Dwight M. Jaffee, Thomas Russell; Imperfect Information, Uncertainty, and Credit Rationing: A Reply*, The Quarterly Journal of Economics, Volume 99, Issue 4, 1

[The consensus in the literature is that the use of only lump-sum taxation is a necessary and sufficient condition for the dynamic consistency of optimal open-loop government policies. We show that this does not hold for models with nonhomogeneous agents. Then the stated condition is neither necessary nor sufficient. Dynamic inconsistency arises because of a shortage of appropriate government policy instruments which amounts to the consensus condition only in special cases.]

Controversy surrounds the Securities and Exchange Commission's (SEC) Rule 415 that went into effect in March 1982 and remained an experiment until it was permanenty adopted for large firms in November 1983. Rule 415allows a company to register all the securities it plans to issue over the next two years and then to sell someor all of the securities whenever it chooses. This procedure is known as a shelf registration. The purposes of Rule 415 are to simplify the registration of new corporate securities and to allow more flexibility in the way issues are underwritten.

In this paper we study the role of promotional expenditures by sellers in a model of product differentiation. Advertising conveys full and accurate information about the characteristics of products. Heterogeneous consumers, who have no source of information other than advertisements, seek to purchase the products that best fit their needs. Despite the roles played by advertising in improving the matching of products and consumers, and in increasing the elasticity of demand faced by each firm, we find that the market-determined Jevels of advertising are excessive, given the extent of diversity in the market. We derive a promotional equilibrium based on a specific information transmission technology, paying explicit attention to the structure of consumer information and its impact on firms' demand curves. This allows us to study the effects of changes in the advertising technology, including an increased ability to target messages to specific groups of consumers, on the equilibrium in the product market. We find that decreased advertising costs may reduce profits by increasing the severity of price competition.

Reviews the book "Topics in Managerial Accounting," by L.S. Rosen.

[The fairness and equity within our current tax system have often been questioned. Indeed, there are several proposals that call for drastic changes in our current system. However, many of the proposals lack input from the general public, i.e., those subject to the tax system. This paper presents the results of an experimental study designed to determine perceptions of fair and equitable tax structures and redistributions. The results indicate that, from an equity viewpoint, taxpayer need and ability to pay are the most significant variables that should be utilized when formulating tax policies.]

The fairness and equity within our current tax system have often been questioned. Indeed, there are several proposals that call for drastic changes in our current system. However, many of the proposals lack input from the general public, i.e., those subject to the tax system. This paper presents the results of an experimental study designed to determine perceptions of fair and equitable tax structures and redistributions. The results indicate that, from an equity viewpoint, taxpayer need and ability to pay are the most significant variables that should be utilized when formulating tax policies.

Stephen M. Schaefer, Eduardo S. Schwartz, A Two-Factor Model of the Term Structure: An Approximate Analytical Solution, The Journal of Financial and Quantitative Analysis, Vol. 19, No. 4 (Dec., 1984), pp. 413-424