Financial Economics : oso

Systemic Risk

Prasanna Gai — 2013-05-23

Author:: Prasanna Gai
ISBN:: 9780199544493
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199544493.001.0001
Published in print:: 2013
Published Online:: 2013-05-23

This book opens new ground in the study of financial crises. It treats the financial system as a complex adaptive system and shows how lessons from network disciplines—such as ecology, epidemiology, and statistical mechanics—shed light on our understanding of financial stability. Using tools from network theory and economics, it suggests that financial systems are robust-yet-fragile, with knife-edge properties that are greatly exacerbated by the hoarding of funds and the fire sale of assets by banks. The book studies the damaging network consequences of the failure of large interconnected institutions, explains how key funding markets can seize up across the entire financial system, and shows how the pursuit of secured finance by banks in the wake of the global financial crisis can generate systemic risks. The insights are then used to model banking systems calibrated to data to illustrate how financial sector regulators are beginning to quantify financial system stress.

Portfolio Theory and Management

H. Kent Baker and Greg Filbeck — 2013-05-23

Author:: H. KentBakerProfessor of Finance, American UniversityGregFilbeckSamuel P. Black III Professor of Insurance and Risk Management, Pennsylvania State University
ISBN:: 9780199829699
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199829699.001.0001
Published in print:: 2013
Published Online:: 2013-05-23

The world of portfolio management has expanded greatly over the past three decades, and along with it, so have the theoretical tools necessary to appropriately service the needs of both private wealth and institutional clients. While the foundations of modern finance emerged during the 1950s and asset pricing models were developed in a portfolio context in the 1960s, portfolio management has now expanded into more complex models. Further, the traditional assumption of rational investor behavior with decisions made on the basis of statistical distributions has expanded to consider behavioral attributes of clients as well as goals-based strategies. Performance assessment has taken on greater importance since the 1990s. Portfolio management today emerges as a dynamic process that continues to evolve at a rapid pace. This 30-chapter book takes readers through the foundations of portfolio management with the contributions of financial pioneers up to the latest trends. Portfolio Theory and Management provides a comprehensive discussion of portfolio theory, empirical work, and practice. It not only attempts to blend the conceptual world of scholars with the pragmatic view of practitioners, but it also synthesizes important and relevant research studies in a succinct and clear manner including recent developments. Chapters are grouped into seven broad categories of interest: (1) portfolio theory and asset pricing, (2) the investment policy statement and fiduciary duties, (3) asset allocation and portfolio construction, (4) risk management, (5) portfolio execution, monitoring, and rebalancing, (6) evaluating and reporting portfolio performance, and (7) special topics.

International Finance

H. Kent Baker and Leigh A. Riddick — 2013-05-23

Author:: H. KentBakerAmerican UniversityLeigh A.RiddickAmerican University
ISBN:: 9780199754656
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics, International
DOI:: 10.1093/acprof:oso/9780199754656.001.0001
Published in print:: 2012
Published Online:: 2013-05-23

This book reflects the new diversity of interest in international finance that summarizes and synthesizes developments in the many and varied areas that are now viewed as having international content. The book attempts to differentiate between what is known, what is believed, and what is still being debated about international finance. The book consists of five major topics: (1) exchange rates and risk management, (2) international financial markets and institutions, (3) international investing, (4) international financial management, and (5) special topics. The chapters cover market integration, financial crises, and the links between financial markets and development in some detail as they relate to these areas.

Hedge Fund Structure, Regulation, and Performance around the World

Douglas Cumming, Na Dai, and Sofia A. Johan — 2013-05-23

Author:: Douglas Cumming, Na Dai, Sofia A. Johan
ISBN:: 9780199862566
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199862566.001.0001
Published in print:: 2013
Published Online:: 2013-05-23

A recurrent concern shared by market participants and regulators around the world is that the increasing size of the hedge fund industry coupled with potential agency problems, activist investment practices and herding behavior may exacerbate financial instability. Having said that, although it is frequently suggested that hedge funds are unregulated, hedge funds are in fact regulated at least to some degree in every country around the world. It is therefore worthwhile to consider such differences in legal and institutional settings across countries as they directly affect the structure, governance and performance of hedge funds. In this book, we consider international data including data from the US, Asia and Europe, to gain a significant amount of insight into how hedge funds operate on a global basis. While hedge funds are hardly regulated in the US, other jurisdictions implement different and sometimes more onerous sets of regulatory requirements. As explained in the book, international differences in hedge fund regulation include, but are not limited to, minimum capitalization requirements, restrictions on the location of key service providers and different permissible distribution channels via private placements, banks, other regulated or non-regulated financial intermediaries, wrappers, investment managers and fund distribution companies. Essentially, hedge fund regulatory structures differ across jurisdictions, so maybe we should not tar and feather all hedge funds with the same brush.

Governance of International Banking

Dirk Schoenmaker — 2013-05-23

Author:: Dirk Schoenmaker
ISBN:: 9780199971596
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199971596.001.0001
Published in print:: 2013
Published Online:: 2013-05-23

In the aftermath of the financial crisis, the business model of international banks is under pressure. Regulators across the world are retrenching to national lines by applying restrictions on cross-border banking. Applying game theory, this book develops a model of the financial trilemma to understand the coordination failure among regulators. Regulators fail to provide the public good of financial stability. The model also provides solutions to overcome this coordination failure. The book provides a framework for the effective governance of global banks. The goal is to offer a long-term perspective on international banking for regulators and academics.

The Unloved Dollar Standard

Ronald I. McKinnon — 2013-01-24

Author:: Ronald I. McKinnon
ISBN:: 9780199937004
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199937004.001.0001
Published in print:: 2012
Published Online:: 2013-01-24

An accident of history, the international dollar standard has greatly facilitated multilateral trade and exchange since 1945. But beginning in 1971, erratic U.S. monetary and exchange rate policies have upset the world’s macro economy so as to make foreigners unhappy. Paradoxically, the asymmetrical nature of the dollar standard also makes Americans unhappy because they cannot control their own exchange rate. Although nobody loves the dollar standard, it is a remarkably robust institution that is too valuable to lose and too difficult to replace. Today, rehabilitating the dollar standard requires that American monetary and financial policies be “internationalized”: the Federal Reserve should aim for greater exchange rate stability by adjusting interest rates to prevent runs for or against the dollar, while the U.S. Treasury aims fiscal policy to balance exports and imports. [21]China, now the world’s largest exporter and creditor country, has a critical role to play in sustaining the dollar standard. Because the renminbi is not much accepted internationally, China’s foreign trade is mainly invoiced in dollars, and interbank payments are cleared in dollars. So helping to stabilize the world dollar standard is in China’s, as well as America’s (and the world’s), own best interests. But how the now dominant “G-2” rationalize their mutual saving imbalances and debtor-creditor relationship, with China holding trillions of dollars of official exchange reserves, is the key question for sustainability.

Innovation and Growth

Martin Andersson, Börje Johansson, Charlie Karlsson, and Hans Lööf — 2013-01-24

Author:: MartinAnderssonProfessor of Innovation Studies, CIRCLE, Lund University and Associate Professor of Industrial Economics, School of Management, Blekinge Institute of TechnologyBörjeJohanssonProfessor of Economics at Jönköping International Business School (JIBS) and the Royal Institute of Technology, Stockholm. Director of CESIS (Centre of Excellence for Science and Innovation Studies)CharlieKarlssonProfessor of the Economics of Technological Change, Jönköping International Business School, Jököping University, and Professor of Industrial Economics, Blekinge Institute of Technology, Karlskrona, Sweden and President of the European Regional Science Association (ERSA).HansLööfProfessor of Economics, Royal Institute of Technology, Department of Industrial Economics and Management, Stockholm, Sweden
ISBN:: 9780199646685
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199646685.001.0001
Published in print:: 2012
Published Online:: 2013-01-24

This volume provides an understanding of firms' R&D and innovation strategies and their economy-wide consequences. It is based on the premise that differences in firm-level returns, as well as economy-wide outcomes, may be linked to the heterogeneous ways in which firms organize and undertake R&D and innovation activities. It emphasizes innovation strategies of innovating firms, and reflects that innovation efforts do not represent a uniform type of expenditure. Organized into three parts the volume moves from the micro to the macro-level. This structure highlights the notion that R&D and innovation and growth are two interdependent perspectives. The first of these is micro-oriented and focuses on innovation processes of firms, where R&D activities and other innovation efforts give rise to consequences such as a strengthening of resource bases, growth of sales and employment, patents, new products, increasing productivity and profits, and improved chances of survival. The second perspective comprises economy-wide effects in the form of overall technological change, growth in total factor productivity, and structural change processes, where certain sectors may benefit from new inputs from other sectors while others experience declining markets and reduced output.

The Global Financial Crisis and Asia

Masahiro Kawai, Mario B. Lamberte, and Yung Chul Park — 2013-01-24

Author:: MasahiroKawaiDean and Chief Executive Officer, Asian Development Bank Institute (ADBI)Mario B.LamberteDirector of Research, Asian Development Bank Institute (ADBI)Yung ChulParkDistinguished Professor, Division of International Studies, Korea University
ISBN:: 9780199660957
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics, South and East Asia
DOI:: 10.1093/acprof:oso/9780199660957.001.0001
Published in print:: 2012
Published Online:: 2013-01-24

This book aims to analyse the impact of the global financial crisis of 2007–09 on Asian economies, to assess the policy responses to the crisis in terms of their effectiveness and sustainability, and to draw lessons about how best to avoid and/or mitigate future crises and to identify structural policy recommendations that can help guide Asian policymakers to expand the growth potential of domestic and regional demand in future, and thereby create a basis for sustainable and inclusive growth. The book is organized into four parts. Part 1 discusses the motivation of the book, provides an overview of the major issues, and presents some policy recommendations. Part 2 includes two chapters that review the crisis in the US and its transmission to Europe. Part 3 focuses on the impacts of the global financial crisis on Asian economies, policy responses and growth strategies. And finally, Part 4 deals with lessons of the crisis for emerging markets. The main inference of the book is that Asian economies have recovered strongly from the global financial crisis, reflecting their aggressive moves to ease monetary and fiscal policy as well as the underlying fundamental strength of their economies. However, Asia as a whole needs to transform itself into a large consumer market while maintaining its competitiveness, by rebalancing sources of growth away from excessive dependence on extra-regional to domestic and regional demand. This growth rebalancing effort requires closer policy coordination in Asia in order to pursue structural adjustment, integration of regional markets, and socially inclusive and environmentally sustainable growth.

The Economics and Management of World Fisheries

Trond Bjørndal and Gordon Munro — 2013-01-24

Author:: Trond Bjørndal, Gordon Munro
ISBN:: 9780199576753
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Development, Growth, and Environmental, Financial Economics
DOI:: 10.1093/acprof:oso/9780199576753.001.0001
Published in print:: 2012
Published Online:: 2013-01-24

Over the past several decades there has been increasing interest in, and concern about, the economics of the world's capture fishery resources. Massive amounts of resource rent are being lost because of inadequate management and major rebuilding of fishery resources is called for. This book draws together the latest economic theory of the management of these resources, at both the national and the international levels, and highlights areas where further research is urgently required. The emphasis is on world capture fisheries, rather than fisheries of specific regions, and examples are drawn upon from both developed and developing countries. It combines economic theory and empirical testing with an examination and analysis of resource policy options, with particular emphasis on fisheries management polices at the international level, where some of the most difficult resource management problems are found. The authors maintain that capture fishery resources are properly viewed as a part of society's portfolio of natural capital assets. Consequently, a central theme of the book is that managing such resources should be viewed as asset management through time

Why Some Firms Thrive While Others Fail

Thomas H. Stanton — 2012-09-20

Author:: Thomas H. Stanton
ISBN:: 9780199915996
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199915996.001.0001
Published in print:: 2012
Published Online:: 2012-09-20

Why did some firms weather the financial crisis and others not? This book builds on interviews and access to internal documents from over a dozen major financial companies, investigates their workings, reveals what went wrong, and discovers a remedy. A critical difference between successful and unsuccessful firms is a culture that encourages respectful challenge, what the book calls “constructive dialogue.” At successful firms top management engaged in constructive dialogue with the board, a strong management team, and the chief risk officer, among others, in making a decision; firms that failed often featured overbearing (or distracted) CEOs or unit heads, supine boards, incapable management, ineffective risk officers, and poor communications both across silos and up the hierarchy. They often lacked ability to manage the firm as an integrated organization. Companies need good management, and not only good risk management, to stay out of trouble. Successful companies operated with strong information systems and a culture of good communications that brought issues promptly to top management so the company could adjust its operations accordingly. Regulators should use constructive dialogue as a test of good management and require evidence that major business decisions result from a robust process rather than merely the will of powerful CEOs or heads of revenue-producing units. Companies should use their regulator as a potential source of useful feedback. The book concludes by looking at major firms in other industries and finds that its conclusions apply to these companies too.

