woman would never fight back. And because this woman is the woman that lawyers want to present and judges expect to see in their courtrooms, women who fight back are at a distinct disadvantage when they turn to the civil legal system for assistance. The battered woman who fights back simply isn't a victim in the eyes of many in the legal system. Who fights back? Unsurprisingly, the women who fight back are the women with the fewest options for addressing the violence against them. African-American women. Poor women. Lesbians. Women who lack access to resources, women who may be afraid or unwilling to turn to the police or other professionals for assistance, women whose marginalized status may deprive them of the ability to make choices other than retaliation. Women who may be conflicted about turning to the civil legal system and who find that when they do, and when they are honest about how they have defended themselves, they are penalized for exercising one of the few options open to them to prevent or escape from an assault. This article looks at the conflicting narratives of victims of domestic violence who ask the civil justice system for assistance. It first discusses the importance of narrative in the construction of identity, both in constituting one's self and in determining how that self is presented to the world. It then juxtaposes the prevailing narrative of the domestic violence victim - the passive white middle class woman - against the narratives of women who fight back. The article examines how victims of violence are encouraged to tailor their stories as closely as possible to the prevailing narrative in order to persuade the civil legal system, and presents the consequences both for victims and for their advocates in constructing narratives that deny women the right to defend themselves. The article finally asks how the construction of the victim of domestic violence can be reframed to include the authentic narratives of women who fight back.
Breach of Fiduciary Duty: On Justifiable Expectations of Loyalty and Their Consequences

This paper covers three distinct but inter-related topics. These are: (1) the functions served by characterizing breach of fiduciary duty as a tort; (2) how best to define a fiduciary relationship in light of the range of situations in which one party is subject to a fiduciary duty to another; and (3) implications and questions that follow from the fact that many contemporary fiduciaries are organizations that assign individual employees or other agents to act on behalf of clients to whom the organization itself owes fiduciary duties. The paper begins by examining how breach of fiduciary duty is characterized by Restatement (Second) of Torts. In Section 874, Restatement (Second) treats breach of fiduciary duty as a tort that subjects a fiduciary to liability to the beneficiary for harm caused by the breach. The definition of a "fiduciary" relation articulated in Section 874 is both under- and over-inclusive, leaving out some well-established categories of fiduciaries but also potentially encompassing many non-fiduciary relationships. Nonetheless, the paper argues that it's useful to situate breach of fiduciary duty within tort law to anchor the basic availability of damages for harm caused by the breach. This anchoring has practical as well as theoretical significance because some breaches of fiduciary duty, although productive of loss to the beneficiary, generate no identifiable profit for the fiduciary to which restitutionary remedies might apply. The paper then articulates a proposed approach for defining when a relationship is fiduciary in character. This is whether the plaintiff (or claimed beneficiary of a fiduciary duty) could justifiably expect of loyal conduct on the part of an actor. Breach of fiduciary duty then turns on whether the actor's conduct contravened that expectation. This test turns on what's distinctive about fiduciary duties, as opposed to the wider range of duties recognized by the law. The paper uses this approach as a framework to evaluate a series of recent cases that assess whether one party owed another a fiduciary duty when the parties' relationship was not one conventionally characterized as fiduciary, such as agent-principal, trustee-trust beneficiary, director-corporation, or lawyer-client. Within this framework, the paper articulates characteristics that define patterns of relationships in which expectations of loyalty may be justified. Finally, the paper explores implications of the fact that many contemporary actors who are subject - on one basis or another - to fiduciary duties are themselves corporations or other legally-constituted organizations. On the ground level, the conduct that constitutes a breach of fiduciary duty is conduct of an employee or other agent of the organization. The paper examines the bases on which the agent's wrongful conduct may be attributed to the organization for purposes of imposing liability and awarding remedies. It is necessary to consider principles of agency law and restitution, in addition to tort law, to reach a complete answer.
The Shrinking Back: The Law of Biography

