State‐Dependent Forward Guidance and the Problem of Inconsistent Announcements

Forward guidance can be provided as an unconditional promise, i.e. commitment to a specific low policy rate. Alternatively, the promise may include an escape clause, i.e. a condition defining the state of the economy under which the central bank would not keep such a low rate and, instead, it would revert to setting policy under discretion. The escape clause can be expressed as a threshold in terms of a specific variable. The present paper shows that, when such a threshold is expressed in terms of an endogenous variable (e.g. output, inflation), there are cases where it becomes impossible for the central bank to act in a way that is consistent with its promise. Consistency imposes limits on the policy rate that can be set since reverting immediately to the optimal discretionary rate can be incompatible with exceeding the threshold.     

The impacts of cattle access points on deposited sediment levels in headwater streams in Ireland

Cattle access to streams has been linked globally with degradation of stream water quality, driven largely by bank erosion and resultant instream, fine sediment deposition. The majority of evidence on such effects is however based in arid and semiarid regions of the United States and Australia, with few studies relating to cool temperate climates such as Northwest Europe. In this study, “Quorer” resuspendable sediment samples were taken from riffle geomorphic units upstream (control) and at two points downstream (pressure and recovery) of cattle access points in headwater streams in agricultural catchments in Ireland to assess levels of deposited stream sediment. Samples were taken in April/May (2016) prior to the grazing season and in October (2016) at the end of the grazing season. Sites in good‐high ecological status catchments and less than good ecological status catchments were included in the study. Higher levels of sediment were found downstream of cattle access points in both good‐high status and less than good status catchments; however, the impacts of access points were spatially confined to, in most cases, the area immediately downstream of the point of access. There was a strong correlation between deposited sediment mass and organic matter (OM) mass, with levels of OM increasing linearly with deposited sediment mass. Levels of measured sediment were negatively correlated with riparian habitat health (measured using a qualitative habitat assessment). The results of this study highlight the need for measures to prevent cattle access to headwater streams where access points can be many in order to manage local habitat quality and downstream water quality issues.     

When Do Qualitative Risk Disclosures Backfire? The Effects of a Mismatch in Hedge Disclosure Formats on Investors' Judgments

Disclosure standards mandate the quantitative disclosure of hedging‐instrument‐related risks but not the disclosure of hedged‐item‐related risks. We examine how a match (mismatch) in formats, caused by making quantitative (qualitative) hedged item disclosures alongside quantitative hedging instrument disclosures, affects investors' integration of information from these two related disclosures. Our first experiment varies the hedged item disclosure format (quantitative or qualitative) and the portion of risk hedged (small or large). We find that when disclosure formats are mismatched, the less comparable nature of the two disclosures caused investors to neglect the offsetting relationship when assessing net risks. As a result, risk and investment judgments were influenced by the more prominent quantitative hedging instrument disclosures. Our second experiment finds that the use of a qualitative debiaser that clarifies the relationship between the two disclosures led to the integration of information and mitigated this effect.     

Ag econ angst crisis revisited

The present paper was inspired by and is a response to the Rola-Rubzen, Hardaker and Dillon paper 'Agricultural economists and world poverty: progress and prospects' (Rola-Rubzen et al. 2001). It is agreed that the position of agricultural economists in foreign aid and poverty programs has declined over recent decades. Such a feeling of guilt and remorse expressed by the above authors does indeed create considerable 'angst'. A major reason for this state of affairs lies in 'the flavour of the month' approach of the development agencies. These include women in development, gender-based farming systems research, household nutrition and food security, people participation, and targeting the poorest of the poor. These fads have driven disciplinary considerations to the wall and the more widely-defined objectives have reduced the drive for economic efficiency. We argue there is still a place for better designed and delivered assistance programs within the wider framework of assistance that has become fashionable. Greater application of institutional principles in both the political processes associated with assistance and the implementation agencies would improve the outcomes of many projects. Particular attention would need to be given to the interface between the development agencies and recipient governments. The present paper picks up on the market failure aspects of agriculture's rather poor contribution to development, and develops a wider perspective in terms of the new institutional economics and a continuing role for the agricultural economist.     

