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The increasingly protean irrevocable trust puts substantive trust law and the federal transfer taxes at cross-purposes. State trust law’s overriding objective is simply to carry out the intent of the trust settlor. Settlors intend to manage or control the benefits from gifts over some period of time—that is, after all, the purpose of the donative trust. In contrast, the federal transfer taxes seek, by major policy purpose, to decrease the incidence of dynastic wealth—wealth locked into single-family possession and passed on from generation to generation. Yet state legislative changes to trust laws—abandoning or extending the terms of rules against perpetuities, for example—pave the way for dynastic wealth by allowing trusts to entrench that wealth in families for generations, or even indefinitely. Evolving trust laws also increasingly permit trust settlors, often by postmortem proxy, to repeatedly modify, refresh or even completely restructure irrevocable trusts in response to post-transfer events. This essay looks critically at a change to the common law equitable deviation doctrine that ensures that irrevocable trusts can always be optimized in the face of circumstantial uncertainty. This modified equitable deviation doctrine invites trustees and courts to first imagine how the settlor would respond to unanticipated circumstances affecting an irrevocable trust, then further directs modification of the trust terms accordingly. Although this development expands settlor control over irrevocable trusts qualitatively and chronically, thereby increasing both the durability and duration of dynastic wealth, current federal transfer tax provisions are likely insufficient to discourage its proliferation. Trust settlors privileged to take advantage of the post-disposition control offered by trust laws already own a vastly disproportionate share of the nation’s wealth. Perpetual post-transfer control of wealth by a trust settlor or his proxy further entrenches this inequality of ownership and contributes to the problems it causes, including the erosion of democratic institutions. Unmitigated allegiance to the expansive value of freedom of disposition and its corollary, “the intent of the donor,” should be tempered, in post-transfer analyses, with a view to its consequences. Failing that, especially but not exclusively where costs to third parties are implicated, certain post-disposition trust modifications should be deemed new dispositions that bring about transfer tax penalties to the trust corpus.

Until the modernizing reforms of the 19th century, the Islamic waqf played a massive role in the economy of the Middle East, the Balkans, and North Africa. Formally, it was a trust founded by an individual; income from the endowed assets financed designated services in perpetuity. The largest waqfs were established by members of high officials of the ruling dynasty to provide social services now supplied by municipalities or charitable corporations. These Islamic “state waqfs” have been the focus of case studies that make the waqf seem mainly a supplier of public goods. Using an original data set consisting of Istanbul waqf deeds from 1457-1923, this paper explores the functions of Islamic “regular waqfs”—waqfs founded either by elites below the top echelon or by commoners. The typical regular waqf had a relatively modest endowment and architectural footprint. In a setting characterized by weak property rights and legal system that favored males, Muslims, and state officials, it was established principally to provide material security to its founder and his or her descendants. Providing public goods was not among its major functions; neither was assisting the poor. Founders belonging to a disadvantaged group, including women, were especially likely to prioritize wealth sheltering. Regular waqfs thus served to perpetuate prevailing worldly inequalities through material security to the wealthy. They also aimed to create inequalities in the hereafter. Their major functions included financing prayers to expiate the sins of founders and their families.

In this reference note, intended for easy reference use by finance generalists, we derive the formulae for a) the prices and dual and single durations and convexities for b) growing and nominal instruments, including c) coupon bonds, zero coupon bonds, annuities, and perpetuities, across d) the seven most useful and relevant combinations of coupon, discounting, and other cash flow details (forms)—all in a relatively compact presentation. These forms include 7 variations of: • Continuous or discrete coupons • Payment timing, i.e., payments made at the end of the period (most common) or payments made at the beginning of the period (annuity due) • Growth beginning right away during the first period, or growth only beginning during the second period (the conventional form for most growing perpetuities and annuities) • Continuous or discrete compounding.

This paper outlines the main operating framework of a Debt Agency (DA) for the management of the Eurozone sovereign debts. The framework leverages on the potential irredeemable nature of sovereign debts in order to build a common bond. Structurally filtering liquidity risk, the DA can price the Member States' installments by referring only to their fundamental risk. The common bond issued by the DA then avoids mutualisation by design, hence it can be directly bought by the ECB. Thanks to its structural intertemporal sustainability, the DA framework sketched here can serve as a benchmark for institutional and political decisions.

This study develops a general equilibrium model within which self revelation of ability - that is not accompanied by any signaling - is compatible with arrival at rational expectations equilibriums (REE). In the model, economic agents either are 'confident', 'overconfident', or 'under-confident' about their ability. Neither of overconfidence nor under-confidence is assumed; on the contrary, the two behavioral biases arise in context of establishment of mathematical boundaries on behaviors of economic agents. In the REE within which all agents are overconfident, innovations are not as robust as they are assumed to be, yet ubiquity of sub-optimality is not discernible. In the REE within which all agents are under-confident, innovations are optimal, yet there exist innovations that, ideally are within reach, but yet are not embarked upon, as such not achieved. We arrive then at existence of a structural difference between effects of either of overconfidence or under-confidence. In the REE within which confident, overconfident, and under-confident agents all mass at the same time on the same path, agents are accepted on basis of their self revelations, yet there exists a procedural mechanism, which facilitates a fully revealing REE within a single period. The structure produced by the formal theoretical model is shown to provide a robust explanation for each of structure of industries that subsist within countries, and activities of venture capitalists. In this respect, while the conventional wisdom asserts necessity of transition to a services and knowledge based economy for maximization of economic development, study findings provide unequivocal evidence that manufacturing initiatives feasibly can support economic development that persists in perpetuity.

When finance textbooks address net borrowing calculation in free cash flow to equity perpetuity, they predominantly do it as the proportion of firm net investment financed by debt (Alternative 1). This method does not apply to all scenarios and requires a peculiar debt ratio. Alternatively, one can calculate net borrowing by applying sustainable growth rate to existing debt (Alternative 2). This method is broader and of simpler implementation. Alternative 1 can lead students, instructors and practitioners to confusion and, therefore, to misapplication and/or misuse. I suggest that neglected Alternative 2 becomes the standard method.

