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The authors discuss the econometric underpinnings of Barro (2006)'s defense of the rare disaster model as a way to bring back an asset pricing model “into the right ballpark for explaining the equity-premium and related asset-market puzzles.” Arbitrarily low-probability economic disasters can restore the validity of model-implied moment conditions only if the amplitude of disasters may be arbitrary large in due proportion. The authors prove an impossibility theorem that in case of potentially unbounded disasters, there is no such thing as a population empirical likelihood (EL)-based model-implied probability distribution. That is, one cannot identify some belief distortions for which the EL-based implied probabilities in sample, as computed by Julliard and Ghosh (2012), could be a consistent estimator. This may lead to consider alternative statistical discrepancy measures to avoid the problem with EL. Indeed, the authors prove that, under sufficient integrability conditions, power divergence Cressie-Read measures with positive power coefficients properly define a unique population model-implied probability measure. However, when this computation is useful because the reference asset pricing model is misspecified, each power divergence will deliver different model-implied beliefs distortion. One way to provide economic underpinnings to the choice of a particular belief distortion is to see it as the endogenous result of investor's choice when optimizing a recursive multiple-priors utility a la Chen and Epstein (2002). Jeong et al. (2015)'s econometric study confirms that this way of accommodating ambiguity aversion may help to address the Equity Premium puzzle.

Many Information Theoretic Measures have been proposed for a quantitative assessment of causality relationships. While Gouriéroux, Monfort, and Renault (1987) had introduced the so-called “Kullback Causality Measures,” extending Geweke’s (1982) work in the context of Gaussian VAR processes, Schreiber (2000) has set a special focus on Granger causality and dubbed the same measure “transfer entropy.” Both papers measure causality in the context of Markov processes. One contribution of this paper is to set the focus on the interplay between measurement of (non)-markovianity and measurement of Granger causality. Both of them can be framed in terms of prediction: how much is the forecast accuracy deteriorated when forgetting some relevant conditioning information? In this paper we argue that this common feature between (non)-markovianity and Granger causality has led people to overestimate the amount of causality because what they consider as a causality measure may also convey a measure of the amount of (non)-markovianity. We set a special focus on the design of measures that properly disentangle these two components. Furthermore, this disentangling leads us to revisit the equivalence between the Sims and Granger concepts of noncausality and the log-likelihood ratio tests for each of them. We argue that Granger causality implies testing for non-nested hypotheses.

At Renault's Douai plant close to Lille, recent investments have focused on creating a flexible production tool that is capable of reacting quickly to the demands of the market. The plant aims to produce vehicles according to a build schedule that is driven by customer orders and to maintain the production sequence fixed at the start throughout the manufacturing process.

In a recent edition of the nation's favourite soap, Coronation Street, a small incident occurred which illustrated in a nutshell the problems facing the deviser of an industrial design in seeking to protect that design from being copied. Angie, a student of fashion design at the local polytechnic put on a successful show of her designs. Emboldened by the favourable reception she set out a couple of days later for an appointment with a local dress manufacturer to try and sell her designs. She returned a few hours later in tears and with hopes dashed. She had arrived at the firm only to discover that her designs were already being made up into dresses. The designs had been copied at the show and already sold to or copied by them. The incident was not without its silver lining in that in getting drunk to forget the whole sad affair this lead to a romantic interlude with fellow lodger, Curley Watts! It is the purpose of this article to examine the main strands of protection for industrial designs and to look at a proposed new European Community Design Law which has recently been published by the prestigious Max Planck Institute for Foreign and International Patent, Copyright and Competition Law (Munich, 1991). This proposal is being put to the EC Commission as the basis for an EC Regulation.