Affordability and mortgage design: Permanent buydowns and buyups

Abstract

A simulation model that mirrors the actual practices of lenders in setting qualification requirements for mortgage loans is used to assess the impact of permanent buydowns and buyups on the maximum sale price that buyers can afford. Buydowns are reductions in the coupon rate traded off against higher discount points; buyups are the reverse. Although buydowns have little effect on afford ability, buyups can have significant effects. Their potential is largely unrealized, however, because of the call risk to lenders of loans carrying premiums. The authors propose a “discount recovery” provision, which would be similar to a prepayment penalty except that the payment upon prepayment would be tied to the amount of the discount foregone by the lender. This would protect lenders against call risk, giving them every reason to offer buyups as a way of expanding demand.     

Would a Value‐Added System of Retention Improve the Distribution of Teacher Quality? A Simulation of Alternative Policies

In this paper, we consider several features of teacher‐retention policies based on value‐added measures of effectiveness under a variety of empirically grounded rules and parameters. We consider the effects of policy design by varying the standard above which satisfactory teachers are expected to perform. We simulate recently adopted policies that remove teachers based on consecutive unsatisfactory performance and compare these to policies that remove teachers based on poor performance on average over a multiyear period. We also consider the precision of the performance measure and the underlying variation in teacher quality on policy effects. Finally, the simulation makes a step forward by incorporating recent empirical findings of a relationship between teacher quality and natural attrition from the profession. Our results indicate that deselection policies based on value‐added measures have the potential to improve teacher quality, although understanding the role of policy design, self‐selected exits, and the underlying variation in teacher quality is essential for determining policy effects.     

Power,Profit and Prestige: The History of American Imperialist Expansion

ABSTRACT

This article provides a critical reading of the idea of ‘the reasonable’ in contemporary politics, as reflected in the work of John Rawls. I argue that this concept is best understood as a practice of political identification, which provides the template for mutual accommodation without concurrent agreement on any substantive commitments. However, by constructing a teleological story in which the reasonable leads naturally back to the liberal principles of justice, Rawls reveals the limits of the concept. Rather than ending political disagreement by establishing a shared foundation, prioritizing reasonableness only repurposes conflicts by transforming disagreement into a series of debates over the meaning of reasonableness itself, battles which are every bit as partisan and vicious as those Rawls sought to exclude. Revitalizing the idea of the reasonable requires abandoning the effort to deploy it as a technique of exclusion. Instead, reasonable politics should be oriented toward engagement with unreasonable critics.     

The intellectual legacy of J.E. Hodgetts

Abstract: J.E. (Ted) Hodgetts was influenced by both the political economy approach that he learned at the University of Toronto and by the comprehensive historical method developed by Leonard White, under whom he studied at Chicago. His first great project, Pioneer Public Service, convinced him that responsible government was impossible without responsible public administration. The authors examine how his response to management theories and practices evolved following his participation in the Glassco, Lambert and Gomery commissions. Hodgetts consistently refused the complete separation of politics and administration, and he promoted the use of management techniques to strengthen parliamentary supervision of the public service. The two key components of his legacy are thus a commitment to the democratic values of representative government and the comprehensive study of the internal dynamics of public administration in interaction with the relevant environmental factors.     

‘Iraq: A note

Gordon Harmon was born in China in 1900 and after the First World War served in the Salt Revenue Guards for a number of years. After the outbreak of WWII he was posted in a liaison role to the centre of Chinese government in Chungking. There he worked with Chiang Kai Shek's Nationalist Intelligence Service. But he also had quite close links with Chou En-Lai, who was also in Chungking at that time. The extent of his more general relationship with the Communists is unclear, but he seems to have reported fairly extensively on their plans and intentions. Harmon has left a very detailed record of a conversation with Mao Tse-tung in 1946 which seems to suggest that he had met Mao a few times before.. It was Mao who apparently said to Harmon “I am not interested in Hongkong and I will certainly not allow it to become a bone of contention between your country and mine”