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Showing papers in "Social Science Research Network in 1980"


Posted Content•
Michael E. Porter1•
TL;DR: Porter as mentioned in this paper presents a comprehensive structural framework and analytical techniques to help a firm to analyze its industry and evolution, understand its competitors and its own position, and translate this understanding into a competitive strategy to allow the firm to compete more effectively to strengthen its market position.
Abstract: Michael Porter presents a comprehensive structural framework and analytical techniques to help a firm to analyze its industry and evolution, understand its competitors and its own position, and translate this understanding into a competitive strategy to allow the firm to compete more effectively to strengthen its market position. The introduction reviews a classic approach to strategy formulation, one that comprises a combination of ends and means (policies), factors that limit what a company can accomplish, tests of consistency, and an approach for developing competitive strategy. A competitive strategy articulates a firm's goals, how it will compete, and its policies for achieving those goals. Competitive advantage is defined in terms of cost and differentiation while linking it to profitability. Part I, "General Analytical Techniques," provides a general framework for analyzing the structure of an industry and understanding the underlying forces of competition (and hence profitability). Five competitive forces act on an industry: (1) threat of new entrants, (2) intensity of rivalry among existing firms, (3) threat of substitute products or services, (4) bargaining power of buyers, and (5) bargaining power of suppliers. Looking at industry structure provides a way to consider how value is created and divided among existing and potential industry participants. One competitive force always captures essential issues in the division of value.There are three generic competitive strategies for coping with the five competitive forces: (1) overall cost leadership, (2) differentiation, and (3) focus. There are risks with each strategy. A firm without a strategy is "stuck in the middle." This framework for examining competition transcends particular industry, technology, or management theories. Building on this framework, techniques are presented for industry forecasting, analysis of competitors, predicting their behavior, and building a response profile. Essential for a competitive strategy are techniques for recognizing and accurately reading market signals. Implications of structural analysis for buyer selection and purchasing strategy are presented. Game theory provides concepts for responding to competitive moves. Using the concept of strategic groups, structural analysis can also explain differences in firm performance (profitability), provide a guide for competitive strategy, and predict industry evolution. Part II, "Generic Industry Environments," shows how firms can use the analytical framework to develop a competitive strategy in industry environments, which reflect differences in industry concentration, state of industry maturity, and exposure to international competition. These environments determine a business's competitive strategic context, available alternatives, and common strategic errors. Five generic industry environments are examined: fragmented industries (where level of industrial concentration is low), emerging industries, transition to industry maturity, declining industries, and global industries. In each, the crucial aspects of industry structure, key strategic issues, characteristic strategic alternatives (including divestment), and strategic pitfalls are identified. Part III, "Strategic Decisions," draws on the analytical framework to examine important types of strategic decisions confronting firms that compete in a single industry: vertical integration, major capacity expansion, and new business entry. Additional use of economic theory and administrative consideration of management and motivation helps a company to make key decisions, and gives insight into how competitors, customers, suppliers, and potential entrants might make them. Appendix A discusses use of techniques for portfolio analysis applied to competitor analysis. Appendix B provides approaches to conducting an industry study, including sources of field and published dat