Brain Drain and Brain Gain

Tito Boeri, Herbert Brücker, Frédéric Docquier, and Hillel Rapoport — 2012-09-20

Author:: TitoBoeriProfessor of Economics, Università Bocconi and Scientific Director of Fondazione Rodolfo Debenedetti, ItalyHerbertBrückerProfessor of Economics, University of Bamberg, Germany and Head of Department, International Comparisons and European Integration, Institute for Employment Research (IAB)FrédéricDocquierProfessor of Economics, Université Catholique de Louvain, Belgium and Research Associate at the National Fund for Economic ResearchHillelRapoportAssociate Professor, Bar-Ilan University, Israel
ISBN:: 9780199654826
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Development, Growth, and Environmental, Financial Economics
DOI:: 10.1093/acprof:oso/9780199654826.001.0001
Published in print:: 2012
Published Online:: 2012-09-20

This volume reviews the most recent research on brain drain and brain gain, producing new original results by the means of data sources specifically assembled for this study, and addressing several key policy issues. Part I focuses on brain gain, that is, it takes the standpoint of the recipient country. The first section provides an overview of skill‐selective immigration policies in the main destination countries and of the major shifts in these policies which have been recently observed. It also documents the strong economic gains from immigration of highly skilled migrants. But what drives the decisions of highly skilled migrants as to where to locate? The econometric analyses performed by the authors indicate that it is mainly the labour market that is key to attracting talent, wage premia on education in particular. R&D spending also induces greater inflows of highly skilled migrants, while generous welfare benefits and strict employment protection end up attracting more unskilled workers. Part II is devoted to the consequences of brain drain, taking the point of view of the sending country. This second section provides for the first time a measure of the net global impact of the brain drain on sending countries. The results indicate that most developing countries experience a net gain from skilled emigration. Adverse overall impacts are found to be limited only to a subset of countries exhibiting very high skilled emigration rates. A number of policy recommendations are also offered to increase the benefits of brain drain.

Banking Strategy, Credit Appraisal, and Lending Decisions

Hrishikes Bhattacharya — 2012-09-20

Author:: Hrishikes Bhattacharya
ISBN:: 9780198074106
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780198074106.001.0001
Published in print:: 2011
Published Online:: 2012-09-20

Banks and financial institutions are faced with two apparently conflicting phenomena — interest rate deregulation on the one hand and capital adequacy requirements and prudential norms on the other. In such a situation, these institutions need to work out a strategic framework which must evolve around the profit objective so as to build up quality loan-assets portfolios and to ensure adequate capital growth. This book provides a comprehensive analysis of lending strategies, credit appraisal, risk analysis, and lending decisions within the overall objectives of a lending organization. This revised edition takes into account recent global developments in the banking sector as well as changes in the notion of banking. It includes three new chapters in which the author discusses topical issues such as the impact of capital regulation on the risk attitude and profitability of banks, strategies to protect banks from a liquidity crisis, and the need of a portfolio approach in developing models for credit exposure and loan management within a risk–return framework.

Taxation and the Financial Crisis

Julian S. Alworth and Giampaolo Arachi — 2012-05-24

Author:: Julian S.AlworthSenior Partner, European Investment Consulting and research associate, Econpubblica, Università Bocconi, MilanGiampaoloArachiProfessor of Public Finance, University of Salento and research associate, Econpubblica, Università Bocconi, Milan
ISBN:: 9780199698165
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199698165.001.0001
Published in print:: 2012
Published Online:: 2012-05-24

The financial crisis has opened up a global debate on the taxation of the financial sector. A number of international policy initiatives, most notably by the G20, have called for major changes in the tax treatment of financial institutions and transactions as well as individuals working in the financial sector. This book examines how tax policies contributed to the financial crisis and whether taxation can play a role in the reform efforts under way to establish a sounder and safer financial system. The book looks at the pros and cons of various tax initiatives, including limiting the tax advantages to debt financing, special taxes on the financial sector and financial transactions taxes.

Sovereign Wealth Funds

Christopher Balding — 2012-05-24

Author:: Christopher Balding
ISBN:: 9780199842902
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199842902.001.0001
Published in print:: 2012
Published Online:: 2012-05-24

Sovereign wealth funds are a dynamic and sizeable force in international finance. There is surprisingly little information about their history, economics, investments, and politics. This book seeks to provide a better understanding of sovereign wealth funds beginning with their history and their evolution from small stabilization funds into major institutional investors. Then the book turns to the economics and finance of sovereign wealth funds seeking to understand the unique challenges facing states that establish sovereign wealth funds and how well they accomplish their task of stabilizing small oil dependent states and managing surplus capital reserves. Despite the focus on the potential for sovereign wealth funds to leverage their financial capital into foreign policy influence, the political ramifications of concentrated public wealth is demonstrated through distorted local economies and stunted domestic politics. Using a variety of case studies from major and unique sovereign wealth fund states coupled with an analysis of their historical, economic, and financial framework, this books lays out a framework of the challenges facing sovereign wealth funds and their founding states.

Reckoning with Markets

James Halteman and Edd S. Noell — 2012-05-24

Author:: James Halteman, Edd S. Noell
ISBN:: 9780199763702
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199763702.001.0001
Published in print:: 2012
Published Online:: 2012-05-24

This book follows the flow of economic thinking from ancient times by observing how moral issues impacted economic ideas and social organization. Over the centuries, thinkers such as Aristotle and Thomas Aquinas emphasized what was right and good more than the pursuit of social efficiency. That changed when scientific methods no longer required moral considerations and economics adopted a values-free scientific methodology. A positive-normative dichotomy has served the profession well in many ways, but there have been voices arguing for a more values-oriented approach to the discipline. Now microeconomics is facing many new challenges as the complications of interdependence increase and behavioral, neurobiological, and other interdisciplinary perspectives need to be addressed. The search to understand and explain behavior is pushing the discipline to enlarge its methodology beyond the standard instrumental prediction goals. This complicates analysis as multiple motivations for behavior are considered and interest in the formation of utility functions begins to creep into economic consciousness again. Moral reflection is relevant as game theory, cooperation models, and theories of trust enter into the discussion. Psychological tendencies and institutional changes involve reference to the moral life as essential for social coordination. The final chapter offers an interdisciplinary framework to incorporate values more directly into economic methods by building on the human passions as discussed by Adam Smith and the behavioral instincts described by Thorstein Veblen. This enlarges the scope of economic actors beyond the homo economicus model without abandoning some of the valuable features of that model.

Credit Rating Agencies on the Watch List

Raquel García Alcubilla and Javier Ruiz del Pozo — 2012-05-24

Author:: Raquel García Alcubilla, Javier Ruiz del Pozo
ISBN:: 9780199608867
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics, Macro- and Monetary Economics
DOI:: 10.1093/acprof:oso/9780199608867.001.0001
Published in print:: 2012
Published Online:: 2012-05-24

In a non-technical language, the book provides an overview of the history of ratings, the role of rating agencies, the industry, the uses of ratings and the rating process. The US subprime crisis that highlighted relevant deficiencies in the rating agencies’ activities and their systemic relevance, led to an international consensus to establish public oversight and regulation of the rating business. The book explains the global initiatives undertaken by the G-20, the Financial Stability Board, and IOSCO to address those failures and the European implementation of such a consensus. It also provides an overview of the new European System of Financial Supervisors implemented as a reaction to the crisis and examines the supervisory and enforcement powers of ESMA, the new authority in charge of the registration and oversight of rating agencies. Through an in-depth analysis of the European Regulation’s requirements on governance, conflicts of interest, methodologies, disclosures, and transparency, the book provides a clear explanation of how rating agencies operate and how the identified failures have been addressed. The explanation of all these aspects is complemented with an analysis of guidance from supervisors (ESMA and EBA), IOSCO’s recommendations, and US legislation. Finally, the book discusses possible new regulatory developments in areas such as the agencies’ business model, competition, civil liability, and ratings of sovereign debt. It concludes with the authors’ support for an enhanced regulatory and oversight coordination at global level, a reduction of the existing over-reliance on ratings, and a concentration of resources on the enforcement of the current regulatory regime.

China's Remarkable Economic Growth

John Knight and Sai Ding — 2012-05-24

Author:: John Knight, Sai Ding
ISBN:: 9780199698691
Publisher:: Oxford University Press
Subjects:: Economics and Finance, South and East Asia, Financial Economics
DOI:: 10.1093/acprof:oso/9780199698691.001.0001
Published in print:: 2012
Published Online:: 2012-05-24

How has the Chinese economy managed to grow at such a remarkable rate — no less than ten per cent per annum — for over three decades? This book combines economic theory, empirical estimation, and institutional analysis to address one of the most important questions facing contemporary economists. A common thread that runs throughout the book is the underlying political economy: why China became a ‘developmental state’, and how it has maintained itself as a ‘developmental state’. The book examines the causal processes at work in the evolution of China's institutions and policies. It estimates cross-country and cross-province growth equations to shed light on the proximate, and some of the underlying, determinants of the growth rate. It explores important consequences of China's growth, posing a series of key questions, such as: Is the economy running out of unskilled labour? Why and how has inequality risen; has economic growth raised happiness? What are the social costs of the overriding priority accorded to growth objectives? Can China continue to grow rapidly, or will the maturing economy, or the macroeconomic imbalances, or financial crisis, or social instability, bring it to an end?

Pension Funds

E. Philip Davis — 2012-03-22

Author:: E. Philip Davis
ISBN:: 9780198293040
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics, Public and Welfare
DOI:: 10.1093/acprof:oso/9780198293040.001.0001
Published in print:: 1998
Published Online:: 2012-03-22

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.

Working Hard, Working Poor

Gary S. Fields — 2012-01-19

Author:: Gary S. Fields
ISBN:: 9780199794645
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Macro- and Monetary Economics, Financial Economics
DOI:: 10.1093/acprof:oso/9780199794645.001.0001
Published in print:: 2011
Published Online:: 2012-01-19

More than three billion people in the world—half of humankind—live on less than two-and-a-half US dollars per person per day. Excellent books can be found on ending world poverty. These books go into depth on many important aspects of economic development but do not focus on employment and self-employment, work and nonwork. The present volume fills in where these others leave off. For the last several decades, Gary Fields has been teaching, conducting research, and working as a policy advisor on labor market issues. Policy makers, businesspeople, and researchers know a great deal about how the world's poor work and what has improved conditions for them. We know how the poor have managed to invest in improving their own self-employment earning opportunities. We know what it takes for the private sector to want to set up operations in a developing country, thereby creating jobs and paying the taxes that can be used to build roads and schools and fund social programs. We know how poor-country governments can stimulate economic growth and make that growth more inclusive of the poor. And we know how the development banks, the rich-country governments, and other development organizations can help poor-country governments and other organizations do what they do not have the means to do on their own: create more good jobs, improve earnings levels in the poorer jobs, and enhance the skills and productivity of their working people. This book shares those lessons with you.

The Rise of Mutual Funds

Matthew P. Fink — 2012-01-19

Author:: Matthew P. Fink
ISBN:: 9780199753505
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Macro- and Monetary Economics, Financial Economics
DOI:: 10.1093/acprof:oso/9780199753505.001.0001
Published in print:: 2011
Published Online:: 2012-01-19

In 1940 few Americans had heard of mutual funds. Today, US mutual funds are the largest financial industry in the world, with over 88 million shareholders and over $11 trillion in assets. This book describes the developments that have produced mutual funds' long history of success. Among these are: the formation of the first mutual funds in the 1920s; how the 1929 stock market crash, a disaster for most financial institutions, spurred the growth of mutual funds; the establishment in 1934, over FDR's objection, of the United States Securities and Exchange Commission, the federal agency that regulates mutual funds; and the enactment of the Revenue Act of 1936, the tax law that saved mutual funds from extinction. In addition the book details the passage of the Investment Company Act of 1940, the “constitution” of the mutual fund industry; the creation in 1972 of money market funds, which totally changed the mutual fund industry and the entire US financial system; the enactment of the Employee Retirement Income Security Act of 1974, which created Individual Retirement Accounts; the accidental development of 401(k) plans, which have revolutionized the way Americans save for retirement; and the 2003 trading abuses, the greatest scandal ever in the history of the mutual fund industry. Many events have never been discussed in detail; others have been discussed in works on other subjects.

The Structure and Regulation of Financial Markets

Peter D. Spencer — 2011-10-03

Author:: Peter D. Spencer
ISBN:: 9780198776093
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780198776093.001.0001
Published in print:: 2000
Published Online:: 2011-10-03

Aimed at advanced undergraduate and graduate students in economics, banking, and finance, this is a core textbook for the financial markets, institutions, and regulation option of courses in financial economics. It integrates modern theories of asymmetric information into the analysis of financial institutions, relating the theory to current developments. The text begins with an analysis of adverse selection in retail financial products such as life assurance, before looking at open capital markets where trades and prices provide information. It then progresses to the more complex areas of corporate governance and financial intermediation in which information is concealed, or confidential and moral hazard and verification problems become important. These chapters study the various mechanisms that the financial markets have developed to allow investors to delegate the management of their assets to others. This analysis is used to show how regulation can reduce the risk of financial failure and how legal, accounting, and regulatory mechanisms can help shape a country’s corporate and financial architecture. These difficult theoretical concepts are conveyed through the careful use of numerical illustrations and topical case studies. Each chapter ends with a set of exercises to test and reinforce students’ comprehension of the material. Worked solutions are provided for the numerical exercises.

