A Theory of Bank Capital

Banks can create liquidity precisely because deposits are fragile and prone to runs. Increased uncertainty makes deposits excessively fragile, creating a role for outside bank capital. Greater bank capital reduces the probability of financial distress but also reduces liquidity creation. The quantity of capital influences the amount that banks can induce borrowers to pay. Optimal bank capital structure trades off effects on liquidity creation, costs of bank distress, and the ability to force borrower repayment. The model explains the decline in bank capital over the last two centuries. It identifies overlooked consequences of having regulatory capital requirements and deposit insurance.     

Global Labor and Worksite Standards: A Strategic Ethical Analysis of Shareholder Employee Relations Resolutions

The purpose of this paper is to analyze from a strategic ethical perspective four selected shareholder resolutions reported by the Social Issues Service of the Investor Responsibility Research Center regarding international labor and workplace standards. Particular attention will be paid to specific employee relations issues at the operating and tactical level of individual multinational firms. The paper concludes with policy recommendations for proxy statements.     

The travel cost method and the economic value of leisure time

Recent estimates of high values for tourist related recreation USA amenity values indicate that allocation of basic water and terrestrial resources to recreation activities should be given precedence over conventional market oriented activities that often degrade or even extirpate the resource. We discuss at length the travel cost method (TCM), a survey based technique that quantifies the non‐market benefits of trips to recreation sites. The TCM has been cast in the role of an ‘umpire’ in recent resource allocation debates. Understanding the key role of the TCM in the debate will aid tourist agency officials throughout the world. This article is a U.S. Government work and is in the public domain in the U.S.A.     

Conservation Practices and the Growth of US Cash Rent Leases

Over the past 20 years the ratio of cash rent to cropshare land leases across the US has more than doubled. We test different theories that might explain this, and conclude that the shift is mostly the result of revolutionary changes in cultivation practices. The switch from conventional to conservation tillage brought about by changes in herbicide technologies, genetically modified seeds, increased fuel costs, and knowledge of the benefits of soil micro‐organisms, has reduced a tenant‐farmer's ability to exploit a landowner's soil. This removes a major incentive to cropshare and makes cash renting more attractive. Using USDA field‐level data from across the US, we find strong support for this hypothesis, and some evidence that increased corporate structure also influences cash renting. Alternatively, we cannot find evidence that changes in risk, risk‐aversion or insurance coverage explain the growth in cash renting.     

The economic feasibility of reclaiming phosphate mined lands with short-rotation woody crops in Florida

Fast growing and short-rotation tree crops provide unique opportunities to reclaim phosphate-mined lands in central Florida. Optimum management of the eucalyptus short-rotation woody crop forestry system studied necessitates harvests every 2.5–3.6 years and replanting after 2–5 coppice harvests. The value of phosphate mined land under Eucalyptus amplifolia forestry ranges from $762 to $6507 ha⁻¹ assuming discount rates of 10% and 4%, respectively, establishment costs of $1800 ha⁻¹, planting costs of $1200 ha⁻¹, planting density of 8400 tree ha⁻¹, and a stumpage price of $20 dry Mg⁻¹.     

The impact of rhino poaching on tourist experiences and future visitation to National Parks in South Africa

Wildlife tourism attracts substantial numbers of tourists worldwide with Africa as the major wildlife viewing destination earning the bulk of its tourism revenue from such tourism. Iconic animals, such as the rhino, are major attractions for tourists to South Africa who holds approximately 80% of the World’s rhino population. However, the rapid increase in rhino poaching activities has reached a crisis point and should the rate of poaching continue to increase Africa’s remaining rhino population will become extinct in the wild within 20 years. How this affects tourists and tourism is still largely unknown. This study shows evidence that rhino poaching and anti-poaching measures do impact tourism in the short term and could affect future visitation to Parks.     

Agricultural climate change mitigation: carbon calculators as a guide for decision making

The dairy industry is receiving considerable attention in relation to both its significant greenhouse gas (GHG) emissions, and its potential for reducing those emissions, contributing towards meeting national targets and driving the industry towards sustainable intensification. However, the extent to which improvements can be made is dependent on the decision-making processes of individual producers, so there has been a proliferation of carbon accounting tools seeking to influence those processes. This paper evaluates the suitability of such tools for driving environmental change by influencing on-farm management decisions. Seven tools suitable for the European dairy industry were identified, their characteristics evaluated, and used to process data relating to six scenario farms, emulating processes undertaken in real farm management situations. As a result of the range of approaches taken by the tools, there was limited agreement between them as to GHG emissions magnitude, and no consistent pattern as to which tools resulted in the highest/lowest results. Despite this it is argued, that as there was agreement as to the farm activities responsible for the greatest emissions, the more complex tools were still capable of performing a ‘decision support’ role, and guiding management decisions, whilst others could merely focus attention on key issues.     

Policy uncertainty and the economic outlook

A large cloud of uncertainty hangs over the economic outlook, particularly the outlook for productivity growth and the long-term trend growth of output. This uncertainty stems from three sources: (a) the fiscal outlook, (b) the policy agenda shifting from campaign promises to partisan opportunity, and (c) the large reliance on executive branch actions. I discuss the foundations and likely evolution of policy uncertainty over the initial months of the Trump Administration.