William W. Hogan, James M. Warren, Toward the Development of an Equilibrium Capital-Market Model Based on Semivariance, The Journal of Financial and Quantitative Analysis, Vol. 9, No. 1 (Jan., 1974), pp. 1-11

Oliver D. Hart, Dwight M. Jaffee; On the Application of Portfolio Theory to Depository Financial Intermediaries12, The Review of Economic Studies, Volume 4

THE CLASSIC PAPER by Grunfeld and Griliches [3] contains many instructive insights into question of circumstances under which an aggregate dependent variable may be forecasted more precisely with a model based on aggregate variables as opposed to an aggregate of forecasts from individual equations. The statistical model they employ is standard regression framework, a single at macro level and a set of seemingly unrelated regressions (to use Zellner's term) at level. Under assumptions of perfect model specification and nonstochastic regressors, a result of Theil's supports superiority of equations. It is Grunfeld and Griliches' main contention, however, that equations are likely to be more poorly specified than is macro equation. Perhaps, therefore, an aggregation will be realized in prediction of aggregate dependent variable by use of macro equation. While intuitively appealing, one soon finds that to articulate notion that micro equations are likely to be more poorly specified than is macro equation is difficult. Grunfeld and Griliches provide an illustration [3, pp. 7-9] that more than anything else points up elusive character of this notion. Recently, Orcutt, Watts, and Edwards [7] and Edwards and Orcutt [2] published papers that ostensibly support prediction from disaggregated data. Edwards and Orcutt note that a more basic difficulty with equations is that suitable data are scarce. Grunfeld and Griliches had earlier observed in passing that the poor quality of data may be another source of aggregation gain [3, p. 10]. It is precisely this consideration which we propose to examine in present paper. More particularly, we examine virtues of estimating or macro equations when independent variables in equations are observed with error, but corresponding aggregate variables have a smaller (or possibly no) observation error. There are many economic applications in which such offsetting errors may be plausibly hypothesized. For example, there may be some arbitrariness in classification of products (or industrial breakdown), so that while total sales figures for a given firm may be well established, their components may be subject to error. Alternatively, we may have common situation in which an aggregate figure is collected on a regular basis from a relatively complete sample, but components are calculated from benchmarks provided from a smaller or an older sample.

This article points out that petroleum production costs outside North America have been declining, not rising, and that scarcity is the pressure of demand on supply. The article indicates our government has surrendered to the Arab oil threats, and that the threats can be broken. It recommends the sound policy outside the U.S. is do nothing and say nothing, while inside the U.S. reducing dependence on Arab oil will weaken the Arab hand.

This article presents comments of M. Chapman Findlay, III on Harold Wyman's article "Financial Lease Evaluation Under Conditions of Uncertainty," published in the July 1973 issue of the journal "The Accounting Review." The author suggests that it must be borne in mind that the savings on operating costs and the loss of the residual value are included in the cost of leasing model because they represent cash flows which would occur if the asset were owned and, as such, are opportunity costs of leasing. He suggests that the greater the dispersion of operating costs to be absorbed by the lessor or residual value, the greater the risk of owning the asset and, accordingly, the greater the desirability of a lease which would relieve the firm of these risks. He notes that, unfortunately, Wyman's technique attributes these risks to the lease. Thus, if a lease were offered on a piece of equipment with wildly uncertain operating costs and residual value, he suggests that the Wyman model would show the lease to be highly risky.

The core is the set of all allocations that cannot be blocked by any coalition no matter how improbable is its formation. Extending the insights of the Continuum School, this article shows that restrictions placed on the formation of coalitions do not enlarge the core very much if the finite economy is large. (Из Ebsco)

J. M. Grandmont, A. P. Kirman, W. Neuefeind; A New Approach to the Uniqueness of Equilibrium12, The Review of Economic Studies, Volume 41, Issue 2, 1 April 1974