[The sequential treatment adopted in many multiple signal studies is consistent with a simultaneous treatment and with other apparently diverse sequential approaches. More importantly, the conventional residual security return research design, which is also a sequential approach, can lead to downward-biased estimates of the incremental explanatory power of the accounting variables introduced at the second stage. This finding is striking in that it implies that the most pervasive use of a sequential approach is likely to lead to biased results.]

David S. Kidwell, Eric H. Sorensen, John M. Wachowicz, Jr., Estimating the Signaling Benefits of Debt Insurance: The Case of Municipal Bonds, The Journal of Financial and Quantitative Analysis, Vol. 22, No. 3 (Sep., 1987), pp. 299-313

Beaver, Lambert and Morse (1980) employ a regression of percentage change in prices on percentage change in earnings in which data are grouped by the dependent variable. Reverse regression offers a more intuitive and direct way to assess the information content of security prices, the objective of Beaver et al. While grouping is asymptotically equivalent, reverse regression is a more efficient way of examining the incremental explanatory power of lagged values of percentage change in price with respect to accounting earnings.

The transfer paradox may occur in a world with only two countri es ata dynamically stable intertemporal competitive equilibrium. In a framework of overlapping generations with production and investment, a transfer of income may immiserize the recipient while enriching thedonor. Away from the golden ru le, a transfer may result in a Paretoimprovement.

We thank Lincoln Anderson, Orley Ashenfelter, Costas Azariadis, David Card, William A. Darity, Jr., Belton Fleisher, Richard Froyen, James J. Heckman, Solomon Polachek, Lawrence H. Summers, and two anonymous referees. Particular thanks go to Didi Dunphy for drafting the figures and to the University of North Carolina, College of Arts and Sciences, Endowment for Scholarly Publications for providingfinancial support. Sarah Mason did her usualfine job of typing, Karen Smith and Jonathan Veum provided valuable computing assistance, and Cynthia McCarty cheerfully checked citations for completeness and correctness. Preliminary versions of this paper have been presented at the 1982 Annual Meetings of the Econometric Society, the Fifth World Congress of the Econometric Society, 1985, and the 1986 Annual Meetings of the Eastern Economic Association.

Historically, poverty rates for minority individuals and families have been substantially higher than poverty rates for nonminorities. Moreover, after several decades of decline, poverty rates have been increasing for the last decade for both minority and nonminority individuals. The traditional gap between minority and nonminority poverty rates arises primarily within the working class and is largely attributable to differences in minority and nonminority labor market earnings. It also seems clear that much of the recent increase in poverty among the working class is a direct result of increasing employment problems and declining real wage rates. Minority individuals, especially minority males, have been particularly hard hit by these recent labor market trends. Explanations of poverty and racial differentials in poverty rates among the working class derived from conventional economic theory have correctly emphasized limited earnings in the labor market as the primary determinant of individual poverty and differences in group poverty rates. However, it is the contention of this paper that the conventional explanation of how labor markets generate poverty and poverty rate differentials among the working class is seriously limited and flawed, and thus provides a poor basis for generating good antipoverty policy advice. I propose an alternative view of how labor markets work to generate poverty that provides a richer basis for generating good policy advice. I. Conventional Explanations for Working Class Poverty

A blush may reveal a lie and cause great embarrassment at the moment. But in situations that require trust, there can be great advantage in being known to be a blusher. This paper develops a model in which tastes are determined endogenously for their capacity to help solve the so-called precommitment problem. The tastes that emerge are very different from those assumed in conventional models of rational choice.

As we approach 1987, the Gordian knot of the international debt problem seems to be tightening again. Rescheduling agreements and requests for new money by several important countries are on the agenda. It will take farsighted and strategic thinking on behalf of all participants to overcome the mounting problems confronting us. Nevertheless, I firmly believe that the problems will continue to be manageable if all participants focus on their long-term interest in coming to a satisfactory solution. It is within that general framework that I would like to approach the topic of this paper. The role of the banks in the debt crisis cannot be seen in isolation. Important interdependences must be considered, including the responsibilities of the debtor countries, the industrialized countries, and the international agencies.