Longevity and Life‐cycle Savings*

We add health and longevity to a standard model of life‐cycle saving and show that, under plausible assumptions, increases in life expectancy lead to higher savings rates at every age, even when retirement is endogenous. In a stationary population these higher savings rates are offset by increased old age dependency, but during the disequilibrium phase, when longevity is rising, the effect on aggregate savings rates can be substantial. We find empirical support for this effect using a cross‐country panel of national savings rates.     

Non-Parametric Regression Models of Deviations from Othogonality in the Expectations Theory of the Term Structure

Regression tests of the expectations theory of the term structure typically reject the null hypothesis of orthogonality between implied forecast errors and the yield spreads. In the statistical literature on the term structure, these rejections are sometimes attributed to time-varying liquidity premia, and Engle et al . (1987) suggest that the ARCH-M model of time-variation in the liquidity premium may be sufficient to account for rejections of the expectations theory. We use non-parametric (kernel) regression to explore the regression test results on a number of data sets, and find some evidence of a persistent deviation from orthogonality for large absolute values of the spread. Incorporating ARCH-in-mean into models of the term premium indicates that this specification does explain significant time variation in liquidity premia, but the effect does not apepar to be sufficient to account for all of the deviations from orthogonality of forecast errors and spreads.     

HOW CHANGES IN BOND CALL FEATURES AFFECT COUPON RATES

In April 1998, Level 3, a telecommunications company, sold $2 billion of 9.19%, ten-year bonds to finance the building of a fiber-optic network. Like most below-investment-grade issues, as well as many investment-grade issues, the Level 3 issue contained an embedded call option that gave the company the right to repurchase the bonds after five years at par value plus the (semi-annual) coupon rate, with the call price declining to par two years before maturity.
Because issuers must pay for the call provision in the form of a higher coupon rate, the choice of whether or not to include a call option can be a difficult one. And, once management decides to include a call option, it must then decide how to structure the call. The most important call structure decisions are how long to make the call protection period and how to set the call price—both of which can have a significant impact upon the coupon yields required to attract investors. Using a well-known option pricing model, the authors of this article summarize their recent research on how variations in bond call features can be expected to affect par coupon yields of new issues under different market circumstances—circumstances that include market conditions relevant to option valuation such as the shape of the term structure and the volatility of interest rates.     

Asymmetric Adjustment in the City of London Office Market

Earlier estimates of the behavior of the City of London office market are extended by considering a longer time series of data, covering two full cycles, and by explicitly modeling asymmetric space market responses to employment and supply shocks. A long run structural model linking real rental levels, office-based employment and the supply of office space is estimated and then rental adjustment processes are modeled using an error correction model framework. Rental adjustment is seen to be asymmetric, depending both on the direction of the supply and demand shocks and on the state of the space market at the time of the shock. Vacancy adjustment does not display statistically significant asymmetries. There is also a supply adjustment equation. Two three-equation systems, one with symmetric rental adjustment and the other with asymmetric adjustment, are subjected to positive and negative shocks to employment. These illustrate differences in the properties of the two systems.     

The FRC AND Accounting Standard‐Setting: Should I Still Call Australia Home?

This paper analyses the decision of the Financial Reporting Council (FRC) to replace Australian accounting standards with international accounting standards on 1 January, 2005. Two main topics are considered: the appropriateness of the FRC's directive, and the case against the proposed adoption date. We argue that the FRC has not conducted sufficient consultation with affected parties and that the hasty implementation will impose costs that could have been avoided with the exercise of more caution.     

Travel information online: navigating correspondents,consensus, and conversation

Travel information exists in paper guides, word of mouth, and countless websites. Organizing a trip has never been more accessible and simultaneously riddled with doubt. Professional journalists produce travel journalism while often anonymous reviewers on TripAdvisor provide their commentaries, and in between, there are blogs, wikis, tourism boards, vendors, and a host of other information sources available. How does the twenty-first-century tourist make sense of all of this information? Through a study of tourists in Paris, this study seeks to understand the methods and strategies that they employ in order to identify trustworthy and useful information. Interviews with a sample of travellers reveal that each person has his/her own unique process guided by their personal motivations, but they also share several practices along the way. This research reveals that tourists ultimately exhibit a multistep process of verification using both professional and non-professional sources. No one type of author or website appears to be a unique or singular influencer when it comes to primary or trustworthy sources. These findings will lead to larger discussions about destination management and transparent practices among information providers.     

卓有成效的技术创新

<正>苹果公司推出的新款iPod音乐 摇放器已被业内公认为是现代技术工 艺和设计创新的绝对典范。这款播放 器从外观、功能甚至使用的便捷性都 成为了美国的专利,然而它能受到如 此广大用户的青睐还是源于它的新颖 独特。