A Note on the Pricing of Real Estate Index Linked Swaps

In this paper we discuss the pricing of commercial real estate index linked swaps (CREILS). This particular pricing problem has been studied by Buttimer et al. (1997) in a previous paper. We show that their results are only approximately correct and that the true theoretical price of the swap is in fact equal to zero. This result is shown to hold regardless of the specific model chosen for the index process, the dividend process, and the interest rate term structure. We provide an intuitive economic argument as well as a full mathematical proof of our result. In particular we show that the nonzero result in the previous paper is due to two specific numerical approximations introduced in that paper, and we discuss these approximation errors from a theoretical as well as from a numerical point of view.Real estate; index linked swaps; arbitrage

Is the Food and Drug Administration Safe and Effective?

In the United States, drug safety and efficacy are primarily regulated by the Food and Drug Administration (FDA) and the legal system, which gives manufacturers large incentives to produce safe drugs and provide proper warnings for side effects, since patients can sue manufacturers that provide unsafe drugs and/or insufficient warnings. In this paper, we begin by examining the efficiency implications of this joint regulation of drug safety. We find that joint regulation of drug safety can be inefficient when the regulatory authority mandates a binding and well enforced level of safety investment. In this case, product liability has no effect on a firm's safety investment, but affects welfare by raising a firm's costs and therefore prices. Using these results, we calibrate a model of the pharmaceutical market and find that, depending on the share of liability costs in marginal costs, a product liability exemption for activities that are well regulated by the FDA could increase consumer welfare by $47.8-$754.7 billion annually (4-66 percent of sales) and producer welfare by $11.9-$173.9 billion annually (1-15 percent of sales). In addition, we summarize the welfare effects of recent legislation, the Prescription Drug User Fee Acts (PDUFA), which mandated faster FDA review times in exchange for user fees levied on the pharmaceutical industry. Overall, we find that the faster review times mandated by PDUFA raised social surplus by $18-31 billion, and that at most, the concomitant cost of reduced drug safety was$5.6-$16.6 billion.

An endemic Taenia from South America: validation of T. talicei Dollfus, 1960 (Cestoda: Taeniidae) with characterization of metacestodes and adults

Taenia talicei is redescribed based on new data from polycephalic, fimbriocercus and cysticercus metacestodes found in Ctenomys spp. (Rodentia: Ctenomyidae) from Argentina. Strobilate adult specimens, derived from experimental infections in domestic dogs, are described for the first time. Identity of the adult and metacestodes stages is based on the number of rostellar hooks (44–50 hooks in 2 rows), their dimensions (large hooks= 232–242; small= 150–187) and shape. Taenia talicei is distinguished from those species that occur naturally in Neotropical Felidae and from those cosmopolitan species that circulate in synanthropic cycles with rodents (or lagomorphs) and domestic hosts such as cats and dogs in South America based on the structure of the metacestode, dimensions and numbers of rostellar hooks and a suite of specific characters of the genital system in strobilate adults. This species is the first that can be considered endemic to South America. Origins of an endemic Taenia species or taeniid assemblages in South America would have relationships to either North American or Eurasian placental carnivores. In these instances, the expansion of Taenia may have resulted from geographic colonization of South America, radiation in both felids (and canids), and host switching by tapeworms to caviomorphs, prior to the emergence of the Panamanian Isthmus. Taenia talicei is capable of development in domestic dogs, and metacestodes in species of Ctenomys were found in urban or semi-urban environments. These factors may establish a role for synanthropic cycles linked to definitive hosts including dogs and cats as a route for exposure of humans to infection by this taeniid.Fil: Rossin, Maria Alejandra. Universidad Nacional de Mar del Plata. Facultad de Ciencias Exactas y Naturales. Departamento de Biología. Laboratorio de Parasitología; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; ArgentinaFil: Timi, Juan Tomas. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad Nacional de Mar del Plata. Facultad de Ciencias Exactas y Naturales. Departamento de Biología. Laboratorio de Parasitología; ArgentinaFil: Hoberg, Eric P.. United States Department of Agriculture. Agricultural Research Service; Argentin

The healthcare sector needs more operational research

Abstract. More efficient use of resources and improved quality of services is needed in the health care sector, in order to meet the challenges of aging populations coupled with rising quality expectations due to technological advances and desire to cap or reduce budgets. In healthcare, complex decisions at strategic, tactical, and operational levels are coupled across organizational boundaries, with interdependency between plans that share many of the same resources and infrastructure. Decision support tools from Operations Research have for decades been successfully applied to complex resource management problems in other industries. While such tools are needed in the health sector, they are no panacea but maybe one of the most promising approach to ease their strain. A wide-spread application of such tools will increased efficiency at hospitals and patients will experience more streamlined coordination of activities, improved predictability and regularity-getting a higher service levels and ultimately better quality of health care services

The Effects of Product Liability Exemption in the Presence of the FDA

In the United States, drugs are jointly regulated by the US Food and Drug Administration, which oversees premarket clinical trials designed to ensure drug safety and efficacy, and the liability system, which allows patients to sue manufacturers for unsafe drugs. In this paper, we examine the potential welfare effects of this dual system aimed at ensuring the safety of medical products, and conclude that product liability exemptions for FDA regulated activities could raise economic efficiency. We show that while reductions in liability, such those associated with pre-emption, may lower welfare in the absence of the FDA, they may raise welfare in its presence. In the presence of the FDA, product liability may reduce efficiency by raising prices without pushing firms, who are already bound by the agency’s requirements, to invest further in product safety. We consider as a case study the National Vaccine Injury Compensation Program, which sharply reduced vaccine manufacturer’s liability in 1988. We find evidence that the program reduced prices without affecting vaccine safety, suggesting that liability reductions can enhance economic efficiency in the presence of the FDA.

Gap analysis of ISO/SAE 21434 – Improving the automotive cybersecurity engineering life cycle

Due to the ongoing legislative shift towards mandatedcybersecurity for road vehicles, the automotive cybersecurityengineering standard ISO/SAE 21434 is seeing fastadoption throughout the industry. Early efforts are focusing onthreat analysis and risk assessment (TARA) in the concept anddevelopment phases, exposing the challenge of managing TARAresults coherently throughout the supply chain and life cycle.While the industry focuses on TARA, other aspects such asvulnerability or incident handling are receiving less attention.However, the increasing threat landscape makes these processesincreasingly important, posing another industry challenge.In order to better address these two challenges, we analyzethe cybersecurity engineering framework of ISO/SAE 21434for gaps or deficiencies regarding TARA management andvulnerability and incident handling, as well as similar processesfor incident handling in IT security. The result is a proposalfor modifications and augmentations of the ISO/SAE 21434cybersecurity engineering framework. In particular, we proposea TARA management process to facilitate the coordination andinformation exchange between different systems and life cyclephases, and we propose improvements to the vulnerability andincident handling processes in ISO/SAE 21434 so that they aremore aligned with established standards. This amounts to 13new terminology definitions, 4 new process steps, 2 modifiedprocess steps and 1 entirely new process