W ITH MUCHI of the nation's attention focused on poverty and minority problems in the 1960s, what effort was made by professional economists to study and report on the economic aspects of these problems? What areas of minority problems have been of interest to economists? To answer these questions a survey of the joumal literature was undertaken in late 1969 and further extended in the early months of 1970. The results clearly show that economists are devoting increased attention to the economic problems of minority groups. At the same time, however, it is also clear that this range of problems remains far from the central concern of the profession. In general, the most activity-judging from the published record-seems to be in the fields of microeconomic theory, international economics, and monetary economics. Yet, in the last few years, there has been a much sharper focus on education, welfare theory, and poverty. It is this latter focus that has led to a broader consideration of economic problems of minority groups. Certain aspects have been of much greater interest to economists, such as labor and employment-largely, no doubt, because it is in these areas that larger amounts of disaggregated data by race have been available traditionally. New areas which need more-and which have received little -assessment by economists are black capitalism, urban economics, and the economic aspects of crime and social disorganization.

The time series behavior of earnings is an important area for empirical research because of its implications for related research in several areas of and finance. Although many other examples could be provided, three accounting issues immediately come to mind: (1) income smoothing, (2) the relative forecast ability of alternative income measurements, and (3) interim reporting. The hypothesis that management uses discretionary practices to smooth income was first posited by Gordon [21] and later tested by Gordon, Horwitz, and Meyers [22] and by Copeland [14] among others. As stated by Gordon, smoothing involves minimizing the deviations of reported income from some standard, where the standard is defined in terms of normal income. Normal income has never been precisely defined at the conceptual level, but in many cases it appears to have been used in the sense of the expected value of the process at a given point in time. A variety of models could be used, and in fact have been used, to assess the normal or expected value of income for a given period. Each model makes specific assumptions about the process generating income numbers. Any inferences drawn from empirical evidence regarding the existence of income smoothing (or the lack of it) are dependent upon the validity of the assumptions made about the underlying earnings process. Moreover, as shown later in the paper, for certain processes attempts to smooth income can have exactly the opposite effect. Yet the models used in the smoothing literature represent only a narrow range of the possible alternatives, little justification (either a priori or empirical) has been offered in their behalf, nor has there been any direct, rigorous investigation of the underlying nature of the earnings process itself

Information systems, Feltham prediction model, Decomposition, Disclosure quality