Bad banks: a proposal based on German financial history

In conventional bad bank models, the estimated fundamental value of the illiquid assets is paid to the ailing bank, thereby leaving considerable economic risk with the asset management company. In this paper, a different approach is proposed which combines the bad bank solution with equalization claims, an instrument that has successfully been used in two previous German debt crises. The main idea is to temporarily swap toxic assets for government bonds with an open maturity date. This approach not only leaves total losses with the banks, but also avoids the problem of evaluating the toxic assets in advance. The current German bad bank legislation largely follows this idea, but suffers severely from unnecessary complexity and lack of participation by commercial banks.     

Regulatory delay and growth: a cross country analysis

This paper exploits cross country data on regulatory delay for 135 countries. The results from the regression analysis suggest that waiting time stemming from business procedures has a negative impact on economic growth, especially when we take into account possible endogeneity.     

Review of “Creative Subversions: Whiteness,Indigeneity, and the National Imaginary,” by Margot Francis

Narrative is not only entertainment but also a mode of engaging in negotiation with others, and culture is one of the things negotiated thereby. Stories are structured by an internal and external authority in terms of origin, coherence, and effectiveness in the world. Cultural managers will inevitably be involved in situations where narratives diverge, and they will discover that dealing with competing narratives involves a type of diplomatic communication with a range of participants in the arena of culture, from artists to civic authorities to audiences. Historical anecdotes from both classical and modern eras suggest how powerful cultural credit and cultural production can be and how ideas of culture can be deployed in politics. The slow and careful procedures of diplomacy—taken analogously as communication, protection, negotiation, and sovereignty—can prevent even domestic cultural management from provoking hostility or resistance to a perceived attempt to exert control. Ultimately, we are mostly living in a fluid rather than a precisely calibrated world, and cultural managers know that absolute justifications for cultural work are impossible to find.     

Accuracy,confidence and consistency in repeated recall of events

Abstract

In legal practice, both confidence and consistency of the testimony of eyewitnesses are often used as indicators for accuracy, but their usefulness has been questioned. The present study was designed to determine the relationship between accuracy, confidence and consistency in episodic memory. After viewing a video of a complex series of events, one group of participants was given an initial cued recall test after one week, and repeated recall tests after three and five weeks. A second group of participants was tested after three and five weeks, and a third group was tested only once after five weeks. Accuracy and confidence (at least for incorrect answers) decreased with longer initial retention intervals, but there was no decrease in either accuracy or confidence when recall was repeated. Repeated testing also did not lead to confidence inflation. Correlations between accuracy, confidence and consistency varied from medium to large. Inconsistencies were mainly caused by forgetting and reminiscence. These inconsistencies were recalled almost as accurately as consistently recalled information.     

Sailors' families and the urban institutional framework in early modern Holland

This article points to a largely neglected theme in the maritime history: the important role of sailors' families in urban seafaring communities during the Early Modern Period. At the end of the seventeenth century and during the first decades of the eighteenth century, about 20% of the crewmembers of the Dutch East India Company (VOC) were married. Accordingly, in the towns in Holland where the VOC was present, many women had to run a household by themselves for a long period of time. The sailors' families were often confronted by emotional and financial distress, which to some extent affected the financial expenses of VOC towns as well. Many of these families were however able to cope because they received material support from various urban institutions. The Company created a system that encouraged sailors to send their money home during voyages, while urban poor relief often temporarily complemented the family's budget. Contrary to other married women, wives of sailors could obtain the legal power to engage in financial transactions, or to have access to inheritances. Town councils, civil courts, church councils, charity institutions and the East India Company were all willing to help the seamen's families. Their motives were twofold: while urban communities benefited from financially stable families, and the VOC compensated for their low pay by offering their employees fringe benefits, the attitudes towards seamen's wives also indicate that the urban elites genuinely wanted to provide some assistance to these needy families.     

Bounded rationality and social interaction in negotiating a climate agreement

An agreement on climate change mitigation hinges on large-scale international cooperation. Rational agents are supposed to consider the cost and benefits of cooperation, which then determine their negotiation positions. Behavioral economics provides experimental evidence that decision-making in negotiation-like situations is influenced by systematic cognitive biases and social interaction. In this paper, we examine the impact of bounded rationality and social preferences on bargaining in international climate negotiations and illustrate how particular deviations from full rationality affect the incentives to cooperate. Of special interest are fairness preferences for burden-sharing rules and behavioral responses to different framings of climate change and policy, as well as implications of these for communication about climate change. The analysis will further address different levels of representation, including individual citizens, politicians, experts, and (professional) negotiators. The consequences of the most prominent nonstandard preferences and biases for negotiating a climate treaty are assessed, and specific strategies to foster cooperation are suggested.     

Norms Network Members Use: An Alternative Perspective for Indicating Network Success or Failure

ABSTRACT

In this article it is argued that one approach to learn more on network success is by studying the norms network members use to control their own network. The results of this study in four health care networks indicate three norms to be central: the norm of network legitimacy, the norm of activating capacity, and the norm of network climate. By comparing the four networks it was explored if and why networks differ in the accomplishment of their own norms. Explanations for the reasonable success of networks can be found in the way the networks were initiated and the legitimacy of the networks. Moreover, only if networks are initiated by the network participants themselves does the network's age positively correlate with the network's activating capacity.     

Business groups,financing constraints and investment: the case of India

We examine the effect of business group affiliation on corporate investment behaviour in India. More specifically, we test whether group affiliation reduces financing constraints for the affiliated firms. We use a data set containing 694 listed Indian companies for the 1989–97 period. We estimate a simple investment equation and find evidence that the investment-cash flow sensitivity is much lower for group affiliates. This suggests that business group affiliates have better access to external funds than stand-alone firms.