Fiscal fan charts - A tool for assessing member states’ (likely?) compliance with EU fiscal rules

This paper sets out a methodology for constructing fan charts for the government deficit and debt ratios over the medium-term. It relies on information contained in Stability/Convergence Programme Updates, a model of the relevant stochastic process (for example, the real GDP process) or processes, and a parameter estimate of the sensitivity of the primary budget balance to the output gap for the member state under consideration. A model of the dynamic deficit-debt relationship allows the impact of random output growth to work its way through the fiscal arithmetic in a consistent and traceable way to produce fan charts over a five-year forecast horizon. The initial set of fiscal fan charts included here for Ireland use the indicative public finance projections set out in the 2011 Update for Ireland. The range of possible fiscal outcomes in the charts assumes no fiscal policy response to any change in the budgetary position over the period such as could arise from changes in growth rates. This assumption of “no policy change” is a standard one in the construction of fan charts. Governments will, however, generally be in a position to adjust fiscal policy towards meeting a specific fiscal target, such as reaching a deficit position of less than 3 percent of GDP in the medium-term. A second set of fan charts is included which indicates how the probabilistic range of fiscal outcomes could be affected by a tightening of fiscal policy in 2013-2015.Programme Updates, fan charts, fiscal arithmetic, stochastic processes, prediction regions

Financial Risks and the Pension Protection Fund: Can it Survive Them?

This paper discusses the financial risks faced by the UK Pension Protection Fund (PPF) and what, if anything, it can do about them. It draws lessons from the regulatory regimes under which other financial institutions, such as banks and insurance companies, operate and asks why pension funds are treated differently. It also reviews the experience with other government-sponsored insurance schemes, such as the US Pension Benefit Guaranty Corporation, upon which the PPF is modelled. We conclude that the PPF will live under the permanent risk of insolvency as a consequence of the moral hazard, adverse selection, and, especially, systemic risks that it faces.

Disregard of the empirical; optimism of the will: The abandonment of good government in the covid-19 crisis

Abstract. We are grateful to the editors and the publishers of the book in which this chapter appears, for that manner of that appearance is unusual. Save for the correction of slips and what it is hoped are some minor stylistic improvements, this chapter has been left as it was when it was given what the authors thought was a shape ready for publication sometime in early 2021. The central thinking of the chapter had taken shape sometime in late 2020. The wish to publish a chapter which will, then, be three years out of date when it appears would anyway require explanation, but this is a fortiori the case with a chapter on a topic so quickly and dramatically shifting as the evaluation of the UK government’s response to the outbreak of Covid in early 2020. In essence, such significance as the chapter possesses is that it shows that, at the time that what is in the chapter called ‘inchoate communism’ was generating lockdown, an immensely superior alternative was perfectly possible, had the UK government taken what can, consistent with the title of this book, be called a ‘conservative’ approach to regulation.Keywords. Covid-19 pandemic; Ronald coase; Government failure; Blackboard economics; Ceteris Paribus reasoning.JEL. F51; F52; P16; P26; P48

CRIMINAL PROCEDURE-EXTRADITION FOR NON-SUPPORT UNDER SECTION 6 OF THE UNIFORM CRIMINAL EXTRADITION ACT

Petitioner had been divorced while residing in the State of California and ordered to pay $30 per month to his wife for the support of three minor children. After moving to New Mexico he defaulted in the payments. The Governor of California requested the extradition of the petitioner under section 6 of the Uniform Criminal Extradition Act to answer the charge of failure to provide for minor children. Petitioner questioned his detention under the order for extradition by seeking a writ of habeas corpus in an original proceeding before the Supreme Court of New Mexico. Held, writ denied. Section 6 of the Uniform Criminal Extradition Act, providing for extradition when the accused was not in the demanding state at the time of the commission of the crime and has not fled therefrom, is constitutional and applicable to the crime of non-support. Ex parte Dalton, (N.M. 1952) 244 P. (2d) 790

TORTS-LIBEL AND SLANDER

Plaintiff brought an action in slander alleging that defendant orally described him as a Communist during the course of a neighborhood argument. Plaintiff further asserted that when the defamatory words were spoken he held the position of an official in the United Financial Employees Union. Defendant moved to dismiss the complaint on the ground that it did not state facts sufficient to constitute a cause of action. Held, complaint dismissed with leave to amend. The court ruled that the averments were not sufficient to show special damage to the plaintiff, nor did they support an interpretation that the words were spoken of and concerning the plaintiff in his business or occupation and thus actionable per se. The court further ruled that it was not slander per se to call one a Communist, for a rule to the contrary would trap the unwary and benefit the cause of Communism in the United States. Keefe v. O\u27Brien, 116 N.Y.S. (2d) 286 (1952)

