Saving–investment Correlations in Response to Monetary Policy Shocks: New Insights into the Feldstein–Horioka Puzzle?

In this paper, it is argued that the observed high positive correlation between national savings and investment which is found in the data can in part be explained by shocks to monetary policy. This hypothesis, which is established by reviewing some empirical findings, is tested in a two-country DSGE-model framework in the tradition of the New Open Economy Macroeconomics. The simulation results obtained support the idea that shocks to monetary policy might contribute to the explanation of the Feldstein-Horioka puzzle.

Latino families report lower child injury rates than white families

Latino children have lower visit rates to emergency departments and primary care physicians than white children in the USA. Using a nationally representative household survey, this study asked whether parental report of injury was also lower for Latino children, after adjusting for demographic, socioeconomic, health status and health care access factors. Data were obtained on injuries for which medical advice or treatment was received from the National Health Interview Survey (NHIS) from 1997 to 2003. Using the multistage probability design of NHIS, annual rates and adjusted odds of childhood injury report by race and ethnicity were calculated. Respondents reported lower rates of injury for Latino children (6.0 (95% CI 5.3-6.8)/100 person-years) than white children (13.4 (12.7-14.2)/100 person-years). Lower injury rates were mainly due to lower rates of sports injuries and accidental falls. Latino children had lower odds of reported injury than white children, even after adjusting for multiple factors (odds ratio 0.7; 95% CI 0.6-0.8). Lower odds of injury report among Latino children are independent of direct measures of demographic, socioeconomic, health status and health care access factors and indirect measures of acculturation including respondent language and country of origin. Potential explanations include lower exposure to risk, greater child supervision, reporting bias, differences in cultural attitudes toward seeking of health care and reduced health care access that cannot be explored in NHIS due to the form of the current questions. Further research is needed to investigate cultural differences in risk exposure, child supervision and seeking of injury care.     

Trading Costs in Early Securities Markets: The Case of the Berlin Stock Exchange 1880-1910

Based on daily prices (amtliche Kurse) we estimate effective spreads of securities traded at the Berlin Stock Exchange in 1880, 1890, 1900 and 1910. Several extensions of the Roll measure are applied. We find surprisingly tight effective spreads for the historical data, comparable with similar measures of the MDAX and DAX at the end of the 20th century.     

Current account adjustment in industrial countries

This paper examines the dynamics of current account adjustment among industrial countries. The purpose is to evaluate whether there is a threshold level of a current account deficit at which it becomes unsustainable and whether it is possible to characterize episodes of adjustment. We identify 25 episodes in which there was a sustained improvement in the current account following a large deficit between 1980 and 1997. We find that a typical current account reversal begins when the current account deficit is about 5% of GDP. However, we also find considerable cross-country variation in the reversal threshold, consistent with a stock-adjustment model of current account sustainability. Reversals are associated with slowing income growth and a 10–20% real exchange rate depreciation. Real export growth, declining investment, and an eventual leveling off in the budget deficit–GDP ratio are also likely to be part of the adjustment. These results imply that current account reversals in industrialized countries are related to the business cycle.     

Relationship Banking, Liquidity, and Investment in the German Industrialization

Close bank relationships are thought to ameliorate firms' liquidity constraints—a phenomenon frequently measured by liquidity sensitivity of investment. Using German firms during the formative years of universal banking (1903–1913), this paper shows that, even controlling for selection bias, investment is more sensitive to internal liquidity for bank-networked firms than unattached firms. The firm exhibiting the greatest liquidity sensitivity, however, faced no apparent liquidity constraint. The findings yield two implications: they support recent research rejecting a linear relationship between liquidity sensitivity and financing constraints, and they suggest that relationship banking provides no consistent lessening of firms' liquidity sensitivity.     

Reasoned Ethical Engagement: Ethical Values of Consumers as Primary Antecedents of Instrumental Actions Towards Multinationals

We examine the implications of the US government’s too-big-to-fail (TBTF) policy as it has been applied to banks. Using alternative measures of risk, we compare the risk-taking behavior of 11 TBTF banks, identified by the Comptroller of the Currency in 1984, to a number of non-TBTF banks. We provide both theory and new empirical evidence to support our argument that the TBTF policy leads management to significantly increase risk-taking, with no corresponding increase in performance. While prior studies have considered the effects of the TBTF policy on limited, but risk-related aspects of bank behavior, such as the cost of funds, our study provides direct evidence about the risk-taking behavior associated with the TBTF policy. Our study has important implications for the current political debate regarding the too-big-to-fail policy.     

The shrine of remembrance Melbourne: a short study of visitors' experiences

The Shrine of Remembrance in Melbourne, Australia opened in 1934 to articulate the social memory of the Great War of 1914–1918. The site has developed to incorporate other memorials and a Visitor Centre. An exploratory study of visitors indicated that the traditional and new memorials continue to evoke a number of responses to war. People expressed a sense of sadness and gratitude for sacrifices made by all those who have fought in war. Many people had poor knowledge of the battles which had initiated the creation of the Shrine. The study indicates the Shrine's complexity which now commemorates multiple conflicts. Copyright © 2009 John Wiley & Sons, Ltd.     

Market impacts of the 2020 short selling bans

At the height of the COVID-19 related market stress in March 2020, six European countries implemented market-wide short selling bans. Based on a difference-in-difference approach using regulatory data, our estimation finds that the bans are associated with a deterioration in liquidity and trading volumes, and a decrease in volatility, without evidence of price impact. Remarkably, the negative impact persisted after the bans' lift. Liquidity deterioration appears stronger for liquid shares- large-cap, highly fragmented stocks, and stocks with listed derivatives. Sectoral effects are noticed for the stocks most affected by the market stress. Finally, no displacement effect was observed.