July Crisis Research Articles

PRINCESS MARY'S HOUSEHOLD AND THE SUCCESSION CRISIS, JULY 1553

This article reconsiders Mary Tudor's victory in the succession crisis of July 1553. It challenges the traditional interpretation which accounts for Mary's unexpected triumph as the result of a ‘spontaneous’ rising of the East Anglian gentry. Instead it reclaims a central role for Mary's household affinity in the succession crisis and as such presents a longer-term perspective than accounts of Mary's coup d’état have provided hitherto. It concludes by pointing to the implications of the role of Mary's household for interpreting the politics and religion of her reign.

A variance equality test of the ICAPM on Philippine stocks: post-Asian financial crisis period

The study examines whether Fama's discrete version of Merton's intertemporal CAPM (ICAPM) can explain the negative market risk premium and the cross-sectional variability of Philippine stock returns after the onset of the Asian financial crisis in July 1997. The change in foreign exchange rate, in addition to the change in market risk premium, is used as a state variable of hedging concern to investors. The relationship of Fama's multifactor minimum-variance (MMV) portfolio to the Markowitz minimum-variance (MV) portfolio is characterized in terms of the equality of the return variances for the same expected return. A test due to Basak et al. (2002) is then used to verify the equality of the return variance of a derived tangency portfolio along the MMV frontier to an MV portfolio with the same sample mean return. The results do not reject the ICAPM during the period covered by the study. Thus, the model provides a plausible explanation both for the cross-sectional variability of stock returns and the negative market risk premium within the framework of mean-variance optimizing investors.

The July 1958 Jordanian Crisis and the Origins of the American–Israeli Alliance: A New Perspective

The literature reviewing the origins of the American–Israeli alliance underscores the role of factors related to “the special relationship paradigm” in establishing the infrastructure of this partnership. However, an analysis of the wealth of primary sources indicates that the central precipitant for its establishment was inherent in a cluster of purely strategic developments that unfolded in the Middle East during the second half of the 1950s, culminating in the Jordanian Crisis of July 1958. In the course of this crisis, Israel emerged as the only regional power prepared to take risks for the sake of deterring Egypt from toppling King Hussein's regime in Jordan. It was this experience and the lessons that American policymakers drew from Israel's behavior in the crisis that provided the main impetus for changing Washington's perceptions of Israel, thus establishing the conceptual basis for the alliance.

The Importance of Effective Corporate Governance

The term corporate governance came into vogue following the Asian Economic Crisis in July 1997 and has since been bandied about quite frequently in the business press. This paper looks at some of the different definitions of corporate governance as well as the importance of corporate governance. It then looks at the core components that contribute to effective governance by looking at the model developed by the Organization for Economic Cooperation and Development (OECD) Business Sector Advisory Group on Corporate Governance or more commonly known as the Millstein Report. It then goes on to discuss the importance of efforts to raise the awareness of corporate governance globally keeping in mind the differences in national cultures as well as differing social and economic priorities between sovereign nations. It then concludes by saying that at this point in time, a consensus on a single model of corporate governance is both unlikely and unnecessary since over time the exigencies of the capital market (market forces) will lead to increasing convergence in practice between countries.

Dike emplacement forerunning the Etna July 2001 eruption modeled through continuous tilt and GPS data

Late on the night of July 17, 2001, a lateral eruption started from the slopes of Mt. Etna. A 7 km long field of ground fractures opened between 13 and 20 July. The eruption ended on August 9, 2001 after emitting a lava volume of approximately 48 · 106 m3. A strong seismic swarm earthquake was recorded between July 12 and 17. The evolution leading up to the July crisis was monitored through continuous tilt and GPS measurements, which constrained the intrusion preceding the eruption in time, and inferred the position and geometry of the uprising dike. We modeled the marked ground deformation changes recorded in the days before the eruption onset. The result shows that a tensile crack with an opening dislocation of ca. 3 m, crossing the volcano edifice slightly southeast of the crater area, can explain the recorded deformation pattern. The location of the modeled tensile source fits the zone of the seismic swarm occurring during the magma uprising. The ground deformation pattern associated with the final uprising and its modeling suggest a very fast dike emplacement which appears different, both in terms of rapidity (only a few days) and source position, with respect to the sources modeled for the other lateral eruptions in the last twenty years.