While ordinary trusts are time-limited, the charitable foundation lasts forever. It is, in consequence, a perpetual legal vehicle through which a donor might seek to egoistically project her character and values into the future after her death. Unfortunately, that self-serving drive leads to bad charity, causing waste, as it crowds out higher social utility – or altruistic – uses of capital. Through attention to the concept of egoism, as it has developed in contemporary donative economics (‘egoistic theory’),this chapter explores the nature of the motivation to create perpetual foundations, and, flowing from that theorisation, it then critically develops a policy justification for the protection of the donor’s plans (plan-protection), alongside development of a legal-conceptual method for the utility-orientated reform of foundations.

Since 2005, the courts have decided more than 90 cases involving challenges to deductions claimed with respect to conservation easement donations. More than 135 opinions have been issued in these cases due to appeals, motions for reconsideration, and the issuance of separate opinions addressing specific issues. This outline, which is updated annually, discusses the case law and other developments in the conservation easement donation context.

Every time a person is convicted of a crime, this event is memorialized in the person’s criminal record in perpetuity, setting off thousands of potential collateral consequences, including being penalized in searches for employment, housing and volunteer opportunities. To remove these harmful consequences, Washington law allows people whose criminal records meet certain conditions to vacate their records. However, the Second Chance Gap in Washington “expungements” - the share of people who aren’t accessing the vacation remedy because of hurdles in the petition process - we suspect is large. To estimate it, we used research and practice expertise to approximately model the eligibility criteria for vacation set forth in the law and applied it to a sample of records obtained through a records request from the Administrative Office of the Courts of Washington. Importantly, data limitations made it impossible for us to consider out of state charges, payment of fines and fees, and sentence completion, so we did not model these eligibility conditions. Based on our analysis, Washington’s vacation laws allow for approximately 60% of those who live burdened with criminal conviction records, or over 1M people, to potentially receive relief. But less than 5% of those eligible for relief, and less than 1% of the charges eligible for relief have received the remedy. At current rates of vacation, we estimate that it would take over 4,000 years to clear the backlog of eligible charges using current, petition-based methods, based on our calculations regarding the number of charges that we estimate are eligible for vacation, and the actual number of charges that were vacated last year (1,973). Existing racial disparities in the Washington criminal justice system are significant: currently, African-Americans represent 4.2% of individuals in Washington but within our sample, Afrian-Americans represented 11% of Washingtonians with a criminal record, 15% of Washingtonians with any felony record, and 22% of Washingtonians with a Class A felony record. Among the population of people with criminal records, Clean Slate would apply evenly and therefore not exacerbate but also, would not narrow racial disparities. However, among the general population, Clean Slate would reduce racial disparities significantly as the differences in the share of African-Americans with a record and share of whites with a record would get considerably smaller. Because of the large second chance gap, the filing of petitions by all those who are entitled to could result in a severe congestion at the courts. Washington can close the 95-99% second chance gap between eligibility and delivery of relief by automating relief, solving both problems, but only if it implements the law with some adjustments and compensates for missing and dirty data.

Today, almost everyone faces extraordinary health, social, and economic risk due to the COVID-19 pandemic. As for all industries, academic institutions face unprecedented challenges and are witnessing the change in short-and long-term risk profile due to COVID-19, e.g., enhanced information and cybersecurity risk due to the adoption of new collaboration tools, deterioration in the effectiveness of traditional fraud risk mitigants as enrollment and document verifications over email, and increased risk of financial viability. In addition to having a robust risk management framework, it is critical for the institutions to carefully recognize and mitigate these emerging risks, which may have long-term implications on the institution's academic performance and perpetuity. Educational institutions, therefore, must adopt a broad spectrum of thinking methods that allow a practical framework for risk decisions and provide a strong foundation for academic institutions to function and enforce strategies both throughout and after the COVID-19 period. With the help of an example, this paper explores how "Six Thinking Hats" may serve as a decision aid and facilitate the risk decisions in an academic institution around risk appetite, risk identification, risk assessment, control design, and risk monitoring. The "Six Thinking Hats" or colors are all about gaining direction, i.e., what can happen (threat and opportunities; effect and probability) and not merely about explaining the event, what is or what has happened. Risk management being forward-looking, this is a significant risk decision consideration. The paper also analyzes the "Six Thinking Hats" method using the ABCD analysis framework as a research case study.

This paper considers dynamic pricing strategies in a durable good monopoly model with uncertain commitment power to set price paths. The type of the monopolist is private information of the firm and not observable to consumers. If commitment to future prices is not possible, the initial price is high in equilibrium, but the firm falls prey to the Coase conjecture later to capture the residual demand. The relative price cut is increasing in the probability of commitment as buyers anticipate that a steady price is likely and purchase early. Pooling in prices may occur for perpetuity if commitment is suciently weak. Polling for innity is also preserved if committing to a high price is endogenously chosen by the firm.

With reference to funds established for the benefits of the public at large, a university endowment, or other similar sovereign wealth fund, we demonstrate that the optimal extraction rate from the fund is significantly smaller than the expected real rate of return on the underlying fund. We consider the situation where the influx to the fund has stopped, it is in a steady state, and is invested broadly in the international financial markets. The optimal spending rate secures that the fund is a perpetuity, i.e., it will last 'forever', where the real value of the fund after payments is stationary, while spending according to the expected rate of return will deplete the fund with probability 1. Optimal portfolio choice and spending are then inconsistent. Our conclusions are contrary to the recommendations of an expert panel to the Norwegian Government Pension Fund Global, as well as at odds with part of the extant literature on the management of endowments of universities.

