An information approach to international currencies

Models of currency competition focus on the 5% of trading attributable to balance-of-payments flows. We introduce an information approach that focuses on the other 95%. Important departures from traditional models arise when transactions convey information. First, prices reveal different information depending on whether trades are direct or though vehicle currencies. Second, missing markets arise due to insufficiently symmetric information, rather than insufficient transactions scale. Third, the indeterminacy of equilibrium that arises in traditional models is resolved: currency trade patterns no longer concentrate arbitrarily on market size. Empirically, we provide a first analysis of transactions across a full market triangle: the euro, yen and US dollar. The estimated transaction effects on prices support the information approach.

A Holistic vs. an Attribute-based Approach to Agri-Environmental Policy Valuation: Do Welfare Estimates Differ?

Different economic valuation methodologies can be used to value the non-market benefits of an agri-environmental scheme. In particular, the non-market value can be examined by assessing the public's willingness to pay for the policy outputs as a whole or by modelling the preferences of society for the component attributes of the rural landscape that result from the implementation of the policy. In this article we examine whether the welfare values estimated for an agri-environmental policy are significantly different between an holistic valuation methodology (using contingent valuation) and an attribute-based valuation methodology (choice experiment). It is argued that the valuation methodology chosen should be based on whether or not the overall objective is the valuation of the agri-environment policy package in its entirety or the valuation of each of the policy's distinct environmental outputs.

Spatial segregation and labour market processes in Belfast

This article examines the nature of labour market exclusion in Belfast and policy responses to the dilemmas of ethnic space. It highlights the value of an area-based approach to understanding the way in which social and ethno-sectarian segregation mediates access to production sites and job opportunities in the wider urban economy. Research from the Belfast metropolitan labour market is used to identify the importance of employment in neutral areas, which can stimulate access from ethnically and socially polarised communities. The article argues for a spatial approach to understanding the structuring of labour market opportunities and constraints and it concludes by highlighting the implications for policy and practice in ethnically territorialised spaces.

A normative approach to the criminalisation of cartel activity

Although cartel behaviour is almost universally (and rightly) condemned, it is not clear why cartel participants deserve the full wrath of the criminal law and its associated punishment. To fill this void, I develop a normative (or principled) justification for the criminalisation of conduct characteristic of ‘hard core’ cartels. The paper opens with a brief consideration of the rhetoric commonly used to denounce cartel activity, eg that it ‘steals from’ or ‘robs’ consumers. To put the discussion in context, a brief definition of ‘hard core’ cartel behaviour is provided and the harms associated with this activity are identified. These are: welfare losses in the form of appropriation (from consumer to producer) of consumer surplus, the creation of deadweight loss to the economy, the creation of productive inefficiency (hindering innovation of both products and processes), and the creation of so-called X-inefficiency. As not all activities which cause harm ought to be criminalised, a theory as to why certain harms in a liberal society can be criminalised is developed. It is based on JS Mill's harm to others principle (as refined by Feinberg) and on a choice of social institutions using Rawls's ‘veil of ignorance.’ The theory is centred on the value of individual choice in securing one's own well-being, with the market as an indispensable instrument for this. But as applied to the harm associated with cartel conduct, this theory shows that none of the earlier mentioned problems associated with this activity provide sufficient justification for criminalisation. However, as the harm from hard core cartel activity strikes at an important institution which permits an individual's ability to secure their own well-being in a liberal society, criminalisation of hard core cartel behaviour can have its normative justification on this basis.

Why Do Firms Pay Dividends?: Evidence from an Early and Unregulated Capital Market

Why do firms pay dividends? To answer this question, we use a hand-collected data set of companies traded on the London stock market between 1825 and 1870. As tax rates were effectively zero, the capital market was unregulated, and there were no institutional stockholders, we can rule out these potential determinants ex ante. We find that, even though they were legal, share repurchases were not used by firms to return cash to shareholders. Instead, our evidence provides support for the information–communication explanation for dividends, while providing little support for agency, illiquidity, catering, or behavioral explanations. © The Authors 2013. Published by Oxford University Press [on behalf of the European Finance Association]. All rights reserved.

Efficiency assessment of electricity power generation on Ireland’s Single Electricity Market by Data Envelopment Analysis

The efficiency of generation plants is an important measure for evaluating the operating performance. The objective of this paper is to evaluate electricity power generation by conducting an All-Island-Generator-Efficiency-Study (AIGES) for the Republic of Ireland and Northern Ireland by utilising a Data Envelopment Analysis (DEA) approach. An operational performance efficiency index is defined and pursued for the year 2008. The economic activities of electricity generation units/plants examined in this paper are characterized by numerous input and output indicators. Constant returns to scale (CRS) and variable returns to scale (VRS) type DEA models are employed in the analysis. Also a slacks based analysis indicates the level of inefficiency for each variable examined. The findings from this study provide a general ranking and evaluation but also facilitate various interesting efficiency comparisons between generators by fuel type.

Market Economies with an Endogenous Social Division of Labour

This paper considers a general equilibrium theory of a competitive market economy with an endogenous social division of labour. The theory is founded on the notion of a “consumer- producer”, who consumes as well as produces commodities. In this approach, the emergence of a meaningful social division of labour is guided by the property of increasing returns to specialisation and the process of trade among fully specialised individuals. All decisions of individual consumer-producers are based on a set of perfectly competitive market prices of the commodities in the economy.
We show that a perfectly competitive price mechanism supports a dichotomy of production and consumption at the level of the individual consumer-producer. In this context we show existence of competitive equilibria and characterise these equilibria under increasing returns to specialisation: Under certain well-described conditions, markets are equilibrated through adjustment of the social division of labour; therefore prices are fully determined by the supply side of the economy.

The VINEYARD Approach: Versatile, Integrated, Accelerator-Based, Heterogeneous Data Centres.

Emerging web applications like cloud computing, Big Data and social networks have created the need for powerful centres hosting hundreds of thousands of servers. Currently, the data centres are based on general purpose processors that provide high flexibility buts lack the energy efficiency of customized accelerators. VINEYARD aims to develop an integrated platform for energy-efficient data centres based on new servers with novel, coarse-grain and fine-grain, programmable hardware accelerators. It will, also, build a high-level programming framework for allowing end-users to seamlessly utilize these accelerators in heterogeneous computing systems by employing typical data-centre programming frameworks (e.g. MapReduce, Storm, Spark, etc.). This programming framework will, further, allow the hardware accelerators to be swapped in and out of the heterogeneous infrastructure so as to offer high flexibility and energy efficiency. VINEYARD will foster the expansion of the soft-IP core industry, currently limited in the embedded systems, to the data-centre market. VINEYARD plans to demonstrate the advantages of its approach in three real use-cases (a) a bio-informatics application for high-accuracy brain modeling, (b) two critical financial applications, and (c) a big-data analysis application.

Oil Market Modelling: A Comparative Analysis of Fundamental and Latent Factor Approaches

We formally compare fundamental factor and latent factor approaches to oil price modelling. Fundamental modelling has a long history in seeking to understand oil price movements, while latent factor modelling has a more recent and limited history, but has gained popularity in other financial markets. The two approaches, though competing, have not formally been compared as to effectiveness. For a range of short- medium- and long-dated WTI oil futures we test a recently proposed five-factor fundamental model and a Principal Component Analysis latent factor model. Our findings demonstrate that there is no discernible difference between the two techniques in a dynamic setting. We conclude that this infers some advantages in adopting the latent factor approach due to the difficulty in determining a well specified fundamental model.