A functional coefficient model view of the Feldstein–Horioka puzzle

What does the saving–investment (SI) relation really measure and how should the SI relation be measured? These are two of the most discussed issues triggered by the so-called Feldstein–Horioka puzzle. Based on panel data we introduce a new variant of functional coefficient models that allows to separate long and short to medium run parameter dependence. The new modeling framework is applied to uncover the determinants of the SI relation. Macroeconomic state variables such as openness, the age dependency ratio, government current and consumption expenditures are found to affect the SI relation significantly in the long run.

Asymmetric space market adjustment in the London office market

Models of the City of London office market are extended by considering a longer time series of data, covering two cycles, and by explicit modeling of asymmetric rental response to supply and demand model. A long run structural model linking demand for office space, real rental levels and office-based employment is estimated and then rental adjustment processes are modeled using an error correction model framework. Adjustment processes are seen to be asymmetric, dependent both on the direction of the supply and demand shock and on the state of the rental market at the time of the shock. A complete system of equations is estimated: unit shocks produce oscillations but there is a return to a steady equilibrium state in the long run.

Statistical monitoring of student performance: an early warning system

Weekly monitoring of profiles of student performances on formative and summative coursework throughout the year can be used to quickly identify those who need additional help, possibly due to acute and sudden-onset problems. Such an early-warning system can help retention, but also assist students in overcoming problems early on, thus helping them fulfil their potential in the long run. We have developed a simple approach for the automatic monitoring of student mark profiles for individual modules, which we intend to trial in the near future. Its ease of implementation means that it can be used for very large cohorts with little additional effort when marks are already collected and recorded on a spreadsheet.

The information content of REIT credit rating actions and transparency

We examine the short-run and long-run price reaction of equity REIT shares following credit rating actions, testing the transparency of the REIT structure. Generally, the economic effect on the stock price is subdued for both upgrades and downgrades compared to prior literature examining the broader U.S. equity market. An examination of trading volume revealed a significant increase in trading in reaction to downgrade credit rating changes, with a more subdued response to upgrades. The findings support the notion that REITs are more publicly forthcoming about the expectation of positive news in comparison to negative news.

The distribution of London residential property prices and the role of spatial lock-in

Much of mainstream economic analysis assumes that markets adjust smoothly, through prices, to changes in economic conditions. However, this is not necessarily the case for local housing markets, whose spatial structures may exhibit persistence, so that conditions may not be those most suited to the requirements of modern-day living. Persistence can arise from the existence of transaction costs. The paper tests the proposition that housing markets in Inner London exhibit a degree of path dependence, through the construction of a three-equation model, and examines the impact of variables constructed for the 19th and early 20th centuries on modern house prices. These include 19th-century social structures, slum clearance programmes and the 1908 underground network. Each is found to be significant. The tests require the construction of novel historical datasets, which are also described in the paper.

International office investment in global cities: the production of financial space and systemic risk

The paper explores the relationships between UK commercial real estate and regional economic development as a foundation for the analysis of the role of real estate investment in local economic development. Linkages between economic growth, development, real estate performance and investment allocations are documented. Long-run regional property performance is not the product of long-run economic growth, and weakly related to indicators of long-run supply and demand. Changes in regional portfolio weights seem driven by neither market performance nor underlying fundamentals. In the short run, regional investment shifts show no clear leads or lags with market performance.

Globalization and the evolution of international retailing: a comment on Alexander’s ‘British Overseas Retailing, 1900-1960'

Nicholas Alexander's (2011. British overseas retailing, 1900–60: International firm characteristics, market selections and entry modes. Business History, 53, 530–556) survey of British overseas retailers from 1900 to 1960 provides pathbreaking new evidence of international retailing activity during the first globalisation boom. The article surveys this and other recent evidence, and confirms that international retailing was far more significant up to 1929 than previously thought. This activity was overwhelmingly undertaken by non-retailers, however, and hence by multinationals whose advantages in retailing were fundamentally unsustainable over the long run. Even the department store format, the principal retail innovation of the period, was not internationalised primarily by multinationals. Rather it was diffused via indigenous entrepreneurs, driven by a rapidly growing global demand for western style fashion and dress.

Price discovery of credit spreads in tranquil and crisis periods

In this paper we investigate the price discovery process in single-name credit spreads obtained from bond, credit default swap (CDS), equity and equity option prices. We analyse short term price discovery by modelling daily changes in credit spreads in the four markets with a vector autoregressive model (VAR). We also look at price discovery in the long run with a vector error correction model (VECM). We find that in the short term the option market clearly leads the other markets in the sub-prime crisis (2007-2009). During the less severe sovereign debt crisis (2009-2012) and the pre-crisis period, options are still important but CDSs become more prominent. In the long run, deviations from the equilibrium relationship with the option market still lead to adjustments in the credit spreads observed or implied from other markets. However, options no longer dominate price discovery in any of the periods considered. Our findings have implications for traders, credit risk managers and financial regulators.

