Fixed Versus Variable Rate Loans

This paper discusses the nature of fixed and variable loan contracts and derives the conditions which determine the optimal quantity of each. The results indicate that the payoff functions are quite different and dependent upon the project financed. The appropriate conditions for the allocation of loan terms to a set of borrowers are then developed. Finally, the analysis derives the optimal portfolio frontier and risk-return trade-off for the banking firm. Here, it is demonstrated that the solution is unlikely to be at a point of zero interest rate risk.     

Conference on Housing,Stability, and the Macroeconomy: International Perspectives

This article provides an introduction to the JMCB special issue on housing bubbles, the global financial crisis, and the ensuing recessions in countries that experienced housing busts. We focus on five themes that are important for policymakers and researchers alike: the domestic and international factors driving housing booms and busts, the relevance of the housing sector for the real economy, how monetary policy should react to housing booms and busts, how housing and mortgage finance reform could affect financial stability, and the broad lessons learned for macroeconomics and macroprudential policy.     

TOP MANAGEMENT TEAM AGREEMENT ABOUT THE STRATEGIC DECISION PROCESS: A TEST OF SOME OF ITS DETERMINANTS AND CONSEQUENCES

The level of agreement among a firm’s top executives about how things are done in that firm has a variety of important implications. For example, agreement about a firm’s decision-making norms may allow members of the top management team (TMT) to focus on the substance of their most critical decisions and not get bogged down in debates about the process. In the present study, data from 65 firms in two industries were used to identify determinants and consequences of TMT agreement about the comprehensiveness of the strategic decision process. Results for consequences indicate that the level of TMT agreement was positively related to organizational performance. As for the determinants of agreement, organizational size was negatively related to agreement but past performance exhibited no association. Therefore, the results suggest that it is TMT agreement that influences performance, not the reverse. In addition, a surprising result was that firms in an industry with an unstable environment exhibited significantly more agreement about the process than did their counterparts in an industry whose environment was stable. © 1997 by John Wiley & Sons, Ltd.     

Leasing Versus Borrowing: Evaluating Alternative Forms of Consumer Credit

A straightforward method for evaluating lease versus borrow (buy) decisions facing consumers is presented and illustrated with actual financing cost data reported to new car purchasers. In general, individuals should consider the after-tax cash flows associated with alternative borrowing arrangements, the period of time in which these cash flows occur, and the opportunity cost of capital in order to identify the least costly financing alternative. The decision framework provided in this article can be used to make informed and intelligent choices between alternative types of consumer credit contracts.     

珠江三角洲经济发展、城市扩张与农田流失研究——以东莞市为例

珠江三角洲自改革开放的２０年来经历了巨大的发展,但也导致了城市的迅速扩张以及大量宝贵农田的流失。本文以珠江三角洲发展最快的城市之一的东莞为例探讨其经济发展、城市扩张以及农田流失的关系。研究发现了农田流失与不同阶段的经济发展有密切的关系。自进入９０年代以来,由于房地产的过热发展,造成了农田的加速流失,严重浪费土地资源。珠江三角洲的农田流失与乡镇企业的发展,地方自主权的扩大,香港的影响,交通条件的改善以及土地管理等一系列因素有关。     

Why Don't We Agree? Evidence from a Social Network of Investors

We study sources of investor disagreement using sentiment of investors from a social media investing platform, combined with information on the users' investment approaches (e.g., technical, fundamental). We examine how much of overall disagreement is driven by different information sets versus differential interpretation of information by studying disagreement within and across investment approaches. Overall disagreement is evenly split between both sources of disagreement, but within-group disagreement is more tightly related to trading volume than cross-group disagreement. Although both sources of disagreement are important, our findings suggest that information differences are more important for trading than differences across market approaches.     

On What States Do Prices Depend? Answers From Ecuador

The frequency of retail price adjustment differs across goods, both in low inflationary environments, such has the United States, and in high inflationary environments typical of less developed countries. We develop a multishock menu cost model in which retailers intermediate trade between producers and consumers. Since the cost share of intermediate inputs varies across goods, the model produces a cross-sectional distribution of frequency of price adjustment even though firms face a common menu cost. The model is evaluated using a rich micropanel of retail prices in Ecuador in a period spanning a financial crisis and subsequent dollarization.     

CREDIT,HOUSING COLLATERAL,AND CONSUMPTION: EVIDENCE FROM JAPAN,THE U.K., AND THE U.S.

The consumption behavior of U.K., U.S., and Japanese households is examined and compared using a modern Ando‐Modigliani style consumption function. The models incorporate income growth expectations, income uncertainty, housing collateral, and other credit effects. These models therefore capture important parts of the financial accelerator. The evidence is that credit availability for U.K. and U.S., but not Japanese, households has undergone large shifts since 1980. The average consumption‐to‐income ratio rose in the U.K. and U.S. as mortgage down‐payment constraints eased and as the collateral role of housing wealth was enhanced by financial innovations, such as home equity loans. The estimated housing collateral effect is similar in the U.S. and U.K. In Japan, land prices (which proxy house prices) continue to negatively impact consumer spending. There are negative real interest rate effects on consumption in the U.K. and U.S. and positive effects in Japan. Overall, this implies important differences in the transmission of monetary and credit shocks in Japan versus the U.S., U.K., and other credit‐liberalized economies.     

The Regulation of Dietary Supplements Within the United States: Flawed Attempts at Mending a Defective Consumer Safety Mechanism

The use of dietary supplements in the United States has escalated in the past decade, driven by the public's desire to exert control over their health and by the mistaken belief that the safety of dietary supplements is assured by the US Food and Drug Administration (FDA). In fact, the marketing of largely unregulated supplements presents significant risks to public health.