The Determinants of Recovery Rates on Defaulted Corporate Securities: Why do Fallen Angels recover more than Original High Yield Issues?

Regression analysis has shown that recovery rates are determined by a variety of conditions at the time of default. These conditions can be broken into five major categories: (1) a security's seniority within the capital structure of the defaulting firm, (2) the type of default event, (3) firm-specific factors, (4) industry-specific factors, and (5) macroeconomic factors. Expectations of these inputs determine the expected recovery rate if default were to occur, thereby determining credit ratings and security prices. Although it is widely understood how recovery rate estimates influence credit rating assignments (the higher the expected recovery rate, the higher the assigned credit rating), no research, to the best of my knowledge, has investigated the reasons why higher rated securities recover more than lower rated securities in the event of default. Specifically, this paper will empirically investigate why securities originally rated investment grade, fallen angels, recover more than securities originally rated high yield in the event of default.

Small-scale randomized controlled trials need more powerful methods of mediational analysis than the Baron-Kenny method

Objective: To devise more-effective physical activity interventions, the mediating mechanisms yielding behavioral change need to be identified. The Baron–Kenny method is most commonly used, but has low statistical power and may not identify mechanisms of behavioral change in small-to-medium size studies. More powerful statistical tests are available.
Study Design and Setting: Inactive adults (N = 52) were randomized to either a print or a print-plus-telephone intervention. Walking and exercise-related social support were assessed at baseline, after the intervention, and 4 weeks later. The Baron–Kenny and three alternative methods of mediational analysis (Freedman–Schatzkin; MacKinnon et al.; bootstrap method) were used to examine the effects of social support on initial behavior change and maintenance. Results: A significant mediational effect of social support on initial behavior change was indicated by the MacKinnon et al., bootstrap, and, marginally, Freedman–Schatzkin methods, but not by the Baron–Kenny method. No significant mediational effect of social support on maintenance of walking was found. Conclusions:  Methodologically rigorous intervention studies to identify mediators of change in physical activity are costly and labor ntensive, and may not be feasible with large samples. The use of statistically powerful tests of mediational effects in small-scale studies can inform the development of more effective interventions.

Decision-making models used by `graduate nurses` managing patients` medications

Background. Nurses in a graduate programme in Australia are those who are in the first year of clinical practice following completion of a 3-year undergraduate nursing degree. When working in an acute care setting, they need to make complex and ever-changing decisions about patients' medications in a clinical environment affected by multifaceted, contextual issues. It is important that comprehensive information about graduate nurses' decision-making processes and the contextual influences affecting these processes are obtained in order to prepare them to meet patients' needs.
Aim. The purpose of this paper is to report a study that sought to answer the following questions: What are the barriers that impede graduate nurses' clinical judgement in their medication management activities? How do contextual issues impact on graduate nurses' medication management activities? The decision-making models considered were: hypothetico-deductive reasoning, pattern recognition and intuition.
Methods. Twelve graduate nurses who were involved in direct patient care in medical and surgical wards of a metropolitan teaching hospital located in Melbourne, Australia participated in the study. Participant observations were conducted with the graduate nurses during a 2-hour period during the times when medications were being administered to patients. Graduate nurses were also interviewed to elicit further information about how they made decisions about patients' medications.
Results. The most common model used was hypothetico-deductive reasoning, followed by pattern recognition and then intuition. The study showed that graduate nurses had a good understanding of how physical assessment affected whether medications should be administered or not. When negotiating treatment options, graduate nurses readily consulted with more experienced nursing colleagues and doctors.
Study limitations. It is possible that graduate nurses demonstrated a raised awareness of managing patients' medications as a consequence of being observed.
Conclusions. The complexity of the clinical practice setting means that graduate nurses need to adapt rapidly to make sound and appropriate decisions about patient care.

Making long-term economic growth more sustainable: evaluating the costs and benefits

Currently, traditional development issues such as economic stagnation, poverty, hunger, and illness as well as newer challenges like environmental degradation and globalisation demand attention. Sustainable development, including its economic, environmental and social elements, is a key goal of decisionmakers. Optimal economic growth has also been a crucial goal of both development theorists and practitioners. This paper examines the conditions under which optimal growth might be sustainable, by assessing the costs and benefits of growth. Key environmental and social aspects are considered. The Ecol-Opt-Growth-1 model analyses economic–ecological interactions, including resource depletion, pollution, irreversibility, other environmental effects, and uncertainty. It addresses some important issues, including savings, investment, technical progress, substitutability of productive factors, intergenerational efficiency, equity, and policies to make economic growth more sustainable—a basic element of the sustainomics framework. The empirical results support growing concerns that costs of growth may outweigh its benefits, resulting in unsustainability. Basically, in a wide range of circumstances, long term economic growth is unsustainable due to increasing environmental damage. Nevertheless, the model has many options that can be explored by policy makers, to make the development path more sustainable, as advocated by sustainomics. One example suggests that government supported abatement programs are needed to move towards sustainable development, since the model runs without abatement were infeasible. The optimal rate of abatement increases over time. Abatement of pollution is necessary to improve ecosystem viability and increase sustainability. Further research is necessary to seek conditions under which alternative economic growth paths are likely to become sustainable.