Manipulating uncertainty

Uncertainty about the distributional incidence of policy reforms may, if it impinges selectively on particular subsets of voters, alter the direction of the majority vote. This possibility should be a matter of special concern when subject to potential manipulation by a purposeful agent such as a Leviathan-like bureaucracy. This paper discusses a constitutional defense against such prospect. This paper was prepared for a conference on “Constitutional Status Quo and Prospects for Change” held at George Mason University in April, 1994. I am grateful to participants in that conference and to my colleagues at Nova, especially to Mário Páscoa, for their comments and criticisms. I also benefited from comments of an anonymous referee. Responsibility for errors remains with me.     

EARNINGS EXPECTATIONS, FIRM SIZE, AND THE INFORMATIVENESS OF STOCK PRICES

The notion that prices impound a wide array of information, including market expectations, has led to earnings forecast models conditioned on prices. Yet, presumably, analysts' forecasts capture both public information and certain private information not previously impounded in prices. Accordingly, price-based models are seemingly an inefficient, and less effective, source of expecta-tions. This article investigates this hypothesis using financial analysts', price-based, and naive forecasts. Results indicate that analysts' forecasts (1) are at least as accurate as price-based and naive models, and (2) yield better expectations for market tests relating returns and earnings. These inferences are robust across different information environments. The evidence suggests that analysts either possess private information or are more effective information processors, or both.     

Regional innovation and small high technology firms in peripheral regions

This paper highlights the difficulty of developing HT firms in a peripheral region of Spain. Although the endogenous development of HT firms in these regions is possible, their evolution depends on more central regions. The firm's geographical location and the type of HT production are the most important endogenous factors governing the firm's success.     

A new coincident index of business cycles based on monthly and quarterly series

Popular monthly coincident indices of business cycles, e.g. the composite index and the Stock–Watson coincident index, have two shortcomings. First, they ignore information contained in quarterly indicators such as real GDP. Second, they lack economic interpretation; hence the heights of peaks and the depths of troughs depend on the choice of an index. This paper extends the Stock–Watson coincident index by applying maximum likelihood factor analysis to a mixed‐frequency series of quarterly real GDP and monthly coincident business cycle indicators. The resulting index is related to latent monthly real GDP. Copyright © 2002 John Wiley & Sons, Ltd.     

Borda's method applied — the right to make a proposal

Borda's vote method was used by the French Academy from 1796 to 1803 when Napoleon got it abolished. In the laws and regulations of the Academy there are stipulations regarding the election of new members. The practice is demonstrated by some examples from the protocols. In fact, Borda presented two vote methods which he showed would give the same conclusion. The method which has not been in the limelight proves to be the same one as is used for selecting the best player in chess tournaments.     

Development and the mystification of ‘cultural factors’: One destiny: Our common future in Africa,by A S van Niekerk

In One destiny: Our common future in Africa the author relates, in popular fashion, a series of incidents which convinced him that the basic difference between black and white in South Africa is cultural deep‐seated and the cause of underdevelopment and conflict He develops a circular argument in which world‐view is taken as the root of perceptions, values and activities. The effects of experience and economic and political factors are given secondary importance. This argument cannot accommodate social change and differentiation, and the author tends to concentrate on perceptions and events which he finds morally unacceptable. He gives an unbalanced assessment and an ethnocentric interpretation of African life. Possible reasons for this type of argument are explored and an alternative which takes its departure from the interaction between experience and perception is offered