We should all be ready to say that if the secrets of our daily lives and inner souls may instruct other surviving souls, let them be open to men hereafter, even as they are to God now.... Not that I do not intimately understand the shrinking back from the idea of publicity on any terms-not that I would not myself destroy papers of mine which were sacred to me for personal reasons-but then I never would call this natural weakness, virtuenor would I, as a teacher of the public, announce it and attempt to justify it as an example to other minds and acts, I hope.1
The First Amendment and Corporate Governance

The Supreme Court's decision in Citizens United did not end the controversy over regulating corporate speech. Although the Court broadly subjected regulation of corporate speech to the First Amendment, it did not wholly preclude regulation of corporate governance processes that produce corporate speech. The Court's opinion therefore shifted debate concerning corporate speech from corporations' external distortion of the political process to their internal distortion of shareholders' self-expression. This paper shows that regulation of the corporate governance process that produces speech faces significant obstacles under the First Amendment. These include the limited efficacy of regulation of corporate governance, regulation's potential for protecting the expressive rights of some shareholders by suppressing others, and the uncertain implications of this rationale for types of speech other than that involved in Citizens United. These problems with the corporate governance rationale for regulating corporate speech suggest that protection of shareholders' expressive rights may be trumped by society's interest in hearing corporate speech and the First Amendment's central goal of preventing government censorship.
Another look at the Radner-Stiglitz nonconcavity in the value of information

Abstract This paper revisits the well-known result of R. Radner and J. Stiglitz (1984, in “Bayesian Models of Economic Theory,” Elsevier, Amsterdam) which shows that, under certain conditions, the value of information exhibits increasing marginal returns over some range. Their result assumes that both the number of states and the number of signal realizations are finite, assumptions which preclude most analyses of optimal information acquisition. We provide sufficient conditions that yield this nonconcavity in the value of information in a general framework; the role that these conditions play is clarified and illustrated with several examples. We also discuss the robustness of the nonconcavity result, and the difficulties involved in getting the value of information to be globally concave. Journal of Economic Literature Classification Number: D83.
Racial Discrimination in the Sharing Economy: Evidence from a Field Experiment

Abstract In an experiment on Airbnb, we find that applications from guests with distinctively African American names are 16 percent less likely to be accepted relative to identical guests with dist...
Income inequality, poverty, and the liquidity of stock markets

Abstract Using a broad cross-sectional sample of countries, this study tests whether stock market liquidity affects the level of income inequality. After holding a variety of factors constant – including traditional measures of financial development, results show that liquidity in a country's stock market is negatively related to various measures of inequality. We find that this relationship does not exist in the most developed countries. Instead, our results are stronger in underdeveloped and moderately developed countries. In addition, we find that stock market liquidity is negatively associated with poverty rates. In our final set of tests, we attempt to identify the mechanism through which liquidity reduces inequality. After decomposing wage growth into the portion that is driven by stock market liquidity and the portion that is orthogonal to liquidity, we find strong evidence that liquidity-induced wage growth drives the reduction in both inequality and poverty.
On the evolution of corporate capital structures

Most, if not all, published theoretical models of capital structure decisions assume that all firms follow the same capital structure decision process or strategy. We argue that such an assumption is inconsistent with extant evidence. Instead, we argue that there is heterogeneity in the decision processes and strategies that managers follow, and that they make adaptive adjustments to their strategies that are conditioned on the choices of other firms as well as their prior choices. Using data on U.S. corporate capital structures between 1965 and 2003, we find evidence that is consistent with our proposed alternative. Our characterization of the evolution of corporate capital structures emphasizes the roles of a firm’s initial capital structure and its competitors’ capital structure strategies.
Financial firm bankruptcy and systemic risk

