effects of announcements of reorganization outcome less is known about whether the market perceives the final resolution of post reorganization filing to be idiosyncratic or to carry endemic implications for the corresponding industries this study observes the presence of intra industry information transfers the magnitude and direction of the reactions in response to three separate resolution outcome differs in a systematic way across industry portfolios specifically portfolio rivals that are affected by competitive realignments in the industry experience stock price reactions in the opposite manner to those of the distressed firms thus suggesting dominant competitive effects in addition this study reveals that the discriminatory power and forecast performance of three hybrid neuro fuzzy models are stable and unimpaired across time and are generally superior in classifying rival cumulative prediction error rcpe candidates

the nba and the influx of international basketball players the determinants of salaries for professional athletes in the national basketball association nba are examined to investigate how international athletes have fared relative to athletes trained in the united states it is found that international basketball players were paid a large premium above other players of similar skills and characteristics for the 1996 97 and 1997 98 seasons after which the premium disappeared this temporary premium is likely attributable to a winner s curse experienced by nba teams before investing significant resources in scouting and evaluating international players

dividend changes abnormal returns and intra lndustry firm valuations previous empirical research has established that dividend changes are associated with sig nificant abnormal returns this association is rationalized on the basis that the dividend announcement acts as a signal of future earnings another body of research has documented the existence of intra industry transfers of information where news about one firm is extrapolated to other companies in the same industry earnings information transfers have been found to be positive in nature with good news about one company leading to stock price increases for rival firms linking dividend signaling and information transfer tests were constructed to ascertain whether the dividend change of one firm is associated with the stock price performance of other companies in the same industry the results indicate there is some small positive information transfer the magnitude of information transfer is related to the degree of the dividend surprise the recent dividend history of the other companies and correlations in stock returns between the dividend announcer and the other companies information transfer is found to affect earnings and earnings growth estimates of the other firms and this leads to revisions in their stock prices

models of stock returns a comparison in this paper a discrete mixture of normal distributions is proposed to explain the observed significant kurtosis fat tails and significant positive skewness in the distribution of daily rates of returns for a sample of common stocks and indexes stationarity tests on the parameter estimates of this discrete mixture of normal distributions model revealed significant differences in the mean estimates that can explain the observed skewness and significant differences in the variance estimates that can explain the observed kurtosis an alternative explanation for the observed fat tails is the symmetric student model the result of a comparison between the models is that the discrete mixture of normal distributions model has substantially more descriptive validity than the student model for many years both financial economists and statisticians have been concerned with the description of stock market returns the form of the distribution of stock returns is a crucial assumption for mean variance portfolio theory theoretical models of capital asset prices and the prices of contingent claims for example understanding the behavior of the variance is essential to option pricing models empirical tests of asset pricing models and the efficient markets hypothesis draw statistical inferences that are also conditional on distributional assumptions the most convenient assumption for financial theory and empirical methods is that the distribution of security rates of return be multivariate normal with parameters that are stationary over time since the normal distribution is stable under addition any arbitrary portfolio of stocks will also be normally distributed with the additional assumption of risk aversion mean variance theory follows furthermore the assumptions of normality and parameter stationarity are required for most of the econometric techniques typically used in empirical research tests of the normality hypothesis on the daily returns of the dow jones industrial stocks by fama 121 revealed more kurtosis fatter tails than that predicted from a sample of independent and identically distributed normal variates fama concluded from this evidence that the distribution of price changes conforms better to the stable paretian distribution with characteristic exponent

structural change competitive balance and the rest of the major leagues i introduction competitive balance is the object of significant attention in the analysis of pro sports leagues under rottenberg s 1956 uncertainty of outcome hypothesis enough imbalance may actually drive down the demand for pro sports and league revenues with it but the analysis of competitive balance itself also is insightful for the impact of league self regulation choices in this paper we extend recent approaches in time series analysis found in schmidt 2001 schmidt and berri 2001a 2001b 2003 2004 lee and fort 2005 henceforth lf and fort and lee 2006 beyond its exclusive focus on major league baseball mlb to the national basketball association nba the national football league nfl and the national hockey league nhl we restrict ourselves only to north american leagues henceforth nals although davies downward and jackson 1995 simmons 1996 and dobson and goddard 1998 provide interesting time series analysis in world leagues as well these works add dramatically to the understanding of structural impacts found from ad hoc cross section approaches the review is in lf in nals a number of structural changes have been hypothesized to dramatically alter competitive balance among teams over time first there are the familiar macro occurrences of depression and war and exogenous league factors like the fundamental alteration in local revenue brought on by increases in the value of local tv broadcast rights beginning in the late 1970s second there are more direct league circumstances changes in the rules of the games the draft the end of the reserve clause changes in the number of teams merger and expansion and their locations salary caps and labor issues lf also examined the impact of racial integration on competitive balance but for the rest of the nals there is no clearly defined point marking their racial integration finally schmidt and berri 2003 and eschker perez and siegler 2004 have begun to investigate the impacts of the influx of foreign born players we apply break point detection techniques described at length in lf to within season competitive balance measures in the rest of the nals there are a number of interesting insights all breaks detected for these other nals occur after 1966 and not until 1970 in the nba rule changes in the nfl in the late 1970s correspond with a break point in that league but generally rule changes do not correspond to any break points the imposition in nals of the draft and free agency conform to rottenberg s invariance proposition ip except for a general negative trend in competitive balance in the nba when they do correspond with break points league expansion and team relocation have predictable impacts but some of these alterations do not have corresponding break points mergers in all three of the other nals correspond in interesting ways with break points that enhance competitive balance but not all mergers correspond with break points there is no correspondence between the break points and the imposition of the salary caps in the nba and the nfl finally we can find no correspondence between break points and any labor issues in any of these leagues except for enhanced balance that followed after the 1998 nba lockout explanations for the negative trend in nba are consistent with the idea that there is a short supply of tall people that is a truly physical limit on talent inputs in the nba originally proposed by berri et al 2005 and an explanation for the second break point in the nhl may have to do with the influx of european players the paper proceeds as follows in section ii we specify the empirical approach and handle the important details of stationary series and detrending the results are shown and discussed within the context of the limits of the break point technique in section iii conclusions round out the paper in section iv ii

