Does travel inspire? Evidence from the superstars of modern art

This paper investigates whether travel increases the value of paintings produced by modern visual artists. The analysis is based on the 214 most prominent modern visual artists born between 1850 and 1945 and auction records of their paintings over the past 20 years. We find that artworks produced in the year of a journey are 7% more valuable than paintings produced in periods with no travel. We attribute this effect to human capital investments, knowledge spillovers and inspiration from the travel destination itself. There are persistent, but declining benefits to travel over the subsequent 4 years. The analysis shows that the impact of travel is smaller for later periods as modern art becomes more abstract. The effect on the value of paintings differs depending on the purpose of a journey: work-related, recreational and politically motivated journeys have a positive contemporaneous effect on value, whereas educational journeys have a negative effect. In addition, we find that France, Germany and the United States are the most frequently visited destinations for modern artists and also yield considerable benefits during times of strong innovation.     

The doughboy premium: an empirical assessment of the relative wages of American veterans of World War I

This article examines 1940 US census data to assess the relative wages of World War I (WWI) veteran and nonveteran men. Our empirical analysis indicates a 3.6% wage premium for veterans, after controlling earnings-related characteristics. Although lower than comparable estimates for WWII veterans, our results suggest that American veterans of the Great War earned a higher wage premium than those of the Vietnam or Korean conflicts.     

Bad volatility is not always bad: evidence from the commodity markets

ABSTRACT

Using exchange-traded fund (ETF) options data, we examine the predictive power of variance risk premium on returns of four commodities: crude oil, natural gas, gold and silver. We also analyze the predictive power of upside and downside variance risk premiums using a decomposition model conditional on the direction of the underlying market movement. We find that both the undecomposed and decomposed variance risk premiums are able to predict commodity prices. The decomposed variance risk premiums, however, outperform the undecomposed premium. The importance of upside and downside variance risk premiums differs across markets, related to hedging demand. In energy markets, both upside and downside premiums have strong predictive power, while in precious metal markets, only the upside premium is predictive.     

MARKET DISCIPLINING OF THE DEVELOPING COUNTRIES' SOVEREIGN GOVERNMENTS

In this article, we contribute to the current literature on market disciplining of the sovereign governments of the developing countries by distinguishing both sides of the market discipline hypothesis by adopting three‐stage least square estimation to incorporate the contemporaneous feedback effects between primary structural budget balances and the country's default‐risk premiums. We provide empirical evidence of a unidirectional causal relationship between a country's default‐risk premium and primary structural budget balances with the direction flowing from primary structural budget balances to country's risk premium in 40 developing countries over the period 1975–2008. We also employ the Arellano‐Bond dynamic panel generalized methods of moments estimation to control for this joint determination of primary structural budget balances and the country's default‐risk premium, and find supportive evidence of undisciplined sovereign governments and of nonlinearly behaving well‐functioning financial markets in the sample countries. (JEL C5, G1, G3)     

Why a new malpractice crisis is coming

This article predicts escalating premiums and a greater risk of malpractice suits based on the increasing frequency and cost of claim payouts. The number of insurance claims increased by 12% in 1978 after a decrease of 11% in 1976 and by 2% in 1977. The percentage of premium income paid out has followed the same pattern. It was a high of 66.5% in 1975 and then fell into the 40% range in the next two years. Last year it bounced back to 60.6%. Some insurance authorities view the 1976-77 drop in claims as artificial and attribute it to a reluctance to file suits during the period immediately following new malpractice laws. The reluctance to sue has apparently relaxed. About 16% of the cases actually go to court. Out of those, 90% of the verdicts favor doctors. The rise in cases going to court shows that reform! legislation passed in several states to reduce malpractice litigation is not yet working. The average payout was up 20% between 1976 and 1978 with the greatest rise in large awards; million-dollar settlements are not uncommon. Escalating payouts are attributed to general inflation anf rising medical costs. In addition, the public has become better medically informed and been taught that for every wrong ther is a remedy.     

HOW DO JAPANESE HEALTH INSURANCE SOCIETIES FINANCE THEIR CONTRIBUTIONS TO THE HEALTH SERVICE SYSTEMS FOR THE ELDERLY?*

We examine how Japanese health insurance societies finance (or distribute) the costs (or cost savings) from an increase (or decrease) in contributions to the Health Service Systems for the Elderly. Three ways are possible: (i) adjusting the premiums of the employee or employer; (ii) providing an optional benefit; and (iii) adjusting reserves by the change in contribution. We find that more than six‐sevenths of the changes are associated with changes in reserves, followed by premiums, and finally optional benefits. The increase in the premium mostly shifted to employees, while employees enjoyed a nearly 60% decrease in total premium.     

