Debt, hedging, and human capital

This paper provides a theory of debt and hedging based on human capital. We distinguish human capital from physical capital in two ways: (1) human capital is inalienable and can exercise a one-sided option to leave the firm, and (2) human capital is not perfectly replaceable. We show that a firm may reach the first best solution while issuing debt or equity to outsiders provided that either the insiders receive a senior claim or that the firm hedges. We then show that, given asymmetric information concerning costs, the only viable solution has the firm issuing debt to outsiders and hedging.

The Effect of the Tax Reform Act of 1986 and Regional Economies on Apartment Values

The theoretical effects of the Tax Reform Act of 1986 on commercial real estate have been widely written about; however, little empirical work has been done that actually measures the hypothesized effects. We find that, after controlling for general national economic conditions and regional effects, the effect of the Tax Act of 1986 was negatively related to apartment values. The magnitude of the effect was a function of the local vacancy rates and economic growth where those regions with slow economic growth and high vacancy rates were strongly affected.

SSME single crystal turbine blade dynamics

A study was performed to determine the dynamic characteristics of the Space Shuttle main engine high pressure fuel turbopump (HPFTP) blades made of single crystal (SC) material. The first and second stage drive turbine blades of HPFTP were examined. The nonrotating natural frequencies were determined experimentally and analytically. The experimental results of the SC second stage blade were used to verify the analytical procedures. The analytical study examined the SC first stage blade natural frequencies with respect to crystal orientation at typical operating conditions. The SC blade dynamic response was predicted to be less than the directionally solidified blade. Crystal axis orientation optimization indicated the third mode interference will exist in any SC orientation

Valuing Ecosystem Services with Fishery Rents: A Lumped-Parameter Approach to Hypoxia in the Neuse River Estuary

Valuing ecosystem services with microeconomic underpinnings presents challenges because these services typically constitute nonmarket values and contribute to human welfare indirectly through a series of ecological pathways that are dynamic, nonlinear, and difficult to quantify and link to appropriate economic spatial and temporal scales. This paper develops and demonstrates a method to value a portion of ecosystem services when a commercial fishery is dependent on the quality of estuarine habitat. Using a lumped-parameter, dynamic open access bioeconomic model that is spatially explicit and includes predator-prey interactions, this paper quantifies part of the value of improved ecosystem function in the Neuse River Estuary when nutrient pollution is reduced. Specifically, it traces the effects of nitrogen loading on the North Carolina commercial blue crab fishery by modeling the response of primary production and the subsequent impact on hypoxia (low dissolved oxygen). Hypoxia, in turn, affects blue crabs and their preferred prey. The discounted present value fishery rent increase from a 30% reduction in nitrogen loadings in the Neuse is $2.56 million, though this welfare estimate is fairly sensitive to some parameter values. Surprisingly, this number is not sensitive to initial conditions.Open access, Predator-prey, Hypoxia, Habitat-dependent fisheries

Extending the Coinvariant Theorems of Chevalley, Shephard--Todd, Mitchell and Springer

We extend in several directions invariant theory results of Chevalley, Shephard and Todd, Mitchell and Springer. Their results compare the group algebra for a finite reflection group with its coinvariant algebra, and compare a group representation with its module of relative coinvariants. Our extensions apply to arbitrary finite groups in any characteristic.Comment: The applications and Examples in section 4 have been extende