The acerbity of the social: how to include the social in governmental risk assessments

This paper addresses the expansion of risk practices through a case study of a government led project in Sweden purposed to develop a method to include social events in mandatory risk practices. Social heterogeneity was to be transformed into straightforward causality in order to turn the social into a manageable object. In this regard, the project was quite successful. By inviting social scientists into the process, otherwise often marginalized within risk practice, causality and quantifiable risk factors could be established and the model became a rigorous and legitimate scientific model. Although experts were granted significant autonomy and became experts far beyond their own area of expertise, the success of the model lies rather in allowing experts authority within confined boundaries. Grand narratives and critical perspectives are disregarded as too abstract and if social scientists are to infuse aspects of social critique they must adapt to these circumstances: they must become instrumentalists.     

Wie die Materialengpässe den Arbeitsmarkt treffen

Wirtschaftsdienst - Although industrial production in Germany picked up again significantly with the recovery from the Corona crisis, supply bottlenecks for raw materials and intermediate products...     

Exploring the Intensive and Extensive Margins of World Trade

World trade evolves at two margins. Where a bilateral trading relationship already exists it may increase through time (intensive margin). But trade may also increase if a trading bilateral relationship is newly established between countries that have not traded with each other in the past (extensive margin). We provide an empirical dissection of post–World War II growth in manufacturing world trade along these two margins. We propose a “corner-solutions version” of the gravity model to explain movements on both margins. A Tobit estimation of this model resolves the so-called “distance puzzle”. It also finds more convincing evidence than recent literature that WTO-membership enhances trade. JEL no. F12, F15     

The LeChatelier-Samuelson principle revisited

Within the context of a linear Leontief model, the LeChatelier-Samuelson principle examines the effects of an increase in some final demand on the output levels under the constraint that the production of certain goods is held at its original value. The principle states that the increase in any output is larger when fewer output levels are kept constant. The present paper discusses bounds for such incremental changes, second-order effects, the consequences on the markets for the products with restricted output levels, and generalizations of the original assumptions.I would like to thank two anonymous referees for their helpful comments.     

INITIAL PUBLIC OFFERINGS: GOING BY THE BOOK

In the U.S., and increasingly in other countries as well, IPO securities are marketed to investors in a process known as "book-building"—one that amounts to polling institutional investors to establish a demand schedule for the issue and then allotting stock to individual investors according to the strength of their professed interest. Although book-building methods require use of discriminatory tactics that have attracted strong criticism from investors and regulators, this article defends such practices by demonstrating that book-building is more efficient than alternative methods. It effectively allows issuers to increase the net proceeds of their offerings by making better use of information about market demand conditions.
In the process of explaining the efficiency of the book-building method, this article also offers a plausible explanation for a phenomenon that has long puzzled economists: the systematic underpricing of IPOs. The key to the success of a book-building effort lies in the use of a strategic pricing and allocation policy designed to offset the investor's incentive to understate his or her interest in an IPO. By committing to favor investors who provide strong indications of interest with relatively large allocations of underpriced shares, the investment bank can limit the distortion of investor's incentives in bidding and so increase the level of proceeds the issuing firm can expect to generate from its IPO.     

Global Integration in Primary Equity Markets: The Role of U.S. Banks and U.S. Investors

We examine the costs and benefits of the global integrationof initial public offering (IPO) markets associated with thediffusion of U.S. underwriting methods in the 1990s. Bookbuildingis becoming increasingly popular outside the United States andtypically costs twice as much as a fixed-price offer. However,on its own, bookbuilding only leads to lower underpricing whenconducted by U.S. banks and/or targeted at U.S. investors. Formost issuers, the gains associated with lower underpricing outweighedthe additional costs associated with hiring U.S. banks or marketingin the United States. This suggests a quality/price trade-offcontrasting with the findings of Chen and Ritter, particularlysince non-U.S. issuers raising US$20 million–US$80 millionalso typically pay a 7% spread when U.S. banks and investorsare involved.