EDITORIAL: TAX REFORM AND SIMPLIFICATION

Major tax reform to simplify the UK tax system is possible. Merging income taxes, social security taxes and corporation tax into only a single flat-rate of tax on all incomes would be a radical start. Avoiding taxes on income and expenditure which are 'too high' requires major reductions in government spending, mainly on the welfare state. Given the political will, over a period of years we really can hugely improve the UK tax system.     

Gentlewomanly capitalism? Spinsters,widows, and wealth holding in England and Wales,c. 1800–1860

This article examines the demographic and geographical importance of wealthy middle-class women. It argues that in certain towns and cities, notably London, such women were of sufficient importance to merit attention in their own right. Drawing upon a sample of wills, it describes the types of wealth owned by these women. By examining women's investment in government securities, it argues that women's wealth was of crucial importance to the British state. Its findings challenge conventional understandings of the relationships between gender ideology, wealth holding, and economic development.     

DURATION MOMENTS AND YIELD CURVE MOVEMENTS

In this paper we will analyze the relationship between the value and duration moments of a cash flow and movements in the yield curve. We will show that for changes in the yield curve which can be related to tⁿ , the 1st order changes in the net present value of a cash flow are linearly dependent on the n + lth duration moments, and that the 2nd order changes are dependent on the sum of duration moments of order 2 n + 1 and 2 n + 2. We will use this relationship to tilt tracking portfolios so as to protect them against specific changes in the yield curve.     

Reform of European Merger Policy

The paper highlights the main drivers for merger policy reform in the European Union, including the consequences of the recent appeal court reverses. It discusses some of the substantive and procedural issues that the reform package should address, and outlines the reforms in progress. The author concludes that much of the reform package will be beneficial, but some important opportunities have been missed in this inevitably patchwork process.     

Accounting for control and trust building in interfirm transactional relationships

This paper theorises the accounting-control-trust nexus in interfirm transactional relationships. In the context of such relationships, accounting has predominantly been conceptualised as a control technology. However, in our paper we analyse stable and durable relationships as being the results of interaction between control and trust building. Such an analysis calls for an additional conceptualisation of accounting as a trust building technology. Furthermore, we explain the interaction between accounting for control and accounting for trust building in the context of a process of embedded agency.     

METROPOLITAN HOUSE PRICES IN SOUTH AFRICA: DO THEY CONVERGE?

The question this paper investigates is whether or not different metropolitan areas each constitute a separate housing market or whether or not there is a single South African housing market. Theory on the Law of One Price suggests that if products or geographic areas belong in the same market, their absolute prices must converge, so that their relative prices are stationary. By using cross-sectional time series data of five metropolitan areas, the paper tests for the Law of One Price by applying the Im, Pesaran and Shin panel unit root test. The paper finds strong evidence of convergence in large middle-segment house prices and weaker support for convergence in medium middle-segment house prices. In addition, the paper finds no evidence for convergence in small middle-segment house prices. This suggests the existence of a national market for large and possibly middle-segment houses in metropolitan areas, but separate metropolitan markets for small middle-segment houses. In addition, the paper estimates the speed of convergence and finds that large middle-segment house prices converge within two to seven quarters, while the speed of convergence for medium middle-segment house prices in three of the five areas is five to eight quarters.     

Competition Policy: What are the Costs and Benefits of Measuring its Costs and Benefits?

Summary  Competition authorities are increasingly measuring the effects of their enforcement actions, seeking a robust justification for the proliferation of competition policy. We highlight the importance of identifying the right counterfactual against which to measure effects, and set out the relevant categories of costs and benefits. We then explore how a balance can be struck between the benefits and inherent limitations of these measurement exercises. Relatively crude analyses of cartel action benefits can be sufficient to achieve public legitimacy for competition policy. Assessing the effects of merger and conduct inquiries is often ambiguous, but could be used to improve decision-making processes. Director and Managing Consultant, respectively, at Oxera, Oxford and London. The valuable comments of Fod Barnes, Kerry Hughes and an anonymous referee are gratefully acknowledged. The opinions expressed in this article are those of the authors alone.