Catering through Nominal Share Prices

We propose and test a catering theory of nominal stock prices. The theory predicts that when investors place higher valuations on low‐price firms, managers respond by supplying shares at lower price levels, and vice versa. We confirm these predictions in time‐series and firm‐level data using several measures of time‐varying catering incentives. More generally, the results provide unusually clean evidence that catering influences corporate decisions, because the process of targeting nominal share prices is not well explained by alternative theories.     

Trading Off Tax Distortion and Tax Evasion

Income tax evasion is modeled as a risky activity and integrated into a standard optimal tax problem in which there is a good whose sales are observable. If the penalty for evasion is proportional to the tax evaded (the Yitzhaki scheme), the optimal tax structure is unaffected by evasion. If the penalty is proportional to unreported income (the Allingham–Sandmo scheme), it is efficient to tax both the observable good and income. The cost of the risk of tax evasion is traded off against the distortion from taxing the observable good. For equal penalties, Allingham/Sandmo is more efficient than Yitzhaki.     

A Comparative‐Advantage Approach to Government Debt Maturity

We study optimal government debt maturity in a model where investors derive monetary services from holding riskless short‐term securities. In a setting where the government is the only issuer of such riskless paper, it trades off the monetary premium associated with short‐term debt against the refinancing risk implied by the need to roll over its debt more often. We extend the model to allow private financial intermediaries to compete with the government in the provision of short‐term money‐like claims. We argue that, if there are negative externalities associated with private money creation, the government should tilt its issuance more toward short maturities, thereby partially crowding out the private sector's use of short‐term debt.     

苏州沿江地区功能定位与空间发展战略

在江苏沿江开发战略的推动下,苏州沿江地区加快了工业化、城市化进程。在沿江地区经济快速发展的同时,也出现了过度依赖工业和外资、抗风险能力低、资源环境矛盾突出等问题。在分析该地区的发展态势、特征与问题、机遇与挑战基础上,研究了苏州沿江地区的功能定位,提出了多中心增长、发展走廊、蓝色和绿色生态走廊、土地混合利用、渐进式开发等策略,从总体上引导苏州沿江地区的持续发展。     

RATIONAL DYNAMIC CHOICE AND EXPECTED UTILITY THEORY

The paper considers the normative status of the independenceand ordering principles of expected utility theory. Preferencesare defined in terms of choice and the two principles derivedfrom restrictions on choice in sequential decision problems.The results extend and clarify important contributions by Hammondand McClennen. They show that it is different requirements ondynamic choice which rationalise independence and ordering respectivelyand illuminate their relationship to consequentialism.