This paper explores tests of the hypothesis that the tail thickness of a distribution is constant over time. Using Hill's conditional maximum likelihood estimator for the tail index of a distribution, tests of tail shape constancy are constructed that allow for an unknown breakpoint. The recursive test is shown to be inconsistent in one direction, and only a one-sided test is recommended. Specifically, the test can be used when the alternative hypothesis is that the tail index decreases over time. A rolling and sequential version of the test is consistent in both directions. The methods are illustrated on recent stock price data for Thailand, Malaysia and Indonesia. The period covers the recent Asian financial crisis and enables us to assess whether breakpoints in domestic asset return distributions are related to known changes in institutional arrangements in the foreign currency markets of these countries.

This paper examines how capital tax competition affects jurisdiction formation. We describe a non-cooperative locational model of public goods provision choices, where the levels of taxation and the local public good varieties provided within jurisdictions are selected by majority voting, and where equilibrium jurisdictions consist of consumers with similar tastes. We show that interjurisdictional tax competition results in an enlargement of jurisdictional boundaries, and, even in the absence of intrajurisdictional transfers, can raise welfare for all members of a jurisdiction.

This study examines how client risk factors and the provision of additional services affect engagement planning and bid pricing for a set of initial engagement proposals that a single firm submitted to its prospective clients in 1997–1998. We find little effect of risk on planned personnel hours, but show that the firm responds to fraud and error risk factors by applying engagement-planning strategies such as assigning more high-risk specialist personnel, assigning more industry expert personnel, applying more intensive testing, and/or performing additional review. Analyzing proposed fees while controlling for planned personnel hours, we find risk premia for both fraud and error risk factors. Supplemental analysis of accepted vs. rejected bids shows that the risk premia are detectable for bids accepted by clients (i.e., the engagements the firm will actually perform), implying that risk premia are not bid away in the market. We also find that for clients purchasing additional services, the firm plans more hours and uses industry experts more often. Results reveal a relatively small fee premium for additional services clients across all bids, but analysis of accepted vs. rejected bids implies that this premium is bid away in the market.

Inflation Is Always and Everywhere a Monetary Phenomenon: Richmond vs. Houston in 1864 by Richard C. K. Burdekin and Marc D. Weidenmier. Published in volume 91, issue 5, pages 1621-1630 of American Economic Review, December 2001