International financial centres, office market rents and volatility

Despite continuing developments in information technology and the growing economic significance of the emerging Eastern European, South American and Asian economies, international financial activity remains strongly concentrated in a relatively small number of international financial centres. That concentration of financial activity requires a critical mass of office occupation and creates demand for high specification, high cost space. The demand for that space is increasingly linked to the fortunes of global capital markets. That linkage has been emphasised by developments in real estate markets, notably the development of global real estate investment, innovation in property investment vehicles and the growth of debt securitisation. The resultant interlinking of occupier, asset, debt and development markets within and across global financial centres is a source of potential volatility and risk. The paper sets out a broad conceptual model of the linkages and their implications for systemic market risk and presents preliminary empirical results that provide support for the model proposed.

Adapting the International System of Units to the twenty-first century

We review the proposal of the International Committee for Weights and Measures (Comité International des Poids et Mesures, CIPM), currently being considered by the General Conference on Weights and Measures (Conférences Générales des Poids et Mesures, CGPM), to revise the International System of Units (Le Système International d’Unitès, SI). The proposal includes new definitions for four of the seven base units of the SI, and a new form of words to present the definitions of all the units. The objective of the proposed changes is to adopt definitions referenced to constants of nature, taken in the widest sense, so that the definitions may be based on what are believed to be true invariants. In particular, whereas in the current SI the kilogram, ampere, kelvin and mole are linked to exact numerical values of the mass of the international prototype of the kilogram, the magnetic constant (permeability of vacuum), the triple-point temperature of water and the molar mass of carbon-12, respectively, in the new SI these units are linked to exact numerical values of the Planck constant, the elementary charge, the Boltzmann constant and the Avogadro constant, respectively. The new wording used expresses the definitions in a simple and unambiguous manner without the need for the distinction between base and derived units. The importance of relations among the fundamental constants to the definitions, and the importance of establishing a mise en pratique for the realization of each definition, are also discussed.

The level of compliance with the International Code of marketing of breast-milk substitutes: does it matter to stock markets?

The present paper explores, theoretically, and empirically, whether compliance with the International Code of marketing of breast-milk substitutes impacts on financial performance measured by stock markets. The empirical analysis, which considers a 20-year period, shows that stock markets are indifferent to the level of compliance by manufacturers with the International Code. Two important issues emerge from this result. Based on our finding that financial performance as measured by stock markets cannot explain the level of compliance, the first issue refers to what alternative types of mechanisms drive manufacturers who comply the least with voluntary codes such as the International Code. Conversely, from our finding that stock markets do not reward the most compliant, the second issue raised is an inherent weakness of stock markets to fully incorporate social and environmental values.