Reforming India’s Fiscal Transfer System : Resolving Vertical and Horizontal Imbalances

Two central problems in a fiscal transfer systemrelate to resolving vertical and horizontal imbalances. In the context of the setting of the 13th Finance Commission, this paper looks at the methodological background of fiscal transfers followed by recent Finance Commissions in India, particularly the Twelfth Finance Commission (TFC). It is noted that in India, there is long - term stability in the share of states after transfers in the combined revenues of the centre and the states. It is argued that this stability depends on linking the share of states in the transfers, particularly tax devolution with the difference in the buoyancies of central and states taxes. In the context of horizontal imbalance, it is argued that some of the recent Finance Commissions have implicitly followed an axiomatic approach to tax devolution and brought in some normative elements in determining grants. In spite of large difference in fiscal capacities, a high degree of equalization has been achieved. It is shown, for example, that in the case of TFC recommended transfers, nearly 88 percent of needed equalization was achieved while devoting 50 percent of transfers to resolving vertical imbalance. Amethodology is also developed to determine weights of vertical and equalizing components of transfers through devolution. In the case of the Twelfth Finance Commission, the horizontal component of tax devolution is strengthened by a scheme of equalizing health and education grants.fiscal transfer system, vertical imbalance, horizontal imbalance, Twelfth Finance Commission

Pay Me Later: Inside Debt and Its Role in Managerial Compensation

Inside debt, such as pensions and deferred compensation, constitutes a widely-used form of executive compensation, yet the valuation and incentive effects of these instruments have been almost entirely overlooked by prior work. Our paper initiates this line of research by studying CEO pension arrangements in a sample of 237 large capitalization firms. Among our findings are that CEO compensation in most large cap firms exhibits a balance between debt- and equity-based incentives, with the balance shifting systematically away from equity and toward debt as CEOs growolder; that annual increases in pension entitlements represent about 10% of overall compensation for the CEOs in our sample, and about 15% for CEOs aged 61 to 65; that CEOs with high debt-based incentives manage their firms conservatively to reduce default risk; and that pension plan compensation strongly influences patterns of CEO turnover and CEO cash compensation.CEO pensions; inside debt; deferred compensation

On the Weakening of Chromospheric Magnetic Field in Active Regions

Simultaneous measurement of line-of-sight (LOS) magnetic and velocity fields at the photosphere and chromosphere are presented. Fe I line at $\lambda6569$ and $H_{\alpha}$ at $\lambda6563$ are used respectively for deriving the physical parameters at photospheric and chromospheric heights. The LOS magnetic field obtained through the center-of-gravity method show a linear relation between photospheric and chromospheric field for field strengths less than 700 G. But in strong field regions, the LOS magnetic field values derived from $H_{\alpha}$ are much weaker than what one gets from the linear relationship and also from those expected from the extrapolation of the photospheric magnetic field. We discuss in detail the properties of magnetic field observed in $H_{\alpha}$ from the point of view of observed velocity gradients. The bisector analysis of $H_{\alpha}$ Stokes $I$ profiles show larger velocity gradients in those places where strong photospheric magnetic fields are observed. These observations may support the view that the stronger fields diverge faster with height compared to weaker fields.Comment: accepted for publication in Ap

Textpresso for Neuroscience: Searching the Full Text of Thousands of Neuroscience Research Papers

Textpresso is a text-mining system for scientific literature. Its two major features are access to the full text of research papers and the development and use of categories of biological concepts as well as categories that describe or relate objects. A search engine enables the user to search for one or a combination of these categories and/or keywords within an entire literature. Here we describe Textpresso for Neuroscience, part of the core Neuroscience Information Framework (NIF). The Textpresso site currently consists of 67,500 full text papers and 131,300 abstracts. We show that using categories in literature can make a pure keyword query more refined and meaningful. We also show how semantic queries can be formulated with categories only. We explain the build and content of the database and describe the main features of the web pages and the advanced search options. We also give detailed illustrations of the web service developed to provide programmatic access to Textpresso. This web service is used by the NIF interface to access Textpresso. The standalone website of Textpresso for Neuroscience can be accessed at http://www.textpresso.org/neuroscience

CDS Credit-Event Auctions

Credit-event auctions were introduced in 2005 to facilitate cash settlement in the credit default swap market following a credit event. They have a novel two-stage structure that makes them distinct from other auction forms. This paper studies outcomes in credit-event auctions over the period 2008-10. Our analysis is in three parts. In the rst part, we look at the ecacy of price discovery in the auction. We nd that the auction price has a signicant bias relative to the pre- and post-auction market prices for the same instruments, and that volatility of market prices often increases after the auction; nonetheless, we find that information generated in the auction is very valuable for post-auction market price formation. In the second part of the analysis, we look at behavior within and across auctions and the factors that in uence it. We find, among other things, that \winner's curse" concerns play a central role, affecting liquidity provision in the auction, the pricing bias, and bidders' within-auction updating of their private information. In the nal part of the paper, under some simplifying assumptions, we carry out a structural estimation to recover the underlying distribution of signals. Using these estimates, we find that the alternative auction formats could reduce the amount of bias in the auction final price

Denumerable-Armed Bandits

This paper studies the class of denumerable-armed (i.e. finite- or countably infinitearmed) bandit problems with independent arms and geometric discounting over an infinite horizon, in which each arm generates rewards according to one of a finite number of distributions, or "types." The number of types in the support of an arm, as also the types themselves, are allowed to vary across the arms. We derive certain continuity and curvature properties of the dynamic allocation (or Gittins) index of Gittins and Jones (1974), and provide necessary and sufficient conditions under which the Gittins-Jones result identifying all optimal strategies for finite-armed bandits may be extended to infinite-armed bandits. We then establish our central result: at each point in time, the arm selected by an optimal strategy will, with strictly positive probability, remain an optimal selection forever. More specifically, for every such arm, there exists (at least) one type of that arm such that, when conditioned on that type being the arm's "true" type, the arm will survive forever and continuously with nonzero probability. When the reward distributions of an arm satisfy the monotone likelihood ratio property (MLRP), the survival prospects of an arm improve when conditioned on types generating higher expected rewards; however, we show how this need not be the case in the absence of MLRP. Implications of these results are derived for the theories of job search and matching, as well as other applications of the bandit paradigm