Human information processing research in accounting: The state of the art in 1982

Awareness of the importance of human information processing research to accounting issues has increased dramatically since 1977. As a result, this literature has expanded in volume and addresses a larger spectrum of accounting problems. Further, it incorporates a wider variety of theories and methodologies. This paper draws upon the framework provided by Libby and Lewis (1977) to synthesize and evaluate accounting research conducted since 1977 using the lens model, probablistic judgment, predecisional behavior, and cognitive style approaches. In addition, the impact of the research on practice and some directions for future research are discussed.     

Effective protection and exchange-rate determination

Considerable research interest has entered on the implications for exchange-rate determination of fluctuations in intermediate goods prices ang changes in tariff protection. This paper draws together the strands of this literature by examining the role of effective protection in exchange rate determination. A disaggregated portfolio balance model of the open economy is used to analyze the determination of real and nominal exchange rates in the presence of rational expectations. Additionally, it is used to explore the implications for resource allocation of changes in the effective rate of protection in a country capable of influencing its terms of trade.     

Usefulness of the newly revised composite index of leading indicators as a quantitative predictor

This paper compares the performance of the current and earlier versions of the Commerce Department's Composite Index of Leading Indicators as predictors of quantitative (percentage) changes in real GNP. Almon-type distributed lag functions are estimated over a sample period covering the years 1948–1970. Tests of predictive accuracy focus on the post-sample period 1971–1975. The results, in terms of three commonly accepted measures of forecast accuracy (root mean square error, mean absolute error and Theil's U), indicate that the new index performs marginally better than the best of the older versions.     

Looking for Europe from the outside

This essay looks at the nature of the new Europe and outlines a number of future trends, focusing on Europe's role in world politics as seen from an American perspective.     

Business and the genesis of the European Community carbon tax proposal

The purpose of this paper is to examine the role of business in the regulatory process associated with the carbon tax proposal. The first part of the paper describes the Community's climate change policy, noting first the essential features of Community environment policy-making, the role of consultation with industry and the significance of the ‘subsidiarity’ principle. This part of the paper moves on to examine the carbon tax proposal and its evolution since 1990. The second part of the paper addresses the specific role which business played in influencing the development of the carbon tax proposal. The general strategy of business was to block the proposal entirely. The paper identifies the potential impacts of the tax on business, implications for corporate strategies and the specific channels through which business influenced the tax proposal, by participating in public debates, through representations to different directorates of the European Commission or by making a case to national authorities. The final part of the paper attempts to draw some lessons about: the business position in relation to large scale environmental problems such as climate change; business responses to economic instruments such as the carbon/energy tax; and the wider relationship between public authorities and business in regulatory processes. The question of whether this relationship has entered a new phase or whether there is still ‘business as usual’ is addressed.     

Central bank cooperation under the interwar gold standard

The limits of cooperation and the failures of leadership are recurrent themes in historical accounts which seek to explain the instability of the interwar gold standard. Yet these themes are wholly incompatible with received models of the gold standard. In an attempt at reconciliation, this paper has presented a simple model of central bank interaction under the interwar gold standard, and used it to interpret Anglo-French financial relations following Britain's return to gold. The model is inspired by Keynes' and Norman's comment that the interwar system can be understood as a competitive struggle for gold. It shows that if two central banks play a noncooperative game in which they both seek to augment their gold reserves, they will tend to raise their discount rates above the level consistent with price stability, depressing incomes at home and abroad. While central bank policy was but one factor at work in the world economy in the 1920s, the model is suggestive when applied to a period marked by historically high discount rates, conflicts over the distribution of gold, and steady deflation culminating in a Great Depression.