An attractive theory of the term structure of interest rates is the expectations hypothesis, which holds that the long rate equals expected future short rates over the term of the bond. Many empirical studies, such as Shiller, Campbell, and Schoenholtz (1983), Fama (1984), Mankiw and Miron (1986), Fama and Bliss (1987), Mishkin (1988), Hardouvelis (1988), Froot (1989), Simon (1989, 1990), Cook and Hahn (1990), Campbell and Shiller (1991), and Roberds, Runkle and Whiteman (1996), find that the estimated coefficients in a regression of the change in the expected future short-term interest rates on the yield spread are significantly less than the value of unity predicted by the expectations hypothesis and differ as the forecast horizon varies. Even though Fama (1984), Mishkin (1988), Hardouvelis (1988), and Simon (1990) have found yield spreads do help predict future rates, the coefficient appears inconsistent with the expectations hypothesis.
There is a growing body of interests in construction insurance, supporting interactions between the construction industry and the insurance industry. However, it is not always clear why construction insurance exists and how it operates from the perspective of the construction industry. This paper argues that to provide a convincing explanation on this interaction, one needs to improve the theoretical and analytic frameworks in four key areas: the nature of construction risks, risk transfer and insurance mechanism, insurable risks, and perspectives on risks from concerned parties.
They explain how insurance can be used as a risk transfer tool in the construction industry and examine the interaction between risk management and insurance. The existing literature on construction insurance is reviewed in the light of this analysis to identify key gaps in knowledge and help to focus further the research priorities. A better understanding of construction insurance can contribute to successful risk management performance on projects.
Part I of this Article presents available data on credit card delinquencies and chargeoffs, and examines the relationship with data on the number of personal bankruptcy filings. The data reflect an historical increase in the rate of credit card defaults over the past twenty-five years, as well as a rise in personal bankruptcies in the 1990s which is astonishingly highly correlated with the rise in credit card defaults.
Part II reviews data relating credit cards defaults and personal bankruptcy filings with two general economic factors: the cyclical state of the economy and the household debt burden. Credit card defaults and personal bankruptcy filings have exhibited a strong countercyclical component, moving upward in recessions and downward in economic booms, and have also tended to rise as the ratio of debt to disposable income has increased among American households.
