Futurology as Further Ideology: Reflections on Pryor's Millennium Survey of Economists

This comment is in response to Frederic L. Pryor (2000). The Millennium Survey: How Economists View the U.S. Economy in the 21^st Century. The American Journal of Economics and Sociology. 59 (January), pp. 3-33.     

Sovereign Geopolitics? – Uncovering the “Sovereignty Paradox”

This paper reconsiders the importance of the sovereign state in contemporary geopolitics. The role of the state in an era of globalisation and devolution is a concern that has gained considerable attention in recent geographical scholarship. What has received less attention is how the state has historically functioned as a device that conflated the linked concerns of sovereignty and territoriality. The authors argue that there exist a number of “sovereignty paradoxes” that inhibit the interdisciplinary analysis of the interrelations between sovereignty, territoriality, and state power. Thus, reconsidering sovereignty and territoriality informs both how the state emerged as an important unit of geographical analysis historically, and why the state has become such a problematic concept in contemporary geopolitics. This work has implications for understanding popular struggles over civil liberties, foreign policy, and justice for indigenous peoples.     

Disentangling types of liquidity and testing limits-to-arbitrage theories in the CDS–bond basis

We disentangle asset-specific, market, and funding liquidity in the CDS–bond basis outside and during the 2007–9 global financial crisis. Our findings stress the importance of separating different types of liquidity, since all three measures have independently negative impacts on the basis. Funding liquidity emerges as the economically most important liquidity metric. While asset-specific liquidity is cross-correlated in both the cash and derivative markets, funding and market liquidity only matter for the cash market. We exploit the decomposition of the basis to test predictions of limits-to-arbitrage theories. We find strong evidence in favor of margin-based asset pricing and flight-to-quality effects.     

Risk Management,Corporate Governance,and the Search for Long-Term Investors

This discussion explores a number of ways that more effective risk management, corporate governance, and communication with investors can help companies increase their effciency and long-run value. According to one of the panelists, recent surveys of corporate directors suggest that companies should devote more time and attention to three issues—strategy, risk management, and succession planning—and that strategy and risk are the “flipsides of the same coin.” As the panelist argues, “You can't talk about strategy without talking about what risks you're going to take—and what risks you decide to take has to depend on the core competencies that drive the corporate strategy.” In addition to making risk management a critical part of corporate strategy, another notable recommendation is to communicate a company's strategy and business plan as clearly as possible to investors, with the aim of attracting more sophisticated, long-term shareholders. Contrary to popular belief, such a group may well include some hedge funds and other activist shareholders. According to a newly released report on shareholder activism (produced and cited by another panelist), corporate boards should work harder to identify and engage the “largest 10 shareholders in the organization,” with the ultimate goal of cultivating a shareholder base that buys into the company's strategy.     

Monitoring the future. Building an early warning system for the Dutch Ministry of Justice

To determine the sustainability of the policy, an Early Warning System (EWS) has been developed for the Dutch Ministry of Justice. An EWS is used to monitor various developments and to place them within the perspective of future scenarios. Without actually predicting the future, this makes it possible to determine which scenario is the most relevant at any given moment, allowing the department to adapt its policies. Regular modifications to the EWS make it possible to monitor in the direction of which scenario society appears to be moving. This creates a path to the future with which the sustainability of (new) policies can be tested periodically.     

Are structural VARs with long-run restrictions useful in developing business cycle theory?

No, unless technology shocks account for virtually all of the fluctuations in output.