This study examines a disequilibrium model of a small, open economy with explicit links between periods due to inventory accumulation, as well as the more conventional channels through current account imbalances and the government budget constraint. The key features of the model are that agents have perfect foresight with neutral public debt and that inventories adjust to smooth production intertemporarily. The paper explores the extent to which fiscal policy can be used selectively for coping with an export slump without running into a balance of payments constraint.

Journal Article Moore's Laws of Wages Get access F. W. Taussig F. W. Taussig Harvard University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 26, Issue 3, May 1912, Pages 511–518, https://doi.org/10.2307/1883534 Published: 01 May 1912

The authors construct a model of a dynamic economy in which lenders cannot force borrowers to repay their debts unless the debts are secured. In such an economy, durable assets play a dual role: not only are they factors of production but they also serve as collateral for loans. The dynamic interaction between credit limits and asset prices turns out to be a powerful transmission mechanism by which the effects of shocks persist, amplify, and spill over to other sectors. The authors show that small, temporary shocks to technology or income distribution can generate large, persistent fluctuations in output and asset prices.

This paper studies the strategic use and timing of share repurchases by insiders for personal gain. Using grant-level compensation data and a hand-collected sample of monthly repurchases, I find a positive causal relation between executive equity sales and share repurchases. I identify the relation using the vesting schedule of equity grants as an instrument for equity sales. This behavior is persistent across firm, executive, and governance characteristics. Both CFO and CEO vesting schedules impact repurchases, suggesting the CFO may also have influence over the execution of the repurchase program. There is minimal evidence of long-term value destruction. The results indicate executive contracts impact the execution of share repurchase programs.

Using a unique set of banking data containing both originally reported and subsequently revised financial variables, we find adverse revisions to accounting statements are associated with downgrades in supervisory ratings. To assess the financial significance of the revisions, we compare the ability of the original and revised data to map into exam ratings. The relationship between accounting data and exam results is significantly stronger for revised data than for real-time data. Our findings document significant differences between real-time and revised banking data, highlight the auditing role of bank exams, and provide a more realistic assessment of early warning model accuracy.

The article is a comment on the article "An Empirical Analysis of the Quality of Corporate Financial Disclosure," by researchers, Surendra S. Singhvi and Harsha B. Desai, published in the January 1971 issue of the journal "The Accounting Review." Singhvi and Desai report on a research project in which they attempted, to identify some of the characteristics of corporations in the United States which are associated with, and the possible implications of, the quality of corporate disclosure. To accomplish their purpose, an index of disclosure was constructed. According to the author, Singhvi and Desai have little to say about how they applied the index. Presumably, they constructed a list of criteria to be met by each item if it were to receive the requisite number of points. However, no mention is made of such a procedure in the article. The lack of specific criteria would tend to give greater play to the variability of human judgment in applying the index. The test, as described by Singhvi and Desai is somewhat misleading.

Recent theories based on sequential financing and information signaling reveal a special role for warrants. Data from initial public offerings (IPOs) of stock-warrant units have been used to test the theories, and we extend the analysis to seasoned offerings. Consistent with predictions from both families of theories, we find that issues made by smaller and younger firms are more likely to involve stock-warrant units, and firms with greater stock price volatility are more likely to issue units in seasoned offerings. Moreover, firms with relatively high levels of long-term debt, and those whose issues are underwritten by less prestigious underwriters are more likely to employ stock-warrant unit financing. Consistent with information signaling, we find that firms with high managerial ownership are more likely to issue units. Firms that include warrants in their stock offerings are predicted to have experienced higher abnormal stock returns than if they had issued shares alone. Thus, consistent with both theoretical explanations, some firms can reduce capital costs by adding warrants to shares in seasoned offerings.

The literature on contracts predicts that some principals will pay agents rents, that is, amounts larger than those necessary to keep the agent in the contract. We calculated the earnings of the average franchisee in seventy franchise systems in various industries to determine whether rents are paid as a solution to the agency problem in franchise contracts. We found that many but not all systems paid rents, both ex post and ex ante, to the average franchisee. The results confirm those of Kaufmann and Lafontaine (1994), who found rents associated with McDonald's, but the magnitude of rents within the systems we study was generally much lower than those of McDonald's.

During the last two decades the issue of equality according to sex and race has become one of increasing importance to economists. An extant literature on the economics of discrimination began with the pioneering work of Becker (1957). This paper is an attempt to shed further light on the extent of employer discrimination by sex and race by comparing the earnings of self-employed workers to their wage and salary counterparts. In short, if employer discrimination is a principal source of discrimination against blacks and women, then we would expect the black/white and female/male earnings ratios to be higher for the self-employed compared to their wage and salary counterparts. No discrimination of this type is applicable to self-employed workers. In addition, blacks and women should be relatively overrepresented among the self-employed compared to wage and salary workers in the economy. Section II of this paper further elaborates on this indirect method to estimate the extent of employer discrimination in the labor market for blacks and women. In section III, the results of this method are presented using the 1978 Current Population Survey as the data source. Results indicate the black/white and female/ male earnings ratios are no larger for the self-employed compared to their wage and salary counterparts, even after making various attempts to adjust for differences in other variables that affect earnings, and to limit the influence of consumer discrimination on the results.