Foods produced using biotechnology: how does the law protect consumers?

This paper addresses the following subjects: biotechnology and consumers, concern about risks, consumer acceptance, labelling of foods produced using biotechnology, the legal approach to consumer protection, and consumer protection policies relating to biotechnology products in the European Union, the United States, Turkey and global institutions such as the Convention for Biological Diversity (CBD) and the World Trade Organisation (WTO). It is likely that biotechnology will gain ground much more rapidly in the twenty‐first century than in the past. Despite rapid, detailed and precise advances in gene technology, its applications have not been the received with a great deal of consumer enthusiasm. Consumers have approached genetically modified foods with considerable apprehension and opposition. Consumer concerns about bioengineered food products focus on the questions of human health, environmental and social risks and benefits. The most important stages in the process of marketing new foods produced using biotechnology are to demonstrate user need and consumer acceptance. Generally, the technical complexity of biotechnology makes it difficult for consumers to understand details of the product and the specific attributes of biotechnology applications. Scientific uncertainty, the nature of consumer concerns and general reluctance to accept biotechnology products, increase the importance of consumer protection. Legal protection is a very important factor in the solution of new social problems related to technological advances. More specifically, consumer and environmental law support consumer protection related to foods produced with biotechnology. The basic principles of consumer law can be re‐formulated as consumer rights. Environmental law is a new phenomenon, but precautionary principles and public participation in decision‐making for environmental law are relevant to consumer protection relating to bioengineered food products.     

The evolution of syndicated loan markets

This paper provides a historical perspective on the development of the global syndicated loan market, where $2.6 trillion worth of funds were raised in 2004. The emergence of the Eurodollar market in the 1960s, the balance of payments problems of non-oil-exporting emerging countries in the 1970s, the Latin American financial crises and the US merger wave of the 1980s, and finally the competitive financial environment and the emergence of the secondary loan market during the 1990s are reviewed. These have been the most influential financial developments that shaped the syndicated loan markets in the last few decades.     

Pricing the risks of default

This paper decomposes default risk into timing and recovery risks. The two default components are explicitly priced as if they were traded in the futures market. We develop estimation strategies evaluating recovery risks and then construct implicit prices of contingent securities reflecting purely the timing risk. The models are estimated on monthly data for rates on certificates of deposit offered by institutions in the Savings and Loan Industry, during the 1987–1991 period. Empirical results support market expectations of lower likelihoods of default after 1989.     

Political economy of eastern enlargement of the European Union: Budgetary costs and reforms in voting rules

Eastern European countries are likely to be major recipients of European Union (EU) funds after membership, which has created serious concern among incumbent members. The EU has devised reforms of budgetary rules to limit the funds that will flow to the East. Using a political economy model and drawing on the experience of previous enlargements, this paper argues that such pre-accession reforms will be ineffective because they can be reversed by a coalition of Eastern European countries after membership. The paper then estimates budgetary costs of eastern enlargement. A better way to resolve budgetary concerns is to reform voting rules rather than budgetary rules, before eastern enlargement.     

POLICY PAPER: The Technical Process of Bank Privatization in Mexico

This paper describes the process of Mexican bank privatization that took place in 1991. We show that the Mexican government was very careful to ensure due process and transparency through the entire bank privatization process. However, the lack of a legal and regulatory framework and lax oversight shadowed the success of the technical process. Hence, the financial system in Mexico had to deal with a banking crisis shortly after their privatization, in 1994.     

Using macro cross‐border trade data to better understand micro‐level country of origin effects

The article adapts an estimation methodology from the border effects literature to reveal consumer ethnocentrism versus cosmopolitanism in each country, and animosity versus nostalgia between country pairs. The measurements rely on actual macro cross‐border trade data rather than individual purchase intentions typically used in the international marketing literature. The results from early 2010s suggest that purchasing intentions against imports found in this literature do not necessarily translate into actual consumption behavior in international trade. It is quite possible that the consumers are unable to assess country of origin of production despite growing ethnocentrism, and base their actual purchases on perceived origin of product brands. Specifically, it is found that most countries are cosmopolitan rather than ethnocentric, particularly developed countries, favoring any foreign product over domestic products. Most countries also have nostalgic purchasing behavior from specific trade partners with historical linkages. Outside the specific traditional animosities between a country pair, a developed country is relatively less open to imports from another developed trade partner, while an emerging country welcomes it more especially from another emerging trade partner.     

Pricing Reinsurance Contracts on FDIC Losses

This paper proposes a pricing model for the FDIC's reinsurance risk. We derive a closed‐form Weibull call option pricing model to price a call‐spread a reinsurer might sell to the FDIC. To obtain the risk‐neutral loss‐density necessary to price this call spread we risk‐neutralize a Weibull distributed FDIC annual losses by a tilting coefficient estimated from the traded call options on the BKX index. An application of the proposed approach yield reasonable reinsurance prices.     

Falling walls and lifting curtains: analysis of border effects in transition countries

Since McCallum's (1995 McCallum, J. 1995. National borders matter: Canada-US regional trade patterns. American Economic Review, 85(3): 615–23. [Web of Science ®] , [Google Scholar]) finding of surprisingly high border effects on trade between the US and Canada, there have been a number of studies on other parts of the world, and improvements made to the gravity model to measure this effect accurately. This paper suggests some other modifications to the model, and applies it to a region of the world that presents a distinctly interesting case. Changes in border effects of formerly socialist countries in Central and East Europe, and countries in the former Soviet Union are analyzed during 1976–2002 at country and sectoral levels, and also with respect to blocs of countries. A discussion on cross-country variations in border effects follows the computations.     

Topological Properties of the International Trade Network Using Modified Measures

This article modifies several social network analysis measures to get a more accurate picture of the topology of international trade. Modifications improve estimations of actual network relationships by avoiding leaving out any trade links, considering directionality of trade, recognizing product-level networks and differences in relative importance of countries, products, and links by weighing the measures. These methods are adopted to modify measures of reciprocity, multiplexity, clustering, degree, betweenness, and closeness centrality. Changes in the trade network over the most recent dozen years are analyzed and several observations are made about trends.