Recent Decisions

Antitrust--Act of State Doctrine Precludes Judicial Review of Cases in which Private Defendant Induces Foreign Sovereign to Boycott Plaintiff\u27s Services and Products David R. Simon Plaintiff, a designer and manufacturer of short takeoff and landing (STOL) aircraft, sought damages from defendants for violation of sections 1 and 2 of the Sherman Act. Specifically, plaintiff alleged that defendant\u27s employees falsely disparaged General Aircraft Corporation\u27s (GAC) STOL aircraft products and services by circulating false and misleading performance reports and engaged in a vendetta designed to drive GAC out of business because of GAC\u27s refusal to conduct Southeast Asian Helio sales under the auspices of defendant Doole and Air American. Plaintiff asserted that in furtherance of this vendetta, Air Asia obtained GAC proprietary data and trade secrets that enabled the defendant to fabricate Hello planes and parts without license at its repair facilities in Taiwan from 1962 to January 31, 1975. Finally, plaintiff alleged that defendant orchestrated a boycott of GAC\u27s STOL aircraft, thereby completing the conspiracy to destroy GAC\u27s competitive position in the marketplace. ==================================== Sovereign Immunity-- Act of State Doctrine--Claim Lies for Iran\u27s Failure to Compensate Following Nationalization David D. Dowd Plaintiffs, three corporations collectively representing American insurance interests in Iran in 1979, filed a motion for partial summary judgment on the issue of liability in an action for damages brought in response to the nationalization without compensation of plaintiffs\u27 Iranian insurance interests by defendants Islamic Republic of Iran and Central Insurance of Iran (CII). This nationalization severed all business relations between plaintiffs, defendants, and those Iranian insurance companies in which plaintiffs had invested. Plaintiffs claimed this nationalization provided no mechanism for adequate compensation in violation of the Treaty of Amity and, independently, international law. Defendants argued that either the act of state doctrine or sovereign immunity precluded the court from awarding partial summary judgment. On plaintiffs\u27 motion for partial summary judgment on liability under the Treaty of Amity and international law, granted

CONFLICT OF LAWS--EFFECT OF FORUM\u27S STATUTE OF FRAUDS ON FOREIGN ORAL CONTRACT TO BEQUEATH PROPERTY

Plaintiff brought an action in New York for specific performance of an oral agreement allegedly made by testator in Florida not to change his will without plaintiff\u27s consent. Defendant\u27s motions for dismissal of the complaint and summary judgment were dismissed. The appellate division on reargument entered orders reversing the lower court. On plaintiff\u27s appeal to the court of appeals, held, affirmed. The New York Personal Property Law, which states that oral contracts to bequeath property are void, is controlling, regardless of whether this section of the statute of frauds is procedural or substantive. If the section is procedural, the law of the forum would apply making the oral contract unenforceable; if substantive, the contract is void because the statute is an expression of the public policy of the forum, permitting the forum to disregard ordinary conflict of laws rules. Rubin v. Irving Trust Co., 305 N.Y. 288, I 13 N. E. (2d) 424 (1953)

Federal Procedure - Realignment of Parties in Non-Diversity Case

Plaintiff (S1), a surety for the subcontractor, brought an action against the subcontractor and the prime contractor to compel them to set off their respective counterclaims in order to diminish the liability of S1. The subcontractor had another surety (S2) on a different obligation arising out of the same construction job, and the prime contractor, uncertain where liability should be placed, impleaded S2. On S1\u27s motion to vacate the impleader order, held, denied, and the court on its own motion directed realignment of the parties, ruling that the main issue was division of liability between the subcontractor\u27s two sureties, S1 and S2, to the prime contractor. The prime contractor was made plaintiff and the other parties, the subcontractor, S1 and S2, defendants, with the result that all matters in controversy could be settled in one action with one trial. In directing this order, the court stated that it relied on its inherent power to require realignment for convenience and expediency. Travelers Indemnity Co. v. J. S. Ramstad Construction Co., (D.C. Alaska 1954) 118 F. Supp. 423

TAXATION - FEDERAL INCOME TAX - DEFERRED COMPENSATION AS AFFECTED BY CONSTRUCTIVE RECEIPT DOCTRINE

Prior to his retirement as a general agent of a life insurance company, the petitioner entered into a new contract with the company by which he was to receive upon retirement fixed monthly instalments for fifteen years in lieu of his original contract rights to receive renewal premium commissions as they were paid into the company. Petitioner, as a cash basis taxpayer, reported as income only the instalments received. The Commissioner assessed deficiencies in the reports, contending that petitioner\u27s taxable income consisted of all renewal commissions received by the company during the taxable year, rather than the instalment payments. Rejecting the Commissioner\u27s argument that the constructive receipt doctrine was applicable to the renewal commissions, the Tax Court upheld the petitioner\u27s challenge of the assessment of the deficiencies. On appeal, held, affirmed. Since the new contract calling for fixed monthly instalments was a binding substituted contract, the taxpayer had no contractual right to the additional renewal commissions. Therefore the constructive receipt doctrine was inapplicable and only the fixed monthly instalments were income to the taxpayer. Commissioner v. Oates, (7th Cir. 1953) 207 F. (2d) 711