Workforce or workfare? The optimal use of work requirements when labour is supplied along the extensive margin

This paper explores the use of workfare as part of a tax mix when labour supply responses are along the extensive margin. In an economy where the government has a priori chosen any tax‐and‐benefit schedule, we show that, despite their common goal of providing additional incentives for individuals to enter the labour force, workfare and an earned income tax credit are at odds with each other. We also show that, in the presence of an optimal nonlinear income tax, introducing unproductive workfare is always suboptimal when individuals face the same disutility of being on workfare. When this disutility is heterogeneous, unproductive workfare may be a useful policy tool.     

Gold price risk and the returns on gold mutual funds

A model is presented for estimating the theoretical gold price elasticity of the value of mutual funds investing in gold mining companies. The theoretical elasticity shows that if the funds invest in companies whose assets are comprised primarily of operating gold mines, then the return of an investment in the fund will be at least as great as an investment in gold (i.e., the gold price elasticity of the gold fund is greater than 1). Empirical tests of the above propositions are presented. Empirical tests also show, however, that the gold mutual funds contain a substantial amount of risk which is not explained either by market risk or gold price risk. Accordingly, gold mutual funds and gold bullion do not bring identical risks to an investor's portfolio.     

Virtue: The Missing Ethics Element in Emotional Intelligence

Journal of Business Ethics - The Emotional Competency Inventory (ECI) framework of Daniel Goleman and Richard Boyatzis has gained significant impact in business leadership and management...     

ASYMPTOTICS OF IMPLIED VOLATILITY IN LOCAL VOLATILITY MODELS

Using an expansion of the transition density function of a one‐dimensional time inhomogeneous diffusion, we obtain the first‐ and second‐order terms in the short time asymptotics of European call option prices. The method described can be generalized to any order. We then use these option prices approximations to calculate the first‐ and second‐order deviation of the implied volatility from its leading value and obtain approximations which we numerically demonstrate to be highly accurate.     

Chinese tax changes and offshore comparisons

Lipsher delivered the following observations and remarks in Shanghai to a group consisting primarily of Chinese tax professionals. The size and composition of the group marked an achievement that validated the close to two decades that Lipsher has lived in China—especially since January 1, 1994, when the first national tax law came into effect. He was in China here when the first, six‐page tax law went into effect. Simultaneously, on that very same day, a new U.S. tax law came into effect. Only that law was 1,447 pages long! His remarks offer an overview of tax‐law changes in China and the advantages of offshore tax benefits from the perspective of an American who has lived and worked in the Chinese business environment as a tax expert as it has evolved and matured. © 2009 Wiley Periodicals, Inc.