T HE equation developed by the Research Department of the Federal Reserve Bank of St. Louis to explain changes in GNP ' has had a considerable impact on the thinking of monetary economists. It has, in particular, reinforced the position of those who contend that monetary policy has a powerful impact on GNP. On the other hand, serious doubts arise according to the basic St. Louis equation as to the efficacy of the fiscal impact on GNP. There have been a, number of comments on the St. Louis equation which presented alternative specifications of the basic reduced-form equa,tion for GNP.2 In general, these formulations have revealed a more powerful role for fiscal policy while the strength of monetary policy remained unaltered. Most of these reformulations of the St. Louis equation have specified different monetary and/or fiscal variables than those used by St. Louis. This has given rise to disputes between researchers as to the appropriate monetary and fiscal variables 3 to use in these equations. In this paper the results of various experiments with the basic St. Louis equation using the St. Louis variables are presented. In other words, the question asked here is: given the use of the same exogenous policy variables as St. Louis are there any changes in the basic regressions which would alter the conclusion regarding the efficacy of monetary and fiscal policy? The results reported below suggest that alternative specifications of the basic St. Louis equation do produce significantly different implications for the efficacy of fiscal policy. In particular, a straightforward division of the sample period produces Republican and Democratic St. Louis equations with the associated monetary and fiscal multipliers.

It appears to a widely held view that corporations with similar operational characteristics ought to have similar financial characteristics. For example, one might expect that the financial characteristics of two drug companies would be similar. This seems entirely reasonable. Unfortunately however, there does not appear to be any quantitative analysis of this point in the literature. Furthermore, discussions with our financial colleagues lead to the conclusion that, if such financial differentiation of corporations were possible, it is by no means obvious what the variables of differentiation would be. Consequently, such an analysis was undertaken and is described in this paper. The basic question asked is whether the statistical grouping of corporations by their financial characteristics is similar to their predetermined, external, industrial classification.

Robert A. Haugen, James L. Pappas, Equilibrium in the Pricing of Capital Assets, Risk-Bearing Debt Instruments, and the Question of Optimal Capital Structure, The Journal of Financial and Quantitative Analysis, Vol. 6, No. 3 (Jun., 1971), pp. 943-953

The advent of the computer has permitted financial theorists to collect and analyze large amounts of financial data. In the field of investments some of the most important work has focused on historical rates of return in investments in common stocks. The classical study in this area is the Fisher-Lorie study [8, 9] in which intern al rates of return were calculated for every security listed on the New York Stock Exchange from 1926–1965. Other studies related to the area have been complicated by Herzog [10], Fisher [6, 7], Latané and Young [11], Soldofsky and Biderman [12], and Evans [3, 4].

Abstract The article focuses on the American Accounting Association (AAA) that has exercised some influence on the Uniform Certified Public Accountants (CPA) Examination through its Committee on CPA Examinations. One of the recommendations made by the 1948 committee was that there should be established a special or standing committee of AAA to cooperate with the Board of Examiners and the Director of Education of AAA Committee on CPA Examinations. The best way to evaluate the kinds of activities taken on by the Committee on CPA Examinations and the results achieved is to consider some of the conclusions, results and unanswered questions left in the wake of twenty years of activity. Somewhat related to its distinction between general and special knowledge and abilities is the 1961 Committee's conclusion that as soon as feasible a fifth year of study in accountancy and related areas should become a requirement. The committee felt that such use of a fifth year would yield greater assurance that the candidate's degree is reliable evidence of his general knowledge.

Abstract The article focuses on an experiment related to accounting course. One of the problems every teacher of auditing faces is how do you make auditing interesting to seniors who are taking the course and are graduating at the end of the term. The round of parties, the final job interview, the anticipation of graduation, all of these factors compete against the professor who teaches auditing. The auditing course assimilates everything an accounting student has learned in his business curriculum and, therefore, should be exciting and challenging to him. The senior views auditing as the last accounting course which he must suffer through in order to get a piece of paper that allows him to go out and earn a living. At Colorado State University the researchers solved the problem of lack of enthusiasm on the part of the accounting student by eliminating the traditional practice set and substituting a real audit. The opportunity to provide a real audit came about as a result of an auditing engagement performed by Price Waterhouse & Co. They audited the Associated Students of Colorado State University in June, 1968.

Abstract The article focuses on arbitrary allocations in accounting. Allocation may be unsuitable for general purposes yet highly useful for some specific purpose. Although this does not alter the financial accounting conclusions of Studies in Accounting Research (SAR #3), it is evident that the existence of useful arbitrary allocations has implications for managerial accounting. The concept of the range of ambiguity of an allocation was applied briefly in SAR #3 to situations in which various allocation methods are available and no conclusive reasons for choosing any individual possibility can be demonstrated. An accounting allocation divides a monetary magnitude among recipients to the firm, accounting periods, and so forth. The range of ambiguity of an allocation with respect to an individual input is the extent to which the amounts attributed to that recipient may vary by virtue of choice of allocation methods. SAR #3 discusses allocations such as depreciation in which the costs of nonmonetary inputs are written off. It points out that financial accounting theory requires that two kinds of allocations be performed in the amortization of nonmonetary inputs.