The relevance of academic accounting research to practice has been frequently discussed in the accounting academy, yet very little data has been put forth in these discussions. We create relevance of accounting research (ROAR) scores by asking accounting professionals to read and evaluate the titles and abstracts of every article published in 12 leading accounting journals for the years 2016 to 2018, inclusive. These scores allow for an evidence-based evaluation and discussion of how academic accounting research is perceived by accounting professionals. The scores also allow us to identify the articles, authors, journals, and accounting topic areas that are perceived to be more relevant to accounting practice. By continuing to produce these scores in perpetuity, we expect this data to help academics and professionals better identify and utilize research relevant to the accounting profession.

Myers (1974---‘M74’) derives the Cost of Capital (CC), including the corporate-tax subsidy on borrowing, for a one-period investment project. From Miles and Ezzell (1980), this CC remains valid in multiperiod projects provided that, during the project's life, debt is continuously re-aligned with ex post GPVs. In contrast, when the debt schedule is static --- i.e. set to stabilise leverage ex ante only --- no CC works outside the Modigliani and Miller (1963---‘MM63’) perpetuities scenario; one generally needs a recursive Adjusted NPV (rANPV). Real-life leverage being neither fully static nor fully dynamic, two questions arise: (i) do M74's CC and rANPV produce very different valuations in a static/multiperiod problem?, and (ii) is it useful to heuristically adopt a non-linear interpolation between the M74 and MM63 polar CCs? We find, first, that M74's CC is is (mildly) conservative but vastly less biased and more precise than MM63's. Second, two of the heuristic compromise CCs are marginally more correct than even M74, but they remain biased upwards. Remembering that M74 also applies when debt is GPV-indexed ex post, M74 seems the safer procedure. Highlights: – With a ‘static’ debt schedule set to stabilise leverage ex ante, a finite-life project’s risk cannot be constant, so no Cost of Capital (CC) can work perfectly. – When expressed as fractions of gross present value, minor-looking CC-based valuation errors largely reflect the low PV of the true tax shields rather than a precise assessment. – The Myers (1974) one-period cost of capital (CC) is mildly conservative and works very well for multiperiod NPV-ing even when debt is static. – The Miller-Modigliani CC for perpetuities, when applied in finite-life problems, is vastly overoptimistic and imprecise, especially when the CC takes into account growth. – We also propose four heuristic procedures that non-linearly interpolate between the above two CCs. The two that take into account the changing risk do succeed in beating Myers’ CC, but the gains are small and the bias is upward rather than conservative.

There is no skepticism about the perpetuity of recorded transactions in BlockChain and its Distributed Ledger Technology. But the hype is casting shadow over the real world implementation issues. Issues like limited scalability and storage constraints impede mass adoption of this world-changing technology. In this paper, we will deliberate on the issues like scalability and storage in BlockChain Technology. We will provide solutions to overcome these problems using Sharding along with distributed load balancing algorithms. The requirement of nodes increases as the number of transactions increases in a network. Preserving the essence of BlockChain Technology, if we can cleave whole system memory into local and global Shards along with dedicated miners at local shards, we can cater to needs of scalability and storage. Distributed load balancing algorithms will be implemented in network to divide the transactions recorded in distributed public ledger among different local shards and global shards. Equal distribution of transactions at local shards will increase the resource utilization of the network. Dedicated miners on these local shards will validate the transactions, hence decreasing the network latency and overhead. Distributed Proof of Stake (PoS) Consensus protocols will validate the transactions by aggregating the results of local and global shards and will update the copy of the public ledger. To meet scalability demands, the system will expand to global shards with global miners assigned dynamically. And partitioning the ledger into local and global shards to be copied to different nodes in the network will address the storage challenges in BlockChain technology. The main contributions of this paper are: 1) Using distributed load balancing algorithms to copy local shards of distributed public ledger to different nodes dynamically with replication 2) On demand expansion of nodes from local to global shards to cater scalability 3) Distributed PoS consensus protocol executed on aggregated results to update the public ledger 4) Performance of the system will improve as load distribution of shards across the nodes and aggregation of results will work in parallel.

In this short note, we present a nontechnical retrospection on the unbearable longevity of the classic WACC (Weighted Average Cost of Capital) for the Free Cash Flow (FCF) in perpetuity. Over the past two decades, researchers in finance have increased greatly our understanding of the properties of the WACC. This means that the usefulness of the classic FCF WACC has long expired. However, inexplicably, it continues to live on in textbooks and websites. The resilience of the classic FCF WACC is puzzling. We discuss some unsatisfactory reasons why the classic FCF WACC continues to thrive.

Civil registration practice usually requires records to be kept for a very long time, or even in perpetuity. Digitization has raised the matter of the (non-)longevity of digital records because of frequent, ongoing changes in hard-and software. This has not been on the radar of the enthusiasts of digital ID. It is not-for example-addressed in the World Bank-initiated 'Principles on Identification' (endorsed by more than two dozen other organizations). Record management has been identified as a vulnerability of the Aadhaar system in India in which more than a billion people have been enrolled. The currently boisterous expectations re digital ID threaten to negatively impact civil registration, including its irreplaceable legal purpose and the importance of the preservation of records of legal identity. The article concludes with an illustration using a World Bank-funded project for Tonga, the Pacific Island country with just over 100,000 inhabitants.

This is a short review of Eric Kades, Of Piketty and Perpetuities: Dynastic Wealth in the Twenty-First Century (and Beyond) 60 B.C.L. 145 (2019).

The purpose of this article is to explain why the result achieved by the Court of Appeal and Supreme Court in Jackson Mews Management Ltd v Menere (Menere) is unsatisfactory and conflicts with our understanding of the nature and character of real property obligations. Flowing from those decisions, encumbrance instruments securing performance of personal obligations may be imposed in New Zealand against future landowners (perhaps) in perpetuity. The result brings into question whether there is justification in continuing to impose obligations by easements, leases or land covenants, given the same or more onerous performance may be imposed by using encumbrance instruments. The New Zealand Law Commission recognised the problems arising from Menere and proposed a legislative solution. However, this was not enacted as part of the Land Transfer Act 2017. Consequentially, the two Menere judgments need to be subjected to close scrutiny to better comprehend their impact and also to assist in future judicial consideration of this issue.

