Interannual Climate Variation, Climate Prediction, and Agricultural Trade: the Costs of Surprise versus Variability

Agriculture remains sensitive to variation in rainfall and temperature. Fortunately, our ability to predict the lower frequency variation in the earth's atmosphere is increasing rapidly. While information cannot affect the underlying source of variability, it allows unexpected shocks to be anticipated and acted upon. This paper develops and analyzes an intertemporal Ricardian trade model with Bayesian beliefs. Results in this paper show that improved climate prediction reduces expected prices, but increases price variability. In addition, trade is crucial to realizing the potential benefits of climate prediction. The value of climate prediction is highest with both storage and trade, and falls by over 300% when a country is in autarky.     

Testing for Unit Roots with Breaks: Evidence on the Great Crash and the Unit Root Hypothesis Reconsidered

Nelson and Plosser (1982), in a classic paper, failed to find strong evidence against the null hypothesis of a generating process with a unit autoregressive root for thirteen US macroeconomic time series. Perron (1989) claimed that such evidence was available for a majority of these series if the alternative hypothesis was of trend stationarity with a break in 1929. Zivot and Andrews (1992) treated the break date as endogenous, then finding strong evidence agcainst the null for a minority of these series. Our own analysis extends theirs by permitting a break under the null as well as the alternative hypothesis, and allowing for the sequential nature of the testing. Our empirical findings complete the circle. We find no strong evidence against the unit root hypothesis for any of the thirteen Nelson–Plosser series.     

CATALOG RETAILER IN‐STOCK PERFORMANCE: AN ASSESSMENT OF CUSTOMER SERVICE LEVELS

The purpose of this article is to study the level of “in‐stock” customer service performance being offered in the catalog channel of distribution. The article provides benchmark information for the catalog industry. More importantly, the article serves as one test of the effectiveness of the modern supply chain, where the expectation is for near perfect orders. Customer service levels are studied by using an empirical observation methodology in which catalog retailer's in‐stock performance was measured. Comparisons are made across item type, season, retailer type, and days from catalog receipt. Overall, items were out‐of‐stock during 15.9% of all checkpoints, compared to an 11.8% stock‐out rate in an earlier study of bricks and mortar retailers.     

Dynamics of the federal funds target rate: a nonstationary discrete choice approach

We apply a discrete choice approach to model the empirical behaviour of the Federal Reserve in changing the federal funds target rate, the benchmark of short‐term market interest rates in the US. Our methods allow the explanatory variables to be nonstationary as well as stationary. This feature is particularly useful in the present application as many economic fundamentals that are monitored by the Fed and are believed to affect decisions to adjust interest rate targets display some nonstationarity over time. The chosen model successfully predicts the majority of the target rate changes during the time period considered (1994–2001) and helps to explain strings of similar intervention decisions by the Fed. Based on the model‐implied optimal interest rate, our findings suggest that there is a lag in the Fed's reaction to economic shocks during this period. Copyright © 2004 John Wiley & Sons, Ltd.     

DETERMINANTS OF GOODWILL AMORTIZATION PERIOD

This study investigates whether economic consequences have an effect on the length of the period over which goodwill is amortized. It finds that there is a significant relationship between the size of the firm and the length of the amortization period. It also finds, when the only firms included in the sample are those reporting debt covenant restrictions dependent in part on goodwill accounting, evidence that the length of the amortization period for goodwill is related to the firm's leverage.     

Competition and structural change in Eastern Europe

Widely publicized reform programs for East Europe which emphasize rapid privatization are questioned on the grounds that structural changes to assure workable competition take precedence and will take years. A mix of deconcentrated state, cooperative, worker-owned, private, and foreignowned business can be workable. Import competition and antitrust legislation have auxiliary roles.