Social Capital and the Terms of Trade for Farmland

Social capital is a person or group's sympathy for or sense of obligation to another person or group. This article introduces social capital into a neoclassical model of farmland exchange and shows how relationships alter the terms of trade. Empirical evidence from a survey of farmers shows that the type of relationship farmland sellers have with farmland buyers has a statistically significant and economically important effect on the minimum-sell price for farmland. Compared to the minimum-sell price when selling to a total stranger in an arm's-length transaction, farmland sellers discount prices to friendly neighbors and relatives and require a premium from unfriendly neighbors and influential people in the community.     

Options on bond futures: Isolating the risk premium

The introduction of unspanned sources of risk (and frictions) implies that option prices include a risk premium. Prima facie evidence of the existence of risk premia in option prices is contained in the implied volatility smile patterns reported in the literature. This article isolates the risk premium (defined as the simple difference between estimated and observed option prices) on options on U.K. Gilts, German Bunds, and U.S. Treasury bond futures using models that include price jumps and stochastic volatility. This study finds that single and multi‐factor stochastic volatility models with jumps may explain the empirical regularities observed in bond futures. © 2003 Wiley Periodicals, Inc. Jrl Fut Mark 23:169–215, 2003     

MANAGING VENDOR INVENTORY IN A DUAL LEVEL DISTRIBUTION SYSTEM

Collaborative arrangements among members of the supply chain have received a great deal of interest in recent years as a means of reducing costs. One such arrangement is vendor managed inventory (VMI). VMI allows the vendor to make decisions concerning the quantity and timing of deliveries to the retailer. Such an arrangement offers the potential of a more efficient supply chain by removing the negative effects of retail ordering policies. A thorough review of the literature was conducted to identify factors likely to impact the performance of a VMI partnership. Computer simulation was used to study the effects of these factors from both the vendor's and retailer's perspectives. The results lend insight into the performance of VMI and guidance for managers as to the environments in which VMI is most effective.     

The Recognition and Timing of Deferred Tax Liabilities

Abstract:   This paper examines the characteristics of firms that account for deferred tax liabilities related to government investment grants under an extended adoption timing period. Not only the recognition but also the timing decision is associated with changes in future performance and changes in the debt structure. Recognisers outperform non‐recognisers in the future, while early recognition is related to post recognition performance but only for those firms that currently perform well. Changes in the balance sheet structure are also related to both decisions. Firms with recent increases in the debt level tend to postpone recognition, while currently well‐performing firms that increase their future debt level are less likely to recognise deferred taxes.     

A RE-EXAMINATION OF THE EFFECT OF 12B–1 PLANS ON MUTUAL FUND EXPENSE RATIOS

In this paper we re-examine the effect of 12b–1 payments on mutual fund expense ratios by analyzing data from 1988 through 1991. The findings are consistent with previous studies that find charges are a dead-weight cost borne by shareholders. However, we show that this cost increases over time.     

The treatment of racial and sexual discrimination in economics journals and economics textbooks: 1972 to 1987

This article examines two decades of scholarly literature on discrimination and two decades of discussion of discrimination in economics textbooks. At first discrimination was taken seriously and policy responses adequate to the problem were advocated. Today this is a minority position. The article first traces the way thatJEL policies concerning indexing and abstracting have contributed to this change. Next textbooks are analyzed to show how this change is manifested in commonly used curricular materials. Finally, political preferences are shown to undergird crucial arguments like those concerning minimum wages. Conclusions linking ideology to research agendas are put forward.     

Sources of Bank Interest Rate Risk

We investigate bank stocks'sensitivity to changes in interest rates and the factors affecting this sensitivity. We focus on whether the exposure of commercial banks to interest rate risk is conditioned on certain balance sheet and income statement ratios. We find a significantly negative relation between bank stock returns and changes in interest rates over the period 1991–1996. We also find that bank characteristics measured from basic financial statement information explain bank stocks'sensitivity to interest rate changes. These results suggest that bank managers, analysts, and regulators can use this information to assess the relative risk exposure of banks.     

Trade uncertainty and the two-step procedure: The choice of numeraire and exact indexation

Summary In a small open economy it is optimal to first maximize national income and second choose the best consumption point.The same two-step procedure under (quantitative) uncertainty is suboptimal if one of the goods is used as numéraire. Optimality is restored however, if nominal prices are deflated by the exact price index. Hence there is equivalence between the appropriate two-step procedure and the introduction of a stock market under uncertainty (Diamond 1967) under ideal circumstances.I would like to thank, without implicating, Peter van Bergeijk, Steven Brakman, Willem Buiter, Richard Gigengack, Jean-Marie, Viaene, Casper de Vries and an anonymous referee for useful comments and Angelique van Haasteren and Martijn Herrmann for graphical assistance.     

Policies for economic growth

Summary The old growth theory of the 1950s led to certain conclusions about the sorts of economic policies that would promote economic growth, and also about their limitations. The new growth theory of the 1980s makes much stronger assumptions and leads to correspondingly stronger conclusions about the scope of growth-promoting policy. This article argues that: (1) empirical work so far has neither confirmed nor denied the strong assumptions underlying the new theory; (2) the theory is worth pursuing because of its intrinsic interest and the possibilities it opens up; (3) whatever the final verdict on the new theory, both theory and evidence support the belief that significant long-run gains, even if not permanent changes in the growth rate, can be achieved by increased investment in the broadest sense, including human capital, technological knowledge, and industrial plant and equipment.Fifth Tinbergen Lecture delivered on October 4, 1991, in Amersfoort for the Royal Netherlands Economic Association