Default probability of a captive credit bank with government capital injections: A capped barrier option approach

Auto dealers use floorplan financing to buy cars from the original equipment manufacturer (OEM) with credit typically provided by the OEM's captive credit bank. The purpose of this paper is to explicate and model captive bank lending to dealers and determine the loan-risk default probability in equity returns of the captive bank under government capital injections during a financial crisis. The lending function of the captive bank necessitates modeling equity return as a “capped” barrier option. Numerical exercises show that a decrease in the discount rate of the floorplan financing or an increase in the amount of government capital injection decreases the default probability in equity returns of the captive bank. Floorplan or government assistance enables the captive bank to be much less prone to loan risk, specifically with large-scale dealers which can substantially affect the stability of the banking system.     

The time-varying and asymmetric dependence between crude oil spot and futures markets: Evidence from the Mixture copula-based ARJI–GARCH model

This paper designs a Mixture copula-based ARJI–GARCH model to simultaneously investigate the dynamic process of crude oil spot and futures returns and the time-varying and asymmetric dependence between spot and futures returns. The individual behavior of each market is modeled by the ARJI–GARCH process. The time-varying and asymmetric dependence is captured by the Mixture copula which is composed of the Gumbel copula and Clayton copula. Empirical results show three important findings. First, jumping behavior is an important process for each market. Second, spot and futures returns do not have the same jump process. Third, the tail dependence between spot and futures markets is time-varying and asymmetric with the magnitude of upper tail dependence being slightly weaker than that of lower tail dependence.     

中国城乡结合部的问题及对策:以利益关系为视角

城乡结合部是城市化、现代化的前沿地带,各种社会问题和矛盾最集中,能否合理解决这些矛盾关系到我国城市化的进程,关系到我国能否实现城乡可持续发展。文章阐释了城乡结合部的定义和主要特征,并以城乡结合部不同的利益主体之间的利益关系为主线来分析城乡结合部存在的主要矛盾和冲突,提出政府有责任对引起冲突的利益关系进行调整,并针对不同的利益主体提出了具体的对策建议。     

Work curiosity: A new lens for understanding employee creativity

Curiosity has long been recognized as the driving force behind individuals' exploratory drive, learning behavior, and willingness to embrace novelty. It is generally believed that the exploratory spirit of a curious mind can enhance the individual's imagination and cognitive capability for creative ideation. But there has been surprisingly little work to clarify the relationship between curiosity and creativity. Moreover, existing research commonly oversimplifies the operationalization of human curiosity. From a pluralist view of curiosity, this paper leverages insights from psychological research to explain how curiosity can be applied in the organizational context and help to better understand employee creativity. We draw upon several seminal theories on curiosity and motivation and explore the effects of organizational context and individual differences on employees' work curiosity. We furthermore elucidate how work curiosity leads to employee creativity by affecting the cognitive processes and psychological states. Implications for future research are discussed.     

How does inflation determine inflation uncertainty? A Chinese perspective

Quality & Quantity - Using a bootstrap Granger full-sample causality test and a sub-sample rolling window estimation, this paper examines the causal link between inflation and inflation...     

Are there bubbles in Chinese RMB–dollar exchange rate? Evidence from generalized sup ADF tests

This article uses recently developed generalized sup ADF (GSADF) unit root tests into the analysis of nominal RMB–dollar exchange rates bubbles. Based on the results from the GSADF tests, we find strong evidence of explosive behaviour in the nominal exchange rate and investigate two bubbles there. The first bubble is during 2005–2006 which is determined neither by the relative prices of traded goods nor the relative price of nontraded goods. The second bubble busts in 2008 during subprime crisis period, and which is determined by the relative prices of traded goods but not the relative price of nontraded goods. There is no bubble before 2005 as the exchange rate is under fixed regime. As for this result, some expansionary monetary and fiscal policies are required in China since these are the most efficient and effective under a bubble burst scenario.     

Do natural disasters increase the likelihood that a government is replaced?

We examine the impact of natural disasters on the likelihood that a government is removed from office using panel data for 156 countries over the period 1975–2010. Employing a conditional logit model, we find that the occurrence of natural disasters, the number of natural disasters and disaster-related losses increase the chances that a government will be replaced. The magnitudes of these effects differ widely across natural disaster types, but are robust to the inclusion of economic and political variables and to model specifications. Overall, these findings are consistent across our sample of OECD and non-OECD countries.     

Is income converging in China?

This study adopts a flexible Fourier unit‐root test proposed by Enders and Lee (2012) to revisit the tendency towards convergence in real per capita income among provinces after economic reform in China. When a data‐generating process is non‐linear, a Fourier series not only allows for the possibility of an unknown number of structural breaks with unknown forms but also allows for the use of a low‐frequency component to capture multiple changes. Contrary to what the linear statistics suggest, our results from a flexible unit‐root test indicate that China's eastern and western regions are converging to their own specific steady states.     

从竞争到合作:中印能源关系析论

中国和印度作为两个新兴大国,又都是能源进口大国,在国际能源领域形成竞争关系在所难免。在中东、中亚—里海、俄罗斯及世界其他地区,中印展开能源竞争导致双方利益缺失。随着中印双边关系的改善,双方领导人做出了及时的政治判断,中印企业联手参与国际能源合作,正在实现由竞争对手向合作伙伴的身份转变。     

THE DEMAND FOR GASOLINE: EVIDENCE FROM HOUSEHOLD SURVEY DATA

In this paper we investigate the demand for gasoline in Canada using recent annual expenditure data from the Canadian Survey of Household Spending, over a 13‐year period from 1997 to 2009, on three expenditure categories in the transportation sector: gasoline, local transportation, and intercity transportation. In doing so, we use three of the most widely used locally flexible functional forms, the Almost Ideal Demand System (AIDS) of Deaton and Muellbauer (1980), the quadratic AIDS (QUAIDS) of Banks et al. (1997)—an extension of the simple AIDS model that can generate quadratic Engel curves—and the Minflex Laurent model of Barnett (1983), which can also generate quadratic Engel curves. We pay explicit attention to economic regularity, argue that unless regularity is attained by luck, flexible functional forms should always be estimated subject to regularity as suggested by Barnett (2002), and impose local curvature to produce inference consistent with neoclassical microeconomic theory. Our findings indicate that the curvature‐constrained Minflex Laurent model is the only model that is able to provide theoretically consistent estimates of the Canadian demand for gasoline. Our estimates show that the own‐price elasticity for gasoline demand in Canada is between ? 0.738 and ? 0.570 —less elastic than previously reported in the literature. Copyright © 2013 John Wiley & Sons, Ltd.