Accounting for decarbonisation and reducing capital at risk in the S&P500

This article accounts for carbon emissions in the S&P 500 and explores the extent to which capital is at risk from decarbonising value chains. At a global level it is proving difficult to decouple carbon emissions from GDP growth. Top-down legal and regulatory arrangements envisaged by the Kyoto Protocol are practically redundant given inconsistent political commitment to mitigating global climate change and promoting sustainability. The United Nations Environment Programme (UNEP) and European Commission (EC) are promoting the role of financial markets and financial institutions as drivers of behavioural change mobilising capital allocations to decarbonise corporate activity.     

Are Gay Men and Lesbians Discriminated against in the Hiring Process?

This article presents the first field experiment on sexual orientation discrimination in the hiring process in the Swedish labor market. Job applications were sent to about 4000 employers in 10 different occupations in Sweden. Gender and sexual orientation were randomly assigned to applications. The results show that sexual orientation discrimination exists in the Swedish labor market. The discrimination against the gay male applicant and the lesbian applicant varied across different occupations and appears to be concentrated in the private sector. The results also show that the gay male applicant was discriminated against in typical male‐dominated occupations, whereas the lesbian applicant was discriminated against in typical female‐dominated occupations. Theoretical implications are discussed.     

Weiter behandeln oder nicht?

Ein Fallbeispiel - Frau Schneider erkrankte im Alter von 73 Jahren an einer akuten myeloischen Leuk?mie (AML). Die eingeleiteten Therapien griffen nicht. Schlie?lich stimmte sie der Therapiebegrenzung zu. Vor welchen klinischen und normativen Herausforderungen stand das Behandlungsteam? Welche L?sungsans?tze für das praktische Vorgehen k?nnen aus diesem Fall geschlussfolgert werden?     

Does conglomeration really reduce credit risk?

I quantify the effects of conglomeration on credit risk by first computing theoretical default probabilities for conglomerates and their hypothetical stand‐alone counterparts and then mapping them into physical probabilities using a comprehensive database of corporate failures. Comparing the credit risk of conglomerates with that of hypothetical stand‐alone firms, I report significant reductions in the annual probability of default for small firms. My results support the proposition that managers can have a strong incentive to engage in conglomeration, even if it reduces shareholder value and show for which firms this is the case.     

Pursuing financial stability under an inflation-targeting regime

We evaluate two main views on pursuing financial stability within a flexible inflation-targeting regime. It appears that potential gains from an activist or precautionary approach to promoting financial stability are highly shock dependent. We find support for the conventional view that concern for financial stability generally warrants a longer target horizon for inflation. The preferred target horizon depends on the financial stability indicator and the shock. An extension of the target horizon favoring financial stability may contribute to relatively higher variation in inflation and output.      

Do Antitrust Laws Facilitate Collusion? Experimental Evidence on Costly Communication in Duopolies*

Bertrand supergames with non‐binding communication are used to study price formation and stability of collusive agreements on experimental duopoly markets. The experimental design consists of three treatments with different costs of communication: zero‐cost, low‐cost and high‐cost. Prices are found to be significantly higher when communication is costly. Moreover, costly communication decreases the number of messages, but more importantly, it enhances the stability of collusive agreements. McCutcheon (1997) presents an interesting application to antitrust policy by letting the cost of communication symbolize the presence of an antitrust law that prohibits firms from discussing prices. Although our experimental results do not support the mechanism of McCutcheon's (1997) argument, the findings point in the direction of her prediction that antitrust laws might work in the interest of firms.     

When it comes to the crunch: What are the drivers of the US banking crisis?

This article considers how permissive regulatory conditions helped change the size and scope of the US mortgage market. Asset backed securitization facilitated an expansion of the US mortgage market and modified the structure of the value chain within which financial assets, risk and liquidity were managed. New sophisticated mortgage products, indulgent lending practices, loose credit assessment and flimsy documentation increased the probability of mortgage default in an economic downturn. US banks were not in a position to absorb mark-to-market losses on mortgage assets and goodwill impairment resulting from a credit crunch because they operate with narrow profit margins and a limited equity cushion in the balance sheet. This article questions the viability and sustainability of this banking business model.