Long run productivity risk and aggregate investment

Long-run productivity risk – shocks to the growth rate of productivity – offers an alternative to microfrictions explanations of aggregate investment non-linearities, in particular the heteroscedasticity of investment rate. Additionally, consistent with the data, these shocks imply that investment rate is history dependent (rising through expansions), its growth is positively autocorrelated, and it is positively correlated with output growth at various leads and lags. A standard model with shocks to the level of productivity either predicts opposite investment behavior or fails to quantitatively capture these features in the data.     

INNOVATIONS IN PARTITIONING A SHARE OF STOCK

This paper presents a synthesis of innovations in the slicing and dicing of cash flows of a share of a firm's common stock. It begins by discussing PRIMEs and SCOREs, then Unbundled Stock Units (USUs), and finally three proposed hybrid equity options called DIVS, OWLS, and RISKS.
Decomposing a share of stock into components that can be traded separately allows investors to choose between the different investment attributes constituting the underlying share. An investor who desires only cash dividend income may buy only DIVS, and another who values capital appreciation but not current income can purchase only the residual claim.
Derivatives seem to go through a developmental process that is analogous to the biological phenomenon of natural selection and adaptation. The engines that drive this evolutionary process are changing domestic and international market conditions, international tax and regulatory arbitrage, and, of course, the financial innovators who learn from their own mistakes, and from the experience of others. These innovators continually develop new products that represent improvements over the old, if only by their ability to adhere more closely to the guidelines laid down by the regulators. The histories of PRIMEs and SCOREs, of USUs, and, most recently, of DIVS, OWLS and RISKS together provide a nice illustration of this developmental process.     

The deductibility of provincial business taxes in a federation with vertical fiscal externalities

Should provincial business taxes be deductible under a federal profit tax? We show that the ‘optimal deductible,’ which neutralizes the vertical fiscal externality between the federal and provincial government, is the change in the federal tax base per dollar of tax revenue collected by the provincial government. The optimal payroll tax deductibility rate depends on the extent to which it is shifted to workers and on the difference between the federal tax rates on profits and on labour income. Two apparently contradictory positions – full deductibility of a payroll tax and non‐deductibility – are special cases of our model. La déductibilité des taxes provinciales imposées aux entreprises dans une fédération où il y a des externalités fiscales verticales. Est‐ce que les taxes provinciales imposées aux entreprises devraient être déductibles de l'impôt fédéral sur les profits? Les auteurs montrent que l'optimum de déductibilité qui neutralise les externalités fiscales verticales entre le fédéral et les provinces est le changement dans la base d'imposition fédérale par dollar de revenu fiscal collecté par le gouvernement provincial. Le taux de déductibilité optimal d'un impôt sur les salaires dépend de la portion du fardeau fiscal qui est déportée vers les travailleurs et de la différence entre les taux d'imposition du fédéral sur les profits et sur le revenu du travail. Deux positions apparemment contradictoires – pleine déductibilité d'un impôt sur les salaires et déductibilité nulle – sont des cas spéciaux du modèle général.     

Biased valuations, damage assessments, and policy choices: The choice of measure matters

Damages from, for example, an oil spill can be measured by how much people are willing to pay to avoid them, or by the minimum compensation they demand to accept them; and decisions to clean up can be justified by the willingness to pay to do it or by the compensation necessary to forgo it. Contrary to the usual official and unofficial conventions that the choice of measure is of no matter, the empirical evidence and intuitions of most people strongly suggest otherwise. The appropriate choice of measure appears to turn, not on legal entitlements, but on the reference state people use to judge negative and positive changes — a criteria that is likely to call into question most estimates of the damages of increased health risks and the value of environmental mitigation efforts.     

Cleanliness and consumption: exploring material and social structuring of domestic cleaning practices

In line with increasing international trends of energy efficient devices on the market and in households, domestic consumption of water and energy should be decreasing. However in Sweden, domestic per capita water consumption is not decreasing rapidly and energy consumption is actually increasing. This suggests that physical contexts are not the only factor shaping resource demand. People are also influenced by collective conventions; what we think is normal has a significant say in what we do, and the resources we consume in the course of everyday life. This paper explores the way context shapes what people do from both a material infrastructures and social infrastructures perspective, using cleanliness in Sweden as a case study. First, material infrastructures in Sweden are mapped, including device ownership, water, energy and time consumed related to cleanliness. Second, qualitative interviews with Swedish people aim to show the social structuring of cleanliness. Understanding the interplay between physical and social structures has potential implications for decreasing resource intensity in everyday life.     

Pushing speed? The marketing of fast and convenience food

The Menu: This paper explores the complex relationship between the marketing of fast and convenience food, and Western constructions and experiences of time in late Modernity, through a polemical analysis of a set of recent British television advertisements for a variety of brands in this sector. A cursory reading of these ads reveals some apparent contradictions in the deployment of time in fast/convenience food marketing: they seem to celebrate both speed (time as “sameness” and “continuity”) and nostalgia (time as “difference” and “discontinuity”). We go beyond a simple understanding of these alternative tropes as indices of competing brand strategies by interpreting their wider relations to the systemic and cultural vicissitudes of contemporary global capital. We conclude that the temporal articulation of fast and convenience foods presented in the ads is not in fact paradoxical, but dialectical. This dialectical relationship is an essential and continuing ideological structure of late Modernity.