The use of biodiversity offsets to compensate for residual impacts on biodiversity resulting from a development or land-use change, is becoming more prevalent. While much has been published on this topic, there has been little published on the theoretical foundation on which biodiversity offsets are based. This paper seeks to unpack the theoretical and practical tenets of biodiversity offsets in relation to the public trust doctrine, responsibilities of the developer and the State, and significant unmitigable impacts on biodiversity. It was reasoned that the responsibility of the developer and the life of a biodiversity offset are finite, and that the concept of ‘in perpetuity’ may not exist practically and in law. It was further discovered that a sound understanding of the public trust doctrine is critical for consistent offset-based decision-making – particularly in those circumstances where an impasse between the potential significant loss to biodiversity and an indispensable need for a development or land-use change arises.

This paper values correlated future cash flows when idiosyncratic risk earns a premium. For example, single period RAROC-style valuations used by financial institutions can be extended to multiple periods. Properties of the valuation differ considerably from traditional NPV analysis. Cash flow valuations are non-additive, and asset values vary inversely with cash flow variances and covariances. Negative valuations are possible even when expected cash flows are positive. The valuation of normally distributed cash flows is provided in matrix form, as well as the period-specific risk charge allocations. Simplified perpetuity formulas are also developed for cash flows that follow random walks.

Second Amici Curiae Brief of Law Professors et al., filed in support of the government in the U.S. Court of Appeals for the Eleventh Circuit in Pine Mountain Preserve, LLP v. Commissioner, on appeal from U.S Tax Court No. 8956-13, 151 T.C. 247 (2018).

Awqāf are undergoing a process of rebirth in Pakistan. Public awqāf are strictly regulated by the State in Pakistan because of their entrenchment with the politics of pirs (spiritual guides). While private awqāf, though relatively lightly regulated, are economically inefficient because of the doctrine of perpetuity. Therefore, most philanthropic activities in contemporary Pakistan take place in the form of various English law institutions such as registered societies, trusts, and not-for-profit corporations. Still, a large number of awqāf properties exists not only as symbols of past practices but religious institutions such as mosques, religious schools (madaris), shrines (dargahs), and graveyards (janazagahs) continue to be established as awqāf. During the post-colonial period in Pakistan, awqāf have also attracted attention for revival for poverty alleviation as part of microfinance. Several initiatives have been taken to develop endowment funds based on waqf model to provide enterprising poor access to finance. This paper explores the current practice of awqāf in Pakistan within its stringent regulatory regime for awqāf. The focus of this paper is on Hamdard Waqf and Ihsan Waqf which present innovative use of the traditional structure of waqf to provide various charitable and welfare services.

In this note, we present a simple numerical example to illustrate the case where the growth rate for the Free Cash Flow (FCF) gU is greater than but different from the growth rate for the Cash Flow to Debt (CFD) gD. Here we assume that the value of the appropriate discount rate for the tax shield KTS equals the cost of debt KD.

The use of biodiversity offsets to compensate for residual impacts on biodiversity resulting from a development or land-use change, is becoming more prevalent. While much has been published on this topic, there has been little published on the theoretical foundation on which biodiversity offsets are based. This paper seeks to unpack the theoretical and practical tenets of biodiversity offsets in relation to the public trust doctrine, responsibilities of the developer and the State, and significant unmitigable impacts on biodiversity. It was reasoned that the responsibility of the developer and the life of a biodiversity offset are finite, and that the concept of ‘in perpetuity’ may not exist practically and in law. It was further discovered that a sound understanding of the public trust doctrine is critical for consistent offset-based decision-making – particularly in those circumstances where an impasse between the potential significant loss to biodiversity and an indispensable need for a development or land-use change arises.

Proponents of the Affordable Care Act have pointed to the Congressional Budget Office’s cost estimates to support their argument that the law will result in lower federal budget deficits in the future. Much less is said about the reasons for this forecast. This paper explains that the primary reason for the projected deficit reduction is the law’s heavy reliance on indexing important provisions in order to restrain spending and increase revenue. The key provisions are a “productivity adjustment factor” that results in across-the-board cuts to hospitals and other facilities in perpetuity; frozen income thresholds for new taxes that supposedly apply only to higher-income households; thresholds for a new “Cadillac” tax on high-cost insurance that rise more slowly than healthcare costs; and indexing rules for premium credits that will cause lower-income households to pay ever higher percentages of their income in premiums. As more taxpayers and beneficiaries come to understand the full implications of these provisions, pressure will build to make significant adjustments to them. The result could be much higher spending and lower revenue than originally forecast by the Congressional Budget Office.

Hybrid securities provide long term funding for financially sound issuers. The coupon deferral option and their perpetuity offer an issuer flexibility of equity without shareholder dilution. The authors present the case study of Volkswagen (VW) hybrid securities where authors compare the market performance of various financial instruments in the scenario of a corporate governance scandal. Analysis covers the interrelation between prices and yields of VW corporate hybrids and senior bonds in reaction to emissions scandal revealed in September 2015. To one’s surprise the prices of more risky equity-like VW hybrids fell less than prices of VW senior bonds. First, we explain this phenomenon through analysis of price, yield and bond duration. Then we estimate the term structure of the discount factors for senior bonds. We study six series of perpetuals issued by VW group. For each hybrid we consider a virtual bond (Proxy) with maturity at its first call day and the same nominals and coupons, paid at the same day of a year as corresponding hybrid. We observe that difference between spreads for different times to maturity is moderate and the spreads for longer times to maturity are bigger. In crisis periods the difference much increases several times and we observe a reverse effect. The spreads for shorter maturities are greater. As the first corporate hybrids were issued around 2003 and the dominant issuers are ‘blue chip’ companies, the VW case creates the first opportunity to observe real-world behavior of such securities class when an issuer is likely to defer scheduled coupon payments.

