Should the government be running job centres?

Most people find their jobs by means other than job centres. Since they are not a monopoly, what reason is there for government to run them? Can it even tell whether they are being run efficiently?     

Facts & figures: Public sector as employer: The disables; Pay and disputes in the NHS

Management buy‐outs provide an extra option for the restructuring of State enterprises. However, as with other privatisations, they may generate problems and measures may need to be taken to ensure that the public interest is not damaged in the long term.     

Olympic soccer comes to Birmingham: managing a nonprofit organization's accounting and finance in a public setting

This case is based on the experience of one of the authors as financial director of the Birmingham, Alabama soccer venue site for the 1996 Summer Olympic Games held in Atlanta, GA, USA. Although many of the circumstances surrounding the case are based on actual events, the people, data and scenarios contained in the case are fictional. However, the case is written carefully to create as realistic an environment as possible. As the only member of the Birmingham Soccer Committee with accounting expertise, the financial director is responsible for identifying and addressing issues involving accounting and finance. The primary learning objective for this case is to provide students with experience actively making decisions in an unstructured environment in which they have sole responsibility for accounting and financial issues. When addressing the issues in the case, students are required to use a decision framework based on a comparison of personal principles and goals to the committee's mission and strategy.     

Commentary: The US and IFRS: Which Way Ahead?

Standard setters, SEC staff and distinguished academics joined together at a panel session of the American Accounting Association meeting in Denver in August 2011 to discuss what course the United States (US) should take with regard to the adoption of IFRS. Panellists drew attention to the political dimensions of the decision. While it might be politically unattractive for the US to surrender some of its power to set its own standards, it would also be unattractive for the US to stay on the sidelines while important international agreements were made. Panellists also looked at developments in the adoption and implementation of IFRS around the world, drew attention to important uncertainties in countries such as China and India, and questioned how far global uniformity was a realistic objective; comparability might be a more sensible goal.     

Probabilistic temperature change projections and energy system implications of greenhouse gas emission scenarios

This paper explores the implications for global average temperature change of a set of reference and mitigation scenarios in a probabilistic framework. First, we use published probability density functions for climate sensitivity to investigate the likelihood of achieving targets expressed as levels or rates of global average temperature change. We find, for example, that limiting warming to 3 C above pre-industrial levels with at least a medium likelihood requires cumulative emissions reductions on the order of 30-60% below one unmitigated reference scenario by 2100, while a more favorable baseline scenario requires no reductions at all to achieve this outcome with the same likelihood. We further conclude that the rate of temperature change may prove to be more difficult to control, especially if most of the mitigation effort is postponed until later in the century. Rate of change targets of 0.1–0.2 °C/decade are unlikely to be achieved by a target for the long-term level of climate change alone. Second, we quantify relationships between mitigation costs and the likelihood of achieving various targets and show how this depends strongly on the reference scenario. Third, we explore relationships between medium-term achievements and long-term climate change outcomes. Our results suggest that atmospheric concentrations and the share of zero-carbon energy in the middle of the 21st century are key indicators of the likelihood of meeting long-term climate change goals cost-effectively. They also suggest that interim targets could be an effective means of keeping long-term target options open. Our analysis shows that least-cost mitigation strategies for reaching low climate change targets include a wide portfolio of reduction measures. In particular, fundamental long-term structural changes in the energy system in these scenarios are a necessary but not sufficient condition to achieve high likelihoods for low temperature targets. The cost-effective portfolio of emissions reductions must also address demand-side measures and include mitigation options in the industry, agriculture, and the forest sector.     

CHARITY AUCTIONS*

In a charity auction the public‐goods nature of auction revenue affects bidding incentives. We compare equilibrium bidding and revenue in first‐price, second‐price, and all‐pay charity auctions. Bidding revenue typically varies by selling format. First‐price auctions are less lucrative than second‐price and all‐pay auctions, and with sufficiently many bidders the all‐pay auction has the highest bidding revenue. However, revenue equivalence applies when the auctioneer can set a reserve price and fees plus threaten to cancel the auction. If the auctioneer cannot threaten cancellation, a reserve and bidding fee can augment revenue but again revenue varies by auction format     

Loss Recoveries,Realized Excess Returns,and Credit Rationing in the Commercial Mortgage Market

In this paper we exploit loan level data combining foreclosure histories with information about the revenues and expenses associated with the ongoing management and eventual sale of financially distressed loans to estimate the magnitude of realized excess returns on commercial mortgages. Our findings are striking. We find that average realized excess returns on commercial mortgages are the lowest at the best times á la Stiglitz and Weiss (Am. Econ. Rev., 71:393–409, 1981). We also find that excess realized returns on commercial mortgages are low when lenders are swamped with funds (which we measure by the volume of commercial mortgage commitments) and when promised spreads are low.      

Shift‐contagion Vulnerability in the MENA Stock Markets

As part of a broader financial development reform agenda, the Middle East and North Africa (MENA) countries have successfully expanded and revitalised their stock markets over the last decade. Whereas previous contributions have investigated efficiency, international integration and portfolio diversification opportunities, very little is known about these markets’ vulnerability to external financial crises. In this paper, we investigate shift‐contagion to the MENA region using a comprehensive battery of econometric tests for a number of different crises episodes: the 1997 Asian crisis, the 1998 Russian virus and its Brazilian sequel, the 2000 Turkish collapse, the 9/11 turmoil, the 2001 Argentinean crisis, the 2002 Enron/WorldCom scandal and the 2007–09 global financial crisis. We found that Turkey, Israel and Jordan were the most vulnerable markets over the 1997–2009 period, followed by Tunisia, Morocco, Egypt and Lebanon. Our results also highlight heterogeneous but increasing levels of sensitivity to external financial shocks, especially during the recent global financial crisis. From a financial point of view, this suggests that MENA‐based diversification strategies may be relatively inefficient during periods of global turmoil. From an economic point of view, our results suggest that stock market development also involves potential destabilisation costs. This issue should be acknowledged and addressed by policymakers if these countries are to ensure a smooth transition towards international financial integration.     

Dueling Jackpots: Are Competing Lotto Games Complements or Substitutes?

This paper considers the relationship that exists between two lottery products offered simultaneously in the same state, a smaller lottery game run by the individual state and a larger multi-state game run in coordination with other states. The primary issue is whether the two different products should be considered substitutes or complements for one another. The question is considered from two different perspectives that lead to a conclusion that while the two products do tend to be complements to one another, overall the individually run state lottery games experience a reduction in sales from the presence of the multi-state game.