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Rückversicherung Versus Indemnity Type Insurance Linked Securities: Eine Arbitrageanalyse

This paper compares insurance linked securities and traditional reinsurance on a structured technical level. Goal is to mathematically capture and compare both risk transfer mechanisms on a conceptual basis. Starting with the basic P&L position of a non-life insurance company, the alternative coverage structures are developed and formally captured with increasing degrees of complexity. While the focus rests on pure insurance risk, additional pricing relevant cost and risk aspects are addressed as well.     

A performance analysis of the Third World

The dispute between the proponents of the market-economy road to development for the countries of the Third World and the advocates of the socialist road is an old one. Too often have the arguments been based on ideology rather than on facts. The recent publication by the World, Bank of comprehensive and comparable data for almost all the countries of the Third World makes it possible to compare the achievements of these two alternative roads on the basis of empirical evidence.     

Coordination, Challenges, and Innovations in 19 National Sustainable Development Strategies

In this article, we study 19 developing and developed countries to identify key challenges, approaches, and innovations in strategic and coordinated action for sustainable development at the national level. We are interested in the institutional fabric of implementing sustainable development. What are governments actually doing to organize the processes required for this? What are the institutional innovations in this regard and what kind of typologies can be identified?Despite some true progress made, our findings indicate that countries are still at the early stages of learning toward effective action for sustainable development. This applies both to developing and developed countries. Key unsolved challenges include (a) coordination with the national budget, (b) coordination with sub-national level sustainable development strategies, and (c) coordination with other national-level strategy processes.     

Investigating the PPP hypothesis using constructed U.S. dollar equilibrium exchange rate misalignments over the post-bretton woods period

This paper investigates the PPP-hypothesis over the post-Bretton Woods period using a representation of the equilibrium exchange rate (EER) that is an alternative to the real exchange rate. The results provide evidence in support of the relative-PPP hypothesis over the current period of floating exchange rates (1974–2005); while stronger evidence is found for the post-Plaza Accord period (1986–2005). EERs based on export price indexes (EPI) and constructed traded goods price indexes (TPI) best demonstrate the mean reverting behavior of the spot exchange rate as opposed to those EERs based on CPI, PPI, or the GDP-deflator. This mean reverting behavior is slightly improved if one takes international interest rate differentials into account; however EERs extended by productivity differentials do not indicate any improvements over the base model. Over the post-Plaza Accord period average half-lives of less than 1 year are reported using TPI-based EERs, adjusted by interest rate differentials. For large misalignments, we find probabilities that the spot exchange rate will converge towards the constructed CPI-based equilibrium exchange rate of up to 80%. Lastly, over the post-Plaza Accord period, the TPI-based EERs are able to statistically significantly outperform the pure random walk at short-term forecast horizons of less than 1 year for some spot exchange rates.     

The impact of national GAAP and accounting traditions on IFRS policy selection: Evidence from Germany and the UK

The adoption of IFRS in the European Union in 2005 aimed to increase the comparability of publicly traded companies’ consolidated accounts. However, previous literature questions whether IFRS are applied consistently across countries with differing institutional environments, and therefore, whether de facto harmony has been achieved. We further examine this question by investigating IFRS accounting policy choices of listed companies in Germany and the UK between 2005 and 2009. We find that most firms, when choosing IFRS options, tend to retain accounting policies required by national rules. We also investigate national accounting traditions in the case of options under national GAAP and find that most companies continue these after adopting IFRS. Moreover, there appears to be little significant change in accounting choices over time from 2005 to 2009. Given the differences in accounting rules and practices that exist across countries, our results suggest that international differences in financial reporting are likely to continue under IFRS.     

Recovery of hidden state participation effects on oil and gas asset values

Commodity price shocks are shown to cause shifts in both the quantity and timing of risk in natural resource assets. We provide evidence that static risk measures understate the periodicity of price risk implicit in depleting assets. Risk measurement is demonstrated to be asset specific and to vary heterogeneously in response to the combined effects of state participation and market factors. We use a global sample of oilfield assets to demonstrate that oilfield participation terms cause corporate asset cash flows, volatility horizons and minimum variance hedge ratios to vary in response to oil price. We provide additional insights into movements in the timing of physical oil and gas asset risk, a hidden effect not recoverable from market oil prices. Temporal variance for physical assets is shown to be a hidden dimensional outcome of the effects of market factors and state participation.     

Investment Project Valuation: A New Equity Perspective

We suggest a new approach to calculating a project's net present value, termed the displaced equity method. Based on a straightforward formula, it analyzes a project partially financed with debt from the perspective that every year the amount of outstanding debt displaces an equivalent amount of equity that otherwise would be tied up in the project. Although they represent distinct shareholders' perspectives, the displaced equity method and the equity residual method yield identical net present values and internal rates of return. Every year, the project's value calculated with the displaced equity method is equal to the sum of the project's debt and equity values. In practice, when the schedule of expected outstanding debt amounts is known, using the displaced equity method is an easy way to estimate the project's net present value.     

Bildungsinvestitionen – wirksames Heilmittel gegen soziale Ungleich heit?

Despite the educational expansion since the 1960s and the rise of the average education level, there has been no significant decrease in education inequality or in its persistence across generations during the past decades in Germany. This depressing realisation is not held by all authors; some others identify positive developments in education. The explanation for underinvestment in people is that these investments generate only long-run returns. In order to reduce social inequalities, further investments in education are necessary. These investments should be target oriented and focus on reducing inequalities in the use of early education and care institutions, as well as on increasing the quality of these institutions. Individuals with lower education levels should be especially targeted to participate in further training, because higher formal qualifications will both insulate them from labour market risks and generate a more favourable social environment for their children. Furthermore, there should be more investments into education at the regional level. Large imbalances in regional participation in further education and training highlight the lack of local universities to act as a local push factor. Fast internet access in rural areas and “freeing” time resources through sabbaticals could improve participation in lifelong learning.     

Development aid and international politics: Does membership on the UN Security Council influence World Bank decisions?

We investigate whether elected members of the UN Security Council receive favorable treatment from the World Bank, using panel data for 157 countries over the period 1970–2004. Our results indicate a robust positive relationship between temporary UN Security Council membership and the number of World Bank projects a country receives, even after accounting for economic and political factors, as well as regional, country and year effects. The size of World Bank loans, however, is not affected by UN Security Council membership.