Inflation, Valuation, Accounting standards

Journal Article A Theory of Saving and Portfolio Selection Get access A. Douglas A. Douglas University of California, Berkeley Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 35, Issue 4, October 1968, Pages 453–463, https://doi.org/10.2307/2296772 Published: 01 October 1968

Incan Empire, Accounting, Double entry Bookkeeping

In a recent article in this journal, Harold Bierman, Jr. takes me to task for an alleged incompleteness and insufficiency of my “Elements of a Theory of Stock-Option Value.” The criticism consists of an insistence that option (call) values are relative to alternative long positions in common stock, rather than of “absolute” and independent value as options per se.

With the increasing emphasis on the performance of managers of institutional portfolios, it becomes important to develop an accurate and complete measure of investment results. Accordingly, this study will be devoted to clarification and possible resolution of the following issues:1. How may operating results be segregated from contributions and withdrawals of capital?2. How may the “dollar weighting” inherent in compound rates of return be eliminated?3. Should investment, in the context of return on investment, be cost-based or value-based?4. How should risk be quantified?5. Can both risk and return be considered in one composite measure of investment performance?

Journal Article Consistent Planning Get access R. A. Pollak R. A. Pollak University of Pennsylvania Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 35, Issue 2, April 1968, Pages 201–208, https://doi.org/10.2307/2296548 Published: 01 April 1968

Journal Article Empirical Evidence on the Acceleration Principle: A Comment Get access A. G. Hines A. G. Hines University College, London Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 35, Issue 3, July 1968, Pages 347–349, https://doi.org/10.2307/2296667 Published: 01 July 1968

Bierwag and Grove [ 1 ] have recently presented an interesting model of the term structure of interest rates which is analytically more appealing than the Meiselman model [5]. In particular, they are able to dispense with the assumption of identical singlevalued expectations and show that individual wealth holders seeking to maximize utility will determine an equilibrium forward rate which is a weighted average of the individual predicted rates. The original Meiselman model is incorporated into this model as a special case. Tests of these new models give good results for the United States using the Durand data [3] but for Britain, using the Grant data [4], the results are generally very poor. This note shows that an alternative set of annual British data, covering yields on government securities for 1933 to 1963, gives results which compare favorably with those for the United States and it is not necessary to conclude, as do Bierwag and Grove, that the expectations mechanism is different in the United Kingdom. The improved results also illustrate the point, elaborated in [2], that the method of yield estimation is the critical factor in tests employing forward interest rates derived from an estimated yield structure. The theoretical model of the term structure developed by Bierwag and Grove shows how a given investment fund is allocated among short and long term bonds given the investor's utility function and the first two moments of his probability distribution of expected interest rates.' The market equilibrium forward rate is then shown to be a weighted average of individual predicted rates. In order to make the model operational, empirical specifications for the formation of interest rate expectations are required. These specifications are of two types: a traditional adaptive expectations function and a Meiselman type adaptive function.2 The relevant equations are specified for each type before the empirical results of the British test are reported.3

Journal Article The Reserve Base, Reserve Requirements, and the Equilibrium Rate of Interest: Comment Get access Paul A. Meyer Paul A. Meyer University of Maryland Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 82, Issue 3, August 1968, Pages 498–504, https://doi.org/10.2307/1879520 Published: 01 August 1968

I. Introduction: comparing allocation mechanisms in an ideal laboratory, 561. — II. The "administrative" period in postwar Yugoslavia, 567. — III. The decentralized mechanism in Yugoslavia, 572. — IV. The administrative and the decentralized periods: comparison of aggregates, 574. — V. The performance of the new mechanism: noncomparative analysis, 579. — VI. Concluding remarks, 585.