Stock Market Capitalism: Welfare Capitalism

Ronald Dore — 2011-10-03

Author:: Ronald Dore
ISBN:: 9780199240623
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199240623.001.0001
Published in print:: 2000
Published Online:: 2011-10-03

This is a book about Washington Consensus capitalism and the controversies its encroachment causes in Japan and Germany. Many people in both those countries share the assumptions dominant today in Britain and America that managers should be intent solely on creating shareholder value, and that shareholders' financial logic alone should determine who buys what company on the stock exchange. That way efficiency (and hence global welfare) will be maximized. Japanese and German advocates of full-bloodied market capitalism are not having it all their own way, however. In both countries there are articulate defenders of what they consider to be a better way of life, informed by a more human, more social-solidary, set of values. This book traces the debates which ensue on corporate governance, on worker rights, on supplier relations, on cartels and anti-trust, on pensions and welfare. It also analyses actual changes in economic behaviour — an essential means of sorting out a lot of the muddle and double-talk, not just in the internal debates themselves, but even more in the foreign reporting of them. These accounts of the battle for the national soul in Japan and Germany constitute a contribution to the ‘diversity of capitalism’ debate.

Social Security Reform

Peter A. Diamond — 2011-10-03

Author:: Peter A. Diamond
ISBN:: 9780199247899
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics, Public and Welfare
DOI:: 10.1093/acprof:oso/9780199247899.001.0001
Published in print:: 2002
Published Online:: 2011-10-03

Social security systems are being reviewed and changed in many countries around the world. This book considers some of the key policy issues for design of a social security reform, as well as reviewing much of the academic literature on the positive and normative aspects of social security. The first chapter provides an examination of key policy issues of general concern includes the funding of social security, the comparison of defined benefit and defined contribution systems, notional defined contribution accounts, alternative approaches to organizing individual defined contribution accounts, and the provision of survivor benefits. The book then turns to the academic literature on the interactions between social security and the labor and capital markets, providing a non-technical overview of the existing literature and pointing-out gaps in current research findings. The second chapter reviews the impact on retirement decisions of forced savings, the use of an earnings or retirement test, mandated annuitization, recognizing heterogeneity in both life expectancy and possibly in risk classification for annuity pricing, and treatment of the family, particularly the use of joint-life annuitization. Also reviewed is the impact on labor supply at younger ages, considering mandatory savings and annuitization, contrasting defined benefit and defined contribution systems, and analysing alternative approaches to redistribution within social security. The final chapter covers issues of aggregate capital accumulation and risk-sharing, with the latter including the risks in annuitization, in the returns to capital, and in aggregate earnings. Also considered are the risks in the political process.

Increasing Returns and Efficiency

Martine Quinzii and Sujaya Parthasarathy — 2011-10-03

Author:: Martine Quinzii, Sujaya Parthasarathy
ISBN:: 9780195065534
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780195065534.001.0001
Published in print:: 1993
Published Online:: 2011-10-03

Increasing returns to scale is an area in economics that is becoming more important in the literature. The economic phenomenon of increasing returns presents serious conceptual difficulties for the traditional competitive theory of resource allocation. While most firms exhibit constant or decreasing returns to scale, some firms manufacture products whose technology permits increasing returns to scale that are large relative to the market. These goods are an important component of economic activity in a modern economy and are typically commodities produced either by a public sector or, as in the United States, by regulated utilities. This book analyzes increasing returns using general equilibrium theory to take into account the interactions between production in the public and the private sectors, and the effects of financing the public sector on the redistribution of income.

Financial Crises and What to Do About Them

Barry Eichengreen — 2011-10-03

Author:: Barry Eichengreen
ISBN:: 9780199257430
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199257430.001.0001
Published in print:: 2002
Published Online:: 2011-10-03

This book provides a critical assessment of the official sector's efforts to manage more effectively financial crises in emerging markets. The book reviews international initiatives on both the crisis prevention and crisis resolution fronts. While crises will always be with us, it concludes that good progress has been made in limiting their spread and strengthening the international financial system. Ironically, however, official sector initiatives in this area may in fact have made life more difficult for the poorest countries. Initiatives to limit the incidence of crises and threats to the stability of the international financial system should therefore be linked to an increase in development assistance designed to offset the extra burdens on the poorest countries. The other place where official efforts have fallen short is in creating new ways of resolving crises. The book argues that the old way — the official sector financing through the International Monetary Fund — is part of the problem, not part of the solution.

Enterprise and Competitiveness

Mark Casson — 2011-10-03

Author:: Mark Casson
ISBN:: 9780198289579
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780198289579.001.0001
Published in print:: 1995
Published Online:: 2011-10-03

This book looks at international economic performance at the end of the 20th century. The book explores in particular performance issues connected with international business. It focuses especially on the interplay between economic and cultural determinants of the behaviour of multinational firms. Chapter 1 offers a selective survey of recent trends in international business activities, and explores the limits of conventional economic analysis to these trends. Chapter 2 develops a ‘systems view’ of international business. Chapter 3– combines economic and cultural determinants of performance within a single analytical framework. The basic argument is that, after allowing for obvious factors such as different resource endowments and different attitudes to work and saving, comparative economic performance is explained by comparative transaction costs, and that these are culture-specific. The economic content of a culture is related to implicit scientific and religious attitudes which are transmitted through education, the media, and personal contact within social groups. The last two chapters discuss more specific applications of the theory. Chapter 7 looks at the joint venture and Chapter 8 at telecommunications. This book as a whole illustrates the power of an approach which synthesizes economic and cultural factors within a systems view of international production.

Dynamic Economics

Gregory C. Chow — 2011-10-03

Author:: Gregory C. Chow
ISBN:: 9780195101928
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780195101928.001.0001
Published in print:: 1997
Published Online:: 2011-10-03

This work provides a unified and simple treatment of dynamic economics using dynamic optimization as the main theme, and the method of Lagrange multipliers to solve dynamic economic problems. The book presents the optimization framework for dynamic economics to foster an understanding of the approach. Instead of using dynamic programming, the book chooses instead to use the method of Lagrange multipliers in the analysis of dynamic optimization because it is easier and more efficient than dynamic programming, and gives an understanding of the substance of dynamic economics better. The book treats a number of topics in economics, including economic growth, macroeconomics, microeconomics, finance, and dynamic games. It also teaches by examples, using concepts to solve simple problems; it then moves to general propositions.

Consumption Tax Policy and the Taxation of Capital Income

Raymond G. Batina and Toshihiro Ihori — 2011-10-03

Author:: Raymond G. Batina, Toshihiro Ihori
ISBN:: 9780198297901
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780198297901.001.0001
Published in print:: 2000
Published Online:: 2011-10-03

The purpose of this book is to introduce the substantial literature on consumption tax policy and the taxation of capital income, the early literature on optimal tax theory in dynamic overlapping generations' models, the more recent literature on optimal taxation in the Ramsey growth model and models of endogenous growth, and the literature on taxation in open economies. The book summarises the main arguments for and against consumption taxation, presents the main theoretical and empirical results of the technical literature, and, finally, extends the literature in a number of useful ways by complicating the models used to study tax issues. These extensions include bequeathing behaviour, the time consistency problem, the capital levy, charity and privately produced public goods, environmental externalities and renewable resources, durable goods and land, and money used in exchange and as an asset. Chapters are self-contained as far as possible, and each uses a variety of models rather than just one to study the issue at hand. Models and notation are explained each time they are used.

Business Cycle Theory

Lutz G. Arnold — 2011-10-03

Author:: Lutz G. Arnold
ISBN:: 9780199256815
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199256815.001.0001
Published in print:: 2002
Published Online:: 2011-10-03

Business cycle theory is a broad and disparate field. Different schools of thought offer alternative explanations for cycles, often using different mathematical methods. This book aims to provide academics and graduate students of economics with an exposition of business cycle theory since Keynes. The author places the main theories — Keynesian economics, monetarism, new classical economics, the real business cycles theory, and new Keynesian economics — in a historical context by presenting them in the chronological order of their appearance and highlighting their differences and commonalities. He minimizes the necessary mathematical prerequisites by using a unifying mathematical approach: stochastic second-order difference equations, which is explained in detail. Throughout the book, the international dimension of business cycles is acknowledged. The theoretical results obtained are set alongside empirical facts in separate boxes. Each chapter finishes with a set of problems designed to deepen the reader's understanding of the theories presented, and further reading sections providing access to related material.

Measuring Corporate Default Risk

Darrell Duffie — 2011-09-22

Author:: Darrell Duffie
ISBN:: 9780199279234
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199279234.001.0001
Published in print:: 2011
Published Online:: 2011-09-22

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.

Fixed Income Modelling

Claus Munk — 2011-09-22

Author:: Claus Munk
ISBN:: 9780199575084
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199575084.001.0001
Published in print:: 2011
Published Online:: 2011-09-22

This book offers a unified presentation of dynamic term structure models and their applications to the pricing and risk management of fixed income securities. The basic fixed income securities and their properties and uses as well as the relations between these securities are explained. The book presents and compares the classical affine models, Heath–Jarrow–Morton models, and LIBOR market models, and demonstrates how to apply those models for the pricing of various widely traded fixed income securities. The book has a number of distinctive features compared to other fixed-income texts. It offers a balanced presentation with both formal mathematical modelling and economic intuition and understanding. A separate chapter gives an introduction to stochastic processes and the stochastic calculus needed for the modern financial modelling approach used in the book. A separate chapter explains how the term structure of interest rates relates to macro-economic variables and to what extent the concrete interest rate models are founded in general economic theory. The book focuses on the most widely used models and the main fixed income securities, instead of trying to cover all the many specialized models and the countless exotic real-life products. The detailed explanation of the main pricing principles, techniques, and models as well as their application to the most important types of securities will help with the understanding and application of other models and price other securities. The book includes separate chapters on interest rate risk management, credit risk, mortgage-backed securities, and relevant numerical techniques.

Changing Fortunes

Stephen P. Jenkins — 2011-09-22

Author:: Stephen P. Jenkins
ISBN:: 9780199226436
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics, Macro- and Monetary Economics
DOI:: 10.1093/acprof:oso/9780199226436.001.0001
Published in print:: 2011
Published Online:: 2011-09-22

Britain's income distribution is like a multi-story apartment building with the numbers of residents on the different floors corresponding to the concentration of people at different income levels in any particular year. The poorest are in the basement, the richest are in the penthouse, and the majority somewhere in between. But what are the dynamics of occupancy patterns? Snapshots of the building register at different times tell us nothing about these. Over time, how much movement between floors is there, and has the frequency of moves or the distance travelled been changing over the last two decades? In particular, is there much turnover in the basement, and do basement dwellers ever reach the penthouse? Who moves the most and how far? What are the factors associated with movements up and down the income tower over time? This book addresses such questions with extensive new analysis based on data from the British Household Panel Survey (BHPS) covering 1991–2006, providing a comprehensive and original study of income mobility and poverty dynamics. There is detailed discussion of why longitudinal perspectives on the income distribution are of interest, and of the relevant concepts and measures. There is in-depth discussion of the BHPS and its household income data, and comparisons with other national and international longitudinal data sources. The book shows that patterns of income mobility in Britain have not changed over the last two decades but fewer people are persistently poor, and it discusses the reasons for these trends.

Survey Research in Corporate Finance

H. Kent Baker, J. Clay Singleton, and E. Theodore Veit — 2011-05-01

Author:: H. Kent Baker, J. Clay Singleton, E. Theodore Veit
ISBN:: 9780195340372
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780195340372.001.0001
Published in print:: 2010
Published Online:: 2011-05-01

This book is dedicated solely to examining survey research in corporate finance. It is part of the Financial Management Association Survey and Synthesis Series. The purpose of this research-oriented book is: (1) to provide financial researchers with an overview of survey methodology; (2) to synthesize the major streams or clusters of survey research in corporate finance; and (3) to provide a valuable resource and guide for those interested in conducting and understanding survey research in finance. Chapter 1 discusses the role of survey research in corporate finanec. Chapters 2 though 8 present financial theory about select corporate finance topics and provide survey evidence about how managers make decisions. Key topic areas include making capital budgeting decisions, determining a firm's cost of capital, managing a firm's capital structure, making dividend policy decisions, engaging in share repurchases, special dividends, stock splits, stock dividends, and managing risk. The book identifies whether gaps exist between finance theory and practice and how the size of the gap has changed over time. Chapter 9 discusses the state of the art of survey research in corporate finance. The book contains extensive references and numerous tables documenting survey-based studies in finance.

Why Does College Cost So Much?

