Financial inclusion--defined as the use of formal accounts--can bring many benefits to individuals. Yet, we know very little about the factors underpinning it. This paper explores the individual and ...country characteristics associated with financial inclusion and the policies that are effective among those most likely to be excluded: poor, rural, female or young individuals. Overall, we find that greater financial inclusion is associated with lower account costs, greater proximity to financial intermediaries, stronger legal rights, and more politically stable environments. However, the effectiveness of policies to promote inclusion varies depending on the characteristics of the individuals considered.
We develop a model in which asset commonality and short-term debt of banks interact to generate excessive systemic risk. Banks swap assets to diversify their individual risk. Two asset structures ...arise. In a clustered structure, groups of banks hold common asset portfolios and default together. In an unclustered structure, defaults are more dispersed. Portfolio quality of individual banks is opaque but can be inferred by creditors from aggregate signals about bank solvency. When bank debt is short-term, creditors do not roll over in response to adverse signals and all banks are inefficiently liquidated. This information contagion is more likely under clustered asset structures. In contrast, when bank debt is long-term, welfare is the same under both asset structures.
In a financial market where traders are risk averse and short lived and prices are noisy, asset prices today depend on the average expectation today of tomorrow's price. Thus (iterating this ...relationship) the date 1 price equals the date 1 average expectation of the date 2 average expectation of the date 3 price. This will not, in general, equal the date 1 average expectation of the date 3 price. We show how this failure of the law of iterated expectations for average belief can help understand the role of higher-order beliefs in a fully rational asset pricing model.
This paper uses a risk-shifting model to analyze policy responses to asset price booms. We show risk shifting leads to inefficient asset and credit booms in which asset prices can exceed ...fundamentals. However, the inefficiencies associated with risk shifting arise independently of whether the asset is a bubble. Given evidence of risk shifting, policymakers may not need to determine if assets are bubbles to justify intervention. We then show that some of the main candidate interventions against asset booms have ambiguous welfare implications: tighter monetary policy can mitigate some inefficiencies but at a cost, while leverage restrictions may raise asset prices and lead to more leveraged speculation rather than less. Policy responses are more effective when they disproportionately discourage riskier investments. (JEL D82, E23, E32, E44, E52, G01, G12)
Surface topography is increasingly used with postural analysis. One system, DIERS formetric 4D, measures 40 defined spine shape parameters from a 6-s scan. Through system algorithms, a set of spine ...shape parameter values from 1 of 12 recorded images obtained during a scan becomes the DIERS-reported value (DRV) for postural assessment. The purpose of the current study was to compare DRV with a standard average value (SAV) calculated from all 12 images to determine which method is more appropriate for assessing postural change.
One mannequin and 30 human participants were scanned over 5 days. Values from each image and the DRV for 40 defined spine shape parameters were exported, and mean DRV, mean SAV, mean DRV, and within-scan variance were calculated. Absolute difference and percent change between mean DRV and mean SAV were calculated for the mannequin and humans. Inter-method reliability was calculated for humans. Within-scan variance for each parameter was tested for significant variability.
For all spine shape parameters on the mannequin, absolute difference (< 0.6 mm, 0.1°, or 0.1%) and percent change (< 2.90%) between mean DRV and mean SAV for each parameter were small. Nine parameters on human participants had a large percent change (> 7%). Absolute difference between mean DRV and mean SAV for those nine parameters was small (≤ 0.87 mm or 0.61°). Absolute difference for all other parameters ranged from 0.02 to 6.98 mm for distance measurements, from 0.01 to 1.21° for angle measurements, and from 0.15 to 0.22% for percentage measurements. Inter-method reliability between DRV and SAV was excellent (0.94-1.00). For the mannequin, within-scan variance was small (< 1.62) for all parameters. For humans, within-scan variance ranged from 0.05 to 36.04 and was different from zero for all parameters (all
< 0.001).
The minimal variability observed in the mannequin suggested the DIERS formetric 4D instrument had high within-scan reliability. The DRV and SAV provided comparable spine shape parameter values. Because within-scan variability is not reported with the DRV, the clinical usefulness of current DRV values is limited. Establishing an estimate of variance with the SAV will allow clinicians to better identify a clinically meaningful change.
We use a genetic algorithm to learn technical trading rules for the S&P 500 index using daily prices from 1928 to 1995. After transaction costs, the rules do not earn consistent excess returns over a ...simple buy-and-hold strategy in the out-of-sample test periods. The rules are able to identify periods to be in the index when daily returns are positive and volatility is low and out when the reverse is true. These latter results can largely be explained by low-order serial correlation in stock index returns.
Optimal Financial Crises Allen, Franklin; Gale, Douglas
The Journal of finance (New York),
August 1998, Letnik:
53, Številka:
4
Journal Article
Recenzirano
Empirical evidence suggests that banking panics are related to the business cycle and are not simply the result of "sunspots." Panics occur when depositors perceive that the returns on bank assets ...are going to be unusually low. We develop a simple model of this. In this setting, bank runs can be first-best efficient: they allow efficient risk sharing between early and late withdrawing depositors and they allow banks to hold efficient portfolios. However, if costly runs or markets for risky assets are introduced, central bank intervention of the right kind can lead to a Pareto improvement in welfare.
A Theory of Dividends Based on Tax Clienteles Allen, Franklin; Bernardo, Antonio E.; Welch, Ivo
The Journal of finance (New York),
December 2000, Letnik:
55, Številka:
6
Journal Article
Recenzirano
This paper explains why some firms prefer to pay dividends rather than repurchase shares. When institutional investors are relatively less taxed than individual investors, dividends induce "ownership ...clientele" effects. Firms paying dividends attract relatively more institutions, which have a relative advantage in detecting high firm quality and in ensuring firms are well managed. The theory is consistent with some documented regularities, specifically both the presence and stickiness of dividends, and offers novel empirical implications, e.g., a prediction that it is the tax difference between institutions and retail investors that determines dividend payments, not the absolute tax payments.
The massive use of public funds in the financial sector and the large costs for taxpayers are often used to justify the idea that public intervention should be limited. This conclusion is based on ...the idea that government guarantees always induce financial institutions to take excessive risk. In this article, we challenge this conventional view and argue that it relies on some specific assumptions made in the existing literature on government guarantees and on a number of modelling choices. We review the theory of government guarantees by highlighting and discussing the role that these underlying assumptions play in the assessment of the desirability and effectiveness of government guarantees and propose a new framework for thinking about them.
We review the theory of deposit insurance, highlighting the underlying assumptions that were not satisfied during the recent financial crisis and that may have led to serious policy mistakes. In ...theoretical models, deposit insurance is mostly seen as an equilibrium selection device to avoid panic-based runs. In such a context, it is not drawn on and is thus costless and fully credible. However, if bank runs are linked to a fall in asset values, providing deposit insurance can be very costly and, as the case of Ireland has shown, can even threaten sovereign solvency. This perspective indicates a need for new research on the relation between bank failures, deposit insurance schemes, sovereign default, and currency depreciation, and for reforms of deposit insurance schemes.
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