Abstract Financial firm distress often leads to regulatory intervention, such as “too big to fail” (TBTF) policies. Two oft-cited channels to justify TBTF are domino effects (counterparty risk) and the effects of fire sales. We analyze the policy responses for avoiding systemic risk while considering the role of these two factors. Prior bankruptcies suggest that cascades caused by counterparty risk do not occur, as firms diversify their exposures. Instead, crises tend to be symptomatic of common factors in financial firms’ portfolios, which lead to widespread instances of declining asset values and which are often misinterpreted as resulting from fire sales.
Combining panel data sets with attrition and refreshment samples

tistical models that allow for more complex relationships than can be inferred using only cross-sectional data. Panel, i.e., longitudinal, data, in which the same units are observed repeatedly at different points in time, can often provide the richer data needed for such models (e.g., Chamberlain (1984), Hsiao (1986), Baltagi (1995), Arellano and Honore (forthcoming)). Missing data problems, however, can be more severe in panels, because even those units that respond in initial waves of the panel may drop out of the sample in subsequent waves (e.g., Hausman and Wise (1979), Robins and West (1986), Ridder (1990), Verbeek and Nijman (1992), Abowd, Crepon, Kramarz, and Trognon (1995), Fitzgerald, Gottschalk, and Moffitt (1998), and Vella (1998)). Sometimes, in the hope of mitigating the effects of such attrition, panel data sets are augmented by replacing the units that have dropped out with new units randomly sampled from the original population. Following Ridder (1992), who used such replacement units to test alternative models for attrition, we call such additional samples refreshment samples. Here we explore the benefits of refreshment samples for inference in the presence of attrition. Two general approaches are often used to deal with attrition in panel data sets when refreshment samples are not available. One model, based on the missing at random assumption (MAR, Rubin (1976), Little and Rubin (1987)), allows the probability of attrition to depend on lagged but not on contemporaneous variables that have missing values. The other model (denoted by HW in the remainder of the paper, given the similarity to a model developed by Hausman and Wise (1979)), allows the probability of attrition to depend on such contemporaneous, but not on lagged, variables. Both sets of models have some theoretical plausibility, but they rely on fundamentally different restrictions on the
Macroeconomic Conditions and Pressures for Protection Under Antidumping and Countervailing Duty Laws; Empirical Evidence from the United States

Antidumping and countervailing duty procedures are governed by specific rules requiring both injury (by reason of imports) and dumping/subsidies, and thus might be expected to be less susceptible to pressures for protection arising from cyclical movements in the domestic macroeconomy. This paper investigates whether there is a connection between the state of domestic macroeconomic activity and pressures for protection under antidumping and countervailing duties. The evidence suggests that pressures for protection under these measures since the Tokyo Round of multilateral trade talks have advanced during periods of macroeconomic weakness and receded during periods of macroeconomic strength.
It's Showtime: Do Managers Report Better News Before Annual Shareholder Meetings?

Annual shareholder meetings provide an opportunity for shareholders to express their concerns with corporate performance, pressuring managers to demonstrate good performance. We show that managers respond to the shareholder pressure by reporting positive corporate news before the annual shareholder meetings. Specifically, we find significantly positive average cumulative abnormal returns (CARs) during the 40 days before the annual meeting date. The premeeting returns are significantly higher when shareholder discontent with managerial performance is likely to be stronger. The decile of companies with the worst past stock price performance exhibits average CARs of 3.4% and buy-and-hold returns of 7.0% during the 40-day premeeting period. Companies with poor past performance exhibit even higher premeeting returns when shareholder pressure on management is greater, such as when institutional ownership is high, when CEO compensation is high, and when shareholders submit proxy proposals on corporate governance. We complement the evidence based on CARs by showing how managers of poorly performing firms manage the timing and content of earnings announcements and management forecast announcements before the annual shareholder meetings. Overall, the results suggest that managers attempt to influence shareholders before annual shareholder meetings through positive news.
Is Europe Going Too Far

Abstract This paper examines the process of European political integration. We start with a political-economy model of monetary policy, illustrating a general principle: economic integration requires setting up European institutions endowed with the authority to enact Europe-wide policies. On the other hand, when countries can take advantage of scale effects thanks to economic integration, the need for large countries is reduced. Thus increased economic integration reduces the need for political integration in Europe. To reconcile these views, we propose a model for the optimal allocation of prerogatives across levels of government. When the provision of public goods is characterized by cross-border spillovers, some centralization of policies is needed to internalize the externality. These gains from centralization must be traded-off against the costs from imposing the same policies upon heterogeneous groups. The optimal allocation of prerogatives results from this trade-off. Using our model as a benchmark, we analyze the institutional incentives at play for the allocation of political prerogatives in Europe and conclude that the EU has gone too far on most issues.
The Expressive Synergies of the Volcker Rule

