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The authors evaluate financial stability and capital flows management objectives of capital controls in the context of four capital control events: removing or imposing controls on capital inflows and removing or imposing controls on capital outflows. The authors use synthetic control method to solve the endogeneity problem stemmed from the timing of capital control implementation. The authors find new evidence that capital controls are not consistently effective in reaching financial stability outcomes but are consistent in reaching capital flows management outcomes. The authors compare our results to estimates using difference-in-difference (DID) and carry out placebo analysis. Finally, we use synthetic DID to correct for the parallel trend bias and show that the results still hold.

That Melchior Palyi taught a course at the University of Chicago on the European banking system is unsurprising, given his background provided in the biographical sketch presented above.

This chapter assesses the extent to which historical levels of inequality affect the creation and survival of businesses over time. To this end, we use the Global Entrepreneurship Monitor survey across 66 countries over 2005–2011. We complement this survey with data on income inequality dating back to early 1800s and current institutional environment, such as the number of procedures to start a new business, countries’ degree of financial inclusion, corruption and political stability. We find that, although inequality increases the number of firms created out of need, inequality reduces entrepreneurial activity as in net terms businesses are less likely to be created and survive over time. These findings are robust in using different measures of inequality across different points in time and regions, even if excluding Latin America, the most unequal region in the world. Our evidence then supports theories that argue early conditions, crucially inequality, influence development path.

This paper reviews the socioeconomic reform policies employed by the China’s party-state between the early 1980s and mid-2000s. Unlike conventional frameworks viewing the reform as an economic development project designed for “national interests” or “ruling elites” personal interests’, this paper interprets the reform as a political attempt of the state made in response to the crisis of dominance over the working class. In the face of the crisis of class dominance expressed as economic and political unrests related to low growth of labor productivity, the state managers of the post-Mao era embarked on the reform as a way of restoring the state’s ability to impose work upon the workers. As is well known, the reform was “market-oriented” with the state relinquishing some of the control over economic managements, and this paper sees it as the state’s strategy of reducing political risks arising from a highly politicized form of class confrontation. By making pressures upon producers look like a purely economic matter arising from private relations, that is, by depoliticizing exploitative social relations of production, the market-oriented reform helped the party-state effectively repress workers without a serious damage to political legitimacy. From this perspective, this paper examines the reform policies in management of labor, firms, and money, and how those policies contributed to the state’s ability to discipline class relations of production in China. This paper, however, does not conclude that the reform as a depoliticization strategy of class dominance was successful and nonproblematic. It is argued that beneath the success of the reform was a growing necessity of crisis; faced with re-burgeoning workers’ struggles, growing problems of overproduction/overaccumulation, and the resultant looming banking system crisis, the party-state came to find it more and more necessary to bring the economic managements back into political ambit with the related political risks also growing.

This chapter presents evidence of persistence in pricing new corporate bond issues. Both transition matrix and regression analyses show that cross-sectional differences in the yields of initial public bond offerings across issuers persist over time, and the persistence effect is stronger for firms with no rating changes, less frequent bond issuance, and higher information asymmetry. Our findings support the hypothesis of the “ride on past” behavior and confirm the value of information production accumulated from the past bond issuances for the pricing of newly issued bonds.

At the end of this session, learners should be able to:

• Understand why interpretation of financial statements is necessary.

• Calculate accounting ratios for profitability, liquidity, efficiency, capital structure and investors.

• Utilise ratio analysis to critically appraise an organisation’s published financial statements.

• Explain the limitations of ratio analysis.

Understand why interpretation of financial statements is necessary.

Calculate accounting ratios for profitability, liquidity, efficiency, capital structure and investors.

Utilise ratio analysis to critically appraise an organisation’s published financial statements.

Explain the limitations of ratio analysis.

This paper surveys the literature on economic research in banking. Two streams of empirical research were reviewed. The first stream of empirical research focus on research examining the effect of bank behaviour on economic performance. The second stream of empirical research focus on research on the effect of economic events on bank behaviour and performance. We provide our views about what we have learned from this research and about what else we would like to know.