Are Adjustments in the U.S. Budget Deficit Asymmetric? Another Look at Sustainability

This study examines the sustainability along with the structural stability of the U.S. federal budget deficit over the post World War II period. Allowing for an endogenously determined structural break in 1982:1, tests of unit roots based on Perron's [1997] methodology suggest a stationary and sustainable budget deficit. Moreover, threshold autoregressive and momentum threshold autoregressive models do not detect asymmetries in the response of the budget deficit to deviations from its long-run trend.     

Market Structure and Fiscal Policy Effectiveness

In a monopolistic competition macromodel with endogenous market structure, the fiscal multiplier is shown to consist of two components. The first depicts the response of output to a fiscal expansion through the conventional channels that disregard the role of market imperfections. The second component captures the effects of firms' market power as well as the policy-induced change in market structure. The latter effect—which has not been taken into account in existing studies—is shown to be quite significant in raising the fiscal multiplier (even above unity) and in improving consumers' welfare when the labour market is competitive.     

Dynamics and Long-run Structure in U.S. Meat Demand

Empirical analysis, based on a general dynamic Almost Ideal Demand System, shows the commonly used autoregressive and partial adjustment processes are restrictive to meat demand data. This study derives a linear specification in levels form to investigate dynamics in a general framework. Merging a long-run steady state structure with short-run dynamics results in consistent and robust long-run demand elasticities Une analyse empirique, basée sur un systéme dynamique général de demande quasi optimale, montre que les mécanismes courants d'ajustement autorégressif et d'ajustement partiel ont un effect restrictif sur l'évaluation des données de la demande de viande. Les auteurs proposent une spécifcation linéaire par niveaux pour examiner la dynamique du cadre général. La combinaison d'une structure stable de longue durée avec une dynamique de courte période a produit des élasticités cohérentes et solides de la demande à long terme     

The closed‐loop effect and the profitability of horizontal mergers

Abstract.  We study the profitability of horizontal mergers in a dynamic competition context with sticky prices. It is shown that, when firms use open‐loop strategies, a merger is profitable only if the share of the market that merges is significant enough. In the case where firms use closed‐loop strategies we provide a method to conduct analytically the study of the profitability of horizontal mergers. We first prove the existence of an equilibrium of the game when a subset of firms merges. When firms use feedback strategies, mergers are profitable even when the share of the market that merges is arbitrarily small. JEL Classification:D4, L13     

Cancellation of Executive Stock Options: Tax and Accounting Income Considerations*

Canadian firms face a trade‐off between reporting higher accounting income and paying lower taxes that arises from their ability to cancel in‐the‐money executive stock options and making a substitute cash payment to the executive instead of issuing shares. Firms' trade‐off hypotheses are operationalized in a multilateral framework and empirically tested using insider‐trading data. The multilateral approach is designed to control for the incentive effects of alternative compensation schemes and to determine the cancellation payment that keeps the executive indifferent between receiving cash or shares. The results show that firms consider both taxes and financial reporting costs in determining their option cancellation behavior.     

Enacting risk reduction: an examination of the volitional stages of smoking cessation within Scotland

This study examines an extended version of the Theory of Planned Behaviour (TPB) in the context of nicotine replacement therapy (NRT) as an aid to smoking cessation. An attempt is made to address the intention–behaviour gap identified in the literature by specifically focusing on the role and interrelationships of volitional stages, namely intention, planning and anticipated effort. A convenience sample of 207 female smokers, aged 16–36, provided information about their views, attitudes and volitional behaviour regarding the use of NRT as an aid to smoking cessation. Results of this study show the TPB to be pertinent, accounting for 41% of the variance in intention to use NRT as an aid to smoking cessation. Furthermore, behavioural intention is found to mediate the relationship between the TPB antecedents (attitude, subjective norm and perceived behavioural control) and each of the two volitional elements, planning and anticipated effort. The implications of these findings are discussed.     

The value relevance of disclosure: Evidence from the emerging capital market of Egypt

This study examines the value of voluntary and mandatory disclosure in a market that applies International Accounting Standards (IAS) with limited penalties for non compliance. The lack of enforcement creates an element of choice in the level of mandatory disclosure by companies. Using panel-data analysis, our empirical results show that, after controlling for factors such as asset size and profitability, mandatory disclosure has a highly significant but negative relationship with firm value. This result, although puzzling from a traditional perspective, is consistent with the predictions of analytical accounting models, which emphasize the complex interplay of factors determining disclosure effects. Our results also show that voluntary disclosure has a positive but insignificant association with firm value. This lack of statistical significance supports the view that there is a complex interplay of different factors determining the relationship between disclosure and firm value.     

Africa and The Global System Disaster

Abstract: The study proposes a critical review of the national modernization project on which every African country embarked as from 1960. Beyond the number of variants of this project based on the social content of the national liberation movement and the development strategy options implemented, the author reviews what he considers to be their common denominator, applicable to the entire third world for the whole post-war (1945-90) period which he calls the Bandoung period. He describes it as a bourgeois project, although there is no real national bourgeoisie: an attempt to build “capitalism without capitalists”. He then proposes a list of its achievements, on the basis of his own criteria, that of national construction and those of the populism of some experiences. He also proposes a classification based on the supreme criterion of the logic of capitalist globalization, that of the capacity of new industries to be competitive on world markets and explains Africa's failure from this standpoint by the delay caused by colonization in solving the agricultural problem. In the light of these considerations, he reviews the nature of the challenges raised today by globalization and outlines the main features of the transformations required in the design of national and regional policies and in the organization of the world system which could sustain a new departure for Africa. Résumé: L‘étude propose une lecture critique du projet national de modernisation dans lequel l'ensemble des pays africains se sont engagés à partir de 1960. L'auteur examine, par delà la variété des variantes de ce projet tenant au contenu social du mouvement de libération national et aux options de stratégie de développement mises en oeuvre, ce qui lui apparaît constituer leur dénominateur commun, caractéristique de toute la période de l'après guerre (1945-90) pour l'ensemble du tiers monde. II qualifie cette période de Bandoung. II catalogue ce projet de bourgeois, en dépit de l'absence d'une véritable bourgeoisie nationale, et l'analyse comme une tentative de construction “d'un capitalisme sans capitaliste”. II propose ensuite un bilan de ses réalisations, sur la base de ses propres critères, celui de la construction nationale et ceux du populisme de certaines expériences. II propose également un classement fondé sur le crière suprême de la logique de la mondialisation capitaliste, celui de la capacité des industries nouvelles de faire face à la compétition sur le marché mondial et explique l’échec africain de ce point de vue par le retard que la colonisation a apportée à la révolution agricole. A à lumière de ces considérations il examine la nature des défis que la mondialisation constitute aujourd'hui et brosse les grands traits des transformations que s'imposent dans la conception des politiques nationales et régionales et dans l'organisation du système mondial, susceptibles de soutenir un nouveau départ de l'Afrique.     

Design of an interrelated quality system for a single product manufacturing process with assembly

The design of a single product manufacturing system with assembly is considered. The processing is on a lot-by-lot basis with the lot size fixed. The decision variables include interrelated single sampling plans, manufacturing process quality levels, incoming raw material quality levels and assembly process quality levels. A solution procedure is given to minimize the expected total of the costs associated with the quality of the finished product subject to a limit on the Average Outgoing Quality Limit of the finished product. An example is provided.