"Inl statistical inference proper, the model is never questioned.... The methods of mathe-matical statistics do not provide us with a means of specifying the model. " 1

R&D, Materiality, Capitalization, Resource allocation decision

[The nonlinear Kaldor theory of macroeconomic business cycles is combined with a classical growth mechanism to derive a deterministic model of business cycle phenomena. Sufficient conditions for the existence, uniqueness, and orbital asymptotic stability of a limit cycle are given. It is shown that the model also exhibits stochastic stability when the deterministic variables are randomly disturbed.]

Using the same sample of 100 countries for 1966 as Sommers and Suits,3 we obtained the following equation 4 GCF/GNP 26.87 (1.04) 4676.54 / (GNP/N + 300). (629.25) R2= .4 (4) Comparing this result with the estimation of the quadratic equation (1) of Sommers and Suits,5 we see that both equations have similar statistical properties. Using (4) as the basis for simulations of the growth path, however, we obtain completely different results from those of Sommers and Suits. Now per capita income does not attain a stationary level, but grows exponentially. The growth rate of per capita income, however, as can be seen from figure 2, attains a stationary level at 4.41 per cent per year. FIGURE 2. SIMULATED GROWTH RATE OF GNP PER CAPITA

Using the mean-variance model, Sharpe [5] and Lintner [4] have derived an equilibrium model for price determination under uncertainty. Jean [2] has tried to generalize this model so that other moments of the distribution will be taken into account. The purpose of this note is to show that unlike the Sharpe-Lintner model, Jean's results make no economic sense.

D. Cass, J. E. Stiglitz; Risk Aversion and Wealth Effects on Portfolios with Many Assets12, The Review of Economic Studies, Volume 39, Issue 3, 1 July 1972

The article focuses on social-psychological processes similar to those found in performance evaluation systems developed and used in accounting information systems. Further research must be done to determine the generalizability of these findings to behavior in actual business firms. However, several tentative hypotheses about accounting systems and their relationships to individual performance can be formulated: Performance reports quantitative measures like the test scores in the experiment accompanied by supportive comments generally stimulate higher performance more than a mere presentation of figures. The effects of certain combinations of factors on performance e.g., ability and self-esteem can be enhanced through the use of supportive feedback or diminished by neutral feedback. Initial budget estimates prepared by individuals holding varying levels of ability and self-esteem will be unrealistically high or low estimates of performance in relatively new activities. Accounting-type feedback decreases differences between expected and actual performance.