Is the institutionalization of urban movements inevitable? A comparison of the opportunities for sustained squatting in New York City and Amsterdam

In this article the opportunity structures of New York City and Amsterdam for organized squatting are compared. New York City knew two distinct squatting waves, with an intermission of several years. The literature on US urban movements predicts transformation through cooptation and repression. Only the first wave, in which housing activists used squatting as a tactic, fits this prediction. The second wave of squatting in New York City, and squatting in Amsterdam in general, escaped cooptation because they involved a squatters' movement proper, in which squatting was not only a tactic but also central to its existence. Compared to Amsterdam, squatting in New York was hampered by technical difficulties and political isolation. Stricter protection of private property made New York squatters restrict themselves to publicly‐owned abandoned buildings. Turf conflicts tended to develop on the neighbourhood level when these buildings were later claimed for the development of low‐income housing. In Amsterdam this type of conflict was rare because of the broad support for low‐income (re)development. Instead, Amsterdam saw citywide protest directed at the real estate sector and municipal authorities. Cet article compare la structure des opportunités des villes de New York et Amsterdam concernant les squats organisés. New York a connu deux vagues de squattage séparées de plusieurs années. Les textes sur les mouvements urbains aux Etats‐Unis prévoient une mutation par cooptation et répression. Seule la première vague, pour laquelle les militants en faveur du logement ont utilisé le squattage comme tactique, répond à cette prédiction. La seconde vague d'opérations à New York, et celles d'Amsterdam en général, ont échappéà la cooptation, car il s'agissait de mouvements de squatters à proprement parler, où le squat n'était pas seulement une tactique mais surtout un fondement de leur existence. Comparéà Amsterdam, le squattage à New York s'est heurtéà des problèmes techniques et à un isolement politique. La protection plus stricte de la propriété privée a forcé les squatters new‐yorkais à se limiter aux bâtiments publics abandonnés. Des luttes de territoires ont eu tendance à se développer entre voisins lorsque ces bâtiments ont ensuite été réclamés pour aménager des logements à faible loyer. A Amsterdam, rare fut ce genre de conflit grâce au vaste soutien favorable au (ré)aménagement social; au contraire, une protestation générale s'est élevée à l'encontre du secteur immobilier et des autorités municipales.     

Private borrowing during the financial revolution: Hoare's Bank and its customers, 1702–241

The financial revolution improved the British government's ability to borrow, and thus its ability to wage war. North and Weingast argued that it also permitted private parties to borrow more cheaply and widely. We test these inferences with evidence from a London bank. We confirm that private bank credit was cheap in the early eighteenth century, but we argue that it was not available widely. Importantly, the government reduced the usury rate in 1714, sharply reducing the circle of private clients that could be served profitably.     

Hedging,Financing and Investment Decisions: A Simultaneous Equations Framework

We empirically investigate the interactions among hedging, financing, and investment decisions. We argue that the way in which hedging affects a firm's financing and investing decisions differs for firms with different growth opportunities. We find that high growth firms increase their investment, but not leverage, by hedging. However, we also find that firms with few investment opportunities use derivatives to increase their leverage.     

Foreign Factor Ownership and Optimal Tariffs

In the presence of foreign factor ownership tariffs change not only the terms of (goods) trade but also income flows between countries. Assume that only the home country owns factors abroad. Then the optimal tariff is negative if and only if foreign factor ownership entails trade-pattern reversals. Trade-pattern reversals are neither a necessary nor a sufficient condition for a negative optimal tariff if the foreign country owns factors in the home country. Changes in the home country's tariff shift the foreign country's offer curve. This adds a new dimension to optimal tariff analysis.