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President Trump imposed tariffs in 2017 on several of China's exports, notably steel. Many papers opposed these tariffs by using a common, invalid argument: rather than arguing these tariffs reduced U.S. welfare, they argue U.S. consumers and businesses pay the tariffs, a different, rhetorical issue. Their main evidence of harm is increases in imported goods' after-tariff U.S. prices, especially relative to other goods' U.S. prices. In a standard, small general equilibrium model (two countries, two goods, two factors), this price evidence is wholly ambiguous—it is even consistent with the view that Trump's tariff was optimal, increasing U.S. welfare. Even sophisticated papers are similarly ambiguous. All fail because they neglect how government uses tariff revenue. Relying on fallacious arguments makes the free-trade position look weak and encourages protectionism. [ABSTRACT FROM AUTHOR]

According to conventional wisdom, industrial country floating exchange rates contain unit roots. SUR tests on panels of monthly Group of Ten (G-1O) log nominal rates reject the null of unit roots for various samples over the current float with significance levels from 0.5% to 15%. On average, in out-of-sample forecasts mean reversion models beat random walks significantly in some forecast periods. For monthly data, the range of expected USD-DHM appreciation rates exceeds 15% per year in the mean reversion model. Mean reversion places strong restrictions on international models: over the sample period, the G-10 had to run monetary policies consistent with stable long-run nominal rates. [ABSTRACT FROM AUTHOR]

This paper extends to Japanese stocks recent research on short-term stock price adjustment to new information. Using standard methodologies, we find that stock returns of firms included in the Nikkei 300 tend to be significantly positive after large price decreases. This is similar to the pattern observed for American stocks in other research. The pattern remains when returns are adjusted for market movements, and exists independently of the October 1987 market break. We find little evidence of significant patterns following large stock price increases. We also find little evidence that non-transaction prices explain the persistent, significant returns observed following large price decreases on the Tokyo Stock Exchange. We conjecture that broker/dealers and TSE member firms respond to large price decreases not by trading for their own profit, but rather by selectively supplying liquidity to their preferred retail customers. We conclude that ordinary investors probably cannot earn economic profits from these statistically significant patterns. [ABSTRACT FROM AUTHOR]

Mechanical trading rules seem to have more potential than previous tests found. Fama and Blume (1966), looking at the Dow 30 of the late 1950s, found no profits for the best (1/2percent) rule after adjusting for transactions costs. Fifteen of these stocks looked profitable in their sample, however; for the same rule, the surviving fourteen show statistically significant profits for 1970-1982 for transactions costs obtainable by floor traders. The test used here assumes constant risk premia, or more generally, that risk premia are on average approximately the same on days "in" as for the total period. [ABSTRACT FROM AUTHOR]

The article examines the use of a capital asset pricing model (CAPM) as a rational expectations model to determine the effect that this will have on financial risk. The macroeconomic model that is used for this study does not take into account things such as fluctuations in inflation or inventory behavior, and it does not try to reconcile CAPM with macroeconomics. Changes in expected inflation can impact capital stock and real production. The article concludes that increases in the expected rate of inflation causes a decrease in two variables of the mathematical model.

This study shows the extent to which deviations from the absolute priority rule increase or decrease the bankruptcy emergence payoff to traded (i.e., usually junior claimants) bondholders. The data indicate that, on average, bondholders benefit, albeit slightly, from absolute priority rule (APR) violations. This paper also examines the degree to which the bond market, in the bankruptcy filing month, anticipates departures from the APR and other influences on the payoff to bondholders. In other words, we investigate the informational efficiency of the market for bankrupt bonds. Overall, despite the complex and lengthy nature of bankruptcy proceedings, the results support efficiency. [ABSTRACT FROM AUTHOR]

Extremely large negative 10-day rates of return are followed on average by larger-than-expected positive rates of return over following days. This price adjustment lasts approximately 2 days and is observed in a sample of firms that is largely devoid of methodological problems that might explain the reversal phenomenon. While perhaps not representing abnormal profit opportunities, these reversals present a puzzle as to the length of the price adjustment period. Such a slow recovery is inconsistent with the notion that market prices quickly reflect relevant information. [ABSTRACT FROM AUTHOR]

