Regional update

Economic indicators ; Labor market ; Louisiana ; New Mexico ; Texas

Forex Trading System Development

This Interactive Qualifying Project introduces the Foreign Exchange market with an emphasis on fundamental and technical parameters, in order to get started as a Forex trader. The purpose of this project is to systematically create a profitable trading strategy in the Forex market. The group used $100,000 each in a simulated account to trade different currency pairs on the TradeStation platform. During this process, two students in the group selected manual trading systems and the other two chose to trade automatically. After collecting the data, the group would compare the profits and constructed a most profitable system

Commercial paper

Commercial paper issues

Regulating Complexity in Financial Markets

As the financial crisis has tragically illustrated, the complexities of modern financial markets and investment securities can trigger systemic market failures. Addressing these complexities, this Article maintains, is perhaps the greatest financial-market challenge of the future. The Article first examines and explains the nature of these complexities. It then analyzes the regulatory and other steps that should be considered to reduce the potential for failure. Because complex financial markets resemble complex engineering systems, and failures in those markets have characteristics of failures in those systems, the Article‟s analysis draws on chaos theory and other approaches used to analyze complex engineering systems

Private Law Alternatives to the Individual Mandate

Despite excitement on the left about a move to universal health care and on the right about a more state-driven model, major policy changes in a time of divided government are not imminent. Yet with the recent repeal of the individual mandate, the current system may be crumbling. The Affordable Care Act guarantees coverage to people with pre-existing conditions and prohibits insurers from charging them more than healthy people. But the mandate was supposed to draw cheaper and healthier people into the risk pools to balance out costs. Without the mandate, healthy people can simply wait to buy insurance until they get sick. Insurers are left to cover an increasingly sicker, more expensive population, and premiums skyrocket, starting a chain reaction ending in the so-called “death spiral.” The model only works if healthy people purchase insurance, and now there is little to prompt them to do so. This Article relies on private law to solve the problem. It looks to both neoclassical economic theory and principles of behavioral economics to better understand what motivates (and deters) the purchase of health insurance. It then explores economic incentives and “nudges” that will encourage healthy individuals to sign up for policies without forcing them to do so. It suggests co-opting practices previously deployed for nefarious purposes to prompt behavior that policy now seeks, such as insurers offering low introductory rates, long-term contracts, and limited exit rights. Other options include insurers selling return of premium-style policies or policies with a generosity frame, simplifying plan offerings, or automatically enrolling the uninsured but giving a right to opt-out. These private law solutions—many of which would not require congressional action—hold the promise of ultimately lowering prices without the government forcing action or taking away the right to make autonomous choices

Inflation dynamics and food prices in an agricultural economy : the case of Ethiopia

Ethiopia has experienced a historically unprecedented increase in inflation, mainly driven by cereal price inflation, which is among the highest in Sub-Saharan Africa. Using monthly data from the past decade, the authors estimate error correction models to identify the relative importance of several factors contributing to overall inflation and its three major components, cereal prices, food prices, and non-food prices. The main finding is that, in a longer perspective, over three to four years, the main factors that determine domestic food and non-food prices are the exchange rate and international food and goods prices. In the short run, agricultural supply shocks and inflation inertia strongly affect domestic inflation, causing large deviations from long-run price trends. Money supply growth does affect food price inflation in the short run, although the money stock itself does not seem to drive inflation. The results suggest the need for a multi-pronged approach to fight inflation. Forecast scenarios suggest monetary and exchange rate policies need to take into account cereal production, which is among the key determinants of inflation, assuming a decline in global commodity prices. Implementation of successful policies will be contingent on the availability of foreign exchange and the performance of agriculture.Markets and Market Access,Currencies and Exchange Rates,Economic Theory&Research,Food&Beverage Industry,Emerging Markets

Psychology and Economics: Evidence from the Field

The research in Psychology and Economics (a.k.a. Behavioral Economics) suggests that individuals deviate from the standard model in three respects: (i) non-standard preferences; (ii) non-standard beliefs; and (iii) non-standard decision-making. In this paper, I survey the empirical evidence from the field on these three classes of deviations. The evidence covers a number of applications, from consumption to finance, from crime to voting, from giving to labor supply. In the class of non-standard preferences, I discuss time preferences (self-control problems), risk preferences (reference dependence), and social preferences. On non-standard beliefs, I present evidence on overconfidence, on the law of small numbers, and on projection bias. Regarding non-standard decision-making, I cover limited attention, menu effects, persuasion and social pressure, and emotions. I also present evidence on how rational actors -- firms, employers, CEOs, investors, and politicians -- respond to the non-standard behavior described in the survey. I then summarize five common empirical methodologies used in Psychology and Economics. Finally, I briefly discuss under what conditions experience and market interactions limit the impact of the non-standard features.

Inflation Dynamics and Food Prices in an Agricultural Economy: The Case of Ethiopia

Ethiopia has experienced a historically unprecedented increase in inflation, mainly driven by cereal price inflation, which is among the highest in Sub-Saharan Africa. Using monthly data over the past decade, we estimate error correction models to identify the relative importance of several factors contributing to overall inflation and its three major components, cereal prices, food prices and non-food prices. Our main finding is that, in the long run, domestic food and non-food prices are determined by the exchange rate and international food and goods prices. In the short to medium run, agricultural supply shocks and inflation inertia strongly affect domestic inflation, causing large deviations from long-run price trends. Money supply growth affects food price inflation in the short run, though excess money supply does not seem to drive inflation in the long run. Our results suggest a challenging time ahead for Ethiopia, with the need for a multipronged approach to fight inflation. Forecast scenarios suggest monetary and exchange rate policies need to take into account the cereal sector, as food staple growth is among the key determinants of inflation, assuming a decline in global commodity prices. Implementation of successful policies will be contingent on the availability of foreign exchange and the performance of agriculture.Agriculture; Cointegration analysis; Ethiopia; Exchange rate; Money demand; Food prices; Forecast; Inertia; Inflation