The empirical results of the risk-return relationship are mixed for both mature and merging markets. In this paper, we develop a new volatility model to revisit the risk-return relation of the aggregate stock market index by extending the Realized GARCH model of Hansen et al. (2012) with the Wang and Yang (2013) framework, in which the overall risk-return relation is decomposed into a risk premium and a volatility feedback effect.

Equity concerns have been an important obstacle to adopting congestion pricing, in both developed and developing countries. However, the existing evidence on the equity effects of congestion pricing has come only from developed countries. In this paper, we shed light on the distributional consequences of a congestion pricing scheme currently under consideration in Beijing. We find that under this scheme, which covers the areas within the city's third ring road, a very small proportion of motorized trips would be subject to the full congestion charge.

Long memory is an important feature of the volatility of financial returns. We document that the recently developed Realized GARCH model (Hansen et al., 2012) is insufficient for capturing the long memory of underlying volatility. We develop a parsimonious variant of the Realized GARCH model by introducing the HAR specification of Corsi (2009) into the volatility dynamics. A comparison of the theoretical and sample autocorrelation functions shows that the new model specification better captures the long memory dynamics of volatility.

The credit reporting system plays an important role in a credit economy, alleviating information asymmetry and reducing transaction costs. This article reviews the historical developments and describes the current structure of China’s government-oriented personal credit reporting system. The article summarizes the rapid development of Internet finance since 2013, and analyzes the challenges and opportunities for the next generation of China's personal credit reporting system.

We introduce the realized exponential GARCH model that can use multiple realized volatility measures for the modeling of a return series. The model specifies the dynamic properties of both returns and realized measures, and is characterized by a flexible modeling of the dependence between returns and volatility. We apply the model to 27 stocks and an exchange traded fund that tracks the S&P 500 index and find specifications with multiple realized measures that dominate those that rely on a single realized measure.

Using province-level yield data and daily weather data from 1980 to 2012, we investigated the responses of early rice, middle-season rice, and late rice yields to weather variations in China. In contrast to prior studies that found negative impacts of elevated daily minimum temperature (Tmin) on rice yield in tropical and subtropical regions, we discovered that rising Tmin increased early and late rice yields in China, with the positive temperature effects varying by rice-growth stage.

We use a mathematical programming model to examine the impacts of simultaneous implementation of two US biofuel and bioenergy policies on commodity markets and spatial distribution of future cellulosic biorefineries.

We developed a mathematical programming model to estimate the supply of cellulosic biomass in Illinois at various biomass prices and examine the implications of biomass production for the maintenance costs of the Conservation Reserve Program (CRP). We find that Illinois has the potential to produce about 38.4–54.5 million dry metric tons (MT) of biomass in 2020 at a biomass price of $150/MT, depending on the production costs of cellulosic feedstocks, residue collection technology, and rates of yield increases of conventional crops.

Using a mathematical programming model, we estimate the economic potential of biomass supply from crop residues in China at various exogenously-given biomass prices and identify the areas that are likely to produce crop residues. Our analysis indicates that China can potentially produce about 174.4–248.6 million dry metric tons of crop residues per year when biomass prices are larger than $100 per metric ton. Rice straw is expected to account for about 47% of total residue production across the different biomass prices and residue production scenarios that we considered.

This paper studies the evolution of wealth inequality in an economy with endogenous borrowing constraints. In the model economy, young agents need to borrow to finance human capital investments but cannot commit to repaying their loans. Creditors can punish defaulters by banishing them permanently from the credit market. At equilibrium, loan default is prevented by imposing a borrowing limit tied to the borrower's inheritance.