THE RISK OF FIRE SALES IN THE TRI‐PARTY REPO MARKET

This paper studies the risk of “fire sales” in the tri‐party repo market, a large and important market where securities dealers find short‐term funding for a substantial portion of their own and their clients' assets. We distinguish between fire sales of assets by a dealer who, facing a run that could lead to default, sells securities to generate liquidity, and fire sales of assets by repo investors after a dealer's default has occurred. While fire sales do cause damage no matter how they arise, the tools available to lessen the harm from the two types of fire sales are different. We find that limited tools are available to mitigate the risk of predefault fire sales and that no established tools currently exist to mitigate the risk of postdefault sales. (JEL G01, G18)     

Stimulating high–tech venture creation

This paper explores whether policy makers can successfully encourage high–tech venture creation. We outline some of the policy interventions that have been used to stimulate new venture creation. We then present case evidence of how a new high–tech industrial district emerged in Dublin, focussing on the role of various policy interventions. We conclude by arguing that a range of appropriately timed policy interventions can be pivotal in the development of internationally competitive high–tech new ventures. However the case suggests that it was a combination of sector level and direct firm level interventions that stimulated and facilitated the emergence of a cohort of high–tech new ventures.     

Pricing dynamics in US fresh produce channels: new empirical evidence

Despite many valuable contributions, prior research has not completely explained retail pricing behavior. This study employs scanner data for 36 fresh produce items analyzing the relationship between costs of goods sold and retail prices to provide further insight into retail pricing behavior. Implications include: (1) where ‘natural’ variation in produce prices do not already exist from the supplier, retailers appear to introduce the variation themselves, independent from shipping point price; and (2) to the extent that supplier-retailer contracts for fresh produce develop, the resulting stabilizing influence on costs may have the preserve effect of increasing retail price variability to consumers.     

Counting carbon: historic emissions from fossil fuels,long-run measures of sustainable development and carbon debt

This article examines how to account for the welfare effects of carbon dioxide emissions, using the historical experiences of Britain and the USA from the onset of the industrial revolution to the present. While a single country might isolate itself from the detrimental effects of global warming in the short run, in the long all countries are unable to free ride. Thus, we support the use of a single global price for carbon dioxide emissions. The calculated price should decrease as we move back in time to take into account that carbon dioxide is a stock pollutant, and that one unit added to the present large stock is likely to cause more damage than a unit emitted under the lower concentration levels in the past. We incorporate the annual costs of British and US carbon emissions into genuine savings, and calculate the accumulated costs of their carbon dioxide emissions. Enlarging the scope and calculating the cumulative cost of carbon dioxide from the four largest emitters gives new insights into the question of who is responsible for climate change.     

A structural portfolio balance model of the Sterling-Dollar exchange rate

Zusammenfassung Ein Strukturmodell des verm?genstheoretischen Ansatzes zur Erkl?rung des Pfund-Dollar-Wechselkurses. — In diesem Aufsatz wird eine Variante des verm?genstheoretischen Ansatzes zur Bestimmung des Wechselkurses in seiner Strukturform auf den Pfund-Dollar-Kurs des Zeitraums 1973–1982 angewandt. Dabei wird die Methodologie von Brainard und Tobin benutzt, wodurch sichergestellt wird, da\ die Koeffizienten bestimmten Restriktionen genügen. Gesch?tzt wird das Modell sowohl mit der Kleinst-Quadrate-Methode als auch mit dem Theil-Goldberger-Verfahren der gemischten Sch?tzungen. Mehrere Aktiva-Schocks werden simuliert und die Reaktionen der Zinss?tze und der Wechselkurse aufgezeigt.

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Résumé Un modèle structurel de ?portfolio balance? du taux de change Sterling-Dollar.- Dans cet article les auteurs appliquent la structure d’une version de l’approche de ?portfolio balance? à la détermination du taux de change sterling-dollar sur la période 1973–1982. Dans le modèle, la méthodologie de Brainard et Tobin est utilisée qui garantit que les restrictions nécessaires d’addition sont satisfaites. Les méthodes des moindres carrés ordinaires aussi bien que les procédures d’estimation mixte de Theil-Goldberger sont appliquées pour estimer le modèle. Les auteurs simulent un nombre des chocs d’actif et illustrent la réponse des taux d’intérêt et du taux de change.

