This paper develops new indicators of accumulated academic science and tests their explanatory power on productivity data from manufacturing industries. Knowledge is found to be a major contributor to productivity growth. Furthermore, a lag in effect of roughly 20 years is found between the appearance of research in the academic community and its effect on productivity in the form of knowledge absorbed by an industry. Academic technology and academic science filtered through interindustry spillovers exhibit lags of roughly 10 and 30 years each. Thus implied search and gestation times far exceed developmental periods in studies of R & D. A clear implication is that basic research declines relative to development in the face of an exogenous rise in the real of interest.

Using data from a sample of the economic literature published over the years 1950 through 1988, we find substantial support for an environmental theory of idea entrepreneurship among economists. In particular, we show that the percentage of economic articles devoted to the topics of inflation and employment are related directly to the actual inflation and unemployment rates in the economy and indirectly to the growth rate of aggregate real income. Moreover, we are able to provide evidence of undirectional causality running from changes in the economic environment to changes in the composition of the economic literature.

The article develops new approximations to the distribution function of a general econometric estimator or test statistic from a linear model. The method relies heavily on the general arguments for the validity of Edgeworth approximations, and produces formulae of a similar type, except that, instead of using the cumulative normal distribution, an Imhof distribution is used derived from the exact distribution of a linear combination of the sample data second moments. On theoretical grounds this might be expected to give better approximations for some estimators. In practice comparisons were made between computed approximations of both types for several simple cases.

[Management accountants are often required to construct measures of performance of individual managers by aggregating several accounting numbers (signals). We show that the same method of aggregation will rarely be used for evaluating the performance of different managers. Instead, the method of aggregation will vary with the specific preference functions of individual managers and the corresponding action choices induced by the owner. Such an optimal aggregate always exists but is not, in general, a sufficient statistic for the individual signals with respect to the agent's effort. We further show that, in most cases, using all the information in the sufficient statistic makes the principal strictly worse off. The analysis provides insights into a different statistical approach for evaluating nonsufficient aggregates based on the signal to noise ratio of the individual signals that are aggregated.]

Share-price responses to 95 announcements of increased research and development (R & D) spending are significantly positive on average, even when the announcement occurs in the face of an earnings decline. High-technology firms that announce increases in R & D spending experience positive abnormal returns on average, whereas announcements by low-technology firms are associated with negative abnormal returns. Further, in our cross-sectional analyses we find that higher R & D intensity than the industry average leads to larger stock-price increases only for firms in high-technology industries.

The value of the dollar appears to move in one direction for long periods of time. The authors develop a new statistical model of exchange rate dynamics as a sequence of stochastic, segmented time trends. They reject the null hypothesis that exchange rates follow a random walk in favor of their model of long swings. The authors' model also generates better forecasts than a random walk. The specification is a natural framework for assessing the importance of the "peso problem" for the dollar. The authors nonetheless reject uncovered interest parity.

This paper concerns the regulation of hazardous economic activities. Economists have generally viewed ex ante regulations (safety standards, Pigouvian fees) that regulate an activity before an accident occurs as substitutes for ex post policies (exposure to tort liability) for correcting externalities. This paper shows that where there is uncertainty, there are inefficiencies associated with the exclusive use of negligence liability and that ex ante regulation can correct the inefficiencies. In such a case it is efficient to set the safety standard below the level of precaution that would be called for if the standard were used alone.