How do ARM rates and teasers differ between solvent and insolvent thrifts?

Some economists have argued that poorly capitalized thrifts are the most aggressive issuers of “underwater” ARMs. The results using data from the previously named Federal Home Loan Bank Board’s (now Office of Thrift Supervision) Monthly Survey suggest that, on average, insolvent thrifts do not offer deeper discounts than other thrifts, nor do they charge fewer points or lower margins. In fact over the “full-sample” 1986–1989, insolvent thrifts offered smaller discounts than solvent thrifts while charging higher margins and more points. Large discounts on the sampled ARMs were most closely associated with increases in the 1-year Treasury bill rate, but were also associated with higher origination fees and greater margins. Higher fees and margins tend to offset the income loss associated with large discounts.     

When does coordination pay?

In a continuous-time model of two symmetric open economies, with a floating exchange rate, we find that the pay-off to macroeconomic policy coordination depends systematically on how heterogeneous is their inflation experience. While monetary policy coordination improves welfare in handling a common rate of underlying inflation, it exacerbates the ‘time consistency’ problem arising when there are differences (as is illustrated diagrammatically). Since the principle of ‘certainty equivalence’ applies to time-consistent policy in linear quadratic models, we are also able to give a stochastic interpretation of the deterministic results.     

Relationships between self-concepts,aspirations, emotional responses,and intent to leave a downsizing organization

This study examines how individual-level factors, such as task self-confidence, self-esteem, personal goals, job satisfaction, and organizational commitment affect workers' decisions concerning intent to leave the downsizing organization. Results indicate that task self-confidence and role self-esteem had positive, largely direct effects on intent to leave, which can be contrasted with the inverse relationship between the self-concept and intent to leave typically found in non-downsizing organizations. From this investigation, several implications for managing human resources in the downsizing organization are drawn and discussed in the context of planning for downsizing, implementing downsizing, and managing the downsized organization.     

Walk or wait? An empirical analysis of street crossing decisions

We examine the behaviour of pedestrians wishing to cross a stream of traffic at signalized intersections. We model each pedestrian as making a discrete crossing choice by comparing the gaps between vehicles in traffic to an individual‐specific ‘critical gap’ that characterizes the individual's minimal acceptable gap. We propose both parametric and nonparametric approaches to estimate the distribution of critical gaps in the population of pedestrians. To estimate the model, we gather field data on crossing decisions and vehicle flows at three intersections in New Delhi. The estimates provide information about heterogeneity in critical gaps across pedestrians and intersections, and permit simulation of the effect of changes in traffic light sequences on pedestrian crossing behaviour and waiting times. Copyright © 2005 John Wiley & Sons, Ltd.     

How effective is fiscal policy? The U.S. experience

Zusammenfassung Wie wirksam ist die Fiskalpolitik? Erfahrungen aus den Vereinigten Staaten. - Der Aufsatz untersucht empirisch die Wirksamkeit der US-Fiskalpolitik in den Perioden 1923–1960 und 1961–1982. Die Ergebnisse zeigen, da\ im Zeitraum 1923–1960 bei konstanter Staatsschuld eine Erh?hung der nominalen Staatsausgaben für Güter und Dienste die reale Nachfrage wesentlich stimulierte. Weitere autonome Ausgabeneffekte, die sich aus dem Wachstum der nominalen Exporte ergaben, übten keinen signifikanten Ansto auf das Wachstum der realen Nachfrage aus. Die Ergebnisse zeigen auch, da\ in dieser Periode eine vollst?ndige Verdr?ngung privater Kreditnehmer (crowding-out) stattfand. Im Gegensatz dazu stimulierte im Zeitraum 1961-1982 das nominale Exportwachstum die reale Nachfrage, w?hrend die Steigerung der nominalen Regierungsausgaben keinen signifikanten Ansto\ gab. Diese Periode stützt nicht die Hypothese des totalen Crowding-Out, sondern vielmehr das ?quivalenz-Theorem von Ricardo.

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Résumé Comment effective la politique fiscale est-elle? L’expérience des E.U. - Cet article empiriquement examine l’efficacité de la politique fiscale dans les E.U. pendant deux périodes: 1923–1960 et 1961–1982. Les résultats démontrent que dans la période 1923–1960 les augmentations des dépenses budgétaires (dette étant constante) ont significativement stimulé la croissance de la demande réelle. De plus, des effets des dépenses autonomes qui proviennent de la croissance des exportations nominales n’ont pas stimulé la croissance de la demande réelle d’une manière significative. Les résultats indiquent aussi qu’un effet de ?crowding out? total se passait pendant cette période. En contraste, dans la période 1961–1982 la croissance des exportations nominales a stimulé la croissance de la demande reelle pendant que la croissance des achats nominaux fédéraux ne l’a pas stimulée. Cette période récente n’a pas supporté l’hypothèse de ?crowding out? total. Plut?t, les résultats supportent le théorème d’équivalence de Ricardo.

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Resumen ?Cuán efectiva es la política fiscal? La experiencia estadounidense. - En este trabajo se examina empíricamente la efectividad de la política fiscal en los EE UU durante dos períodos: 1923– 1960 y 1961– 1982. Los resultados indican que para el período 1923– 1960 el gasto fiscal aumenta (manteniendo la deuda constante) en calidad de demanda federal de bienes y servicios, significando un fuerte estímulo para el crecimiento real de la demanda. También, los resultados se?alan que durante este período ocurrió un ?crowding-out? total. A diferencia del período anterior, el período 1961–1982 fué uno en el cual el crecimiento nominal de las exportaciones constituyó un estímulo para el crecimiento real de la demanda; el crecimiento nominal de la demanda federal no signifieó un estímulo importante en este período. En este último perído no se encuentra evidencia de un ?crowdihg- out? total. Empero, los resultados confirman el teorema ricardiano de equivalencia.

     

Distortions of Sino-US and Sino-EU Safeguard Agreements： Effects on World Textile Markets

The effects of Sino‐US and Sino‐EU safeguard agreements on US, Chinese and world cotton and textile sectors are investigated using a partial equilibrium model. The effects are compared to a free trade scenario under the provisions of the Agreement on Textiles and Clothing. The two safeguard agreements capping Chinese textile exports would decrease China's textile and apparel exports, production, and domestic consumption by an average 1.57, 0.63 and 0.32 percent, respectively. The safeguard agreements cause an increase in the US cotton textile price index and a slight decrease in US net textile imports and textile consumption. The agreements cause a decrease in the world cotton price and the quantity of cotton traded, but these trends reverse at safeguard expiration. The results generally support the view that the safeguard agreements forestall the effects of free trade in textiles and apparel rather than creating long lasting shifts in the textile trade.     

THE POLITICS OF PRECOMMITMENT WITH ELECTORAL UNCERTAINTY AND TRANSACTION COSTS

Despite the lack of legal channels through which binding commitments can be made by the government, economic and political factors enable it to affect future outcomes. In practice, large transaction costs are associated with any significant change of policy, and therefore the current government can adopt policies so that certain outcomes are more likely to be realized by its successor. In this paper it is argued that transaction costs combined with electoral uncertainty are likely to drive the current government to adopt a policy which is extreme relative to the preferences of the existing political parties. This policy is adopted in order to ensure that due to transaction costs, the future government will not depart radically from the most preferred policy of the current government. If the current policy is likely to affect the election outcome, then, in addition to the above considerations, the electorate attitudes would have to be taken into account by the government. Hence, the current government confronts two factors in choosing its policies: the behavior of the future government and the behavior of the electorate. The interplay between the two factors determines the choice of the current policy.