This paper provides evidence that changes in government bond yields clearly affect ex post returns to electric utilities, and that this phenomenon is concentrated to a much larger extent in this particular industry than in NYSE firms as a whole (Table I). Evidence of the pricing is provided within the framework of the APT. Empirical work employed a pooled cross-section approach using a nonlinear constrained version of FIML estimation. [ABSTRACT FROM AUTHOR]

Filter rule profits found in foreign exchange markets in the early days of the current managed float persist in later periods, as shown by statistical tests developed and implemented here. The test is consistent with, but independent of, a wide variety of asset pricing models. The profits found cannot be explained by risk if risk premia are constant over time. Inclusion of the home-foreign interest rate differential in computing profits has little effect on the comparison of filter returns to those of buy-and-hold. [ABSTRACT FROM AUTHOR]

Court packing greatly threatens democracy. This paper examines, compares and draws conclusions from two attempts: The PiS government is near to packing Polish courts; President Roosevelt tried but failed to pack the U.S. Supreme Court in 1937. In most democracies a head of government with a legislative majority and strong party control can pack courts, giving complete control. The United States escaped; Roosevelt lacked complete party control. Poland is unlucky; PiS is strongly controlled. Peaceful domestic protest is necessary, but Poland's hope is from EU-level institutional pressure, supported by major democracies, to reverse packing and prevent further seizure of power. [ABSTRACT FROM AUTHOR]

Abstract: In cross‐section studies, if the dependent variable is I(0) but the regressor is I(1), the true slope must be zero in the resulting “unbalanced regression.” A spuriously significant relationship may be found in large cross‐sections, however, if the integrated regressor is related to a stationary variable that enters the DGP but is omitted from the regression. The solution is to search for the related stationary variable, in some cases the first difference of the integrated regressor, in other cases, a categorical variable that can take on limited number of values which depend on the integrated variable. We present an extensive survey, new developments, and applications particularly in finance. [ABSTRACT FROM AUTHOR]

Introduction. Standard precautions are disease transmission prevention strategies recommended by both the World Health Organization (WHO) and by the Centers for Disease Control and Prevention (CDC). Emergency medical services (EMS) personnel are expected to utilize standard precautions. Methods. This was a prospective observational study of the use of standard precautions by EMS providers arriving at a large urban emergency department (ED). Research assistants (RAs) observed EMS crews throughout their arrival and delivery of patients and recorded data related to the use of gloves, hand hygiene, and equipment disinfection. Results. A total of 423 EMS deliveries were observed, allowing for observation of 899 EMS providers. Only 512 (56.9%) EMS providers arrived wearing gloves. Hand washing was observed in 250 (27.8%) of providers. Reusable equipment disinfection was noted in only 31.6% of opportunities. The most commonly disinfected item was the stretcher (55%). Conclusion. EMS provider compliance with standard precautions and equipment disinfection recommendations is suboptimal. Strategies must be developed to improve EMS provider compliance with internationally recognized infection control guidelines. Key words: Emergency medical services, hand washing, hygiene, disinfection, disease prevention [ABSTRACT FROM AUTHOR]

This article examines power issues for the ADF and four break models (Perron, 1989; Zivot and Andrews, 1992) when the DGP corresponds to one of the break models. Choosing to test an incorrect break model can, but need not, greatly reduce the probability of rejecting the null. Break points that are relatively early in the sample period have substantial effects of increasing power. For modest shifts in time trends, simply including a time trend without shift in the model preserves power, but not for large time-trend shifts. [ABSTRACT FROM PUBLISHER]