Robert B. Archibald and David H. Feldman — 2011-01-01

Author:: Robert B. Archibald, David H. Feldman
ISBN:: 9780199744503
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199744503.001.0001
Published in print:: 2010
Published Online:: 2011-01-01

College tuition has risen more rapidly than overall inflation for much of the past century, and in recent years this growth has accelerated. The rhetoric of crisis now permeates public discussion of the cost of attendance. Much of what is written ties rapidly rising tuition to dysfunctional behavior in the academy. Common examples include prestige games among universities, gold-plated amenities, and bloated administration. This book offers a different view, one that places higher education firmly within the larger economic history of the United States. A technological trio of broad economic forces has come together in the last thirty years to cause higher education costs, and costs in many other important service industries, to rise much more rapidly than the inflation rate. The main culprit is economic growth itself. This finding does not mean that all is well in American higher education. A college education has become less reachable to a broad swath of the American public at the same time that the market demand for highly educated people has soared. This affordability problem has deep roots. The book explores how cost pressure, the changing wage structure of the U.S. economy, and the complexity of financial aid policy combine to reduce access to higher education below what we need in the 21st-century labor market. This book is a call to calm the rhetoric of blame and to find instead policies that will increase access to higher education while preserving the quality of our colleges and universities.

The Ruling Class

Tito Boeri, Antonio Merlo, and Andrea Prat — 2011-01-01

Author:: TitoBoeriProfessor of Economics, Università Bocconi, Italyhttp://didattica.unibocconi.eu/myigier/index.php?IdUte=48791&idr=1866&lingua=engAntonioMerloProfessor of Economics and Director, Penn Institute for Economic Research, University of Pennsylvania, USAAndreaPratProfessor of Economics, London School of Economics and Political Science, UKhttp://econ.lse.ac.uk/~prat/
ISBN:: 9780199588282
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics, Public and Welfare
DOI:: 10.1093/acprof:oso/9780199588282.001.0001
Published in print:: 2010
Published Online:: 2011-01-01

The ruling class plays a major role in our societies. It makes possible what would otherwise be infeasible, by shifting out those constraints that stand in the way of long-term growth. Historically, economists devoted far less attention than sociologists to the study of ruling classes. Using the theoretical tools of economists, this book provides an understanding of what drives the formation of a ruling class, and the relationship between politics and business firms. Focusing on Italy, it uses labour economics to analyse the selection of the ruling class, the labour market of politicians, the allocation of managers' time, and their incentives, remunerations, and career paths. It draws on contributions from two teams of leading scholars and on research undertaken by the Fondazione Rodolfo DeBenedetti. Part I focuses on the labour market of politicians. It uses detailed information on personal characteristics, incomes, performance in office, and career paths (before, as well as after, the Parliamentary mandate) of all the politicians elected to the Italian Lower Chamber (Camera) between 1948 and 2008. Part II is devoted to the managerial class. It includes cross-country surveys of managers across a sample of European countries, surveys carried out in cooperation with the largest union of managers in the service sector, social security records, and, for the first time, surveys on the allocation of time of top executives.

Financial Ethics

George A. Aragon — 2011-01-01

Author:: George A. Aragon
ISBN:: 9780195305968
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780195305968.001.0001
Published in print:: 2010
Published Online:: 2011-01-01

This book provides a framework for the study of financial ethics built on a broad review of research published in finance and economics journals. This book demonstrates that ethics is already an important part of financial research, and therefore the approach taken here is more of a “rediscovery” of the ethical dimension of financial economics. The book adopts a positivist framework for the field of financial ethics within which it is proposed that many “finance” problems are actually “ethics” problems; and that many economic phenomena can be explained as mechanisms for controlling moral risks. The text discusses several examples in which an ethics-centered approach to understanding economic phenomena is similar in spirit to other frameworks which have been applied in positive financial research including: the framework used for understanding corporate governance mechanisms as devices for mitigating agency costs and “moral hazards” in contractual relationships; the transaction “governance structure” framework that can explain the existence of hierarchies relative to markets when opportunistic behavior is assumed; and the roles of reputation and corporate culture in making credible commitments of trust in exchange. The book argues that these “financial ethical technologies” are not mutually exclusive but, rather, mutually enriching ways to deepen our understanding of the same economic phenomena. They are financial technologies because they enhance economic value; and, they are ethical technologies because their value enhancing contributions are produced by mitigating moral risks in exchange.

The Economics of Clusters

Gilles Duranton, Philippe Martin, Thierry Mayer, and Florian Mayneris — 2011-01-01

Author:: Gilles Duranton, Philippe Martin, Thierry Mayer, Florian Mayneris
ISBN:: 9780199592203
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics, Microeconomics
DOI:: 10.1093/acprof:oso/9780199592203.001.0001
Published in print:: 2010
Published Online:: 2011-01-01

Cluster policies have become very popular among policy makers over the last thirty years. However, the mechanisms at work behind cluster dynamics, the gains that can be expected from more clustering, and the determinants of cluster policies that are implemented are not so clear. This book addresses these issues theoretically and empirically on the French case. Studying France is interesting because there is a long tradition of strong government intervention regarding the location of economic activity and because French cluster initiatives are more or less unified across the country. From a theoretical point of view, spatial agglomeration brings gains until a certain point from which congestion effects can offset these gains, and under certain conditions, it is likely that firms tend to cluster too much. This raises questions about cluster policies that would aim at always increasing concentration. Moreover, cluster policies are very demanding in terms of information and are subject to many political economy issues. The empirical analysis on French firm‐level data confirms that, in the short run, firms reap gains from agglomeration until a given level of agglomeration from which congestion effects become more important. Given these agglomeration economies, the current geography in France does not seem vastly suboptimal. On the other hand, the analysis of the first cluster policy implemented in this country shows that traditional equity determinants of regional policies, instead of competitiveness considerations, were still in play. In that sense, while acknowledging the positive impact of spatial agglomeration on firm‐level performance, this book tends to tone down the worldwide enthusiasm for cluster policies.

Monetary and Financial Integration in East Asia

Yung Chul Park and Charles Wyplosz — 2010-09-01

Author:: Yung Chul Park, Charles Wyplosz
ISBN:: 9780199587124
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics, South and East Asia
DOI:: 10.1093/acprof:oso/9780199587124.001.0001
Published in print:: 2010
Published Online:: 2010-09-01

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.

Working Capital Management

Lorenzo Preve and Virginia Sarria-Allende — 2010-05-01

Author:: Lorenzo Preve, Virginia Sarria-Allende
ISBN:: 9780199737413
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199737413.001.0001
Published in print:: 2010
Published Online:: 2010-05-01

Working capital management is one of the most important topics in corporate finance: it relates to the operating investment of a firm and the way managers choose to finance it. This topic, mostly ignored by academics for years, is now gaining importance as we realize that financial markets are not as efficient as they were assumed to be, especially as firms expand outside the developed economies. This book provides a general framework that helps to understand working capital in a comprehensive approach, linking operating decisions to their financial implications and to the overall business strategy.

Time for a Visible Hand

Stephany Griffith-Jones, José Antonio Ocampo, and Joseph E. Stiglitz — 2010-02-01

Author:: StephanyGriffith-JonesUniversity Professor Columbia University, Financial Markets Program Director, Initiative for Policy DialogueJosé AntonioOcampoProfessor and Co-President Initiative for Policy Dialogue at Columbia Universityhttp://www.sipa.columbia.edu/academics/directory/jao2128-fac.htmlJoseph E.StiglitzProfessor and Co-President Initiative for Policy Dialogue at Columbia Universityhttp://www2.gsb.columbia.edu/faculty/jstiglitz/
ISBN:: 9780199578801
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Macro- and Monetary Economics, Financial Economics
DOI:: 10.1093/acprof:oso/9780199578801.001.0001
Published in print:: 2010
Published Online:: 2010-02-01

The financial crisis, which originated in developed country financial markets, has spread to developing countries and has turned into a global financial meltdown. Governments and Central Banks—though taking many and costly measures—seem powerless to stop the crisis. In light of this major global crisis that is hurting economies across the globe, this highly topical book will focus on a) the transparency and regulatory measures that become desirable after the current crisis; b) the implications of both the crisis and regulatory discussions for developing and developed economies; and c) reforms in the global financial architecture that might make the global financial system more stable and more equitable. Given the depth of the current financial crisis, the world economy is in unchartered territory. As a consequence, this book aims to systematically understand current major problems, both in the financial system, its governance, and in its links to global economic imbalances. It will try to explain how both market actors and regulators behave, as well as the prevailing ideology of extreme financial liberalization without sufficient regulation that contributed to the financial crisis. The book will present radical, but specific and hopefully politically feasible, proposals to try to ensure a more stable, equitable and growing world economy.

Value–Based Management with Corporate Social Responsibility

John D. Martin, J. William Petty, and James S. Wallace — 2009-09-01

Author:: John D. Martin, J. William Petty, James S. Wallace
ISBN:: 9780195340389
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Macro- and Monetary Economics, Financial Economics
DOI:: 10.1093/acprof:oso/9780195340389.001.0001
Published in print:: 2009
Published Online:: 2009-09-01

The current financial crisis has caused many of us to question the motives and actions that drive the business world. Even the basic notion that firms should be run so as to maximize shareholder value has come under increasing scrutiny. Simply put, the failures of some of our nation's most venerable financial institutions have called into question the very premise of value-based management (VBM). Moreover, by being paid out at a time when rank-and-file employees, suppliers, and other corporate stakeholders are suffering, excessive CEO compensation has produced public outrage. This book provides an up-to-date look at value-based management and finds that the underlying concept is as sound today as ever. One finding, however, is that, as initially practiced, VBM was often short sighted and thus needs to evolve if it is to continue to flourish. In particular, this book promotes a marriage of traditional VBM with the growing trend toward corporate social responsibility (CSR), a combination termed value(s)-based management. The case is made that CSR is much more than a feel-good concept; rather, it can make good business sense if practiced in a strategic manner. Ultimately, the book concludes that evidence supports the finding that, by embracing a program of corporate social responsibility, a firm can make the pie bigger, thus providing a win-win situation in which both the shareholders and other stakeholders benefit.

Reforming Pensions

Nicholas Barr and Peter Diamond — 2009-09-01

Author:: Nicholas Barr, Peter Diamond
ISBN:: 9780195311303
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780195311303.001.0001
Published in print:: 2008
Published Online:: 2009-09-01

Mandatory pension systems are a worldwide phenomenon. Many need reform. This book, a summary of a longer book, sets out an extensive but nontechnical explanation of the economics of pension design. The book recognizes the multiple objectives of pension plans—consumption smoothing, insurance, poverty relief, and redistribution. Analysis includes discussion of labor markets, capital markets, risk sharing, and gender and family. This is supplemented by discussion of implementation, and of experiences, both good and bad, in many countries, with particular attention to China and Chile.

Finance, Development, and the IMF

James M. Boughton and Domenico Lombardi — 2009-09-01

Author:: James M.BoughtonHistorian of the International Monetary Fund and Assistant Director in the Policy Development and Review Department of the IMFDomenicoLombardiPresident, The Oxford Institute for Economic Policy (OXONIA)
ISBN:: 9780199239863
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics, Development, Growth, and Environmental
DOI:: 10.1093/acprof:oso/9780199239863.001.0001
Published in print:: 2009
Published Online:: 2009-09-01

This book provides an assessment of the role of the International Monetary Fund in poor countries. In recent years, a large portion of the work of the IMF has focused on the economies of low-income countries by aiming to create conditions conducive to poverty reduction and stable economic growth. More than two fifths of the IMF's 185 members are low-income countries and many others have substantial pockets of poverty in their populations. Since economic development and the reduction of poverty are the most important economic challenges that these countries face, how can the IMF best help them? How can the imperative of macroeconomic and financial stability be reconciled with the requirements for sustained economic growth? This book brings together the research of leading economists, political scientists, and historians to suggest ways for the IMF to address these issues effectively.

The Pledge

Stuart Rutherford — 2009-05-01

Author:: Stuart Rutherford
ISBN:: 9780195380651
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780195380651.001.0001
Published in print:: 2009
Published Online:: 2009-05-01

ASA of Bangladesh recently topped Forbes Magazine's first ever list of the world's best microfinance banks. This was an extraordinary outcome for an organization that had started life in 1978 as a revolutionary movement aiming to bring a peasant-led government to the newly-created and desperately poor South Asian nation of Bangladesh. The book tells the story of how ASA's determined but practical-minded founder and leader, Shafiqual Haque Choudhury, steered his organization through the maze of competing ideas about how best to develop poor countries. The book sets Choudhury's achievement in the context of Bangladesh's chaotic but inspiring postcolonial history and is rich in its understanding and descriptions of how ordinary village and slum dwellers deal with what politicians, international donors, and development experts throw at them. ASA began by trying to foment a peasant-led revolution, but within a few years it became clear that villagers were not responding. Fearing that his donors would stop supporting him, Choudhury shifted ASA to a more conventional NGO role, delivering basic services in health, education, and legal advice and spending donor money on disaster relief. But by 1991 Choudhury became convinced that microfinance would prove the most sustainable way of developing Bangladesh and of making ASA a permanent institution. There then followed a period of rapid growth until by 2008 ASA was serving more than six million poor Bangladeshis with financial services and was readying a massive privately financed for-profit replication of its work in a dozen poor Asia and African countries.

