Black-Scholes and Monetary Black Holes

The Black-Scholes formula is fundamental to modeling carried out in the financial world. Black-Scholes presents investment bankers a method of evaluating a stock in order to know how much to charge for a premium when dealing with options; a way of selling and/or buying securities at a predetermined time in the future. Understanding how Black-Scholes and options theory work relies on understanding probability, statistics, and Brownian motion. these tools make it possible for Black-Scholes to do its dirty work

Combining the contributions of behavioral economics and other social sciences in understanding taxation and tax reform

This paper extends previous work presented at the SABE/IAREP conference at St Mary’s University, Halifax (James, 2009). In the earlier paper it was shown that conventional economic theory is used to make the case for tax reform but does not always adequately incorporate all the relevant factors. However, an approach based on behavioral economics can make the difference between success and failure. In this paper the contributions of other social sciences are also included. Taxation is a particularly appropriate subject to explore the integration of the social sciences since they have all devoted considerable attention to it. It can be seen that different social sciences suggest a range of variables that might be taken into account in addition to those included in mainstream economics. Other social sciences also offer different methodological approaches and consider the possibility of different outcomes of the fiscal process. The paper concludes that it is not easy to integrate the social sciences in a single approach to the study of tax and tax policy. There may also be the risk of encouraging inappropriate integration - researchers operating outside their expertise can produce results that are not helpful. However, comparing the contribution of behavioral economics with those of the social sciences more generally, it can be seen that behavioral economics can offer a framework within which these areas can be examined. Indeed, it may be a useful channel to add the contributions of other social sciences to mainstream economic research

Bardoxolone methyl in type 2 diabetes and stage 4 chronic kidney disease

BACKGROUND: Although inhibitors of the renin-angiotensin-aldosterone system can slow the progression of diabetic kidney disease, the residual risk is high. Whether nuclear 1 factor (erythroid-derived 2)-related factor 2 activators further reduce this risk is unknown. METHODS: We randomly assigned 2185 patients with type 2 diabetes mellitus and stage 4 chronic kidney disease (estimated glomerular filtration rate [GFR], 15 to <30 ml per minute per 1.73 m2 of body-surface area) to bardoxolone methyl, at a daily dose of 20 mg, or placebo. The primary composite outcome was end-stage renal disease (ESRD) or death from cardiovascular causes. RESULTS: The sponsor and the steering committee terminated the trial on the recommendation of the independent data and safety monitoring committee; the median follow-up was 9 months. A total of 69 of 1088 patients (6%) randomly assigned to bardoxolone methyl and 69 of 1097 (6%) randomly assigned to placebo had a primary composite outcome (hazard ratio in the bardoxolone methyl group vs. the placebo group, 0.98; 95% confidence interval [CI], 0.70 to 1.37; P=0.92). In the bardoxolone methyl group, ESRD developed in 43 patients, and 27 patients died from cardiovascular causes; in the placebo group, ESRD developed in 51 patients, and 19 patients died from cardiovascular causes. A total of 96 patients in the bardoxolone methyl group were hospitalized for heart failure or died from heart failure, as compared with 55 in the placebo group (hazard ratio, 1.83; 95% CI, 1.32 to 2.55; P<0.001). Estimated GFR, blood pressure, and the urinary albumin-to-creatinine ratio increased significantly and body weight decreased significantly in the bardoxolone methyl group, as compared with the placebo group. CONCLUSIONS: Among patients with type 2 diabetes mellitus and stage 4 chronic kidney disease, bardoxolone methyl did not reduce the risk of ESRD or death from cardiovascular causes. A higher rate of cardiovascular events with bardoxolone methyl than with placebo prompted termination of the trial. Copyright © 2013 Massachusetts Medical Society