Linear and nonlinear Granger causality tests are used to examine the dynamic relation between daily Dow Jones stock returns and percentage changes in New York Stock Exchange trading volume. We find evidence of significant bidirectional nonlinear causality between returns and volume. We also examine whether the nonlinear causality from volume to returns can be explained by volume serving as a proxy for information flow in the stochastic process generating stock return variance as suggested by Clark's (1973) latent common‐factor model. After controlling for volatility persistence in returns, we continue to find evidence of nonlinear causality from volume to returns.

The purpose of this note is to propose a decomposition of the Gini index of inequality into within and between subpopulations using the Lerman-Yitzhaki covariance method. The present method suggests that once the population is arranged in ascending order of income and assigned ranks, the same ranks will be used to calculate total as well as between inequality. In this way, it differs from the one suggested by Jacques Silber (1989) in the measurement of between inequality and, thereby, in the interaction term.

[Recently, management accountants have focussed attention on the appropriate treatment of costs associated with resources committed to support activities which do not vary proportionally to production once initial capacities have been set. In one typical case, it is assumed that costs of committed resources will be incurred irrespective of actual usage, and increasing initial capacities to accommodate unexpected demand involves penalties above normal costs. There are at least two important issues that arise in such a case: (1) how should costs of resources committed to, or subsequently required by, support activities enter into pricing and capacity decisions, and (2) what information should the accounting system provide to marketing and production in order to implement those decisions. Our objective in this paper is to address these two issues. The basic tension which underlies both pricing and capacity decisions is between the nonrecoverable cost of adding capacity before demand becomes known, and the expected penalty-adjusted cost of doing so after demand becomes known. In regard to the first issue, we find in our setting that only normal cost enters into pricing rules established at the time initial capacities are set. (Penalties for exceeding initial capacities are implicit in that for the marginal unit of each activity, normal cost equals expected penalty-adjusted cost.) Findings on the second issue are that the product costing system can be designed without knowledge of demand parameters; the marketing manager only requires activity-based unit costs provided by that system, along with knowledge of demand parameters, to make pricing decisions which are optimal from a firm-wide standpoint; and the production manager only needs expected demand from marketing, along with knowledge of the distribution of random demand shocks, and cost and production parameters, to make initial capacity decisions. The economic sufficiency of the activity-based unit cost in pricing decisions is in the spirit of Amershi et al. (1989), while the equivalence of marginal cost, normal cost, and expected penalty-adjusted cost of under-capacity bear similarity to results in studies by Miller and Buckman (1987), Whang (1989) and Hansen and Magee (1993). The main distinctions between these studies and ours lie in assumptions regarding production functions, the nature of information asymmetries, and our incorporation of pricing decisions as well as capacity decisions.]

Reviews the book `The Benchmarking Management Guide,' from the American Productivity & Quality Center.

In this paper, the authors model a job-specific shock process in the matching model of unemployment with noncooperative wage behavior. They obtain endogenous job creation and job destruction processes and study their properties. The authors show that an aggregate shock induces negative correlation between job creation and job destruction, whereas a dispersion shock induces positive correlation. The job destruction process is shown to have more volatile dynamics than the job creation process. In simulations, the authors show that an aggregate shock process proxies reasonably well the cyclical behavior of job creation and job destruction in the United States.

The authors develop a measure of public information flow to financial markets and use it to document the patterns of information arrival, with an emphasis on the intraday flows. The measure is the number of news releases by Reuter's News Service per unit of time. The authors find that public information arrival is nonconstant, displaying seasonalities and distinct intraday patterns. Next they relate their measure of public information to aggregate measures of intraday market activity. The authors' results suggest a positive, moderate relationship between public information and trading volume but an insignificant relationship with price volatility.