The determinants of excessive indebtedness of the rural poor

Conclusion The foregoing analysis helps to explain how the poverty cycle deepens and becomes increasingly intolerable for the rural poor. The authors acknowledge the assistance of Les Pinter and Riad Chehlaoui, graduate students, Rice University and the University of Houston, respectively, for some statistical work.     

THE RECENT REGULATORY RESPONSE TO CORPORATE ECONOMIC CRIME IN THE UNITED STATES: OBSERVATIONS AND COMMENTS

Corporate economic crime, including accounting and auditing fraud and inappropriate behaviour by directors on the boards of US corporations, has resulted in stockholder financial losses and the loss of confidence in investing in the US stock market. We observe the modern corporation with its absentee ownership and professional management team and discuss its inherent incentives to commit management crime. In spite of financial reporting, audits and the use of boards of directors to represent stockholders, management misbehaviour persists. We conclude that the failure of these potential remedies is due to a lack of independence from management in their execution. We comment on some of the provisions of the Sarbanes–Oxley Act, enacted in 2002, and their potential to mitigate some of these conflict of interest conditions.     

Ethics as social science

The author explores overlaps between economics and ethics. A society's moral climate conditions its degree of economic development and prosperity. Policy recommendations necessarily rest on normative as well as positive judgments. Social science contributes to posing and answering questions about the nature and grounding of ethical precepts. Pursuing these questions leads to an "indirect utilitarianism" incorporating insights of David Hume, Ludwig von Mises, Henry Hazlitt, and F. A. Hayek. Criticisms of this approach are answered, including charges that it is collectivistically aggregative, is vacuous, makes a fetish of rules, and encourages immoralities illustrated by "lifeboat cases". Alternatives to it are also appraised, including the natural-rights and "contractarian" approaches that have found favor with prominent economists. Presidential Address at the Fortieth International Atlantic Economic Conference, Williamsburg, Virginia, October 8–11, 1995.     

Did the repeated debt ceiling controversies embed default risk in US Treasury securities?

We examine whether the financial market charged a default risk premium to US Treasury securities when the US Federal government repeatedly reached the legally binding debt limits between 2002 and 2006. We show that for the first two of the four recurrences since the first episode in 1996, the financial market charged a small default risk premium to the Treasury securities. However, we find no significant evidence of a pricing effect in the last two recurrences. The results suggest that the financial market gradually perceived the budget standoffs as the boy who cried wolf.