Are gold,USD, and Bitcoin hedge or safe haven against stock? The implication for risk management

This study investigates whether gold, USD, and Bitcoin are hedge and safe haven assets against stock and if they are useful in diversifying downside risk for international stock markets. We propose a combined GO-GARCH-EVT-copula approach to examine the hedge and safe haven properties of gold, USD, and Bitcoin. We then examine the attractiveness of these assets in reducing stock portfolio risk by using downside risk measures estimated by the proposed approach and other competing models. We also evaluate the relative performance of the proposed model in reducing downside risk with the competing models. The findings of the study indicate that the USD is the most valuable hedge and safe haven asset closely followed by gold, while Bitcoin is the least valuable. It is also observed that the proposed combined approach performs best in reducing the portfolio downside risk. The findings of this study are of significance for portfolio managers and individual investors who wish to protect the portfolio value during market turmoil.     

ACCOUNTING RATIOS TO LOCATE TAKE-OVER TARGETS

This paper uses both the univariate and multivariate techniques to discover whether liquidity, leverage, payout, activity, and profitability ratios can distinguish non-taken-over, domestic taken-over and foreign taken-over firms in Canada. The results indicate that the three categories of firms emanate from the same population, and the article concludes that even if a connection between historical accounting information and the firm's expected cash flows were to be hypothesized, the semi-strong efficient capital market would ensure that accounting information would be impounded in the prices of securities of target firms.     

A volume and material handling cost based heuristic for designing cellular manufacturing cells

One of the major problems in a group technology or cellular manufacturing environment is the formation of part groups and machine cells. Because of the combinatorial nature of the cell formation problem, it is difficult to solve the problem optimally. Most of the procedures related to cell design in cellular manufacturing operate on the part-machine incidence matrix in an attempt to identify block diagonality. If complete block diagonality does not exist, the decision about cell configuration is left to the subjective judgement of the designer. These procedures are also generally based on part routing only, and do not consider part volume and material handling costs.In this paper we develop an integer programming model, as well as a heuristic to effectively assign machines to cells. In these procedures we consider component volumes, costs related to movement of components between and within cells, and penalty for not using all machines in a cell visited by a component. Since the integer programming formulation becomes large even for small problems, an efficient heuristic is developed to solve larger problems. The heuristic solutions to 180 randomly generated small problems were compared against the optimal solutions obtained by the integer programming model. The heuristic has been found to identify optimal solutions in all 180 cases.This heuristic is also compared to several well known algorithms on 900 larger test problems. These problems were generated to cover a wide range of environmental situations such as varying levels of block diagonality in the part-machine incidence matrix, and diversity in the component volumes and material handling costs. In 99% of the problems our heuristic generated solutions which are better or as good as the best solution obtained by other algorithms. Further, in situations where complete block diagonality in the part-machine incidence matrix did not exist, our heuristic produced even better results. Since the maximum number of iterations required in our heuristic is the number of machines in the problem, the heuristic is computationally efficient.     

International Trade and the Value of Time

I discuss a generalized Heckscher–Ohlin–Vanek (HOV) model in which consumption requires time as well as money (as in Becker's theory of the allocation of time) and the amount of work that a worker can do per unit of time—her “ability”—varies from country to country. High ability implies high income per hour, which implies a high value of time and, therefore, high consumption of the good that is more “time‐saving.” Therefore, if domestic production of this good is not commensurately high, it would have to be imported. In this way, I demonstrate that international differences in worker ability constitute an independent source of gains from trade. The model is able to explain several observed features of North–South trade that are not explained by the HOV model. The theoretical possibility of a Leontief paradox‐type trade pattern is also demonstrated.     

Optimal Growth with Public Capital and Public Services

We characterize optimal economic growth in an endogenous growth model in which production requires public capital (a stock) and public services (a flow) in addition to private capital and labor. We analyze the comparative static effects of changes in the fundamental technological and preference parameters of the model on the optimal values of several variables, such as the optimal rate of growth and the optimal allocation of resources among consumption, the provision of public services, and investment in public and private capital. We show that the general optimal path converges in finite time to the balanced growth optimal path. We relate our paper to important contributions to the existing literature by obtaining them as special cases of our model.     

Fiscal policy, long‐run growth, and welfare in a stock‐flow model of public goods

Abstract.  We introduce public capital and public services as inputs in an endogenous growth model. We show that the growth rate depends on the apportionment of tax revenues between the accumulation of public capital and the provision of public services. When public spending is financed by proportional income taxes, the growth rate, the level of public spending as a proportion of GDP, the level of investment in public capital as a proportion of total public spending, and the level of private investment as a proportion of total private spending all are lower in the equilibrium outcome than in the optimal outcome. JEL classification: E62, O40     

Explaining the Superior Education Outcomes of Kerala: The Role of State Activism and Historical Endowment

Over time, the state of Kerala has systematically outperformed the rest of India in terms of literacy outcomes, establishing a strong positive record in this respect. Two main, explanations exist for this phenomenon. The first being the unique historical endowment inherited from the pro-education and social policies from the nineteenth century kingdom of Travancore and Cochin (South-Central Kerala) and secondly state activism initiated with the social reforms movement in the late 1950s. Using historical Census data and Employment-Unemployment rounds of the National Sample Survey, we find state activism was critical in achieving mass literacy in Kerala. Though historical endowment established a tradition of competitive demand for education across certain communities which largely explains the existing differences in higher education indicators between the Travancore-Cochin and the Non Travancore-Cochin regions, its contribution to improve education metrics of Scheduled Castes (vulnerable segment) was minimal.     

The effect of labor market monopsony on economic growth

In this endogenous growth model, a minimum efficient scale of production and workers’ home-to-work travel costs combine to give firms monopsony power, and this monopsony power leads to slower growth. Monopsony drives the wage below the marginal product of labor. This lower wage leads to lower investment in human capital and thereby to a lower growth rate. This makes investment in human capital – and therefore the growth rate – suboptimal. We provide evidence from a cross-country panel to support our model: Urbanization, which we assume is determined by a country’s exogenous population density and cropland area, positively impacts the wage share of output; the wage share positively impacts educational attainment; higher-income countries have higher wage shares; and within-country upticks in the wage share have a positive lagged effect on the growth rate.