Mean motions induced by baroclinic instability in a jet

A study is made of the zonal-mean motions induced by a growing baroclinic wave in several contexts, under the framework of three different analysis schemes: the conventional Eulerian mean (EM), the transformed Eulerian mean (TEM), and the generalized Lagrangian mean (GLM). The effect of meridional shear in the initial jet on these induced mean motions is considered by treating the instability problem in the context of the two-layer model. The conceptual simplicity of the TEM formulation is shown to be useful in diagnosing the dynamics of instability, much as it has been found helpful in many problems of wave, mean-flow interaction. In addition, it is found that the TEM vertical velocity is a very good indicator of the GLM vertical velocity. However, the GLM meridional velocity is always convergent towards the centre of instability activity, and is not at all well represented by the nondivergent TEM meridional velocity. In comparing the results with Uryu's (1979) calculation of the GLM circulation induced by a growing Eady wave, it is found that the inclusion of meridional jet shear in the present work leads to some strikingly different effects in the GLM zonal wind acceleration. In the case of pure baroclinic instability treated by Uryu, the Eulerian and Stokes accelerations nearly cancel each other in the centre of the channel, leaving a weak Lagrangian acceleration opposed to the Eulerian one. In the more general case of mixed baroclinic-barotropic instability, however, the Eulerian and Stokes accelerations can reinforce one another, leading to a very strong Lagrangian zonal wind

Flow-induced morphological instability of a mushy layer

A morphological instability of a mushy layer due to a forced flow in the melt is analysed. The instability is caused by flow induced in the mushy layer by Bernoulli suction at the crests of a sinusoidally perturbed mush–melt interface. The flow in the mushy layer advects heat away from crests which promotes solidification. Two linear stability analyses are presented: the fundamental mechanism for instability is elucidated by considering the case of uniform flow of an inviscid melt; a more complete analysis is then presented for the case of a parallel shear flow of a viscous melt. The novel instability mechanism we analyse here is contrasted with that investigated by Gilpin et al. (1980) and is found to be more potent for the case of newly forming sea ice.

International terrorism, domestic political instability, and the escalation effect

What are the main causes of international terrorism? Despite the meticulous examination of various candidate explanations, existing estimates still diverge in sign, size, and significance. This article puts forward a novel explanation and supporting evidence. We argue that domestic political instability provides the learning environment needed to successfully execute international terror attacks. Using a yearly panel of 123 countries over 1973–2003, we find that the occurrence of civil wars increases fatalities and the number of international terrorist acts by 45%. These results hold for alternative indicators of political instability, estimators, subsamples, subperiods, and accounting for competing explanations.

Political instability and the persistence of religion in Greece: the policy implications of the cultural defence paradigm

This paper examines the implications of ‘cultural defence’ in the nature of democracy and the stability of the political system in Greece. It focuses on the Greek Orthodox Church’s maintenance of power and political relevance by virtue of its strong link to national identity. We argue that the inhibition of secularization in Greece as a result of cultural defence has significant policy implications, especially in times of crises, when the role of nationalism as a cohesive factor against perceived threats is intensified. The paper further explores three policy/politics areas: (1) political orientation; (2) religious pluralism; and (3) education.

Baroclinic instability on hot extrasolar planets

We investigate baroclinic instability in flow conditions relevant to hot extrasolar planets. The instability is important for transporting and mixing heat, as well as for influencing large-scale variability on the planets. Both linear normal mode analysis and non-linear initial value cal- culations are carried out – focusing on the freely-evolving, adiabatic situation. Using a high- resolution general circulation model (GCM) which solves the traditional primitive equations, we show that large-scale jets similar to those observed in current GCM simulations of hot ex- trasolar giant planets are likely to be baroclinically unstable on a timescale of few to few tens of planetary rotations, generating cyclones and anticyclones that drive weather systems. The growth rate and scale of the most unstable mode obtained in the linear analysis are in qual- itative, good agreement with the full non-linear calculations. In general, unstable jets evolve differently depending on their signs (eastward or westward), due to the change in sign of the jet curvature. For jets located at or near the equator, instability is strong at the flanks – but not at the core. Crucially, the instability is either poorly or not at all captured in simulations with low resolution and/or high artificial viscosity. Hence, the instability has not been observed or emphasized in past circulation studies of hot extrasolar planets.

Real-time factor model forecasting and the effects of instability

Factor forecasting models are shown to deliver real-time gains over autoregressive models for US real activity variables during the recent period, but are less successful for nominal variables. The gains are largely due to the Financial Crisis period, and are primarily at the shortest (one quarter ahead) horizon. Excluding the pre-Great Moderation years from the factor forecasting model estimation period (but not from the data used to extract factors) results in a marked fillip in factor model forecast accuracy, but does the same for the AR model forecasts. The relative performance of the factor models compared to the AR models is largely unaffected by whether the exercise is in real time or is pseudo out-of-sample.

