TRENDS IN AGGREGATE HOUSEHOLD WEALTH IN THE US., 1900–83

New estimates of aggregate household wealth for the U S. covering selected years in the period from 1900 to 1983 are presented. I find that marketable wealth per capita grew at 1.46 percent per year in real terms over the 1900–83 period, while real wealth per household grew at 0.81 percent per year. However, the growth rate was not uniform over the period, with the rates high during the 1900–29 and the 1949–69 periods, and slow during the other years. Moreover, real per capita wealth actually increased more slowly than real per capita disposable income and real per capita GNP over the century. I also find dramatic changes in the composition of household wealth over the century. In particular, both tangibles and fixed claim assets increased relative to total assets over the period from 1900 to 1983, while equities fell from about half to a quarter. Owner-occupied housing increased only moderately as a proportion of assets, from 17 percent in 1900 to 20 percent in 1983. Unincorporated business equity fell from over a third of total assets to 12 percent. Among financial assets, the biggest relative growth occurred in deposits in financial institutions, which grew from 8 percent in 1900 to 22 percent in 1983. Corporate stock had the most volatile behavior in the household portfolio, growing from 13 percent of total assets in 1900 to 27 percent in 1929, falling to 10 percent in 1949, rising to 22 percent in 1965, and then falling to 11 percent by 1983. Debt as a proportion of total assets rose from 5 percent in 1900 to 16 percent in 1983. Finally, both pension reserves and social security wealth increased relative to marketable assets from virtually zero in 1900 to 12 and 48 percent, respectively.     

Mutual Fund Stock‐Picking Skill: New Evidence from Valuation‐ versus Liquidity‐Motivated Trading

We propose a novel Trade Motivation Matrix that allows differentiating funds’ valuation‐motivated (VM) and liquidity‐motivated (LM) trades on single trade level. It thus enables analyses of stock‐picking skill on three levels: trade, stock, and fund. On trade level, we find significant outperformance of VM buys and significant underperformance of VM sells, indicating manager stock‐picking skills, especially during illiquid market periods. VM trades outperform LM trades, confirming negative performance effects due to flow risk, especially when market liquidity is low. On stock level, collective VM buying explains high future stock returns while collective VM selling is related to future losses, indicating wisdom of the crowd. On fund level, higher trading discretion, measured by a higher degree of VM trading, is observed for smaller, older funds holding higher cash buffers. Finally, higher trading discretion is related to higher future fund alpha, especially during illiquid times.     

Exchange rate models and innovations : A derivation

An explicit relationship between innovations in the spot exchange rate and innovations in its driving variables is derived in the context of the ‘asset market theory’ of the exchange rate. The relationship forms a theoretical basis for regression results in ‘news’ form that have been reported in the literature.     

Idiosyncratic risk and the cost of capital: the case of electricity networks

We analyze the treatment and impact of idiosyncratic or firm-specific risk in regulation. Regulatory authorities regularly ignore firm-specific characteristics, such as size or asset ages, implying different risk exposure in incentive regulation. In contrast, it is common to apply only a single benchmark, the weighted average cost of capital, uniformly to all firms. This will lead to implicit discrimination. We combine models of firm-specific risk, liquidity management and regulatory rate setting to investigate impacts on capital costs. We focus on the example of the impact of component failures for electricity network operators. In a simulation model for Germany, we find that capital costs increase by \(\sim \) 0.2 to 3.0 % points depending on the size of the firm (in the range of 3–40 % of total cost of capital). Regulation of monopolistic bottlenecks should take these risks into account to avoid implicit discrimination.     

Firm Characteristics and Managerial Perceptions of NAFTA: An Assessment of Export Implications for U.S. SMEs

The North American Free Trade Agreement (NAFTA) may present significant opportunities or significant threats for small and medium–sized firms based in the U.S. Arguments are developed that explore the relationship among four internal firm characteristics and managers' perceptions of NAFTA. Managers' perceptions of NAFTA are measured as either favorable or unfavorable. The firm dimensions examined are strategy, performance, export experience, and size. The findings imply that managers' exhibiting favorable perceptions of NAFTA are related positively to differentiation strategy, performance, export experience, and size. A cost–leadership strategy demonstrated no discernable relationship with regard to perceptions about NAFTA. Implications and directions for future research are discussed.     

Measuring learning from others: The development and validation of the Proactive Social Informal Learning Questionnaire

The present study aims to develop, validate, and cross-validate an instrument measuring three proactive social informal learning activities, namely feedback seeking, help seeking and information seeking. Prior research mainly focused on detecting or measuring the frequency of these seeking behaviours and did not consider whether the information, help or feedback that has been sought was also used. Furthermore, although these seeking behaviours were studied extensively in different research fields, the current study takes a learning perspective and interprets feedback, help and information seeking as learning activities. The questionnaire was completed by a convenient sample of 650 professionals working in higher education, consultancy, retail and food production. We performed an exploratory factor analysis (N = 230 educators) to explore the structure of the questionnaire. This was followed by a confirmatory factor analysis (N = 230 educators) to confirm the structure. Finally, we cross-validated the questionnaire in a sample of business professionals (N = 190) by testing for measurement invariance. The final questionnaire resulted in a five-factor structure measuring the (1) Use of Feedback Seeking, (2) Frequency of Help and Information Seeking, (3) Use of Help seeking, (4) Use of Information Seeking and (5) Frequency of Feedback Seeking. The current study presents a preliminary, yet promising instrument that taps into proactive social informal learning.