Are professional macroeconomic forecasters able to do better than forecasting trends?

This paper investigates whether survey forecasters are able to make more accurate forecasts than simply supposing that the future values of the variable will move monotonically to the long-run expectation. We consider the forecasts individually, and the consensus forecasts. Consensus survey forecasts are able to do so to varying degrees depending on the variable, but this ability is largely limited to forecasts of the current quarter.

Pension scheme redesign and wealth redistribution between the members and sponsor: the USS rule change in October 2011

The redesign of defined benefit pension schemes usually results in a substantial redistribution of wealth between age cohorts of members, pensioners, and the sponsor. This is the first study to quantify the redistributive effects of a rule change by a real world scheme (the Universities Superannuation Scheme, USS) where the sponsor underwrites the pension promise. In October 2011 USS closed its final salary scheme to new members, opened a career average revalued earnings (CARE) section, and moved to ‘cap and share’ contribution rates. We find that the pre-October 2011 scheme was not viable in the long run, while the post-October 2011 scheme is probably viable in the long run, but faces medium term problems. In October 2011 future members of USS lost 65% of their pension wealth (or roughly £100,000 per head), equivalent to a reduction of roughly 11% in their total compensation, while those aged over 57 years lost almost nothing. The riskiness of the pension wealth of future members increased by a third, while the riskiness of the present value of the sponsor’s future contributions reduced by 10%. Finally, the sponsor’s wealth increased by about £32.5 billion, equivalent to a reduction of 26% in their pension costs.

A Longitudinal Three-Center Study of Dental Arch Relationship in Patients With Bilateral Cleft Lip and Palate

Objective: To compare and evaluate longitudinally the dental arch relationships from 4.5 to 13.5 years of age with the Bauru-BCLP Yardstick in a large sample of patients with bilateral cleft lip and palate (BCLP). Design: Retrospective longitudinal intercenter outcome study. Patients: Dental casts of 204 consecutive patients with complete BCLP were evaluated at 6, 9, and 12 years of age. All models were identified only by random identification numbers. Setting: Three cleft palate centers with different treatment protocols. Main Outcome Measures: Dental arch relationships were categorized with the Bauru-BCLP yardstick. Increments for each interval (from 6 to 9 years, 6 to 12 years, and 9 to 12 years) were analyzed by logistic and linear regression models. Results: There were no significant differences in outcome measures between the centers at age 12 or at age 9. At age 6, center B showed significantly better results (p = .027), but this difference diminished as the yardstick score for this group increased over time (linear regression analysis), the difference with the reference category (center C, boys) for the intervals 6 to 12 and 9 to 12 years being 10.4% (p = .041) and 12.9% (p = .009), respectively. Conclusions: Despite different treatment protocols, dental arch relationships in the three centers were comparable in final scores at age 9 and 12 years. Delaying hard palate closure and employing infant orthopedics did not appear to be advantageous in the long run. Premaxillary osteotomy employed in center B appeared to be associated with less favorable development of the dental arch relationship between 9 and 12 years.

Comparing methods for sampling large- and medium-sized mammals: camera traps and track plots

Activities involving fauna monitoring are usually limited by the lack of resources; therefore, the choice of a proper and efficient methodology is fundamental to maximize the cost-benefit ratio. Both direct and indirect methods can be used to survey mammals, but the latter are preferred due to the difficulty to come in sight of and/or to capture the individuals, besides being cheaper. We compared the performance of two methods to survey medium and large-sized mammal: track plot recording and camera trapping, and their costs were assessed. At Jatai Ecological Station (S21 degrees 31`15 ``- W47 degrees 34`42 ``-Brazil) we installed ten camera traps along a dirt road directly in front of ten track plots, and monitored them for 10 days. We cleaned the plots, adjusted the cameras, and noted down the recorded species daily. Records taken by both methods showed they sample the local richness in different ways (Wilcoxon, T=231; p;;0.01). The track plot method performed better on registering individuals whereas camera trapping provided records which permitted more accurate species identification. The type of infra-red sensor camera used showed a strong bias towards individual body mass (R(2)=0.70; p=0.017), and the variable expenses of this method in a 10-day survey were estimated about 2.04 times higher compared to track plot method; however, in a long run camera trapping becomes cheaper than track plot recording. Concluding, track plot recording is good enough for quick surveys under a limited budget, and camera trapping is best for precise species identification and the investigation of species details, performing better for large animals. When used together, these methods can be complementary.

