Because there are no market‐determined prices for IPO shares before they are sold to investors, issuers and underwriters must use nonprice information about the firm to set the offering price. Accounting‐based measures are frequently identified as particularly useful in valuing untraded securities. This paper reports evidence that IPO issuers make income‐increasing discretionary accruals in the financial statements released before the offering. This evidence is consistent with the hypothesis that issuers believe that financial statement information affects IPO offering prices. Résumé. Les actions émises dans le cadre d'un premier appel, public à l'épargne n'ayant pas de prix fixé par le marché avant d'être vendues aux investisseurs, les émetteurs et les preneurs ferme doivent utiliser l'information relative à l'entreprise n'ayant pas trait au prix pour établir le prix d'émission. Les mesures d'origine comptable sont souvent considérées comme étant particulièrement utiles dans revaluation de valeurs mobilières non encore négociées. L'auteur démontre que dans les états financiers qu'elles publient avant l'émission, les entreprises qui procèdent à un premier appel public à l'épargne traitent les charges abonnées sur lesquelles elles exercent un pouvoir discrétionnaire de façon à hausser les bénéfices. Cette constatation est conforme à l'hypothèse selon laquelle les émetteurs estiment que l'information contenue dans les états financiers a une incidence sur le cours des actions émises dans le cadre d'un premier appel public à l'épargne.

Before 1986 Australian companies' unregulated foreign currency accounting practices were diverse. Firms variously recognised exchange rate gains or losses on foreign currency long‐term debt (1) as the exchange rate moved, (2) when the debt was settled, or (3) progressively over the term of the debt. This study tests empirically whether the voluntary accounting policy choices were endogenous to contractual equilibria between claimants against the firm and management. Managers' choices are explained as an efficient means to report the impact on debt and equity values from exchange rate movement effects on the value of investments in foreign currency earning assets domiciled in Australia. The study finds that asset specificity and the ratio of firms' investments in assets in place to growth options are significant in explaining the accounting policy choice. Firms used accounting methods that provided accounting exchange rate hedges concurrent with their economic exchange rate hedges of specialised assets in place. Résumé. Les méthodes de comptabilisation des opérations en devises — qui ne faisaient l'objet d'aucune réglementation— variaient dans les sociétés australiennes. Les entreprises constataient de différentes manières les gains ou les pertes de change sur les dettes à long terme libellées en devises, soit (1) à mesure que le taux de change évoluait, soit (2) lorsque la dette était réglée, soit (3) progressivement pendant la durée de la dette. L'auteur vérifie au moyen d'un test empirique si les choix volontaires de politique comptable étaient endogènes aux équilibres contractuels entre les parties par rapport à l'entreprise et à la direction. Les choix des gestionnaires sont, explique‐t‐il, un moyen efficient de faire état de l'incidence sur la valeur de la dette et des capitaux propres des effets des mouvements du taux de change sur la valeur des placements que possèdent les entreprises australiennes dans des éléments d'actif rapportant des bénéfices en monnaie étrangère. L'auteur constate que la spécificité des éléments d'actif et le rapport entre les placements en immobilisations et les options de croissance sont déterminants du choix de politique comptable. Les entreprises, observe‐t‐il, utilisaient des méthodes comptables offrant une couverture comptable des taux de change concurremment à la couverture économique des éléments d'actif spécialisés qu'elles possédaient.

This study examines budgetary control in automated production environments. It is argued that the relative insignificance of direct labor costs, together with the greater degree of integration of service and production departments in automated production environments, restrict the degree of freedom that normally exists in the design of an appropriate budgetary control system. The paper argues for a more integrated approach, and demonstrates that the reciprocal allocation method, linked with the dual allocation approach, has the properties necessary for an appropriate budgetary control system for automated production environments. The paper extends the current literature by demonstrating some properties of the reciprocal method hitherto unexplored. Résumé. L'auteur examine le contrôle budgétaire dans le contexte de la fabrication automatisée. Il soutient que le peu d'importance relative des coûts de main‐d' œuvre directe, associé au degré plus grand d'intégration des services auxiliaires et du service de fabrication dans le contexte de la fabrication automatisée, restreint la liberté qui existerait normalement dans la conception d'un système de contrôle budgétaire approprié. L'auteur favorise une méthode plus intégrée et démontre que la méthode de répartition réciproque, liée à la méthode de double répartition, présente les propriétés nécessaires pour que le système de contrôle budgétaire soit approprié au contexte de la fabrication automatisée. Dans le prolongement des publications courantes, l'auteur fait état de certaines propriétés de la méthode réciproque jusqu'ici inexplorées.

