Sheep in Wolves' Clothing?

The 1990s have been a decade of upheaval in international financial markets. Much of the responsibility for financial instability has been placed on speculators, particularly hedge funds. Speculative capital has been characterized as "hot money", with capital flows driven by "herding" and "contagion" among players in foreign-exchange, stock, bond, and commodity markets. Policies to deal with financial instability by weakening, or even disabling speculation, have been based largely on anecdote, convenience (speculators have long served as scapegoats for various problems), and ideology, rather than careful analysis. Part of the problem arises from the secrecy with which speculators operate. Since speculative trading cannot easily be observed, it is difficult to assess speculators' contribution, if any, to financial volatility. This paper looks at speculative behavior in one of the largest, and most volatile, international financial markets, petroleum derivatives. It utilizes a large, detailed database on individual trader positions in crude-oil and heating-oil futures markets. The paper is exploratory, focusing on measuring and assessing the tendency of speculators to herd. Two theories behind rational herding behavior are examined - the asymmetric information view (poorly-informed traders make decisions based on observing well-informed traders, rather than market fundamentals) and the monitoring/incentive view (institutiona investors make decisions knowing that their incentives are based on performance relative to a benchmark such as mean returns for a group). These theories generate different predictions regarding the types of speculators most likely to herd. The evidence does not support the view that herding among speculators as a group is widespread in this market. In contrast, evidence in favor of a moderate degree of herding among one group of speculators, commodity-fund managers. The evidence is supportive of the monitoring/incentive theory, but not the asymmetric-information theory.

Multinational Corporations, Transfer Prices, and Taxes: Evidence from the U.S. Petroleum Industry

Economic research on transfer-pricing behavior by multinational corporadons has emphasized theoretical modeling and institutional description. This paper presents the fiit systematic empirical analysis of transfer prices, using data from the petroleum industry. On the basis of oil imported into the United States over the period 1973 - 1984, we test two propositions: i) Are prices set by integrated companies for their internal transfers different from those prevailing in arm 's-length (i.e., inter-company) trade, when other variables, such as oil quality, are controlled for? ii) Do average effective corporate income tar rates explain observed patterns of transfer pricing? Regression analysis leads to the following conclusions: i) Transfer and arm's-length prices differ significantly for oil origznating in some countries but not all. When multiplied by the relevant import volumes, these differences are relatively smalL The revenue transferred through deviations from arm's-length prices represents two percent or less of the value of the crude oil imported by multinational companies each year. ii) The observed differences between arm's-length and transfer prices are not easily explained by average effective tax rates in exporting countries. Our results provide little support for the claim that multinational petroleum companies set their transfer prices to evade taxes. We offer several hypotheses to explain our findings.

Nominal Contracting and Price Flexibility in Product Markets

The search for microeconomic foundations of non-Walrasian outcomes in labor and product markets has spawned many studies of contracting. This paper emphasizes the role of contracts for market equilibrium -- for many raw materials and basic industrial commodities -- in which long-term contractual arrangements and spot markets coexist. Our principal goals are two -- (i) to explain the existence of contracts and the equilibrium fraction of trades carried out under contract, and (ii) to consider the impact of demand and supply shocks on spot prices when market trades also take place through long-term contracts. We find that the relative importance of contracting depends on, inter alia, the variance of the spot price and the sources of underlying fluctuations. Consistent with the findings of previous macroeconomic studies, we find that contracting and price rigidity are more likely the more important demand shocks are relative to supply shocks. We adapt our static model of contract price and quantity determination to discuss the adjustment of contract prices. Finally, we discuss three important applications of our multiple-price modeling structure -- to (i) analyses of the effects of changes in vertical market structure on market equilibrium in commodity markets (with specific reference to petroleum and copper), (ii) models of the optimal degree of contract indexation,and (iii) aggregate studies of "sticky prices" in macroeconomics.

Evaluating Electronic Resources: Criteria Used by Librarians

Librarians use a variety of criteria when evaluating research databases for potential purchase or subscription. The development of a systematic approach to making library purchasing decisions can ensure that an informed decision-making process is used in library database collection building

Long-Term Contracting and Multiple-Price Systems

This paper examines product markets in which long-term contracts and spot transactions coexist. Such markets are characterized by "multiple-price systems," wherein adjustment to supply and demand shocks occurs through spot prices, while contract prices are fixed, or adjust slowly. We derive the existence of contracts, as well as the equilibrium fraction of spot trade, in the framework of an optimizing model, and analyze the effects of shocks on market equilibrium when some buyers and sellers are "locked in" contractually. The model is employed to interpret the change in the copper market from a multiple-price system to one characterized solely by spot trade.

p53-mediated neurodegeneration in the absence of the nuclear protein Akirin2.

Proper gene regulation is critical for both neuronal development and maintenance as the brain matures. We previously demonstrated that Akirin2, an essential nuclear protein that interacts with transcription factors and chromatin remodeling complexes, is required for the embryonic formation of the cerebral cortex. Here we show that Akirin2 plays a mechanistically distinct role in maintaining healthy neurons during cortical maturation. Restricting Akirin2 loss to excitatory cortical neurons resulted in progressive neurodegeneration via necroptosis and severe cortical atrophy with age. Comparing transcriptomes from Akirin2-null postnatal neurons and cortical progenitors revealed that targets of the tumor suppressor p53, a regulator of both proliferation and cell death encoded b