We develop the real option signaling game models of equity financing of a risky project under asymmetric information, where the firm quality is known to the firm management but not outside investors. Unlike the usual assumption of perpetuity of investment, we assume that the time window of the investment opportunity has a finite time horizon. The firm chooses the optimal time to issue equity to raise capital for the investment project. The number of shares of equity issued to fund the project depends on the outside investors’ belief on the firm quality. The low-type firm has the incentive to sell overpriced securities through mimicking the investment strategy of the high-type firm in terms of investment timing and number of equity shares. On the other hand, the high-type firm may adopt the separating strategy by imposing mimicking costs on the low-type firm. We examine the incentive compatibility constraints faced by the firm under different quality types and discuss characterization of the separating and pooling equilibriums. We also explore how the separating and pooling equilibriums evolve over the time span of the investment opportunity. The information costs and abnormal returns exhibit interesting time dependent behaviors, in particular, at time close to expiry of the investment opportunity.

This report was prepared by Nancy A. McLaughlin, Robert W. Swenson Professor of Law at the University of Utah S.J. Quinney College of Law, in her role as Reporter for the Uniform Law Commission's Uniform Conservation Easement Act Study Committee. The report provides an overview of the Uniform Conservation Easement Act (UCEA), which was approved by the Commission in 1981, and examines the provisions in individual state conservation easement enabling statutes that differ from the provisions in the UCEA.

Conservation easements are increasingly being used both for traditional conservation purposes and as a tool for critical climate change mitigation and adaptation. Because land use decisions are generally made at the local level, environmental and conservation stakeholders should consider using easements as a hedge against inactive or regressive federal policy as well as against the stressors from our warming climate. On May 17, 2017, ELI convened a seminar around the book A Changing Landscape: The Conservation Easement Reader (ELI Press, 2016), which excerpts leading articles and reports to illuminate various aspects of conservation easements. This discussion provided valuable information and strategies for maintaining the integrity of conservation easements in perpetuity while creating flexibility to address the dynamic threats of climate change. Below we present a transcript of the discussion, which has been edited for style, clarity, and space considerations.

It would seem that Hotelling's rule and its related models of resource extraction and electricity production as largest consumer of scarce resources are closely related. However, although fixed costs and a non-storable product are essential in characterizing electricity markets, they can hardly be found in respective literature. We show optimal extraction paths when coal, gas and a renewable with differing fixed and variable costs as well as carbon intensities are considered. The technology with lowest fixed costs will then – though relying on a scarce resource – always be used in perpetuity. The high fixed-cost fossil technology may be exploited at a definite point of time if it is relatively scarce or also used ad infinitum.

This chapter considers why Sustainable Value Money (SVM) is needed and how to get it. It is required because no existing official currency has its value defined by any one or more real goods or services. Official money has become a social construct with no direct feedback from nature if human existence and their natural environment are sustainable. Twenty-four other reasons are identified why official currencies are not fit for purpose. All 25 deficiencies are compared with SVM tethered to an index based on the efficiency and dependency of each region of the planet being serviced by Kilowatt-hours (Kwhrs) of electricity generated from benign source of renewable energy. Sustainable Energy Dollars (SEDs=$Z) would create a global unit of account, with its value determined in each currency region by the ability of the host environment to support humanity in perpetuity. Electricity is the most crucial resource for maintaining the necessities of life. The value of the index and so money would be highest in regions best capable of eternally servicing humanity. Market forces would arise to encourage humanity to become allocated sustainably while also reducing the incentive to burn carbon to reduce the need for carbon taxing or trading.

For the first time since independence, in a nation founded in large part on the rejection of a fixed nobility determined by birth and perpetuated by inheritance, America is paving the way for the creation of dynastic family wealth. Abolition or evisceration of the Rule Against Perpetuities in over half the states along with the likely repeal of the federal estate tax mean that there soon will be no obstacles to creating large pools of wealth that will insure lavish incomes to lucky heirs for generations without end. The timing of these legal changes could hardly be worse. Marshaling innovative economic data extending back centuries, Thomas Picketty convincingly argues that the relatively egalitarian incomes enjoyed in developed economies from the end of World War II until around 1980 were an aberration and that we are in the process of returning to the historical norm of much greater income and wealth inequality. The driving force is the return to a world in which the rate of return to capital (r) exceeds the growth rate of national income (g) — another historical norm temporarily abrogated during the 20th century. The wealthy hold an extremely high fraction of national wealth, and when returns to that wealth exceed the growth rate of national income, their relative economic power (and all that goes with that) increases proportionally. The main contribution of this article is, unhappily, to explore reasons that this revival of unending inherited wealth is of even greater concern than previously thought. First and foremost, the savings rate to a significant degree will be set by the dead hand control of those creating perpetual dynastic trust. In order to insure that trust assets keep up with income and beneficiary class growth, settlors will need to mandate very high savings rates for trust income. In the long term excessive savings (in excess of the “golden rule” savings rate), perhaps surprisingly, can actually retard the growth of consumption. In the shorter term, in a well-known phenomenon called the “paradox of thrift,” high savings rates can cause recessions, make them more severe, and increase their duration. Second, beneficiaries of dynastic trusts lack the power to dissipate the pools of family wealth that provide their high incomes. Prodigal children’s spending of principal is a powerful force for reducing inequality and increasing socioeconomic mobility. When not barred from doing so, descendants’ ability to sell trust assets to fund even more lavish lifestyles means that they will buy copious goods and services from those with lower incomes and less wealth. Thus perpetual dynastic family wealth thus imposes real social costs. This article recommends the conventional solution to such negative externalities: calibrated taxation of the anti-social behaviors. Instead of reinstating the Rule Against Perpetuities, this article instead suggests imposing perpetuities taxes on dynastic trusts with rates set, as closely as possible, to equal the costs imposed in terms of lower growth; more frequent and sharper business cycles; higher inequality; and lower socioeconomic mobility.

