Applied Economics

North begins his book by stating that "institutions are the rules of the game in a society or, more formally, are the humanly devised constraints that shape human interaction."(3) That being said North then proposes to examine institutions, changes in them, and their impact on economic performance over time.

This report summarizes the results of a two-year study of the economic value of New Jersey's natural capital. Natural capital consists of those components of the natural environment that provide aa long-term stream of benefits to individual people and to society as a whole; the value of natural capital is defined in this report as the present value of that benefit stream. Many of the benefits provided by natural capital come from ecological systems ("ecosystems"); an ecosystem is a dynamic complex of plant, animal, and microorganism communities and their nonliving environment, all interacting as a functional unit.

This paper develops a new approach to the problem of testing the existence of a level relationship between a dependent variable and a set of regressors, when it is not known with certainty whether the underlying regressors are trend- or first-difference stationary. The proposed tests are based on standard F- and t-statistics used to test the significance of the lagged levels of the variables in a univariate equilibrium correction mechanism. The asymptotic distributions of these statistics are non-standard under the null hypothesis that there exists no level relationship, irrespective of whether the regressors are I(0) or I(1). Two sets of asymptotic critical values are provided: one when all regressors are purely I(1) and the other if they are all purely I(0). These two sets of critical values provide a band covering all possible classifications of the regressors into purely I(0), purely I(1) or mutually cointegrated. Accordingly, various bounds testing procedures are proposed. It is shown that the proposed tests are consistent, and their asymptotic distribution under the null and suitably defined local alternatives are derived. The empirical relevance of the bounds procedures is demonstrated by a re-examination of the earnings equation included in the UK Treasury macroeconometric model. Copyright © 2001 John Wiley & Sons, Ltd.

Practice expands and updates the ideas and concepts of the authors groundbreaking first book. Offering fresh innovations, strategies, and concise explanations of long-held theories, this book includes new alternatives for practitioners and researchers.

To JAMIE, WHO SET THE DEADLINE AND TO MARTY, WHO HELPED ME MEET IT Copyright © 1994, 1996 by the President and Fellows of Harvard College All rights reserved Printed in the United States of America First Harvard University Press paperback edition, 1996 ...

This paper examines how recent econometric policy evaluation research on monetary policy rules can be applied in a practical policymaking environment. According to this research, good policy rules typically call for changes in the federal funds rate in response to changes in the price level or changes in real income. An objective of the paper is to preserve the concept of such a policy rule in a policy environment where it is practically impossible to follow mechanically any particular algebraic formula that describes the policy rule. The discussion centers around a hypothetical but representative policy rule much like that advocated in recent research. This rule closely approximates Federal Reserve policy during the past several years. Two case studies—German unification and the 1990 oil-price shock—that had a bearing on the operation of monetary policy in recent years are used to illustrate how such a policy rule might work in practice.

While the conventions for evaluating information systems case studies conducted according to the natural science model of social science are now widely accepted, this is not the case for interpretive field studies. A set of principles for the conduct and evaluation of interpretive field research in information systems is proposed, along with their philosophical rationale. The usefulness of the principles is illustrated by evaluating three published interpretive field studies drawn from the IS research literature. The intention of the paper is to further reflection and debate on the important subject of grounding interpretive research methodology.

A Beginner's Guide to Structural Equation Modeling, second ed., 2004, Lawrence Erlbaum and Associates, Mahwah, NJ Is structural equation modeling (SEM) a mathematical Godsend or an instrument of the devil? Well respected researchers have staked a claim on each side of this debate, and I outline both positions briefly below. But no matter which stance one takes, SEM has acquired such a stature and prevalence in the social sciences that, for better or worse, evaluators of all stripes must come to grips with it. Even hard-core qualitative researchers who think statistical analysis is no more informative than numerology can benefit from an understanding of SEM. For example, consider reports of quantitative social science (such as that television viewing in infancy causes attention deficits in later childhood or that day-care fosters anti-social behavior) that frequently find their way to the front pages of the newspaper. Because such findings are often derived from SEM methods, a thoughtful critique requires an understanding of at least the rudiments of that methodology.

We examine the specification and power of tests based on performance-matched discretionary accruals, and make comparisons with tests using traditional discretionary accrual measures (e.g., Jones and modified-Jones models). Performance matching on return on assets controls for the effect of performance on measured discretionary accruals. The results suggest that performance-matched discretionary accrual measures enhance the reliability of inferences from earnings management research when the hypothesis being tested does not imply that earnings management will vary with performance, or where the control firms are not expected to have engaged in earnings management. r 2004 Elsevier B.V. All rights reserved. JEL classification: M41; C12; C15; M42

This paper evaluates (1) whether the exogenous component of "nancial intermediary development in#uences economic growth and (2) whether cross-country di!erences in legal and accounting systems (e.g., creditor rights, contract enforcement, and accounting standards) explain di!erences in the level of "nancial development. Using both traditional cross-section, instrumental variable procedures and recent dynamic panel techniques, we "nd that the exogenous components of "nancial intermediary development is positively associated with economic growth. Also, the data show that cross-country di!erences in legal and accounting systems help account for di!erences in "nancial development. Together, these "ndings suggest that legal and accounting reforms that strengthen creditor rights, contract enforcement, and accounting practices can boost "nancial development and accelerate economic growth.