Keeping Up with the Joneses and the Home Bias

We argue that when individuals care about their consumption relative to that of their neighbours, a home bias emerges, that is investors overweight domestic stocks in their portfolios. Domestic stocks are preferred because they also serve the objective of mimicking the economic fortunes and welfare of the investor's neighbours, countrymen, and social reference group. We also demonstrate that globalization mitigates the home bias, and derive a modified international CAPM.     

Developing a tutoring module for presentation of computerized patient management problems

The simulation problem is one of the most commonly used formats in computer-assisted instruction (CAI). In medical education, a patient simulation problem is known as a patient management problem (PMP). A number of computerized PMP systems are currently available. However, to date, there is no record of PMP systems having been developed using artificial intelligence. This is noteworthy since artificial intelligence techniques could help in the generation of more effective and intelligent instructional systems.

This paper analyzes and evaluates existing instructional simulation software in clinical medicine in terms of effective educational design attributes. Components of effective PMP systems thus identified are incorporated into a computerized instructional system which uses artificial intelligence techniques for teaching problem-solving and diagnostic skills to undergraduate medical students.     

A taxonomy of manpower—educational planning models

In the last decade the literature has recorded several works concerned with the applications of network flow-like models to the area of manpower planning, and specifically the management manpower training program to assure that supply will meet the demand. Because the system which these models attempt to describe and/or decisions which they prescribe are rather complex in the real world, each of these models has imbedded in them certain simplifying assumptions. On the other hand, each incorporates different aspects of what is real. This paper develops a taxonomy of the landmark developments in this area. The taxonomical schema is then used to unify the models in consideration of the decision factors used. The schema envisions a general model containing all the factors which are explicitly or implicitly considered in the existing literature as being germane. The schema lends itself to both the identifying of those models which might be of interest and not available in the literature on the one hand and it shows in bold relief the similarities and differences between existing models.     

Evaluating a Global Vector Autoregression for Forecasting

Global vector autoregressions (GVARs) have several attractive features: multiple potential channels for the international transmission of macroeconomic and financial shocks, a standardized economically appealing choice of variables for each country or region examined, systematic treatment of long-run properties through cointegration analysis, and flexible dynamic specification through vector error correction modeling. Pesaran et al. (2009) generate and evaluate forecasts from a paradigm GVAR with 26 countries, based on Dées, di Mauro et al. (2007). The current paper empirically assesses the GVAR in Dées, di Mauro et al. (2007) with impulse indicator saturation (IIS)??a new generic procedure for evaluating parameter constancy, which is a central element in model-based forecasting. The empirical results indicate substantial room for an improved, more robust specification of that GVAR. Some tests are suggestive of how to achieve such improvements.     

The law of one accounting variable

The ‘law of one accounting variable’ is defined in this paper as an extension of ‘the law of one price’. It says roughly that if the future payoffs of two assets are the same (in every state of the world), then the accounting variable of the assets are approximately the same. The paper derives a condition under which this law holds and shows that when the law holds for some accounting variables, these variables can replace betas in the multibeta representation of asset returns, provided some admissibility conditions are satisfied.     

Intertemporal arbitrage pricing theory

It is shown that the arbitrage pricing theory holds in eachinfinitesimal period of a continuous trading model under theassumption that dividend payoffs are functionals of factor andidiosyncratic uncertainty. This generalizes the one- periodmodel's result that the arbitrage pricing theory holds underthe assumption that price changes in a given period satisfya factor structure. Since instantaneous returns in a multiperiodmodel are endogenously determined, the theory is derived underassumptions that may be viewed as restricting more primitivecharacteristics of the economy than the assumptions made forthe one-period model.