THE CASE FOR A COMMUNITY TRANSACTION ENGINE: GETTING COASE FOR THE TWENTY‐FIRST CENTURY

New types of marketplace are now becoming viable. They can slash transaction costs, bring new resources into the economy and expand economic opportunity. These markets can be grown by the private sector. But, to deliver their full potential, they need a change in the mindset of government.     

Regulators’ and stakeholders’ perspectives in a framework for bioenergy development

In this study, ten bioenergy crop rotations (corn, corn-stover, sorghum, soybean, corn-soybean, corn-soybean-canola, corn-stover-soybean, miscanthus, switchgrass, and sorghum-soybean) were selected based on local stakeholder (economically motivated) and regulator (environmentally motivated) preferences. These crops were implemented on diverse landscapes (agricultural, marginal, and agricultural plus marginal lands) one at time for 17 years using a SWAT model of the Saginaw River Watershed in Michigan. The bioenergy crops were evaluated based on 100 percent, 50 percent, and zero percent weight assigned to both stakeholders’ and regulators’ preferences using analytic hierarchy process (AHP), an optimization and decision-making technique that aims to satisfy multiple conflicting objectives. The corn-soybean-canola rotation was selected in all landscapes based on economic benefits (stakeholders’ preferences). Meanwhile, perennial grasses (miscanthus and switchgrass) were selected based on environmental benefits (regulators’ preferences), because they maintain permanent cover, require fewer inputs than traditional row crops, and are less management intensive. When implementing bioenergy crops on marginal lands, pollution generation greatly increased at the field level, indicating that these lands are likely not viable for bioenergy crop production to meet potential future renewable energy demand.     

Lumpy Investment and Corporate Tax Policy

In the presence of both convex and nonconvex capital adjustment costs in a dynamic general equilibrium model, corporate tax policy generates both intensive and extensive margin effects via the channel of marginal Q. Its impact is determined largely by the strength of the extensive margin effect, which, in turn, depends on the cross‐sectional distribution of firms. Depending on the initial distribution of firms, the economy displays asymmetric responses to tax changes. Moreover, an anticipated increase in the future investment tax credit reduces investment and adjustment rate initially.     

Real options and contingent convertibles with regime switching

We consider a firm with no assets in place but an option to invest in a project. The investment is irreversible but delayable in a regime-switching economy. The firm issues equity, straight bonds (SBs) and contingent convertibles (CoCos). We provide the closed-form prices for the firm׳s securities and the pricing and timing of the option. Our numerical analyses discover that issuing CoCos instead of SBs induces much less agency cost of debt. The agency cost is higher in a boom economy than in recession but the difference is small. There is a unique CoCos׳ conversion ratio such that the agency cost arrives at the minimum value zero. The inefficiencies arising from asset substitution and debt overhang are much more significant in recession than in boom. Only if the conversion ratio is not too small, the two inefficiencies disappear during boom periods. While the effects of the conversion rate on optimal capital structure and firm value and those of supervision and jump intensity on optimal CoCos׳ coupon are ambiguous and weak, the stricter the supervision or the longer the economy remains in recession, the less the option value and the optimal SBs׳ coupon.     

Understanding the formation of e-loyalty based on a dedication-constraint perspective

Despite the importance of retaining customers in the context of e-shopping, the formation of an e-buyer’s loyalty remains inconclusive. Drawing on e-shopping literature, this study developed and tested a model to explain e-buyer loyalty from the perspective of business-to-consumer relationship management. We build on a dedication-constraint dual model to delineate the relationship between perceived benefits, switching cost, service-specific investment, and loyalty. Empirical results from 505 respondents show that loyalty is influenced by both perceived benefits and switching costs. In addition, switching costs partially mediate the relationship between service-specific investments and loyalty. Implications of these results are discussed.     

The importance of firing costs and the Hosios condition in search models with endogenous job destruction

We construct a DSGE search model with endogenous job destruction, incorporating wage rigidities, firing costs and unemployment benefit. We investigate the most important factors in matching the model’s cyclical properties with empirical data, particularly those of job creation rates (JCR) and job destruction rates (JDR). Firing costs assist significantly in explaining the procyclicality of JCR, the negative correlation of JCR and JDR, and the persistence of vacancies. They also decrease the counter-cyclicality of job turnover. We also postulate that the Hosios condition helps explain the negative correlation of JCR and JDR and vacancies’ persistence. Varying wage rigidities and unemployment income, however, do not improve the results.     

Price Effects on Compound Commodities

We examine the effect of simultaneous price changes on the total demand for a group of goods, which we call a compound commodity. Specifically, we consider unit and proportional cost components (e.g., taxes, transportation costs) imposed on compound commodities. If the unit cost is positive, then the proportional cost raises the relative price of the more expensive good, and thus induces substitution towards the less expensive good within this group. Then, the substitution effect of the proportional cost for a compound commodity is non‐negative if and only if the compound commodity and the other goods are, on average, not strongly substitutable.     

关于美国战争费用的启示

本文以本次局部战争为案例,根据目前披露出来的一些数据进行初步的分析,希望能够为我们了解美国战争费用的总体情况提供参考。     

Wall of cash: The investment-cash flow sensitivity when capital becomes abundant

In the mid 2000s the oil and gas industry was hit by what might be best described as a ‘wall of cash’ as oil prices successively reached new record levels and access to external financing improved greatly. In this article we investigate what this sudden abundance of liquidity implied for the investment-cash flow relationship, the interpretation of which continues to generate controversy in the literature. For financially constrained firms we find that the investment-cash flow sensitivity decreases in the abundance period (2005–2008), suggesting that the financing constraints became less binding in this period. For financially unconstrained firms the investment-cash flow sensitivity instead increases over time, suggesting that this relationship is driven by agency problems related to free cash flow. Our paper is the first in the investment-cash flow literature to bring evidence from a natural experiment in which there was an unexpected, exogenous, substantial, and persistent decrease in the cost of external financing.