Corporate Decision-Making with Macroeconomic Uncertainty

Lars Oxelheim and Clas Wihlborg — 2009-05-01

Author:: Lars Oxelheim, Clas Wihlborg
ISBN:: 9780195335743
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780195335743.001.0001
Published in print:: 2008
Published Online:: 2009-05-01

This book develops “Macroeconomic Uncertainty Strategy” (MUST) as a tool for coping with the impact of macroeconomic fluctuations on risk management, performance assessment, and strategies for value enhancement. The essential elements of a corporate strategy for managing uncertainty in the macroeconomic environment includes setting corporate objectives for risk management, measuring risk, choosing operational and financial instruments for risk management, filtering out macroeconomic influences on performance, and developing compensation schemes that enhance shareholder value when macroeconomic fluctuations bias performance measures. The information obtained through conventional accounting systems become seriously misleading in response to macroeconomic fluctuations with the consequence that alternative ways to obtain relevant information must be considered. Conventional measures of exchange rate, interest rate, and inflation risk are similarly misleading with the consequence that a comprehensive view of the macroeconomic impact on the firm—recognizing the interdependence between macroeconomic variables—must be developed. Most of all, strategies to deal with macroeconomic fluctuations should be considered on a strategic level in the firm in order to establish shareholder wealth maximization as the objective of risk management and reward systems. Shareholder wealth maximization also requires that external stakeholders obtain information that allows them to evaluate the competitiveness of the firm without obfuscation by macroeconomic events.

The Rise of Mutual Funds

Matthew P. Fink — 2009-01-01

Author:: Matthew P. Fink
ISBN:: 9780195336450
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Macro- and Monetary Economics, Financial Economics
DOI:: 10.1093/acprof:oso/9780195336450.001.0001
Published in print:: 2008
Published Online:: 2009-01-01

The book describes the developments that caused mutual funds to go from a virtually unknown financial product in the 1920s to the largest financial industry in the world today. It covers the formation of the first mutual funds in the roaring ’20s; how the 1929 stock market crash, a disaster for most financial institutions, spurred the growth of mutual funds; the establishment in 1934, over FDR's objection, of the Securities and Exchange Commission, the federal agency that regulates mutual funds; enactment of the Revenue Act of 1936, the tax law that saved mutual funds from extinction; passage of the Investment Company Act of 1940, the constitution of the mutual fund industry; creation of money market funds, which totally transformed the U.S. financial system; the accidental development of 401(k) plans, which revolutionized the way Americans save for retirement; and the late trading and market timing abuses, the greatest scandal ever in the history of the fund industry. The author was personally involved in developments over the past forty years, and much of the book is a personal narrative regarding the people and events that have shaped the mutual fund industry.

Learning to be Capitalists

Annette Miae Kim — 2009-01-01

Author:: Annette Miae Kim
ISBN:: 9780195369397
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780195369397.001.0001
Published in print:: 2008
Published Online:: 2009-01-01

Why have some countries been able to escape the usual dead end of international development efforts and build explosively growing capitalist economies? Based on years of fieldwork, this book provides an account of the first generation of entrepreneurs in Vietnam in comparison to those in other transition countries. Focusing on the emergence of private land development firms in Ho Chi Minh City, this book shows how within seven years the private sector produced the majority of all new houses in the real estate market. This book demonstrates that capitalist entrepreneurialism was not the result of state initiative, properly incentivized policies, or individual personality traits. Rather, a society-wide reconstruction of cognitive paradigms enabled entrepreneurs to emerge and transform Vietnam from a poor, centrally planned economy into one of the fastest growing, market economies in the world.

The Everyday Life of Global Finance

Paul Langley — 2008-09-01

Author:: Paul Langley
ISBN:: 9780199236596
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199236596.001.0001
Published in print:: 2008
Published Online:: 2008-09-01

Grounded in literature from the sociology of finance and international political economy, and informed by extensive empirical research, this book explores the unprecedented relationships that now bind Anglo-American society with the financial markets. As mutual funds have increased in popularity and pension provision has been transformed, many more individuals and households have come to invest in stocks and shares. As consumer borrowing has risen dramatically and mortgage finance has embraced those deemed sub-prime, so the repayments of credit card holders and mortgagors have provided the basis for the issue and trading of bonds and other market instruments. This book shows how financial market networks have come to extend well beyond Wall Street and the City of London, becoming embedded and embodied in routine saving and borrowing in the US and UK. Society's new-found relationships with the markets are also shown, however, to be marked by stark inequalities, manifest contradictions, and political dissent.

Valuing the Closely Held Firm

Michael S. Long and Thomas A. Bryant — 2008-01-01

Author:: Michael S. Long, Thomas A. Bryant
ISBN:: 9780195301465
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780195301465.001.0001
Published in print:: 2007
Published Online:: 2008-01-01

A closely held firm is not a smaller version of a large public firm, anymore than a child is a miniature adult. While realizing that like large corporations, value comes from a business' ability to generate future cash flows, this book emphasize the differences between the two. The primary question is does a separate entity exist or is the business just an extension of its principal owner or manager? If yes, how does this business vary from a large publicly traded firm with market and not management control? This book gets to the fundamental differences between the two and the adjustments made to value correctly. It avoids the traditional multiples of earnings or multiple of sales and other cookie-cutter approaches, to focus on the basic ability to create value. The book also avoids specifics in tax laws as they change and vary between countries.

A Game-Theoretic Perspective on Coalition Formation

Debraj Ray — 2008-01-01

Author:: Debraj Ray
ISBN:: 9780199207954
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199207954.001.0001
Published in print:: 2007
Published Online:: 2008-01-01

The formation of coalitions to achieve both collaborative and competitive goals is a phenomenon we see all around us. The list of examples of this phenomenon is long and varied: production cartels, political lobbies, customs unions, environmental coalitions, and ethnic alliances are just a few everyday instances. This book looks at coalition formation from the perspective of game theory. How are agreements determined? Which coalitions will form? And are such agreements invariably efficient from a social perspective? The book brings together developments in both cooperative and non-cooperative game theory to study the analytics of coalition formation and binding agreements. It concentrates on pure theory, but discusses several potential applications, such as oligopoly and the provision of public goods.

Global Governance of Financial Systems

Kern Alexander, Rahul Dhumale, and John Eatwell — 2007-09-01

Author:: Kern Alexander, Rahul Dhumale, John Eatwell
ISBN:: 9780195166989
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780195166989.001.0001
Published in print:: 2005
Published Online:: 2007-09-01

This book sets forth the economic rationale for international financial regulation and what role, if any, international regulation can play in effectively managing systemic risk while providing accountability to all affected nations. The book suggests that a particular type of global governance structure is necessary to have more efficient regulation of the international financial systems. The book defines global governance of financial systems to involve three main principles: effectiveness in devising efficient regulatory standards and rules; accountability in decision-making structure and chain of command; and legitimacy, meaning that those subject to international regulatory standards have participated in some meaningful way in their development.

Work and Pay in 20th Century Britain

Nicholas Crafts, Ian Gazeley, and Andrew Newell — 2007-05-01

Author:: NicholasCraftsProfessor of Economic History, University of Warwickhttp://www2.warwick.ac.uk/fac/soc/economics/staff/academic/crafts_/IanGazeleySenior Lecturer in Economic History, University of Sussexhttp://www.sussex.ac.uk/cwrs/profile985.htmlAndrewNewellHead of the Department of Economics and Senior Lecturer, University of Sussexhttp://www.sussex.ac.uk/profiles/1932
ISBN:: 9780199212668
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199212668.001.0001
Published in print:: 2007
Published Online:: 2007-05-01

This book charts the immense transformation of work and pay across the 20th century and provides a labour-focused history of Britain. It has been written by British historians and economists. Each chapter stands as a self-contained reading providing an overview of each topic. The chapters also give an introduction to and analysis of the controversies among scholars at the current time. The 20th century was a period of unrivalled change in the British labour market. Technology, social movements, and political action all contributed to an increased standard of living, while also revolutionizing what workers do and how they do it. The book covers a range of topics from lifetime work patterns and education to unemployment and the welfare state. It provides a practical introduction to the evolution of work and pay in 20th century Britain.

Last Rights

Ben S. Branch, Hugh M. Ray, and Robin Russell — 2007-05-01

Author:: Ben S. Branch, Hugh M. Ray, Robin Russell
ISBN:: 9780195306989
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780195306989.001.0001
Published in print:: 2007
Published Online:: 2007-05-01

This book examines the business liquidation process — the winding up of the affairs of a company that has either decided voluntarily to liquidate or been forced to liquidate by its creditors. The contributors to the book have substantial hands-on experience in the reorganization and liquidation of businesses, the sale of business assets, and management of commercial litigation. They share their approach to maximizing and creating value in the deteriorating and chaotic business environment that so often leads to a company going out of business. The legal forums for liquidation — bankruptcy, state receivership, federal receivership, and assignment for the benefit of creditors — are explained. The liquidator's role, powers, duties, oversight, and compensation are outlined and the special rules for bankruptcy trustees are set forth. The chapters also cover the major tasks of liquidation including investigation of the company, termination of employees, disposition of assets, evaluation of litigation, resolution of claim, distributions and ultimately, and the dissolution or “winding down” of the company.

Investment Banking

Alan D. Morrison and William J. Wilhelm, Jr. — 2007-05-01

Author:: Alan D. Morrison, William J. Wilhelm, Jr.
ISBN:: 9780199296576
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199296576.001.0001
Published in print:: 2007
Published Online:: 2007-05-01

This book provides an economic rationale for the dominant role of investment banks in the capital markets, and uses it to explain both the historical evolution of and recent changes to the investment banking industry. The book points to the importance of well-defined property rights and properly-functioning property rights institutions in supporting the devolved decision making that drives capitalist economies. A critical decision in capitalist economies is the investment decision that allocates resources to new ventures. But this decision relies upon price-relevant information over which it is impossible to establish property rights; as a result, it is very hard to coordinate the exchange of this information. The book argues that investment banks help to resolve this problem by managing ‘information marketplaces’ within which extra-legal institutions support the production and dissemination of information that is important to investors. Reputations and relationships are more important in fulfilling this role than financial capital. The theory is substantiated with reference to the industry's evolution during the last three centuries. It shows how investment banking networks were formed, and identifies the informal contracts they supported. This historical development points to tensions between banks and the regulatory impulses of the State, thus providing some explanation for periodic large-scale State intervention in the operation of capital markets. The book's theory also provides a technological explanation for the massive restructuring of the capital markets in recent decades, which can be used to think about the likely future direction of the investment banking industry.

Endowment Asset Management

Shanta Acharya and Elroy Dimson — 2007-05-01

Author:: Shanta Acharya, Elroy Dimson
ISBN:: 9780199210916
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199210916.001.0001
Published in print:: 2007
Published Online:: 2007-05-01

There is a profound linkage between the quality of a university and its financial resources. The universities of Oxford and Cambridge rank among the world's finest educational institutions, and are able to draw on invested assets that are large by any standards. This book explores how the colleges that comprise these two universities make their investment decisions. Oxford and Cambridge are collegiate institutions, each consisting of a federal university and over thirty constituent colleges. While the colleges may have ostensibly similar missions, they are governed independently. Since they interpret their investment objectives differently, this gives rise to some remarkably dissimilar approaches to investment, which the book explores. It analyses the objectives, investment philosophy, asset management, and governance of over sixty college and university endowment funds. Drawing on research and discussions with Oxford and Cambridge investment bursars, the book investigate issues such as asset allocation and spending policy, which have a major influence on the institutions' financial health. This study reveals the colleges' individualism and diversity, and carefully analyses their strategies, which range from the traditional to cutting edge.

Contemporary Issues in Management Accounting

Alnoor Bhimani — 2007-05-01

Author:: AlnoorBhimaniProfessor of Management Accounting, Department of Accounting and Finance, London School of Economics and Politicshttp://www2.lse.ac.uk/accounting/facultyAndStaff/profiles/bhimani.aspx
ISBN:: 9780199283361
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780199283361.001.0001
Published in print:: 2006
Published Online:: 2007-05-01

Over the past decade, management accounting has seen changes not just within existing domains of the field but has also witnessed extensions outside its established realms of activity. Wider systemic transformations including changes in political regimes, novel conceptions of management controls, the impact of globalizing forces on commercial affairs, shifts in notions of effective knowledge management, governance and ethics, and technological advances, including the rise of broadband, have all impacted management accounting endeavours. The field is as fast changing as it has ever been. This book captures key facets of current thoughts, concerns, and issues in management accounting. The book consists of eighteen chapters. The topic areas covered in some chapters reflect established management accounting topics such as budgeting and responsibility accounting, contract theory analysis, contingency frameworks, performance measurement systems and strategic cost management which are considered within the perspective of changing concerns facing modern organizations and present day management thought. Other chapters deal with newly emerging concerns in management accounting, including network relations, integrated cost management systems, knowledge management pursuits, environmental management accounting and accounting and digitization. Each chapter encompasses discussions of basic premises complemented by insights from modern day practice, research, and thought.

Capital Adequacy beyond Basel

Hal S. Scott — 2007-01-01

Author:: Hal S.ScottHarvard Law Schoolhttp://www.law.harvard.edu/faculty/directory/index.html?id=63
ISBN:: 9780195169713
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/acprof:oso/9780195169713.001.0001
Published in print:: 2005
Published Online:: 2007-01-01

This book is timely since the Basel Committee on Banking Supervision at the Bank for International Settlements is in the process of making major revisions in the capital rules for banks. It is important that capital adequacy regulation helps to achieve financial stability in the most efficient way. Capital adequacy rules have become a key tool to protect financial institutions. The research contained within the book covers some key issues at stake in the capital requirements for insurance and securities firms. The contributors are among the leading scholars in financial economics and law. Their contributions analyze the use of subordinated debt, internal models, and rating agencies in addition to examining the effect on capital of reinsurance, securitization, credit derivatives, and similar instruments.

Restructuring Retirement Risks

David Blitzstein, Olivia S. Mitchell, and Stephen P. Utkus — 2006-09-01

Author:: DavidBlitzsteinDirector of the United Food and Commercial Workers Union (UFCW) Negotiated Benefits DepartmentOlivia S.MitchellInternational Foundation of Employee Benefit Plans Professor of Insurance and Risk Management, the Executive Director of the Pension Research Council, and the Director of the Boettner Center on Pensions and Retirement Research at the Wharton School, University of Pennsylvaniahttp://insr.wharton.upenn.edu/people/researchpapers.cfm?id=430Stephen P.UtkusDirector of the Vanguard Center for Retirement Research
ISBN:: 9780199204656
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199204659.001.0001
Published in print:: 2006
Published Online:: 2006-09-01

This book posits that retirement security is the central policy concern of our time. A generation of ‘Baby Boomers’ is on the verge of retirement, yet pension systems confront crushing challenges, and governments often appear confused about which direction they should move in. The book addresses the question: ‘What are the new risks and rewards in pensions, and what paths can stakeholders chose to solve these problems?’ In doing so, it explores three aspects of the evolution of risk and reward-sharing in retirement in order to offer guidance to pension fiduciaries, plan participants, and policymakers. First, it focuses on new perspectives for assessing retirement risks and rewards. Second, it evaluates efforts to insure retirement plans. Lastly, it provides several new strategies for managing retirement system risk.

Stochastic Optimal Control, International Finance, and Debt Crises

Jerome L. Stein — 2006-05-01

Author:: Jerome L. Stein
ISBN:: 9780199280575
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199280576.001.0001
Published in print:: 2006
Published Online:: 2006-05-01

This book focuses on the interaction between equilibrium real exchange rates, optimal external debt, endogenous optimal growth, and current account balances in a world of uncertainty. The theoretical parts result from interdisciplinary research between economics and state of the art applied mathematics. From the economic theory and the mathematics of stochastic optimal control, benchmarks are derived for the optimal debt and equilibrium real exchange rate in an environment where both the return on capital and the real rate of interest are stochastic variables. The theoretically derived equilibrium real exchange rate — the natural real exchange rate (NATREX) — is where the real exchange rate is heading. These benchmarks are applied to answer the following questions: What is a theoretically based empirical measure of a “misaligned” exchange rate that increases the probability of a significant depreciation or a currency crisis? What is a theoretically based empirical measure of an “excess” debt that increases the probability of a debt crisis? What is the interaction between an excess debt and a misaligned exchange rate? The theory is applied to evaluate the Euro exchange rate, the exchange rates of the transition economies of Eastern Europe, the sustainability of U.S. current account deficits, and derives warning signals of the Asian crises, defaults, and debt crises in emerging markets.

Emerging Markets and Financial Globalization

Paolo Mauro, Nathan Sussman, and Yishay Yafeh — 2006-05-01

Author:: Paolo Mauro, Nathan Sussman, Yishay Yafeh
ISBN:: 9780199272693
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199272697.001.0001
Published in print:: 2006
Published Online:: 2006-05-01

This book provides the first comparative analysis of the determinants of sovereign bond spreads in the first era of financial globalization and bond finance (1870-1913) and today (1994-2002). Drawing on a newly-collected data set on bond yields, macroeconomic variables, and news of various categories for a panel of emerging markets, it is shown that news about wars or episodes of politically-motivated violence are significant and robust determinants of spreads; fiscal variables also play a role. In contrast, news about institutional reforms seldom have a rapid and significant impact. There are also important differences between the two eras: country-specific fundamentals accounted for a greater share of variation in spreads during the pre-WWI period than they do today. Crises shared by more than one country are common now, but were rare in the past. The mechanisms for addressing sovereign defaults in the previous era of globalization are discussed and some lessons for today are drawn.

Worldwide Financial Reporting

George J. Benston, Michael Bromwich, Robert E. Litan, and Alfred Wagenhofer — 2006-02-01

Author:: George J. Benston, Michael Bromwich, Robert E. Litan, Alfred Wagenhofer
ISBN:: 9780195305838
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0195305833.001.0001
Published in print:: 2006
Published Online:: 2006-02-01

This book provides readers with reasonably concise descriptions of the state of global markets, the benefits and limitations of financial accounting and accounting/auditing standards, and the development, status, and current policy issues of corporate financial reporting in major countries and the European Union. The globalization of financial markets has contributed to a growing consensus that national financial reporting standards should give way to a single, harmonized set of global reporting standards. This book takes a more practical approach and reaches a different conclusion: that global standards are unlikely to be achieved, and in any event, are not likely to remain unified in the face of continued changes in markets and financial practices. National accounting standards are likely to continue to be relevant for the foreseeable future, and for that reason, the book discusses the national systems and their origins in some detail. The authors also consider a range of other substantive reporting issues, notably the debate over the issue of “fair value” measurement of assets and liabilities, which the authors reject in favor of a system that marks to market only those assets with deep traded markets, coupled with additional disclosures, where relevant.

Reinventing the Retirement Paradigm

Robert L. Clark and Olivia S. Mitchell — 2006-02-01

Author:: Robert L.ClarkProfessor of Business Management and Economics, North Carolina State Universityhttp://www.mgt.ncsu.edu/index-exp.php/directory/dossier/robert-clark/Olivia S.MitchellInternational Foundation of Employee Benefit Plans Professor of Insurance and Risk Management, the Executive Director of the Pension Research Council, and the Director of the Boettner Center on Pensions and Retirement Research at the Wharton Schoolhttp://insr.wharton.upenn.edu/people/researchpapers.cfm?id=430
ISBN:: 9780199284603
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199284601.001.0001
Published in print:: 2005
Published Online:: 2006-02-01

This book explores how rising pension and healthcare costs, along with workforce aging, are affecting pension and retirement planning around the world. Many middle-aged workers now realize that they will have to work longer than intended, as they begin to recognize that their retirement resources will not be inadequate to finance retirement consumption. Volatile capital markets, rising medical-care costs, and low saving rates make retirement behaviour and policy a moving target. This book explores these themes, touching on a diverse set of issues ranging from employment trends to pension accounting and investment, to retirement system overhaul. It illustrates how employers are actively reformulating the meaning of work and retirement, seeking to encourage more people to work longer than ever before in the face of projected labour shortages. At the same time, public and private trust in traditional pension offerings is rapidly eroding, as companies alter, amend, and terminate their conventional plans in the face of poor investment performance and new methods of pension accounting.

Theory and Practice of Excise Taxation

Sijbren Cnossen — 2005-10-01

Author:: SijbrenCnossenUniversity of Maastricht and OCFEB
ISBN:: 9780199278596
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199278598.001.0001
Published in print:: 2005
Published Online:: 2005-10-01

Excise taxes on smoking, drinking, gambling, polluting, and driving are always topical and controversial. Not only are these taxes convenient sources of government revenue, they can also be designed to reflect the external costs that consumers or producers of excisable products impose on other people. Global warming, acid rain, traffic congestion, and the economic costs of tobacco and alcohol consumption are problems that can be corrected through selective taxes and other regulatory instruments. Addressing these and other issues, this book by internationally recognized experts analyses the art of excise taxation, providing a systematic, insightful, and often provocative treatment of a major fiscal instrument that policy-makers often neglect, and that gets little attention in the professional literature. This comprehensive guide to the debate on excise tax policy will be invaluable to government officials, policy-makers, academics and students of taxation, and those working in relevant industries.

The Financial Economics of Privatization

William Leon Megginson — 2005-10-01

Author:: William Leon Megginson
ISBN:: 9780195150629
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0195150627.001.0001
Published in print:: 2005
Published Online:: 2005-10-01

This book explores the different aspects of privatization. It charts the emergence of privatization and looks at how and why countries privatize their state-owned enterprises (SOEs). It examines the impact of privatization on financial markets, and transition and nontransition economies. It analyzes the privatization experiences of five industries that have seen the largest number of state ownership sales: telecommunications, banking, oil and gas, electricity production and distribution, and commercial airlines. The key lessons of privatization based on experience and empirical research as well as unresolved issues in privatization policy and research are discussed.

Creating Value with Knowledge

Eric Lesser and Lawrence Prusak — 2005-10-01

Author:: EricLesserLawrencePrusak
ISBN:: 9780195165128
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0195165128.001.0001
Published in print:: 2004
Published Online:: 2005-10-01

The mid-1990s saw the rise of an important movement: a recognition that organizational knowledge, in its various forms and attributes, could be an important source of competitive advantage in the marketplace. Knowledge management has become one of the core competencies in today's competitive environment, where so much value in companies resides in their people, systems, and processes. This book examines a variety of important knowledge-related topics, some of which has been previously published in such journals as the Harvard Business Review, California Management Review, and the Sloan Management Review, such as the use of informal networks, communities of practice, the impact of knowledge on successful alliances, social capital and trust, narrative and storytelling and the use of human intermediaries in the knowledge management process. The book includes contributions from such leading thinkers as Lawrence Prusak, Dorothy Leonard, Eric Lesser, Rob Cross, and David Snowden. This book synthesizes some of the best thinking by the IBM Institute for Knowledge-Based Organizations, a think tank whose research agenda focuses on the management methods for deriving tangible business value from knowledge management and their real-world application.

Arbitrage Theory in Continuous Time

Tomas Björk — 2005-10-01

Author:: Tomas Björk
ISBN:: 9780199271269
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199271267.001.0001
Published in print:: 2004
Published Online:: 2005-10-01

This book presents an introduction to arbitrage theory and its applications to problems for financial derivatives. This second edition includes more advanced materials; appendices on measure theory, probability theory, and martingale theory; and a new chapter on the martingale approach to arbitrage theory. The chapters cover the binomial model, a general one period model, stochastic integrals, differential equations, portfolio dynamics, arbitrage pricing, completeness and hedging, parity relations and delta hedging, the martingale approach, incomplete markets, dividends, currency derivatives, barrier options, stochastic optimal control, bonds and interest rates, short rate models, forward rate models, and LIBOR and swap market models.

Regulating Finance

Tommaso Padoa-Schioppa — 2005-07-14

Author:: Tommaso Padoa-Schioppa
ISBN:: 9780199270569
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199270562.001.0001
Published in print:: 2004
Published Online:: 2005-07-14

This book presents eight essays on financial regulation, focusing on the European context. Essay one examines the concept of market-friendly regulation. Essay two discusses the need for stronger bank licensing principles. Essay three explores the changing attitude towards banking competition. Essay four discusses self-regulation by financial institutions. Essay five explores the increasing links between banking and securities activities. Essay six examines the organisational structure of financial regulatory and supervisory functions. Essays seven and eight discuss the abandonment of the coincidence between the jurisdiction of monetary policy and the jurisdiction of banking supervision, and the important role of central banks in financial stability, respectively.

Private Sector Involvement and International Financial Crises

Michael Chui and Prasanna Gai — 2005-07-14

Author:: Michael Chui, Prasanna Gai
ISBN:: 9780199267750
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199267758.001.0001
Published in print:: 2005
Published Online:: 2005-07-14

This book offers an analytical perspective on the policy debate on the design and reform of the international financial architecture. It stresses the role played by coordination problems in the origin and management of crises by relating the insights of the new literature on global games to earlier work on currency crises, bank runs, and sovereign debt default. It draws on recent research and policy work to examine the debate on the design of sovereign bankruptcy procedures, the role of the IMF in influencing the actions of creditors and debtors, and the role of private sector involvement in the management of financial crises.

Managing Pension and Retirement Plans

August Baker, Dennis E. Logue, and Jack S. Rader — 2005-07-14

Author:: August Baker, Dennis E. Logue, Jack S. Rader
ISBN:: 9780195165906
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/019516590X.001.0001
Published in print:: 2004
Published Online:: 2005-07-14

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.

