Growth and Public Debt: What Are the Relevant Trade‐Offs?

The interplay between growth and public debt is addressed considering a Barro‐type (1990) endogenous growth model where public spendings are financed through taxes on income and public debt. The government has a target level of public debt relative to GDP, and the long‐run debt‐to‐GDP ratio is used as a policy parameter. We show that when debt is a large enough proportion of GDP, two distinct balanced‐growth paths (BGPs) may coexist, one being indeterminate. We exhibit two types of important trade‐offs associated with self‐fulfilling expectations. First, we show that the lowest BGP is always decreasing with respect to the debt‐to‐GDP ratio while the highest one is increasing. Second, we show that the highest BGP, which provides the highest welfare, is always locally indeterminate while the lowest is always locally determinate. Therefore, local and global indeterminacy may arise and self‐fulfilling expectations appear as a crucial ingredient to understand the impact of debt on growth, welfare, and macroeconomic fluctuations. Finally, a simple calibration exercise allows to provide an understanding of the recent experiences of many OECD countries.     

Are Analysts’ Recommendations for Other Investment Banks Biased?

This paper provides evidence of a “Potential conflict of interest by equity analysts” who issue recommendations for investment banks that are related to their own bank through syndication. Analysts issue significantly more optimistic recommendations for investment banks with which their bank is syndicated. Recommending banks upgrade their recommendations just before a relation is initiated, suggesting that they use analyst optimism as a means of currying favor with the syndicate lead in hopes of being invited to join. It also appears that as part of a quid pro quo of sorts, relatively optimistic recommendations are rewarded with more syndicate appointments in the year after the recommendations.     

Are Stock‐for‐Stock Acquirers of Unlisted Targets Really Less Overvalued?

Extant studies assume that targets’ private ownership mitigates acquirers’ incentives and opportunities to finance acquisitions with inflated stocks. This view stems from the observation that, although the average stock‐for‐stock acquirer's merger announcement return is negative when the target is listed, it is positive when the target is unlisted. Accordingly, extant studies often suggest that announcements of stock‐for‐stock acquisitions of unlisted targets convey favorable private information about the acquirers. However, an analysis of stock‐for‐stock acquirers’ stock performance, abnormal accruals, net operating assets, and insider trading suggests the opposite. Acquirers of unlisted targets are generally more overvalued than acquirers of listed targets.     

Accounting Education and the Prerequisite Skills of Accounting Graduates: Are Accounting Firms’ Moving the Boundaries?

The current requisite skills of accounting graduates guide the graduate attributes delivered by university learning outcomes. A recent trend by Australian accounting firms to outsource accounting services may impact on accounting graduates if entry‐level tasks normally completed by graduates are sent to offshore processing centres. This study examines the impact of the outsourcing of accounting services by Australian accounting firms and classifies the current requisite skills for accounting graduates identified by accounting firms. Following a review of the current academic literature, a positivist approach using empirical data is taken in this paper. The responses elicited from a survey questionnaire mailed to a random sample of Australian accounting firms provide information for the data analysis. One of the most widely outsourced services identified is the preparation of income tax returns, which has been identified as a key area where graduate accountants normally learn the basic skills required to phase them into the profession. Accounting firms that considered the outsourcing of accounting services would change the 12 ranked prerequisite skills for graduates presented in this paper in order of importance.     

Residual Income Valuation: Are Inflation Adjustments Necessary?

This paper explores the question of whether the residual income valuation relationship (RIVR) should be written in inflation-adjusted terms. This question is of particular interest in the light of Ritter and Warrs (2002) claim that the standard nominal historical cost formulation of RIVR misvalues firms because it fails to deal properly with inflation. We present two inflation-adjusted formulations of RIVR, each of which is based on an income measure from the inflation accounting literature, and one of which is a general case of a formulation proposed by Ritter and Warr. We show that neither of these formulations is any more or less correct than the standard formulation of RIVR, and find no support for the view that it is necessary to write RIVR in inflation-adjusted terms. Finally we argue that, in a setting in which accounting numbers and forecasts thereof are normally presented in historical cost terms, the inflation adjustment of RIVR is likely to bring unnecessary complication to the valuation process, with increased scope for error.JEL Classification: M4     

Are Trade Size‐Based Inferences About Traders Reliable? Evidence from Institutional Earnings‐Related Trading

The use of observed transaction sizes to differentiate between “small” and “large” investor trading patterns is widespread. A significant concern in such studies is spurious effects attributable to misclassification of transactions, particularly those originating from large investors. Such effects can arise unintentionally, strategically, or endogenously. We examine comprehensive records of a sample of institutional investors (i.e., “large” traders), including their order sizes and overall position changes, to assess the degree to which such misclassifications give rise to spurious inferences about “small” and “large” investor trading activities. Our analysis shows that these institutions are heavily involved in small transaction activity. It also shows that they increase their order sizes substantially in announcement periods relative to nonannouncement periods, presumably as an endogenous response to earnings news. In the immediate earnings announcement period, transaction size‐based inferences about directional trading are quite misleading—producing spurious “small trader” effects and, more surprisingly, erroneous inferences about “large trader” activity.     

