Using Excel simulation model, John Marthinsen and John Edmunds demonstrate how portfolio investment flowing from one currency zone to another can easily cause the value of the euro to spiral away from its 'correct' value. The authors simulated trajectories for exchange rates among the euro, the...

This article shows that European firms do their shareholders a disservice if they use bank financing, especially if that financing comes with restrictive covenants and floating interest rates. The restrictive covenants discourage expansion and the floating interest rates make the firm's cash...

All companies hedge currency, interest rate, or commodity price exposure, using natural or contractual hedges. But traditional defensive hedging is restrictive and yet, greater flexibility appears to bring problems of control. Ashok Rao and John Edmunds solve this dilemma in a simple model which...

Australia has a progressive personal income tax schedule with a seemingly simple five rate structure (including a zero rate). Overlaying the statutory tax schedule are more than 40 offsets designed to reduce tax liability for certain taxpayers. These offsets add complexity to the tax system and...