10 Things to Watch in 2015

【正】We expect GDP growth to average 7.1%in 2015:7.1%in Q1,7.2%in Q2 and Q3,and 7.0%in Q4CPI inflation should average 2%;disinflationary pressure is set to build ...     

A model of the firm in time and space

We consider a multi-plant monopoly that sells to markets which are geographically separated and which stores product over time via an inventory capability. It is assumed that plant average production cost is U-shaped and that, if the output of a plant's production run were sold to a single market at only one point in time, the plant would operate on the falling portion of its average cost curve. Hence, it is in the interest of the firm to aggregate markets, both spatially and temporally, to lower average production cost. We develop the optimal joint interplant spacing-inventory policy. We also consider the effects changes in freight costs, storage costs, and interest charges have on the firm's optimal policy.     

Moderate Rent Controls: A Microeconomic and Public Choice Analysis

Why do people vote for (and against) moderate rent controls? The microeconomic effects of rent controls are complex–they affect both renters and homeowners in many ways, creating a complicated pattern of winners and losers. Renters stand to gain initially from the controlled rents, but competition for scarce housing dissipates these gains. Homeowners are affected by changing housing demand patterns and shifts in property tax burdens. An econometric analysis of the 1980 Seattle, Washington rent control referendum supports the conclusion that voters recognized the microeconomic gains and losses and voted accordingly on this issue. Use of census tract data makes this public choice analysis particularly strong compared to other studies that aggregate voters at the city or county level, possibly missing important intrajurisdiction voting patterns.     

The Value‐relevance of Equity Accounted Carrying Amounts and Disclosed Fair Values of Listed Associates

Equity accounting is a controversial accounting treatment. Although fair value measurement represents a potential alternative measurement base, information content may be lost under a pure fair value measurement approach. This study investigates the value‐relevance of equity accounted carrying amounts and disclosed fair values of listed associates, using a sample of the largest firms listed in South Africa, Australia and the UK. The main finding is that the alternative measurement bases are incrementally value‐relevant during the sample period of 31 December 2005 to 31 December 2011, implying that equity investors do not blindly accept either measurement base. Rather, investors include their own assessment of the intrinsic value of an entity's listed associates in their valuations.     

Interest rate changes and the timing of debt issues

There is much recent interest in the role of market timing in firm financial decisions. Using a large detailed sample of corporate public debt issues, private placements, Rule 144A issues and bank loans over the period 1970–2006, we investigate the relationship between interest rate changes and issues of floating and fixed-rate debt. Our results indicate that both past and future rates are associated with issuance decisions. We examine whether firms are able to lower their cost of capital by anticipating future rate changes, controlling for firm characteristics and market conditions. Our findings suggest that evidence of timing success is dependent on the time interval and type of debt examined. Over the longest time intervals available in our data, we do not find evidence of timing ability for fixed-rate or floating-rate debt issues.     

RATIONAL TIMING OF CALLS OF CONVERTIBLE PREFERRED STOCKS

Conversion-forcing calls of convertible preferred stocks are re-examined focusing on the value of the conversion option impounded in the preferred price. This amount represents the preferred shareholder wealth potentially transferable to common stockholders. Capture of this wealth underlies the theoretical motivation for calling and forcing conversion as soon as possible. Most of the preferred issues examined exhibit nonpositive average option values throughout all but short periods; hence, no wealth transfer opportunity exists for immediate calls. Issues that exhibit positive option values are called quickly. In contrast to interpretations that have persisted for over fifteen years, our results reveal no substantial delays in calling convertible preferred stocks.