Finance Commons^™

Upjohn Institute Policy Paper: Public Pension Crisis And Investment Risk Taking: Underfunding, Fiscal Constraints, Public Accounting, And Policy Implications, Nancy Mohan, Ting Zhang

Economics and Finance Faculty Publications

Public pension funds that cover retirement benefits for almost 20 million active or retired employees have been significantly underfunded. An important, though largely overlooked, issue related to pension underfunding is the excessive investment risk levels assumed by public plans. Our analysis suggests government accounting standards strongly affect public fund investment risk, as higher return assumptions (used to discount pension liabilities) are associated with higher investment risk.

Public funds undertake more risk if they are underfunded and have lower investment returns in previous years, consistent with the risk transfer hypothesis. Furthermore, pension funds in states facing fiscal constraints allocate more assets …

Beyond Catch-Up To New Growth Sources, Hian Teck Hoon

Research Collection School Of Economics

SMU Professor of Economics Hoon Hian Teck gave his take on the impact of the Budget announced last Friday and wrote that the 2012 Budget, in essence, recognises that Singapore is now making a transition from a phase of catch-up growth to being a mature economy. In this mature phase, Singapore needs new sources of growth, and policy interventions are necessary to boost the employability and wage earnings of low-wage and older workers. Professor Hoon is also Associate Dean at the SMU School of Economics.

Micro-Finance Competition With Motivated Mfis, Brishti Guha, Prabal Roy Chowdhury

Research Collection School Of Economics

In this paper we examine the effect of increased MFI competition, focusing on its implications for borrower targeting, both in the presence and the absence of double-dipping. In the absence of competition we find that the loans are more likely to go to relatively richer borrowers whenever inequality is not too large, and the technology is sufficiently convex. In the presence of competition, the results depend on whether double-dipping is feasible or not. In case double-dipping is not feasible, we find that the MFIs necessarily target the richer borrowers. Interestingly, it turns out that double-dipping may encourage the MFIs to …

Bayesian Hypothesis Testing In Latent Variable Models, Yong Li, Jun Yu

Research Collection School Of Economics

Hypothesis testing using Bayes factors (BFs) is known not to be well defined under the improper prior. In the context of latent variable models, an additional problem with BFs is that they are difficult to compute. In this paper, a new Bayesian method, based on the decision theory and the EM algorithm, is introduced to test a point hypothesis in latent variable models. The new statistic is a by-product of the Bayesian MCMC output and, hence, easy to compute. It is shown that the new statistic is appropriately defined under improper priors because the method employs a continuous loss function. …

A Panel Smooth Transition Regression Model For The Determinants Of Inflation Expectations And Credibility In The Ecb And The Recent Financial Crisis, Anjeza Kadilli

Anjeza Kadilli

No abstract provided.

Industry Contagion In Loan Spreads, Michael G. Hertzel, Micah S. Officer

Finance Faculty Works

Spreads on new and renegotiated corporate loans are significantly higher when the loan originates (or is renegotiated) in the two years surrounding bankruptcy filings by industry rivals. This industry-specific contagion is particularly severe in the middle of industry bankruptcy waves. Furthermore, this contagion in loan spreads is mitigated in concentrated industries, consistent with the hypothesis and evidence in Lang and Stulz (1992) that bankruptcy filings in concentrated industries can have positive consequences for rivals (increased market share and/or power). There is also some evidence that contagion affects non-spread terms in loan contracts.

Sisteme Bancare Comparate. Comparative Analysis Of Banking Systems, Cristi Spulbăr, Mihai Nițoi

Mihai Nițoi

No abstract provided.

Smart Stimulus Amid Deepening Debt: Future-Flow Tax Credit Programs, William Werkmeister

William Werkmeister

No abstract provided.

Harmonising And Regulating Financial Markets, Mads Andenas

Mads Andenas

This paper discusses problems of harmonisation and regulation of the European Internal Financial Market. The argument is that the current division of powers between the EU and Member States is not achieving sufficient harmonisation to develop an internal market. The obstacles to the Internal Financial Market presented by national regulatory and supervisory regimes remain too high, and the EU minimum standards and mutual recognition regime has failed to lower these barriers sufficiently. There is a need for broader based regulatory and supervisory institutions, undertaking at a European level what cannot effectively be done at a national level, including providing a …

Sisteme Bancare Comparate. Comparative Analysis Of Banking Systems, Cristi Spulbăr, Mihai Nițoi

Cristi Spulbăr

No abstract provided.