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Resumen Un modelo ?portfolio balance? estructural del tipo de cambio entre la libra esterlina y el dólar. - En este trabajo se presenta una versión del modelo de ?portfolio balance? para determinar el tipo de cambio, que es implementado estructuralmente para el tipo libra esterlina - dólar en el período 1973–1982. En la implementación de este modelo se utiliza la metodología de Brainard y Tobin, que garantiza la consistencia de las restricciones. Con el fin de estimar el modelo se aplica tanto el método de cuadrados mínimos como también el método mixto de Theil y Goldberger. Se llevan a cabo varias simulaciones a base de shocks de activos para ilustrar la reacción de las tasas de interés y del tipo de cambio.

     

React to the future: political visualization,emotional reactions and political behavior

Abstract

This study explores the mediating role political visualization – the process of imagining future political scenarios – plays in determining how political advertising affects voting behaviour. Specifically, we theorize that when partisans are exposed to political ads that are narrative (compared to non-narrative) in nature, they will engage in more political visualization. Partisans will then experience emotional reactions to these imagined futures – specifically, enthusiasm for the in-group candidate and anger towards the out-group candidate. These emotional reactions, in turn, will make a partisan more likely to vote for the in-group candidate and less likely to vote for the out-group candidate. We test this model by employing an experimental design where American partisans were presented a political ad (in the form of an email) that is either narrative or non-narrative. Results provide support for most of our expectations and suggest that visualization may play an important role in determining the influence of a political ad.     

Strengthening executive decision making

Although decisions determine corporate fates, executives don't always know how to make the best choices. The author examines today's dissatisfaction with corporate decision making, reviews how it can deteriorate as the pace of change increases, and offers five comprehensive strategies for improving the decision making process. © 1995 by John Wiley & Sons, Inc.     

What is a multinational corporation? Classifying the degree of firm-level multinationality

The degree of firm-level multinationality is a key dimension that spans all theoretical frameworks, levels of empirical analysis and domains of investigation in international business research. There is, however, no agreed approach to defining or measuring firm-level multinationality. This is reflected in inconsistent approaches to sample selection and empirical testing, and it has curtailed the advancement of the discipline. We propose that instead of searching for the elusive, all-encompassing definition of an MNC, international business scholars should instead agree on a classification system for the degree of firm-level multinationality. We illustrate the advantages of this approach by constructing a simple classification system that takes into account the firm's breadth and depth of multinational engagements. We illustrate our matrix of firm multinationality by classifying a novel sample of over 1000 firms from seven countries, and we demonstrate how it can guide theory development and empirical testing. We also provide examples of potential future research directions.     

Measuring small area variation in hospital use: site-of-care versus patient origin data.

There has been increasing attention paid to small area variation in hospital discharge rates. While there is general agreement about the importance of correcting for the migration of patients to hospitals outside their geographic area when constructing population-based hospital use rates for these small areas, there have been no studies of the sensitivity of simple correlations or multiple regression results to these adjustments. Given the paucity of patient origin data, which is needed to adjust hospital discharge rates for patient crossovers, the problems of measurement error present in the more readily available site-of-care data need to be addressed. This paper analyzes the variation in hospital discharge rates, both an unadjusted site-of-care rate and an adjusted patient origin rate, across the 68 counties in the lower peninsula of Michigan in 1980. The results indicate that both simple correlations and multiple regression results of these rates with socio-economic and health care resource characteristics of the counties are very sensitive to the specification of the discharge rate, with the analysis of the unadjusted rate potentially leading to incorrect policy recommendations. The explanatory power of the socio-economic characteristics is underestimated and that of health care resource measures most likely overestimated when the discharge rate is not adjusted for patient crossovers.     

On a monotonicity property of the Klein-Rubin true cost-of-living index

It is shown that the Klein-Rubin true cost-of-living index associated with the Stone-Geary Linear Expenditure System has a highly restrictive feature. When used to measure the impact of relative price changes on different income (expenditure) groups, the index numbers will always be monotonic in income.