Integration of U.S. Macroeconomic Accounts: A Progress Report

This article reviews the results of this joint agency effort to provide complete and integrated U.S. accounts. It discusses the new data prepared as a result of this effort and the proposed work plan to eliminate some of the major differences within the U.S. accounts and between the U.S. accounts and the new international guidelines.JEL Classification E010     

Modeling conditional return autocorrelation

Empirical estimates of conditional return autocorrelation are generated over the period 1973 to 2000 for S&P500 index data, as well as for a small selection of individual U.S. stocks. We find that conditional autocorrelation is highly variable, and these dynamics are consistent with changes in point autocorrelation estimates generated in various subperiods. The conditional autocorrelation estimates for some stocks exhibited a pattern of mean reversion, while for others, evidence of long-term trends and structural breaks was found. While we were unable to uncover what characteristics drive the nature of these autocorrelation patterns, our analysis ruled out industry, investor type or degree of internationalisation as explanations.     

Did decimalization hurt institutional investors?

We examine institutional trading costs around the move to penny size ticks in 2001 (i.e., decimalization). We find that overall trading costs declined, with improvements in most partitions across order size, firm size, and manager style. Improvements were most pronounced for orders that were executed over multiple days and for stocks where the minimum tick sizes were likely to have been binding. However, costs did increase for orders executed within a single day. The improvements we document contrast with changes accompanying the reduction of minimum ticks to sixteenths in 1997 though, in both cases, results suggest that more patient traders fare relatively better than those that demand immediacy.     

The Finances of Major U.S. Unions

Financial resources have a significant impact on labor's current attempt to reassert itself. We examine the total assets, net worth, and income of unions in (1) a cross-sectional analysis of the distribution of financial resources across national, intermediate, and local levels of unions and (2) a longitudinal analysis of trends in a variety of financial measures. We observe considerable decentralization of financial resources across levels, substantial concentration of resources, and differences across and within union sectors. These results are discussed with regard to current merger activity.     

Foreign investment in North America and the pharmaceutical industry in Canada

Unique among developed countries in denying patent protection for pharmaceuticals, Canada modified her laws in 1987 and again in 1993 to meet international standards, thereby permitting her to participate in NAFTA and become a signatory of the TRIPS of the Uruguay Round. Canada's concerns for containing health costs and providing quality health care for all its citizens were important factors in her original position. It was only as a result of international pressure and an alliance between the multinational pharmaceutical firms and the university community in Canada that she offered greater patent protection. The results of these changes had an immediate effect on improving the business environments and significant investments by the multinational pharmaceutical firms have increased substantially since 1987.     

Challenges of AACSB international accreditation for business schools in the United States and Europe

The Association to Advance Collegiate Schools of Business International (AACSB International) is committed to its role in setting worldwide standards to enhance the quality of management education. The organization is expanding its brand presence in Europe, where business schools are beginning to seek AACSB International accreditation. In the United States, an increase in the number of business schools seeking AACSB International accreditation is also occurring. Business school leaders not only see the transcendent importance of AACSB International accreditation; they also realize the challenges that are involved in the accreditation process. The focus of our discussion is on the challenges confronted by business schools in both the United States and Europe. We compare and contrast the challenges on both continents. © 2005 Wiley Periodicals, Inc.     

Board Pay and the Separation of Ownership from Control in U.K. SMEs

This paper examines Board pay for a sample of 571 U.K. SMEs from 1991 to 1995. Approximately half of the sample were closely-held (i.e., owner-managed) firms which allowed empirical testing of models of the relationship between Board pay and ownership from control characteristics. Consistent with their need to align shareholder and manager incentives, the results indicate that the change in nonclosely-held SME Board pay is significantly related to both external market pay comparisons and “benchmark” profits. This contrasts with the empirical results for the closely-held firms where Board pay awards are typically highly sensitive to current total profits but wholly unrelated to external market pay levels.     

Competition among regulators and credit market integration

We analyze the incentives for independent bank regulators with financially integrated jurisdictions to form a regulatory union. Externalities lead competing regulators to choose suboptimally low standards. Centralized regulation, however, entails a loss of flexibility if equal standards must be applied across jurisdictions. We find that, first, centralized regulation will more likely emerge among relatively homogeneous jurisdictions/countries. Second, centralized regulation will be unanimously preferred to independence only if it entails standards higher than those of the country with the highest individual standards. Third, financial integration among more than two jurisdictions may prevent partial unions, which, in turn, may prevent more comprehensive agreements.     

What drives racial segregation? New evidence using Census microdata

Using restricted Census microdata that link households to the Census block in which they live, this paper re-examines the question of whether racial differences in sociodemographic characteristics can explain observed levels of racial segregation. We develop a simple measurement framework designed to make use of the rich joint distribution of individual and neighborhood characteristics that these data provide, analyzing segregation patterns in the San Francisco Bay Area. The results indicate that racial differences in the collective set of characteristics we consider do have the potential to explain a considerable amount of the observed segregation, although more so for Asians and especially Hispanics than whites and blacks. Different sociodemographic factors emerge as potentially important for each race.     

Why cities should not be subsidized

The paper deals with the question of whether fiscal transfers received by cities can be justified by a higher cost of producing publicly provided goods. In the model, increasing the population density implies both a higher output per capita due to agglomeration economies and a higher cost of the publicly provided good due to congestion. It is shown that introducing fiscal transfers to be paid by the region with the lower population density will generally reduce welfare. This result is obtained since the city is already beyond the level of optimum agglomeration.