Asset Pricing in Discrete Time

Ser-Huang Poon and Richard Stapleton — 2005-07-14

Author:: Ser-Huang Poon, Richard Stapleton
ISBN:: 9780199271443
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199271445.001.0001
Published in print:: 2005
Published Online:: 2005-07-14

Relying on the existence, in a complete market, of a pricing kernel, this book covers the pricing of assets, derivatives, and bonds in a discrete time, complete markets framework. It is primarily aimed at advanced Masters and PhD students in finance. Topics covered include CAPM, non-marketable background risks, European-style contingent claims as in Black–Scholes and in cases where risk-neutral valuation relationship does not exist, multi-period asset pricing under rational expectations, forward and futures contracts on assets and derivatives, and bond pricing under stochastic interest rates. All the proofs, including a discrete time proof of the Libor market model, are shown explicitly.

Pension Design and Structure

Olivia S. Mitchell and Stephen P. Utkus — 2005-01-20

Author:: Olivia S.MitchellInternational Foundation of Employee Benefit Plans Professor of Insurance and Risk Management, and Executive Director of the Pension Research Council at the Wharton School of the University of Pennsylvaniahttp://insr.wharton.upenn.edu/people/researchpapers.cfm?id=430Stephen P.UtkusDirector of the Vanguard Center for Retirement Research, The Vanguard Group
ISBN:: 9780199273393
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199273391.001.0001
Published in print:: 2004
Published Online:: 2005-01-20

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.

The German Financial System

Jan P. Krahnen and Reinhard H. Schmidt — 2005-01-20

Author:: Jan P.KrahnenChair Corporate Finance, Department of Business and Economics, University of Frankfurthttp://www.ifk-cfs.de/index.php?id=823Reinhard H.SchmidtWilhelm Merton Chair for International Banking and Finance, Department of Business and Economics, University of Frankfurthttp://www.finance.uni-frankfurt.de/schmidt/index.php?case=prof&men=2&lg=0
ISBN:: 9780199253166
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199253161.001.0001
Published in print:: 2004
Published Online:: 2005-01-20

The book provides a comprehensive and up-to-date overview of all aspects of the German financial system, grounded in the current discussion about the importance of a country's financial system for its economic development. The common starting points for the book as a whole as well as for all 15 individual chapters are what the respective authors perceive as peculiarities of the German financial system and the perception that seems to prevail among foreign observers of this system. The book covers a wide range of topics from the banking system, the stock exchanges, bank–client relationships, regulation and competition in the financial sector to corporate governance and financial accounting in Germany.

The Economics and Politics of Accounting

Christian Leuz, Dieter Pfaff, and Anthony Hopwood — 2005-01-20

Author:: ChristianLeuzAssistant Professor in Accounting at the Wharton School of the University of Pennsylvaniahttp://www.chicagobooth.edu/faculty/bio.aspx?person_id=12825260032DieterPfaffProfessor of Accounting at the University of Zurichhttp://www.irc.uzh.ch/irc/lehrstuehle/prof-dr-dieter-pfaff/lebenslauf.htmlAnthonyHopwoodPeter Moores Dean of the Saïd Business School, University of Oxford
ISBN:: 9780199260621
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199260621.001.0001
Published in print:: 2004
Published Online:: 2005-01-20

The book focuses on key issues in accounting, setting them in the context of current accounting debates and trends. It makes the point that although, for the most part, we have accepted the impartiality and objectivity of accounting, we have not recognized how accounting systems are embedded in a country’s economic and legal framework, much of which is in turn shaped by political processes. This web of interactions results in complex economic and political questions that require accounting researchers to focus on several related trends: information economics, regulatory economics, sociology, and political science. Although considerable progress has been made, many fundamental questions are still subject to debate, and in the book leading international scholars address a number of these: what is the role of accounting in security valuation, decision making, and contracting; what can we learn from economics-based research in accounting; what is the role of auditing and how can accounting standards be enforced; what are the cost and benefits of accounting and disclosure regulation; what is the role of accounting in society; how does lobbying affect the political process of standard setting; and what are the consequences of the internationalization of standard setting?

Competing in the Information Age

Jerry N. Luftman — 2005-01-20

Author:: Jerry N. Luftman
ISBN:: 9780195159530
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0195159535.001.0001
Published in print:: 2003
Published Online:: 2005-01-20

This book presents a new set of practical and powerful tools to help business get the full benefit from their information technology (IT) investments. It addresses how organizations can work together to improve business performance. It elaborates on the approach for assessing the maturity of IT-business alignment; once maturity is understood, businesses can identify opportunities for enhancing the harmonious relationship of business and IT. The book is divided into eight parts, with parts II-VII focusing on the six strategic alignment maturity assessment criteria.

Pension Security in the 21st Century

Gordon L. Clark and Noel Whiteside — 2004-08-01

Author:: Gordon L.ClarkHalford Mackinder Professor of Geography and Professorial Fellow of the Saïd Business School University of Oxfordhttp://www.geog.ox.ac.uk/staff/glclark.htmlNoelWhitesideProfessor of Comparative Public Policy and Senior Fellow at the Institute of Governance and Public Management at the University of Warwickhttp://www2.warwick.ac.uk/fac/soc/sociology/staff/academicstaff/whitesiden/
ISBN:: 9780199261765
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199261768.001.0001
Published in print:: 2003
Published Online:: 2004-08-01

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.

The Pension Challenge

Olivia S. Mitchell and Kent Smetters — 2004-08-01

Author:: Olivia S.MitchellInternational Foundation of Employee Benefit Plans Professor and Executive Director Pension Research Council of the Wharton School University of Pennsylvaniahttp://insr.wharton.upenn.edu/people/researchpapers.cfm?id=430KentSmettersAssistant Professor in the Insurance and Risk Management Department Wharton School University of Pennsylvaniahttp://www.wharton.upenn.edu/faculty/smetters.cfm
ISBN:: 9780199266913
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199266913.001.0001
Published in print:: 2003
Published Online:: 2004-08-01

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.

Management Accounting in the Digital Economy

Alnoor Bhimani — 2004-08-01

Author:: AlnoorBhimaniReader Department of Accounting and Finance London School of Economics and Political Sciencehttp://www2.lse.ac.uk/accounting/facultyAndStaff/profiles/bhimani.aspx
ISBN:: 9780199260386
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199260389.001.0001
Published in print:: 2003
Published Online:: 2004-08-01

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.

The Japanese Main Bank System

Masahiko Aoki and Hugh Patrick — 2004-08-01

Author:: MasahikoAokiStanford and Kyoto Universitieshttp://fsi.stanford.edu/people/masahikoaoki/HughPatrickColumbia University Business Schoolhttp://www4.gsb.columbia.edu/cbs-directory/detail/494738/Hugh+Patrick
ISBN:: 9780198288992
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics, South and East Asia
DOI:: 10.1093/0198288999.001.0001
Published in print:: 1995
Published Online:: 2004-08-01

This book is based on a collaborative project sponsored by the World Bank. Its purpose is to describe, analyse, and evaluate the Japanese main bank system, and examine its relevance as a model for developing market economies and transforming social economies. It is divided into two parts: Part I, The Japanese Main Bank System, presents ten chapters that explore the development, functions, relationships and regulation of the main bank system; and Part II, The Comparative Context: Relevance for Developing and Transforming Economics, contains seven chapters that compare the Japanese main bank system with that of other Germany, Mexico, India, China, and Poland.

Economic Organizations and Corporate Governance in Japan

Curtis J. Milhaupt and Mark D. West — 2004-08-01

Author:: Curtis J. Milhaupt, Mark D. West
ISBN:: 9780199272112
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199272115.001.0001
Published in print:: 2004
Published Online:: 2004-08-01

Using an institutional and empirical approach, this book analyses the role of formal rules (law and regulations) and informal rules (norms, practices, and shared beliefs) in the Japanese economy. Through in‐depth studies of corporate governance and finance, mergers and acquisitions, financial regulation, organized crime, and markets for everything from venture capital to legal talent, Professors Milhaupt and West show that institutions play a crucial and heretofore overlooked role in the structure of the Japanese economy, which often is portrayed as being governed exclusively by interpersonal relations and bureaucratic fiat. As these rules change, Japanese actors are responding, reshaping corporate governance and financial markets, while eroding the bureaucracy's power.

Dividend Policy and Corporate Governance

Luis Correia da Silva, Marc Goergen, and Luc Renneboog — 2004-04-07

Author:: Luis Correia da Silva, Marc Goergen, Luc Renneboog
ISBN:: 9780199259304
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199259305.001.0001
Published in print:: 2004
Published Online:: 2004-04-07

By reviewing the interactions between dividend policy and other corporate governance mechanisms, this book provides a major contribution to the debate about the best corporate governance system. A conscious effort is made to compare existing empirical studies on the UK and US with those on other countries such as France, Germany, and Japan. The book provides new empirical evidence on German dividend policy, one of the representatives of the corporate governance system of Continental Europe – a system that remains largely under‐researched. We find major differences between the dividend policy of German firms and that of UK or US firms. First, the conventional wisdom, which states that German dividends are lower than UK or US dividends is not necessarily upheld as on a published profits basis; the exact converse is true. Second, dividends in the UK and US are relatively smooth as they are characterized by frequent, but small changes, whereas dividends in Germany show less frequent, but larger changes. Third, we find a link between corporate control and dividend payouts. Fourth, we report evidence that the existence of a loss is an additional determinant of dividend changes. Finally, we do not find a link between the tax status of the controlling shareholder and the firm's dividend payout. Our results have important implications for the current debate on the best corporate governance system.

The Challenges of Privatization

Bernardo Bortolotti and Domenico Siniscalco — 2004-04-07

Author:: Bernardo Bortolotti, Domenico Siniscalco
ISBN:: 9780199249343
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199249342.001.0001
Published in print:: 2004
Published Online:: 2004-04-07

This book provides a systematic account of the privatization process at the global scale, presenting an overarching description of the phenomenon, and panel data empirical analyses testing some of the predictions of the recent economic theory of privatization. At the macroeconomic level, privatization processes of the 1980s and 1990s are shown to be a cyclical phenomenon shaped by economic, political, and institutional determinants. At the microeconomic level, privatization has been partial and incomplete, with only minority rights transferred to the private sector. However, genuine privatization, involving the full transfer of control to the private sector, is difficult to achieve as several conditions must be met. First, markets should be competitive or suitably regulated. Second, private investors should be adequately protected by the law in order to avoid expropriation. Third, political institutions should be designed to limit the veto power of constituencies ousting full divestiture. Last but not least, governments should be credibly committed not to interfere post-privatization in the operating activity of the companies. As a consequence, private ownership is likely to coexist with public control, at least in the near future.

Wall Street

Charles R. Geisst — 2003-11-01

Author:: Charles R. Geisst
ISBN:: 9780195130867
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Economic History, Financial Economics
DOI:: 10.1093/0195130863.001.0001
Published in print:: 1999
Published Online:: 2003-11-01

A history of Wall Street beginning in 1791 and ending in the present, the book traces the development of the major financial markets from the New York Stock Exchange's origins in the outdoor curb market through developments in the 1990s. The history is divided into four main periods – 1791 through the Civil War, the Civil War to 1929, 1929 to 1954, and the late 1950s to the present. In each period, the book traces the development of Wall Street by examining how it issued new securities and traded existing ones on the exchanges. It also examines the role of major personalities such as Jay Gould, J. P. Morgan, and Michael Milken in new developments in finance. A major area of focus is the securities and banking laws initiated in the 1930s and their impact upon the Street's future role in raising and trading securities. Also discussed are the major milestone deals in each period and how they affected future trends. The major theme throughout is the often uneasy relationship between Wall Street and Washington, especially during the 1930s and again in the 1990s when several major scandals erupted.

Strategic Asset Allocation

John Y. Campbell and Luis M. Viceira — 2003-11-01

Author:: John Y. Campbell, Luis M. Viceira
ISBN:: 9780198296942
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0198296940.001.0001
Published in print:: 2002
Published Online:: 2003-11-01

One of the most important decisions many people face is the choice of a portfolio of assets for retirement savings. The leading academic paradigm of portfolio choice, the mean‐variance analysis of Markowitz, does not give adequate guidance for this long‐term investment problem because it assumes that investors care only about the mean and variance of return over a single short period. The book develops an alternative paradigm, the inter‐temporal model of Merton, into an empirically usable framework with the following implications. The safe asset for a long‐term investor is not a Treasury bill, but a long‐term inflation‐indexed bond that provides a stable stream of real income. A nominal bond is a good substitute for an inflation‐indexed bond only if inflation risk is low. There is evidence that stock returns are mean‐reverting, with bull markets tending to follow bear markets and vice versa; this suggests that long‐term investors should increase their average stockholdings but should also vary their stockholdings with the overall level of the stock market. Investors with a stable stream of labour income can afford a greater exposure to stock market risk.

Macro Markets

Robert J. Shiller — 2003-11-01

Author:: Robert J. Shiller
ISBN:: 9780198294184
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Macro- and Monetary Economics, Financial Economics
DOI:: 10.1093/0198294182.001.0001
Published in print:: 1998
Published Online:: 2003-11-01

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.

