Does attendance affect performance in college economics courses? David Romer (1993) found that attendance did contribute significantly to the academic performance of students in a large intermediate macroeconomics course that he taught in the fall of 1990. (See the Summer 1994, Journal of Economic Perspectives [vol. 8, no. 3, pp. 205-15] for numerous comments on Romer.) This conclusion held even after controlling for student motivation which, it may be argued, is the true factor determining performance and is only approximated by attendance. An earlier study by Kang Park and Peter Kerr (1990) found that attendance was a determinant of student performance in a money and banking course, but not as important as a student's GPA and the percentile rank on a college entrance exam. A study by Robert Schmidt (1983) reported that time spent attending lectures contributed positively to performance in a macroeconomic Principles course. On the other side of the ledger is evidence from Neil Browne et al. (1991) showing that students who did not attend a typically structured class with lectures did just as well on the Test of Understanding College Economics (TUCE) as those students who attended a standard microeconomic Principles course. They also reported, however, that those students who attended the lectures performed better on essay questions than those who did not. A similar study by Campbell McConnell and C. Lamphear (1969) found no significant difference in the performance of students with no classroom attendance vis-a-vis those attending class. Finally, Stephen Buckles and M. E. McMahon (1971) found attendance at lectures that simply explained material covered in reading assignments did not enhance students' understanding of economics. In this paper we present new evidence on the effects of class attendance on student performance. Our results pertain to the Principles of Economics course as it is taught in a two-semester sequence at a medium-size, comprehensive state university.

Caught between the end of the National Banking Era and the beginning of the Federal Reserve System, the crisis of 1914 provides an example of a banking panic avoided. We investigate how this outcome was achieved by examining data on the issues of Aldrich-Vreeland emergency currency and clearing house loan certificates to New York City institutions that identify the borrower and the quantity requested for each type of temporary liquidity measure. The extensive provision of temporary credit to a wide array of financial intermediaries was, in our opinion, essential to the successful alleviation of financial distress in 1914. Empirical results indicate an important role for clearing house loan certificates that is distinct from the influence of Aldrich-Vreeland emergency currency issues.

El proposito del articulo es analizar, utilizando modelos keynesianos, los efectos de las operaciones de mercado abierto y de las variaciones de los requisitos de reservas sobre las tasas de interes de prestamos y de depositos. Las conclusiones, aparentemente obvias, son que aumentos de los requisitos de reservas, comparado con disminuciones de la base monetaria, tienden a ampliar la brecha entre las tasas de prestamos y de depositos. Por ello, parece preferible utilizar las modificaciones de la base monetaria como instrumento de politica monetaria, a no ser la autoridad monetaria abone intereses por las reservas de los Bancos.

We examine the influence of outside directors’ industry experience on segment investment, segment operating performance, and firm valuation for conglomerates. Given board composition is endogenous, we instrument for the presence of industry expert directors using the supply of experienced executives near conglomerate firms’ headquarters. We find that industry expert representation on the board causes increased segment investment. Consistent with experienced directors playing favorites rather than acting as dispassionate advisors, segment profitability (firm value) is lower for segments (firms) with industry expert outside directors. We do not find analogous negative profitability or valuation effects of director experience for single-segment firms.

The paper argues that while attempts have been made to reform four of the five key pillars of banks’ operation, (i.e. competition, resolution, supervisory, and auditing and valuation policies), less attention has been paid to the role of bank governance and systemic risk, despite a strong link between governance and risk-taking. The paper offers four solutions to strengthen bank governance. First, the regulatory capital base of banks could be increased. Second, the compensation structure of managers could be reformed. Third, effort could be focussed on creating and implementing resolution regimes which offer the credible prospect of “bailing-in” creditors in the event of stress and fourth solution is to reform the structure of company law– for example, by extending control rights beyond shareholders. Furthermore, the paper argues that given the diversity of the whole financial system, it is expected that the risks individual financial institutions face are also diverse. It cannot be assumed that the appropriate capitalisation is constant across all risks. While leverage ratios are a useful backstop measure and guard against potential gaming of risk-weights, their appropriate role is as a backstop. The diversity within the financial system also supports the fact that a single measure of systemic risk is unlikely to be universally applicable, nor is a single instrument of financial stability policy.

We use the introduction of direct flights as an exogenous shock to the travel time between mutual funds and firms to estimate the causal effects of proximity on fund investment decisions and performance. We find that a fund invests significantly more in firms that become more proximate following the introduction of direct flights and that these more proximate investments exhibit superior performance. Our findings are robust to including a variety of fixed effects and potential confounders such as firm-level shocks, fund-level shocks, and time trends. Collectively, our results indicate that proximity enhances investors’ ability to acquire value-relevant information about firms.