The effects of monetary policy changes on market interest rates in Greece: An event study approach

The operational procedures of the Bank of Greece underwent major changes during the 1990s. These shifts in operational strategy made interest rates the main tool of monetary policy for the first time in Greece. This paper examines the effects of changes in the bank's operational interest rates on market interest rates at eight maturities and for different operational regimes. A major feature of our study is the application of the event study methodology used in finance, which has not been employed in any previous study on this subject. We find that changes in official interest rates had a significant influence on short-term and intermediate-term rates and that this relationship was affected by the changes in the bank's operational procedure.     

全球化与WTO：利益分析及争端解决

一、引言“全球化”这一说法是最近才开始流行的,而我们这些贸易经济学家对它的研究历史却有几十年甚至上百年了;世界贸易组织(WTO)也是最近才成立的,而国际贸易方面的法律专家对它和它的前身--GATT的研究也已近五十年了。在前面的两种情况中,国际贸易方面的专家都会强调世界经     

What Makes an Independent Regulator Independent?

As private capital is increasingly invested in utilities across the globe, the issue of regulation and its inferace with different types of government, culture and society has become every more complex. This article focuses on the design of regulatory systems outside the US and the UK. With references to current practice in many countries, the author argues that formal regulatory independence and accountability is not always a necessary condition for effective regulation (though where feasible and effective it carries potential economic benefits). On the other hand, he also argues that an informal or advisory regulatory system may work better in some situations. In all circumstances, informal accountability and a clear understanding of the "rules of the game" are crucial for effective regulation.     

Infrastructure Contracts: Trust and Institutional Updating

This paper discusses trust and trust perceptions in infrastructure contracts and supporting institutions. We focus on perceptions of the trustworthiness of the government purchasers of infrastructure services by the supplying companies and by the governments themselves. In particular, we allow for trust updating and trust misalignments, which may give rise to ‘undertrusting’ and ‘overtrusting’. The core of the paper sets out a game theoretic model of contracts with dynamic adjustment of trust perceptions, which we use to explore the impact of trust misalignment both on economic efficiency (measured by expected welfare) and on investment levels. We explore flexible contracts with and without pre-payments, rigid contracts (which do not allow for post-investment renegotiation), and hybrid contracts. We then compare the efficiency of the flexible contracts to that of hybrid contracts using as a criterion the expected welfare implications of each contract. The model is used to shed light on current issues on the sustainability of private investment infrastructure contracts in developed and in developing countries, including the role of regulatory institutions.     

A Parimutuel Market Microstructure for Contingent Claims

Parimutuel principles are widely used as an alternative to fixed odds gambling in which a bookmaker acts as a dealer by quoting fixed rates of return on specified wagers. A parimutuel game is conducted as a call auction in which odds are allowed to fluctuate during the betting period until the betting period is closed or the auction ‘called’. The prices or odds of wagers are set based upon the relative amounts wagered on each risky outcome. In financial microstructure terms, trading under parimutuel principles is characterised by (1) call auction, non‐continuous trading; (2) riskless funding of claim payouts using the amounts paid for all of the claims during the auction; (3) special equilibrium pricing conditions requiring the relative prices of contingent claims equal the relative aggregate amounts wagered on such claims; (4) endogenous determination of unique state prices; and (5) higher efficiency. Recently, a number of large investment banks have adopted a parimutuel mechanism for offering contingent claims on various economic indices, such as the US Nonfarm payroll report and Eurozone Harmonised inflation. Our paper shows how the market microstructure incorporating parimutuel principles for contingent claims which allows for notional transactions, limit orders, and bundling of claims across states is constructed. We prove the existence of a unique price equilibrium for such a market and suggest an algorithm for computing the equilibrium. We also suggest that for a broad class of contingent claims, that the parimutuel microstructure recently deployed offers many advantages over the dominant dealer and exchange continuous time mechanisms.     

The Attributes of a Costly Recall: Evidence from the Automotive Industry

While researchers have extensively documented the equity response to product recalls and subsequent shareholder losses, less attention in the literature has been given to examining the damaging recall attributes. Using 1973–1998 automotive safety recall data, this study identifies the kinds of recalls that cause significant shareholder losses. After constructing an equally-weighted automotive market index to control for industry effects and adjusting the abnormal returns to account for the degree of surprise in the recall announcement, the study estimates both percentage and real dollar abnormal returns. We find that the indirect costs of automotive recalls are likely larger than the direct costs.     

A note on the allocation of time

A multi-commodity model in which time as well as nominal income is necessary in the process of consumption is analyzed. Duality theory is used to provide a counter example to the ‘Linder Theorem’ that a rise in real wages will decrease consumption of some good if it is more time intensive than the weighted average of the time intensity of all other commodities.