DENG XIAOPING'S GREAT TRANSFORMATION

Editor's Note: The First Annual Arnold C. Harberger Distinguished Lecture, University of California, Los Angeles, November 17, I997     

A conditional version of working's model

Working's (1943) model is shown to imply conditional Engel curves of the Working form when the income elasticity of demand for the group of goods as a whole is about unity.     

An Empirical Examination of the Market Returns and Financial Performance of Entities Engaged in Sustainability Reporting

The importance of sustainability reporting to external stakeholders is reflected in the advent of various reporting guidelines and government inquiries. However, evidence of the inadequacy of such reporting, coupled with limited evidence of its use by market participants (such as investors and creditors) for resource-allocation decisions, raises questions about the overall value-relevance of sustainability reporting. This study seeks to identify, in the Australian context, whether the level of sustainable reporting is associated with a range of financial and market performance attributes of the firm.     

Asymmetry in the effects of economic fundamentals on rising and falling exchange rates

Empirical research provides evidence for exchange rates overreaction to changes in economic fundamentals over a short run, but convergence in a long run. In this research we use statistical method developed by Cox [Cox, D.R., “Regression models and life-tables,” Journal of the Royal Statistical Society. Series B (Methodological), Vol. 34, Iss. 2 (1972), 187-220.] to examine the differences in the effects of local economic fundamentals on the probability of occurrence of extreme fluctuations in exchange rates over time periods of rising and falling exchange rates. We identify an extreme fluctuation as a 10% decrease or increase in exchange rate over a three month period and 20% over a one year period. We find asymmetry in the effects of economic fundamentals on exchange rates (eight countries' exchange rates quoted as f/$) during time periods of rising and falling exchange rates: the probability of extreme fluctuation is greater during time periods of rising exchange rates as compared to falling.     

Basis Pricing, Futures-Cash Price Transmission and Appropriate Hedge Ratios: The Case of the Soybean Market in Ontario

The academic literature on the determination of risk-minimizing hedge ratios has apparently ignored the potential impact that the pricing strategies adopted by the grain elevators may have on the futures-cash price transmission, and therefore on the determination of the correct hedge ratio. This paper addresses this problem from a theoretical perspective, and then develops a model that is applied to the soybean market in Chatham, Ontario.
La littérature académique concernant la détermination des ratios de couverture à terme minimisant le risque a apparemment ignoré l'impact potential des stratégies des faiseurs de prix sur un marché sur la relation entre les prix spot et les prix à terme. II est possible que de ce fait ces stratégies influencent également la détermination du vrai ratio de couverture. Ce papier traite ce problème d'un point de vue théorique, puis vérifie ces résultats en les appliquant au cas du marché du soja à Chatham, Ontario.     

Is there chronic excess supply of labor?: Designing a statistical test

We devise and implement a statistical test of the hypothesis that the labor market has chronic excess supply. We find that the data reject this hypothesis.     

The conditional probability and the linear flow graph approaches to analyzing probabilistic causal systems

An alternative theoretical approach to the analysis for dichotomous causal systems that involve probabilistic causation, the conditional probability approach, has recently been explicated. It was shown that there exist various composition and decomposition rules for analyzing various kinds of general causal systems, and an important distinction between pure-“or”-and pure-“and”-causal systems was explicated. In this paper these earlier results are used to analyze a causal system which has been studied by J.A. Davis (1976), who uses his linear flow graph approach to analysis. The results of the conditional probability approach are compared to the linear flow graph, and it is shown that the two approaches lead to strikingly different results.