USING THE WORLD WIDE WEB IN ACCOUNTING RESEARCH: A HUGE STEP FORWARD OR A NEW CONSTRAINT?

The Internet has been used in academia as a means of sharing information between researchers for many years. The more recent development of the World Wide Web as an Internet tool launched this technology into the business domain and this has led to a significant growth in the availability of business related information resources on the network. This paper discusses the potential of the web for the use in the specific domain of accounting research. It highlights the relevant information a researcher can expect to find on the network, suggests ways of using the web to improve research development and dissemination and discusses a number of concerns that are commonly raised by researchers who wish to use the web in their research.     

The Effects of Analyst‐Country Institutions on Biased Research: Evidence from Target Prices

Prior research demonstrates that a strong institutional infrastructure in a country moderates self‐serving behavior of market participants. Cross‐country economic activities have increased significantly, presenting a research opportunity to examine the relative influence of local versus foreign institutional infrastructure on individual market participants. We utilize variation in analyst‐country location relative to covered firm location to examine institutional determinants of optimism in analyst research. Focusing on target prices, where persistent optimism is well documented, we find that analysts domiciled in countries with stronger institutional infrastructures exhibit significantly attenuated target price optimism and more value‐relevant target prices. Our results demonstrate the importance of domestic country‐level institutional factors in moderating self‐serving behavior of market participants engaged in cross‐country activities.     

Long-term Unemployment and the Labour Market: some further results

In a previous Briefing Paper we discussed the current high rate of long-term unemployment. We described the process by which the ratio of long-term unemployment to total unemployment was determined and suggested some explanations for the rapid rise in long-term unemployment since 1980. We also investigated the role of long-term unemployment in shifting the relationship between unemployment and vacancies. In this Briefing Paper we extend our study to consider the relationship between unemployment and inflation. In particular we discuss the apparent failure of high unemployment to affect the growth of real wages. Finally we compare some policies for reducing unemployment.     

Is the Economy Overheating?

In the last year total output has risen 4 per cent and manufacturing is up 6 per cent. Unemployment has fallen by 400,000. The current account, which was in surplus in the first half of the year, has moved back into deficit. Does this mean that the economy is “over- heating”? In the context of our forecast we examine this issue; we consider how rapidly supply can increase and how fast demand is increasing. We conclude that the growth of output in the last year was initially driven by supply and that, more recently, domestic demand has been growing very rapidly. The emergence of a current account deficit is evidence of excess domestic demand but from now on we expect demand to grow less rapidly. With non-oil supply expanding at a rate in excess of 3 per cent, we forecast steady output growth and little change in either inflation or the current account. In our judgement, the economy, though hot, is not overheating.     

Letter to a Young Economist

Professor Prest prepares a recently graduated student of economics for the traps and tripwires of his profession. He is reticent about his allusions, and readers may guess - or grimace - at the organisations and individuals he has in mind.     

Monetary Targets and the World Economy: A Progress Report

The recent changes in the value of the dollar and the talk of an interest rate ‘war’ demonstrate again that the world finds it difficult to cope with rapid exchange rate movements. In some ways the experience - and the reactions to it - are similar to the events of 1978. As now, the world was in a recession (though on a milder scale) and there were fears that exchange rate problems would obstruct economic recovery. The main difference is that in 1978 it was the strength of the Deutschmark which caused concern whereas this time the problems are associated with the rise in the value of the dollar. In a Briefing Paper in Economic Outlook, February 1978, ‘Monetary Targets and the World Economy’ we suggested that the problem arose from inconsistencies between national monetary policies and exchange rate objectives. In general, countries dislike exchange rate changes - in either direction - and there were problems because countries would not accept the exchange rate consequences of their own or other countries' monetary policies. We estimated the required monetary policies for stable exchange rates and suggested specific national monetary targets for 1978 which would at least move the world economy towards consistent monetary policies. In this Economic Viewpoint we return to those ideas. We consider what happened in 1978 and we also revise the underlying monetary rules. More recent experience suggests that although there has been some progress towards the convergence of monetary policies there will continue to be trend changes in exchange rates. It is also clear that there will be short-term fluctuations around these trends. We believe that greater convergence of monetary policies would be desirable but failing that it is important that countries should avoid abrupt changes in monetary policy. It is also important that countries should become accustomed to exchange rate changes. They should direct monetary policy towards their objectives for inflation and should not be diverted from it by temporary or permanent changes in their exchange rates.