This study provides formal theoretical evidence that in presence of leverage, share prices cannot be characterized to be robust proxies for product price premiums that are outcomes of firms' corporate reputations. The formal theoretical model predicts proxies for each of corporate reputation, and product price premiums can be derived from firms' financial statements. In presence of global convexity of relations between reputation estimates, and estimates of prior period product price premiums, constructs proposed for each of price premiums or corporate reputation are predicted to be robust. Perpetuity of regulatory reporting ensures robust constructs that are derived from firms' financial statements have time series properties, absence of which has stunted development of a rich literature that studies reputation of non-financial corporations. In presence of generality or normativeness of the global convexity condition, and allowance for development of reputation constructs that are industry specific, commonality of robustness theory (across industries) is combined with pragmatism of industry specificity. We have then that differences in effects of corporate reputation are comparable across industries.

We propose a formula to derive the reinvestment rate to be employed in the terminal value of discounted cash flow models. We argue – on the back of a strict set of assumptions – that the reinvestment rate is first and foremost conditioned on two factors: the average economic lifetime of assets and the assumed average growth rate in the terminal value. The derived formula may allow practitioners to make a more thorough (value sensitive) judgement as regards the proper relation between (i) investments and (ii) depreciation & amortization in perpetuity.

Whatever trade arrangement the UK decides to adopt with the EU post-Brexit, the UK government will have authority over fisheries policy. Under the EU’s Common Fisheries Policy (CFP), after many years of stock decline, there has been a recent stabilisation and even increase in stocks. However, the CFP is not an effective way for managing fishing rights. Other countries such as Iceland have more effective policies that lead both to sustainable management and also reduce conflict between different interests. The UK should adopt a tradable quota share system whereby quotas are allocated as a share of the annual total allowable catch in perpetuity. Such a system mirrors the way in which property rights on land encourage sustainable farming. Under such a system the quota-holders have an incentive to agree the total allowable catch to maximise sustainability. In-shore fisheries might be better managed in other ways with self-management often being more sustainable than government regulation. Having determined the principles by which the system should operate, there are a number of practical difficulties that need to be addressed. These are important issues, but need not get in the way of the development of an effective and sustainable property-rights based system for allocating fishing rights

We examine Singapore's fairly homogeneous private-housing market and show that new apartments on historical multi-century leases trade at a non-zero discount relative to property owned in perpetuity. Descriptive regressions indicate that new apartments with 825 to 986 years of tenure remaining are priced 4 to 6% below new apartments under perpetual ownership contracts that are otherwise comparable. We consider an empirical model in which asset value is decomposed into the utility of housing services and a second factor that shifts with asset tenure and the discount rate schedule. Exploiting the supply of new property with tenure ranging from multiple decades to multiple centuries, we estimate the discount rate schedule, restricting it to vary smoothly over time through alternative parametric forms. Across different specifications and subsamples, we estimate discount rates that decline over time and, accounting for the observed price differences, are of the order of 0.5% p.a. by year 400-500. The finding that households making sizable transactions do not entirely discount benefits accruing many centuries from today is new to the empirical literature on discounting and, with the appropriate risk adjustment, of relevance to evaluating climate-change investments.

This essay regards the soul. Any hypothesis about the soul is existential, not evidentiary. The branching process of existence determines our concept of the soul. Sartre argued for comprehension elicited by biography, because biography leads to an understanding of wider existential questions. This essay borrows both from biography and existential literature to frame a soul hypothesis.Everyone has written about the soul from Aristotle to Crick and beyond. The soul is the most latent of latent variables; without definition, observation, or codification; yet referenced in perpetuity. Necessarily, a soul hypothesis must be considered in the abstract and not the particular. The essay presumes that we are bounded by existence; by our impermanence; by the uncertainty as to who we are; and by the mediation of others who are similarly bounded. And we have invented the soul to free ourselves from those bounds. The soul is our escape clause. In his fundamental project of being, Sartre unlocks the bounds of existence through a pure principle of what it is to be. If the soul were to exist, it would be consistent with Sartre’s for-itself being; and the project of being would constitute an evolution of the soul. This essay’s hypothesis is that the soul can only be calibrated through dispassionate observation of the project of being. But our existence does not allow such dispassion. Our concept of the soul will always be an estimate of how a dispassionate observer in the universe may see us; but it is an estimate mediated by us for we cannot free ourselves from who we are in order to see who we are. That is the enigma of our existence.

The valuation of equity is a central topic in finance and accounting from many fronts. However, equity valuation is still subjective as different analysts obtain target prices that are not similar despite using the same publicly available information. Growth has a substantial influence on the value of equities when using Gordon Growth Model. Nevertheless, initial high growth and a constant growth to perpetuity assumption whereby a company continues to grow indefinitely is considered to be naive and simplistic. Therefore, this study proposes the use of sigmoid growth curve equation that is expected to better capture practicalities of firm growth. The sigmoid curve consists of lag, exponential, stationary and decline phases. The aim of this study was to provide evidence of sigmoid growth patterns of Johannesburg Securities Exchange listed companies and to propose a model for valuing equities using principles behind the sigmoid growth curve. This has implications for improving accuracy when approximating the value of equities, detecting mispriced stocks and informing buy/ sell decisions. For this purpose, cumulative sustainable growth patterns of 64 JSE listed companies were examined using data from 1994 to 2014, followed by curve fitting to determine whether the profiles were sigmoid. Interestingly, 50% of the firms showed typical sigmoid growth patterns. Ultimately, a model was developed for valuing equities by replacing growth, g, in the Gordon Growth Model with equivalent parameters in the sigmoid equation. In conclusion, the findings of this study accentuate that the Gordon Growth Model for equity valuation must factor in the complex growth parameters of firms in order to circumvent mispricing shares.