"农超对接":金融服务"三农"的切入点

近一段时间,农产品价格上涨再次引发人们对"农超对接"问题的关注.实施"农超对接",能够有效减少农产品流通成本,降低大中城市菜、肉、鲜蛋等基本农产品供应价格,保持物价基本稳定."农超对接"对于开展服务"三农"业务的农村金融机构而言,蕴含着巨大的金融商机.针对"农超对接"过程中产生的资金需求,各农村金融机构要创新工作方法,...     

The Namesake: Futures; futures studies; futurology; futuristic; foresight—What's in a name?

The term we used to describe the study of alternative futures is important. Disciplines and discourses do not emerge from a vacuum but have a history and a cultural context; and their names can hide as much as they reveal. This paper examines such terms as ‘futurology’ and ‘foresight’, and argues that to emphasise plurality and diversity the study of the future is best served by the moniker ‘futures studies’. It suggests that remembering the history of futures discourse is necessary to resolve the crisis of identity and meaning, and frequent fruitless reinvention, of the field. Finally, it presents Sardar's four laws of futures studies: futures studies are wicked (they deal largely with complex, interconnected problems), MAD (emphasise Mutually Assured Diversity), sceptical (question dominant axioms and assumptions) and futureless (bear fruit largely in the present).     

卡扎菲:身在"火城"

“我们有一张你想象不到的巨网,只要一听说神父死了,教会无首,已经安装好的炸弹就会被引爆,全利比亚的控制所和控制剂生产厂都会被炸掉.只要能切断供给哪怕一天,人的本性就会使我们成功.”     

Systemic risk and financial consolidation: Are they related?

The creation of a number of very large and sometimes increasingly complex financial institutions, resulting in part from the on-going consolidation of the financial system, has raised concerns that the degree of systemic risk in the financial system may have increased. We argue that firm inter-dependencies, as measured by correlations of stock returns, provide an indicator of systemic risk potential. We analyze the dynamics of the stock return correlations of a sample of US large and complex banking organizations (LCBOs) over 1988–1999, and find a significant positive trend in stock return correlations. This finding is consistent with the view that the systemic risk potential in the financial sector appears to have increased over the last decade. In addition, we relate firms' return correlations to their consolidation activity by estimating measures of the consolidation elasticity of correlation. Consolidation at the sample LCBOs appears to have contributed to LCBOs inter-dependencies. However, consolidation elasticities of correlation exhibit substantial time variation, and likely declined in the latter part of the decade. Thus, factors other than consolidation have also been responsible for the upward trend in return correlations.     

Capital Structure Decisions: Which Factors Are Reliably Important?

This paper examines the relative importance of many factors in the capital structure decisions of publicly traded American firms from 1950 to 2003. The most reliable factors for explaining market leverage are: median industry leverage (+ effect on leverage), market-to-book assets ratio (−), tangibility (+), profits (−), log of assets (+), and expected inflation (+). In addition, we find that dividend-paying firms tend to have lower leverage. When considering book leverage, somewhat similar effects are found. However, for book leverage, the impact of firm size, the market-to-book ratio, and the effect of inflation are not reliable. The empirical evidence seems reasonably consistent with some versions of the trade-off theory of capital structure.     

Childcare Assistance: Are Subsidies or Tax Credits Better?

We evaluate price subsidies and tax credits for childcare. We focus on partnered women's labour supply, household income and welfare, demand for childcare and government expenditure. Using Australian data, we estimate a joint, discrete structural model of labour supply and childcare demand. We introduce two methodological innovations – a more flexible quantity constraint that total formal and informal childcare hours are at least as large as the mother's labour supply and the explicit inclusion of maternal childcare in the utility function as a proxy for child development. We find that tax credits are more effective than subsidies in terms of increasing average hours worked and household income. However, tax credits disproportionately benefit wealthier and more educated women. Price subsidies, while less efficient, have positive redistributional effects.     

Are accounting academics culturally intelligent?: An empirical investigation

Cultural diversity within accounting university classrooms creates a number of educational challenges that have been little investigated. This study draws on the theoretical framework of cultural intelligence (CQ), which is new to accounting research, to enhance understanding of the intercultural capabilities of accounting academics. CQ is comprised of four interrelated capabilities: metacognitive, cognitive, motivational and behavioural. The previously validated cultural intelligence scale (CQS) survey was used to identify CQ levels and results were compared to demographic variables and other factors in order to explain differences. The results indicate that accounting academics display levels of CQ at the lower end of comparable studies on other professionals. Results also show that academics who have lived abroad for longer than one year and who have taught transnationally in Southeast Asia are likely to possess significantly higher levels of total CQ. Female accounting academics are more likely to possess higher levels of behavioural CQ indicating a propensity to more easily adapt their behaviour in culturally diverse situations. This paper contributes to the growing literature on CQ by increasing our understanding of the antecedents that influence CQ levels in the area of international experience, through the examination of the potential impact of overseas teaching experiences and overseas residency. Furthermore, this study introduces and examines new measures capturing the breadth and depth of international experience; that of long-term overseas residency and cultural distance.