Cambium non est mutuum: exchange and interest rates in medieval Europe

A major gap in our understanding of the medieval economy concerns interest rates, especially relating to commercial credit. Although direct evidence about interest rates is scattered and anecdotal, there is much more surviving information about exchange rates. Since both contemporaries and historians have suggested that exchange and rechange transactions could be used to disguise the charging of interest in order to circumvent the usury prohibition, it should be possible to back out the interest rates from exchange rates. The following analysis is based on a new dataset of medieval exchange rates collected from commercial correspondence in the archive of Francesco di Marco Datini of Prato, c.1383-1411. It demonstrates that the time value of money was consistently incorporated into market exchange rates. Moreover, these implicit interest rates are broadly comparable to those received from other types of commercial loan and investment. Although on average profitable, the return on any individual exchange and rechange transaction did involve a degree of uncertainty that may have justified their non-usurious nature. However, there were also practical reasons why medieval merchants may have used foreign exchange transactions as a means of extending credit.

Dung and nest surveys: estimating decay rates

1. Wildlife managers often require estimates of abundance. Direct methods of estimation are often impractical, especially in closed-forest environments, so indirect methods such as dung or nest surveys are increasingly popular. 2. Dung and nest surveys typically have three elements: surveys to estimate abundance of the dung or nests; experiments to estimate the production (defecation or nest construction) rate; and experiments to estimate the decay or disappearance rate. The last of these is usually the most problematic, and was the subject of this study. 3. The design of experiments to allow robust estimation of mean time to decay was addressed. In most studies to date, dung or nests have been monitored until they disappear. Instead, we advocate that fresh dung or nests are located, with a single follow-up visit to establish whether the dung or nest is still present or has decayed. 4. Logistic regression was used to estimate probability of decay as a function of time, and possibly of other covariates. Mean time to decay was estimated from this function. 5. Synthesis and applications. Effective management of mammal populations usually requires reliable abundance estimates. The difficulty in estimating abundance of mammals in forest environments has increasingly led to the use of indirect survey methods, in which abundance of sign, usually dung (e.g. deer, antelope and elephants) or nests (e.g. apes), is estimated. Given estimated rates of sign production and decay, sign abundance estimates can be converted to estimates of animal abundance. Decay rates typically vary according to season, weather, habitat, diet and many other factors, making reliable estimation of mean time to decay of signs present at the time of the survey problematic. We emphasize the need for retrospective rather than prospective rates, propose a strategy for survey design, and provide analysis methods for estimating retrospective rates.

Linkages between property asset returns and interest rates: evidence for the UK

This paper considers the effect of short- and long-term interest rates, and interest rate spreads upon real estate index returns in the UK. Using Johansen's vector autoregressive framework, it is found that the real estate index cointegrates with the term spread, but not with the short or long rates themselves. Granger causality tests indicate that movements in short term interest rates and the spread cause movements in the returns series. However, decomposition of the forecast error variances from VAR models indicate that changes in these variables can only explain a small proportion of the overall variability of the returns, and that the effect has fully worked through after two months. The results suggest that these financial variables could potentially be used as leading indicators for real estate markets, with corresponding implications for return predictability.

Agricultural commodity markets : reference point for the real value of a currency

Using monthly time-series data 1999-2013, the paper shows that markets for agricultural commodities provide a yardstick for real purchasing power, and thus a reference point for the real value of fiat currencies. The daily need for each adult to consume about 2800 food calories is universal; data from FAO food balance sheets confirm that the world basket of food consumed daily is non-volatile in comparison to the volatility of currency exchange rates, and so the replacement cost of food consumed provides a consistent indicator of economic value. Food commodities are storable for short periods, but ultimately perishable, and this exerts continual pressure for markets to clear in the short term; moreover, food calories can be obtained from a very large range of foodstuffs, and so most households are able to use arbitrage to select a near optimal weighting of quantities purchased. The paper proposes an original method to enable a standard of value to be established, definable in physical units on the basis of actual worldwide consumption of food goods, with an illustration of the method.

Low-frequency volatility of real estate securities in relation to macroeconomic risk

Real estate securities have a number of distinct characteristics that differentiate them from stocks generally. Key amongst them is that under-pinning the firms are both real as well as investment assets. The connections between the underlying macro-economy and listed real estate firms is therefore clearly demonstrated and of heightened importance. To consider the linkages with the underlying macro-economic fundamentals we extract the ‘low-frequency’ volatility component from aggregate volatility shocks in 11 international markets over the 1990-2014 period. This is achieved using Engle and Rangel’s (2008) Spline-Generalized Autoregressive Conditional Heteroskedasticity (Spline-GARCH) model. The estimated low-frequency volatility is then examined together with low-frequency macro data in a fixed-effect pooled regression framework. The analysis reveals that the low-frequency volatility of real estate securities has strong and positive association with most of the macroeconomic risk proxies examined. These include interest rates, inflation, GDP and foreign exchange rates.

