Synthetic Floating‐Rate Debt: An Example of an Asset‐Driven Liability Structure

An asset‐driven liability (ADL) structure is analogous to a liability‐driven investment (LDI) strategy. In both cases, the intent is to reduce the risk arising from a mismatch of assets and liabilities by aligning the interest rate sensitivity of cash flows on both sides of the balance sheet. Increasingly, defined‐benefit pension plans have adopted LDI strategies that reduce their equity assets and increase the average duration of their debt assets to better match the typical long duration of their retirement obligations to its employees. To illustrate the concept of ADL, the authors use the example of a corporate issue of traditional fixed‐rate debt that is transformed into synthetic floating‐rate debt using an interest rate swap (in which the corporation receives the fixed rate on the swap and pays at money market reference rate like three‐month LIBOR). The use of such long‐term, floating‐rate debt reduces interest rate risk when the firm has operating revenues that are positively correlated to the business cycle. However, a problem arises in that there is limited demand for such debt securities from institutional investors, many of which, because of LDI guidelines, prefer long‐term, fixed‐rate securities. Derivatives provide a way of resolving this mismatch between issuer and investor interests. In the article, the authors present a detailed example of the cash flows on the “receive‐fixed” interest rate swap (and its valuation for financial reporting) to show how the synthetic ADL debt structure obtains the desired outcome.     

THE POLITICAL ECONOMY OF CONTINGENT PROTECTION

In recent years, several empirical studies have attempted to investigate the key influences, or determinants, of the anti-dumping and countervailing duty (AD/CVD) decision-making process. As a consequence, several different empirical modelling approaches have been developed using alternative, and in some cases, competing theoretical frameworks. Each approach tests empirically aspects of the AD/CVD decision-making process for evidence of particular forms of pressure that contribute to protectionist outcomes. However, the results of these studies have been somewhat inconsistent and inconclusive, possibly because the analytical scope of these studies appears to be too narrow. Hence, the current article sets for itself the important objective of developing a more general framework for modelling contingent protection empirically. A taxonomy is introduced that suggests that the types of bias affecting AD/CVD decision-makers may be separated into three broad categories: political supply pressure, industry demand pressure, and regulatory process pressure. This approach is then used to analyse recent Australian anti-dumping outcomes. The empirical results generated from the Australian data, using the taxonomy, suggest that from the supply side, the Australian government appears to be biased against the provision of AD/CVD protection. On the other hand, the results suggest that a demand-side bias appears to be present. That is, the Australian AD/CVD process appears to be weighted towards a demand, rather than supply, orientation contrary to political economy suggestions that AD/CVD policy is used as a politically driven trade policy device.     

Book review

Tourism Marketing. By Salah Wahab, Jack Crampon, and L. Rothfield. London, England: Tourism International, 1976. 273 pp. U.S. $16.00

Tourism in the Bahamas and Bermuda: Two Case Studies. By Brian H. Archer. Bangor, Wales: University of Wales Press, 1977. Pp. ix, 87. £3.25

Park Planning Handbook: Fundamentals of Physical Planning for Parks and Recreation Areas. By Monty L. Christiansen. New York: John Wiley & Sons, Inc., 1977. Pp. xiv, 413. Hardcover: $18.95

Educating for Leisure‐Centered Living. By Charles K. Bright‐bill and Tony A. Mobley. (2nd Edition—Revised). New York: John Wiley and Sons, 1977. Pp. viii, 128. Paperback: $4.95

Private and Commercial Recreation: A Text and Reference. By Arlin F. Epperson. New York: John Wiley & Sons Publishing Company, Inc., 1977. Pp. 385. Hardcover: $15.95

The Economic Impact of Parks. A report prepared for the Federal/Provincial Parks Conference. By the Canadian Outdoor Recreation Research Committee. Toronto: Ontario Research Council on Leisure, 1975. Pp. 107. $4.50

A Model for Planning and Managing National Parks. By Laurence Prosser. Center of Leisure Studies, University of Oregon, 1977. Pp. 456. $25.00

Delivery of Community Leisure Services: An Holistic Approach. By James F. Murphy and Dennis R. Howard. Philadelphia: Lea & Febiger, 1977. Pp. vii, 219. Paperback: $9.75

Recreation Leadership. 3rd edition. By Maryhelen Vannier. Philadelphia: Lea & Febiger, 1977. Pp. 387. Hardcover: $12.50

