The systematic risk of corporate bonds: default risk,term risk,and index choice

In this paper, we empirically examine the systematic risk of corporate bonds in the Euro area. Based on a unique sample of 784 bonds from 1999 to 2010, we show that the systematic risk of constructed bond portfolios and individual bonds—measured against three different market indices—depends on credit quality, term risk, and index choice. A significant increase in systematic risk for lower-rated bonds is observed following the start of the financial crisis. In multi-factor models, bond portfolios load significantly on default and term risk, which are included as additional factors. Conducting Fama and MacBeth cross-sectional tests, we find that default and term risk are priced with economically relevant premiums that range from 0.35 to 0.62 % per month. Our results are robust to the inclusion of characteristics such as rating and time to maturity.     

Tourism,changing architectural styles,and the production of place in Itacaré, Bahia,Brazil

This article examines changing architecture in Itacaré, Brazil, as it transitions from a fishing village to an international tourist destination. Tourism, as an assemblage of practices and perspectives, recreates places in specific ways that structure social and environmental relationships. Through an examination of historical architectural styles, tourist architecture, and popular architecture in Itacaré, this article analyses the ways a tourist economy has physically and socially rebuilt the city. Socially, the changing architecture marks and creates differences between class, racial, and regional identities while also providing an idiom through which public conversations about these changing economic systems and demographics are articulated. At the same time, the expansion of the city has led to racial-, regional-, and class-based segregation. Environmentally, tourist architecture creates new relationships to nature through re-imagining Itacaré’s position in relation to other rural and urban places and a new emphasis on the aesthetic value of nature.     

Der Flexibilitätsbeitrag in der Arbeitslosenversicherung

The controversy around fixed-term contracts centres around the conflict between the employer’s need for flexibility and the employee’s need for security. The authors propose flexible contributions for employers to the public unemployment insurance system to balance both interests. The employers’ contributions for their temporary staff would increase while the contributions for their permanent staff would in turn decrease slightly. The authors calculate four versions. With regards to the total sum of contributions, the first version holds the contributions received constant while the second version leads to a reduction. They then repeat these two calculations for fixed-term contracts without substantive grounds. The flexibility premium takes into account the higher unemployment risk of employees with fixed-term contracts and establishes monetary incentives for employers to hire employees with permanent contracts.     

CHOOSING THE VARIABLES TO ESTIMATE SINGULAR DSGE MODELS

We propose two methods to choose the variables to be used in the estimation of the structural parameters of a singular DSGE model. The first selects the vector of observables that optimizes parameter identification; the second selects the vector that minimizes the informational discrepancy between the singular and non‐singular model. An application to a standard model is discussed and the estimation properties of different setups compared. Practical suggestions for applied researchers are provided. Copyright © 2014 John Wiley & Sons, Ltd.