Financial crises and reform of the international financial system

Between December 1994 and March 1999, Mexico, Thailand, Indonesia, Korea, Malaysia, Russia and Brazil experienced major financial crises, which were associated with massive recessions and extreme movements of exchange rates. Similar crises have threatened Turkey and Argentina (2000 and 2001) and most recently Brazil (again). This article discusses the reform of the international financial system with a focus on the role of the IMF—reforms directed at crisis prevention, and those intended to improve the responses to crises. The article concludes with an appraisal of what has been achieved, and what remains to be done to make the international financial system safer. JEL no. E5, E6, F3, F4, G1     

Investment,interest rate rules,and equilibrium determinacy

Summary. By adding endogenous investment to a flexible-price, money-in-the-utility-function model, this paper studies the role that physical capital plays in stabilizing the real side of the economy when the monetary authority follows interest-rate feedback rules. We show that with inelastic labor supply equilibrium uniqueness is ensured under both active and passive monetary policies. For the case where money affects both preferences and technology, the uniqueness result remains true under active monetary policy. With endogenous labor supply, the uniqueness result holds again regardless of the stance of monetary policies for the case with separable leisure, but indeterminacy remains likely under both active and passive monetary policies when leisure is nonseparable.Received: 19 December 2001, Revised: 12 May 2003, JEL Classification Numbers: E52, O42.We are grateful to Jess Benhabib and an anonymous referee for helpful comments and suggestions. Correspondence to: C.K. Yip     

The effect of portfolio weighting on investment performance evaluation: The case of actively managed mutual funds

Among the factors influencing investment performance measurement is the weight dedicated to each security. This paper develops metrics for measuring the extent of equal weighting and value weighting of a portfolio. A sample of 506 actively managed mutual funds shows that funds tend to be equally weighted to a greater degree than they are value weighted, implying that investment performance based solely on a single value-weighted benchmark may not adequately identify excess performance. We propose a two-factor model utilizing both a value-weighted and an equally weighted index and show that the model provides a better fit than the single-index model.(JEL G1)     

Market‐oriented is more than being customer‐led

Connor, in ‘Customer‐led and market‐oriented: A matter of balance’, argues, among other things, that we propose that market oriented businesses focus on future customer needs to the neglect of current customer needs, that market oriented businesses over‐emphasize marketing activities in their value chains, that market oriented businesses emphasize generative learning to the neglect of adaptive learning, and that only large companies have the resources to become market oriented. These arguments are largely unfair extrapolations of our position and reflect a superficial understanding of the nature and benefits of being market oriented. We use this response to clarify our position on these issues. Copyright © 1999 John Wiley & Sons, Ltd.     

The educational impact of unresolved conceptual issues in interest capitalization

In SFAS 34, the FASB adopted “avoidable interest” as the measurement objective for interest capitalization. This article discusses the compromise which resulted in the avoidable interest concept, the circumstances under which the compromise took place, and the effect it has had on textbook presentations of interest capitalization.     

碳审计在总体规划中的角色

所有国家地区都会受气候变化影响,无一例外.全世界需要要走向低碳经济发展道路."低碳经济"一概念被提出.低碳经济是指一种发展模式,在经济增长中排放最少之温室气体,以高能源效率产出,推动可持续之社会发展.目前我国把城市经济、社会、环境体系作为单元出计量碳排放量之实施经验不多,更没有具体项目把碳审计概念融进我们之城市规划管理体系内.城市规划建设作为直接影响城市碳排放之决策环节,这缺口必须通过把规划编制过程和手法扩展.最基本任务是把"碳排放审计"概念实施在总体规划编制过程中.本文笔者就城市总体规划编制流程和规划管理提出建议,深化我国城市规划决策流程,应对气候变化之挑战.     

It’s time for a true and fair view

The standard unqualified United States audit report states that the firm’s financial statements present fairly, in all material respects, the financial position of the company at year end, the results of operations, and its cash flows, in conformity with generally accepted accounting principles (GAAP). The United Kingdom counterpart states that the company accounts give a true and fair view (TFV). The focus on conformity with GAAP in the US has created a rule-dominated audit arena which, in effect, means that if the audited financial statements are in accordance with GAAP, the auditor will find them acceptable. We offer modified audit report terminology that substitutes “true and fair view” for “present fairly”. Although Rutherford [J. Business Financial Accounting 12 (1985) 483], Houghton [Accounting Organizations Soc. 12 (1987) 143], and Karan (2002) have cited problems with the TFV language, especially in its interpretation, we find the phrase superior to “present fairly” and propose an operational definition for its application.     

Resolving ethical conflicts at workthrough cooperative goals and constructive controversy in the People's Republic of China

The idea of constructive controversy and the theory of cooperation and competition together suggest the type of interaction that promotes satisfactory resolution of ethical conflicts and the conditions under which this occurs. A sample of 101 Chinese mainland employees described and rated a critical incident of an ethical conflict at work. Structural equation analyses indicated that when the employees had goals that were cooperatively related with those of other stakeholders in the conflict, rather than competitive or independent goals, this facilitated constructive controversy, i.e., open-minded discussion, which, in turn, led to effective outcomes in terms of substantive ethical impact and interactional justice. Results also indicated that high levels of moral intensity strengthened competitive goals and rendered constructive controversy less likely. Implications are that organizations should make it clear to members that conflict avoidance and moral muteness are inappropriate responses to ethically unsound practices and policies, that it is important to detect ethically questionable behaviours or policies at an early stage, and that wherever possible these should be discussed promptly, before an uncomfortably high level of moral intensity is reached. Constructive controversy is suggested as a process through which corporate codes of conduct may be developed.