The directors' and officers' insurance premium: an outside assessment of the quality of corporate governance

Using a sample of directors' and officers' (D & O) premiumsgathered from the proxy statements of Canadian companies, thisarticle examines the D & O premium as a measure of ex antelitigation risk. I find a significant association between D& O premiums and variables that proxy for the quality offirms' governance structures. The association between the proxiesfor governance structure quality and D & O premiums is robustto a number of alternative specifications. This article providesconfirmatory evidence that the D & O premium reflects thequality of the firm's corporate governance by showing that measuresof weak governance implied by the D & O premium are positivelyrelated to excess CEO compensation. The overall results suggestthat D & O premiums contain useful information about thequality of firms' governance.     

The costs of doing hard time: a penitentiary-based regional price index for Canada, 1883–1923

Abstract.  We construct consumer price indices for Canada, based mainly on the expenditure records of Canada's federal penitentiaries. Regional price variation was much greater in Canada in the late nineteenth century than in the northern U.S. The new data suggest substantial price decline to 1900. Regional price variation in Canada decreased gradually to 1914, and quickly during the First World War. For 1900–14 and 1922–3, new data are largely consistent with consumer price data compiled by the Labour Gazette . The new data suggest more inflation during the First World War.     

Do financial distress and liquidity crises affect value and size premiums?

This study investigates the impact of liquidity crises on the relationship between stock (value and size) premiums and default risk in the US market. It first examines whether financial distress can explain value and size premiums, and then, subsequently, aims to determine whether liquidity crises increase the risk of value and size premium investment strategies. The study employs a time-varying approach and a sample of US stock returns for the period between January 1982 and March 2011, a period which includes the current liquidity crisis, so as to examine the relationship between default risk, liquidity crises and value and size premiums. The findings indicate that the default premium has explanatory power for value and size premiums, which affect firms with different characteristics. We also find that liquidity crises may actually increase the risks related to size and value premium strategies.     

A place for everything and everything in its place: New York's role in the art market

A crucial point in any sale is the choice of the market where to sell. This issue is much more important in the case of the artworks, where there is evidence that arbitrage does not necessarily equalise prices of comparable items across different cities of sale. Are these price differences due to the specific characteristics of items sold in different places or do they capture the idiosyncratic nature of the markets? In order to answer to this question, we apply the unconditional Recentered Influence Function (RIF) regression method to a sample of Picasso paintings sold worldwide during the period 2000-2019. Specifically, we compare percentile price differences between New York City, which is known for its status as a world art city and the Rest of World. Overall, results illustrate that the law of one price fails with Picasso's ‘blue chips’, his most expensive artworks. However, after the 2008-09 financial crisis the art market became more efficient and the idiosyncratic nature of New York's art market faded.     

MEASURING NEW ZEALAND'S GDP 1865–1933: A COINTEGRATION-BASED APPROACH

Official and semi-official estimates of New Zealand's national income are available on an annual basis for the years since 1932. Retrospective, non-official, estimates are available from 1859. Chiefly these are constructed following Doblin's (1951) pioneering use of money stock data, velocity, and the implications of the Quantity Theory of Money, and include the estimates of Hawke (1975), Rankin (1992) and Cashin (1995).
This paper estimates New Zealand real GDP per capita with monetary data using valid, intervention-free, cointegration methods. The new measures avoid the ad hoc adjustments found in Rankin (1992), yet unlike Cashin (1995), they incoporate specific New Zealand monetary features. The new time series conform well with independent benchmarks and the historiography of the pre-1914 period. Alternatively, they suggest an interpretation of New Zealand's growth experience for years around World War One which differs from that of Australia, and from the findings of Rankin (1992) and Cashin (1995).     

GENDER DIFFERENCES IN VOCATIONAL SCHOOL TRAINING AND EARNINGS PREMIUMS IN TAIWAN

Abstract

International capital mobility and economic restructuring have brought training and skills acquisition to the forefront of policy dialogues. Taiwan has gone beyond most countries in promoting vocational education and setting strict quotas for schooling. Although the education plans do not have separate targets for men and women, they have gendered outcomes. Estimates of earnings premiums using ordinary least squares and quantile regression techniques indicate that only men have gained consistently higher premiums from vocational school compared to general schooling. Women who were denied access to the university system have forgone college premiums that exceed those of men. Also, the commerce track, in which women cluster, yields an earnings penalty compared to general schooling, while the technical track, in which men predominate, yields an earnings premium. Policy reforms based on relaxing education quotas and enforcing equal opportunity legislation would provide women with more rewarding education and career options.     

