This paper studies the information value of immediate disclosure of the FOMC policy directive. The value of disclosure is measured by its ability to reduce investors' expected uncertainty about futures interest rates where uncertainty is defined as the conditional variance of forecast errors. Analytical relationships between new information and the conditional variance of forecast errors are developed and the relation of the “uncertainty‐reducing” value of information to its social value, as defined in recent literature, is indicated. In the empirical work, forward interest rates are treated as reflecting market expectations conditioned on existing information. The empirical tests indicate that information in the undisclosed, prevailing policy directives (1974–79) were able to make only a very marginal improvement in the predictive accuracy of forecasts relying only on the forward rates. Thus, the hypothesis that immediate disclosure has a significant information value to market participants is not supported.

Reviews the book "Recognition of Contractual Rights and Obligations," by Yuji Ijiri.

Reviews the book "Imperial Sportswear, Inc.: An Audit Case Problem," by Stephen Fogg.

The purpose of this exploratory research is to assess empirically the potential usefulness of municipal accounting data for explaining voting decisions. The economic theory of voting behavior forms a conceptual foundation for examining the utility of accounting information for discriminating between mayoral election results. A stepwise discriminant analysis was used to develop multivariate models that distinguish between samples of cities clustered into three homogeneous groups on the basis of socio-demographic attributes. The dependent variable for the discriminant analysis was the outcome of elections for mayor in 113 cities with populations exceeding 25,000 in 1977, and the independent variables were municipal accounting ratios. Statistically significant discriminant functions were produced which correctly classified a greater-than-chance percentage of the election outcomes. These results suggest that municipal accounting numbers may provide useful information for explaining voter behavior since they measure the effects of municipal policy decisions consistent with voter assessments.

Wei Shih, professor of applied statistics and operation research, presented a general decision model that accounts for uncertainty in demand, while assuming that costs and selling prices are known parameters. Under this model, Shih developed methods for computing the optimal production level and formulas for the mean, variance and distribution of the amount of profit. In this article, the author investigates how management should perform break-even analysis when confronted with production decisions for situations satisfying Shih's model. At first the author demonstrates by argument and counter-example that Shih's analysis of the break-even decision is incorrect and then presents a valid approach to break-even analysis for the general decision model. Shih's model assumes that price, variable cost and fixed cost are known parameters. Demand has to be determined by the decision maker. Usually the decision maker will choose the value of demand so as to maximize the expected profit. According to Shih's model, since the profit is a linear function of demand, it is only necessary to compare the average demand with the break-even point to determine the profitability of new product.

Reviews the book "Capital Budgeting: Planning and Control of Capital Expenditures," by John J. Clark, Thomas J. Hindelang and Robert E. Pritchard.

Reviews the book "Managerial Accounting: An Introduction," 3rd ed., by James H. Rossell, William W. Frasure and Donald H. Taylor.

This paper presents a model of myopic tastes, both in the context of intertemporal decision making and choice under uncertainty. Infinite dimensional consumption plans arise naturally in both contexts, either involving a denumerable number of periods or a countable number of states of the world. The essential feature of our model is that myopic behavior is formalized by defining topologies, on the space of consumption plans, which discount the future or improbable events.