Tail estimation and mean–VaR portfolio selection in markets subject to financial instability

Risk managers are increasingly required by international Regulatory Institutions to adopt accurate techniques for the measurement and control of portfolios financial risks. The task requires first the identification of the different risk sources affecting the portfolio and the measurement of their impact, then after: the adoption of appropriate portfolio strategies aimed at neutralising these risks. The comprehensive concept of Value-at-Risk (VaR) as a maximum tolerable loss, with a given confidence interval, has become in this regard the industry standard in risk management. In the paper we focus on the implications of different risk measurement techniques and portfolio optimisation strategies in presence of markets subject to periods of severe instability, resulting in significant deviations of financial returns from the Normality assumption typically adopted in mainstream finance. Comparative results on 1 day-VaR(99%) estimation are presented over a range of bond and equity markets with different risk profiles. The reference period of our analysis includes several market shocks and in particular the Argentinean Eurobond crisis of July 2001. The solution of an optimal portfolio problem over the crisis period is discussed within a [mean, variance, VaR99%] portfolio space, emphasising the difficulty of the portfolio's relative return maximisation problem faced by fund managers.

Helmuth von Moltke and the Origins of the First World War

Introduction 1. Military decision-making in Wilhelmine Germany 2. Alfred von Schlieffen and Helmuth von Moltke: 'military genius' and 'reluctant military leader' 3. From crisis to crisis: the international background to military planning in the pre-war years 4. The July crisis and the outbreak of war: the German perspective 5. The General Staff at war Conclusion.

Exchange rate regime credibility, the agency cost of capital and devaluation

Hong Kong pegs their currency to the US dollar with a currency board. In the wake of the Asian financial crisis in 1997, the US–Hong Kong interest rate differential jumped from 1 2 % to 4–6%. Investors feared Hong Kong would abandon the peg. This paper analyzes the crucial role of credibility in a stochastic dynamic rational expectations regime switch model. I parameterized the model using estimates of the exchange rate process for Hong Kong. The model generated interest rate differentials are consistent with the interest differentials in Hong Kong before the Asian financial crisis in July of 1997 but not after the crisis.

Brésil 1840: la majorité anticipée de l'empereur, un coup d'état conservateur?

SUMMARY On 22 July 1840 a handful of members of the Brazilian Imperial Parliament proclaimed the anticipated majority of the 14-year-old Emperor Pedro II. Many contemporary actors in this major political change in the institutional life of the only South American monarchy considered this a necessary measure to prevent the process of ‘republicanization’ that they feared. This is a highly controversial issue in the present historiography, both on the role played by the parliament and on the question of the ‘republican’ character of the immediately preceding period of the Regency (1831–40). Estevão de Rezende Martins makes three points on this issue: (a) the roots of the political problem of a minor emperor since 1831 are fundamental for understanding the event; (b) the problems and difficulties of an effectively ‘republican’ way of governing in the period between 1831 and 1840; (c) the direct initiative of members of Parliament in the crisis of July 1840 and its importance for the consolidation of the monarchical regime in Brazil. This initiative, the circumstances under which the MPs acted and the institutional manner in which its results contributed to the consolidation of the Bragança Empire until 1889, allow the conclusion that the proclaimed majority was a conservative manoeuvre to keep public affairs under control.

Changes in the Labor Market and International Migration since the Economic Crisis in Thailand

The economic crisis in July 1997 led to a sharp increase in unemployment and underemployment, particularly among workers with primary and lower secondary education, a drop in real earnings, and an increase in poverty incidence. Labor surplus and poverty pressures during the economic downturn likely boosted labor migration. New government measures in promoting overseas employment and the facilitation of recruitment agencies and migrants' social networks encouraged the outflows. Data from the Ministry of Labor indicate higher levels of overseas labor migration, especially to Taiwan. Most Thai overseas workers have a primary education and are engaged in unskilled labor. Although the government has started to provide skills training to help workers adjust to the needs of the labor market, more measures are needed to promote sustainable employment and human resource development, especially in the rural areas. Better protection for Thai workers overseas is another priority.

Agency versus Structure in A. J. P. Taylor's Origins of the First World War

origins of the First World War, which engaged A. J. P. Taylor's attention over the course of fifteen years, reveal his underlying approach to international relations. Fundamentally a 'realist', defined as someone who emphasizes the primacy of Anssenover Innenpolitik and the key role of power, he regarded the First World War as a preventive war that Germany was willing to fight, or at least risk, in an attempt to forestall a negative shift in the balance of power. At a deeper level, however, Taylor is at odds with realism. He describes the leaders of Austria-Hungary and Germany whom he holds primarily responsible for the war as acting on the basis of seriously flawed and irrational conceptions of the national interest. Such an explanation is more consistent with 'constructivist' approaches to international relations that stress the role of identities and inter-subjective understandings, and the particular constructions of interests to which they lead. Taylor makes no attempt to reconcile these different approaches, nor does he indicate that he is aware either of the contradictions between them or of the different assumptions they make about the relative importance of agency and structure. Taylor see-saws back and forth between viewing the war's origins from the perspective of actors that is, as a problem of foreign policy and from the system level and its focus on the 'rules' governing actors' behaviour. He is puzzled by the success of cthe system' at keeping the peace by resolving a series of warthreatening crises prior to 1914, and is at something of a loss to explain why the outcome of the July crisis should have been different. System dynamics, which encourage us to think about European international relations as a non-linear and open system, suggest one possible answer to this question. Taylor's most scholarly treatment of the First World War, The Struggle for Mastery in Europe, is also his first investigation of its origins.1 He devotes a twenty-page chapter to the subject, half of which focuses on the July crisis. The other half and the three preceding chapters describe the development of the European alliance system, colonial disputes and agree-

Made In Germany: The German Currency Crisis of July, 1931

The Great Depression reached a turning point in the currency crises of 1931, and the German banking and currency crisis was a critical event whose causes are still debated. We demonstrate in this paper that the crisis was primarily domestic in origin; that it was a currency crisis rather than a banking crisis; and that the failure was more political than economic. German banks failed in 1931, but the problem was not primarily with them. Instead, the crisis was a failure of political will in a time of turmoil that induced a currency crisis.

The Effects of the Asian Crisis on Global Equity Markets

AbstractWe investigate the comovement of daily returns from 13 Asian and non‐Asian markets before and after the advent of the Asian crisis in July 1997. For individual pairs of markets, our analysis shows a seven‐fold increase in feedback relations. For the markets as a group, we find a reduction in the number of common factors that generate returns. Since the post‐crisis period included the collapse of the Russian market and attack on the Brazilian real, we also analyze six three‐month subperiods surrounding the crisis. We find that the perceived increase in comovement during the post‐crisis interval was the result of subperiod transitory shocks.

Nutritional status of children under 5 years of age in three hurricane-affected areas of Honduras.

Hurricanes and other natural disasters can produce crop destruction, population displacement, infrastructure damage, and long-term public health consequences that include increased malnutrition among the affected populations. This paper presents the results of anthropometric measurements taken of 295 children under 5 years of age from three regions of Honduras that were affected by Hurricane Mitch, a major storm that struck Central America in the fall of 1998. The children in our study were sampled in three shelters in the capital city of Tegucigalpa; in the resettlement zone of Nueva Choluteca, Choluteca; and in the small urban area of Catacamas, Olancho. Our data indicated that, in comparison to the period before the hurricane, there was an elevated prevalence of wasting in all three of the study areas, and that there were also high levels of underweight in the Tegucigalpa and Nueva Choluteca study areas. There were statistically significant differences between the mean values of malnutrition indicators for Catacamas and those for the Tegucigalpa and Nueva Choluteca settlements. These differences suggest that resettled families were confronting a nutritional crisis in July and August of 1999, some 9 months after the hurricane struck.

The relationship between developed equity markets and the Pacific Basin's emerging equity markets

Using a trivariate vector autoregression (VAR) model with a proper control for heteroscedasticity, this paper investigates the relationships between the two largest equity markets in the world—the U.S. and Japan—and the four Asian emerging equity markets: Hong Kong, Korea, Singapore, and Taiwan. Evidence indicates that the links between the developed markets and the Asian emerging markets (AEMs) began to increase after the stock market crash in October 1987, and have significantly intensified since the outbreak of the Asian financial crisis in July 1997.

Malaysia´s Alternative Approach to Crisis Management

The severity of the crisis and the speed of its recovery surprised not only the affected countries but the market as well.1 After a decade of high economic growth supported by an outward-looking strategy, active participation by for eign investors and prudent fiscal policy, the East Asian economies had been touted as the global growth centre for the next century. Within six months of the onset of the crisis in July 1997, the affected East Asian economies were threatened with economic implosion and hardship. Their economic contrac tion in 1998 was the worst ever experienced. Similarly, the recovery also came swiftly, if only to some. In 1999, most of the crisis-hit countries grew between 4 and 10 per cent. Short-term capital, which had drained from the region, flooded back, thus pushing the stock markets past their pre-crisis levels. The Malaysian experience of fall and recovery generally follows that of other affected countries. The initial impact of the crisis was delayed and Malaysia managed to register a reasonably strong growth rate of 7.7 per cent in 1997. The severity of the crisis was really felt in the first quarter of 1998 when the gross domestic product (GDP) declined by 3.1 per cent, but by the third quarter the GDP fell by 10.9 per cent, its largest contraction. This sharp con traction was caused by the collapse of aggregate demand by 20.3 per cent, which primarily came from a decline of private sector investment of 50.5 per cent. Higher cost of funds and shortage of credit, excess capacity, and the expectation of decreasing consumption triggered cut-backs in private invest ment. Although there was a reduction in public consumption (-7.2 per cent), public investment (0.4 per cent), and private consumption (-7.5 per cent), these were relatively small compared with the drop in private investment. But unlike some other crisis-hit economies, the severe economic contraction in Malaysia did not translate into hyperinflation and widespread unemployment. In 1998, inflation rose to 5.3 per cent, double that of 1997, and unemploy ment climbed to 3.2 per cent from 2.5 per cent. Apart from the GDP contraction, the most striking effects of the crisis were the steep depreciation of the ringgit and the massive short-term capital out

A Reluctant Military Leader? Helmuth von Moltke and the July Crisis of 1914

A Reluctant Military Leader? Helmuth von Moltke and the July Crisis of 1914

A Reluctant Military Leader? Helmuth von Moltke and the July Crisis of 1914

A Reluctant Military Leader? Helmuth von Moltke and the July Crisis of 1914

The ASEAN Economic Miracle Unravels

In 1998, the Asian economic miracle seemed like a distant dream for the economies of Southeast Asia, with the string of bad news being blamed on excesses committed during the years of strong growth. The countries reeled from the continued withdrawal of capital from the region, the disintegration and collapse of confidence in domestic financial sectors, policy- and psychology-induced demand contractions, the interdependent weaknesses in the international value of their currencies, and political conflict and a significant erosion of the social consensus over economic policy. The Southeast Asian economies faced these problems in common, but the impact varied according to the level of development, specific features in their financial systems, the nature of the governments' responses to the crisis, and the impact of the crisis on political stability. The withdrawal of capital from the region in 1998 constituted the biggest shared factor among the Southeast Asian economies. The level of capital outflow, initiated by the Thai economic crisis of July 1997, increased in 1998 for the four most severely affected ASEAN economies — Indonesia, Malaysia, the Philippines, and Thailand — plus South Korea, with net capital outflows accelerating from US$1 billion in 1997 to $28 billion in 1998. In 1996, there had actually been net inflows of $103 billion. The fickle nature of short-term portfolio investments was much in evidence during 1998. There was a brief slowdown of capital outflow from the region in the first quarter of 1998, but the levels accelerated as evidence of a deep recession in Japan became inescapable and the yen weakened, Russia's teetering economy saw the offering of interest rates on short-term Russian bonds reach 80 to 100 per cent, and Indonesia's thirty-year political arrangements disintegrated with President Soeharto's resignation in May. In August, the Russian economic programme collapsed and a general retreat from portfolio investments in all emerging markets ensued. The premium on developing country debt shot up to unprecedented levels of 10 to 15 percentage points by October 1998.

The End of the Cuban Contradiction in U.S. Refugee Policy

This article describes and analyzes the Clinton Administrations decision to end the almost automatic acceptance of Cubans as political refugees to the US. The decision came after the Balsero Crisis in July 1994 after many people stormed embassies and diplomatic residences in Havana Cuba demanding asylum and complaining about impoverished living conditions. Riots erupted. The May 2 1995 policy ended the indefinite detention of over 28000 Cubans in safe haven camps repealed the Cuban Adjustment Act of 1966 restricted travel to Cuba halted monetary remittances to Cuba equalized the number of annual visas from Cuba and legalized the return of Cubans adrift at sea. The goals were to solve the immediate migration crisis created by Cubans detained at Guantanamo Bay to implement controls of future waves of Cuban asylum seekers and to oppose Castro with economic and political initiatives. The economic embargo during the 1960s 1970s and 1980s devastated the Cuban economy and led to its alliance with the USSR. Each of the four waves of migration was distinctive in composition and reasons for migrating. By the mid-1990s Cuba was no longer a threat Soviet interests in Cuba had declined and the policy was hoped to bring about the collapse of Castro and promotion of democracy. The 1994 resolution ended the contradictory and preferential treatment of Cubans. It also ended the selectivity of the US in admitting those from countries the US was directly opposed to. The permanence of the embargo due to legislation in 1996 is a push factor for mass migrations.