Can US Fiscal Stimulus Negatively Affect US Balance of Trade?

In an attempt to take the U.S. economy out of recession or to stimulate a sluggish economy, US presidents, democrats and republicans alike, have used an expansionary fiscal policy. While an expansionary fiscal policy raises the GDP, it also raises a nation’s import due to increased income brought about by the expansionary fiscal policy. If the increase in a nation’s import exceeds that in export, it negatively impacts the nation’s balance of trade. So, our study examines the impact of US government stimulus spending on the nation’s balance of trade. We use a general equilibrium framework and apply the VECM model on US data from 1980 to 2020. Our study finds that, while the long-run impact of US fiscal stimulus spending on US balance of trade is positive and significant, the short-run impact is negative. We also found that any short term fluctuation in US balance of trade is adjusted to its long-run equilibrium level

Measuring Losses For Small Business Interruption Claims: Depreciation Expenses

Business interruption insurance, commonly called lost profit insurance is written to protect a firm when its operations are interrupted and income is reduced due to a covered peril. The calculation of the economic loss depends on how certain expenses are used in the loss computation. Depreciation is an expense that can have significant implications on the measure of the loss figure but how depreciation should be accounted for is not specified in policies or law. This paper reviews the depreciation controversy and offers a more theoretically correct solution

Demographics In Civil Trials: Biases And Implications

This paper investigates the implications of the demographics of jury members and its influence on their findings.   A written civil case where the defendant was at fault but the damage and injury claims were equally believable on both sides was presented to a random group of potential jurors.  A survey instrument collected selected demographic information from participants and asked how they would rule as to injury and damage awards were they jurors in the case.  The sample was then analyzed as to the difference in their finding of fault and award recommendation based on the jurors’ selected demographic characteristics.  Findings indicate that a juror’s recommendation regarding medical expense award and business damage award is not independent of gender and race. &nbsp

How Much Did The Gulf Oil Spill Actually Cost British Petroleum Shareholders?

On April 20, 2010, the Deepwater Horizon Drilling Platform, a British Petroleum (BP) licensed rig, exploded. Two days later the huge rig sank to thebottom of the Gulf of Mexico triggering the United States worst offshore oilspill. By April 26, investors and themarket began realizing that the costs associated with this catastrophic eventto BP could be significant and BP shares fell by over two percent. The next day BP reported its annual earningswhich showed a huge rise in profits, due in part to much higher oil prices forthe previous year and BPs common stock price increased. However, on May 6, 2010, analysts warned that the Gulf ofMexico oil spill disaster would likely cost BP over $23 billion dollars (15bn)and its shares can be expected to lag behind those of its competitors by 5% forthe lasting future. At the same time,Tony Hayward insisted the company would "bounce back" from thesetback though he could not give a timescale for when the flow of oil would behalted. This study investigated BPsstock returns using two models to determine if their stocks experiencedabnormal returns for the period April 20, 2010 through April 5, 2011. Results show that the most significant impact of the oilspill to the stock price was over the first 34 days of the event period. This study estimates a significant negativeimpact of 38% to 41% in share value for BP during this event period

A New And Better Way To Measure The Cost Of Equity Capital For Small Closely Held Firms

The purpose of this paper is to explore the theoretical structure that underlies the valuation process for small closely held firms.  Specifically, cost of capital estimate methods which appear in the current literature are examined, and a theoretically correct and simple method to measure cost of equity capital for privately held companies is offered.&nbsp

A Better Way To Measure The Cost Of Equity Capital For Small Closely Held Firms

A company’s cost of capital is the average rate it pays for the use of its capital funds. Estimating the cost of equity capital for a publicly traded firm is much simpler than estimating the same for a small privately held firm. For privately owned firms there is the lack of market based financial information. In business damage cases, valuation of the firm is often a prime interest. A necessary variable in the valuation process is the estimate of the firm’s cost of capital. Part of the cost of capital is the equity holders or owners required rate of return. The purpose of this paper is to explore the theoretical structure that underlies the valuation process for business damage cases that involve privately owned businesses. Specifically, cost of equity capital estimate methods which appear in the current literature are examined, and a theoretically correct and simple method to measure cost of equity capital for closely held companies is offered