Quantitative estimates show that India's nuclear tests caused important economic damage to India and its neighbors, Pakistan and China. Pakistan's tests caused further economic damage to all three countries. In response to India's tests, India's stock market fell by 7.26 percent, Pakistan's by 10.59 percent and China's by 2.70 percent. In response to Pakistan's tests, India's stock market fell by another 5.57 percent, Pakistan's by 16.82 percent and China's by 3.93 percent. Overall, the two countries' tests caused India's stock market to fall by 12.83 percent, Pakistan's by 27.41 percent and China's by 6.63 percent. Some argue that going nuclear increased India and Pakistan's national security and their international political standing. In the financial markets' opinion, these tests caused major reductions in both countries' economic security, and harmed China's economic security. The tests had no important effects on the Group of Ten countries' stock markets; thus, the tests' economic effects seem for the moment of be confined to southern Asia. [ABSTRACT FROM AUTHOR]

The article provides an example of a short-term technical trading strategy, based on past price movements, that produces statistically significant risk-adjusted profits at levels of transaction costs surely available to floor traders and professional money managers but not to investors paying even the lowest discount commercial rates. A short-term technical strategy can be made to work by those who pay relatively low but feasible transaction costs. The strategy uses a naive filter rule and quite small buy and sell triggers, with two main innovations--a method for selecting and updating a trading list, and a statistical test both for implementing the approach and judging performance. The data and the cost considerations do not make a strong case one way or the other as to whether this system can be made to work. The analysis of cost and volume assumes an investor employing no more than $3 million, implying this system could not by itself form the basis for most institutional investors' behavior.

Standard event-study methods compare the returns in the window with forecasted values based on a benchmark period. These methods fail to account for the fact that errors in parameter estimates in the benchmark period give serially correlated errors in the window's abnormal returns. This is true both of mean-adjusted returns and market-model adjusted returns. This oversight leads to overstatement of significance levels, the degree of overstatement varying positively with the ratio of periods in the window to periods in the benchmark period. Sometimes the overstatement is minimal, but it can be substantial if the window is large relative to the benchmark period. [ABSTRACT FROM AUTHOR]

International traders frequently use forward exchange transactions to hedge their cash flows in foreign currencies. A key issue is whether the forward rates are efficiently priced. There is evidence of time-varying risk premia in forward exchange rates. Are these risk premia systematic or unsystematic? This article uses a market model to explain risk, implying that the risk premium in the forward rate varies pari passu with the beta of the return to speculative forward positions. Assuming the unobserved risk premium is proportional to the forward premium allows testing the predicted relations; the data reject the joint hypotheses of the model and systematic risk. In terms of a simple factor model explaining the covariation of the forward premium, the risk premium, and the expected percentage rate of change of the spot exchange rate, the assumption that the forward premium and the risk premium are proportional can be relaxed without changing the empirical results. [ABSTRACT FROM AUTHOR]

Analyzes the accuracy improvements in out-of-sample forecasts of one-year ahead return-on-equity to examine the predictive content of corporate earnings disaggregation. Usefulness of disaggregation on the income statement in forecasting future probability; Significance of the disaggregation of net income into specific components.

This paper makes some extensions in the analysis of cartels and examines the affect on cartel pricing that ocean mining places on potential cartels in copper and nickel. Using the highest projected costs but only average yields from deep sea mining, it is determined that such mining represents a significant threat to OPEC type organizations in seabed minerals. The Law of the Sea negotiations take on added significance if viewed in this light. In a more general context the potential for cartelization when joint production exists is discussed. [ABSTRACT FROM AUTHOR]

BSTRACT The authors show that estimates of risk premia on the market based on capital asset pricing models or arbitrage pricing theories can only be estimates of the ex post or sample risk premium on the market and cannot be interpreted as better estimates of the ex ante premium than those provided by sample averages of data. The ex ante premium drops out of the generating function for the returns used in the second-pass regressions. Although previous estimates of nonmarket premia have failed to take appropriate account of the population mean, that mean can in fact be estimated and appropriate adjustments made. Various approaches to estimating the ex ante risk premium and the population mean are discussed. [ABSTRACT FROM AUTHOR]

Examines business cycle theory of Milton Friedman. Discussion of the business cycle regularities; Effect of the size of contraction on the size of the following expansion; Impact of the supply-side ceiling to aggregate output on the size of expansion.