Leisure: An Introduction. Edited by Hilmi Ibrahim and Fred Martin. Los Alamitos: Hwong Publishing Company, 1977. Pp. 360

Outdoor Recreation in America: Trends, Problems and Opportunities. 3rd edition. By Clayne R. Jensen. Minneapolis: Burgess Publishing Company, 1977. Pp. 269. Hardcover: $12.95

A Research Study into Provision for Recreation in the Highlands and Islands: Phase 1—Areas Affected by Oil‐Related Development. Research Reports 22, 23, and 31. Tourism and Recreation Research Unit, University of Edinburgh, Scotland, 1976 and 1977. Pp. 339, 411, and 145.

Research Study into Provision for Recreation in the Highlands and Islands: Phase 2—Regional Perspective: A Commentary by J. A. Long, J. T. Coppock, and B. S. Duffield. Research Report 37. Tourism and Recreation Research Unit, University of Edinburgh, Scotland, 1978. 110 pp.

The Environmental Impact of Outdoor Recreation. By Geoffrey Wall and Cynthia Wright. Waterloo, Ontario, Canada: Department of Geography Publication Series, Faculty of Environmental Studies. 1977, 69 pp. $5.00.

Avocational Counseling Manual—A Complete Guide to Leisure Guidance. By Robert Overs, Sharon Taylor, and Catherine Adkins. Washington, D.C.: Hawkins and Associates, Inc., 1977, 203 pp.

Leisure and Recreation: Introduction and Overview. By Clayne R. Jensen. Philadelphia: Lea & Febiger, 1977, 295 pp. Paperback $13.50.

The Joy of Sport. By Michael Novak. New York: Basic Books, 1976. Pp. 358. $10.95     

The effect of physician advice on alcohol consumption: count regression with an endogenous treatment effect

Although there are encouraging trends, alcohol abuse continues to be a significant public health problem. Econometric studies of alcohol demand have yielded a great deal of information for alcohol abuse prevention policy. These studies suggest that higher alcohol taxes and stricter drunk‐driving policies can reduce heavy drinking and drunk driving. In this paper we explore the role physician advice plays in the campaign to prevent alcohol‐related problems. Compared to alcohol taxation, physician advice is a more precisely targeted intervention that does not impose extra costs on responsible drinkers. Compared to the resource costs of arresting, processing, and punishing drunk drivers, physician advice may be a lower‐cost intervention. To provide a basis for alcohol policy analysis, we use an alcohol demand framework to test whether physician‐provided information about the adverse consequences of alcohol abuse shifts demand to more moderate levels. There are three aspects of our alcohol demand model that complicate the estimation: (1) the dependent variable is non‐negative (it is a count variable—number of drinks consumed); (2) a non‐trivial number of sample observations have zero values for the dependent variable; and (3) because the data we use is non‐experimental, the treatment variable indicating receipt of advice from a physician may be endogenous. We implement an estimation method that is specifically designed to deal with these three complicating factors. Our results show that advice has a substantial and significant impact on alcohol consumption by males with hypertension, and that failing to account for the endogeneity of advice masks this result. Copyright © 2001 John Wiley & Sons, Ltd.     

The neglect of spatial mobility in contemporary studies of work: the case of telework

Whilst many teleworkers are increasingly working beyond home and office, these mobile teleworkers are neglected in the telework literature. This neglect is addressed through reviewing relevant literature, developing a conceptual locational framework that accounts for mobile teleworkers and the presentation of an illustrative example which links to the theme of work–life balance in the telework literature.     

Perestroika and parallelism: advanced information technology and the soviet union

This paper begins by examining the history of Soviet computer hardware and software development, in part seeking the roots of the persistent Soviet lag behind the West. Then some impressions of the current situation are given, based around visits to a leading Soviet research establishment, the Institute for Space Research. At that Institute and others. parallel architectures are being used to gain reasonable computing power from what is by contemporary Western standards mediocre hardware. Impressive expertise, particularly in software development, is to be found, but it is still operating under constraints, such as difficult access to Western technology and technologists. In the last section of the paper it is argued that it is now in the interests of both East and West to ease that access. Improving and diffusing Soviet information technology is a key goal of the process of perestroika (restructuring). Cooperation with, rather than hostility to, Soviet efforts in information technology now makes sense for the West, especially Europe, because of the possibilities for mutually beneficial trade and also because we should wish perestroika to succeed.