According to endogenous growth theory, permanent changes in certain policy variables have permanent effects on the rate of economic growth. Empirically, however, U. S. growth rates exhibit no large persistent changes. Therefore, the determinants of long-run growth highlighted by a specific growth model must similarly exhibit no large persistent changes, or the persistent movement in these variables must be offsetting. Otherwise, the growth model is inconsistent with time series evidence. This paper argues that many AK-style models and R&D-based models of endogenous growth are rejected by this criterion. The rejection of the R&D-based models is particularly strong.

This study tests the theory that students' performance on different types of examination questions is related to their level of formal reasoning ability, where formal reasoning refers to their ability to solve different types of problems. The theory of formal reasoning is based on Piaget's theory that the ability to solve problems is related to the maturation process. Piaget argued that young children can solve only the most straightforward types of problems and are not capable of solving complex problems simply because their minds have not developed sufficiently. With maturation, more complex types of problems can be solved. To measure the formal reasoning level of intermediate accounting students, we used an instrument developed by Piaget. Then, we related this level to the marks they received on examinations in several accounting courses. On examination questions that involve only straightforward types of problems, students performed equally well, regardless of their formal reasoning level, but students with higher levels of formal reasoning ability performed significantly better on questions that involve more difficult types of problems. The paper concludes by suggesting that accounting examinations should include more questions that require the use of higher reasoning skills if the accounting profession is to attract more students who have higher levels of reasoning ability. Résumé. Les auteurs testent la théorie voulant que la performance des étudiants qui répondent à différentes formes de questions d'examen soit reliée à leur capacité de raisonnement structuré, l'expression ≪ raisonnement structuré ≫ désignant leur capacité de résoudre différentes catégories de problèmes. La théorie du raisonnement structuré se fonde sur la théorie de Piaget selon laquelle la capacité de résoudre des problèmes est reliée au processus de développement. Selon Piaget, les jeunes enfants ne peuvent résoudre que les problèmes les plus simples et sont incapables de résoudre des problèmes complexes, du simple fait que leur intelligence n'est pas suffisamment développée. Avec le développement de l'intelligence, il devient donc possible de résoudre des problèmes de nature plus complexe. Les auteurs utilisent un instrument mis au point par Piaget pour mesurer la capacité de raisonnement structuré des étudiants des cours de comptabilité intermédiaire et relient cette capacité aux notes qu'obtiennent les étudiants aux examens, dans plusieurs cours de comptabilité. Les résultats révèlent que les questions d'examen qui ne font intervenir que des problèmes simples sont résolues aussi bien par tous les étudiants, peu importe leur capacité de raisonnement structuré, mais que la performance des étudiants ayant une capacité de raisonnement structuré supérieure est significativement meilleure lorsque les questions font intervenir des problèmes plus difficiles. Les auteurs concluent par une suggestion: les examens de comptabilité devraient comporter davantage de questions exigeant des facultés de raisonnement supérieures si l'on souhaite que la profession comptable attire une plus grande population d'étudiants possédant une capacité de raisonnement supérieure.

This paper argues that the 'scale effects' prediction of many recent R&D-based models of growth is inconsistent with the time-series evidence from industrialized economies. A modified version of the Romer model that is consistent with this evidence is proposed, but the extended model alters a key implication usually found in endogenous growth theory. Although growth in the extended model is generated endogenously through R&D, the long-run growth rate depends only on parameters that are usually taken to be exogenous, including the rate of population growth.

This paper argues that the "scale effects" prediction of many recent R & D-based models of growth is inconsistent with the time-series evidence from industrialized economies. A modified version of the Romer model that is consistent with this evidence is proposed, but the extended model alters a key implication usually found in endogenous growth theory. Although growth in the extended model is generated endogenously through R & D, the long-run growth rate depends only on parameters that are usually taken to be exogenous, including the rate of population growth.

This paper considers a standard monetary economy with indivisible primary assets and transaction costs. When assets are indivisible, if a steady-state equilibrium with positive savings exists, there necessarily exists a very large set of equilibria. The intermediation of indivisible assets substantially reduces the set of competitive equilibria, and enhances the "flexibility" of prices. We state sufficient conditions for intermediaries to form and hold all primary assets directly. We define and analyze various measures of the consumer surplus created by intermediaries. We show that conventional measures of intermediary output bear no obvious relation to the consumer surplus created by intermediation. Journal of Economic Literature Classification Numbers: E40, G20.

This paper examines the empirical relation between corporate ownership structure and innovation. We test the hypothesis that diffusely-held firms are less innovative than firms with either a high concentration of management ownership or a significant equity block held by an outside investor. Overall, the evidence indicates that diffusely-held firms are less innovative along the dimensions we examine: patent activity, growth by acquisition versus internal development, and timing of long-term investment spending. These results are consistent with the conjecture that concentrated ownership and shareholder monitoring are effective at alleviating the high agency and contracting costs associated with innovation.

We report the first results for Japanese firms on the effects of employee stock-ownership plans (ESOP's) and bonuses by estimating production functions using new panel data. We find that the introduction of an ESOP will lead to a 4-5-percent increase in productivity; this productivity payoff takes 3-4 years. There is a modest productivity gain from the bonus system. We also find evidence that the productivity effect of bonuses is enhanced by the existence of ESOP's, suggesting that ESOP's may create a climate conducive to profit-sharing by enhancing long-term commitment and peer monitoring.

[Nonprofit, mutually owned insurance and banking organizations have significant market shares in the insurance and banking industries. A first step in a systematic study of these financial mutuals is to examine the reasons for their formation. Doing so provides empirical support for the view that these mutuals arose as an efficient means of addressing contracting challenges caused by aggregate uncertainties and moral hazard. A formal model with this property is presented. We argue that information asymmetries do more to explain the kinds of contracts offered by financial mutuals than do agency problems between owners, managers, and customers.]

Empirical studies of dual class shares indicate that superior voting shares (SVS) sell at a premium relative to their counterpart restricted shares (RVS). This paper uses Toronto Stock Exchange data to show that SVS price premium over RVS reflects the expected takeover premium paid to shareholders outside the control block. Thus, marginal shareholders pay a higher SVS price in anticipation of receiving a differential takeover bid as suggested by the extra merger hypothesis. Further analysis indicates that voting power increases the price premium while ownership, size, and the higher trading liquidity of RVS are inversely related to the premium.