Narrow Results

A macroeconomic model based on the economic variables (i) assets, (ii) leverage (defined as debt over asset) and (iii) trust (defined as the maximum sustainable leverage) is proposed to investigate the role of credit in the dynamics of economic growth, and how credit may be associated with both economic performance and confidence. Our first notable finding is the mechanism of reward/penalty associated with patience, as quantified by the return on assets. In regular economies where the EBITA/Assets ratio is larger than the cost of debt, starting with a trust higher than leverage results in the highest long-term return on assets (which can be seen as a proxy for economic growth). Therefore, patient economies that first build trust and then increase leverage are positively rewarded. Our second main finding concerns a recommendation for the reaction of a central bank to an external shock that affects negatively the economic growth. We find that late policy intervention in the model economy results in the highest long-term return on assets. However, this comes at the cost of suffering longer from the crisis until the intervention occurs. The phenomenon that late intervention is most effective to attain a high long-term return on assets can be ascribed to the fact that postponing intervention allows trust to increase first, and it is most effective to intervene when trust is high. These results are derived from two fundamental assumptions underlying our model: (a) trust tends to increase when it is above leverage; (b) economic agents learn optimally to adjust debt for a given level of trust and amount of assets. Using a Markov Switching Model for the EBITA/Assets ratio, we have successfully calibrated our model to the empirical data of the return on equity of the EURO STOXX 50 for the time period 2000–2013. We find that dynamics of leverage and trust can be highly nonmonotonous with curved trajectories, as a result of the nonlinear coupling between the variables. This has an important implication for policy makers, suggesting that simple linear forecasting can be deceiving in some regimes and may lead to inappropriate policy decisions.

The desire to demonstrate performance with respect to sustainable development has led to a profusion of approaches. The widespread use of quantitative indicators often appears unconnected to any theory of sustainable development. One reason for this disconnect is that theoretical treatments have tended to focus on global and national scales whereas practical attempts to report on sustainable development tend to operate at smaller scales such as regions, industries and corporations. The relevance of existing theory to those reporting at smaller scales is not widely recognised. This paper develops an approach to reporting that is motivated by a theoretical interpretation of sustainable development in terms of assets. The approach is illustrated with a hypothetical example. The asset-based approach can be applied in a variety of contexts (national, regional, industry, corporation and product) and provides a common framework for linking what have been regarded as disparate approaches to reporting on sustainable development. The recognition that different players have responsibilities for different mixes of assets is the key to understanding how performance should be measured and how information can be combined to report at different scales.

Household wealth is an important indicator of financial well-being that is highly concentrated in China. Wealth ownership is a particularly important measure for China given that asset ownership is one of the more visible and influential measures of social and economic status. This chapter contributes to the emerging literature on Chinese household wealth ownership and inequality in three ways. First, we provide updated estimates of the degree to which wealth ownership is concentrated, including estimates for net worth, homes, and financial assets. Second, we document the portion of wealth that is held by top households again including separate estimates of net worth, homes, and financial assets. Third, we explore the social and economic factors that are associated with wealth ownership and with membership in top wealth positions, including a focus on market and political capital. Our findings underscore the importance of wealth for understanding inequality and highlight the degree to which top households are accumulating assets. Our results also show that both market and political capital contribute to wealth ownership, but the relative importance of these influences varies for net worth, housing wealth, and financial assets.

Primary agricultural cooperative societies (PACSs) are the bases of cooperative credit structure in India. The cooperative credit structure functioning in Maharashtra state has three tiers. The main function of the PACSs is to provide short- and medium-term credit to its members. PACSs play a vital role in the socio-economic development of its members. Finance is the key to all types of activities. The efficient management of any society depends on the efficient management of finance. PACSs being financial intermediaries provide financial service with the objective of growth and profit. In the era of globalisation, PACSs face a different type of challenge which raises questions about the viability and sustainability of PACSs. A low resource base has been a major constraint in the effective functioning of PACSs. Financial stability has a direct bearing on the deposit mobilisation and overdue reduction. Limited resources result in low business activity. Limited resources, an increase in nonperforming asset, low recovery, overdue, lack of finance and lack of diversification have affected the viability of primary agricultural societies. Besides providing agriculture credit, some PACSs in Pune District are engaged in diversified activities. The PACSs that have diversified their business are more viable and sustain better than non-diversified societies. This chapter reports the viability analysis of selected PACSs in the Pune District. Multi-stage sampling technique was used. The primary and secondary data were mixed together. Primary data were collected with the help of specially designed schedules by conducting interviews, and secondary data were collected from different published sources and annual reports of PACSs. The study concludes that, as a result of the diversification, Talegoan Dhamdhere PACS in Shirur Block is potentially viable as compared to the Bhairawnath Kasarsai PACS in Mulshi Block of Pune District.

The following sections are included:

• INTRODUCTION

• DATA COLLECTION
  • Primary and Secondary Sources of Data

• DATA PRESENTATION: TABLES
  • Annual CPI, T -Bill Rate, and Prime Rate

• DATA PRESENTATION: CHARTS AND GRAPHS

• APPLICATIONS
  • Analysis of Stock Rates of Return and Market Rates of Return
  • Financial Health of the Banking Industry: 1981 Versus 1989
  • How Congress Voted on the Gulf Resolution
  • Bar Charts Reveal How Several Economic Indicators Are Related

• Summary

• Appendix 2A Using Microsoft Excel to Draw Graphs

• Appendix 2B Stock Rates of Return and Market Rates of Return

• Appendix 2C Financial Statements and Financial Ratio Analysis
  • Review of Balance Sheets and Income Statements
  • Financial Ratio Analysis

• Questions and Problems

Beaches are arguably the most valuable of coastal tourism assets. Around beaches, communities develop and tourism markets expand, often resulting in intimate human interaction with diverse environments. This chapter provides an overview of economic research on beach and surf recreation and tourism in existing and expanding markets, including a description of the techniques most commonly used to estimate the economic impact and value of beach recreation and some of the challenges around developing accurate estimates of use and value. Better understanding of the drivers and values for beach and surf tourism is an important consideration for optimal management of coastal tourism and recreation assets. This is brought into sharper focus as a result of the frontline exposure of many of these assets to the impacts of climate change. The importance, utility and benefit of beach valuation studies are highlighted through two detailed cases that demonstrate the use of a range of techniques and applications. The authors conclude the chapter with a discussion on the rationale for the development of a framework to more accurately identify and value beach and surf tourism and recreation assets and how it might best be applied to improve management outcomes.