The Diversity of Debt Crises in Europe

The foreign debts of the European countries are at the core of the current crises. Generally, the crises are attributed to government budget deficits in excess of the values stated in the Stability and Growth Pact (SGP)/Maastricht treaty. Proposals for reform generally involve increasing the powers of the European Union to monitor fiscal policies of the national governments and increasing bank regulation. My article is concerned with the following issues. [Q1] How can one explain the inter country differences in the debt crisis in Europe? Is there a single explanation, cause? [Q2] Specifically, were the crises due to government budget deficits or to the private sector? The answer will determine what is the appropriate policy to prevent a recurrence. [Q3] The Stability and Growth Pact/Maastricht Treaty and the European Union focused upon rules concerning government debt ratios and deficit ratios. They ignored the problem of “excessive” debt ratios in the private sector that led to a crisis in the financial markets. Neither the markets nor the Central Banks anticipated the crises until it was too late. My basic questions are: What is an “excessive” private sector debt ratio that is likely to lead to a crisis? What are theoretically based, not empirical ad hoc, Early Warning Signals (EWS) of debt crises? The answers determine to a large extent how one should evaluate proposals for economic reform, to avert future crises?European debt crisis, excess debt, early warning signals, domestic housing sector, government deficit debt

A Critique of the Literature on the US Financial Debt Crisis

A healthy financial system encourages the efficient allocation of capital and risk. The collapse of the house price bubble led to the financial crisis that started in 2007. There is a large empirical literature concerning the relation between asset price bubbles and financial crises. I evaluate the key studies with the respect to the following questions. To what extent do the empirical relations in the existing literature help to identify asset price bubbles ex-ante or ex-post? Do the empirical studies have theoretical foundations? On the basis of that critique, I explain why the application of stochastic optimal control (SOC)/dynamic risk management is a much more effective approach to determine the optimal degree of leverage, the optimum and excessive risk and the probability of a debt crisis. The theoretically founded early warning signals of a crisis are shown to be superior, in general, to those empirical relations in the literature. Moreover the SOC analysis provides a theoretical explanation of the extent that the empirical measures in the literature can be useful.stochastic optimal control, mortgage and financial crises, Ito equation, optimal dynamic risk management, warning signals of crisis, optimal leverage and debt ratios, Congressional Oversight Panel, Case-Shiller index

A Tale of Two Debt Crises: A Stochastic Optimal Control Analysis

Banks should evaluate whether a borrower is likely to default. I apply several techniques in the extensive mathematical literature of stochastic optimal control/dynamic programming to derive an optimal debt in an environment where there are risks on both the asset and liabilities sides. The vulnerability of the borrowing firm to shocks from either the return to capital, the interest rate or capital gain, increases in proportion to the difference between the Actual and Optimal debt ratio, called the excess debt. As the debt ratio exceeds the optimum, default becomes ever more likely. This paper is “A Tale of Two Crises” because the analysis is applied to the agricultural debt crisis of the 1980s and to the sub-prime mortgage crisis of 2007. A measure of excess debt is derived, and we show that it is an early warning signal of a crisis.optimization, banking, stochastic optimal control, agriculture debt crisis, subprime mortgage crisis

Sharing by Design: Data and Decentralized Commons

Ambitious international data-sharing initiatives have existed for years in fields such as genomics, earth science, and astronomy. But to realize the promise of large-scale sharing of scientific data, intellectual property (IP), data privacy, national security, and other legal and policy obstacles must be overcome. While these issues have attracted significant attention in the corporate world, they have been less appreciated in academic and governmental settings, where solving issues of legal interoperability among data pools in different jurisdictions has taken a back seat to addressing technical challenges. Yet failing to account for legal and policy issues at the outset of a large transborder data-sharing project can lead to undue resource expenditures and data-sharing structures that may offer fewer benefits than hoped. We propose a framework to help planners create data-sharing arrangements with a focus on critical early-stage design decisions including options for legal interoperability

The generation and reactivity of functionalised organozinc carbenoids for cyclopropane synthesis

This thesis describes the generation and reactivity of functionalised organozinc carbenoids for cyclopropane synthesis with alkenes. In the introductory chapter, a brief overview of the different methods for preparation of heteroatom-functionalised cyclopropanes is presented, including [2+1] cycloaddition reactions using a carbene or carbenoid as a cyclopropanating agent with an alkene, ionic stepwise methods, and chemical modifications from existing cyclopropanes. The remainder of this chapter then focuses on previous work within our own group in this area. The second chapter presents the results obtained from different areas of research in the present study, the first of these being a deeper understanding and extension of the research work undertaken by my predecessor for the development of the cyclopropanation reaction using an “amidoorganozinc” carbenoid derived from N,N diethoxymethyloxazolidinones derivatives in the presence of a source of zinc and chlorotrimethylsilane. Thus, the chemoselectivity and stereoselectivtity of the reaction were fully studied, and a quadrant model was constructed to rationalise the stereochemistry of the products obtained. The second part of this section outlines the generation of new enantiopure organozinc carbenoids precursors derived from substituted chiral precursors followed by the synthesis of novel enantiopure highly functionalised N-cyclopropyl oxazolidinones. The intramolecular version of this cyclopropanation reaction was then successfully studied using diethoxylactam derivatives as organozinc carbenoid precursors. The methodology was then applied to the preparation of novel aminocyclopropyl functionalised compounds selected as interesting building blocks which can lead to the synthesis of natural and biologically active compounds. The fifth part of this chapter describes subsequent studies towards the design of new carbenoid precursors containing additional functional groups of interest. Finally, a brief study on the potential of an organozinc carbenoid to participate in a novel [2,3] sigmatropic rearrangement was investigated. The thesis concludes with a summary of the results obtained, a detailed description of the experimental procedures used and the characterization and analysis of the compounds prepared, together with a full bibliography

