Middlemen: the good,the bad,and the ugly

We examine the role of a middleman as an expert in markets. A seller's effort determines the quality of the good. Buyers observe neither the seller's effort nor the good's quality. A middleman, after observing a signal about the good's quality, decides whether to purchase it and then to sell it. We show that the presence of a middleman may either reduce or exacerbate the seller's moral hazard problem. We also consider a model with multiple middlemen. We find that the seller's effort is minimized if either the middleman's signal is perfect or the number of middlemen is large.     

Rent control: The citizen,the market,and the state

The paper is a positive and normative public choice analysis of rent control. The positive public choice section hypothesizes that differences in rent control regimes across countries emerge out of differences in the political power of tenants and landlords, out of differing attitudes to security of tenure and the fairness of gains from property ownership, and out of differing values regarding equality of opportunity versus equality of result. The normative public choice analysis evaluates rent control by asking whether rent control would be allowed under a unanimously approved constitution. It is argued control would not be allowed; not because the objectives of control are outside the sanctioned domain of government but because control is horizontally inequitable.     

Cancellation Latency: The Good,the Bad,and the Ugly

This paper provides several statistics concerning cancellation latency that would be helpful to regulators as they consider policies to establish a minimal quote life. We find that cancellation latency is related to market quality and is not constant. Rather, it varies depending upon the time of day, order price and size, market congestion, trader type, firm size, order imbalance, and technology used for submitting an order.     

Oil, Macroeconomics, and Forests: Assessing the Linkages

How does an oil boom affect the forest cover of tropical oil-exportingcountries? What macroeconomic linkages and policies are decisive?A comparison of research findings on long-run land-use changesin eight tropical developing economies reveals that the directphysical impacts of the oil industry on forests are unquestionablyless than its derived macroeconomic impact. In most cases oilwealth indirectly but significantly protects tropical forests.The core mechanism is that oil rents cause macroeconomic "Dutchdisease" decreasing the price competitiveness of agricultureand logging, strongly diminishing pressures for forest degradationand deforestation. But domestic policy responses to oil wealthare also vital determinants of the forest outcome. When governmentsuse oil wealth for urban spending sprees, this reinforces thecore effect by pulling more labor out of land-using and forest-degradingactivities. When oil revenues finance road construction or frontiercolonization, however, the core forest-protective effect canbe reversed. Repeated currency devaluation and import protectionof land-using domestic sectors also increase pressures on forests.Other international capital transfers, like bilateral credits,aid, or debt relief, can have impacts similar to those of oilwealth, either alleviating pressures on forests or aggravatingspecific forest-detrimental policies. These insights point toforest-friendly safeguards that can realistically be made inthe design of structural adjustment programs, considering theimportant tradeoffs between development and conservation objectives.      

Bridging the Gaps: Credits,Adoption, and Inequality

We examine here the role of credits on technology adoption and inequality from the perspective of developing countries. Utilizing a model of exogenous growth, with heterogeneous labor and technical progress embodied in physical capital, we find that credits can contribute to a faster adoption and to reducing income inequality. Thus, a virtuous cycle of credits, a shorter technological gap, less inequality, and economic growth is feasible to be created when there is full liquidity in the market. When credits are constrained, the cycle loses virtuosity, where the economy can lose up to two points in growth due to credit constraints.     

Finance,growth, and stability: Lessons from the crisis

This article introduces a special issue on lessons from the recent crisis on finance, growth, and stability. The papers in the special issue discuss (i) the benefits and risks of financial innovation and regulatory responses to these risks, (ii) the effect of finance and globalization on the real economy, and (iii) the role of government in providing credit guarantees. This introductory article provides a broader view on these issues and closes with ideas on the future research agenda in this field.     

JRI, JF, and the Internet: Coauthors, New Authors, and Empirical Research

This article examines how the Internet has changed the work of academic researchers and addresses the question of how expanded Internet usage has affected Journal of Risk and Insurance (JRI) and Journal of Finance (JF) articles, including the shift to empirical research, joint authorship, and new authorship. Internet availability significantly increased joint authorship overall (more for JF than for JRI), shifting upwards a strong secular trend toward working with other researchers. Another big impact of the Internet has been to increase the number of new authors (more for JRI than for JF).     

Dark trends: Psychology,science fiction,and the ominous consensus

Many science fiction authors predict that the world will continue moving towards an environment characterised by a combination of high population density and advanced technology. Psychologists and writers of fiction both appear to be in general agreement that such an environment will result in an information overload, intolerable time pressures, overwork for a minority with a lack of meaningful work for the majority, and the loss of privacy and autonomy. Futurists should note the agreement between artistic vision and scientific research—that human civilisation appears to be moving towards conditions that are unpleasant and deleterious.     

Multinationals in the Middle Kingdom: Performance,Opportunities, and Risks

For many U.S. companies, China is the most promising growth opportunity in the business portfolio. The interest of managements and boards has been backed up with action, making China the preferred country for foreign direct investment in the last several years. Yet the experience also shows that many companies were unprepared to operate in a developing economy and with a foreign culture. The normal start‐up problems have been aggravated by unfamiliar joint venture partners, large regional differences in purchasing power, language, and regulation, and weak enforcement of intellectual property rights. The first wave of China investment by U.S. multinationals, corresponding roughly to the decade of the 1990s, was marked by poor performance. But in the last five years, multinationals have made significant adjustments—particularly, the “localizing” of suppliers, the workforce, and the products offered. And recent data indicates much improved profitability. Still, there remain substantial challenges to further growth, including increasing local competition, a thin human resources market, the lack of prime acquisition candidates, and continued low rates of consumption. The different experiences of multinationals such as Procter & Gamble, Anheuser‐Busch, and Wal‐Mart are used to illustrate these challenges and provide some important lessons for companies now evaluating their opportunities in China.     

未来的世界:可预测的周期、趋势和未来

未来将会有许多为这些普通人做事的机会。企业家、商人和投资者将迎来重大的商业机遇。那些具有创造性而且有趣的工作岗位也会大量增加。问题是,这种机会会出现在哪些行业?如果你是一个考虑学习科学、商业或金融专业的学生,你应该关注哪些方面?如果你是一名熟练的企业家,在哪里你可以用很少的钱启动创业,并有机会让你的企业成为一个伟大的公司,甚至在相对较少的几年内,就得到初始投资1000倍的回报?或者,如果你是一个投资者,在未来的几十年里,哪些资产和哪些行业将是最有利可图的?如果你的时机和选择都很好,你完全可能在10年内获得10倍的回报.     

Conference on Housing,Stability, and the Macroeconomy: International Perspectives

This article provides an introduction to the JMCB special issue on housing bubbles, the global financial crisis, and the ensuing recessions in countries that experienced housing busts. We focus on five themes that are important for policymakers and researchers alike: the domestic and international factors driving housing booms and busts, the relevance of the housing sector for the real economy, how monetary policy should react to housing booms and busts, how housing and mortgage finance reform could affect financial stability, and the broad lessons learned for macroeconomics and macroprudential policy.     

The net effect: Design, the rhizome, and complex philosophy

Complex networks keep appearing in design research. A consideration of networks brings us into contact with Deleuze and Guattari's concept of the rhizome. On the one hand, their characterisation of the rhizome seems to be an extension and vindication of the application of the network. On the other hand, it diminishes the authority of the network as providing a general account of social conditions, spatial configuration, and design processes. In this paper we examine critically how both the network and the rhizome feature in major design legacies.