Predicting the Monthly and Annual Current Account Balance from Provisional Data*

This paper uses provisional monthly data to predict the one-month-ahead and one-year-ahead current account balance. Single-equation methods are compared to an eight-equation VAR model that utilizes the Box-Tiao (1977) modifications. It is found that the single-equation model of the current account out-performs the system method for the short- term but the positions are reversed for the annual forecast     

Optimum Taxation of Each Year's Income

In this paper, a two‐type, two‐period model of optimum income taxation is investigated. I assume full commitment and that current income determines the agents' tax burden in each period. It is shown that such a tax system does not allow one to implement the optimal long‐term tax contract and that it implies positive marginal tax rates at the upper end of the income distribution.     

CURRENCY SUBSTITUTION, U.S. MONEY DEMAND, AND INTERNATIONAL INTERDEPENDENCE

A number of writers have argued in recent years that massive international currency substitution has been a major cause of exchange rate volatility and monetary instability in the United States and other major countries. Such analysis is frequently coupled with recommendations for a return to pegged exchange rates. This paper critically examines the evidence presented for this currency substitution view. It argues that the weight of latest research suggests that direct international currency substitution has not been of major quantitative importance for the U.S. However, empirical evidence supports traditional views that international capital mobility can generate substantial short-run monetary interdependence even under flexible exchange rates. Thus, even though international currency substitution is of little importance to U.S. monetary conditions, a broader range of international considerations may be of considerable importance for the U.S. economy.     

TALKING ACCOUNTING: AN ETHNOGRAPHY OF MANAGEMENT KNOWLEDGE IN BRITISH AND GERMAN BREWERS

The organisational functionings of accounting hinge on its combination with other forms of organisational knowledge in talk. This paper analyses some of the talk observed in paired situations in British and German brewers, to contrast the intertwining of accounting and other expertise and relate it to the enactment of different organisational orders. Through accounting talk, organisational members air their shifting conceptions of order and, thereby, point to its precariousness and ambivalence. The focus on accounting talk emerges as an approach to the study of the organisational practice of accounting which promises insight into the complex processes of enacting the orders which accounting engenders, their flexibility and fragility. © 1997 Elsevier Science Ltd     

The Evolution of Security Designs

We consider a competitive and perfect financial market in which agents have heterogeneous cash flow valuations. Instead of assuming that agents are endowed with rational expectations, we model their behavior as the product of adaptive learning. Our results demonstrate that adaptive learning affects security design profoundly, with securities mispriced even in the long run and optimal designs trading off underpricing against intrinsic value maximization. The evolutionary dominant security design calls for issuing securities that engender large losses with a small but positive probability, but that otherwise produce stable payoffs, almost the exact opposite of the pure state claims that are optimal in the rational expectations framework.     

STADIUM CONSTRUCTION AND MINOR LEAGUE BASEBALL ATTENDANCE

The established literature shows that new stadium construction for major league baseball (MLB) teams can increase attendance, but there are limited studies at the minor league level. We use a data set encompassing all A, AA, and AAA minor league baseball teams from 1992 to 2006 to estimate the impact of stadium construction on minor league attendance. This data set includes almost 200 teams, over half of which constructed a new stadium during the 15‐year observation period. Over a 10‐year period our results show that new stadiums increase attendance by 1.2 million fans at the AAA level, 0.4 million at the AA and high A level, and 0.2 million at short season low A. A cost benefit analysis suggests that increased ticket sales do not offset the stadium costs, in line with previous works on MLB. (JEL H0, L83)     

AMERICAN SOCIETY FOR ENGINEERING EDUCATION

High technology investments are a rapidly growing segment of business capital expenditures. The questionnaire responses presented in this paper provide information on the capital investment decision processes currently being used for high technology projects. Respondents indicate that the capital evaluation techniques used to justify high technology investments are similar to those used for other types of capital projects and that high-tech projects must meet normal requirements for project acceptability. Respondents specified that a wide variety of factors, some quantified and some not quantified (such as quality control and reduced lead time), are included in their decision process. While there is general satisfaction with the procedures used for project justification, the relative newness of these investments suggests that there is a need to gather more detailed information about this type of capital decision.     

The Dynamics of Dealer Markets Under Competition

The behavior of competing dealers in securities markets is analyzed. Securities are characterized by stochastic returns and stochastic transactions. Reservation bid and ask prices of dealers are derived under alternative assumptions about the degree to which transactions are correlated across stocks at a given time and over time in a given stock. The conditions for interdealer trading are specified, and the equilibrium distribution of dealer inventories and the equilibrium market spread are derived. Implications for the structure of securities markets are examined.     

Illegitimacy,paternal financial responsibility,and the 1834 Poor Law Commission Report: the myth of the old poor law and the making of the new

The new poor law's bastardy clauses were amongst the most contested of the 1834 Act, and their unpopularity led to their (partial) reversal by 1844. The issue of paternal financial responsibility for the maintenance of illegitimate children was central to the reforms, and this article uses the Rural and Town Queries to show how parishes could enforce this responsibility effectively. This evidence could have been used as an alternative model of reform; instead, the Poor Law Commissioners misrepresented the operation of the law and recommended the abolition of affiliation. Rooted in the writings of Malthus, their proposals proved ultimately impracticable.     

Benefits from U.S. Monetary Policy Experimentation in the Days of Samuelson and Solow and Lucas

A policy maker knows two models. One implies an exploitable inflation-unemployment trade-off, the other does not. The policy maker's prior probability over the two models is part of his state vector. Bayes' law converts the prior probability into a posterior probability and gives the policy maker an incentive to experiment. For models calibrated to U.S. data through the early 1960s, we compare the outcomes from two Bellman equations. The first tells the policy maker to "experiment and learn." The second tells him to "learn but don't experiment." In this way, we isolate a component of government policy that is due to experimentation and estimate the benefits from intentional experimentation. We interpret the Bellman equation that learns but does not intentionally experiment as an "anticipated utility" model and study how well its outcomes approximate those from the "experiment and learn" Bellman equation. The approximation is good. For our calibrations, the benefits from purposeful experimentation are small because random shocks are big enough to provide ample unintentional experimentation.