Rational speculative bubbles: an empirical investigation of the London Stock Exchange

In recent years, a sharp divergence of London Stock Exchange equity prices from dividends has been noted. In this paper, we examine whether this divergence can be explained by reference to the existence of a speculative bubble. Three different empirical methodologies are used: variance bounds tests, bubble specification tests, and cointegration tests based on both ex post and ex ante data. We find that, stock prices diverged significantly from their fundamental values during the late 1990's, and that this divergence has all the characteristics of a bubble.

The expenses scandal and the politics of electoral reform

The scandal over MPs' expenses that erupted in 2009 was followed by a surge in discussion of electoral reform. A range of reforms to Westminster's existing electoral system are now high on the political agenda. This article examines the extent and the nature of the scandal's impact on the electoral reform debate and draws out comparative implications for the sorts of conditions that can force politicians to accept electoral reforms that they do not want. It finds that the expenses scandal significantly changed debate about some electoral reform topics, but not about others. It proposes three factors likely to increase the impact of scandal in sparking reform: that the scandal is seen as harming ordinary people in their daily lives; that reforms can readily be understood as likely to mitigate the sources of scandal; and that those reforms do not seriously harm politicians' own perceived interests.