12,533 citations


Posted Content•
TL;DR: In this paper, the authors propose a model in which there is an equilibrium degree of disequilibrium: prices reflect the information of informed individuals (arbitrageurs) but only partially, so that those who expend resources to obtain information do receive compensation.
Abstract: If competitive equilibrium is defined as a situation in which prices are such that all arbitrage profits are eliminated, is it possible that a competitive economy always be in equilibrium? Clearly not, for then those who arbitrage make no (private) return from their (privately) costly activity. Hence the assumptions that all markets, including that for information, are always in equilibrium and always perfectly arbitraged are inconsistent when arbitrage is costly. We propose here a model in which there is an equilibrium degree of disequilibrium: prices reflect the information of informed individuals (arbitrageurs) but only partially, so that those who expend resources to obtain information do receive compensation. How informative the price system is depends on the number of individuals who are informed; but the number of individuals who are informed is itself an endogenous variable in the model. The model is the simplest one in which prices perform a well-articulated role in conveying information from the informed to the uninformed. When informed individuals observe information that the return to a security is going to be high, they bid its price up, and conversely when they observe information that the return is going to be low. Thus the price system makes publicly available the information obtained by informed individuals to the uninformed. In general, however, it does this imperfectly; this is perhaps lucky, for were it to do it perfectly , an equilibrium would not exist. In the introduction, we shall discuss the general methodology and present some conjectures concerning certain properties of the equilibrium. The remaining analytic sections of the paper are devoted to analyzing in detail an important example of our general model, in which our conjectures concerning the nature of the equilibrium can be shown to be correct. We conclude with a discussion of the implications of our approach and results, with particular emphasis on the relationship of our results to the literature on "efficient capital markets."

5,740 citations


Posted Content•
TL;DR: In this paper, a model of corporate leverage choice is formulated in which corporate and differential personal taxes exist and supply side adjustments by firms enter into the determination of equilibrium prices of debt and equity.
Abstract: In this paper, a model of corporate leverage choice is formulated in which corporate and differential personal taxes exist and supply side adjustments by firms enter into the determination of equilibrium prices of debt and equity. The presence of corporate tax shield substitutes for debt such as accounting depreciation, depletion allowances, and investment tax credits is shown to imply a market equilibrium in which each firm has a unique interior optimum leverage decision (with or without leverage-related costs). The optimal leverage model yields a number of interesting predictions regarding cross-sectional and time-series properties of firms’ capital structures. Extant evidence bearing on these predictions is examined.

2,569 citations


Report•DOI•
TL;DR: The most familiar interpretation for the large and unpredictable swings that characterize common stock price indices is that price changes represent the efficient discounting of "new information" as discussed by the authors. But it is remarkable given the popularity of this interpretation that it has never been established what this information is about.
Abstract: The most familiar interpretation for the large and unpredictable swings that characterize common stock price indices is that price changes represent the efficient discounting of "new information." It is remarkable given the popularity of this interpretation that it has never been established what this information is about. Recent work by Shiller, and Stephen LeRoy and Richard Porter, has shown evidence that the variability of stock price indices cannot be accounted for by information regarding future dividends since dividends just do not seem to vary enough to justify the price

729 citations


Posted Content•
TL;DR: In this paper, the authors show that temporary variations in government purchases as in wartime, would have a strong positive effect on aggregate demand, because of a small direct negative effect on private spending.
Abstract: Because of a small direct negative effect on private spending, temporary variations in government purchases as in wartime, would have a strong positive effect on aggregate demand. Intertemporal substitution effects would direct work and production toward these periods where output was valued unusually highly. Defense purchases are divided empirically into "permanent" and "temporary" components by considering the role of (temporary) wars. Shifts in non-defense purchases are mostly permanent. Empirical results verify a strong expansionary effect on output of temporary purchases, but contradict some more specific expectational propositions.

645 citations


Posted Content•
TL;DR: In this paper, a structural life cycle model of labor supply is proposed to predict the response of hours of work to life cycle wage growth and shifts in the lifetime wage path, using theoretical characterizations derived from an economic model of life cycle behavior.
Abstract: This paper formulates and estimates a structural life cycle model of labor supply. Using theoretical characterizations derived from an economic model of life cycle behavior, a two-stage empirical analysis yields estimates of intertemporal and uncompensated substitution effects which provides the information needed to predict the response of hours of work to life cycle wage growth and shifts in the lifetime wage path. The empirical model developed here provides a natural framework for interpreting estimates found in other work on this topic. It also indicates how cross section specifications of hours of work can be modified to estimate parameters relevant for describing labor supply behavior in a lifetime setting.

