The Board of Governors of the Federal Reserve System establishes initial margin requirements under Regulations T, U, and X. Recent margin loan increases, both in aggregate value and relative to market capitalization, have rekindled the debate about using margin requirements as an instrument to...

Since the mid 1980s the mutual fund industry has enjoyed explosive growth in the number of funds, the types of funds available, and total assets under management. Much of this growth is the result of the increasing convenience offered to owners of long-term assets. Mutual funds offer portfolio...

Perhaps the most widely held view of the Crash of 1987 is the Cascade Theory: the Crash emerged from the interaction of stock prices with new financial strategies such as program trading and portfolio insurance, which use new financial instruments including stock index options and futures....

Examines the New View of yield spreads between taxable and tax-exempt bonds, which argues that personal income taxes are irrelevant to the relationship between interest rates on tax-exempt and taxable bonds. Finds evidence that the implicit tax rate, adjusted for quality differences, is related...

A New View of tax exemp-tion rejects the Traditional View that tax exemption gives a capital cost subsidy measured by the difference between taxable and tax-exempt interest rates. This paper develops a decisive voter model in which the New View is a special case. It considers the effects of...

The exemption of coupon payments by state and local governments from federal income taxes in the United States is examined from the vantage point of its effects on resource allocation—that is, its impact on the consumer's choice between goods produced privately and goods produced by the...

In Trading & Exchanges: Market Microstructure for Practitioners, SEC Chief Economist Larry Harris has written a must-read for anyone interested in the good, the bad, and the ugly of securities trading.

Trading volume and open interest in options and futures contracts on stock indices, equities, and interest rate instruments traded on world exchanges have experienced remarkable growth. However, this growth has been accompanied by controversy about the proper role of financial derivatives and...