Pluralism or isolation of Civilisations? Russia's foreign policy discourse and the reception of Huntington's paradigm of the post‐cold war world

This paper studies the effects of Samuel Huntington's ‘Clash of Civilisations’ thesis on Russian foreign policy discourse. In response to Huntington's thesis, two major currents of Russia's foreign policy thinking ‐ Liberals and Nationalists ‐ are identified, both of which are critical of the thesis. The two groups offer diametrically opposed alternatives to Huntington's paradigm of the post‐Cold War world. The Liberal‐Nationalist controversy reflects Russia's debates about its own political identity and provides us with a rich and informative understanding of the process of identity formation. By identifying Russia's various reactions to the ‘Clash of Civilisations’ thesis, the paper identifies potential influences of various currents in Russian foreign policy thinking on the country's future foreign policy. It also suggests some implications for further studies of cultures/civilisations in international politics.     

Analysis of a threshold dividend strategy for a MAP risk model

We consider a class of Markovian risk models in which the insurer collects premiums at rate c₁(c₂) whenever the surplus level is below (above) a constant threshold level b. We derive the Laplace-Stieltjes transform (LST) of the distribution of the time to ruin as well as the LST (with respect to time) of the joint distribution of the time to ruin, the surplus prior to ruin, and the deficit at ruin. By interpreting that the insurer pays dividends continuously at rate c₁?c₂ whenever the surplus level is above b, we also derive the expected discounted value of total dividend payments made prior to ruin. Our results are obtained by making use of an existing connection which links an insurer's surplus process to an embedded fluid flow process.     

Computer-assisted analysis of public discourse: a case study of the precautionary principle in the US and UK press

Content analysis of newspaper publications has become a major scientific method of the analysis of public discourse. Within the framework of content analysis, we suggest a computer-assisted method to extract the most important topics of this discourse in an objective, quantifiable manner. The method combines frequency and proximity analysis of the text population, selection of the key words, text modification based on a key word dictionary, factor analysis of the modified text population, and factor interpretation. We illustrate the concept by applying the method to study the major topics discussed in the US and UK prestige press that relate to the precautionary principle. Precautionary principle is a concept of preventing environmental damage under scientific uncertainty. The analysis demonstrates the difference between the major topics of the precautionary principle discussion in the US and UK press. In the US, it revolves around an emphasis on the action on global warming, international trade on genetically modified food, environment pollution, the risks of new technologies, and cost-benefit analysis (CBA). In the UK, the major discussion topics include threats to agriculture and farmers, climate change economics, national and EU regulations, and commercial fishing. Other discussion topics, such as health and pollution, water safety regulations, meat safety and trade, and GMO regulations are shared between the countries. The US sample demonstrates more negative views towards the precautionary principle, which is presented as a threat to the US economic interests.     

Common agency with risk-averse agent

In a common agency model with a risk-averse agent and private information distortion in the equilibrium policy from the first-best is greater compared to the case of a risk-neutral agent. The principals are unable to screen completely the agent’s preferences if he is sufficiently risk-averse: there is bunching in the contract. The contribution schedules keep track of informational externality. However, when the coefficient of risk-aversion goes to zero the contributions become truthful as in the complete information case.     

The law and economics of self-dealing

We present a new measure of legal protection of minority shareholders against expropriation by corporate insiders: the anti-self-dealing index. Assembled with the help of Lex Mundi law firms, the index is calculated for 72 countries based on legal rules prevailing in 2003, and focuses on private enforcement mechanisms, such as disclosure, approval, and litigation, that govern a specific self-dealing transaction. This theoretically grounded index predicts a variety of stock market outcomes, and generally works better than the previously introduced index of anti-director rights.     

Assessing the maintenance of savings sufficiency over the first decade of retirement

The goal of securing adequate resources in retirement dominates the ongoing debate regarding social security reforms designed to accommodate the demographic transformation and to provide minimum income security to retired workers. Policy proposals concerned with the implication of future public sector costs emphasize greater individual responsibility for meeting retirement resource goals. Proposals seeking minimum living standards imply expansion of public fiscal liabilities. We contribute to this discussion by examining the extent to which a cohort of US retirees were able to meet resource adequacy standards at the time of retirement, and to maintain initial levels of resources over the first decade of retirement. We compare annuitized wealth, including social security and pension wealth, to two adequacy standards—a household’s preretirement earnings (reflecting the goal of maintaining preretirement consumption) and the US poverty threshold (reflecting the goal of meeting minimum consumption standards). We analyze the relationship of individual characteristics to changes in resource adequacy over time, and identify the characteristics of those who gain and lose resources over the first decade of retirement. Finally, we simulate the effects on adequacy and public sector benefit costs of four social insurance policy proposals. This research was partially supported by a grant from the Social Security Administration. Additional support was provided by the Institute for Research on Poverty, the Graduate School and the Center for Demography and Ecology all at the University of Wisconsin-Madison. Conclusions represent those of the authors alone and not of the funding agencies.     

Experimental Evidence on Portfolio Size and Diversification: Human Biases in Naïve Security Selection and Portfolio Construction

We conduct an experiment in which individuals select securities to reproduce the well‐known relationship between portfolio risk and the number of securities. The standard result occurs on average but not for most individuals, many of whom effectively de‐diversify as they add seemingly random securities. Moreover, only slightly better results are achieved using a random number generator. This finding challenges the belief that only a small number of securities are required for diversification and shows that it is applicable only to a large sample. The implications are important given that many individual investors hold very few stocks in their portfolios.     

ESTIMATING DIRECTIONAL MIGRATION FLOWS FROM AGE-SPECIFIC NET MIGRATION DATA

This paper focuses on a method for indirectly inferring migration flows in the absence of migration data, using two successive counts of birthplace-specific population stocks . Such stocks have been used in the past to infer patterns of mortality and indeed of net migration. But a workable method for using such population stocks to indirectly estimate directional migration flows still eludes us. Widely observed regularities in the age patterns of outmigration indicate that age-specific propensities of migration are correlated, and this characteristic suggests an estimation method that directs attention to the age-specific relative propensities of two or more flows exhibited in the historically preceding time intervals, and then uses those past measures of relative propensities to disaggregate residually estimated net migration flows into the underlying contributions of inmigration and outmigration. A detailed demonstration of the method, applied to US data, is set out in this paper.     

Hedging, Familiarity and Portfolio Choice

We exploit the restrictions of intertemporal portfolio choicein the presence of nonfinancial income risk to test hedgingusing the information contained in the actual portfolio of theinvestor. We use a unique data set of Swedish investors withinformation broken down at the investor level and into variouscomponents of investor wealth, income, and demographic characteristics.Portfolio holdings are identified at the stock level. We showthat investors do not hedge but invest in stocks closely relatedto their nonfinancial income. We explain this with familiarity,that is, the tendency to concentrate holdings in stocks to whichthe investor is geographically or professionally close or thathe has held for a long period. We show that familiarity is nota behavioral bias, but is information driven. Familiarity-basedinvestment allows investors to earn higher returns than theywould have otherwise earned if they had hedged.