The lover of country life who looks upon rural objects in the true spirit, and, for the ... exceeds North America. 16 It is the idea of some, that a house or building which the farmer or planter occupies, should, in shape, ... description, Mode of Taking the Honey, An Ice House, Elevation and Ground Plan, An Ash House and Smoke House, Elevation and ...
Story - acrobat - 03/28/2008 - 01:48 - 0 comments - 0 attachments
Economic recessions, i.e. GDP contraction, have been studied thoroughly within the Real Business Cycle paradigm. The underlying intuition is that they are caused by adverse productivity shocks. The role of monetary policy is to stabilize prices and the function of the financial sector to facilitate the transfer of funds from depositors to entrepreneurs and the production sector. This literature has traditionally assumed that explicit modeling of banking activity was unnecessary, since it is commonly concluded that monetary policy and its effect on credit extension are neutral in the long-run.
As conventional wisdom has it, markets shut down during financial crises, as sellers struggle to find their buyers. However, an empirical assessment of what really goes on with secondary market liquidity in periods of financial distress is far from trivial, as a quick survey of the related literature illustrates. Whereas the relation between liquidity and market returns in the US has been studied extensively in both directions, the results differ according to the measure of liquidity in use. Moreover, much less is known about the behavior of secondary market liquidity (in its different dimensions) in periods of financial turmoil, a critical test to evaluate both the functioning of financial markets and the mechanics of financial crises. This paper contributes to fill in this gap, conducting the first systematic empirical study of secondary market liquidity under stress across emerging market crises.
A generally accepted theoretical argument relating liquidity and market returns is the collateral-based view: pronounced falls in asset prices reduce the value of financial intermediaries’ capital and increase their margin calls, forcing them to liquidate their positions, thereby inducing wider bid-ask spreads and increasing the price response to trading. Since net withdrawals are a function of the intermediaries’ performance, when the value of assets drop the short-term inflow of funds decreases or even reverses, forcing financial intermediaries to sell, adding to the price downturn, and generating a spiraling fall in some liquidity measures. Therefore, market liquidity is closely related to intermediaries’ funding needs, and this mutually reinforcing relation can generate sudden spikes in illiquidity indicators. While collateral-based theories assume that outside capital does not enter the market during downturns, fire-sale theories highlight precisely the role of outside capital: lower asset prices reward liquid outside buyers who profit from illiquid asset holders. Fire-sales (namely, forced wide-spread selling from distressed funds when investors redeem their capital en masse) put downward pressure on prices, as outside buyers demand additional compensation for providing needed liquidity.
The representative assembly, or parliament as it is called most often, is one of the oldest, most commonplace and - for the socialist tradition most controversial democratic institutions. Suspicion of parliament is certainly not confined to the socialist tradition. The modern history of parliament - the ultimate political symbol of peaceful compromise and quiet agreement have been littered with bitter conflicts, paralysis and open violence. In the early decades of this century, these trends reached something of a climax. With the Bolshevik Revolution, the severe political crises that followed in the aftermath of the First World War, and the rise of syndicalism and fascism, parliament appeared to have little or no future. This period saw not only the first successful government. It also witnessed a deep loss of confidence in the spirit of parliamentarism among its closest supporters, many of whom publicly lamented the declining legitimacy and effectiveness of representative assemblies.’
Carl Schmitt, whose political writings are little known outside his native Germany, was undoubtedly the shrewdest and most controversial European critic of parliament during this period. His writings on parliament directly address the subject of civil society and the state. They cast serious doubts on the capacity of parliament to regulate the relations of power within and between civil society and the state. Schmitt’s rejection of parliament raises fundamental political questions concerning state sovereignty, civil war, dictatorship and the future of democracy, and these in turn have a strikingly contemporary ring about them. For these reasons, his writings on parliament deserve careful reconsideration, freed from the highly personalized and bitter reaction the typically evoke in West Germany today.
