In an arbitrage‐free economy, there will always exist a set of linear operators which map future contingent dividends of securities into their current prices. It happens that such operators will also form an “evolution semigroup” as a consequence of intertemporal analysis of the no‐arbitrage restriction. This paper summarizes some of the major implications of the semigroup properties, but avoids almost all of the technical discussion which underlies them. Instead, several practical examples are presented. Some well‐known continuous‐time results are replicated by this alternative method, and certain new developments are explored.

In an arbitrage-free economy, there will always exist a set of linear operators which map future contingent dividends of securities into their current prices. It happens that such operators will also form an “evolution semigroup” as a consequence of intertemporal analysis of the no-arbitrage restriction. This paper summarizes some of the major implications of the semigroup properties, but avoids almost all of the technical discussion which underlies them. Instead, several practical examples are presented. Some well-known continuous-time results are replicated by this alternative method, and certain new developments are explored.

We propose a simple model of equilibrium asset pricing in which there are differences in the amounts of information available for developing inferences about the returns parameters of alternative securities. In contrast with earlier work, we show that parameter uncertainty, or estimation risk, can have an effect upon market equilibrium. Under reasonable conditions, securities for which there is relatively little information are shown to have relatively higher systematic risk when that risk is properly measured, ceteris paribus. The initially very limited model is shown to be robust with respect to relaxation of a number of its principal assumptions. We provide theoretical support for the empirical examination of at least three proxies for relative information: period of listing, number of security returns observations available, and divergence of analyst opinion.

In another paper (forthcoming), I have contrasted wage setting in the 1920's with that of the post-World War II period. During the 1920's and early 1930's, the U.S. Bureau of Labor Statistics published an incomplete sample of reported wage-change decisions at the establishment level. Perhaps the best way to summarize the results is to direct attention to Table 1, which presents the distribution of manufacturing wagechange decisions during 1924 and 1925, years in which consumer price inflation was, respectively, -.2 and +4.0 percent on a December-to-December basis. The table shows a wide array of wagechange decisions ranging from cuts of over 20 percent to increases of similar magnitude. This dispersion of decisions is remarkable by post-World War II standards. Moreover, the postwar evidence suggests that nominal wage cuts are a rarity, even in periods of low inflation. When they do occur, as in some recent union concessions, the cuts result from a painful negotiations process against a background of threatened or actual mass layoffs. By the 1920's, many features of modern corporate enterprise were present. But were of little significance in most sectors, including manufacturing, the result of a sustained open shop campaign by employers after World War I. There was little labor market intervention by government. Workers resented wage cuts-during periods of generalized wage cutting such reductions became important causes of strikes-but employers implemented them anyway. And when employers did not want to take the blame for wage cuts, they used company unions to negotiate reductions (Robert Dunn, 1927, pp. 21-23). In short, in the absence of or other institutional constraints, the implicit contracts offered by employers in the 1920's provided substantially more wage flexibility than existed after World War II. The wagesetting mechanisms of the 1920's did not approach the flexibility of a classical auction market, a fact of some comfort to implicitcontract theorists. However, it is unclear that one needs to go much beyond simple explanations of how wage cuts (or even relative wage slippage) would lead to worker resentment and management caution.

Between 1971 and 1978, wages of more than one-half million nonwhite laborers in the South African mines tripled in real terms. In the same period, the nonwhites employed in the mines switched from being 62 percent foreign to 62 percent domestic.' These changes followed a period-from 1911 to 1971 -during which real wages of black gold miners did not rise, and terminated almost a century of reliance on foreign labor reserves for the majority of such labor.2 These dramatic events are examined here in the context of an econometric model of the demand for labor by the South African mining sector from 1946 to 1980. This affords an unusual opportunity to study the demand side of a market for internal and international migrants, in a society where racial discrimination is formalized in the apartheid system, where powerful mining houses wield potential monopsony power, and where political factors in the region are major determinants of economic behavior. To comprehend the derived demand for workers in this sector, it is essential to outline at least certain aspects of the industry's organization and that of the market for labor; this is undertaken in Section I. Section II develops a stylized model, which is then estimated, from data described in Section III, for the gold, diamond, coal, and other minerals sectors separately in Section IV. I. Organization of the Mine Labor Market

[The existence of a positive balanced growth solution for the discrete dynamic input-output (IO) model is studied. Previous work in the area invariable assumed unrealistic restrictions on the matrices A or B, such as regularity or irreducibility. In our work these restrictions are not imposed. We find that in the realistic case of reducible A, a balanced growth solution exists if each sector depends on all others for either its current account or its capital inputs. If this condition is not satisfied a balanced growth solution may still exist. Conditions for its existence relate the overall growth rate to the growth rates which groups of sectors would have if they were isolated from the rest of the economy.]

[This study examines the motivations for failing firms to change auditors. Some of the factors that could influence auditor switching include audit qualifications, reporting disputes, management changes, audit fees, and insurance needs. Annual reports, 10-Ks, and proxy statements were used to gather data for a sample of 132 failing (bankrupt) firms and a matched-pair sample of nonfailing firms. The investigation's findings strongly supported our prior expectations that failing firms have a greater tendency to switch auditors than do healthier firms. Other findings revealed that neither audit qualifications nor management changes were statistically associated with auditor displacement in failing firms. Failing firms that changed auditors did display a preference to move to a different class of CPA firms. Also, size did not appear to matter with respect to the observed auditor switching among the failing firms, although it appeared to have some effect among control firms. Overall, our study's major findings suggest a definite need to control for the presence of financial distress in studies on auditor switching.]