STANDARD SETTING FOR OIL AND GAS ACCOUNTING: AN ANALYSIS USING ALLISON'S APPROACH

The three models advanced by G. T. Allison in Essence of Decision are applied to FASB's Statement of Financial Accounting Standards No. 19 to explain the adoption of the “successful-efforts” method. In the first model, the decision is explained as the action that reflects a consistent, value maximizing choice within specific constraints. In the second, it is interpreted as the “output” of the FASB regulated by standard procedures, namely in recognizing an asset. In the third, it is viewed as a political resultant in a struggle involving interest groups. The analysis revealed the usefulness and some weaknesses of the Allison Approach to an understanding of the standard setting decision by the FASB. The approach is applicable world-wide to other standard setting scenarios.     

A comparison of national and international aggregate supply and demand var models: The United States,Japan and the European economic community

Zusammenfassung Ein Vergleich von nationalen und internationalen VAR-Modellen mit Angebots- und Nachfrageaggregaten: USA, Japan und Europ?ische Wirtschaftsgemeinschaft. - Es wird gezeigt, da\ für nationale Volkswirtschaften und auch für supranationale Gebilde vektorautoregressive Modelle konstruiert werden k?nnen, die Ergebnisse liefern, welche mit einem theoretischen Rahmen für Aggregate des Angebots und der Nachfrage in Einklang stehen. Energiepreise sind in allen Modellen einigerma\en wichtig, aber Geldangebot und Zinsen sind in dem EWG-Modell ziemlich unbedeutend. Natürlich kann dieses Ergebnis auf die Unterschiede zwischen der EWG, den USA und Japan zurückzuführen sein oder auf die Aggregation innerhalb des EWG-Modells. Trotzdem stimmt dieses Ergebnis mit den theoretischen Erwartungen überein, wonach alle Volkswirtschaften gemeinsamen weltweiten Angebotsschocks gegenüberstehen, aber - bei manipulierten floatenden Wechselkursen - eine gewisse monet?re Unabh?ngigkeit besitzen.

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Resumen Comparación de modelos autoregresivos de oferta y demanda agregada nacionales e internacionales: EE.UU., Japón y la Comunidad Económica Europea. - Se demuestra que los modelos VAR pueden ser construidos para economias tanto nacionales como supranacionales con resultados consistentes con el marco teórico de oferta y demanda agregadas. Los precios de energia tienen una cierta importancia en todos los modelos; la oferta monetaria y las tasas de interés no son importantes en el modelo para la CEE. Sin embargo, este resultado es consistente con expectativas teóricas segiín las cuales todas las economias enfrentan shocks de oferta globales comunes, pero disponen de un cierto grado de independencia monetaria en el marco de una flotatión administrada del tipo de cambio.

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Résumé Une comparaison entre des modéles VAR nationaux et internationaux d’offre et demande agrégée: les E.U., le Japon et la CEE. - Les auteurs demontrent que les modéles vecteurautorégressifs peuvent etre construits pour des économies nationales aussi bien que supranationales et que ces modeles produisent des résultats qui s’accordent avec le cadre théorique de l’offre et de la demande agrégée. Les prix d’énérgie sont importants dans tous les modéles jusqu’a un certain point, mais la masse monétaire et les taux d’ interet sont moins importants dans le modéle CEE. Naturellement, ce résultat peut etre expliqué par les différences entre la CEE et les E.U. et le Japon ou par l’agrégation dans le modéle CEE. Cependant, ce résultat est consistant avec des expectatives théoriques car toutes les économies sont confrontees avec des chocs d’offre communs globaux mais disposent de quelque independance monétaire grace au systéme de changes flottants dirigés.

