Reviews the book "New Directions in Federal Tax Policy for the 1980s," edited by Charls E. Walker and Mark A. Bloomfield.

Reviews the book "Accounting for Management: Planning and Control," 3rd ed., by Richard M. Lynch and Robert W. Williamson.

This article presents information on the validity of the 1966 tax model and its effectiveness as a research tool. The Internal Revenue Service expects that the 1966 Model will aid researchers in measuring the impact of proposed changes code. The description manual accompanying the model states that, the Individual Tax Model is primarily a research tool that will accurately test hypotheses regarding income, deductions, tax base, tax rates, or any combination of these factors. This paper reports on a validity check on the data underlying the tax model. Specifically, they were concerned with concurrent validity, that is, investigation of the relationship of one set of data to an alternate accepted contemporary measure of the same underlying phenomenon. Tax researchers often desire data on the average dollar amount of an informational item categorized by Adjusted Gross In come (AGI) class. For example, researchers may be interested in the average amount of salaries and wages, dividends, property taxes and so forth, for categories of taxpayers broken down by AgI classes.

Reviews the book "Management of Industrial Enterprises," by Richard N. Owens.

Equity valuation effects of decisions by corporations to shift assets to master limited partnerships (MLPs) are examined for the period 1982–1987. Positive average abnormal returns are found for (1) total conversions of corporations to MLPs (5.89%), (2) rollouts of subsets of assets by distribution of MLP equity claims to parent-firm shareholders (6.41%), and (3) rollouts of subsets of assets by public sale of MLP equity claims (2.41%). The positive effects are consistent with tax advantages, reduction in free cash flow, and information signaling. The positive effects for rollouts of subsets of assets are also consistent with reductions in information asymmetry and improvements in asset management.

We argue that a contract provides a reference point for a trading relationship: more precisely, for parties' feelings of entitlement. A party's ex post performance depends on whether he gets what he is entitled to relative to outcomes permitted by the contract. A party who is shortchanged shades on performance. A flexible contract allows parties to adjust their outcomes to uncertainty but causes inefficient shading. Our analysis provides a basis for long-term contracts in the absence of noncontractible investments and elucidates why “employment” contracts, which fix wages in advance and allow the employer to choose the task, can be optimal.

The authors present a structural model of the U.S. economy that combines their price-contracting specification with a term-structure relationship, an aggregate demand curve, and a monetary-policy reaction function. The model matches important features of postwar data well and provides a structural explanation of the correlation between real output and the short-term nominal rate of interest. The authors perform a battery of monetary-policy experiments that show that, as viewed through the lens of this model, monetary policy has struck a good balance recently among competing monetary-policy objectives.

We present a structural model of the U.S. economy that combines our price-contracting specification with a term-structure relationship, an aggregate demand curve, and a monetary-policy reaction function. The model matches important features of postwar data well and provides a structural explanation of the correlation between real output and the short-term nominal rate of interest. We perform a battery of monetary-policy experiments which show that, as viewed through the lens of this model, monetary policy has struck a good balance recently among competing monetary-policy objectives.

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