Some behavioral aspects of budgeting for control: An empirical study

The research reported in this article empirically evaluated the relationships between perceived participation in the budget process, perceived reward dependency of budget performance, and perceived attainability of the budgeted goals, and the dependent variable of motivation to achieve the budget. The results indicated that there were two dimensions to a manager's effort expended (motivation) to achieve the budgeted goals for which he is responsible; they are a goal-directing effort and an evaluative effort. It was found that perceived participation had the most significant relationship with the goal-directing effort, whereas perceived reward dependency had the most significant relationship with the evaluative effort. The relationships between perceived attainability and both dimensions of effort expended (motivation) were either not significant or only moderately significant.     

MACROECONOMIC POLICY AND ELECTIONS IN OECD DEMOCRACIES*

The purpose of this paper is to test for evidence of opportunistic “political business cycles” in a large sample of 18 OECD economies. Our results can be summarized as follows: 1) We find very little evidence of pre-electoral effects on economic outcomes, in particular, on GDP growth and unemployment; 2) We see some evidence of “political monetary cycles,” that is, expansionary monetary policy in election years; 3) We also observe indications of “political budget cycles,” or “loose” fiscal policy prior to elections; 4) Inflation exhibits a post-electoral jump, which could be explained by either the pre-electoral “loose” monetary and fiscal policies and/or by an opportunistic timing of increases in publicly controlled prices, or indirect taxes.     

The evolution of Canadian international travel documentation

Canada's geographic position, adjacent to the United States and comparatively distant from other countries, has concentrated a very large part of the foreign travel into a north-south flow. The development of international travel statistical methodologies has been patterned upon this heavy preponderance of travel. The evidence shows that the magnitude and scope of the flow of people and money between Canada and the United States necessitated that a cooperative approach be taken by both countries in undertaking this large-scale, continuous statistical operation. Canada's international travel statistical methodologies have demonstrated a flexibility to adapt to changing travel patterns and the reduction in border restrictions and documentation. At the same time, the statistical systems have had to meet increased demands of international tourism on a global scale.     

LEVERAGING THE UNDERINVESTMENT PROBLEM: HOW HIGH DEBT AND MANAGEMENT SHAREHOLDINGS SOLVE THE AGENCY COSTS OF FREE CASH FLOW

It is argued that leveraged buyouts (LBOs) provide managers with a powerful incentive to release excess cash rather than invest in negative net present value projects. This incentive is attributed to the large debt obligations associated with “junk” bond financing and to an increase in the shareholdings of top management. In this paper I explore the conditions under which leverage and management shareholdings complement one another in resolving the agency costs of free cash flow and would therefore optimally be used “together” as in an LBO. Complementarity is shown to obtain under plausible conditions, essentially because increased leverage reduces equityholders' share of investment returns. Increased management shareholdings then leverage this underinvestment effect. My analysis also helps explain why top managers who participate in an LBO receive a highly leveraged equity claim rather than a share of the “strip” that is generally provided to outside investors.     

Small-sample properties of dimensionality statistics for fitting VAR models to aggregate economic data: A Monte Carlo study

The analysis of aggregate economic phenomena by VAR's as suggested by Sims often results in a small sample relative to the number of estimated parameters. Since the model is identified by a dimensionality criterion, the small-sample properties of available criteria are important. This paper presents a study of small-sample properties for six criteria with Monte Carlo methods. It is found that no criterion performs well, and that underfitting of models may be quite common.