     

Threshold cointegration between inflation and US capacity utilization

An analogue to the Phillips curve shows a positive relationship between inflation and capacity utilization. Some recent empirical work has shown that this relationship has broken down when using data after the mid-1980s. We empirically investigate this issue using several threshold error correction models. We find, in the long run, a 1% increase in the rate of inflation leads to approximately a 0.0046% increase in capacity utilization. The asymmetric error correction structure shows that changes in capacity utilization show significant corrective measures only during booms while changes in inflation correct during both phases of the business cycle with the corrections being stronger during recessions. We also find that, in the short run, changes in the inflation rate do Granger cause capacity utilization while changes in capacity utilization do not Granger cause inflation. The Granger causality from inflation to capacity utilization can be interpreted as supporting recent calls made in the popular press by some economists that it may be desirable for the Federal Reserve Bank to try to induce some inflation. However, it is also possible to interpret these Granger causality results as arising because both variables respond to some more fundamental set of variables with the inflation rate simply responding sooner. The lack of Granger causality from capacity utilization to inflation casts doubt on the older view that capacity utilization could be a leading indicator for future inflation.     

Sexual Prejudice and Labor Market Outcomes for Gays and Lesbians: Evidence from Sweden

This paper presents results from a study of sexual prejudice and differentials in labor market outcomes due to sexual orientation. It uses data from a nationwide Swedish survey on public attitudes toward homosexuals, conducted in 1999, and combines them with register data for 2007, which include information about sexual orientation, employment status, and yearly earnings for the total population in Sweden. It finds that prejudice against homosexuals negatively affects the relative employment and relative earnings of gay men. Lesbians are affected negatively by prejudice against homosexuals in terms of employment, but the relationship is less clear in regard to earnings. Discrimination against homosexuals, as well as social norms, occupational sorting and self-selection in, geographic mobility are presented as explanations for the results.     

The Evolution of Cost-based Pricing Rules in Britain: An institutionalist perspective

This paper illustrates how an institutionalist perspective can help us understand the development of cost-based pricing rules in Britain. It explores the historical development of rule-based procedures, such as absorption costing and the cost allocation systems used by trade associations and government departments in the first half of the last century. The intention is to identify the institutional rationalities that underpinned the evolution of these supposedly 'irrational' practices. A case study of British Printers in the early years of the 20th century illustrates how a rule-based system, collectively designed and built around costing knowledge was used to promote stability and certainty in a chaotic market. Similarly, the cost-based rules introduced and administered by the British Government during the First and Second World Wars were used to control overpricing and profiteering, and hence cost measurement was seen as instrumental in bringing stability and control to a market that was operating in an apparently unacceptable way. In the post-war period, however, similar cost-based pricing rules and cost allocations procedures were implicated in a variety of restrictive practices.     

Return distributions and volatility forecasting in metal futures markets: Evidence from gold,silver, and copper

The characterization of return distributions and forecast of asset‐price variability play a critical role in the study of financial markets. This study estimates four measures of integrated volatility—daily absolute returns, realized volatility, realized bipower volatility, and integrated volatility via Fourier transformation (IVFT)—for gold, silver, and copper by using high‐frequency data for the period 1999 through 2008. The distributional properties are investigated by applying recently developed jump detection procedures and by constructing financial‐time return series. The predictive ability of a GARCH (1,1) forecasting model that uses various volatility measures is also examined. Three important findings are reported. First, the magnitude of the IVFT volatility estimate is the greatest among the four volatility measures. Second, the return distributions of the three markets are not normal. However, when returns are standardized by IVFT and realized volatility, the corresponding return distributions bear closer resemblance to a normal distribution. Notably, the application of financial‐time sampling technique is helpful in obtaining a normal distribution. Finally, the IVFT and realized volatility proxies produce the smallest forecasting errors, and increasing the time frequency of estimating integrated volatility does not necessarily improve forecast accuracy. © 2010 Wiley Periodicals, Inc. Jrl Fut Mark 31:55–80, 2011     

Evidence on the role of accounting conservatism in monitoring managers’ investment decisions

Watts (2003), among others, argues that conservatism helps in corporate governance by mitigating agency problems associated with managers’ investment decisions. We hypothesize that if conservatism reduces managers’ex ante incentives to take on negative net present value projects and improves the ex post monitoring of investments, firms with more conservative accounting ought to have higher future profitability and lower likelihood (and magnitude) of future special items charges. Consistent with this expectation, we find that firms with more conservative accounting have (i) higher future cash flows and gross margins and (ii) lower likelihood and magnitude of special items charges than firms with less conservative accounting.