Robert H. Ashton, Cognitive Changes Induced by Accounting Changes: Experimental Evidence on the Functional Fixation Hypothesis, Journal of Accounting Research, Vol. 14, Studies on Human Information Processing in Accounting (1976), pp. 1-17

Auditing, Materiality, Material error, Sampling plan

Richard H. Pettway, The Effects of Large Bank Failures Upon Investors' Risk Cognizance in the Commercial Banking Industry, The Journal of Financial and Quantitative Analysis, Vol. 11, No. 3 (Sep., 1976), pp. 465-477

This brief paper will show that (a) a theoretical equilibrium state of the world exists in the absence of capital controls and trade barriers when prices for the same goods in different markets are equal, after translation at the spot exchange rate; (b) differences in rates of aggregate price change in different markets eventually cause offsetting exchange rate changes which restore condition (a); (c) returns on equivalent securities denominated in different currencies but covered in the forward market are almost instantaneously equalized; (d) the market's expected rate of change of the exchange rate equals, to a close approximation, the control-free interest rate differential between the two currencies; (e) in the absence of predictable exchange market intervention by central banks, the interest rate differential is the best possible forecaster of the future spot rate; and (f) the forward rate also provides the best forecast of the future spot rate. A final corollary identifies a relationship between inflation rates and international interest rate differentials.

Journal Article A Note on Consistent Naive Intertemporal Decision Making and an Application to the Case of Uncertain Lifetime Get access H. Stuart Burness H. Stuart Burness University of Kentucky Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 43, Issue 3, October 1976, Pages 547–549, https://doi.org/10.2307/2297234 Published: 01 October 1976 Article history Received: 01 May 1975 Accepted: 01 October 1975 Published: 01 October 1976

I. Introduction and background, 346.—II. A two-asset model with trade, 349.—III. Instantaneous equilibrium with a flexible exchange rate, 355.—IV. Stock equilibrium with a flexible exchange rate, 357.—V. Monetary and fiscal policy reconsidered, 361.—VI. Stock equilibrium with a fixed exchange rate, 364.—Appendix: Determinant condition for stock equilibrium, 366.

[This paper presents a Bayesian analysis of a single equation from a simultaneous equations system. The analysis is carried out under "limited information" because no prior information (other than a list of endogenous and exogenous variables) is introduced on the parameters of the remaining equations in the in the system. These parameters are integrated out analytically. The equation of interest may or may not be identified by means of exact a priori information; probabilistic prior information is equally acceptable. The prior density is either of the non-informative or the natural conjugate type. The kernel of the posterior density for the regression coefficients is a ratio of t kernels. The existence of posterior moments is ascertained. This approach is applied for illustrative purposes to Tintner's model of the meat market.]

The impatience implications of continuous time utility indicators are interesting to the extent that they differ from the discrete time results. The class of tFaditional integral utility indicators are considered and impatience implications are shown to depend on the dif- ferent convergence implications of the continuous time case. The stronger separability assumptions of continuous time utility indicators allow a weakening of compactness assumptions often required to demonstrate impatience. presence of impatience. Specific separability assumptions were invoked by Koopmans (8) and Koopmans, Diamond, and Williamson (9) in order to demonstrate the presence of impatience in problems involving choice over an infinite program horizon. From a paper by Diamond (4) one,can infer much of the relationship between separability assumptions and impatience implications. Diamond employed several intertemporal non-complementary assumptions to demonstrate eventual impatience for a case in which the consumption space was not compact in the topology of the norm. The use of non-complementary axioms seems justifijable as their economic implications are straightforward while those of compactness assumptions are not immediately obvious.2 Moreover the natural extension of Diamond's first axiom to all time periods yields a condition equivalent to the independence assumption employed by Debreu (3) in representing preferences by an additive function. Consequently, this paper analyzes separable utility indicators directly for impatience implications; the analysis considers the continuous time case as it subsumes the discrete time analog. However the discrete time case will be discussed in order to facilitate analogy construction.