The emergence of property rights enforcement in early trade : A behavioral model without reputational effects

Original article can be found at: http://www.sciencedirect.com/ Copyright ElsevierThe present article focuses on the conditions that allow governments to increase property rights protection because they expect enough income from such action. We develop a behavioral explanation, according to which the answer lies in the growth in the importance, size and wealth of merchant guilds in the medieval era in Western Europe as well as a somewhat surprising effect of volatile price structures. We add to prior research by showing that even uncoordinated embargo pressures among multiple guilds could get medieval rulers to offer high levels of property rights protection. © 2008 Elsevier B.V. All rights reserved.Peer reviewe

What about me? Factors affecting individual adaptive coping capacity across different populations

 When and why will people adapt to climate change? We conducted a number of studies examining the psychological drivers of individual adaptation to climate change across different populations. We used a variety of methodologies including interviews, surveys, survey experiments and face-to-face experiments. There was a high level of rigour involved in each of these methodologies which means that we can believe in the results. This programme of research represents one of the largest and most integrated attempts to understand some of the psychological drivers of individual-level adaptation.First, we used the most recent advances in the psychological literature of coping more generally to develop a valid scale to measure coping with climate change. Across three studies we found that our tool was both reliable and valid, providing an accurate measure of the different ways in which people cope with climate change. This tool can now be used to understand the effects of both adaptive and maladaptive coping and to understand what leads to these different ways of coping.Next, we examined adaptive capacity. We found that adaptive coping strategies were associated with perceiving climate change as a threat to oneself and one’s way of life, rating environmental goals as important, and believing that adaptive behaviours could help achieve significant personal goals. Furthermore, when looking at societal adaptive capacity (support for governmental policies) we found that not only were a threat appraisal, climate change or environmental goal, and goal connectedness related to support, but also political affiliation, perceived human contribution to climate change, (lack of) denying that climate change exists, and a number of emotions (enthusiasm, worry, (lack of) happiness, and (lack of ) embarrassment). By knowing these factors that lead to adaptive coping and support for adaptive policies we can identify strategies to improve individual adaptive capacity.Third, based on a range of psychological literature, we hypothesised that adaptive behaviour would be related to goals, goal connectedness, adaptive coping, beliefs about climate change (including denial), and emotions that create an uneasy state of activation (enthusiasm and hope combined with worry). We found support for each of these relationships. Thus, we can again identify strategies to increase adaptive climate change behaviour. Across the studies, we found that adaptive capacity and adaptive behaviours relied upon both “green” beliefs and goals and “non-green” beliefs and goals. Moreover, believing that the adaptive behaviours helped a person to achieve their goals (whether they were related to climate change or not) was strongly related to adaptive capacity and behaviour. We have therefore shown that we can improve adaptation not only in those people who want to help the environment but also in those who are less interested.Unfortunately, the goal structure of environmental goals appears difficult to change. However, making people think about politics did have an effect: Regardless of their own political orientation, a person’s belief about the degree of human contribution to climate change decreased when they were thinking about politics (compared to not thinking about politics). This has implications for how climate change adaptation is discussed in the media and by researchers.The results of our research also have implications for the communication of climate change adaptation policies. Our results show that framing the costs of reducing CO2 emissions in terms of a decrease in future gain—rather than as an opportunity-cost—renders people more willing to commit to climate change initiatives.In summary, this programme of research has taken an integrated and rigorous step towards greater understanding of some of the psychological drivers of individual adaptation to climate change. Given the complexity of the problem, more research is needed, however we believe that our research provides a good early step in this direction.Please cite as: Unsworth, K, Russell, S, Lewandowsky, S, Lawrence, C, Fielding, K, Heath, J, Evans, A, Hurlstone, M, & McNeill, I 2013 What about me? Factors affecting individual adaptive coping capacity across different populations, National Climate Change Adaptation Research Facility, Gold Coast, pp. 161. AbstractWhen and why will people adapt to climate change? We conducted a number of studies examining the psychological drivers of individual adaptation to climate change across different populations. We used a variety of methodologies including interviews, surveys, survey experiments and face-to-face experiments. There was a high level of rigour involved in each of these methodologies which means that we can believe in the results. This programme of research represents one of the largest and most integrated attempts to understand some of the psychological drivers of individual-level adaptation.First, we used the most recent advances in the psychological literature of coping more generally to develop a valid scale to measure coping with climate change. Across three studies we found that our tool was both reliable and valid, providing an accurate measure of the different ways in which people cope with climate change. This tool can now be used to understand the effects of both adaptive and maladaptive coping and to understand what leads to these different ways of coping.Next, we examined adaptive capacity. We found that adaptive coping strategies were associated with perceiving climate change as a threat to oneself and one’s way of life, rating environmental goals as important, and believing that adaptive behaviours could help achieve significant personal goals. Furthermore, when looking at societal adaptive capacity (support for governmental policies) we found that not only were a threat appraisal, climate change or environmental goal, and goal connectedness related to support, but also political affiliation, perceived human contribution to climate change, (lack of) denying that climate change exists, and a number of emotions (enthusiasm, worry, (lack of) happiness, and (lack of ) embarrassment). By knowing these factors that lead to adaptive coping and support for adaptive policies we can identify strategies to improve individual adaptive capacity.Third, based on a range of psychological literature, we hypothesised that adaptive behaviour would be related to goals, goal connectedness, adaptive coping, beliefs about climate change (including denial), and emotions that create an uneasy state of activation (enthusiasm and hope combined with worry). We found support for each of these relationships. Thus, we can again identify strategies to increase adaptive climate change behaviour. Across the studies, we found that adaptive capacity and adaptive behaviours relied upon both “green” beliefs and goals and “non-green” beliefs and goals. Moreover, believing that the adaptive behaviours helped a person to achieve their goals (whether they were related to climate change or not) was strongly related to adaptive capacity and behaviour. We have therefore shown that we can improve adaptation not only in those people who want to help the environment but also in those who are less interested.Unfortunately, the goal structure of environmental goals appears difficult to change. However, making people think about politics did have an effect: Regardless of their own political orientation, a person’s belief about the degree of human contribution to climate change decreased when they were thinking about politics (compared to not thinking about politics). This has implications for how climate change adaptation is discussed in the media and by researchers.The results of our research also have implications for the communication of climate change adaptation policies. Our results show that framing the costs of reducing CO2 emissions in terms of a decrease in future gain—rather than as an opportunity-cost—renders people more willing to commit to climate change initiatives.In summary, this programme of research has taken an integrated and rigorous step towards greater understanding of some of the psychological drivers of individual adaptation to climate change. Given the complexity of the problem, more research is needed, however we believe that our research provides a good early step in this direction