644 citations


Posted Content•
TL;DR: In this paper, a solution method and an estimation method for nonlinear rational expectations models are presented, which can be used in forecasting and policy applications and can handle models with serial correlation and multiple viewpoint dates.
Abstract: A solution method and an estimation method for nonlinear rational expectations models are presented in this paper. The solution method can be used in forecasting and policy applications and can handle models with serial correlation and multiple viewpoint dates. When applied to linear models, the solution method yields the same results as those obtained from currently available methods that are designed specifically for linear models. It is, however, more flexible and general than these methods. For large nonlinear models the results in this paper indicate that the method works quite well. The estimation method is based on the maximum likelihood principal. It is, as far as we know, the only method available for obtaining maximum likelihood estimates for nonlinear rational expectations models. The method has the advantage of being applicable to a wide range of models, including, as a special case, linear ,models. The method can also handle different assumptions about the expectations of the exogenous variables, something which is not true of currently available approaches to linear models.

481 citations


Posted Content•
TL;DR: In this article, the non-negativity restriction of the expected excess return is explicitly included as part of the specification for estimating the expected market return, and estimators which use realized returns are adjusted for heteroscedasticity.
Abstract: The expected market return is a number frequently required for the solution of many investment and corporate finance problems, but by comparison with other financial variables, there has been little research on estimating this expected return Current practice for estimating the expected market return adds the historical average realized excess market returns to the Current observed interest rate While this model explicitly reflects the dependence of the market return on the interest rate, it fails to account for the effect of changes in the level of market risk Three models of equilibrium expected market returns which reflect this dependence are analyzed in this paper Estimation procedures which incorporate the prior restriction that equilibrium expected excess returns on the market must be positive arc derived and applied to return data for the period 1926- 1978 The principal conclusions from this exploratory investigation are: (1) in estimating models of the expected market return the non-negativity restriction of the expected excess return should be explicitly included as part of the specification; (2) estimators which use realized returns should be adjusted for heteroscedasticity

462 citations


Posted Content•
TL;DR: In this article, the authors compare strict liability and negligence rules on the basis of the incentives the provide to "appropriately" reduce accident losses, and the welfare criterion is taken to be the following aggregate: the benefits derived by parties from engaging activities less total accident losses and total accident prevention costs.
Abstract: The aim of this article is to compare strict liability and negligence rules on the basis of the incentives the provide to "appropriately" reduce accident losses. It will therefore be both convenient and clarifying to abstract from other issues in respect to which the rules could be evaluated. In particular, there will be no concern with the bearing of risk - for parties will be presumed risk neutral - nor with the size of "administrative costs" - for the legal system will be assumed to operate free of such costs - nor with distributional equity - for the welfare criterion will be taken to be the following aggregate: the benefits derived by parties from engaging activities less total accident losses less total accident prevention costs.

414 citations


Report•DOI•
TL;DR: In this article, the authors focus on the question: what difference does the set of commercial policies chosen by a developing country make to its rate of economic growth, and the empirical evidence overwhelmingly indicates that there are important links between them.
Abstract: My topic is the question: what difference does the set of commercial policies chosen by a developing country make to its rate of economic growth? Three points are salient. First, in its present state, trade theory provides little guidance as to the role of trade policy and trade strategy in promoting growth. Second, the empirical evidence overwhelmingly indicates that there are important links between them. Third, a number of hypotheses as to the reasons for these links have been put forward, but there is not as yet sufficient evidence to enable us to estimate their relative importance.

405 citations


Posted Content•
TL;DR: The evidence presented in this article indicates that changes in government spending, transfers and taxes can have substantial effects on aggregate demand and that the promise of future social security benefits significantly reduces private saving.
Abstract: The evidence presented in this paper indicates that changes in government spending, transfers and taxes can have substantial effects on aggregate demand The estimates also indicate that the promise of future social security benefits significantly reduces private saving Each of the basic implications of the so-called "Ricardian equivalence theorem" is contradicted by the data The results are consistent with the more general view of the effects of fiscal actions and fiscal expectations that is described in the paper

