Renminbi Internationalisation: Precedents and Implications

While it is commonly assumed that there are no known precedents against which to benchmark the internationalisation of the Renminbi (RMB), this paper argues that the PRCs own development experience provides a useful perspective on the internationalisation debate. In particular it indicates that lessons can be learnt from both the successes and the shortcomings of efforts to internationalise the RMB in the 1970s. During this period state-owned banks in Hong Kong played a central role in mobilising finance for foreign trade. Access to Hong Kong’s developed financial institutions allowed the PRC to maximise receipts from foreign trade as well as minimise the risks of undue swings in capital flows. The paper shows that although China no longer faces foreign exchange scarcity, economic reforms have not yet resolved vulnerabilities in China’s financial institutions and as such Hong Kong’s role in mitigating the risk of undue capital swings remains

Legal Precedent: A Theoretical and Empirical Analysis

The use of precedents to create rules of legal obligation has, to our knowledge, received little theoretical or empirical analysis. This paper presents and tests empirically an economic approach to legal precedent that is derived mainly from the analysis of capital formation and investment. We treat the body of legal precedents created by judicial decisions in prior periods as a capital stock that yields a flow of information services which depreciates over time as new conditions arise that were not foreseen by the framers of the existing precedents. New (and replacement) capital is created by investment in the production of precedents.

Distribution of Damages in Car Accidents throught the Use of Neural Networks

After a traffic accident the damage has to be fairly divided among the parties involved, and a ratio has to be determined. There are many precedents for this, and judges have developed catalogues suggesting ratios for common types of accidents. The problem that "every case is different," however, remains. Many cases have familiar aspects, but also unfamiliar ones. Even if a case is composed of several familiar aspects with established ratios, the question remains as to how these are to be figured into one ratio. The first thought would be to invent a mathematical formula, but such formulae are rigid and speculative. The body of law has grown organically and must not be forced into a sleek system. The distant consequences of using a mathematical formula cannot be foreseen; they might well be grossly unjust. I suggest using a neural network instead. Precedents may be fed into the network directly as learning patterns. This has the advantage that court rulings can be transferred directly and not via a formula. Future modifications in court rulings also can be adopted by the network. As far as the effect of the learning patterns on new cases is concerned, a relatively safe assumption is that they will fit in harmoniously with the precedents. This is due to the network's structure—a number of simple decisional units, which are interconnected, tune their activity to each other, thus achieving a state of equilibrium. When the conditions of such an equilibrium are translated back into the terms of the case, the solution can hardly be totally unjust

Student Debt: Bigger and Bigger

This report examines the amount of debt than an average student incurs to attend a four-year college, historical precedents of debt, and the implications for working students and families.

Cases and Case-Lawyers

In the nineteenth century, the term “case-lawyer” was used as a label for lawyers who seemed to care more about locating precedents applicable to their current cases than understanding the principles behind the reported case law. Criticisms of case-lawyers appeared in English journals in the late 1820s, then in the United States, usually from those who believed that every lawyer needed to know and understand the unchanging principles of the common law in order to resolve issues not found in the reported cases. After the Civil War, expressions of concern about caselawyers increased with the significant growth in the amount of published law after private companies entered the legal publishing market. By the turn of the twentieth century, it was generally acknowledged the number of cases had made it impossible for attorneys to not focus on locating precedents. In the twentieth century most references to case-lawyers were historical, even as the amount of published law facing lawyers continued to grow

The Persistence of "Bad" Precedents and the Need for Communication: A Coordination Experiment

Precedents can facilitate successful coordination within groups by reducing strategic uncertainty, but they may lead to coordination failure when two groups with diverging precedents have to interact. This paper describes an experiment to explore how such coordination failure can be mitigated and whether subjects are aware of it. In an initial phase, groups were able to establish a precedent in a repeated weakest-link game, and in a second phase two groups with dierent precedents are merged into a larger group. As expected, this leads to coordination failures. Unlike most of the previous literature, subjects could endogenously choose to communicate in the merged group for a small fee. The results suggest that communication can mitigate the coordination failure in the merged group and, in most cases, leads to efficient coordination. However, subjects in particular from groups with an efficient precedent in the initial phase are inattentive to the potential coordination failure and choose not to communicate. This can have profound consequences since groups who fail to implement communication are unable to achieve efficient coordination in the second phase. The results may be useful for the understanding of how groups learn to solve coordination problems from past coordination success or failure.coordination, precedent, costly communication, cheap talk

Courts and contractual innovation: a preliminary analysis

The authors explore a model in which agents enter into a contract but are uncertain about how a judge will enforce it. The judge can consider a wide range of evidence, or instead, use a rule-based method of judgment that relies on limited information. The authors focus on the following tradeoff: Considering a wide range of evidence increases the likelihood of a correct ruling in the case at hand but undermines the formation of precedents that resolve legal uncertainty for subsequent agents. ; In a model of contractual innovation, they show that the use of evidence increases the likelihood of innovation in any period, while rule-driven judgments increase the rate of diffusion of the innovation. When courts can use a mixture of evidence and rules, the minimum amount of evidence that induces adoption is (weakly) decreasing over time. They also examine the breadth of precedents. Overlapping jurisdictions reduce the optimal breadth of precedents because broad precedents are more likely to introduce conflict. Accordingly, overlapping jurisdictions increase the value of using evidence. The authors use their model to interpret differences between the legal systems in the U.S. and England.Contracts