Μood Effects In Optimal Debt Contracts, Nicholas Apergis, Dimitris Voliotis

Dimitris Voliotis

The impact of strong emotions or mood on decision making and risk taking is well recognized in behavioral economics and finance. Yet, and in spite of the immense interest, no study, so far, has provided any comprehensive evidence on the impact of such emotions on financial contracts and particularly on debt contracts. This paper provides the theoretical framework to study the impact of mood on financial contracting.

Mexico Consensus Economic Forecast, Volume 15, Number 1, Thomas M. Fullerton Jr., Adam G. Walke

Departmental Papers (E & F)

No abstract provided.

Risk Management In A Volatile Market, Singapore Management University

Perspectives@SMU

As stock markets around the world whipsaw in a manner that bewilders even the seasoned trader, an academic has suggested for financial institutions to look more closely at linking dynamic loss tail distributions to contagion modeling for effective risk management.

The Impact Of Institutional Arrangements On Educational Efficiency, Trevor Collier

Economics and Finance Faculty Publications

Per-pupil expenditures on education in the United States have grown immensely in recent decades, yet student achievement has been stagnant. An abundance of research has sought to solve this enigma, much of it centered on the incentive structure facing administrators. Some recent papers use TIMSS data to analyze the relationship between institutional arrangements—that typically do not vary within a single country—and student achievement. Similarly, we utilize TIMSS 1999 to determine if there is an indirect relationship between institutional arrangements and student achievement, via a relationship with school efficiency. Our results show that the specified link between institutional arrangements and student …

The Gettysburg Economic Review, Volume 6, Spring 2012

Gettysburg Economic Review

No abstract provided.

The Rise Of American Industrial And Financial Corporations, Elizabeth A. Laughlin

Gettysburg Economic Review

This paper identifies and analyzes the steps the United States took in its progression to an industrial nation. Launched by the merger movement in the late nineteenth century, vertical and horizontal integration lead to trusts and monopolies in a number of industries. Simultaneously, the labor market was undergoing a number of reforms with the deskilling of workers. The rise of big business was made possible through the growth of the financial sectors and companies such as J.P Morgan. The case study of The Standard Oil Co. highlights the wealth and power that robber barons such as J.D. Rockefeller held during …

Three Essays On Financial Development, Biniv K. Maskay

Theses and Dissertations--Economics

My dissertation investigates three separate issues pertaining to a country's financial development. The first essay provides an introduction to the three essays. The second essay examines the combined effect of financial development and human capital on economic growth. While both financial development and human capital are individually positively correlated with growth, the literature has not emphasized their combined effect on growth. In this essay, I analyze the extent to which the effect of financial development on growth depends on a country's level of human capital. Using dynamic panel difference and system GMM, as well as the pooled OLS, I find …

U.S. Cross-Listing, Institutional Investors, And Equity Returns, Yui Law

Theses & Dissertations

Cross-listing refers to firms listing their equities on more than one stock exchange. Cross-listing is an interesting topic of international finance. This is because along with the deeper integration of the global financial market, we should see lesser importance of geographic factors. Thus, the motivations and effects of listing a firm on exchanges of different regions should have essential economic implications. The reputation bonding hypothesis suggests that U.S. cross-listing improves the information environment of a firm because of the higher disclosure standard and more analyst coverage. The legal bonding hypothesis argues that U.S. cross-listing improves the investor protection and corporate …

G-20 Summit And Debt Crisis Of Europe, Badar Alam Iqbal

Business Review

Europe is under debt threat, facing the biggest crisis of uncertainty. If Euro fails, Europe fails. Since the Second World War, this is the hardest hour for Europe. One of the biggest limitations of global integration of EU is that small and weak countries could not fall in line with strong economies. This crisis is the example in this regard. The recent summit at Cannes has failed in giving concrete solution to the debt crisis especially in case of Greece, Italy, Portugal, Ireland and Spain. The crisis in Greece and ltaly cost the resignations of two popular Prime Ministers. The …

Risk Management: Bankruptcy Prediction Models For Banks, Ponkala Anand Vaseekhar Manuel

Theses Digitization Project

The purpose of this study is to determine the causes for financial distress which lead to bankruptcy and identify which of the five models used in this paper is more accurate in forecasting bankruptcy. It analyzes the changes in market, policy, economy, and political influence which leads to bankruptcy. Methodologies chosen to investigate financial distress and bankruptcy in this paper are Moody's, Standard and Poor's, Vaziri's, Z-score Model, and Logit Model. Data was collected from various websites to perform the analysis.