It is well known that corporations issue foreign currency-denominated debt to hedge foreign currency cash flows with offsetting interest payments. We test an alternative “opportunistic” motive for foreign currency-denominated borrowing. We do so by constructing a comprehensive sample of foreign currency-denominated bonds issued by sovereign government and agency issuers with no foreign currency cash flows or foreign operations. We find strong and consistent evidence that the borrowers in our sample consider cross-currency differences in covered and uncovered interest yields in choosing the currency in which to denominate their international debt. We estimate the average gains to opportunistic covered yield borrowing to be 4 to 18 basis points. Interestingly, we also find that the average bond offering in our sample precedes a large and beneficial depreciation of the issue currency over the course of the following year. These results support what has been a frequent conjecture in the foreign debt market.

M. Lee Pelton of The Boston Foundation reviews “What Universities Owe Democracy” by By Ronald J. Daniels. The Econlit abstract of this book begins: “Promotes the argument that colleges and universities are essential to the flourishing of liberal democracy, suggesting that these institutions have a responsibility to act in defense of the liberal democratic experiment.”

Eric M. Leeper of Department of Economics, University of Virginia reviews “A Monetary and Fiscal History of the United States, 1961-2021” by Alan S. Blinder. The Econlit abstract of this book begins: “Examines monetary and fiscal policy in the United States since the 1960s, chronicling how stabilization policy struggled to fight recessions, unemployment, and inflation.”

IN THE FALL OF 1942, as the Allied and Axis nations marshalled their forces for decisive battles at Guadalcanal, El Alamein, and Stalingrad, Joseph A. Schumpeter's Capitalism, Socialism, and Democracy (CSD) was published. Perceived by Schumpeter at the time as a little book of essays somewhat in the nature of a potboiler,' it distilled for the intelligent lay reader almost forty years' thought, observation, and research (1942, p. ix) by the Austrian economist-statesman-banker turned Harvard don. Fifty years later, it remains relevant. In particular, it brought into the main stream of economic discourse the question of what market structures were most favorable to technological change and hence economic growth. Both in the United States and abroad, policy debates over that issue persist. Schumpeter's conjectures on market structure, the work by economists to extend them, and the continuing policy puzzles are the main focus of this anniversay essay. II. The Challenge

This paper reviews the economic literature on welfare reform over the 1990s. A brief summary of the policy changes is followed by a discussion of the methodological techniques that analyze the effects of these changes on outcomes. The paper then critically reviews the econometric and experimental literature on caseload changes, labor force changes, poverty and income changes, and family formation changes. A growing body of evidence suggests that recent policy changes have influenced economic behavior and well-being. One particular set of "new-style" welfare programs seems to show especially promising results, with significantly increased work and earnings and reduced poverty.

This paper reviews the economics literature on welfare reform over the 1990s. A brief summary of the policy changes over this period is followed by a discussion of the methodological techniques utilized to analyze the effects of these changes on outcomes. The paper then critically reviews the econometric and experimental literature on caseload changes, labor force changes, poverty and income changes, and family formation changes. A growing body of evidence suggests that the recent policy changes have influenced economic behavior and well-being in a variety of ways. One particular set of "new-style" welfare programs seems to show especially promising results, with significantly increased work and earnings and reduced poverty.

E BEGAN to conceptualize average total cost functions during the early decades of the twentieth century. But a century before, a German music publishing firm calculated and used in its internal decision making output-dependent average cost estimates for two methods of printing sheet music. This note describes that early experience and juxtaposes against it the relatively late emergence of the ATC curve in the formal literature of economics.