In the continued debate over passive and active funds, literature commonly looks at superior returns and their persistence when measuring fund performance. This paper, however, demonstrates that over time, superior returns can create losses that supersede gains after accounting for costs typical of actively managed funds. More notably, cost-based losses from these returns outpace their gains at an increasing rate, resulting in an eventual negative sum in profitability. Since investors fundamentally seek profit, returns are a problematic measure of fund performance. Institutional portfolios that in effect are perpetuities, are extremely sensitive to these findings, since time amplifies negative profitability. For such portfolios, we would expect negative profit resulting from superior returns to be radically higher than that common to portfolios of retail investors.

Perpetuity growth models are very popular throughout academia and practice. Given their parsimonious nature and their often implicit assumptions, it is not surprising that they can yield rather different results. First, the Miller and Modigliani (1961) model, coined as the investment opportunity approach, reformulates the Gordon and Shapiro (1956) model. Both are based on marginal rates of return. Second, we establish that steady state is a sufficient condition to align models employing marginal rates of return with models employing average rates of return, mostly stated as the “textbook formula”.

We examine a set of equity analysts' private models from a large investment bank equity research department as a new way of understanding how analysts actually value the companies their follow. We identify their valuation approaches and use of inputs, including equity research premium, risk free rate and beta. We find that the analysts broadly follow textbook valuation approaches in their discounted cash flow analysis, including at least five years of explicit forecasts, a perpetuity-based terminal value and reasonable long term growth rate assumptions. But they are not always consistent in their use of valuation parameters. We hypothesise that analysts can manipulate their inputs to achieve desired valuation outputs while maintaining the appearance of theoretically sound valuation methods.

The recent rise of perpetual trusts has brought new attention to previously obscure state constitutional prohibitions of perpetuities. This symposium commentary examines the historical origins of the first such prohibition, Clause 23 of the 1776 North Carolina Constitution and Declaration of Rights, which provided that “perpetuities and monopolies are contrary to the genius of a free State, and ought not to be allowed.” Although many good reasons can be offered for the provision, it is curiously absent from the constitutions of the twelve other original states. Why did this provision emerge only in North Carolina, and not in Virginia, Massachusetts, Pennsylvania, or any of the other “free states” that together rose up against their colonial masters? This commentary suggests a possible answer to that question. Although the problems with perpetuities were well known to learned inhabitants of all the newly independent American states, those problems were particularly salient in North Carolina in 1776 due to that colony’s unique history as a former proprietary colony. The decision by the heir of one of the original Lords Proprietors not to sell his share back to the British crown gave rise to specific grievances in North Carolina that did not exist in the other twelve former colonies. Moreover, North Carolina was unique in witnessing a violent confrontation between the colonial authorities and backcountry farmers that stemmed in part from those grievances. The peculiar case of the Earl Granville and assorted problems in his Granville District shifted the problem of perpetuities from the periphery to the center of North Carolina politics in the late eighteenth century, and made perpetuities warrant an explicit mention in the 1776 North Carolina Constitution and Declaration of Rights.

In Islam, Waqf is one of the most encouraged and sought-after supererogatory charitable practices. A deed of Waqf encapsulates spiritual, social and economic dimensions but traditionally has been linked with endowments of real estate that either producing direct social returns as in the case of hospitals, schools etc or indirectly through producing rental returns. The validity of setting up a sum of money in the form of a Cash Waqf was approved by some classical jurists as early as the eighth century, it barely received any significant applicability until the sixteenth century in the Ottoman era. During the Ottoman regime, the concept was officially sanctioned and profusely employed. In the contemporary context, cash Waqf seems to be one of the most suitable methods of endowment in perpetuity, given its liquid nature. This is arguably because cash is easy to endow, relatively easy to manage, more practical to distribute its benefits among a wider sections of beneficiaries or to deploy in the specific projects, and also easiest for beneficiaries to utilise for their day to day needs.The link between cash-Waqf and microfinance has, however, rarely been made despite the fact that many Islamic microfinance institutions are unable to access financial markets and therefore suffer from discontinuity of capital and lack economies of scale. This, in turn, has led to many Islamic microfinance institutions lacking economic and financial sustainability of the financing modalities employed and therefore produce often very little social impact.

An investment vehicle for production modernization has been introduced taking into account specifics of company activities in Russia. This vehicle comes with a procedure for analyzing practicability of plant replacement, which may be applied to expediency consideration with regard to replacement of a single piece of equipment and the entire equipment stock if there is no budgetary limitation at the company. The vehicle also comes with a procedure for step-by-step renewal of equipment stock, which makes it possible to upgrade its various units in succession, with minimum expense, if there is lack of funds to modernize it completely on a one-time basis.

By unwittingly granting a tax exemption for perpetual trusts, Congress undermined state perpetuity law and promoted private trusts that can last and remain tax exempt for many centuries and maybe forever. As a direct result of Congress’s action, and then of lobbying by financial institutions and other interest groups holders to convince state legislatures to remove the obstacle of perpetuity law, the very wealthy can now create tax-exempt private trusts for generations upon generations of their descendants. And they are taking advantage of the opportunity.Congress as an institution has known of its blunder for years, but has failed — so far — to remedy its mistake. On February 26, 2014, the House Ways and Means Committee unveiled its long-awaited proposal for comprehensive tax reform, but the proposal did not address the tax exemption for perpetual trusts and, in any event, was not enacted.The author asks why Congress has not acted to correct its mistake and why it seems so uninterested in doing so. There is no federal interest in promoting perpetually tax-exempt trusts and, in fact, the federal interest cuts the other way. Tax revenues are lost by Congress’s action and subsequent inaction. A plausible explanation for Congress’s persistent indifference to the problem is that the revenue gain by correcting the oversight would be a long way off. Congress is not known for giving a high priority to problems of that sort. The longer Congress procrastinates, however, the amount of wealth that is safely sheltered in perpetually tax-exempt trusts — already estimated to be in the billions of dollars — continues to grow.The Treasury Department has a proposal before Congress for remedying the situation, but the Treasury’s proposal is not nearly as effective as it could and should be. The author proposes a remedy that would be entirely effective and would be consistent with the original purpose of the tax law.Regrettably, the prospect that Congress will ever address the problem, much less address it effectively, grows dimmer with each passing year.

