The composition of interest: The judaic prohibition

An interest charge is made up of an award for waiting known as the real rate of interest, a premium for risk and compensation for transaction costs. Where inflation exists the lender seeks further compensation. In order to understand the composition and evolution of different versions of the usury prohibition it is necessary to ask which components of an interest charge are prohibited by each version. The Judaic prohibition has two aspects which are of particular interest to business historians and students of usury. First, the general rule is that a reward for waiting is prohibited. This focuses on the time-based part of interest charge. Second, interest is prohibited because it amounts to placing a stumbling block before the blind. This focuses on the typical gullibility of the borrower confronted by a more expert, better funded lender. Economics confirms and enriches our understanding of these important aspects of the prohibition. They achieve this by increasing our understanding of two facts: first, that the borrower is a gullible individual subject to irrational and inconsistent behaviour; and, second, that this behaviour relates to the waiting aspect of interest which is proscribed in the prohibition. How far these insights apply to other civilisations' prohibition, particularly those which derive from the Judaic prohibition, merits further study; so also do the ethical lessons of the Mosaic rules for a globalised society based on capitalism.     

A new coincident index of business cycles based on monthly and quarterly series

Popular monthly coincident indices of business cycles, e.g. the composite index and the Stock–Watson coincident index, have two shortcomings. First, they ignore information contained in quarterly indicators such as real GDP. Second, they lack economic interpretation; hence the heights of peaks and the depths of troughs depend on the choice of an index. This paper extends the Stock–Watson coincident index by applying maximum likelihood factor analysis to a mixed‐frequency series of quarterly real GDP and monthly coincident business cycle indicators. The resulting index is related to latent monthly real GDP. Copyright © 2002 John Wiley & Sons, Ltd.     

Syndicated Loan Announcements and Borrower Value

Announcements of syndication loans increase borrowers' shareholder wealth if they are revolving credit agreements but not if they are term loans. Share price responses to revolving credit announcements are positive and significant, whereas the wealth effect for term loans is negative and significant. The results show that announcements from both the financial press and commercial information providers can affect borrower share price reaction. Overall, single syndication announcements appear to be more newsworthy than multiple announcements reported in the financial press, and we find evidence of information leakage, post‐announcement drift, or both.     

Countries and their products: A cognitive structure perspective

This research reports on consumers’ cognitive structures for countries and their products. In-depth personal interviews identified respondents’ knowledge, beliefs, myths, and other relevant cognitions related to a diverse set of 11 countries and their products. Derived cognitive dimensions were analyzed via correspondence analysis, and the 11 countries were subsequently grouped into five sets, or cognitive categories. In addition to the empirical findings, the article introduces the concept of country equity as a new way of thinking about global brands and discusses managerial implications related thereto. He has published in theJournal of Consumer Research, Journal of Marketing Research, Journal of Marketing, and elsewhere. His articles have appeared in theJournal of Marketing, Journal of the Academy of Marketing Science, Journal of International Business Studies, California Management Review, and others. He is the coauthor of two marketing research textbooks and has published in leading marketing and social psychological journals.     

Golden Parachutes: Incentive Aligners,Management Entrenchers,or Takeover Bid Signals?

In this paper we investigate the effect of golden parachute (GP) adoptions on shareholder wealth. We control for the potential effect a GP adoption has on the probability that a firm will receive a takeover bid by investigating the wealth effects for firms that are in play when the GP is adopted. We find that announcements are wealth neutral when firms are in play and wealth increasing when firms are not in play when a GP is adopted. The results suggest that GPs have no influence on the success of a tender offer, refuting the hypotheses that they either align manager and shareholder interests or that they entrench inefficient managers. The difference in the results for in-play and not-in-play firms is consistent with the hypothesis that GPs signal an increased likelihood that a firm will receive a takeover bid.     

Relationship of direct nursing care hours to DRG and severity of illness

Great variation in nursing resource use is documented within DRGs. Much of this variation may be explained by patient severity of illness. Variance in nursing resource use within DRGs can be reduced by using a severity of illness instrument to score patients.