The impact of foreign direct investment and openness on Vietnamese economy

This thesis examines the impact of foreign direct investment (FDI) on Vietnamese economy based on Partial Adjustment Model and time series data from 1976 to 2004. FDI is shown to have not only short run but also long run effect on gross domestic product (GDP) of Vietnam. However, elasticity of GDP with respect to FDI is small and it will take many years to fully manifest itself. The impact of trade openness on GDP has also been examined and it is shown to be stronger than that of FDI. The paper offers a number of explanations and discusses briefly suggestions in order to increase the contribution of FDI to Vietnam’s economic development.

How to avoid Copenhagen : An experimental economic approach to climate negotiations

This study got its origin in the failed climate negotiations in the Copenhagen 2009 summit. By conducting a public good game, with participants from China and Sweden, my study indicates that previous studies on public good games can predict the outcome of the game to a quit large extent even though most of my statistical tests came out statistically insignificant. My study also indicates that by framing the game as climate negotiations there were no statistical significant difference on the level of contributions in comparison to the unframed versions of the game. The awareness of the issues with emissions, global warming and other environmental problems are pretty high but even so when push comes to shove gains in the short run are prioritized to gains in the long run. There are however hypothetical willingness to come to term with the environmental issues. The results of the study indicate that the outcome of the Copenhagen summit can be avoidable but would need additional experiments made on cultural differences and behavior.

Understanding Foreign Masters : the examples of Rabindranath Tagore and Fyodor Dostoyevskiy

The Indian author Rabindranath Tagore was received like royalty during his visits to the West after winning the Nobel Prize in 1913. Dreams of foreign cultures offered a retreat from a complicated age. In a time when the West appeared to be living under threat of disintegration and when industrialism seemed like a cul-de-sac, he appeared to offer the promise of a return to a lost paradise, a spiritual abode that is superior to the restless Western culture. However, Tagore’s popularity faded rapidly, most notably in England, the main target of his criticism. Soon after Tagore had won the Nobel Prize, the English became indignant at Tagore’s anti-colonial attitude.Tagore visited Sweden in 1921 and 1926 and was given a warm reception. His visits to Sweden can be seen as an episode in a longer chain of events. It brought to life old conceptions of India as the abode of spirituality on earth. Nevertheless, interest in him was a relatively short-lived phenomenon in Sweden. Only a few of his admirers in Sweden appreciated the complexity of Tagore’s achievements. His “anathema of mammonism”, as a Swedish newspaper called it, was not properly received. After a steady stream of translations his popularity flagged towards the end of the 1920s and then almost disappeared entirely. Tagores visits in Sweden gave an indication that India was on the way to liberate itself from its colonial legacy, which consequently contributed to the waning of his popularity in the West. In the long run, his criticism of the drawbacks in the western world became too obvious to maintain permanent interest. The Russian author Fyodor Dostoyevskiy’s Crime and Punishment (1866) has enticed numerous interpretations such as the purely biographical approach. In the nervous main character of the novel, the young student Raskolnikov, one easily recognizes Dostoyevskiy himself. The novel can also be seen as a masterpiece of realistic fiction. It gives a broad picture of Saint Petersburg, a metropolis in decay. Crime and Punishment can also be seen as one of the first examples of a modern psychological novel, since it is focused on the inner drama of its main character, the young student Raskolnikov. His actions seem to be governed by mere coincidences, dreams and the spur of the moment. it seems fruitful to study the novel from a psychoanalytical approach. In his book Raskolnikov: the way of the divided towards unity in Crime and Punishment (1982), a Swedish scholar, Owe Wikström, has followed this line of interpretation all the way to Freud’s disciple C G Jung. In addition to this, the novel functions as an exciting crime story. To a large extent it is Viktor Sjklovskij and other Russian formalists from the 1920s and onwards who have taught the western audience to understand the specific nature of the crime story. The novel could be seen as a story about religious conversion. Like Lasarus in the Bible (whose story attracts a lot of attention in the novel) Raskolnikov is awakened from the dead, and together with Sonja he starts a completely new life. The theme of conversion has a special meaning for Dostoyevskiy. For him the conversion meant an acknowledgement of the specific nature of Russia itself. Crime and punishment mirrors the conflict between traditional Russian values and western influences that has been obvious in Russia throughout the history of the country. The novel reflects a dialogue that still continues in Russian society. The Russian literary historian Mikhail Bakhtin, who is probably the most famous interpreter of the works of Dostoyevskiy, has become famous precisely by emphasizing the importance of dialogues in novels like Crime and Punishment. According to Bakhtin, this novel is characterized by its multitude of voices. Various ideas are confronted with each other, and each one of them is personified by one of the characters in the novel. The author has resigned from his position as the superior monitor of the text, and he leaves it to the reader to decide what interpretation is the correct one..The aim of the present study is thus to analyze the complex reactions in the west to Tagore’s visits in Sweden and to Fyodor Dostoyevskiys novel Crime and Punishment.. This leads to more general conclusions on communication between cultures.