Posted Content•
TL;DR: Can the slowdown in productivity growth be explained, wholly or in part, by the recent slowdown in the growth of real R&D expenditures? But first we have to review the following questions: I) What is to be explained? Which productivity and what slowdown? as discussed by the authors.
Abstract: The question I shall address in this pa-per is: Can the slowdown in productivity growth be explained, wholly or in part, by the recent slowdown in the growth of real R&D expenditures? But first we have to review the following questions: I) What is to be explained? Which productivity and what slowdown? 2) What is the mechanism by which R&D could have contributed to this slowdown? 3) What did happen to R&D in the relevant period? Besides traversing this somewhat familiar ground and reviewing some of the recent literature on this topic, I shall also report on some estimates of my own. The direct answer to the opening question is "probably not." But how we get there needs documenting and may prove instructive on its own merits.

Posted Content•
TL;DR: In this article, the authors consider volatility measures in the efficient markets models to clarify the basic smoothing properties of the models to allow an understanding of the assumptions which are implicit in the notion of market efficiency.
Abstract: My initial motivation for considering volatility measures in the efficient markets models was to clarify the basic smoothing properties of the models to allow an understanding of the assumptions which are implicit in the notion of market efficiency. The efficient markets models, which are described in section II below ,relate a price today to the expected present value of a path of future variables. Since present values are long weighted moving averages, it would seem that price data should be very stable and smooth. These impressions can be formalized in terms of inequalities describing certain variances (section III). The results ought to be of interest whether or not the data satisfy these inequalities, and the procedures ought not to be regarded as just "another test" of market efficiency. Our confidence of our understanding of empirical phenomena is enhanced when we learn how such an obvious property of data as its "smoothness" relates to the model, and to alternative models (section IV below).On further examination of the volatility inequalities, it became clear that the inequalities may also suggest formal tests of market efficiency that have distinct advantages over conventional tests. These advantages take the form of greater power in certain circumstances of robustness to data errors such as misalignment and of simplicity and understandability. An interpretation of volatility tests versus regression tests in terms of the likelihood principle is offered in section V.

Posted Content•
TL;DR: The location of overseas manufacturing production by U.S. firms seems to have been strongly influenced by common factors that operate in all industries: notably proximity to the United States and to other markets.
Abstract: The location of overseas manufacturing production by U.S. firms seems to have been strongly influenced by common factors that operate in all industries: notably proximity to the United States and to other markets. Within industries, the choices made by parent firms among locations appear to show a tendency of "opposites attract," with low-wage and low-capital-intensity parents choosing high-wage, high-capital intensity countries and high-wage, high-capital-intensity parents making the opposite choice. Production for export seems to have been most strongly attracted by large internal markets in host countries. Economies of scale in production presumably made large markets also economical as export bases. Another factor was high trade propensities of host countries, which we interpret as representing access to imported materials at low world prices or better transport, finance, and other trade facilities. Labor cost seems to have been a weak influence on location choices. U.S. firms tended to export from high-wage countries but the high productivity in such countries more than offset the high wages. However, labor cost, to the extent we could measure it, was not in general a major influence on the location of export production.

Posted Content•
TL;DR: The authors discusses the exchange rate economics and empirically tests the explanatory power of theory using the dollar-mark exchange rate using the explanatory variables are relative nominal money supplies, relative real income levels, and nominal long-term and short-term interest differentials.
Abstract: Publisher Summary This chapter discusses the exchange rate economics. There are basically three views of the exchange rate. The first takes the exchange rate as the relative price of monies, and the second as the relative price of goods. An increase in the money supply at home leads to an equiproportionate depreciation. As an increase in domestic real income raises the demand for real balances and thus leads to a fall in domestic prices, it induces an offsetting exchange appreciation. Relatively higher domestic interest rates, by contrast, reduce the demand for real balances, raise prices, and therefore bring about exchange depreciation. There are two ways to test the monetary approach. Instantaneous purchasing power parity (PPP) is an essential part of the monetary approach and directly tests whether PPP prevails. The alternative approach to testing the monetary theory relies on evidence from regression equations. The empirical evidence tests the explanatory power of theory using the dollar-mark exchange rate. The explanatory variables are relative nominal money supplies, relative real income levels, and nominal long-term and short-term interest differentials.