The London Stock Exchange

Ranald Michie — 2003-11-01

Author:: Ranald Michie
ISBN:: 9780199242559
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Economic History, Financial Economics
DOI:: 10.1093/0199242550.001.0001
Published in print:: 2001
Published Online:: 2003-11-01

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.

Inefficient Markets

Andrei Shleifer — 2003-11-01

Author:: Andrei Shleifer
ISBN:: 9780198292272
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0198292279.001.0001
Published in print:: 2000
Published Online:: 2003-11-01

This book describes an approach, alternative to the theory of efficient markets, to the study of financial markets: behavioural finance. It begins by assessing the efficient market hypothesis, emphasising how some of its foundations are contradicted by psychological and institutional evidence. It then introduces the theory of behavioural finance and devotes the rest of the book to explore its main aspects, concentrating on the role and characteristics of noise traders, arbitrageurs, and investors. Chapters 2 through 4 focus on the limits imposed on arbitrage by factors such as risk aversion or agency problems. Two crucial conclusions are reached. First, plausible theories of arbitrage do not lead to the prediction that markets are efficient—quite the opposite. Second, the recognition that arbitrage is limited, even without specific assumptions about investor sentiment, generates new empirically testable predictions, some of which have been confirmed in the data. Chapters 5 and 6 centre on how investor sentiments are built, emphasising some empirical violations to the idea of efficient markets such as price bubbles. The book concludes suggesting that the theory of behavioural finance is indeed more effective that the efficient market theory in explaining some financial evidence.

Global Banking

Roy C. Smith and Ingo Walter — 2003-11-01

Author:: Roy C. Smith, Ingo Walter
ISBN:: 9780195134360
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics, International
DOI:: 10.1093/0195134362.001.0001
Published in print:: 2003
Published Online:: 2003-11-01

Adaptability to the pace of evolution of the global banking and financial services sector is a key challenge for modern enterprise management. The book attempts to make sense of the chaos and confusion of today's global banking and capital market environment by analyzing its central components. The purpose is to obtain a better understanding of the process and the services involved, and of their impact on public policy issues.

Firms, Contracts, and Financial Structure

Oliver Hart — 2003-11-01

Author:: Oliver Hart
ISBN:: 9780198288817
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0198288816.001.0001
Published in print:: 1995
Published Online:: 2003-11-01

This book provides a framework for thinking about economic relationships and institutions such as firms. The basic argument is that in a world of incomplete contracts, institutional arrangements are designed to allocate power among agents. The first part of the book is concerned with the boundaries of the firm. It is argued that traditional approaches such as the neoclassical, principal‐agent, and transaction costs theories cannot by themselves explain firm boundaries. The book describes a theory—the incomplete contracting or property rights approach—based on the idea that power and control matter when contracts are incomplete. If the terms of a transaction can always be renegotiated, the incentives of a party to undertake relationship‐specific investments will depend crucially on the ability to control the use of productive assets when renegotiation takes place. Asset ownership becomes an essential source of power. The theory suggests that firm boundaries are chosen to allocate power optimally among the various parties to a transaction. The foundations of incomplete contracting are also discussed. The remainder of the book applies incomplete contracting ideas to understand the financial structure of closely held and public companies. The analysis illustrates how debt acts as an automatic mechanism to constrain the behaviour of managers or owners of both kinds of companies. In closely held companies, debt can force an entrepreneur to pay out funds to investors rather than to himself. In a public company, ownership is dispersed among small shareholders causing a separation between ownership and control. It is argued that debt and equity choices, capital structure decisions, bankruptcy procedures, corporate governance, and takeovers, play a substantial role in limiting the ability of a (self‐interested) manager to make unprofitable but power‐enhancing decisions.

The Economics of Financial Markets

Hendrik S. Houthakker and Peter J. Williamson — 2003-11-01

Author:: Hendrik S. Houthakker, Peter J. Williamson
ISBN:: 9780195044072
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/019504407X.001.0001
Published in print:: 1996
Published Online:: 2003-11-01

This book puts economics to work on the daily problems faced by investors, traders, speculators, and brokers as they wrestle with increasingly diverse and complex financial markets. Drawing mainly on data direct from the financial behavior of households, corporations, and governments in the USA, the authors show how accessible but rigorous economics can help in making sense of the financial markets (including those in equities, bonds, mutual funds, options, and futures) and of the ways in which these markets are organized. The authors contend that many of the approaches that might seem random or counter‐intuitive at first sight are in fact rational and often predictable responses to events – but they also find that real markets stray from the rational economic path – financial markets make mistakes, and inefficiencies do exist. When they do, unique profit opportunities arise that the authors demonstrate throughout the book. The book differs from many works on financial markets in that it provides a systematic framework for analyzing the impact of events on security prices and trading volumes; explains how the value of a firm's assets and dividend flow will influence the prices of its securities; provides the tools to identify and manage different types of risk; discusses what protection investors can expect from financial market regulators and what happens when a clique tries to squeeze or corner a market; includes a detailed treatment of futures and their role at the core of today's financial markets, and explains why they should be of concern to more and more investors and traders; shows how to use modern corporate strategy tools in security analysis; and shows how to discover inefficiencies in financial markets and profit from them. By bringing together information on the institutional details of financial markets with the concepts and tools of economic theory, the book will be of value to practitioners and students of financial markets alike.

Debt, Financial Fragility, and Systemic Risk

E. Philip Davis — 2003-11-01

Author:: E. Philip Davis
ISBN:: 9780198233312
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0198233310.001.0001
Published in print:: 1995
Published Online:: 2003-11-01

A remarkable feature of the period since 1970 has been the patterns of rapid and turbulent change in financing behaviour and financial structure in many advanced countries. These patterns have, in turn, often been marked by rising indebtedness, volatile asset prices, and periods of financial stress, whether in the non‐financial sector, the financial sector, or both. At the same time, the economics profession has seen a notable advance in the scope and depth of the theory of finance, particularly as it relates to the nature and behaviour of financial institutions and markets. In this context, the objective of the book is to explore, in both theoretical and empirical terms, the nature of the relationships in advanced industrial economies between levels and changes in borrowing (debt), vulnerability to default in the non‐financial sector (financial fragility), and widespread instability in the financial sector (systemic risk). The work seeks to provide a survey and critical assessment of the current economic theory relating to debt and financial instability to offer empirical evidence casting light on the validity of the theories, and it suggests a number of policy implications and lines of further research. Unlike most extant texts on these matters, which generally relate to one country's experience, the book focuses on the way similar patterns are observable in several countries—but not in others—as well as in the international capital markets themselves. Particular attention is paid to the importance of the nature and evolution of financial structure to the genesis of instability. Whereas a structural approach is common in analysis of comparative behaviour of financial systems—notably in corporate finance—its application to instability is relatively rare. Given the international scope of the analysis, the work is germane to understanding the behaviour of financial systems in all capitalist economies, as well as in the international capital markets. However, it is of particular relevance to analysis of the US, Japan, Germany, France, the UK, Canada, Sweden, Norway, Italy, and Australia, whose recent experience is analysed in some detail.

The Control of Corporate Europe

Fabrizio Barca and Marco Becht — 2003-11-01

Author:: FabrizioBarcaItalian Finance Ministry and University of SiennaMarcoBechtEuropean Corporate Governance Institute and Free University of Brusselshttp://www.ecgi.org/members_directory/member.php?member_id=6
ISBN:: 9780199257539
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0199257531.001.0001
Published in print:: 2002
Published Online:: 2003-11-01

Written by an international team of authors, this book provides the first systematic account of the control of corporate Europe based on voting block data disclosed in accordance with the European Union's Large Holdings Directive (88/627/EEC). The study provides detailed information on the voting control of companies listed on the official markets in Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, the UK, and as a benchmark comparison, the US. The authors record a high concentration of control of corporations in many European countries, with a single blockholder frequently controlling more than 50% of the corporate votes. In contrast, a majority of UK‐listed companies have no blockholder owning more than 6% of shares. These chapters devoted to individual countries illustrate how blockholders can use legal devices to leverage their voting power over their cash‐flow rights or how incumbents prevent outsiders from gaining voting control.

Beyond Junk Bonds

Glenn Yago and Susanne Trimbath — 2003-11-01

Author:: Glenn Yago, Susanne Trimbath
ISBN:: 9780195149234
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0195149238.001.0001
Published in print:: 2003
Published Online:: 2003-11-01

Since financial myths exploded in the 1980s, the perspective of time creates a unique opportunity to update and expand the analysis begun in Glenn Yago's 1991 book, Junk Bonds: How High Yield Securities Restructured Corporate America (OUP). When first published, Junk Bonds drew controversial responses, but some 12 years later, enough time has passed to allow this dispassionate empirical analysis to shear away the hype and hysteria that surrounded the Wall Street scandals, Washington controversies, and media frenzy of the time. In retrospect, the evidence clearly casts favorable light on the role of high‐yield securities (junk bonds), and the research presented in this book demonstrates how financial innovations enabled capital access for industrial restructuring, capital and labor productivity gains, and improved global competitiveness. The book provides a one‐stop data, reference, and case study presentation of firms and securities in the contemporary high‐yield market in the USA (and elsewhere), and of the financial innovations that spurred growth in the 1990s and will continue to finance the future. The high‐yield market incubated successive waves of financial technologies that now proliferate beyond junk bonds to all the dimensions and dynamics of global debt and equity capital markets. The book charts the recovery of the market in the 1990s, the wave of fallen angels, distressed credits and defaults in 2001–2002, and suggests how the high‐yield market will be recreated in the global market of the twenty‐first century. It also explicates the linkages between the high‐yield market and other credit and equity markets in managing a firm's capital structure to execute its business strategy. Anyone active in corporate finance, financial institutions, or capital markets will find this book useful for interpreting and understanding the recent history of both the high‐yield marketplace and its interaction with private equity, public equity, and fixed‐income markets. The material presented is arranged in 11 chapters and four appendices. The latter provide definitions of junk bonds, some technical material from Ch. 4, a “tools of the trade” glossary, and a literature review containing short summaries of seven topics (bond ratings, macroeconomic relationships, regulation, use of proceeds, Drexel Burnham Lambert – a bond underwriter, default rates, and risk) with associated references, a table of annotated references, and further references.

Beyond Greed and Fear

Hersh Shefrin — 2003-11-01

Author:: Hersh Shefrin
ISBN:: 9780195161212
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0195161211.001.0001
Published in print:: 2002
Published Online:: 2003-11-01

Behavioral finance is the study of how psychology impacts finance. This book represents the first general, comprehensive treatment of the subject. The book explains how psychological phenomena impact the entire field of finance. Readers will learn to recognize the influence of psychology on themselves, on others, and on the financial environment at large. Psychology is the basis for human desires, goals, and motivations. Psychology is also the basis for a wide variety of human errors that stem from perceptual illusions, overconfidence, over‐reliance on rules of thumb, and emotions. Errors and bias cut across the entire financial landscape, affecting individual investors, institutional investors, analysts, strategists, brokers, portfolio managers, options traders, currency traders, futures traders, plan sponsors, financial executives, and financial commentators in the media.

Asset Pricing under Asymmetric Information

Markus K. Brunnermeier — 2003-11-01

Author:: Markus K. Brunnermeier
ISBN:: 9780198296980
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0198296983.001.0001
Published in print:: 2001
Published Online:: 2003-11-01

Asset prices are driven by public news and information that is dispersed among many market participants. Traditional asset pricing theories have assumed that all investors hold symmetric information. Research in the past two decades has shown that the inclusion of asymmetric information drastically alters traditional results. This book provides a detailed up‐to‐date survey that serves as a map for students and other researchers navigating through this literature. The book starts by introducing the reader to different knowledge, equilibrium, and efficiency concepts. After explaining no‐trade theorems, it highlights the important role of asymmetric information in explaining the existence and anatomy of bubbles. The subsequent overview of market microstructure models shows how information is reflected in prices and how traders can infer it from prices. Insights derived from herding models are used to provide explanations for stock market crashes. If investors have short horizons, price correcting arbitrage activity is limited and investors have a tendency to focus on the same (possible unimportant) news, a phenomena that led Keynes to compare the stock market with a beauty contest. The book concludes with a brief summary of bank runs and their connection to financial crises. In summary, models with asymmetric information provide a better understanding of bubbles, crashes, and other market inefficiencies and frictions.

Arbitrage Theory in Continuous Time

Tomas Björk — 2003-11-01

Author:: Tomas Björk
ISBN:: 9780198775188
Publisher:: Oxford University Press
Subjects:: Economics and Finance, Financial Economics
DOI:: 10.1093/0198775180.001.0001
Published in print:: 1998
Published Online:: 2003-11-01

This book gives a comprehensive introduction to arbitrage theory for the pricing of contingent claims, such as options, futures, and other financial derivatives. The arbitrage theory for the term structure of interest rates is given particular consideration. Also included is a self‐contained exposition of stochastic optimal control, with applications to portfolio optimisation. The mathematical development is precise but avoids the explicit use of measure theory.