Rates of production of acetate, propionate, and butyrate in the rumen of lactating dairy cows given normal and low-roughage diets

Five lactating dairy cows with a permanent cannula in the rumen were given ( kg DM/d) a normal diet (7.8 concentrates, 5.1 hay) or a low-roughage (LR) diet (11.5 concentrates, 1.2 hay) in two meals daily in a two-period crossover design. Milk fat (g/kg) was severely reduced on diet LR. To measure rates of production of individual volatile fatty acids (VFA) in the rumen, 0.5 mCi 1-C-14-acetic acid, 2-C-14-propionic acid, or 1-C-14-n-butyric acid were infused into the rumen for 22 h at intervals of 2 to 6 d; rumen samples were taken over the last 12 h. To measure rumen volume, we infused Cr-EDTA into the rumen continuously, and polyethylene glycol was injected 2 h before the morning feed. Results were very variable, so volumes measured by rumen emptying were used instead. Net production of propionic acid more than doubled on LR, but acetate and butyrate production was only numerically lower. Net production rates pooled across both diets were significantly related to concentrations for each VFA. Molar proportions of net production were only slightly higher than molar proportions of concentrations for acetate and propionate but were lower for butyrate. The net energy value (MJ/d) of production of the three VFA increased from 89.5 on normal to 109.1 on LR, equivalent to 55 and 64% of digestible energy, respectively. Fully interchanging, three-pool models of VFA C fluxes are presented. It is concluded that net production rates of VFA can be measured in non-steady states without the need to measure rumen volumes.

Root pruning as a means to encourage root growth in two ornamental shrubs, Buddleja davidii ‘Summer Beauty’ and Cistus ‘Snow Fire'

The inability of a plant to grow roots rapidly upon transplanting is one of the main factors contributing to poor establishment. In bare-rooted trees, treatments such as root pruning or application of the plant hormone auxin [e.g., indole butyric acid (IBA)] can promote root growth and aid long-term establishment. There is little information on ornamental containerised plants, however, other than the anecdotal notion that 'teasing' the roots out of the rootsoil mass before transplanting can be beneficial. In the present study we tested the ability of various root-pruning treatments and application of IBA to encourage new root and shoot growth in two shrub species, commonly produced in containers - Buddleja davidii 'Summer Beauty' and Cistus 'Snow Fire'. In a number of experiments, young plants were exposed to root manipulation (teasing, light pruning, or two types of heavy pruning) and/or treatment with IBA (at 500 or 1,000 mg l-1) before being transplanted into larger containers containing a medium of 1:1:1 (v/v/v) fine bark, sand and loam. Leaf stomatal conductance (gl) was measured 20 min, and 1, 2, 4 and 6 h after root manipulation. Net leaf CO2 assimilation (A) was measured frequently during the first week after transplanting, then at regular intervals up to 8 weeks after transplanting. Plants were harvested 8 weeks after transplanting, and root and shoot weights were measured. In both species, light root pruning alone, or in combination with 500 mg l-1 IBA, was most effective in stimulating root growth. In contrast, teasing, which is commonly used, showed no positive effect on root growth in Buddleja, and decreased new root growth in Cistus. The requirement for exogenous auxin to encourage new root growth varied between experiments and appeared to be influenced by the age and developmental stage of the plants. There were no consistent responses between root treatments and net CO2 assimilation rates, and changes in root weight were not closely correlated with changes in assimilation. The mechanisms whereby new root growth is sustained are discussed.

Commodity currency: an alternative route to currency union

Proposals have been made for a common currency for East Asia, but the countries preparing to participate need to be in a state of economic convergence. We show that at least six countries of East Asia already satisfy this condition. There also needs to be a mechanism by which the new currency relates to other reserve currencies. We demonstrate that a numéraire could be defined solely from the actual worldwide consumption of food and energy per capita, linked to fiat currencies via world market prices. We show that real resource prices are stable in real terms, and likely to remain so. Furthermore, the link from energy prices to food commodity prices is permanent, arising from energy inputs in agriculture, food processing and distribu-tion. Calibration of currency value using a yardstick such as our SI numéraire offers an unbiased measure of the con-sistently stable cost of subsistence in the face of volatile currency exchange rates. This has the advantage that the par-ticipating countries need only agree to currency governance based on a common standards institution, a much less on-erous form of agreement than would be required in the creation of a common central bank.

Do variations in substitution rates and male mutation bias correlate with life-history traits? A study of 32 mammalian genomes

Life-history traits vary substantially across species, and have been demonstrated to affect substitution rates. We compute genomewide, branch-specific estimates of male mutation bias (the ratio of male-to-female mutation rates) across 32 mammalian genomes and study how these vary with life-history traits (generation time, metabolic rate, and sperm competition). We also investigate the influence of life-history traits on substitution rates at unconstrained sites across a wide phylogenetic range. We observe that increased generation time is the strongest predictor of variation in both substitution rates (for which it is a negative predictor) and male mutation bias (for which it is a positive predictor). Although less significant, we also observe that estimates of metabolic rate, reflecting replication-independent DNA damage and repair mechanisms, correlate negatively with autosomal substitution rates, and positively with male mutation bias. Finally, in contrast to expectations, we find no significant correlation between sperm competition and either autosomal substitution rates or male mutation bias. Our results support the important but frequently opposite effects of some, but not all, life history traits on substitution rates. KEY WORDS: Generation time, genome evolution, metabolic rate, sperm competition.

Medieval foreign exchange: a time series analysis

This chapter applies rigorous statistical analysis to existing datasets of medieval exchange rates quoted in merchants’ letters sent from Barcelona, Bruges and Venice between 1380 and 1310, which survive in the archive of Francesco di Marco Datini of Prato. First, it tests the exchange rates for stationarity. Second, it uses regression analysis to examine the seasonality of exchange rates at the three financial centres and compares them against contemporary descriptions by the merchant Giovanni di Antonio da Uzzano. Third, it tests for structural breaks in the exchange rate series.