A Pricing Model for Quantity Contracts

An economic model is proposed for a combined price futures and yield futures market. The innovation of the article is a technique of transforming from quantity and price to a model of two genuine pricing processes. This is required in order to apply modern financial theory. It is demonstrated that the resulting model can be estimated solely from data for a yield futures market and a price futures market. We develop a set of pricing formulas, some of which are partially tested, using price data for area yield options from the Chicago Board of Trade. Compared to a simple application of the standard Black and Scholes model, our approach seems promising.     

How do consumers switch between close substitutes when price variation is small? The case of cigarette types

Past empirical studies report ambiguous results regarding the magnitude and significance of substitution between different types of smoking tobacco. Since all types of tobacco contain nicotine this is quite surprising. Using a 20-year rotating panel data set of Norwegian households and a multinomial logit model, we find evidence that consumers switch between tobacco types: first, estimated price effects on choice probabilities have mostly expected signs, albeit their statistical significance vary across different metrics, second, household characteristics affect tobacco composition significantly. These findings suggest that consumers’ choices are ‘locked’ when the relative price variation is small, as has been the case in most of the data period, but that larger changes could induce large-scale switching between tobacco types. Our conjecture is that there is a latent potential for switching, which will become manifest if prices change sufficiently. Similar considerations are likely to have relevance for other close substitutes.     

Hysteresis in Unemployment

After two decades of ratcheting unemployment in Europe, most economists agree that structural changes associated with higher equilibrium rates of unemployment have occurred. But the direction of causality is a matter of controversy: Have the structural changes caused the long-lasting increases in actual unemployment? Or have the increases in actual unemployment caused the structural changes? The latter possibility is often referred to as hysteresis. During the past decade, a distinct research program has evolved around the idea that equilibrium employment tracks actual unemployment. This survey reviews the various hysteretic explanations offered in the literature and evaluates their empirical standing.     

Die Mitgliedschaft EG-ausländischer Versicherungsunternehmen im Sicherungsfond der Lebens- und Krankenversicherung

The present regulation of the German guarantee funds for life and health insurance offers no possibility for insurance enterprises from other memberstates of the EC to become a member of these funds. Whereas an obligatory membership for EC-foreign insurance enterprises would violate the single-license-principle for financial supervision in the EC, community law requires a possibility to become a member of the German guarantee funds on a voluntary basis. The absence of the possibility of such a voluntary membership in the German insurance supervision law leads to an inadmissible restriction of the fundamental economic freedom rights of the common market. Therefore, the German legislator has to add the possibility of a voluntary membership to his national regulation of the guarantee funds to secure an undistorted competition on the common market for insurance in the EC.     

The use of term structure information in the hedging of mortgage‐backed securities

This article examines the importance of term structure variables in the hedging of mortgage‐backed securities (MBS) with Treasury futures. Koutmos, G., Kroner, K., and Pericli, A. (1998) find that the optimal hedge ratio is time varying; we determine the effect of yield levels and slopes on this variation. As these variables are closely tied with mortgage refinancing, intuition suggests them to be relevant determinants of the hedge ratio. It was found that a properly specified model of the time varying hedge ratio that excludes the level and slope of the yield curve from the information set would provide similar out‐of‐sample hedging results to a model in which term structure information is included. Thus, both the level of interest rates and the slope of the yield curve are unimportant variables in determining the empirically optimal hedge ratio between MBS and Treasury futures contracts. © 2005 Wiley Periodicals, Inc. Jrl Fut Mark 25:661–678, 2005     

Accounting graduates' perceptions of skills emphasis in undergraduate courses: an investigation from two Victorian universities

This study investigated the emphasis placed on technical and generic skills developed during undergraduate accounting courses from the graduate perspective. It is motivated by two issues. First, calls by the accounting profession and international education committees regarding the professional adequacy of graduates. Second, the challenge facing educators and professional bodies to design accounting courses that address a diverse range of needs from students, the educational philosophy of the institution, and the changing dynamics of global business. Data obtained from 310 graduates from two Victorian universities provided insights into the types of skills development considered necessary for a successful accounting career.     

Das Spannungsverhältnis von Unklarheitenregel und Transparenzgebot — insbesondere bei Allgemeinen Versicherungsbedingungen

The text deals with the relation of § 305c Abs. 2 BGB (contra proferentem rule) and § 307 Abs. 1 S. 2 BGB (transparency control) especially in terms and conditions of insurance contracts. The author demonstrates that the contra proferentem rule is a special rule for ambiguous standard terms and conditions that is of higher priority than the transparency control.     

Letter to the editor on some frequently occurring errors in the economic literature concerning problems of maxima and minima

This paper points out some rather elementary mathematical errors perpetuated in textbooks.