In this Article, I propose an implementation of the Volcker Rule that balances the statutory mandate to promote the safety and soundness of U.S. banking organizations with the significant role that bank-affiliated dealers currently play as providers of liquidity in over-thecounter markets. The Volcker Rule restricts the proprietary trading activities of U.S. banks and their affiliates subject to exemptions for traditional banking activities and certain “client-oriented” activities. This Article draws upon the academic literature regarding expressive law, the history of federal banking legislation, and the text of the Dodd-Frank Act to argue that federal financial regulators have the discretion to implement the Rule’s exemption for “market-making-related activities” to realize synergies with Dodd-Frank’s initiatives in the regulation of over-the-counter markets. Specifically, I envision that the market making exemption could be implemented with a view to encouraging the provision of liquidity to competitive trading facilities. I further argue that such an implementation may well be essential to the vitality of the Volcker Rule, in light of the political forces aligned in favor of the Rule’s repeal.
Death, Taxes, and Property (Rights): Nozick, Libertarianism, and the Estate Tax

Contemporary policy discussions of taxes in general, and of the estate tax in particular, are often dominated by arguments that start from libertarian premises. However, these libertarian views are rarely fully unpacked, and, as a result, the conclusions of these arguments often extend beyond what can be justified by those libertarian premises. With regard to the estate tax, many libertarians argue that government interference with the free transfer of assets after death is an immoral violation of the property rights of the deceased. In this Article, I work through the libertarian arguments of Robert Nozick in his seminal work, Anarchy, State, and Utopia, with special attention to his views of property and inheritance rights. By demonstrating that libertarianism cannot justify property rights that extend beyond death, I show that, in fact, libertarianism is entirely consistent with a robust estate tax. While this does not mean that the libertarian views of property rights require an estate tax, those views do not, on moral grounds, preclude the imposition of the tax.
Appointing Federal Judges: The President, the Senate, and the Prisoner's Dilemma

The withdrawal in 2003 of George W. Bush’s nomination of Miguel Estrada to the D.C. Circuit, bemoaned by Senate Republicans as the first-ever successful filibuster of an appeals court nomination,1 underlined a growing sense that the federal judicial appointments process has degenerated, in the words of one senator, into a vicious cycle of “payback on top of payback on top of payback.”2 Tempers, to be sure, have frayed. Republican leaders blamed “rank and unbridled Democratic partisanship”3 for what they dubbed a “political hate crime”4 and a “constitutional disaster,”5 and the White House took to bypassing the Senate entirely with the use of recess appointments.6 Meanwhile, Democrats bitterly accused Republicans of employing a “double standard”7—and even political espionage8—to achieve their
Heights and human welfare: Recent developments and new directions

Abstract Since 1995 approximately 325 publications on stature have appeared in the social sciences, which is more than a four-fold increase in the rate of production relative to the period 1977–1994. The expansion occurred in several areas, but especially within economics, indicating that heights are now widely accepted as useful measure of human welfare. Much of this new work extends beyond the traditional bailiwick of anthropometric history, including biological welfare during economic and political crises; anthropometric determinants of wages; the welfare of women relative to men in the contemporary world; the fetal origins hypothesis; and inequality in the developing world. The approach has also expanded within economic history to consider the consequences of empire for colonials; the health of populations lacking traditional measures of social performance; the consequences of smallpox; and very long-term trends in health. Much has also been learned about socioeconomic aspects of inequality, the welfare implications of industrialization, and socioeconomic determinants of stature. The last is a work in progress and one may doubt whether sufficient longitudinal evidence will become available for a complete understanding of the variety and strength of pathways that affect human physical growth.
What do corporate directors maximize? (Not quite what everybody thinks)