One-fifth of all Americans today live in privately governed, common interest communities (CICs). By definition, property in a CIC is subject to restrictions on use, however many CIC properties are also constrained by restrictions on transfer. Owners may not be able to freely sell or lease their property because of limitations in the community’s covenant regime. Such restrictions on transfer increase the economic vulnerability of communities and their members and compromise owners’ property rights. Proponents of such restrictions cite countervailing, albeit amorphous, community interests (such as harmonious neighborhoods and property values) to justify alienation controls. Legitimate neighborhood concerns could be addressed directly through rules governing use, and therefore these goals do not generally justify restrictions on transfer. Courts take a hands-off approach with respect to the content of CIC covenants, reasoning that since these covenants are private contracts, freedom of contract mandates their enforcement. But CIC covenants differ from voluntary private contracts in important ways, making deferential enforcement in the name of contract policy unwarranted. Covenants that run with the land are specifically enforceable and bind subsequent owners of the property, potentially in perpetuity. CIC covenants are contracts of adhesion, made up of completely non-negotiable, recorded terms bundled into home acquisition. Developers and lenders generally prescribe the content of such covenants, and they may not reflect community desires or values. Yet most courts reflexively uphold covenant transfer restraints based on freedom of contract principles without fully vetting implications for individual autonomy and market efficiency. This approach is unwarranted.Free alienability preserves owner autonomy and stimulates market efficiency. Barriers to transfer perpetuate neighborhood segregation, adversely impact minority groups, and can even imperil community financial stability. Legitimate neighborhood concerns regarding maintenance and behavior are better directly controlled through community use regulations rather than through alienation restraints. To promote the still-compelling policies behind free alienability of property, courts should invalidate covenant restrictions that unjustifiably constrain the right to transfer, particularly when the same community objectives could be accomplished through less intrusive means.

The valuation of firms with discounted cash flows poses the problem of quantifying the terminal value. Attention is centered on one of the most common methods of doing it: assuming that the company will operate "forever" and thus calculating the final value as the present value of a perpetuity. Seven important errors have been identified when this procedure is followed. They are caused by a failure to correctly account for the instability of the free-cash flows during the projection horizon, lack of consistency between the last free-cash flow of the horizon and the assumptions about reinvestment and growth, failure to account for the possibility to grow through external funding, inconsistency between the market exchange rate and the equilibrium exchange rate when working in different currencies, ignoring the possibility of different phases of growth, and setting up growth rates with little concern for the characteristics of the firm and the industry, inflation, market growth or market share. It is hoped that the proposed corrections will help to improve future valuation exercises.

The Voting Rights Act of 1965 (VRA) was designed to guarantee actual voting rights for Black Americans, rights that had been abrogated for a century by obstructive electoral devices (known as the Jim Crow laws) which kept them from their free exercise of the right to vote. Language added in 1982 to § 2 of the VRA reoriented its purpose from the guarantee of the individual right to vote to a focus on, first, assuring a descriptive representation of Black Americans to the body of elected officials, then second, preventing vote dilution resulting from the then-processes of electing these representatives. Attaining this dual goal was operationalized through the mechanism of Majority-Minority districts (MM’s). Our research finds, however, that the Majority-Minority mechanism does not guarantee political influence in the legislative body as opposed, on the contrary, to descriptive political representation. Indeed, the mechanism may in fact work against a target group’s actual political influence, all the while that it succeeds in increasing the group’s descriptive representation. It does so by institutionalizing partisan polarization across the body of elected representatives. Polarization, in turn, if based on partisanship, neuters the political influence of any specific group present in the elected body: First, by mandating the artificial creation of M-M districts, reapportionment processes implemented by state legislators move Black voters from opposite leaning districts. The Black AND the White majority districts that result are increasingly homogenous and therefore susceptible to the sirens of extremism, shorthand for political discourse never has to take into account opposite views. Second, the process then leads to elected officials whose electoral incentives wholly oriented to the wishes of homogenous constituencies and because these homogenous districts have put into place by the constitutional process of apportionment, they are both inviolable and semi permanent, impermeable thereby to entreaties pressing in upon them from others’ points of view. What the new language in § 2 has in fact accomplished is to provide sustained presence of a larger Black Caucus inside the House. But “larger,” as long as larger does not reach the level of absolute majority, does not necessarily translate to greater Black-American influence at the level of the House floor and its votes or within the body’s committees as this influence is neutered by the polarization dynamic within the House overall. Moreover, the polarization dynamic within the House is rendered self-reinforcing, and therefore self-perpetuating in perpetuity: first, in one very important unintended consequence of the MM mechanism, for every safe Majority-Minority district that is created, at least one and sometimes multiple White majority districts are also created. These White majority districts are also thereby safe districts insofar as it was ideological difference between Blacks and Whites that created the need for a districting mechanism such as the M-M, the safe White majority districts representatives, also beholden to only the views of their homogenous constituency bring their defense of these opposing values to their work as representatives in the House.

Legal conflicts cause tensions between Islamic law and the common law. One such conflict exists between the rule against perpetuities in trusts and mandatory perpetuities in family Waqfs. This conflict is a prime example of a direct clash of legal philosophies. To appreciate the full extent of this conflict, this article analyses three seminal cases from colonial times, a period in which English common law judges had the opportunity to adjudicate on Islamic legal matters in colonial dominions where Islamic law prevailed. The cases will help gauge how receptive the common law is to Islamic legal doctrines that clash with it.