Previous estimates of a ‘size effect’ based on daily returns data are biased. The use of quoted closing prices in computing returns on individual stocks imparts an upward bias. Returns computed for buy-and-hold portfolios largely avoid the bias induced by closing prices. Based on such buy-and-hold returns, the full-year size effect is half as large as previously reported, and all of the full-year effect is, on average, due to the month of January.

Reviews the book "Opportunities in Accounting," by Martin Rosenberg.

The paper employs the intergenerational model to derive the demands for domestic and foreign currencies from microeconomic optimizing behavior. In the absence of government policy, we obtain the Kareken and Wallace result that exchange rates are constant and indeterminate. We discuss the reasons why nations may find it in their interests to impose probabilistic capital controls. It is shown that the imposition of probabilistic capital controls yields a unique (generally nonstationary) exchange rate path and that this path is determined in accord with the Monetary Approach. As the probability of controls tends to zero, the exchange rate remains determinate.

THIS paper models and estimates import demand and demand for export functions for 19 industrial countries. Although primary emphasis is placed on the period of generalized floating exchange rates, 1972 through 1980, estimates are also provided for the fixed exchange rate years (1957-1970), thus making possible a comparison between the two eras. Aside from the conventional income and price variables, the paper assesses the effect of variations in the exchange rate and in the expected exchange rate, on real trade flows. Additionally, it estimates an unrestricted lag structure of the effect of price and exchange rate variations on imports.

Reviews the book "Accounting: A Management Approach," 7th ed., by Gordon Shillinglaw and Philip E. Meyer.

Reviews the book "Financial Reporting and Changing Prices: A Review of Empirical Research," by Paul Frishkoff.

The article presents a discussion on corporate accounting practices. Questionable accounting practices such as deferring expenses, inflating revenue, altering invoices, and exaggerating the value of inventories are occurring more frequently. Auditors are being urged to study the attitudes of management toward its own internal controls, be cautious when a client consistently chooses the least conservative approach, and, to analyze the condition of each client to figure out which economic conditions are causing the most pressure and what the companies might be doing to alleviate the pressure. Auditors are warned to watch for unreasonable management pressures in face of difficult times. Accountants work under tremendous stress and work pressure. This suggests that stress can be an important accompaniment of accounting practices. In work situations such as those in which accountants work, stress may be indicated by behaviors such as: working late more than usual; increases in the number of careless mistakes; missing deadlines or forgetting appointments; etc.

The model investigated here is an adaptation of the free-entry model introduced in Kihlstrom-Laffont [1979]. In that model the only labor market is one in which employers pay workers an ex ante guaranteed wage. In the model of this paper, there is also a spot market for labor. In the earlier sections of the paper, the existence of the equilibrium is established, and its efficiency is investigated. In this analysis it is assumed that all individuals are identical. In the later sections we drop this assumption and investigate conditions under which employers are more risk-averse than workers.

This picture is greatly complicated when restrictions on the structural disturbance variances and covariances, (henceforth "covariance restrictions") are allowed.Koopmans Rubin, and Leipnik (1950) recognized the usefulness of such restrictions for identification and demonstrated their equivalence to bilinear restrictions on the coefficients.This work was pursued by Wegge (1965) j Rothenberg (1971), and especially Fisher (1963, 1965), surveyed in Fisher (19-66, Chapters 3 and 4).Structural estimation is also complicated by covariance restrictions: as pointed out by Rothenberg and Leenders (1964), system instrumental variables estimators (3SLS) are asymptotically inefficient when covariance i restrictions are present.Two features of these results are (i) the absence of useful necessary and sufficient conditions for identifiability in the presence of covariance restrictions, and (ii) the disappearance of the link between restrictions required for identification and instrumental variables required for estimation.The problem of incorporating covariance restric- tions Into the theory of identification and estimation is thus Incomplete.In this and a companion paper on estimation (Hausman-Taylor (1981)), we provide a simple, complete, and useful solution to the problem In terms of instrumental variables .In the present paper, we derive necessary and sufficient conditions for identifiability in linear simultaneous equations models subject to linear restrictions on the coefficients and covariances.The result, in practical