The agency problem at the core of corporate law stems from a chronic potential conflict of interest between directors’ self-interest and that of shareholders. Corporate law views directors’ self-interest in terms of diverting welfare to directors at the expense of shareholders. Another component of directors’ self-interest – being perceived as maximizing shareholders’ welfare – is seen not as part of the agency problem, but as part of the solution (aligning directors’ incentives with shareholders’). This is true only if taking actions that maximize shareholders’ welfare is also the optimal manner for a director to be perceived as maximizing welfare. However, directors have more appealing ways to be positively perceived. In conducting bias arbitrage, directors identify risks that shareholders over-estimate, take action to address the risk, and then take credit for the ‘lowered’ risk (i.e., shareholders’ corrected assessment of the risk). Bias arbitrage is more attractive as shareholders’ misperception of a risk increases. The opportunity to bias arbitrage thus leads directors to address highly misperceived risks instead of highly remediable risks.
How Large Are Returns to Scale in the U.S.? A View Across the Boundary

I study the degree of returns to scale in aggregate U.S. data by estimating the standard RBC model with and without variable capacity utilization using Bayesian methods. The source of increasing returns is the presence of an externality in production. I find that, at best, returns are mildly increasing at a level statistically indistinguishable from the constant-returns case. A high enough degree of increasing returns is needed to support equilibrium indeterminacy and sunspot-driven business cycle fluctuations. In my estimation results, I find that I can conclusively rule out this possibility on account of a low estimated degree of increasing returns and a fairly inelastic labor supply.
Taxes, Wages, and the Labor Supply of Older Americans.

Given the aging of the U.S. population and the greater contributions of older workers to the labor force, understanding how policy levers can affect elderly labor supply has become increasingly important. The authors use data from the Health and Retirement Study linked to state identifiers to estimate the responsiveness of the labor supply of older workers to the wage and features of the tax code, both on the probability of participating in the labor market and on hours of work for those who choose to work. The authors find that a 10% increase in the wage is associated with a 5% increase in participation, and they estimate slightly larger responses to marginal tax rates. These results suggest that government policies could increase the labor supply of older individuals by changing the returns to work through the tax code.
The Issuer Choice Debate

This article responds to Professor Romano’s piece in this issue. It concerns our ongoing debate with regard to the desirability of permitting issuers to choose the securities regulation regime by which they are bound. Romano favors issuer choice, arguing that it would result in jurisdictional competition to offer issuers share value maximizing regulations. I, in contrast, believe that abandoning the current mandatory system of federal securities disclosure would likely lower, not increase, U.S. welfare. Each issuer, I argue, would select a regime requiring a level of disclosure less than is socially optimal because its private costs of disclosure would be greater than the social costs of such disclosure. Professor Romano and I agree on most of the basic analytic building blocks for deciding whether issuer choice is a desirable reform: belief in analyzing the problem in terms of the broadly accepted principles of modern financial economics; recognition that disclosure has costs as well as benefits; and acknowledgment that incentives exist for issuers to provide at least some disclosure. We nevertheless reach the opposite conclusion on the desirability of issuer choice. To start, Romano believes that issuers’ private costs of disclosure will not generally be greater than the social costs of such disclosure, whereas I show they will be. Romano argues as well that this is a special case in which any divergence of private and social costs that does exist will not lead to a market failure, at least one possibly correctable by public regulation. I show her argument to be unpersuasive. Finally, Romano interprets the existing empirical evidence as proving mandatory disclosure’s lack of social value, while I show that the evidence in fact does not point in either direction. Where, as here, the theoretical case for the existence of a market failure is strong and the current program for dealing with it is widely admired, the advocate of change should have the burden of proof. Professor Romano has not met this burden. If she is serious about advancing her proposal for issuer choice, she needs to show that despite the market failure inherent in issuer choice, there is inevitably an even greater failure in the regulatory response. Absent such a showing, mandatory disclosure should be retained.
Finding the Original Meaning of American Criminal Procedure Rights: Lessons from Reasonable Doubt's Development

