This paper examines predictions of a life-cycle simulation model—in which individuals face uncertainty regarding their length of life, earnings, and out-of-pocket medical expenditures, and imperfect insurance and lending markets—for individual and aggregate wealth accumulation. Relative to life-cycle or buffer-stock alternatives, our augmented life-cycle model better matches a variety of features of U.S.
In this paper, the author outlines what he believes to be causes of why many people do not save. Much of the research examining levels of consumption, saving, and wealth, as well as their responsiveness to policy, has been done using a life-cycle model with the simplifying assumption of perfect certainty. More recently, a line of inquiry has examined the effects of uncertainty on saving, generally in the context of highly stylized models. This research has shown that, in these models, uninsured earnings uncertainty can alter optimal saving behavior in a variety of important ways.
We examine associations between accounting measures of earnings and stock returns in Japan over varying window lengths and compare them to those for the United States. Our results are consistent with the view that Japanese investors utilize less accounting information in their pricing of equities than do their U.S. counterparts. This was particularly evident in the 'boom' period of the mid to late 1980s when the fundamental values conveyed by accounting measures appear to have been largely ignored.
We show that valuing performance is equivalent to valuing a particular contingent claim on an index portfolio. In general the form of the contingent claim is not known and must be estimated. We suggest approximating the contingent claim by a series of options. We illustrate the use of our method by evaluating the performance of 130 mutual funds during the period 1968-82. We find that the relative performance rank of a fund is rather insensitive to the choice of the index, even though the actual value of the services of the portfolio manager depends on the choice of the index.
In this study we compare the value relevance of accounting measures for U.S. and German firms matched on industry and firm size, and evaluate the incremental informativeness of earnings adjusted on the basis of a formula proposed by analysts.
The authors argue that attribution patterns reflect implicit theories acquired from induction and socialization and hence differentially distributed across human cultures. In particular, the authors tested the hypothesis that dispositionalism in attribution for behavior reflects a theory of social behavior more widespread in individualist than collectivist cultures. Study 1 demonstrated that causal perceptions of social events but not physical events differed between American and Chinese students.
We find support for a negative relation between conditional expected monthly return and conditional variance of monthly return, using a GARCH-M model modified by allowing (1) seasonal patterns in volatility, (2) positive and negative innovations to returns having different impacts on conditional volatility, and (3) nominal interest rates to predict conditional variance. Using the modified GARCH-M model, we also show that monthly conditional volatility may not be as persistent as was thought.
Why do some new ventures succeed while others fail? What is the essence of entrepreneurship? Who is most likely to become a successful entrepreneur and why? How do entrepreneurs make decisions? What market, regulatory, and organizational environments foster the most successful entrepreneurial activities? Entrepreneurship research is plagued by these and other fundamental unanswered questions, for which there does not exist a cohesive explanatory, predictive, or normative theory.
In the standard analysis of overlapping generations economies with gifts from children to parents, each generation takes the actions of other generations as given. The resulting equilibrium is dynamically inefficient. In reality, however, parents realize that children will respond to higher parental saving by reducing gifts. For a broad class of gift economies, this implicit tax on saving pushes the equilibrium to dynamic efficiency.