Search Results
Journal Article
Wildcat banking, banking panics, and free banking in the United States
Banks in the United States issued currency with no oversight of any kind by the federal goverment from 1837 to 1865. Many of these banks were part of "free banking" systems with no discretionary approval of entry into banking, and these banks issued notes that were used for payments in transactions just as Federal Reserve notes are today. There was no central bank or goverment insurance, and the ultimate guarantee of the value of a bank's notes was the value of the bank's assets. As the author indicates, these banknotes have similarities to some forms of electronic money. ; Free banking in ...
Working Paper
Factor returns, institutions, and geography: a view from trade
The authors show that estimated productivities of labor and capital, which rationalize trade flows across countries, are related to total factor productivities, which rationalize output differences across countries. They present evidence that these productivities from trade are related to the institutions and geography across countries. Protection of property rights is the dominant influence on both labor and capital productivity, with geography less important and democracy even less important. The authors also present preliminary evidence that protection of property rights has similar ...
Working Paper
Banking reform
Journal Article
Investment analysts' forecasts of earnings
The literature on investment analysts' forecasts of firms' earnings and their forecast errors is enormous. This paper summarizes the evidence on the distribution of analysts' forecasts and forecast errors using data for all U.S. firms from 1990 to 2004. The evidence indicates substantial asymmetry of earnings, earning forecasts, and forecast errors. There is strong support for average and median earning forecasts being higher than actual earnings a year before the earnings announcement. Such differences between earnings and forecasts also exist across time periods and industries. A month ...
Journal Article
Social Security private accounts: a risky proposition?
In the ongoing debate over Social Security, private accounts have been recommended as one part of the resolution of the funding difficulties the system faces in coming years. This article discusses what private accounts can and cannot do for individuals who choose to use them and for future Social Security deficits. ; Under current proposals, private accounts would give account holders personal ownership rights and could be willed to heirs at death. Most proposals would limit the range of assets that can be held but would permit account owners to determine their investments based on personal ...
Working Paper
Financial and real integration
We examine the relationship between real and financial integration. Real integration is measured by productivities of capital and labor from trade data for 1982 to 1997. Financial integration is measured by the black market exchange rate. We find more evidence of convergence to equality for returns to capital than for returns to labor. There is some support for associating the convergence of black market premia with declines in black market premia.
Working Paper
Are stocks in new industries like lottery tickets?
We examine the distribution of returns in new industries to determine whether stocks in new industries are similar to lottery tickets. We focus on one characteristic of lottery tickets: negative expected returns. We examine data from the United States on sellers of own-brand personal computers, airlines and airplane manufacturers, automobile manufacturers, railroads, and telegraphs. A relatively small number of companies generate outstanding returns in some industries. We find no evidence of low expected returns. On the contrary, firms in new industries typically have high volatility of ...
Working Paper
Bank relationships and small firms’ financial performance
We examine the relationship between the number of bank relationships and firms? performance, evaluating possible differential effects related to firms? size. Our sample of firms from Italy includes many small firms, 99 percent of which are not listed and for which bank debt is a major source of financing. In the sample, 4 percent of the firms have a single bank relationship, and 66 percent of them have five or fewer relationships. We find that return on equity and return on assets decrease as the number of bank relationships increases, with a stronger relationship for small firms than for ...
Journal Article
Are money growth and inflation still related?
Despite the long history and the substantial evidence supporting the conclusion that persistent changes in the price level are associated with changes in the money supply, the predicted association remains dis-puted. Is it debated because the empirical relationship holds over time periods so long that it may be uninformative for practitioners and policymakers, who are more concerned about inflation next month or next year? If it takes a generation for the relationship between money growth and inflation to become apparent, it would not be surprising that central bankers and practitioners put ...