Lessons can be learned about finding the original meaning of American criminal procedure rights by an examination of the development of the reasonable doubt standard. This is for a number of reasons. First, the status of the reasonable doubt standard seems secure. No debate questions the constitutional requirement that an accused can only be convicted if the crime is proven beyond a reasonable doubt. The standard’s original meaning can be explored uncolored by the partisanship often engendered when present seekers of original meaning hope to define a new contour to a constitutional guarantee. Furthermore, serious scholars have studied the reasonable doubt standard’s early development and its original meaning, purposes, and intent. An examination of those scholarly sources, methods, and conclusions provides a number of valuable insights that should affect the search for finding the original meaning of other American criminal procedure guarantees. These are first that the seeker of original meaning of evolved criminal procedure rights has to go beyond traditional legal sources and explore the broader epistemological developments in religion, philosophy, and science that affected the development of the right. Second, conclusions about original meaning drawn primarily from English and other European sources can be misleading without a consideration of American developments. What might seem like a sound conclusion when English sources are examined may look suspect when viewed in the light of American developments. Finally, the reasonable doubt scholarship reveals that definitive conclusions about the original meaning of American constitutional rights will often be impossible to find both because the necessary American record is absent and because evolved rights never really had a definitive original meaning.
Is There a Technology Age Gap? Associations Among Age, Skills, and Employment Outcomes

Teachers College, Columbia UniversityThe current study used survey data collected by a top job search web site to explore theextent to which older (50–64 years), middle-aged (40–49 years), and younger (18–39years)computerprogrammersreporteddifferentlevelsofhumancapital(e.g.,jobtenure)andspecializedcomputerskills(e.g.,numberofprogramminglanguages).Inaddition,weexploredtheeffectofageonannualsalaryandjobbenefitscontrollingforbothtraditionalhuman capital factors and specialized computer skills. Although older computerprogrammers reported higher levels of most human capital factors, there were nodifferences in the ten specialized computer skills as a function of age. Results alsoindicated that age was negatively associated with both annual salary and job benefitslevels even when human capital factors and specialized computer skills were statisticallycontrolled. However, the variance accounted for by age was quite small.
Simulations of a magnetic fluctuation driven large-scale dynamo and comparison with a two-scale model

Models of large-scale (magnetohydrodynamic) dynamos (LSDs) which couple large-scale field growth to total magnetic helicity evolution best predict the saturation of LSDs seen in simulations. For the simplest so-called ‘α2’ LSDs in periodic boxes, the electromotive force driving LSD growth depends on the difference between the time-integrated kinetic and current helicity associated with fluctuations. When the system is helically kinetically forced (KF), the growth of the large-scale helical field is accompanied by growth of small-scale magnetic (and current) helicity which ultimately quench the LSD. Here, using both simulations and theory, we study the complementary magnetically forced (MF) case in which the system is forced with an electric field that supplies magnetic helicity. For this MF case, the kinetic helicity and turbulent diffusion terms comprise the backreaction that saturates the LSD. Simulations of both MF and KF cases can be approximately modelled with the same equations of magnetic helicity evolution, but with complementary initial conditions. A key difference between KF and MF cases is that the helical large-scale field in the MF case grows with the same sign of injected magnetic helicity, whereas the large- and small-scale magnetic helicities grow with opposite sign for the KF case. The MF case can arise even when the thermal pressure is approximately smaller than the magnetic pressure, and requires only that helical small-scale magnetic fluctuations dominate helical velocity fluctuations in LSD driving. We suggest that LSDs in accretion discs and Babcock models of the solar dynamo are actually MF LSDs.
Trilogy Redux: Using Arbitration to Rebuild the Labor Movement

In 1960, the Supreme Court revolutionized arbitration, at least in the labor arena, by deciding the Steelworkers Trilogy, which encouraged arbitration to resolve labor disputes and directed the courts to abstain from involvement in the merits of these disputes. The decisions validated a system of selfgovernment that had evolved in industrial workplaces and affirmed the peaceful resolution of labor disputes internally through the use of arbitration.
Tolerant (In)civility? A Longitudinal Analysis of White Conservative Protestants' Willingness to Grant Civil Liberties