Posted Content•
TL;DR: Bonacich and Modell as discussed by the authors explored class and ethnic behavior as reflected in the history of Japanese Americans in the United States and demonstrated that involvement in certain types of self-consciously ethnic business structures supports the development and maintenance of Japanese American ethnic solidarity.
Abstract: Bonacich and Modell explore class and ethnic behavior as reflected in the history of Japanese Americans in the Unites States. They demonstrate that involvement in certain types of self-consciously ethnic business structures supports the development and maintenance of Japanese American ethnic solidarity. The authors question the idea of ethnicity as a natural or primordial bond; they accept that ethnicity reflects social and political decisions; ethnic solidarity and antagonisms are socially constructed. Moreover, economic factors play a great role in maintenance or dissolution of ethnic bonds, and ethnic groups often function as economic-interest groups; when they no longer do so, they dissolve. Participation in wider society and professions diminishes such ethnicity. The middleman-minority thesis is used to interpret the experience of pre- and post-war Japanese Americans. The model comprises three traits: social and economic characteristics and society reactions. This study emphasizes the importance of a concentration in trade for creation and perpetuation of ethnicity. The middleman-minority model applies best to the first (Issei) generation of Japanese Americans. This generation had a peculiar economic position consisting of family-centered, non-contractual oriented firms doing business (primarily agricultural related) in the midst of a capitalist economy. Owners of these ethnic firms faced open hostility and discrimination, which drove them to develop and preserve their own distinctive ethnic associations and outlook. Characteristic features of Japanese American small businesses are identified. Using the structural framework of the "middleman minority," the authors explain the decreasing ethnic identity among second generation Japanese Americans in terms of the decreasing importance of small business as an economic base for the group, as members of this generation tended to move out into the professions. Using data from the Japanese American Research Project, the researcj examines the postwar development of this ethnic group to see to what degree pre-war economic forms have been reestablished among the second generation of Japanese Americans and the implications for their internal social organization and integration with the outside community. The pre-war ethnic economy was most revived by the oldest Japanese Americans. A division was found in the second (Nisei) generation, who are divided in economic orientation between small business and the professions. Degree of Nisei ethnicity and education are strongly related to birth date. The more educated Nisei moved into professions. Three important aspects of ethnic community are examined for the mid-1960s. Close family and kin relationships, and strong formal and informal ethnic associations, support and are supported by the middleman-minority ethnic economy. There is only a weak, but positive relationship between participation in small business and ethnic socialization and values; the relation is stronger for religion. The Sansei (children of the Nisei) show an even greater shift toward the professions than their parents. The study strongly departs from the "success story" or "model minority" approach of other ethnic research. Concludes that ethnic solidarity is a historical phenomenon; when ethnic minorities become like the majority economically, preserving their distinctiveness is difficult. (TNM)

Report•DOI•
TL;DR: In this paper, the authors examined the extent of turbulence in foreign exchange markets by examining the magnitude of short-run variations in exchange rates relative to other measures of economic variability, the degree of divergence between actual and expected changes in exchange rate, and the extent to which exchange-rate movements have diverged from movements of relative national price levels.
Abstract: Since the move to generalized floating in1973, exchange rates between major currencies have displayed large fluctuations. This turbulence of foreign exchange rates is an important concern of government policy and its explanation is a challenge for theories of foreign exchange market behavior. In Section I of this paper, we document the extent of turbulence in foreign exchange markets by examining (i) the magnitude of short-run variations in exchange rates relative to other measures of economic variability; (ii) the degree of divergence between actual and expected changes in exchange rates; and (iii) the extent to which exchange-rate movements have diverged from movements of relative national price levels. In Section II, we provide a general explanation of this turbulence in terms of the modern "asset market theory" to exchange-rate determination. This theory emphasizes that exchange rates, like the prices of other assets determined in organized markets, are strongly influenced by the market's expectation of future events. In this context, we also discuss the narrower technical question of "foreign exchange market efficiency." Finally, in Section III, we address the question of whether turbulence in the foreign exchange markets has been "excessive" and what policy measures can (or should) be taken to reduce it.

