The impact of interest-rate subsidies on long-term household debt: Evidence from a large program

The responsiveness of long-term household debt to the interest rate is acrucial parameter for assessing the effectiveness of public policies aimedat promoting specific types of saving. This paper estimates the effect ofa reform of Credito Bonificado, a large program in Portugal that subsidizedmortgage interest rates, on long-term household debt. The reform establisheda ceiling in the price of the house that could be financed through theprogram, and provides plausibly exogenous variation in incentives. Usinga unique dataset of matched household survey data and administrative recordsof debt, we document a large decrease in the probability of signing a newloan after the removal of the subsidy.

Species of Euglossa (Glossura) in the Brazilian Atlantic forest, with taxonomic notes on Euglossa stellfeldi Moure (Hymenoptera, Apidae, Euglossina)

The species of Euglossa (Glossura) occuring in the Brazilian Atlantic forest were revised and an identification key to males and females is provided. The status of Euglossa annectans Dressler and E. stellfeldi Moure is reevaluated and the latter species is transferred from E. (Glossura) to E. (Glossurella). Here we also synonymize E. carinilabris Dressler under E. stellfeldi. Taxonomic notes are provided and relevant morphological features are illustred. Latitudinal color variation along the Brazilian Atlantic forest, found in two of the species studied here, is also presented and discussed.

Speculative dynamics in the term structure of interest rates

When long maturity bonds are traded frequently and traders have non-nestedinformation sets, speculative behavior in the sense of Harrison and Kreps (1978) arises.Using a term structure model displaying such speculative behavior, this paper proposesa conceptually and observationally distinct new mechanism generating time varying predictableexcess returns. It is demonstrated that (i) dispersion of expectations about futureshort rates is sufficient for individual traders to systematically predict excess returns and(ii) the new term structure dynamics driven by speculative trade is orthogonal to publicinformation in real time, but (iii) can nevertheless be quantified using only publicly availableyield data. The model is estimated using monthly data on US short to medium termTreasuries from 1964 to 2007 and it provides a good fit of the data. Speculative dynamicsare found to be quantitatively important, potentially accounting for a substantial fractionof the variation of bond yields and appears to be more important at long maturities.

Interest rate restrictions in a natural experiment: loan allocation and the change in the usury laws in 1714

This article studies the effects of interest rate restrictions on loan allocation. The British governmenttightened the usury laws in 1714, reducing the maximum permissible interest rate from 6% to5%. A sample of individual loan transactions reveals that average loan size and minimum loan sizeincreased strongly, while access to credit worsened for those with little social capital. Collateralisedcredits, which had accounted for a declining share of total lending, returned to their former role ofprominence. Our results suggest that the usury laws distorted credit markets significantly; we findno evidence that they offered a form of Pareto-improving social insurance.

Constant interest rate projections without the curse of indeterminacy

Constant interest rate (CIR) projections are often criticized on the grounds that they are inconsistent with the existence of a unique equilibrium in a variety of forward-looking models. This note shows howto construct CIR projections that are not subject to that criticism, using a standard New Keynesian model as a reference framework.

Risk management under a two-factor model of the term structure of interest rates

This paper presents several applications to interest rate risk managementbased on a two-factor continuous-time model of the term structure of interestrates previously presented in Moreno (1996). This model assumes that defaultfree discount bond prices are determined by the time to maturity and twofactors, the long-term interest rate and the spread (difference between thelong-term rate and the short-term (instantaneous) riskless rate). Several newmeasures of ``generalized duration" are presented and applied in differentsituations in order to manage market risk and yield curve risk. By means ofthese measures, we are able to compute the hedging ratios that allows us toimmunize a bond portfolio by means of options on bonds. Focusing on thehedging problem, it is shown that these new measures allow us to immunize abond portfolio against changes (parallel and/or in the slope) in the yieldcurve. Finally, a proposal of solution of the limitations of conventionalduration by means of these new measures is presented and illustratednumerically.

The taxonomic placement and provenance of Hypopyra inconspicua Herrich-Schäffer (Lepidoptera, Thyrididae)

The taxonomic placement and provenance of Hypopyra inconspicua Herrich-Schäffer (Lepidoptera, Thyrididae). Tanyodes inconspicua (Herrich-Schäffer) comb. nov. is transferred from Spirama Guenée (Noctuidae, Catocalinae) to Striglininae (Thyrididae), as a senior synonym of Ortogramma rufitibia R. Felder & Rogenhofer syn. nov. and Tanyodes ochracea Möschler syn. nov., and from the African to the Neotropical fauna.

On the timing of balance of payments crises: Disaggregated information and interest rate policy

This paper proposes a dynamic framework to study the timing of balance of paymentscrises. The model incorporates two main ingredients: (i) investors have private information; (ii)investors interact in a dynamic setting, weighing the high returns on domestic assets against the incentives to pull out before the devaluation. The model shows that the presence of disaggregated information delays the onset of BOP crises, giving rise to discrete devaluations. It also shows that high interest rates can be eective in delaying and possibly avoiding the abandonment of the peg. The optimal policy is to raise interest rates sharply as fundamentals become very weak. However, this policy is time inconsistent, suggesting a role for commitment devices such as currency boards or IMF pressure.

