Economics and Finance

Ranald Michie traces the history of the London Stock Exchange from its beginnings around 1700 to the end of the twentieth century, chronicling the challenges and opportunities it has faced, avoided, or exploited over the years. Throughout, the history seeks to blend an understanding of the London Stock Exchange as an institution with that of the securities market of which it was––and is––such an important component; one cannot be examined satisfactorily without the other. Without a knowledge of both, for example, the causes of the ’Big Bang’ of 1986 would forever remain a mystery. However, the history of the London Stock Exchange is not just worthy of study for what it reveals about the interaction between institution and market. Such was its importance that its rise to world dominance before 1914, its decline thereafter, and its renaissance from the mid‐1980s explain a great deal about Britain's own economic performance and the working of the international economy.

This book, which is part of the distinguished Clarendon Lectures in Economics series, puts forward a unique and authoritative set of detailed proposals for establishing new markets for the management of the biggest economic risks facing governments and society. Robert Shiller argues that we have largely the wrong financial markets, and that establishing new ones may fundamentally alter and diminish international economic fluctuations (and thus enable better risk management) and reduce the inequality of incomes. Shiller argues that although some risks, such as natural disaster or temporary unemployment, are shared by society, most risks are borne by the individual, and standards of living are determined by luck. He investigates whether a new technology of markets could make risk sharing possible and shows how new contracts could be designed to hedge all manner of risks to the individual's living standards. He proposes new international markets for perpetual claims on national incomes, and on components and aggregates of national incomes, concluding that these markets may well dwarf our stock markets in their activity and significance. He also argues for new liquid international markets for residential and commercial property. Establishing such unprecedented new markets presents some important technical problems that Shiller attempts to solve with proposals for implementing futures markets on perpetual claims on incomes, and for the construction of index numbers for cash settlement of risk management contracts. These new markets could fundamentally alter and diminish international economic fluctuations, and reduce the inequality of incomes around the world. Much of the book is technical, and it is intended mostly for economists, contract designers at futures and options exchanges, originators of swaps and other financial deals, and designers of retail products associated with risk management (such as insurance, pension plans, and mortgages). However, the material within the book is mostly arranged so that a non‐technical reader can follow the broad themes, and until Ch. 6, most of the technical material is relegated to appendices.

This book explores the impact of the digital economy on the practice of management accounting. The digital economy is defined as the digital interrelationships and dependencies between emerging communication and information technologies, data transfers along predefined channels and emerging platforms, and related contingencies within and across institutional and organisational entities. The book is divided into three parts. Part 1 discusses accounting and management control systems, and structural changes relating to the advent of digital technologies. Part 2 examines organisationally focused shifts in the face of digitisation trends in the economy. Part 3 looks into the accounting transformations which may be pursued in terms of practice and as concepts.

This book discusses the different financial issues surrounding pension plans. It covers the different types of pension plans, fiduciary responsibilities, investment policy, performance monitoring, risk management, and cost control. The book is divided into five parts. Part I introduces the two main types of pension plans (defined benefit and defined contribution plans), then presents an overview of fiduciary responsibilities and regulatory compliance. Part II focuses on the different aspects of Defined Benefit plans. Part III focuses on Defined Contribution plans and hybrid plans. Part IV discusses the measurement, evaluation, and improvement of investment performance. Part V addresses the management of the decision-making process, asset managers, and costs.

This book addresses the empirical estimation of corporate default risk. The book addresses the measurement of corporate default risk based on the empirical estimation of default intensity processes, and their correlation. The default intensity of a borrower is the mean rate of arrival of default, conditional on the available information. For example, a default intensity of 0.1 means an expected arrival rate of one default per ten years, given all current information. Default intensities change with the arrival of new information about the borrower and its economic environment. The main focus here is on methodologies for estimating default intensities and on some key empirical properties of corporate default risk. The book pays special attention to the correlation of default risk across firms, and unobserved “frailty” factors that increase this correlation.

East Asia's recent economic integration is in many ways similar to that undergone by Western Europe following the Second World War. The book analyses the Asian experience from both Asian and European perspectives. The two regional evolutions share a number features but the political, historical, and economical differences are significant enough to warrant caution in drawing lessons. Even though the quest for exchange rate policy stability has been a longstanding common concern, the European experience — and its monetary union — does not always transfer successfully to Asia. Successes and failures in both regions are highlighted, and suggestions are made for future policy and practice in monetary and financial integration. Particular areas of focus are: Asia's response to the 1997–8 crisis; the euro area's framework for monetary policy implementation, introduced in 1999; initiatives for financial cooperation and macroeconomic surveillance; and the East Asian reliance on markets in a globalized world that makes it difficult for the region to achieve the deep integration seen in Europe. The implications of the recent global financial crisis are also examined although the book has been completed before the public debt crisis hit Europe and forced important policy measures.

This book is the first in a new series produced by the Pension Research Council of the Wharton School of the University of Pennsylvania. It discusses how to improve retirement security given the volatility of the capital market, and introduces new financial instruments aimed at minimising the risks to retirement income. The book is divided into two sections. Part I presents studies on managing pension plan risks. Part II deals with global developments in retirement risk transfer.

This book explores how behaviour affects individual decisions on retirement planning. It seeks to provide plan sponsors, retirement service providers, and policymakers with new insights on designing retirement plans, to encourage more savings and better preparation for retirement. The book is divided into four parts. Part I presents studies on retirement planning decisionmaking. Part II deals with retirement plan design. Part III examines the impact of retirement education. Part IV studies the implications of retirement payouts.

Coping with the ageing of the population without major economic disruption is undoubtedly one of the major challenges facing the global economy and world financial markets both now and for the coming decades. In this context, this book assesses the major economic issues raised by occupational pension funds, as they have arisen in twelve OECD countries — the US, the UK, Germany, Japan, France, Italy, Canada, Australia, Denmark, Sweden, Switzerland, and the Netherlands, as well as in Chile and Singapore. Particular emphasis is placed on the performance of funds in financial markets, the influence on funds of fiscal and regulatory conditions, and the consequences of funds' development for capital markets, corporate finance, and international investment. The relationship with social security, the comparative advantages of defined benefit and defined contribution funds, and the role of funds in developing countries are also examined in detail.

This book focuses on how Europe and the United States are dealing with the demographic, financial, and political pressures on pension security. It seeks to explore the links between two spheres often considered separately in literature: old age security and global finance, and compare continental European traditions with Anglo-American initiatives and institutions. It features nine chapters, dealing with pension reform issues in the United Kingdom, Netherlands, France, Germany, Sweden, and the United States.