Contracting and Reporting Conservatism around a Change in Fiduciary Duties*

We exploit an influential 1991 Delaware court ruling to examine simultaneously two types of conservatism that play important roles in resolving creditor–owner agency conflicts: contracting conservatism and reporting conservatism. The ruling expanded managerial fiduciary duties in favor of creditors for Delaware-incorporated firms in the vicinity of insolvency. In those firms, following the ruling, debt contracts are less likely to include conservative adjustments to accounting numbers used for covenant compliance (i.e., contracting conservatism decreases), while public financial reporting becomes more conservative (i.e., reporting conservatism increases). The decrease in contracting conservatism is concentrated in firms that exhibit a greater increase in reporting conservatism, suggesting that reporting conservatism is more cost-effective in resolving agency conflicts. In addition, the substitution effect is more pronounced in firms facing greater business uncertainty and firms with greater board independence.     

The ‘new public management’ and the reform of public services to agriculture in adjusting economies: the role of contracting

This paper outlines the conditions under which contracting of different types succeeds in the provision of public services to agriculture. It observes that performance contracting has been widely attempted in adjusting countries but generally with little success, since it is demanding of resources, flexibility and motivation in government under conditions where these are scarce. Examples are drawn from agricultural marketing. Given the largely private nature of the services to agriculture currently provided by the state, the long-term reform strategy should be market development. Contracting out and management contracting may have a role in this strategy, particularly in better managed adjusting economies.     

基于不完全契约理论的军队运用地方第三方物流思考

文章以不完全契约理论的视角，分析了军队用户与地方物流服务商的契约所具有更为显著的不完全性，提出了强化军事物流服务商管理机制、构建含有军事物流服务商的信息网络、加强有军事物流服务商参加的物流演练等对策。     

浅析农村妇女在婚姻家庭中土地财产权益及法律保护

土地是农民生存和发展的根基,土地问题是解决当前"三农"即农村、农业、农民问题的核心.土地制度的建立完善和实施直接关系到国家农业产业的发展和农村社会、经济秩序的稳定.农村妇女由于传统习惯和文化素质的影响对土地的依赖性更强,所以对农村妇女土地权益的保护更为重要.《婚姻法》修正后对夫妻财产制度作了许多新的规定,特别是第39条第2款,"夫或妻在家庭土地承包经营中享有的权益等,依法应当予以保护"的规定,是婚姻法对夫妻财产制度的一个新的突破.目前,农村妇女土地权益受侵害的现象比较严重和突出,在一定程度上扰乱了农村的经济秩序和社会秩序,因此,关注农村妇女权益保护,对解决农村妇女土地承包权问题是非常必要的.     

Domestic financial market frictions,unrestricted international capital flows,and crises in small open economies

Summary. We present an example of a small open economy where small increases in the world interest rate may induce a sharp decline in output and a precipitous depreciation of the exchange rate. Due to a costly state verification problem in domestic credit markets, combined with unrestricted international capital flows, our economy generates two long-run equilibria, one with low GDP and a relatively depreciated real exchange rate (RER), and one with high GDP and a relatively appreciated RER. The first is always a saddle, while the second may be a sink or a source, depending on the level of the world interest rate. A crisis is identified with the economy switching from an equilibrium path approaching the high-output steady state to the saddlepath approaching the low-output steady state. In Mexicos recent history, periods of growth associated with appreciation of the RER have alternated with periods of sharp contraction and depreciation of the RER. Our economy displays such behavior in response to changes in the world interest rate.Received: 9 April 2002, Revised: 20 March 2003JEL Classification Numbers: E5, F4.G. Antinolfi, E. Huybens: We thank Steve Fazzari, Tim Kehoe, Todd Keister, Manuel Santos, Karl Shell and especially Bruce Smith for very helpful discussions. Jaime Calleja Alderete, Eduardo Camero Godínez, and Juan Vargas Hernández provided excellent research assistance. All remaining errors are ours. Huybens was an assistant professor in the Centro de Investigación Económica, ITAM, at the time this article was written, and part of this work was completed while Antinolfi was a visiting scholar at the Federal Reserve Bank of St. Louis. The views expressed herein are those of the authors, and do not reflect those of the World Bank or the Federal Reserve Bank of St. Louis. Correspondence to: G. Antinolfi     

Optimal Dynamic Capital Requirements

We characterize welfare maximizing capital requirement policies in a quantitative macrobanking model with household, firm, and bank defaults calibrated to Euro Area data. We optimize on the level of the capital requirements applied to each loan class and their sensitivity to changes in default risk. We find that getting the level right (so that bank failure risk remains contained) is of foremost importance, while the optimal sensitivity to default risk is positive but typically smaller than under Basel internal ratings based (IRB) formulas. Starting from low levels, savers and borrowers benefit from higher capital requirements. At higher levels, only savers prefer tighter requirements.     

Bubbles,banks and financial stability

The macroeconomic impact of rational bubbles in a limited commitment economy crucially depends on whether banks or ordinary savers hold the bubble. Banks hold the bubble asset when their leverage is high, when long-term real interest rates are low or when lax supervision allows them to enjoy high deposit insurance subsidies. When banks are the bubble-holders, this amplifies the output boom by reducing loan–deposit rate spreads while the bubble survives but also deepens the recession when the bubble bursts. In contrast, the real impact of bubbles held by ordinary savers is more muted.     

MODELLING A REGIME‐SHIFTING BEVERIDGE CURVE

This paper offers new insights into Beveridge curve analysis by modelling the unemployment–vacancy rate relationship within a Markov regime‐switching environment in which the probabilities of curve‐shifting are determined endogenously by shift factors. Shift factors include structural factors such as labour market participation and net migration, while cyclical variables include GDP growth, the real rate of interest, and labour productivity. This approach enables us to estimate regime‐specific parameters and to assess the role played by these factors in influencing the transition probabilities of switching between regimes. Using New Zealand data, we show that increases in the participation rate have shifted the Beveridge curve inward, while increases in net migration have shifted the curve outward.     

Preference shocks,international frictions,and international business cycles

Replicating the degree of cross-country comovements of macroeconomic aggregates, dynamics of prices and quantities of international trade, and the behavior of consumption and labor remains an important challenge in international business cycle literature. This paper incorporates preference shocks into a standard two-country model in which there exist international frictions, such as costs of transportation and restrictions to international asset trade. Country-specific preference shocks that generate fluctuations in each country's consumption and labor solve the puzzles, except for the discrepancy between theory and data regarding international trade variables. The presence or absence of international frictions plays a limited role in solving the puzzles.     

Corporate stakeholders,corporate valuation and ESG

In addition to explicit contracts, corporations issue their stakeholders implicit claims, including fair treatment of employees and the promise of continuing service to customers. Corporate value is created by selling these implicit claims for more than it costs to honour them. Recently, a new class of non-investor stakeholders, related to environmental, social and governance (ESG) issues, has arisen. Although many ESG advocates stress their role in creating shareholder value, they do not explain how this value creation occurs. This paper shows that implicit claims provide a critical link that ties non-investor stakeholders and ESG to shareholder value, both its creation and its possible destruction.