In this article we argue that during the period from 1870 to 1914 adherence to the gold standard was a signal of financial rectitude, a "good housekeeping seal of approval," that facilitated access by peripheral countries to capital from the core countries of western Europe. Examination of data from nine widely different capital-importing countries, using a model inspired by the Capital Asset Pricing Model, reveals that countries with poor records of adherence were charged considerably more than those with good records, enough to explain the determined effort to stay on gold made by a number of capital-importing countries. T he global economy in its present form emerged in the half century before World War I. That "golden age" was characterized by massive interregional flows of capital, labor, and goods. It was also an era when most nations adhered to (or attempted to adhere to) the gold standard rule of convertibility of national currencies into a fixed weight of gold. Common adherence to gold convertibility in turn linked the world together through fixed exchange rates. In this article we argue that adherence to the gold standard also served as "a good housekeeping seal of approval" that facilitated access by peripheral countries to capital vital to their development from the core countries of western Europe. We view the gold standard as a contingent rule or a rule with escape clauses. Members were expected to adhere to convertibility except in the event of a well-understood emergency such as a war, a financial crisis, or a shock to the terms of trade. Under these circumstances, temporary departures from the rule would be tolerated on the assumption that once the emergency passed, convertibility at the original parity would resume.' It is well known that a number of core countries (England, France, and Germany as well as several other developed western European countries) adhered to this rule before 1914. Even a number of developing peripheral countries also did so (Canada, Australia, and the United States), or

/pdf/the-gold-standard-as-a-good-housekeeping-seal-of-approval-4qjfa5ai26.pdf

The Gold Standard as a "Good Housekeeping Seal of Approval>"

https://www.krannert.purdue.edu/centers/ijio/Accepted/mspa.pdf

Competing models of firm profitability

We review the empirical literature that extends and tests the Hotelling model of the optimal depletion of an exhaustible resource. The theory is briefly described to set the stage for the review of empirical tests and applications. Those tests can be roughly divided into two broad categories—descriptive and structural—and we discuss the strengths and weaknesses of each before presenting the empirical studies of optimal extraction under conditions of exhaustibility. We also discuss some econometric pitfalls that applied researchers face when attempting to test the model.

/pdf/whither-hotelling-tests-of-the-theory-of-exhaustible-1ljki11766.pdf

Whither Hotelling: Tests of the Theory of Exhaustible Resources

Game theory has been applied to a growing list of practical problems, from antitrust analysis to monetary policy; from the design of auction institutions to the structuring of incentives within firms; from patent races to dispute resolution. The purpose of Game Theory and Business Applications is to show how game theory can be used to model and analyze business decisions. The contents of this revised edition contain a wide variety of business functions – from accounting to operations, from marketing to strategy to organizational design. In addition, specific application areas include market competition, law and economics, bargaining and dispute resolution, and competitive bidding. All of these applications involve competitive decision settings, specifically situations where a number of economic agents in pursuit of their own self-interests and in accordance with the institutional “rules of the game” take actions that together affect all of their fortunes. As this volume demonstrates, game theory provides a compelling guide for analyzing business decisions and strategies.

Game theory and business applications

Gain a clear understanding of today's most important investment topics--from the fundamentals you need to prepare for the CFP exam to more advanced issues that will help you develop strong investment skills for today's business world. Mayo's INVESTMENTS: AN INTRODUCTION, 9e--the text of choice for the College of Financial Planning--minimizes the focus on math for a clear, user-friendly presentation. You'll learn to make sound investment decisions with this book's emphasis on the individual financial planner's perspective and the fresh, ongoing Financial Advisor's Investment Case that continues throughout each chapter. Internet assignments demonstrate how to use technology for actual investments, while expanded coverage of key topics such as stock valuation ratios, stock repurchases and dividend payments, and globalization of financial markets prepares you for tomorrow's investment challenges. A new CengageNOW online learning system with a personalized study plan helps you maximize study and earn the grade you want. The book's Thomson ONE -Business School Edition lets you access the same financial analysis tool used on Wall Street every day. Whether you are preparing for a career in finance or general business, INVESTMENTS, 9e, offers the engaging investment details that will further your success in this course and beyond."

Investments: An Introduction

Two general approaches to the problem of valuing assets under uncertainty may be distinguished. The first approach relies on arbitrage arguments of one kind or another, while under the second approach equilibrium asset prices are obtained by equating endogenously determined asset demands to asset supplies, which are typically taken as exogenous. Examples of the former range from the static arbitrage arguments which underlie the Modigliani-Miller theorem to the dynamic arbitrage strategies which are the basis for the Option Pricing Model: such arbitrage based models can only yield the price of one asset relative to the prices of other assets. The Capital Asset Pricing Model (CAPM) is an example of an equilibrium model in which asset prices are related to the exogenous data, the tastes and endowments of investors although, as we shall see below, the CAPM is often presented as a relative pricing model.

M. J. Brennan

Papers

Capital Asset Pricing Model