This paper considers two methods for pricing assets and examines the relations between them. The +rst method is based on the principle of no-arbitrage, which asserts that introduction of the new asset should not create an arbitrage in a market that was before arbitrage free. This condition is satis+ed by prices for the new asset between speci+c lower and upper limits, determined as the values o...

The paper develops a new and easy-to-use F test in a time series GMM framework that allows for general forms of serial dependence. The test is based on the Wald statistic with a multiplicative correction factor and employs critical values from a standard F distribution. The F critical values are high-order correct under the conventional asymptotics. Monte Carlo simulations show that the F test ...

We develop a model to study the implications of a legal environment on the organization of software production. We show that contract enforcement a®ects the organizational mode (i.e., in-house versus outsourcing) of customized software development while copyright protection determines the introduction of package software. When copyright protection is weak, only customized software will be devel...

Standard economic analysis holds that labor market rigidities are harmful for job creation and typically increase unemployment. But many orthodox reforms of the labor market have proved di±cult to implement because of political opposition. For these reasons it is important to explain why we observe such regulations. In this paper I outline a theory of how they may arise and why they ̄t together...

Context. Observations with the Hinode spectro-polarimeter have revealed strong horizontal internetwork magnetic fields in the quiet solar photosphere. Aims. We aim at interpreting the observations by means of results from numerical simulations. Methods. Radiative MHD simulations of dynamo action by near-surface convection are analyzed with respect to the relation between vertical and horizontal...