In Search of the Fourth Way: A Commentary on the Books by Fred Argy and Mark Latham

This paper is a critique of the new books by Mark Latham and Fred Argy, the first of which in particular is said to herald the 'Third Way' in Australian politics. It considers the implications for new policies of economic power and the redefinition of economic welfare, and concludes that if this is the Third Way then we are in need of a Fourth Way.     

Can we improve the perceived quality of economic forecasts?

A number of topics are discussed concerning how economic forecasts can be improved in quality or at least in presentation. These include the following: using 50% uncertainty intervals rather than 95%; noting that even though forecasters use many different techniques, they are all occasionally incorrect in the same direction; that there is a tendency to underestimate changes; that some expectations and recently available data are used insufficiently; lagged forecasts errors can help compensate for structural breaks; series that are more forecastable could be emphasized and that present methods of evaluating forecasts do not capture the useful properties of some methods compared to alternatives.     

The transformational model of social activity and economic analysis: a reinterpretation of the work of J.R. Commons

The work of J.R. Commons, I want to argue, bears a close relationship to, is clarified by and informs, recent developments in social theory. Specifically, recent developments in social theory, elaborated under the heading of critical realism, serve to organize or systematize Commons' work in such a way as to defend it against the commonly made criticisms of incoherence and irrelevance to more general or theoretical concerns. On the other hand Commons' work, based as it is upon practical case study and intervention, serves both to extend or ‘deepen’ existing critical realist accounts and demonstrate their relevance for political economy.     

Polarities between Naturalism and Non-Naturalism in Contemporary Economics: An Overview

We provide a dynamic model of banking competition, in which bounded rationality of some competitors explains how the credit cycle is intensified. We model the economic cycle following Tobias F. Rötheli (2012b), who argues that boundedly rational banks, in their Bayesian learning, overestimate the probability of success during booms and underestimate it during recessions. We obtain three main results. First, the model suggests that pessimism/underconfidence is not a powerful driver of credit cycles. Instead, it supports the conclusion that it is euphoria during large upswings that leads to the next crunch. Second, the dynamization of the model provides further insight into the way boundedly rational competition intensifies the credit cycle. Third, it additionally predicts that the effects of behavioral biases are more pervasive when the quality of the niche markets is lower.     

Enhanced job satisfaction under tighter technological control: The paradoxical outcomes of digitalisation

Via a multiple case study of work in microfinance institutions in India, this paper reports on the experiences of field officers and branch managers following work digitalisation. It identifies and explains an intriguing post-digitalisation paradox of reported increased job satisfaction and tighter technological control diminishing branch managers' work-life balance. The paradox draws attention to the significance of context in workers' experiences of mobile digital technologies (MDTs) and contradicts previous studies on workers' positive experiences of adopting MDTs: the workers in this study did not experience greater autonomy or flexibility but reported enhanced employment security and status. The paper also adds to literature on employment relations following work digitalisation by revealing powerful enforcement of technological control, with ‘WhatsApp’ identified as a key managerial tool used for surveillance and discipline, and worker resistance at the margins.     

Too Much Monitoring, Not Enough Performance Pay

This paper endogenises the internal organisation of competitive firms in a simple general equilibrium framework. The options are monitored teams, unmonitored teams motivated by collective performance pay, and self-employment. The choice of incentive scheme depends on market price and also affects price through its influence on output. As more people opt for self employment, pecuniary externalities increase the pressure on the rest to follow suit and Pareto rankable multiple equilibria arise. The conditions for a competitive equilibrium to be constrained efficient are restrictive and everyone may gain from policies limiting monitoring and self employment and from the imposition of entry taxes.     

Accounting and Finance: authorship and citation trends

Accounting and Finance (A&F ) has experienced a surge in published research in the last decade. The analysis here reveals a marked increase in the number of published articles in A&F since 2003, a distinct trend for published papers to have a larger number of authors, a significant and stable contribution by the top 5 Australian accounting/finance departments, as well as a notable increase in contribution from non‐US foreign universities, particularly those located in the UK, Canada, Hong Kong, Singapore and Spain. An analysis of citations indicates the increasing impact of A&F in recent years.     

Precision in auditing standards: effects on auditor and director liability and the supply and demand for audit services

Theoretical research suggests that large auditors have more incentive to issue accurate reports compared to small auditors (DeAngelo, 1981; Dye, 1993). Controlling for the client characteristics of large and small auditors, this paper shows that large auditors issue reports that are more accurate and more informative signals of financial distress. These findings are consistent with the theoretical prediction of a positive relationship between auditor size and auditor accuracy.