Durable Goods,Time Preference and The Dynamics of the Current Account

A small open economy model with an endogenous time preference is used to study the current account dynamics when consumption exhibits durability. There is a unique level of instantaneous utility and stock of durables that must be maintained in the steady state. A terms of trade deterioration requires a net asset accumulation and a fall in consumption expenditures along the adjustment path. Nevertheless, the fall in consumption expenditures leads to a fall in the stock of durables, which has to be corrected somewhere along the adjustment path, and which may lead to a non-monotonic adjustment of the current account (J-curve).

A note on the turn of the month and year effects in international stock returns

This examination of the turn of the month (TOM) and turn of the year (TOY) effects in 50 international stock indices, for the period 1994–2006, characterises the degree that the effects are influenced by: (i) the gross domestic product of the economy, (ii) the sign of the return on the prior day (called the prior day effect), (iii) a temporal indicator and (iv) the Monday effect. These effects are assessed by the use of an estimated generalised least squares (EGLS) panel regression model incorporating panel-corrected standard errors. Three important results relating to the TOM and TOY effects are observed. When the prior day effect on control days is used as the reference and controls are made for market development and year, we find that: (i) there is a relatively enhanced return on all TOM days, (ii) there is a relatively enhanced return on good TOY days and (iii) returns of bad TOY days are not remarkable.     

The under-pricing of IPOs in the Gulf cooperation council countries

We document the phenomenon of under-pricing initial public offerings (IPOs) for 47 Gulf firms that went public between 2001 and 2006. The IPOs had, on average, initial abnormal returns of 290 percent, far exceeding those documented for both developed and emerging markets. In aftermarket performance, we find that these IPOs provide investors with negative abnormal returns over a one-year period, which seems to be consistent with findings in other industrial and emerging markets. The empirical models fail, however, to provide us with a satisfactory explanation using the common independent variables employed in the literature. Nevertheless, it appears that country- and industry-specific characteristics, in addition to the timing of the offers, play a key role in explaining IPO behavior in the region. This paper's empirical findings support the hypothesis that investors are initially over-optimistic about an IPO's performance, but grow more pessimistic over time.     

Can Robust Optimization Offer Improved Portfolio Performance? An Empirical Study of Indian market

Journal of Quantitative Economics - The emergence of robust optimization has been driven primarily by the necessity to address the demerits of the Markowitz model. There has been a noteworthy...     

Effect of HIV/AIDS on Economic Growth in Sub-Saharan Africa: Recent Evidence

International Advances in Economic Research - This paper examines the effect of human immunodeficiency virus/acquired immunodeficiency syndrome (HIV/AIDS) on economic growth in sub-Saharan Africa...     

Synthesis of Complex Criteria Decision Making: A Case Towards a Consensus Agreement for a Middle East Conflict Resolution

The title of this paper reflects both the process and the outcome of the current undertaking. Frustrated with the current state of the Middle East but encouraged by earlier attempts at modeling complex problems, the authors participated in a panel discussion assembled to address the conflict and propose a possible road-map to peace. However, the participants of this project did not come to a single course of action that will result in peace in the Middle East but did reach a consensus agreement about a resolution that needs to be managed. This paper explores the process, the outcome and the factors that influence the decision as well as potential pitfalls. The Analytic Network Process (ANP), a well known multicriteria decision making approach, applied frequently in recent years to examine conflicts around the world, is used in this analysis. It provides a framework for synthesizing judgments on the diverse aspects of the problem represented in the structure of the decision. It pieces together these judgments in a holistic and logical way.     

Basic Process Capability Indices: An Expository Review

A review of the four basic process capability indices has been made. The interrelationship among these indices has been highlighted. Attention has been drawn to their drawbacks. The relation of these indices to the proportion nonconforming has been dwelt upon and the requirement of the adequate sample size has been emphasized. Cautionary remarks on the use of these indices in the case of nonnormal distributions, skewed distributions, and autocorrelated data are also presented. The effect of measurement error on process capability indices has been dealt with in great detail.     

Vertical integration as an input price hedge: The case of Delta Air Lines and trainer refinery

In April 2012, Delta Air Lines (Delta) purchased a mothballed oil refinery. We use this case to illustrate when, how, and why vertical integration (VI) can hedge input price risk. First, we show that stockholders and creditors expected the move to create wealth. Consistent with their predictions, Delta's exposure to refining margins, cash flow volatility, cost of debt, and default probability all decreased, relative to peers, postacquisition. Our evidence is consistent with the refinery influencing Delta's operating strategies, especially in its most affected markets. The case demonstrates how asset specificity and financial hedging frictions can justify VI.