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Chapter VIII presents a novel mathematical theory of non-linear cointegration among second-order random processes. It begins by explaining why the accepted characterization of integrated second-order processes is inadequate for the analysis of non-linearly cointegrated economic systems, proposes alternative characterization of integrated processes, and develops novel ideas of non-linearly cointegrated second-order random processes. Thereafter, it presents a data confrontation of an economic theory about the dynamics of spot rates in foreign exchange whose variables share the behavior characteristics of the random processes in the mathematical theory. The data consist of weekly observations of a triple of exchange rates, and the empirical analysis is carried out in two ways – one by the methods of formal econometrics and another by the methods of present-day econometrics. The results of the two empirical analyses differ in interesting ways. Both agree that the behavior of the three exchange rates has the characteristics on which the mathematical theory insists, but their description of the dynamics of foreign exchange differ. Also, the present-day econometrics analysis rejects the empirical relevance of the given economic theory while the formal econometrics analysis accepts it. The acceptance of the theory carries interesting information about the dynamics of foreign exchange in social reality.

This chapter compares the properties of unit root processes with stationary processes, and considers alternative ways of testing for unit roots. The discussions cover difference stationary processes; unit root and other related processes; trend-stationary versus first difference stationary processes; variance ratio tests; Dickey-Fuller unit root tests; other unit root tests; and long memory processes. Exercises are provided at the end of the chapter.

This chapter addresses the Securities Act registration framework. In its determination to maintain a transaction-based Securities Act registration framework while making necessary adjustments, the SEC has appropriately acted. With the improvements made, the registration framework functions in a relatively efficient manner and generally provides investors with adequate safeguards. Nonetheless, significant deficiencies exist which are addressed in this chapter. Among the improvements that should be implemented are: mandating that all material information (absent a meritorious business justification) be contained in a registration statement; limiting the use of incorporation by reference to those issuers whose securities in fact trade in efficient markets; and requiring that a sufficiently comprehensive summary section be included in the statutory prospectus. The chapter also focuses on due diligence and the integrated disclosure system. In the context of incorporation by reference and shelf registered offerings, the dilemma faced by outside directors and underwriters in performing their due diligence functions can be largely ameliorated by: for outside directors, the presence of a vibrant disclosure committee (comprised solely of outside directors) that is actively engaged in the disclosure process; and, for underwriters, the retention by a subject company’s audit or disclosure committee of a reputable law firm to conduct continuous due diligence on the prospective underwriter’s behalf.

Article 222 TFEU as a general solidarity clause was introduced by the ToL. Relevant provisions were contained in Articles I-43 and III-329 of the ConstT (not entered into force). Article 222 TFEU can be seen as one of the political responses to different terrorist attacks, such as those in New York on 11 September 2001 or in Madrid on 11 March 2004, but also of natural disasters such as in particular the floods in Central Europe in 2002. The location of Article 222 TFEU in Part V TFEU (external action by the EU), despite the fact that the events dealt with in that provision occur on the territory of the MS and not externally, underlines that the sources of these threats are, at least in part, seen to be seated outside the Union.