Abstract ABSTRACT: For many quarterly time series of corporate earnings per share, the data indicate the desirability of incorporating a power transformation into the time series model. Our empirical results suggest that, for such series, this will generally lead to forecasts of improved quality. The resulting forecasts compare more favorably with those of financial analysts than do forecasts derived from models without the transformation parameter.

Consumer protection regulation has come under increasing fire from the Congress, courts, and the business community. In response, regulators have begun to innovate with market interventions that are more compatible with economic incentives. These incentive-compatible techniques include establishing property rights, mandating performance standards (instead of design standards), increasing competition, and encouraging and mandating information disclosure. Information disclosure allows consumer self-protection, compatible with individual preferences. Information is also compatible with sellers' incentives, inducing them to compete on the basis of information disclosed. In addition, this competition increases the incentive to generate and disseminate additional product information, thereby repeating the cycle. In this way, information remedies rely on private economic incentives to achieve regulatory goals, rather than on expensive direct enforcement by the regulator. Diagnosis of an information problem and evaluation of alternative remedies requires a number of steps: analysis of information production and distribution, identification of market failures and their implications for resource allocation in the information and product markets, and analysis of alternative remedies in light of these market failures.

On October 6. 1979, the Federal Reserve announced what most people interpreted as a change in monetary policy. The purpose of this paper is to estimate the effects of this change on the 1980-81 economy. The effects of the change are estimated from simulations with my model of the U.S. economy (1976, 1980b).

James G. Beierlein, James W. Dunn, James C. McConnon, Jr., The Demand for Electricity and Natural Gas in the Northeastern United States, The Review of Economics and Statistics, Vol. 63, No. 3 (Aug., 1981), pp. 403-408

Abstract ABSTRACT: Public outcry over widespread disclosures of corporate fraud, bribes, and illegal political contributions has resulted in greater responsibility being thrust upon both internal and external auditors for the prevention and detection of corporate irregularities. Little is known, however, concerning the potential effectiveness of the internal or external auditor in preventing corporate irregularities. In this study, it was hypothesized that an increase in the perceived "aggressiveness" of the internal and external auditor in detecting corporate irregularities would function as a deterrent. These two hypotheses were tested in a field experiment employing business managers. Neither of the hypotheses was supported. These results have important implications for the role of the internal and external auditor as "police officers" in corporate society.

A framework is developed for decomposing product price changes into changes in input prices, technical efficiency, and deviations of price from unit cost. This framework facilitates the measurement of productivity growth in noncompetitive industries. The history of American steel rail prices between 1879 and 1910 is analyzed, and it is concluded (in contrast with much recent work) that productivity growth remained rapid until the twentieth century and that the steel industry was sufficiently collusive so that the rail producers received the benefits of that productivity growth as excess profits.

ECONOMISTS and statisticians who construct estimates of total factor productivity or who estimate production functions or systems of consumer demand functions are often forced to aggregate subsets of their data. In order to perform this aggregation, an index number formula is generally used. A price index P(pO, pl, x?, xI) is defined to be a function P of the prices of the N commodities to be aggregated in periods 0 and 1,p?-(pll, . . . , PNO) and pl (pl,.'.. PN'), respectively, and of the corresponding quantities utilized during periods 0 and 1, x? (xi?, . . .,XNO) andX1 _ (xi', . . .,XN1), respectively. A quantity index Q(p0, pl, x?, xl) is defined to be another function Q of the price and quantity vectors for the two periods. Generally, we assume that P and Q satisfy Fisher's (1922) weak factor reversal test: