Backward Intergenerational Goods and Endogenous Fertility

This paper characterizes the consequences of introducing the public provision of intergenerational goods to the elderly in a model with endogenous fertility. With exogenous fertility, it has been shown that the government can mandate the first‐best outcome by simply imposing the socially optimal transfer. By contrast, with endogenous fertility, the government can no longer enforce this outcome. This is due, in part, to the effects of mandatory provision on the birth rate. However, taxes may still have a salubrious effect on social welfare as they can eliminate particularly bad equilibria.     

The Determinants of Being Unbanked for U.S. Immigrants

Random‐effects binary choice models are estimated to identify the attributes that influence the likelihood that immigrants are unbanked. This study finds that the likelihood to be unbanked is higher for immigrants with less education, poverty‐level income, or a larger family but lower for immigrants with greater net worth or higher income. Among immigrant groups, Mexican and other Latin American immigrants have the highest rates of being unbanked. Programs aimed at helping immigrants move into the financial mainstream may benefit from taking into account the differences in socioeconomic attributes and migration experiences of specific populations.     

STABILIZING THE EXPECTED PRICE LEVEL IN A BFH PAYMENTS SYSTEM

The Black-Fama-Hall system of free banking promises improved macroeconomic performance through the use of a common unit of account defined in terms of a bundle of goods and services and indirectly convertible means of payment. This paper shows how BFH can operate when the actual market price of the dollar-defining bundle is measured only periodically. The proposed version of BFH would require banks to calculate the amount of redemption medium (gold or securities) needed to redeem money using the subsequent measurement of the bundle's market price. The procedure in effect would make checks, banknotes, and token coins of given face value directly convertible into redemption medium of equal market value and into an index futures contract on the bundle's market price. The paper explains how the system would tend to stabilize the expected price of the dollar-defining bundle and uses a dynamic stochastic model to illustrate the consequences for the actual price level, real income, and interest rates.     

A Reexamination of Auditor versus Model Accuracy within the Context of the Going-Concern Opinion Decision*

Abstract. The Cohen Commission and previous research have suggested that auditors' opinions are inferior indicators of bankruptcy relative to the predictions of statistical models. This research reexamines this question in light of two important considerations that make the comparison between audit opinions and model predictions considerably more reflective of the auditors' real-world decision environment. First, the sample is partitioned into stressed and nonstressed observations and the importance of doing so is demonstrated; second, the statistical models and the forecast errors are adjusted so that they reflect the proportion of bankrupt firms actually faced by auditors. The empirical results provide convincing evidence suggesting that the notion established in previous research that auditors' opinions are interior to models in predicting bankruptcy is unfounded. It should be noted, however, that neither the auditors' opinions nor the bankruptcy prediction model are very good predictors of bankruptcy when population proportions, differences in misclassification costs, and financial stress levels are considered. Résumé. Les travaux de recherche de la Commission Cohen et d'autres travaux qui les ont précédés semblent indiquer que les opinions des vérificateurs sont des indicateurs de faillite moins efficaces que les prédictions des modèles statistiques. Les auteurs se penchent à leur tour sur cette question, à la lumière de deux éléments importants qui font en sorte que la comparaison entre les opinions des vérificateurs et les modèles prévisionnels s'inscrit beaucoup plus dans le contexte décisionnel véritable dans lequel travaillent les vérificateurs. D'abord, l'échantillon est scindé en deux groupes d'observations selon la présence ou l'absence de contrainte financière, partage dont les auteurs expliquent l'importance; ensuite, les modèles statistiques et les erreurs prévisionnelles sont ajustés de manière & refléter la proportion des sociétés dont la faillite a été envisagée par le vérificateur. Les résultats empiriques démontrent de façon probante que les conclusions tirées des travaux précédents selon lesquelles les opinions des vérificateurs sont moins efficaces que les modèles en matière de prévision des faillites ne sont pas fondées. Il convient de noter, cependant, que ni les opinions des vérificateurs ni les modèles prévisionnels ne sont des prédicteurs très efficaces des faillites si l'on tient compte des proportions de la population, des différences dans le coût des erreurs de classification et du niveau de contrainte financière.     

Smithian National Product and the Wealth of African Nations

Abstract . Given the contemporary interest in growth, conventional measures of economic growth (changes in real GDP or real GDP per capita) may be less preferable than a measure that is more plutological by design. The plutological measure presented in this paper is that of Adam Smith (1776 ). While Smith's work pre‐dated formal national income accounting, there was a macroeconomic accounting scheme implicit in his theorizing on economic growth. This study articulates Adam Smith's concept of national product (referred to as Smithian national product, or SNP). It uses current output data to compute SNP for a set of six African countries, and examines the growth experience of these countries when using SNP as opposed to the more conventional GDP measure.     

Partially defatted soy flour effects on sensory and physical characteristics of baked products

Physical and sensory characteristics of quick breads (e.g. muffins) formulated to contain 0%, 40%, 50% or 60% of partially defatted soy flour substituted for wheat flour were evaluated. As defatted soy flour levels increased, muffin batter linespread, baked volume, peak height at the crown and lightness (L* value) decreased while baked product air cell number, redness and yellowness (a* and b* values), crust surface unevenness, graininess, aftertaste, tenderness and moistness increased. Results indicate that partially defatted soy flour substituted for wheat flour at high levels in muffins adversely affected both physical and sensory characteristics.