INFLATION ECONOMICS: THE HEATH–BARBER BOOM, 1972–74

The UK macroeconomic boom of the early 1970s is an experiment that refutes the notion of cost–push inflation. However, such nonsense endures as the consequence of two factors. The first is the convenient ruse by which the state ducks its responsibility for monetary inflation and points the finger in other directions. The second is a potential to confuse the source of an individual price increase (rising scarcity) and the source of general price increases (excessive money).     

Cliometrics, 1971–1986: A survey

The paper selectively surveys recent quantitative work in economic history with special emphasis on research into unemployment in interwar Britain, the Habakkuk controversy, the Kuznets curve, the demographic transition and heights in history. It is shown that the field has advanced well beyond the routine applications of elementary microeconomics which characterized its early days. Considerably greater quantitative sophistication and a much wider coverage of historical issues have been notable features of this advance. It is argued that econometric methods need to be supplemented in historical work by other forms of evidence to obtain persuasive answers to historical questions.     

Hostile–vs.–white‐knight bidders

We examine the hypothesis that white knights enter control contests to spend free cash flow instead of paying it out to shareholders. Tobin's q is used to measure management's inclination to invest in negative NPV investments. We find that historically, white knights have over‐invested and their acquisition of the target is one more negative NPV investment. Alternatively, hostile bidders’ past investment decisions have increased shareholder wealth. Furthermore, white knights’ returns upon the announcement of their bid have a significant negative relationship with free cash flow, implying that their bid reveals information about white knights management's investment decisions. Copyright © 1999 John Wiley & Sons, Ltd.