Order Flow and Exchange Rate Dynamics

Macroeconomic models of nominal exchange rates perform poorly. In sample, R2 statistics as high as 10 percent are rare. Out of sample, these models are typically out-forecast by a na‹ve random walk. This paper presents a model of a new kind. Instead of relying exclusively on macroeconomic determinants, the model includes a determinant from the field of microstructure-order flow. Order flow is the proximate determinant of price in all microstructure models. This is a radically different approach to exchange rate determination. It is also strikingly successful in accounting for realized rates. Our model of daily exchange-rate changes produces R2 statistics above 50 percent. Out of sample, our model produces significantly better short-horizon forecasts than a random walk. For the DM/$spot market as a whole, we find that$1 billion of net dollar purchases increases the DM price of a dollar by about 1 pfennig.

Why not euroisation?.

This item has no abstract

Stock ownership and political behavior: evidence from demutualizations

A natural experiment in which customer-owned mutual companies converted to publicly listed firms created a plausibly exogenous shock to the stock market participation status of tens of thousands of people. We find the shock changed the way people vote in the affected areas, with a 10% increase in share-ownership rate being followed by a 1.3%–3.1% increase in right-of-center vote share. The institutional details and additional tests suggest that wealth, liquidity, and tax-related incentives cannot fully explain the results. A plausible explanation is that the associated increase in the salience of stock ownership causes a shift in voters’ attention

Propagation and smoothing of shocks in alternative social security systems

Even with well-developed capital markets, there is no private market mechanism for trading between current and future generations. This generates a potential role for public old-age pension systems to spread economic and demographic shocks among different generations. This paper evaluates how different systems smooth and propagate shocks to productivity, fertility, mortality and migration in a realistic OLG model. We use reductions in the variance of wealth equivalents to measure performance, starting with the existing U.S. system as a unifying framework, in which we vary how much taxes and benefits adjust, and which we then compare to the existing German and Swedish systems. We find that system design and shock type are key factors. The German system and the benefit-adjustment-only U.S. system best smooth productivity shocks, which are by far the most important shocks. Overall, the German system performs best, while the Swedish system, which includes a buffer stock to relax annual budget constraints, performs rather poorly. Focusing on the U.S. system, reliance solely on tax adjustment fares best for mortality and migration shocks, while equal reliance on tax and benefit adjustments is best for fertility shocks