Previous studies identify predetermined variables that predict stock and bond returns through time. This paper shows that loadings on the same variables provide significant cross‐sectional explanatory power for stock portfolio returns. The loadings are significant given the three factors advocated by Fama and French (1993) and the four factors of Elton, Gruber, and Blake (1995). The explanatory power of the loadings on lagged variables is robust to various portfolio grouping procedures and other considerations. The results carry implications for risk analysis, performance measurement, cost‐of‐capital calculations, and other applications.

We report on the design of the new clearinghouse adopted by the National Resident Matching Program, which annually fills approximately 20,000 jobs for new physicians. Because the market has complementarities between applicants and between positions, the theory of simple matching markets does not apply directly. However, computational experiments show the theory provides good approximations. Furthermore, the set of stable matchings, and the opportunities for strategic manipulation, are surprisingly small. A new kind of "core convergence" result explains this; that each applicant interviews only a small fraction of available positions is important. We also describe engineering aspects of the design process.

This paper embeds variable effort into a traditional two‐sector Heckscher‐Ohlin model of international competition. Effort enters a production function as total factor productivity, and on the assumption that effort does not affect capital depreciation, the capital cost savings from high‐effort operations are passed on to workers. The labor market thus offers a set of contracts with higher wages compensating for higher effort. This has implications for growth, openness, minimum wages, collective bargaining, public support of education, efficiency of state enterprises, the distribution of wealth, childbearing, and much more.

Recent turmoil in international financial markets has raised a set of fundamental questions for the global community: Is the set of international financial arrangements, established after the Great Depression and World War II and modified after the abandonment of the gold standard in 1973, up to the challenges of the twenty-first century? Are minor modifications such as slight changes in the governance of the international financial institutions, increased transparency, or surveillance! all that is required to adapt these institutions to the needs of modern economies, or are more fundamental changes necessary? Today, although much has been proposed, discussed, and argued, no consensus on desirable changes has yet been reached. In the meantime, what can countries, especially the poor, the small, and the less developed, do to protect themselves from the seeming ravages of storms brought on by international financial instability?

In this study, we use data for 1981 through 1994 on a large sample of U.S. companies to examine the persistence of incremental industry, corporate-parent, and business-specific effects on profitability. Our results indicate that the incremental effects of industry on profitability persist longer than the incremental effects of the corporate parent and of the specific business. Changes in industry structure have a more persistent impact on profitability than do changes in firm structure.

Governments often promote inward foreign investment to encourage technology “spillovers” from foreign to domestic firms. Using panel data on Venezuelan plants, we find that foreign equity participation is positively correlated with plant productivity (the “own-plant” effect), but this relationship is only robust for small enterprises. We then test for spillovers from joint ventures to plants with no foreign investment. Foreign investment negatively affects the productivity of domestically owned plants. The net impact of foreign investment, taking into account these two offsetting effects, is quite small. The gains from foreign investment appear to be entirely captured by joint ventures. (JEL F2, O1, O3).

Based on results from a 1999 national survey, William Becker and Michael Watts found that student evaluations of teaching were by far the most widely used, and often the only method used by economics departments, to evaluate teaching in undergraduate economics courses. To investigate whether departments of economics have moved beyond the use of student evaluations of teaching, in 2011 the current authors conducted a national survey of departments based largely on questions used in the 1999 survey. The surveys included items on how courses and teaching are evaluated, and on how that information is used in departmental promotion and salary decisions.

This study examines whether personally performing other audit tasks can bias supervising seniors' going-concern judgments. During an audit, the senior performs some audit tasks him/herself and delegates other tasks to staff members. When personally performing an audit task, the senior would focus on the evidence related to that task. We predict that such evidence will have greater influence on the senior's subsequent going-concern judgment. The results of our experiment are consistent with our predictions. When provided with an identical set of information, seniors who performed another audit task for which the underlying facts of the case reflected positively (negatively) on the company's viability, subsequently made going-concern judgments that were relatively more positive (negative). Our results also demonstrate that the well-documented tendency of auditors to attend more to negative information does not always dominate auditors' information processing. Subjects who performed the task for which the underlying facts reflected positively on the company's viability directed their attention to such positive information and, consequently, both their memory and judgments were more positive than those of subjects in the other conditions. Recent findings indicating that biases in seniors' going-concern judgments may not be fully offset in the review process are discussed along with other potential implications of our results.

Previous studies identify predetermined variables that predict stock and bond returns through time. This paper shows that loadings on the same variables provide significant cross‐sectional explanatory power for stock portfolio returns. The loadings are significant given the three factors advocated by Fama and French (1993) and the four factors of Elton, Gruber, and Blake (1995). The explanatory power of the loadings on lagged variables is robust to various portfolio grouping procedures and other considerations. The results carry implications for risk analysis, performance measurement, cost‐of‐capital calculations, and other applications.

Are nominal bonds appropriately discounted for taxes? Empirical estimates of the response of nominal interest rates to changes in inflation, the Fisher effect, have failed to produce a definitive answer. Four reasons have been put forward as possible explanations: (i) Tobin effects, (ii) fiscal illusion, (iii) peso problems, and (iv) different estimators. Utilizing data on taxable and tax‐exempt bond interest rates and several different estimators, we find that the Fisher effect estimates are always larger for the taxable bond relative to the tax‐exempt bond, suggesting that fiscal illusion and different estimators cannot account for the previous results.