Solving exchange rate puzzles with neither sticky prices nor trade costs

We present a simple framework in which both the exchange rate disconnect and forward bias puzzles are simultaneously resolved. The flexible-price two-country monetary model is extended to include a consumption externality with habit persistence. Habitpersistence is modeled using Campbell Cochrane preferences with ‘deep’ habits along the lines of the work of Ravn, Schmitt-Grohe and Uribe. By deep habits, we mean habits defined over goods rather than countries. The model is simulated using the artificial economy methodology. It offers a neo-classical explanation of the Meese–Rogoff puzzle and mimics the failure of fundamentals to explain nominal exchange rates in a linear setting. Finally, the model naturally generates the negative slope in the standard forward market regression.

Crime, Punishment and Article 3 ECHR: Puzzles and Prospects of Applying an Absolute Right in a Penal Context

Article 3 of the European Convention on Human Rights (ECHR), which provides that ‘No one shall be subjected to torture or to inhuman or degrading treatment or punishment’, is considered to enshrine an absolute right. Yet it contains an under-explored element: inhuman and degrading punishment. While torture has been the subject of extensive academic commentary, and inhuman and degrading treatment has been examined to some extent, the prohibition of inhuman and degrading punishment has not been explored in significant depth, in spite of its considerable potential to alter the penal landscape.

This paper elucidates the key doctrinal elements of inhuman and degrading punishment ‘and treatment associated with it’, in the words of the European Court of Human Rights (ECtHR). It addresses a number of ‘puzzles’ or problems which arise in applying the absolute right enshrined in Article 3 of the ECHR to sentencing and imprisonment, clarifies ECtHR doctrine and highlights some of its key implications. Bringing a theoretically informed understanding to bear on the application of Article 3 of the ECHR in a penal context, the paper provides clarity and coherence to a complex and crucial intersection between human rights and penology.

Less of a Puzzle: a new look at the forward forex market

The two-country monetary model is extended to include a consumption externality with habit persistence. The model is simulated using the artificial economy methodology. The 'puzzles' in the forward market are re-examined. The model is able to account for: (a) the low volatility of the forward discount; (b) the higher volatility of expected forward speculative profit; (c) the even higher volatility of the spot return; (d) the persistence in the forward discount; (e) the martingale behavior of spot exchange rates; and (f) the negative covariance between the expected spot return and expected forward speculative profit. It is unable to account for the forward market bias because the volatility of the expected spot return is too large relative to the volatility of the expected forward speculative profit.

Complete Sudoku - extra rules for more symmetry

We propose some extra rules to add to the well-known Sudoku puzzle and present an argument to justify their inclusion. The rules mean that puzzles can be created with fewer cells completed initially yet which still have only one solution. We have created a Web-based program which can be used to generate and solve both standard and extended (Complete) puzzles.

Short-Sale Constraints and the Pricing of Managerial Skills

We investigate the impact of the absence of short selling on the pricing of managerial skills in the mutual fund industry. In the presence of divergent opinions regarding managerial skills, fund managers can strategically use fees to attract only the most optimistic capital. The recognition of this fee strategy helps explain a set of stylized observations and puzzles in the mutual fund industry, including the underperformance of active funds, the existence of flow convexity, and the negative correlation between gross-of-fee α and fees.

Foreign Direct Investment and Country Risk::Is There Evidence of 'Malign Investment in the Former Soviet States'

This paper examines the relationship between concepts of MNE bargaining power and broader concepts of political power. It notes that the analysis of MNE bargaining power presents a number of puzzles from the perspective of political theory. These puzzles arise, in part, from the fact that the overlap between traditional concepts of MNE bargaining power and broader concepts of political power is only a partial one. Despite these problems, it is suggested that political- theory-based approaches can add realism to our understanding of bargaining power.

Approaches through Materiality

Religion is a funny thing, because it always seems to be riding two horses at once. One could describe these horses in a number of different ways, using all sorts of familiar dichotomies; practice and belief, body and soul, earthly and heavenly, here and hereafter. “Give us this day our daily bread and forgive us our trespasses”. Here, food and forgiveness, or, perhaps more accurately, ingestion and salvation, are claimed, simultaneously – even seamlessly – by religion. This list could (and does) go on, being inclusive of, for example, immanence and transcendence – but more on this below. Yet these binary pairs can clearly be observed bleeding into one another. Ingesting pork, for example, often appears to be religiously more troublesome than does ingesting bread. This is because matter matters. We may ask, then, is religion really riding two horses, or are these ‘familiar dichotomies’ so familiar because they are false? Rephrasing the question in terms that partially echo the title and subtitle of Morgan’s (2010) landmark edited volume Religion and Material Culture: The Matter of Belief, is, I think, helpfully clarifying. What, then, is the matter with religion? The answer presented below is that, very often, the matter with religion is the matter of religion. Put more simply still, the problem with religion is its materiality. This chapter examines the whys and wherefores of this problem for the anthropology of religion – its ethnographic puzzles and methodological opportunities, as well as its conceptual impasses and theoretical insights.

Back to the failure: an analytic narrative of the De Lorean debacle

There has been a recent identification of a need for a New Business History. This discussion connects with the analytic narrative approach. By following this approach, the study of business history provides important implications for the conduct and institutional design of contemporary industrial policy. The approach also allows us to solve historical puzzles. The failure of the De Lorean Motor Company Limited (DMCL) is one specific puzzle. Journalistic accounts that focus on John De Lorean's alleged personality defects as an explanation for this failure miss the crucial institutional component. Moreover, distortions in the rewards associated with industrial policy, and the fact that the objectives of the institutions implementing the policy were not solely efficiency-based, led to increased opportunities for rent-seeking. Political economy solves the specific puzzle; by considering institutional dimensions, we can also solve the more general puzzle of why activist industrial policy was relatively unsuccessful in Northern Ireland.