THE ECONOMETRICS OF THE HOLY GRAIL — A REVIEW OF ECONOMETRICS: ALCHEMY OR SCIENCE? ESSAYS IN ECONOMETRIC METHODOLOGY

Books reviewed in this article: David F. Hendry (1993) Econometrics: Alchemy or Science? Essays in Econometric Methodology     

Initial public offerings in the gaming industry: an empirical study

The fastest growing segment of the hospitality industry is gaming-related business. This industry has experienced record numbers of companies going public, and their stocks are considered favorable long-term investments. Research in the initial public offering (IPO) area suggests that investors acquiring stock at the initial offering price earn large returns. The purpose of this study was to determine if large returns are being experienced for IPOs in the gaming segment of the hospitality industry, and if these large returns were limited to investors who purchased the stock at the initial offer price. There were 14 gaming-related companies selected for the study. The conclusions supported research reporting that the highest returns from IPO investments are made when the stock is purchased at the initial offer price. This study concludes that returns based on the initial offer price were greater than the casino index and the IPO index. When the investor purchased the stock at the first day's closing price, however, returns compared to the two indices were surpassed only after holding the stock for 8 weeks.     

Multiple regimes and cross-country growth behaviour

This paper provides some new evidence on the behaviour of cross-country growth rates. We reject the linear model commonly used to study cross-country growth behaviour in favour of a multiple regime alternative in which different economies obey different linear models when grouped according to initial conditions. Further, the marginal product of capital is shown to vary with the level of economic development. These results are consistent with growth models which exhibit multiple steady states. Our results call into question inferences that have been made in favour of the convergence hypothesis and further suggest that the explanatory power of the Solow growth model may be enhanced with a theory of aggregate production function differences.     

Policies for economic growth

Summary The old growth theory of the 1950s led to certain conclusions about the sorts of economic policies that would promote economic growth, and also about their limitations. The new growth theory of the 1980s makes much stronger assumptions and leads to correspondingly stronger conclusions about the scope of growth-promoting policy. This article argues that: (1) empirical work so far has neither confirmed nor denied the strong assumptions underlying the new theory; (2) the theory is worth pursuing because of its intrinsic interest and the possibilities it opens up; (3) whatever the final verdict on the new theory, both theory and evidence support the belief that significant long-run gains, even if not permanent changes in the growth rate, can be achieved by increased investment in the broadest sense, including human capital, technological knowledge, and industrial plant and equipment.Fifth Tinbergen Lecture delivered on October 4, 1991, in Amersfoort for the Royal Netherlands Economic Association     

The role and place of research and intellectual discourse in the reproduction of social relations of racial domination in South Africa

The South African research community which undertakes all research activity in the social and natural sciences, with and without state and corporate sponsorship, draws its membership mainly from the dominant social group. In this country, the dominant group is both economically and racially determined. Consequently, the white minority dominates the research community and intellectual discourse as it does other socio‐economic and political spheres of society. This situation guarantees the constant reproduction and perpetuation of the social relations of racial domination.

As an agent that generates knowledge and new ideas, research as an academic and intellectual tool of enquiry is an instrument of social control, producing new concepts, language and theoretical abstractions which are not accessible to those outside its multi‐farious disciplines. Insofar as the largest proportion of practitioners of these specialised disciplines is drawn from the dominant group, research has itself become a pivotal part of the dominant ideology. Its role is inevitably and inextricably bound up with the processes of systematic reproduction of the relations of domination.

The aim of this viewpoint is therefore to explore various ways in which research bodies and intellectual discourse in general in South Africa can be deracialised and be made more representative of the social make‐up of society.