Rising longevity, education, savings, and growth

This paper examines the impact of declines in adult mortality on growth in an overlapping generations model. With public education and imperfect annuity markets, a decline in mortality affects growth through three channels. First, it raises the saving rate and thereby increases the rate of physical capital accumulation. Second, it reduces accidental bequests, lowers investment, and thereby lowers the rate of physical capital accumulation. Third, it may lead the median voter to increase the tax rate for public education initially but lower the tax rate in a later stage. Starting from a high mortality rate as found in many Third World populations, the net effect of a decline in mortality is to raise the growth rate. However, starting from a low mortality rate such as is found in most industrial populations, the net effect of a further decline in mortality is to reduce the growth rate. The findings appear consistent with recent empirical evidence. (C) 2002 Elsevier Science B.V All rights reserved.

Why do US banks borrow from the Fed? A fresh look at the ‘reluctance’ phenomenon

The role of several theoretical factors in determining the demand of US banks for borrowed reserves from the Fed is empirically investigated. The main objective is to isolate the candidate(s) most likely responsible for the recent observed phenomenon of banks reluctance to borrow from the Fed, particularly since the mid-1980s. The results indicate that the declining number of banks due to mergers and consolidations holds much of the weight for explaining the weakened demand for borrowed reserves since the mid-1980s. Consistent evidence is found suggesting that US banks may have been unlawfully exploiting the discount window service for profit-taking purposes. This finding proves credible and suggests the need for further loan scrutiny at the Federal discount window.

Anomalous magnetic susceptibility values and traces of subsurface microbial activity in carbonate banks on San Salvador Island, Bahamas

Pure limestones beneath the paleosols on San Salvador Island, Bahamas, contain strong positive magnetic susceptibility anomalies, although the iron content is generally very low. These magnetic phenomena differ from those associated with disconformities, which are marked by accumulation of paramagnetic airborne dust deposits with relatively high iron content. The strength and characters of the magnetic response in these subsurface zones correspond to the presence of magnetite, particularly small single-domain magnetite crystals of microbial origin. These crystals are not present elsewhere in the intergranular rock pores or microvugs. They are preferentially concentrated in capillary microborings, which developed concurrently with formation of calcite cements that have soil-related C and O isotope compositions. These magnetic zones occur several meters below the overlying soil horizons. Very thin and long linear microborings may be attributable to cyanobacterial microborers. The single-domain magnetites in these micrometer-size tunnels plugged by calcite appear to result from later occupation of these tiny holes by magnetotactic bacteria. Inorganic origin of the magnetite seems unlikely. Numerous traces that suggest subsurface microbial activity provide evidence that may be used to develop possible scenarios for subsequent biological studies of the precise bacteria involved.

How useful is the genuine savings rate as a sustainability indicator for regions within countries? Australia and Queensland compared

This article shows how macroeconomic indicators of sustainable development can be applied to the Queensland economy. While recognising the complex and contentious theoretical and practical issues in deriving the Genuine Savings Rate (GSR) to serve as such an indicator, we use the World Bank's methodology, which includes only mineral depletion, deforestation and carbon dioxide emissions as environmental terms, to estimate GSRs for Queensland for the period 1989 to 1999, and compare these to World Bank estimates of Australia's GSR for the same period. We find that Queensland has a higher rate of natural resource depletion and a lower GSR than the whole of Australia. We also examine how well the World Bank GSR performs as a 'headline' measure of overall sustainability, review criticisms of the GSR, and compare its implicit policy implications with those of net state savings, and of the GSR plus a suite of other indicators.

Bryophyte propagule banks in a feldmark on subantarctic Macquarie Island

Subantarctic Macquarie Island has substantial areas of feldmark on its plateau above 200 m altitude. Samples of the substrate (5.5 cm in depth) from bare areas of feldmark contained viable propagules of bryophyte species found at adjacent and distant sites on the island. In laboratory conditions propagules of 15 bryophyte taxa germinated, allowing interpretation of reasons for bare patches in feldmark: bryophytes were successful at colonizing stable ground but when surface movement was present, burial and/or damage of propagules and young plants prevented colonization. Spherical moss polsters found in cryoturbatic areas in feldmark, however, represent a growth form that can tolerate surface movement. A conceptual model illustrating processes associated with colonization dynamics of bryophytes on feldmark terraces is presented. Ten of the 15 germinated taxa were nonlocal taxa which currently grow in plant communities at lower and hence warmer altitudes on Macquarie Island. The presence of viable propagules of these taxa provide an immediate and constant potential for dramatic vegetation change with climate change.

A note on the modelling the efficiency of top Arab banks

The major aim of this research is benchmarking top Arab banks using Data Envelopment Analysis (DEA) technique and to compare the results with that of published recently in Mostafa (2007a,b) [Mostafa, M. M. (2007a). Modeling the efficiency of top Arab banks: A DEA–neural network approach. Expert Systems with Applications, doi:10.1016/j.eswa.2007.09.001; Mostafa M. M. (2007b), Benchmarking top Arab banks’ efficiency through efficient frontier analysis, Industrial Management & Data Systems, 107(6) 802–823]. Data for 85 Arab banks used to conduct the analysis of relative efficiency. Our findings indicate that (1) the efficiency of Arab banks reported in Mostafa (2007a,b) is incorrect, hence, readers should take extra caution of using such results, (2) the corrected efficiency scores suggest that there is potential for significant improvements in Arab banks. In summary, this study overcomes with some data and methodology issues in measuring efficiency of Arab banks and highlights the importance of encouraging increased efficiency throughout the banking industry in the Arab world using the new results.

The sensitivity of US banks' stock returns to interest and exchange rate changes

Purpose – The purpose of this paper is to investigate the impact of foreign exchange and interest rate changes on US banks’ stock returns. Design/methodology/approach – The approach employs an EGARCH model to account for the ARCH effects in daily returns. Most prior studies have used standard OLS estimation methods with the result that the presence of ARCH effects would have affected estimation efficiency. For comparative purposes, the standard OLS estimation method is also used to measure sensitivity. Findings – The findings are as follows: under the conditional t-distributional assumption, the EGARCH model generated a much better fit to the data although the goodness-of-fit of the model is not entirely satisfactory; the market index return accounts for most of the variation in stock returns at both the individual bank and portfolio levels; and the degree of sensitivity of the stock returns to interest rate and FX rate changes is not very pronounced despite the use of high frequency data. Earlier results had indicated that daily data provided greater evidence of exposure sensitivity. Practical implications – Assuming that banks do not hedge perfectly, these findings have important financial implications as they suggest that the hedging policies of the banks are not reflected in their stock prices. Alternatively, it is possible that different GARCH-type models might be more appropriate when modelling high frequency returns. Originality/value – The paper contributes to existing knowledge in the area by showing that ARCH effects do impact on measures of sensitivity.