The distribution, abundance, and ecology of larval tunas from the entrance to the Gulf of California

ENGLISH: This study is based on collections of larvae of Thunnus albacares, Euthynnus llneatus, and Auxis sp. obtained from surface and oblique net tows made during seven cruises, each along a comparable track in the entrance of the Gulf of California and each during a different month. Concomitant measurements of surface temperature, salinity, and zooplankton were made at each of the plankton stations. The catches of larval Auxis sp. were examined by analysis of variance techniques to determine which environmental features were associated with the spawning of this tuna as indicated by the distribution of larvae and to gain some insight into the behavior of the larvae themselves. The testing indicated that the spawning of Auxis sp. varied significantly among the different months of the cruises. The testing also indicated that if the larvae were capable of avoiding the sampling apparatus, this ability was not related to features associated with time of day such as light conditions. The analysis did not detect any change in the vertical distribution of the larvae among the months of the experiment. It was concluded that the larvae did not exhibit a diel vertical movement. The measurements of temperature, salinity, and zooplankton volumes were treated as covariates in the analysis. The surface temperature proved to be a highly important factor in explaining the distribution of larvae, but salinity and zooplankton volumes were not. Catches of Thunnus albaeares and Euthynnus lineatus were rare during the course of the study; these are discussed in qualitative terms with respect to the time of the year and the surface temperature. The distribution of larval tunas in the area of study was compared with the distribution of surface water masses. It appeared that these masses had no influence per se on the distribution of larvae. SPANISH: Este estudio está basado en las recolecciones de larvas de Thunnus albacares, Eutbynnus lineatus, y Auxis sp. obtenidas según los arrastres superficiales y oblicuos de la red, realizados durante siete cruceros, cada uno a la entrada del Golfo de California a lo largo de un derrotero comparable, y cada uno durante distintos meses. Las mediciones correspondientes de la temperatura superficial, salinidad y de zooplancton se realizaron en cada una de las estaciones de plancton. Las capturas de larvas Auxís sp. fueron examinadas mediante el análisis de la varianza para determinar cuales características ambientales se encontraban asociadas con el desove de este atún según lo indicaba la distribución de las larvas, y para obtener alguna idea del comportamiento de las larvas en sí mismas. Las pruebas indicaron que el desove de Auxis sp. varió significativamente entre los diferentes meses de los cruceros; indicaron también que si las larvas eran capaces de evitar el aparato de muestreo, esta habilidad no se relacionaba a las características asociadas con la hora del día de acuerdo a las condiciones de luz. El análisis no demostró ningún cambio en la distribución vertical de las larvas durante los meses del experimento. Se determinó que las larvas no exhiben un movimiento vertical diario. Las mediciones de temperatura, salinidad, y de los volúmenes de zooplancton fueron tratadas como covariables en el análisis. La temperatura superficial demostró ser un factor altamente importante en la explicación de la distribución de las larvas, pero la salinidad y los volúmenes de zooplancton no lo fueron. Las capturas de Thunnus albacares y Eutbynnus lineatus fueron pocas durante el curso de este estudio; éstas se discuten en términos cualitativos respecto a la época del año y a la temperatura superficial. La distribución de los atunes larvales en el área de estudio fue comparada con la distribución de las masas superficiales de agua. Parece que estas masas no tienen influencia per se en la distribución de las larvas. (PDF contains 40 pages.

Who Are the Givers? Briefing Paper on British Social Attitudes to Charitable Giving

This Institute for Philanthropy paper summarizes the findings of the annual British Social Attitudes Survey on the attitudes and values of Britons regarding charitable giving and philanthropy, and on their behavior. The authors differentiate the target group by age, education, religion, income, political affiliation, and newspaper readership, and determines that there are broadly three groups in British society: contributors, bystanders, and investors

Stochastic Optimal Control, International Finance and Debt

We use stochastic optimal control-dynamic programming (DP) to derive the optimal foreign debt/net worth, consumption/net worth, current account/net worth, and endogenous growth rate in an open economy. Unlike the literature that uses an Intertemporal Budget Constraint (IBC) or the Maximum Principle, the DP approach does not require perfect foresight or certainty equivalence. Errors of measurement and the effects of unanticipated shocks are corrected in an optimal manner. We contrast the DP and IBC approaches, show how the results of the dynamic programming approach can be interpreted in a traditional simple mean-variance/Tobin-Markowitz context, and explain why our results are generalizations of the Merton model.stochastic optimal control, foreign debt, international finance, vulnerability to external shocks, sustainable current account deficits