Determinants of small firm debt ratios: an analysis of retail panel data

In this paper, the relevance of some debt ratio determinants from the recent theory of finance is empirically investigated in a small business sector. The data used in this study consist of average financial data of 27 shoptypes in 20 different years, covering a period of 24 years. The panel character of the data facilitates the use of analytical techniques aimed at reducing or avoiding the biasing effect of omitted variables on the outcomes. The main conclusion is, that the theoretical determinants appear indeed to be relevant for the small business sector investigated here, but the influences encountered in the analyses are far less straightforward than the hypothesized effects in the theory. Influences on total debt are frequently found to be the net effects of opposite influences on long and short term debt and some variables show large time and industry specific effects. Further, distinct patterns in the time specific effects were found

Balancing Costs and Benefits: Designing effective global climate policy in an uncertain landscape

As the world continues to emit large amounts of greenhouse gas emissions, the global mean temperature has already increased by 1.1°C, and could increase to over 3°C by the end of the century if no climate policies are implemented. This would lead to unprecedented, widespread and devastating impacts of climate change. The emission of greenhouse gases needs to be reduced drastically to limit these impacts. However, determining optimal climate policy (including the level of ambition) is very challenging, mainly because climate change is a long-term problem with many uncertainties, and because damages are expected to occur unequally over regions and generations. In this thesis, we combine new estimates of the economic costs of climate change and compare those with the costs of reducing emissions through climate policies by examining various aspects of cost-optimal climate policy. To that end, the main research question of this thesis is: “How could climate policy be effectively designed on the basis of cost-benefit analysis, taking into account new insights in the costs of climate policy, the damages of climate change, and key uncertainties?” To answer this question, we have developed a new Integrated Assessment Model, called MIMOSA, which combines the geophysical aspects of climate change with the human and socio-economic aspects. This research has led to the following main conclusions. The uncertainty in climate change damage estimates is found to have a large impact on the optimal design of climate policy. Moreover, effective climate policy should consider key uncertainties when basing decisions on cost-benefit analyses. The uncertainty in climate damage estimates accounts for 50% of the uncertainty in determining the optimal temperature target, while the uncertainty in mitigation costs, the discount rate, and the damage function account in equal parts for uncertainty in the initial carbon price in cost-effectiveness setting. The benefits from avoided damages outweigh the mitigation costs required to stay well below 2°C for almost all uncertainty estimates, except when damages turn out to be very low. This provides strong economic validation of the Paris Agreement. Under medium assumptions of damages and discounting, the cost-optimal temperature is below 2°C, and for low discount rates or high damages, this drops to 1.5°C. Moreover, the Benefit-Cost Ratio is 1.5-3.9 for a well-below 2°C target. The benefits, however, occur mostly in the second half of the century and beyond, while the mitigation costs mostly happen upfront, earlier in the 21st century. These climate impacts are not equally distributed across regions. It is therefore important to also take damages into account when considering equitable distributions of mitigation effort. Finally, cost-benefit analysis using Integrated Assessment Models is a useful tool to support climate policy assessment, but requires up-to-date estimates of climate damages and mitigation costs, needs a clear and transparent incorporation of key uncertainties, and should be complemented with more specialised and detailed tools to design effective climate policies

Lifting the Curse of Knowing: How Feedback Improves Readers’ Perspective-Taking

Previous studies have shown that readers often overestimatethe similarity between their perspective and the perspective ofprotagonists in a story. This egocentric projection is argued tooriginate from readers’ tendency to use their own knowledgeas a frame of reference from which they (insufficiently) adjustaway to account for protagonists’ less informed perspective.This experimental study demonstrated that readers usefeedback about protagonists’ knowledge status to drawinferences that are more accurate on future perspective-takingtrials. Readers who were given the opportunity to learn throughfeedback not only adjusted their perspective-judgment morethan those who did not receive feedback, these readers alsoshowed less egocentric projection on future assessments