Bell's theorem: Critique of proofs with and without inequalities

Most of the standard proofs of the Bell theorem are based on the Kolmogorov axioms of probability theory. We show that these proofs contain mathematical steps that cannot be reconciled with the Kolmogorov axioms. Specifically we demonstrate that these proofs ignore the conclusion of a theorem of Vorob'ev on the consistency of joint distributions. As a consequence Bell's theorem stated in its full generality remains unproven, in particular, for extended parameter spaces that are still objective local and that include instrument parameters that are correlated by both time and instrument settings. Although the Bell theorem correctly rules out certain small classes of hidden variables, for these extended parameter spaces the standard proofs come to a halt. The Greenberger-Horne-Zeilinger (GHZ) approach is based on similar fallacious arguments. For this case we are able to present an objective local computer experiment that simulates the experimental test of GHZ performed by Pan, Bouwmeester, Daniell, Weinfurter and Zeilinger and that directly contradicts their claim that Einstein-local elements of reality can neither explain the results of quantum mechanical theory nor their experimental results.Comment: 13 page

Optimal leverage, its benefits, and the business cycle

We study the effect of the business cycle on optimal capital structure choice and the benefit to leverage. We propose a regime switching model with a state-dependent cash flow process to capture macroeconomic risk in a firm's cash flow. Our model is parsimonious but still realistic and allows for a wide range of analysis. We find pro-cyclical optimal leverage ratios, benefits to leverage, and costs of operating at a non-optimal leverage. If macroeconomic risk decreases, i.e. earnings become more stable and growth rates less volatile, optimal leverage and its benefits increase due to lower default risk. The regime switching property of EBIT traces observed EBIT paths closely and is applicable to a wide range of corporate valuation models. Our model offers novel empirically testable implications, such as higher tax benefits after the change in macroeconomic risk since the late 1980s and common capital structure adjustments in recessions and around turning points. --capital structure,macroeconomic risk,regime switching,benefit to leverage