Posted Content•
TL;DR: In this paper, the authors report the results of an exploratory survey designed to measure differences in time preference across individuals and to test for relationships between time preference and schooling, health behaviors, and health status.
Abstract: This paper reports the results of an exploratory survey designed to measure differences in time preference across individuals and to test for relationships between time preference and schooling, health behaviors, and health status. Approximately 500 adults age 25-64 were surveyed by telephone. Time preference was measured by a series of six questions asking the respondent to choose between a sum of money now and a larger sum at a specific point in the future. Approximately two-thirds gave consistent replies to the six questions. The implicit interest rate revealed in their replies is weakly correlated with years of schooling (negative), cigarette smoking (positive), and health status(negative). Family background, especially religion, appears to be an important determinant of time preference.

Posted Content•
TL;DR: The behavior of real wages has complicated macroeconomic policy in the industrialized world during the 1970s as mentioned in this paper, and many commentators have discussed the extraordinary increase in wage inflation in Europe and Japan at the end of the last decade.
Abstract: The behavior of real wages has complicated macroeconomic policy in the industrialized world during the 1970s. Many commentators have discussed the extraordinary increase in wage inflation in Europe and Japan at the end of the last decade. Few have noted that the nominal wage gains resulted in remarkable increased in real wages. The five large economies outside North America in the Organization for Economic Cooperation and Development (OECD) had rapid growth of real hourly compensation in 1969-73, along with high rates of increase of nominal compensation. In most large OECD economies, real wages in the late 1960s grew faster than productivity, so that the distribution of income shifted toward labor, while the rate of return on capital was substantially reduced.

Posted Content•
TL;DR: In this paper, a general-purpose empirical U.S. general equilibrium model is used to plot the Laffer curve for several elasticities, and to plot a newly introduced curve using the labor tax example.
Abstract: When Arthur Laffer or other "supply side advocates" plot total tax revenue as a function of a particular tax rate, he draws an upward sloping segment called the normal range, followed by a downward sloping segment called the prohibitive range. Since a given revenue can be obtained with either of two tax rates, government would minimize total burden by choosing the lower rate of the normal range. A brief literature review indicates that tax rates on the prohibitive range in theoretical and empirical models have been the result of particularly high tax rates, high elasticity parameters, or both. Looking at labor tax rates and total revenue, for example, the tax rate which maximizes revenue will depend on the assumed labor supply elasticity. This paper introduces a new curve which summarizes the tax rate and elasticity combinations that result in maximum revenues, separating the "normal area" from the "prohibitive area." A general-purpose empirical U.S. general equilibrium model is used to plot the Laffer curve for several elasticities, and to plot the newly introduced curve using the labor tax example. Results indicate that the U.S. could conceivably be operating in the prohibitive area, but that the tax wedge and/or labor supply elasticity would have to be much higher than most estimates would suggest.

Posted Content•
TL;DR: This article used historical U.S. data to directly estimate the contribution of intergenerational transfers to aggregate capital accumulation and found that only a negligible fraction of actual capital accumulation can be traced to life cycle or "hump" savings.
Abstract: This paper uses historicaI U.S. data to directly estimate the contribution of intergenerational transfers to aggregate capital accumulation. The evidence presented indicates that intergenerational transfers account for the vast majority of aggregate U .S. capital formation; only a negligible fraction of actual capital accumulation can be traced u, life-cycle or "hump" savings. A major difference between this study and previous investigations of this issue is the use of more accurate longitudinal age-earnings and age-consumption profiles. These profiles are simply too flat to generate substantial lifecycle savings. This paper suggests the importance of and need for substantially greater research and data collection on intergenerational transfers. fife-cycle models of savings that emphasize savings for retirement as the dominant form of apical accumulation should give way to models that illuminate the determinants of intergenerational transfers.