A two-mean reverting-factor model of the term structure of interest rates

This paper presents a two--factor model of the term structure ofinterest rates. We assume that default free discount bond prices aredetermined by the time to maturity and two factors, the long--term interestrate and the spread (difference between the long--term rate and theshort--term (instantaneous) riskless rate). Assuming that both factorsfollow a joint Ornstein--Uhlenbeck process, a general bond pricing equationis derived. We obtain a closed--form expression for bond prices andexamine its implications for the term structure of interest rates. We alsoderive a closed--form solution for interest rate derivatives prices. Thisexpression is applied to price European options on discount bonds andmore complex types of options. Finally, empirical evidence of the model'sperformance is presented.

Description of a new species of Toumeyella Cockerell (Hemiptera, Coccidae) from Mexico, with a taxonomic key to mexican species

A new species of soft scale insect from Mexico, Toumeyella fontanai Kondo & Pellizzari sp. nov. is des-cribed and illustrated. A taxonomic key to the species of scale insects of the genus Toumeyella Cockerell known in Mexico is provided.

Conflicts of interest, information provision and competition in banking

In some markets, such as the market for drugs or for financial services, sellers have better information than buyersregarding the matching between the buyer's needs and the good's actual characteristics. Depending on the market structure,this may lead to conflicts of interest and/or the underprovision of information by the seller. This paper studies this issuein the market for financial services. The analysis presents a new model of competition between banks, as banks' pricecompetition influences the ensuing incentives for truthful information revelation. We compare two different firm structures,specialized banking, where financial institutions provide a unique financial product, and one-stop banking, where a financialinstitution is able to provide several financial products which are horizontally differentiated. We show first that, althoughconflicts of interest may prevent information disclosure under monopoly, competition forces full information provision forsufficiently high reputation costs. Second, in the presence of market power, one-stop banks will use information strategicallyto increase product differentiation and therefore will always provide reliable information and charge higher rices thanspecialized banks, thus providing a new justification for the creation of one-stop banks. Finally, we show that, ifindependent financial advisers are able to provide reliable information, this increases product differentiation and thereforemarket power, so that it is in the interest of financial intermediaries to promote external independent financial advice.

Taxonomic key for the genera of Elmidae (Coleoptera, Byrrhoidea) occurring in Goiás State, Brazil, including new records and distributional notes

A taxonomic key for the genera of Elmidae (Coleoptera, Byrrhoidea) occurring in Goiás State, Brazil, including new records and distributional notes. Despite their great diversity and high abundance in Neotropical aquatic environments, the fauna of Elmidae remains practically unknown in some areas and even entire biomes in this region. In this work we bring, for the first time, faunistic data for the Elmidae of central Brazil. The aim of this work was to inventory the Elmidae fauna in central, southwestern and southeastern Goiás State, Brazil and to produce a taxonomic key, at genus level, for adults from the studied region. The taxonomic key presented herein offers means for the identification of all the 13 genera known to occur in Goiás, 11 of them being new records for the State. Moreover, the number of named species registered for Goiás increased from one to nine.

On the taxonomic status of Nephochaetopteryx calida (Wiedemann) (Diptera, Sarcophagidae)

On the taxonomic status of Nephochaetopteryx calida (Wiedemann) (Diptera, Sarcophagidae). Based on analysis of the holotype of Nephochaetopteryx calida (Wiedemann) it was concluded that this species does not belong to Nephochaetopteryx. The holotype is a female partly damaged and it was not possible to place it in one of Sarcophaginae genera, remaining as Sarcophaga calida Wiedemann, 1830, incertae sedis.

Flowering date of taxonomic families predicts phenological sensitivity to temperature: Implications for forecasting the effects of climate change on unstudied taxa.

PREMISE OF THE STUDY: Numerous long-term studies in seasonal habitats have tracked interannual variation in first flowering date (FFD) in relation to climate, documenting the effect of warming on the FFD of many species. Despite these efforts, long-term phenological observations are still lacking for many species. If we could forecast responses based on taxonomic affinity, however, then we could leverage existing data to predict the climate-related phenological shifts of many taxa not yet studied. METHODS: We examined phenological time series of 1226 species occurrences (1031 unique species in 119 families) across seven sites in North America and England to determine whether family membership (or family mean FFD) predicts the sensitivity of FFD to standardized interannual changes in temperature and precipitation during seasonal periods before flowering and whether families differ significantly in the direction of their phenological shifts. KEY RESULTS: Patterns observed among species within and across sites are mirrored among family means across sites; early-flowering families advance their FFD in response to warming more than late-flowering families. By contrast, we found no consistent relationships among taxa between mean FFD and sensitivity to precipitation as measured here. CONCLUSIONS: Family membership can be used to identify taxa of high and low sensitivity to temperature within the seasonal, temperate zone plant communities analyzed here. The high sensitivity of early-flowering families (and the absence of early-flowering families not sensitive to temperature) may reflect plasticity in flowering time, which may be adaptive in environments where early-season conditions are highly variable among years.