Using inflation to erode the US public debt

Projections indicate the US Federal debt held by the public may exceed 70–100% of GDP within 10 years. In many respects, the temptation to inflate away some of this debt burden is similar to that at the end of World War II. In 1946, the debt ratio was 108.6%. Inflation reduced this ratio by more than a third within a decade. Yet there are some important differences – shorter debt maturities today reduce the temptation to inflate, while the larger share of debt held by foreigners increases it. This paper lays out an analytical framework for determining the impact of a large nominal debt overhang on the temptation to inflate. It suggests that when economic growth is stalled, the US debt overhang may induce an increase in inflation of about 5% for several years that could significantly reduce the debt ratio.     

LONG WAVES IN ECONOMICS AND POLITICS

Paul Kennedy, The Rise and Fall of Great Powers: Economic Change and Military Conflict from 1500 to 2000 , New York: Random House, 1987; and Joshua S. Goldstein, Long Cycles: Prosperity and War in the Modern Age , New Haven: Yale University Press, 1988.     

Did public wage premiums fuel agglomeration in LDCs?

This paper develops the idea that wage premium jobs cause nearby agglomeration. We show that spatial mobility costs enable wage premiums to cause agglomeration, whereas previous studies crucially assume that wage premium jobs are allocated to favor nearby residents (Harris–Todaro (H–T)). This extends the idea to LDCs, such as Egypt, Ethiopia and Kenya, which have had centralized job allocation mechanisms that do not give a search advantage to locating near public jobs. We show that high public jobs' growth in Egypt has altered regional mobility and population shares in a way that is consistent with agglomeration due to wage premiums and mobility frictions.     

中国国情下的保险费率监管模式选择及影响分析--来自车险市场的经验证据

我国保险监管朝着“放开前端、管住后端”的模式发展,保险费率市场化改革的呼声始终较高。文章以财险市场中市场份额最大的车险为研究对象,基于2001－2014年样本分析了费率市场化与费率水平合理性之间的关系。研究发现,我国车险市场的实际费率水平明显低于理论费率;费率监管的严格程度的确会影响费率水平的合理性,其中适度监管模式下的费率水平最为合理。文章进一步深入探究了费率水平合理性对偿付能力的影响机制,发现费率差异的波动性会通过净利润而间接影响偿付能力。费率差异的波动性越小,净利润越高,偿付能力越强,因此应慎重选择费率监管制度。文章建议我国保险市场应采用适度监管的费率制度,完全放开的费率市场化略显激进,不适合当前国情。这样不仅能使费率水平更加合理,还不会威胁保险公司的偿付能力,从而使保险市场更加健康稳步的发展。     

Great game or Grubby game? the struggle for control of the Caspian

In this article I examine the way in which resource conflict in the Caspian Sea Basin has become entwined in the development of geopolitical thought and ideas since the late nineteenth century. I argue that Mackinder's inclusion of the Caspian in his original pivot was significant and that because of its considerable strategic importance control of the region was seen as crucial to all sides in both the First World War and the Second World War. The struggle for control of the Caspian bolstered Mackinder's ideas which were influential in the development of Cold War geopolitics. Since the collapse of the Soviet Union the desire to control the ‘heartland’ has been played out via the control of the region's energy resources.     

Health insurance subsidies and the expansion of an implicit marriage penalty: a regional comparison of various means-tested programmes

Any subsidy provision for healthcare premiums, including those embedded in Affordable Care Act (ACA), has the potential to result in some couples facing an implicit penalty when married relative to unmarried. To illustrate such consequences of means-tested subsidies of health insurance premiums, we construct hypothetical households earning different levels of income who are eligible for current subsidies in the USA. and compare the estimated implicit marriage penalty faced by these households to the one faced by low-income households who are eligible for various means-tested programmes (e.g. TANF, WIC, SNAP) for each of the 48 contiguous states. We find that, like very low-income households, marriage can potentially penalize couples who receive health insurance premium subsidies by decreasing their overall disposable income by as much as 14%. We find that the ACA increases the number of households subject to marriage penalties embedded in means-tested programmes for low-income couples. This distortion will exist for any future health insurance premium subsidies that are means tested at the household income level.     

Health insurance market reform and employee compensation: The case of pure community rating in New York

Pure community rating, which was enacted to improve access to health insurance in New York's small group market in 1993, prevents carriers from charging different premiums based on the ages of a firm's workers. If small firms were adjusting compensation packages prior to reform to offset higher health care costs of older workers, then community rating could lead to greater relative wages for older workers post reform and not necessarily induce adverse selection that results in changes in who is insured. I present evidence showing that relative wages of older workers in small firms increased in comparison with other states and with large firms within New York following reform.