Posted Content•
TL;DR: In this paper, the authors proposed a shock-absorber model of money demand in which money supply shocks affect the synchronization of purchases and sales of assets and so engender a temporary desire to hold more or less money than would otherwise be the case.
Abstract: Previous models of the demand for money are either inconsistent with contemporaneous adjustment of the price level to expected changes in the nominal money supply or imply implausible fluctuations in interest rates in response to unexpected changes in the nominal money supply. This paper proposes a shock-absorber model of money demand in which money supply shocks affect the synchronization of purchases and sales of assets and so engender a temporary desire to hold more or less money than would otherwise be the case. Expected changes in nominal money do not cause fluctuations in real money inventories. The model is simultaneously estimated for the United States, United Kingdom, Canada, France, Germany, Italy, Japan, and the Netherlands using the postwar quarterly data set and instruments used in the Mark III International Transmission Model. The shock-absorber variables significantly improve the estimated short-run money demand functions in every case.

Posted Content•
TL;DR: In this paper, the authors developed the efficient markets model in Section I to clarify some theoretical questions that may arise in connection with the inequality, and some similar inequalities will be derived that put limits on the standard deviation of the innovation in price and the variance of the change in price.
Abstract: This paper will develop the efficient markets model in Section I to clarify some theoretical questions that may arise in connection with the inequality (1) and some similar inequalities will be derived that put limits on the standard deviation of the innovation in price and the standard deviation of the change in price. The model is restated in innovation form which allows better understanding of the limits on stock price volatility imposed by the model. In particular, this will enable us to see (Section II) that the standard deviation of p is highest when information about dividends is revealed smoothly and that if information is revealed in big lumps occasionally the price series may have higher kurtosis (fatter tails) but will have lower variance. The notion expressed by some that earnings rather than dividend data should be used is discussed in Section III, and a way of assessing the importance of time variation in real discount rates is shown in Section IV. The inequalities are compared with the data in Section V.

Posted Content•
TL;DR: In this article, the authors proposed a method to solve the problem of unstructured data in order to improve the quality of the data collected, but no abstract is available for this method.
Abstract: No abstract is available for this paper.

Posted Content•
TL;DR: This paper presents a descriptive model and propositions concerning the potential impacts of office automation on the organization and it stresses the need, when implementing automated office systems, to take a broad perspective of their potential positive and negative effects on the Organization.
Abstract: Computer technology has recently been applied tothe automation of office tasks and procedures. Much ofthe technology is aimed not at improving the efficiencyof current office procedures, but at altering the nature ofoffice work altogether. The development of automatedoffice systems raises a number of issues for the organization.How will this technology be received by organizationmembers? How will it affect the definition oftraditional office work? What will be its impact onindividuals, work groups, and the structure of the organization?This paper presents a descriptive model andpropositions concerning the potential impacts of officeautomation on the organization and it stresses the need,when implementing automated office systems, to take abroad perspective of their potential positive and negativeeffects on the organization. The need for further researchexamining the potential effects of office automation isemphasized.

Posted Content•
Ben S. Bernanke1•
TL;DR: In this article, the authors studied the optimal timing of real investment under the assumption that investment is irreversible and that new information about returns is arriving over time and showed that investment should be undertaken in this case only when the costs of deferring the project exceed the expected value of information gained by waiting.
Abstract: The optimal timing of real investment is studied under the assumptions that investment is irreversible and that new information about returns is arriving over time. Investment should be undertaken in this case only when the costs of deferring the project exceed the expected value of information gained by waiting. Uncertainty, because it increases the value of waiting for new information, retards the current rate of investment. The nature of investor's optimal reactions to events whose implications are resolved over time is a possible explanation of the instability of aggregate investment over the business cycle.

