Position limits for cash‐settled derivative contracts

Cash settlement of derivative contracts makes them susceptible to manipulation by traders who expect to close large positions upon final settlement. Cash settlement also increases underlying volatility when hedgers unwind their hedges if they have no incentives to control their trading costs. Limits on the positions that traders can carry into final settlement can be used to mitigate associated economic inefficiencies when surveillance is insufficient. This article develops a model that regulators can use to set these limits that is based upon microstructure theory. The empirical findings indicate that existing position limits are largely inconsistent with those suggested by the model. © 2005 Wiley Periodicals, Inc. Jrl Fut Mark 25:945–965, 2005     

The structural and economic implications of urbanization

"This study surveys the policy issues associated with urbanization following the abolition of the pass laws [in South Africa]. The demographic background is briefly sketched. Using neo-classical analysis as a starting point, particular attention is paid to the present inefficiencies of city form associated with segregation. It is argued that current planning procedures are in danger of perpetuating or even worsening the situation. Obstacles to employment generation are considered and transport, local government and housing issues are discussed. On every front, urbanization policy is unstable and, even in the short term, there will be pressures to change it."     

Health and development∗

The linkage between development and health is clearly spelt out in the definition of primary health care by the World Health Organisation. There is a widespread and growing disillusionment with the traditional Western approach to health care which fails to meet the real demands of the Third World situation.

This paper looks briefly at conditions in the developing world and the strategy proposed by the W H O to attempt to meet the objective of health for all by the year 2000 and refers to the South African situation.     

Income distribution,economic structure and employment in South Africa

This paper discusses the impact of a redistribution of current income from the White to the Black population on the distribution of sectoral output, and total employment by means of a semi‐closed input‐output model.

The results show that a redistribution of current income towards Black households — which no doubt will have positive social and political repercussions — has a non‐negative effect on GDP and a definite positive effect on the performance of sectors with a high private consumption expenditure component, as well as on total employment.     

Team up to meet child-care needs

Recognizing the importance of child care is not the same as providing it. The options for many employees are limited, but some employers are trying to assist employees with their child-care needs. One option that benefits many small to medium-sized companies is a child-care consortium.     

Discriminating Among Alternative Theories of the Multinational Enterprise

Recent theoretical developments have incorporated endogenous multinational firms into the general–equilibrium model of trade. One simple taxonomy separates the theory into "vertical" models, in which firms geographically separate activities by stages of production, and "horizontal" models, in which multiplant firms duplicate roughly the same activities in many countries. The authors nest a horizontal and a vertical model within a hybrid (unrestricted) "knowledge–capital model" and estimate the specifications with data on US foreign direct investment activity. In the nested econometric tests, the data sample cannot distinguish statistically between the unrestricted model and the restricted horizontal model, indicating that the latter captures virtually all of the determinants of FDI. The tests overwhelmingly reject the vertical model.