A review of “ Edited by Richard H. Bernhard,North Carolina State University ” THE BUSINESS OF RISK by Peter G. Moore,Cambridge University Press,New York, 1984, x + 244 pages,ISBN 0521-24174 X ( hard cover), List $ 44.50; ISBN 0521-28497 X (paperback), List $ 16.95

Four replacement scenarios were analyzed for a vehicle fleet designed to haul sensitive packages at two different customer locations. In addition to completing an economic replacement analysis study, each option was analyzed according to availability requirements and other intangible attributes. Finally, a thorough sensitivity analysis was performed to examine the impact of reliability assumptions on both life cycle costs and the expected economic life of each option. Once all factors were analyzed, each critical input was graded and scored, leading to the final recommendation to replace the current equipment with a new technology.     

Measuring input-specific productivity change based on the principle of least action

In for-profit organizations, efficiency and productivity measurement with reference to the potential for input-specific reductions is particularly important and has been the focus of interest in the recent literature. Different approaches can be formulated to measure and decompose input-specific productivity change over time. In this paper, we highlight some problems within existing approaches and propose a new methodology based on the Principle of Least Action. In particular, this model is operationalized in the form of a non-radial Luenberger productivity indicator based on the determination of the least distance to the strongly efficient frontier of the considered production possibility sets, which are estimated by non-parametric techniques based upon Data Envelopment Analysis. In our approach, overall productivity change is the sum of input-specific productivity changes. Overall productivity change and input-specific changes are broken up into indicators of efficiency change and technical change. This decomposition enables the researcher to quantify the contributions of each production factor to productivity change and its components. In this way, the drivers of productivity development are revealed. For illustration purposes the new approach is applied to a recent dataset of Polish dairy processing firms.     

Transparency in the interbank market and the volume of bank intermediated loans

In the present paper we study the equilibrium interaction through which the interbank market is related to the public lending and borrowing market. It turns out that this interaction is affected by the transparency in the interbank market. Interbank market transparency is modeled by means of more informative signals about future interbank rates. We find that more transparency might increase or decrease the volume of bank intermediated loans in the public market. In particular, the impact of more transparency on the volume of loans depends on the curvature of the marginal cost function of the banking firm. Furthermore, we find that expected profits of the bank are higher when the interbank market is more transparent.     

Stochastic and structural fiscal policy in a monetary stationary economy

In the framework of a monetary asset pricing model which is simple enough to generate closed form formulae for equilibrium price functions the interactions between output, fiscal policy, and asset markets is investigated. With money yielding liquidity services in the exchange process real stock prices are negatively correlated with anticipated (stochastic) fiscal policy changes, while the impact of unanticipated (structural) fiscal policy on the stock market depends qualitatively on the ‘business cycle’ of the economy. It is shown that the monetary character of the economy, more precisely the role of money in the exchange process, is critical for the relationship between fiscal policy and real share prices. Moreover, while contingent fiscal policy measures may be successful in stabilizing the real interest rate on money they are incapable of achieving a stable term structure of the real rate on stocks. In contrast, uncontingently higher public expenditures generally promote the volatility of the real rates on financial assets.