Posted Content•
TL;DR: In this paper, a multivariate autoregressive model for a major Canadian supermarket is presented, and a procedure to detect multiple causality is suggested for detecting causality in multivariate stochastic processes.
Abstract: This paper describes a modelling methodology for multivariate stochastic processes. The concept of multiple causality is discussed and a procedure to detect multiple causality is suggested. The data of a major Canadian supermarket is analyzed and a multivariate autoregressive model for this supermarket is constructed and estimated. Several empirical findings are reported.

Posted Content•
TL;DR: In this article, the authors present data on the investment experiences of a large and representative sample of individual investors, based on a 7-year history of actual trading behavior, which suggest some reasonable skill in security selection, particularly in connection with short-term trading cycles.
Abstract: Over the last decade and a half, individual investors in the aggregate have consistently been net sellers of corporate common stocks; simultaneously, the holdings of equities by mutual funds, pension funds, insurance companies, and bank trust funds on behalf of individuals have increased dramatically (Soldofsky 1971; U.S. Securities and Exchange Commission 1971; Board Virtually all existing empirical studies of the American capital market deal with the investment performance record of institutions. The present paper offers data on the investment experiences of a large and representative sample of individual investors, based on a 7-year history of actual trading behavior. Those experiences suggest some reasonable skill in security selection, particularly in connection with shortterm trading cycles. Transactions costs, however, have a substantial impact on realized net returns, rendering the overall performance results observed similar to those available from passive investment strategies over corresponding calendar periods. Financial support for the investigation was provided by the National Bureau of Economic Research, the Investment Company Institute (ICI), the Purdue Research Foundation, the College of Business at the University of Utah, and the brokerage house from whose customer group the investor sample was drawn. The computations were performed at the computer centers of Purdue University and the University of Utah. A substantial portion of the requisite securities price data were obtained from the Wells Fargo Bank of San Francisco, which made available its stock data file to Purdue for the research. Particular thanks are also due: William Elbring of Purdue for his contributions to the computer programming effort; Robert Lipsey and Christine Mortensen of the NBER for their counsel and administrative support; Alfred Johnson of the ICI; James Lorie, Myron Scholes, and Lawrence Fisher of the University of Chicago, for the opportunity to review the findings at seminars sponsored by the Center for Research in Security Prices; James Jenkins, Donald Farrar, and Ramon Johnson of the University of Utah; Edgar Pessemier, Frank Bass, and Donald King of Purdue University; John Lintner of Harvard University; and Marshall Blume of the University of Pennsylvania. The responsibility for the findings is, of course, the authors' alone. While the paper represents a segment of an NBER project, it has not undergone a full critical review by the NBER and should not be considered an official NBER publication.

Posted Content•
TL;DR: This article showed that, contrary to commonly held views, the provisions of the social security law actually provide strong work incentives for older men, for most workers, higher current earnings lead to higher future social security benefits.
Abstract: This paper shows that, contrary to commonly held views, the provisions of the social security law actually provide strong work incentives for older men. The reason is that, for most workers, higher current earnings lead to higher future social security benefits. These incentives have been particularly strong for workers under 65 years of age and, although they will be reduced somewhat when the 1977 amendments to the social security law become fully effective, they will remain substantial. The findings raise serious questions about recent econometric work attributing the decline in labor force participation rates of older men to the social security system.

Posted Content•
TL;DR: The authors summarizes the results of an empirical study of the operation of flexible exchange rates during the 1920's under both the hyperinflationary conditions and under the normal conditions (based on the experience of Britain, the United States and France).
Abstract: This paper summarizes the results of an empirical study of the operation of flexible exchange rates during the 1920's under both the hyperinflationary conditions (based on the experience of Germany) and under the normal conditions (based on the experience of Britain, the United States and France).Section I deals with some general characteristics of the market for foreign exchange by examining the relationship between spot and forward exchange rates. Section II deals with the relationship between exchange rates and prices by examining aspects of the purchasing power parity doctrine. Section III deals with the determinants of exchange rates within the context of a simple monetary model.