How Elections Matter: Theory and Evidence from Environmental Policy

This paper explores to what extent secondary policy issues are infuenced by electoral incentives. We develop a two dimensional political agency model in which a politician decides on both a frontline policy issue and a secondary policy issue. The model predicts when the incumbent should manipulate the secondary policy to attract voters. We test our model by using panel data on environmental policy choices in the U.S. states. In contrast to the popular view that secondary policies are largely determined by lobbying, we find strong effects of electoral incentives.elections; environmental policy; lobbying; term limits

On refined volatility smile expansion in the Heston model

It is known that Heston's stochastic volatility model exhibits moment explosion, and that the critical moment $s_+$ can be obtained by solving (numerically) a simple equation. This yields a leading order expansion for the implied volatility at large strikes: $\sigma_{BS}( k,T)^{2}T\sim \Psi (s_+-1) \times k$ (Roger Lee's moment formula). Motivated by recent "tail-wing" refinements of this moment formula, we first derive a novel tail expansion for the Heston density, sharpening previous work of Dragulescu and Yakovenko [Quant. Finance 2, 6 (2002), 443--453], and then show the validity of a refined expansion of the type $\sigma_{BS}( k,T) ^{2}T=( \beta_{1}k^{1/2}+\beta_{2}+...)^{2}$, where all constants are explicitly known as functions of $s_+$, the Heston model parameters, spot vol and maturity $T$. In the case of the "zero-correlation" Heston model such an expansion was derived by Gulisashvili and Stein [Appl. Math. Optim. 61, 3 (2010), 287--315]. Our methods and results may prove useful beyond the Heston model: the entire quantitative analysis is based on affine principles: at no point do we need knowledge of the (explicit, but cumbersome) closed form expression of the Fourier transform of $\log S_{T}$\ (equivalently: Mellin transform of $S_{T}$ ); what matters is that these transforms satisfy ordinary differential equations of Riccati type. Secondly, our analysis reveals a new parameter ("critical slope"), defined in a model free manner, which drives the second and higher order terms in tail- and implied volatility expansions

How Elections Matter: Theory and Evidence from Environmental Policy

In this paper we explore to what extent secondary policy issues are influenced by electoral incentives. We develop a political agency model in which a politician decides on both a frontline policy issue, such as the level of public spending, and a secondary policy issue, such as environmental policy. The model shows under which conditions the incumbent finds it worthwhile to manipulate the secondary policy to attract additional votes to his platform. We test the predictions of the model using state-level panel data on Gubernatorial environmental policy choices over the years 1960-2000. In contrast to the popular view that choices on secondary policy instruments are largely determined by lobbying, we find strong effects of electoral incentives on environmental policy.

RXJ0123.4-7321, a Be/X-ray binary in the wing of the SMC

To confirm faint Be/X-ray binary candidates from the XMM-Newton survey of the Small Magellanic Cloud, we searched for X-ray outbursts in archival ROSAT observations. We found that RXJ0123.4-7321 was much brighter when detected with ROSAT than seen 16 years later by XMM-Newton. We analysed the ROSAT observations and the OGLE I-band light curve of the optical counterpart to investigate the nature of the system. High long-term variability in the X-ray flux of a factor of ~150 was found between the ROSAT and XMM-Newton detections, indicating strong outburst activity during the ROSAT observations. The I-band light curve reveals long-term variability and regular outbursts with a period of (119.9+-2.5) days indicating the orbital period of the binary system. The large X-ray flux variations and the properties of the optical counterpart confirm RXJ0123.4-7321 as a new Be/X-ray binary in the wing of the Small Magellanic Cloud.Comment: 5 pages, 8 figures, accepted for publication in A&

Reliability measurement during software development

During the development of data base software for a multi-sensor tracking system, reliability was measured. The failure ratio and failure rate were found to be consistent measures. Trend lines were established from these measurements that provided good visualization of the progress on the job as a whole as well as on individual modules. Over one-half of the observed failures were due to factors associated with the individual run submission rather than with the code proper. Possible application of these findings for line management, project managers, functional management, and regulatory agencies is discussed. Steps for simplifying the measurement process and for use of these data in predicting operational software reliability are outlined

Multi-wavelength properties of IGR J05007-7047 (LXP 38.55) and identification as a Be X-ray binary pulsar in the LMC

We report on the results of a $\sim$40 d multi-wavelength monitoring of the Be X-ray binary system IGR J05007-7047 (LXP 38.55). During that period the system was monitored in the X-rays using the Swift telescope and in the optical with multiple instruments. When the X-ray luminosity exceeded $10^{36}$ erg/s we triggered an XMM-Newton ToO observation. Timing analysis of the photon events collected during the XMM-Newton observation reveals coherent X-ray pulsations with a period of 38.551(3) s (1 {\sigma}), making it the 17$^{th}$ known high-mass X-ray binary pulsar in the LMC. During the outburst, the X-ray spectrum is fitted best with a model composed of an absorbed power law ($\Gamma =0.63$) plus a high-temperature black-body (kT $\sim$ 2 keV) component. By analysing $\sim$12 yr of available OGLE optical data we derived a 30.776(5) d optical period, confirming the previously reported X-ray period of the system as its orbital period. During our X-ray monitoring the system showed limited optical variability while its IR flux varied in phase with the X-ray luminosity, which implies the presence of a disk-like component adding cooler light to the spectral energy distribution of the system.Comment: 11 pages, 11 figures, Accepted for publication in MNRA

Convergence of Monetary Transmission in EMU New Evidence

This paper examines how the pass-through of monetary policy measures in 6 EMU countries has evolved over time and whether there is convergence in monetary transmission. The countries included are: Belgium, France, Germany, Italy, the Netherlands and Spain, and the sample period is 1980-2000. We conclude that major differences in pass-through exist in our sample, both in terms of initial as well as long-run responses to policy-induced interest rate changes. There is no indication for convergence of monetary policy transmission.Monetary transmission, pass-through, interest rate stickiness, EMU