Past research has found conservative Protestants to be less willing than most Americans to grant civil liberties to unpopular groups. In light of evidence of high and growing civility by Smith (2000) and Hunter (1984), there is good reason to believe that conservative Protestants are becoming less distinctive with regard to granting civil freedoms. We update and expand previous research on conservative Protestants and civil liberties by examining the civil liberties measures in the General Social Survey over a 26-year period, with special attention to explaining conservative Protestantism’s rejection of civil liberties. In comparison to mainline Protestants and Catholics, we find that conservative Protestants are still less willing to grant civil liberties to unpopular groups, though important qualifications apply. Various explanations are examined. One of the most consistent findings in the literature on religion and civil liberties has been the unwillingness of those who affiliate with conservative Protestant denominations to grant civil liberties. Lack of support for civil liberties and political tolerance has attracted the interest of both researchers and the media sources. Fundamentalists and conservative Protestant (CP) 1 religious activists specifically, and all conservative Protestants generally, have been viewed as uncivil and intolerant, a stereotype that has recently been challenged by Smith (2000). We look at this issue again because there are good reasons to believe that the degree of CP libertarianism 2 (the term we will use to refer to “willingness to grant civil liberties”) is changing, and we extend previous studies in important ways. Furthermore, the topic is important because the smooth running of democratic societies like the United States—where opposing groups vigorously challenge each other and those in power—requires the protection of civil liberties and support for tolerance. Our purpose is to examine, first, if CP willingness to extend civil liberties to unpopular groups has changed over time; and second, to examine individual (within-cohort) and cohort replacement explanations for change. We start by reviewing explanations of why CPs are nonlibertarian, and then look at reasons to expect change.
Derailing Union Democracy: Why Deregulation Would be a Mistake

This article is a response to Prof. Samuel Estreicher’s article, Deregulating Union Democracy, 21 J. LAB. RES. 247 (2000). It argues against Estreicher’s call for the deregulation of internal union affairs by repealing the Labor-Management Reporting and Disclosure Act of 1959 on several grounds. First, it disputes some of Estreicher’s basic assumptions about the nature and effectiveness of union democracy legislation, in part because Estreicher views unions strictly as economic entities and overlooks their important political and social functions, and in part because he is mistaken when he dismisses the current scheme of regulating internal union affairs as completely ineffectual. Second, the article criticizes Estreicher’s proposal for new and different ways of providing workplace representation, arguing that without democratic safeguards such as protection for the freedom of speech of workers represented under these new forms of workplace representation, access to information, and effective protection against retaliation, the employee voting opportunities on which Estreicher’s plan is based would provide the appearance of democracy without the reality.
The labor market returns to a for-profit college education

A lengthy literature estimating the returns to education has largely ignored the for-profit sector. In this paper, we estimate the earnings gains to for-profit college attendance using restricted-access data from the 1997 National Longitudinal Survey of Youth (NLSY97). Using an individual fixed effects estimation strategy that allows us to control for time-invariant unobservable characteristics of students, we find that students who enroll in associate's degree programs in for-profit colleges experience earnings gains of about 10% relative to high school graduates with no college degree, conditional on employment. Since associate's degree students attend for an average of 2.6 years, this translates to a 4% return per year of education in a for-profit college, slightly lower than estimates of returns for other sectors found in the literature.
Measuring Segregation When Hierarchy Matters

This paper considers the problem of measuring segregation when groups form a hierarchy whereby some groups have greater economic status than others. While existing measures of segregation address the case where people are unequally distributed across groups with the same economic status, concern often focuses on groups with different status, e.g., occupational segregation where women have limited access to high wage occupations. This paper first defines a class of segregation indexes that encompasses both the "same economic status" and "different economic status" case. It then proposes two methods for incorporating economic status into empirical work. One is to rank groups from highest to lowest economic status and apply the dominance criteria in Theorem 2. The other is to invoke a cardinal measure of group economic status and then compute a numerical index. Finally, a numerical index of segregation is introduced, and both methods are used to analyze U.S. occupational segregation by gender and ethnicity.