The Financial Crisis from the Family's Perspective: Evidence from the 2007–2009 SCF Panel*

This paper examines changes in families' finances as captured in the 2007–2009 Survey of Consumer Finances panel. The broad contours of changes in families' assets, debts, and wealth align with changes in the corresponding aggregate measures, but the microdata from the panel highlight substantial variation in families' experiences between 2007 and 2009. Although more than 60% of families saw their wealth decline over the two‐year period, a sizable fraction experienced gains in wealth, while some families' financial situations saw little change on net. The shifts in wealth do not appear to be correlated in a simple way with families' characteristics. Instead, the patterns of mixed losses, gains, and modest shifts in wealth generally hold within groups defined by demographic characteristics or by 2007 wealth or income. On the whole, changes in wealth appear to stem from changes in asset values rather than from changes in portfolio composition or debt levels.     

The disinfectant action of low-temperature laundering

The purpose of this research was to investigate the disinfectant action of a heavy-duty biological detergent at low and recommended washing temperatures. The effectiveness of the process was measured in terms of the removal, transfer and destruction of bacteria from infected test pieces. The results indicate that reducing the washing temperature decreases the degree of disinfection and increases the cross-infection of any articles washed in the same load. Evidence is also obtained that shows that the presence of detergent is more important than the washing temperature for disinfectant action.     

AUSTRALIAN CREDIT UNIONS AND THE DEMUTUALIZATION AGENDA

ABSTRACT ** :  There is a strong prospect of widespread demutualization occurring in the Australian credit union industry in coming years. This paper explains the reasons for this phenomenon, identifies some potentially undesirable social consequences, and examines the relative merits of alternative types of demutualization process. It identifies a number of principles which warrant reflection in the design of legislation addressing demutualization processes.     

MARKETS, MORALS, PROPERTY, AND OTHER RIGHTS: A REJOINDER TO THE PASTORAL LETTER

The pastoral letter calls for a radical restructuring of the American economy. The restructuring is to be set on a foundation of economic rights, a social mortgage on privately held property, and a deference toward the small within the political system. The restructuring also is intended to avoid statist or totalitarian outcomes. The second half of the pastoral letter, containing the policy analysis and recommendations, is not consistent with the basic system for restructuring the economy contained in the first half. The practical visions of the second half of the pastoral letter do not provide for economic rights or a social mortgage. Analyzing the logic of the basic system for restructuring the economy shows that it is inconsistent with the bishops' intended goal of a non-statist economy. The flawed logic of the basic system explains the inconsistency between the two major parts of the pastoral letter.     

RESOURCE CURSE,POLITICAL ENTRY,AND DEADWEIGHT COSTS

A simple model of political entry in a two‐sector economy is developed to analyze the effects of natural resource wealth on economic policy, political development, and civil insurrection. The model emphasizes the role of political entry and deadweight costs of taxation on the joint determination of these economic and political outcomes. Contrary to popular belief, my model shows that natural resource abundance is an economic blessing even in a rent‐seeking society, although resource dependence can be negatively associated with economic performance. In a contested political market, dictators care about popular support and hence resource wealth can help reduce the deadweight cost of taxation (and hence the cost of public good provision). On the other hand, natural resource wealth can be a political curse, because it encourages political entry and hence it induces incumbent dictators to run more repressive regimes. With constant returns counterinsurgent technology, however, the equilibrium number of insurgents is independent of the size of resource wealth. The onset of civil war, therefore, depends on the counterinsurgent technology and whether the costs of entry deterrence are affected by resource wealth. This helps clarify the two seemingly contradictory hypotheses that “resource wealth enhances regime durability” and “resource wealth fuels conflict.”     

HOW DOES GLOBALIZATION AFFECT INDUSTRIAL COMPETITIVENESS?

Industrial competitiveness (IC), reflecting a country's ability to produce and export manufactures competitively, is closely associated with economic growth. How does globalization affect IC? While the topic is of great importance, empirical studies on the issue in the literature have been limited. This article attempts to close the gap by estimating the role of foreign direct investment (FDI) and international trade with cross‐country data in 1985 and 1998. Taking advantage of a recently constructed IC index, we estimate several regression models of effects of FDI and trade on industrial performance. Results suggest that FDI and trade have a positive impact on IC, and increasing integration with the world economy through FDI and trade contributes to better industrial performance. (JEL F02, F10, F21, L60)     

An Experimental Analysis of Contingent Capital with Market‐Price Triggers

We report an experiment that evaluates three market‐based regimes for triggering the conversion of contingent capital bonds into equity: a “fixed‐trigger” regime, where a price threshold triggers mandatory conversion; a “regulator” regime, where regulators make conversion decisions based on prices; and a “prediction market” regime, where regulators also observe a market that predicts conversion. Consistent with theory, we observe inefficiencies and conversion errors in the fixed‐trigger and regulator regimes. The prediction market somewhat improves the regulator's performance, but inefficiencies and conversion errors persist. The regulator regime has conversion errors over the widest range of shocks.     

Beyond a Code of Professional Ethics: A Holistic Model of Ethical Decision-Making for Accountants

Most accountants do not realize—until it is perhaps too late—that virtually all aspects of their work have an ethical dimension. They often lack the knowledge and skills to analyse issues effectively, and when confronted with conflicting ethical problems cannot choose the way to move forward that is consistent with their own values and/or the profession's code of professional conduct. This article proposes that the accounting profession worldwide has simply attempted to prescribe simplistic solutions to often complex ethical problems. It endeavours to provide an alternative approach based on the process of 'ethical knowing' ( Melchin, 1998 ). Such an approach turns the acquisition of understanding away from a focus on the external world of rules, concepts and exemplars, to the interior world of how accountants, as people, arrive at an understanding that is consistently ethical. To achieve this, the article relies on Lonergan's seminal (1957 ) examination of the internal processes of decision-making and the critical roles played by developing skills in data retrieval and insight in the exercise of judgment.