Liquidity Mismatch Index and Bank Performance

The relationship between liquidity and bank performance in finance literature remains an unresolved empirical issue. The main objective of this article was to investigate the relationship between liquidity mismatch index (LMI) initially developed by Brunnermeier, Gorton and Krishnamurthy (2012) and further developed by Bai, Krishnamurthy, and Weymuller (2018) and South African bank performance empirically. Different from other prior studies, the study undertook to determine the relationship employing the liquidity measure that integrates both market liquidity and funding liquidity within a context of asset liability mismatches. The unit of analysis was a panel of 12 South African banks over the period 2008–2018. Specifically, two liquidity measures – the bank liquidity mismatch index (BLMI) and the aggregate liquidity mismatch index (ALMI) were regressed against bank performance matrices. The newly developed liquidity measures are based on portfolio management theory and they account for the significance of liquidity spirals. Results revealed that, bank performance is negatively and significantly related with BLMI. While the bank performance is positively related to ALMI, the relationship is not significant. Also, the nature of relationship is dependent on the measure of profitability employed.

Core cognition in adult vision: A surprising discrepancy between the principles of object continuity and solidity.

From an early age, humans intuitively expect physical objects to obey core principles, including continuity (objects follow spatiotemporally continuous paths) and solidity (two solid objects cannot occupy the same space at the same time). These two principles are sometimes viewed as deriving from a single overarching “persistence” principle. Indeed, violations of solidity where one solid object seemingly passes through another could theoretically be interpreted as a violation of continuity, with an object “teleporting” to switch places rather than passing through a solid obstacle. However, it is an empirical issue whether the two principles are processed distinctly or identically to one another. Here, adult participants tracked objects during dynamic events in a novel location detection task, which sometimes involved violations of the principles of continuity or solidity. While participants explicitly noticed both types of violations and reported being equally surprised at both, they made more errors and answered more slowly after continuity violations than after solidity violations. Our results demonstrate that the two principles show different signature patterns, and are thus represented distinctly in the mind.

Causation in the law

Causal language is pervasive in the law, especially in those areas, such as contract law, tort law and criminal law, that deal with legal responsibility for the adverse consequences of voluntary and involuntary human interactions. Yet there are widely varying theories on the nature and role of causation in the law. At one extreme, the causal minimalists claim that causation plays little or no role in attributions of legal responsibility. At the opposite extreme, the causal maximalists claim that causation is the primary or sole determinant of legal responsibility. These divergent views are rooted in different conceptions of: (1) the nature or meaning of causation, (2) the relationship between causation and attributions of legal responsibility, and (3) the basic purposes of the relevant areas of law. Much of the disagreement and confusion stems from the ambiguous usages of causal language in the law, which follow the ambiguous usages of causal language in ordinary, non-legal discourse. In both areas, causal language is sometimes used in its primary sense to refer to the content and operation of the empirical laws of nature, but at other times it is used in a more restricted normative sense to signify that one of the contributing conditions has been identified as being more important than the other conditions, in relation to some particular purpose. The relevant purpose in the law is the attribution of legal responsibility for some consequence. Thus, in legal discourse, causal language is ambiguously employed to grapple not only with the empirical issue of causal contribution but also with the normative issue of legal responsibility. The failure to use language that clearly identifies and distinguishes these two issues has generated considerable disagreement and confusion over each issue and the nature of the relationship between them. Further disagreement and confusion have been generated by the difficulty of providing useful, comprehensive criteria for the resolution of each of these issues. The most widely used criterion for the empirical issue of causal contribution is the necessary-condition (conditio sine qua non) test. This test has been subjected to considerable criticism as being over-inclusive or under-inclusive or both, and as inviting or even requiring resort to normative policy issues to resolve what supposedly is a purely empirical issue. The deficiencies of the necessary-condition test, coupled with the difficulties encountered in trying to devise a useful alternative test that does not beg the question, have led many to conclude that there is no purely empirical concept of causation, and that there is thus no more than a minimal role for causation in the attribution of legal responsibility. This causal-minimalist position has been especially attractive to the legal economists and the critical legal scholars, since it undermines the traditional conception of the law as an instrument of interactive justice, whereby everyone is required to avoid causing injury to the persons and property of others through interactions that fail to respect properly those others’ equal dignity and autonomy. The traditional conception, with its focus on individual autonomy, rights and causation, is inconsistent with the social-welfare maximizing theories of the legal economists and the anti-liberal, deconstructionist programme of the critical legal scholars. The members of each causal-minimalist group therefore argue that the concept of causation should be: (a) jettisoned entirely and replaced by direct resort to the social policy goals which they believe do or should determine the ultimate incidence and extent of legal responsibility; (b) redefined as being reducible to those social policy goals; or (c) retained as useful rhetoric that can be manipulated to achieve or camouflage the pursuit of those social policy goals.

Virtue as a Trait

One of the most common assumptions about the moral virtues is that they are traits, or more specifically, traits of character. But what are character traits, and what character traits do individuals actually possess today? This chapter takes up each of these questions in turn. First it considers the metaphysics of character traits, distinguishing between three competing views: the summary view, the conditional view, and the dispositional view. Then it turns to the empirical issue of whether most people actually have character traits, and if so, what they tend to look like. Different options include the possession of traditional virtues, traditional vices, local traits, and mixed traits.

Against Smallism And Localism

The question whether cognition ever extends beyond the head is widely considered to be an empirical issue. And yet, all the evidence amassed in recent years has not sufficed to settle the debate. In this paper we suggest that this is because the debate is not really an empirical one, but rather a matter of definition. Traditional cognitive science can be identified as wedded to the ideals of “smallism” and “localism”. We criticize these ideals and articulate a case in favor of extended cognition by highlighting the historical pedigree and conceptual adequacy of related empirical and theoretical work.

'Take It or Go to Court': The Impact of Sec. 1a of the German Protection Against Dismissal Act on Severance Payments

In 2004, a section was added to the German Protection against Dismissal Act, establishing a new procedure to dismiss an employee, given a predetermined severance payment. Most legal scholars presume the change to be without impact, while a minority of experts claims it to be either beneficial or unfavorable to employees. Our theoretical model suggests that firms will use the new procedure, but that the change in payoffs is indeterminate and, therefore, an empirical issue. Exploiting the fact that collective dismissals are not directly affected by the amendment, difference-in-differences estimates based on panel data for West Germany indicate that the legal change did have a negative effect on severance pay.

Efficient Contracts Without Bargaining Over Employment

It is often asserted that unions must bargain over employment if efficient contracts are to be achieved. However, efficient outcomes can be reached and supported if the average rate of compensation paid to labour decreases with employment. The author argues that common fringe benefit and layoff and recall provisions should make the average cost of compensation decline with employment. This implies that most firms and unions can reach and support efficient outcomes even though the union negotiates only wages and fringes, and the employer chooses employment unilaterally. Thus the distinction between monopoly models and efficient bargain models of union-firm interaction is not as relevant an empirical issue as previously believed.

Historical Variations in the Impact of Union Density on Strike Frequency: Some U.K. Evidence

Considerable debate exists on the influence of fluctuations in union membership on strike frequency. On a theoretical level it is possible to advance a number of arguments about the sign and meaning of the regression coefficient on union membership in a strike function (see Kaufman (1982)) so the issue remains primarily an empirical one. This paper attempts to shed some new light on the empirical issue using U.K. evidence.