Earnings management in firms seeking to be acquired

Empirical evidence regarding accrual-based earnings management around mergers and acquisitions has been setting-specific as far as target firms are concerned. This might be due to the fact that target firms cannot always anticipate an acquisition proposal, and thus lack the motive and the time necessary to manage their earnings in order to facilitate or impede the deal. In this paper, we provide clear evidence of downward earnings management by a sample of target firms that have both time and motive to engage in such actions. These are firms that publicly announce their intention to be acquired. Publicly ‘seeking a buyer’ represents a rather unusual corporate event, and we find that these firms engage in downward earnings management in the years surrounding the ‘announcement year’. To some extent, this result is explained by overrepresentation of low performance and growth among these firms, and it can be interpreted under alternative explanations. Furthermore, we show that such downward earnings management negatively affects the probability for a ‘seeking buyer’ firm to secure an acquisition within a reasonable amount of time, a possible indication of efficient diligence by prospective buyers having a preference for firms ‘seeking buyer’ with no informationally obscure earnings.

Accounting quality, information risk and implied volatility around earnings announcements

We examine the impact of accounting quality, used as a proxy for information risk, on the behavior of equity implied volatility around quarterly earnings announcements. Using US data during 1996–2010, we observe that lower (higher) accounting quality significantly relates to higher (lower) levels of implied volatility (IV) around announcements. Worse accounting quality is further associated with a significant increase in IV before announcements, and is found to relate to a larger resolution in IV after the announcement has taken place. We interpret our findings as indicative of information risk having a significant impact on implied volatility behavior around earnings announcements.

Accrual-based and real earnings management before and after IFRS adoption: the case of Greece

Purpose – The purpose of this study is to examine the use of accrual-based vs real earnings management (EM) by Greek firms, before and after the mandatory adoption of International Financial Reporting Standards (IFRS). The research is motivated by the fact that past studies have indicated the existence of significant levels of EM for Greece in particular before IFRS. Design/methodology/approach – Accrual-based earnings management (AEM) is examined by assessing performance-adjusted discretionary accruals, while real earnings management (REM) is defined in terms of abnormal levels of production costs, discretionary expenses, and cash flows from operations, for a three-year period before and after the adoption of IFRS in 2005. Findings – The authors find evidence on a statistically significant shift from AEM to REM after the adoption of IFRS, indicating the replacement of one form of EM with the other. Research limitations/implications – The validity of the results depends on the ability of the empirical models used to efficiently capture the existence of AEM and REM. Practical implications – IFRS adoption aims to improve accounting quality, especially in countries with high need for such an improvement; however, the tendency to substitute one form of EM with another highlights unintended consequences of IFRS adoption, which do not improve the informational content of financial statements if EM continues under different forms. Originality/value – Under the expectation that IFRS adoption should lead to improvements in accounting quality, this study examines whether IFRS actually led to a reduction of EM practices for a country with exceptionally high levels of EM before IFRS, by accounting for all possible forms of EM.

The effect of financial leverage on real and accrual-based earnings management

Past research has documented a substitution effect between real earnings management (RM) and accrual-based earnings management (AM), depending on relative costs. This study contributes to this research by examining whether levels of (and changes in) financial leverage have an impact on this empirically documented trade-off. We hypothesise that in the presence of high leverage, firms that engage in earnings manipulation tactics will exhibit a preference for RM due to a lower possibility—and subsequent costs—of getting caught. We show that leverage levels and increases positively and significantly affect upward RM, with no significant effect on income-increasing AM, while our findings point towards a complementarity effect between unexpected levels of RM and AM for firms with very high leverage levels and changes. This is interpreted as an indication that high leverage could attract heavy outsider scrutiny, making it necessary for firms to use both forms of earnings management in order to achieve earnings targets. Furthermore, we document that equity investors exhibit a significantly stronger penalising reaction to AM vs. RM, indicating that leverage-induced RM is not as easily detectable by market participants as debt-induced AM, despite the fact that the former could imply deviation from optimal business practices.

High-frequency extensions of magnetorotational instability in astrophysical plasmas

High-frequency extensions of magnetorotational instability driven by the Velikhov effect beyond the standard magnetohydrodynamic (MHD) regime are studied. The existence of the well-known Hall regime and a new electron inertia regime is demonstrated. The electron inertia regime is realized for a lesser plasma magnetization of rotating plasma than that in the Hall regime. It includes the subregime of nonmagnetized electrons. It is shown that, in contrast to the standard MHD regime and the Hall regime, magnetorotational instability in this subregime can be driven only at positive values of dln Omega/dlnr, where Omega is the plasma rotation frequency and r is the radial coordinate. The permittivity of rotating plasma beyond the standard MHD regime, including both the Hall regime and the electron inertia regime, is calculated.