Maximum likelihood estimation of the Rotterdam model under two different conditions

This letter describes maximum likelihood (ML) procedures for the Rotterdam model (1) when the model is formulated in relative prices and (2) under the constraints of the theory of rational random behavior.     

The positive correlation of affluence and freedom

Non-communist countries rated ‘free’ have on average a much higher per capita income than those rated ‘partly free’ or ‘not free’. The latter two groups differ primarily in terms of the dispersion of their per capita incomes, those rated ‘not free’ being much more dispersed than those rated ‘partly free’.     

The Antonelli matrix and the reciprocal Slutsky matrix

Inverted demand models which describe deflated price changes in terms of quantity changes can be formulated by means of the Antonelli matrix or the reciprocal Slutsky matrix. The two approaches differ with respect to the price deflator and the role of the Divisia volume index.     

World income inequality and its components

About 65 percent of total income inequality in the non-communist world is accounted for by international inequality, and about 35 percent by inequality within nations. More than 70 percent of international inequality is accounted for by the inequality of two major regions.     

A maximum entropy approach to the specification of distributed lags

The maximum entropy (ME) criterion is used to justify three different specifications of distributed lags. For lag distributions in several dimensions, the ME criterion yields a considerable simplification.     

Optimal Product Variety and Economic Growth: The Trade-off between Internal and External Economies of Scale

Received July 17, 2000; revised version received February 1, 2001     

The Construction of Risk Management Credibility Within Corporate Boardrooms

Despite various corporate collapses over the last decades, risk management is increasingly influential across organizations worldwide, as if the apparatus’ credibility was impermeable to scandals that, from critical angles, cast doubt on its efficacy. Relying on a cultural perspective of analysis highlighting the range of social processes that protect prevailing institutions’ legitimacy from aberrations, we examined the sense-making approaches employed by corporate boardroom actors to maintain their confidence in the credibility of the risk management apparatus despite being exposed to a continuous flow of corporate failures pointing to risk management efficacy limitations. Specifically, we conducted 35 interviews with corporate board stakeholders, mostly board members and corporate consultants. Our analysis indicates that actors involved in risk management processes tend to interpret aberration cases through perspectives that put the blame on some implementation deficiency, thereby ensuring that risk management's core assumptions are not questioned. These perspectives point to a defensive system of thought grounded in the director and consultancy communities, whose main referents are subject to intense work and re-conceptualization in the aftermath of aberrations, thereby providing community members with the means to make sense of the frictions of organizational life in ways that maintain the legitimacy of the risk management apparatus.     

Virtual research universes and research management

The analysis of large research production, such as universities, towns, cities or even countries, can be performed in several ways. These various approaches can range from the experts′ feeling to a more precise analysis of co-authors′ productivity. The various results obtained introduce the concept of ‘virtual research universes’ where the global perception of the production hides the sharp reality of objectives and subjects. The ability to apply the various methodologies and tools to make such analysis can reduce misunderstanding and misleading positions, especially in funding, planning and project evaluation. This paper takes as an example the production of physics laboratories in Marseille (from the INSPEC databae), and shows how the various levels of analysis can move from virtual to real research universes, thus helping the experts in their decision process.     

Hybrid Cat Bonds

Natural catastrophes attract regularly the media attention and have become a source of public concern. From a financial viewpoint, they represent idiosyncratic risks, diversifiable at the world level. But for various reasons, reinsurance markets are unable to cope with this risk completely. Insurance-linked securities, such as catastrophe (cat) bonds, have been issued to complete the international risk transfer process, but their development is disappointing so far. This article argues that downside risk aversion and ambiguity aversion explain their limited success. Hybrid cat bonds, combining the transfer of cat risk with protection against a stock market crash, are proposed to complete the market. The article shows that replacing simple cat bonds with hybrid cat bonds would lead to an increase in market volume.