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Oil might not make the world go round, but it surely greases the wheels of economic activity. As the figure illustrates, oil prices have climbed sharply since 2002 to inflation-adjusted levels that approach those reached during the 1979 oil shock. Supply cuts from Middle Eastern exporters generated the very high prices of the 1970s; this time, demand from Asia’s two most populous countries—China and India—is driving price trends.

We propose a measure of capital market integration arising from a conditional regime-switching model. Our measure allows us to describe expected returns in countries that are segmented from world capital markets in one part of the sample and become integrated later in the sample. We find that a

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are conditional on market volatility. Under certain assumptions, it is possible to adjust for this bias. Using this adjustment, there was virtually no increase in unconditional correlation coefficients (i.e., no contagion) during the 1997 Asian crisis, 1994 Mexican devaluation, and 1987 U.S. market crash

.e., their capital and the margins they are charged, depend on the assets' market liquidity. We show that under certain conditions margins are destabilizing and market liquidity and funding liquidity are mutually reinforcing, leading to liquidity spirals. The model explains the empirically documented features

Scholars of the theory of the firm have begun to emphasize the sources and conditions of what has been described a s "the organizational advantage, " rather than focus on the causes and consequences of market failure. Typically, researchers see such organizational advantage a s accruing

This article presents a simple yet powerful new approach for approximating the value of America11 options by simulation. The kcy to this approach is the use of least squares to estimate the conditional expected payoff to the optionholder from continuation. This makes this approach readily

. Such an optimum can be realized in a market if perfectly discriminatory pricing is possible. Otherwise we face conflicting problems. A competitive market fulfilling the marginal condition would be unsustainable because total profits would be negative. An element of monopoly would allow positive profits, but would

), shaped by the firm’s (specific) asset positions (such as the firm’s portfolio of difficult-to-trade knowledge assets and complementary assets), and the evolution path(s) it has adopted or inherited. The importance of path dependencies is amplified where conditions of increasing returns exist. Whether