seasonalities in security returns the case of earnings announcements abstract we document a seasonal pattern in stock returns around quarterly earnings announcement dates small firms show large positive abnormal returns and a sizable increase in the variability of returns around these dates only part of the large abnormal returns can be accounted for by the tendency of firms with good news to announce early large firms show no abnormal returns around announcement dates and a much smaller increase in variability

the division of gains from complementarities in human capital intensive activity this study uses data from the national basketball association to explore organizational mechanisms that affect the division of firm surplus in human capital intensive activity it builds on the idea that reciprocal interdependence among team members creates the potential for complementarity complementarity in turn translates into higher firm surplus the division of this surplus is subject to bargaining between the firm owner and labor we argue that when complementarity increases the firm owner s share of surplus will grow if interdependence among team members is symmetric furthermore we identify three levers that make complementarity amenable to managerial design the nature of interaction among team members the relative dominance of team members and the composition of a team we find that greater interaction among team members and higher recruitment of team oriented individuals are associated with increased complementarity whereas dominant team members are associated with reduced complementarity the study contributes to the literature on organization design by extending its implications to the division of surplus in human capital intensive activity

equilibrium pricing and portfolio composition in the presence of uncertain parameters abstract we analyze the effect of parameter uncertainty on equilibrium asset prices for the symmetric case when the amount of estimation risk is the same for all securities the existing literature argues that parameter uncertainty is largely irrelevant for equilibrium our results differ we find that symmetric estimation risk affects equilibrium values of relative asset prices expected returns market weights and betas

racial discrimination and professional basketball salaries in the 1990s racial differences in professional basketball player salaries are examined to determine whether the 20 premium paid to whites in the mid 1980s has persisted into the 1990s ols and tobit regressions indicate no difference between white and black salaries controlling for player and team characteristics for the 1994 95 season however censored quantile regressions show substantial racial differences at certain points in the salary distribution whites earn less than blacks at the lower end of the distribution although the difference is not statistically significant and varies with minutes played in contrast whites receive a significant premium 18 at the upper end of the salary distribution these findings are consistent with a form of consumer discrimination in which sports fans prefer to see white star players all else equal

a direct test of roll s conjecture on the firm size effect empirical research indicates that small firms earn higher average rates of return than large firms even after accounting for beta risk roll conjectured that the small firm effect might be attributed to improper estimation of security betas the evidence shows that while the direction of the bias in beta estimation is consistent with roll s conjecture the magnitude of the bias appears to be too small to explain the firm size effect

an examination of investor behavior during periods of large dividend changes the information content of dividends hypothesis which emanates from the early work of lintner 17 and miller and modigliani 18 states that managers use dividend announcements to signal their beliefs about the prospects of the firm thus an announcement of an increase in the dividend rate reflects management s belief that the firm s cash flows in the foreseeable future will be sufficiently high to sustain payment at the increased rate similarly an announcement of a dividend decrease occurs only when management is extremely pessimistic about the probability that future cash flows will be sufficient to continue dividends at their present rate the theoretical implication of the information content hypothesisis that the announcement of a dividend or change in dividend conveys information about management s assessment of the firm s prospects that this information is different from other information provided by management and this information may cause an immediate investor reaction including but not limited to price changes

valuation effects of greenmail prohibitions greenmail payments are widely viewed as actions designed by managers to perpetuate their tenure in offiee this view which suggests that greenmail prohibitions would enhance shareholder wealth receives mixed empirical support in this paper the average market reaction to charter amendments prohibiting greenmail payments is weakly nega tive suggesting there is a value to maintaining managerial flexibility nonlinear maxi mum likelihood estimation however reveals a strong positive correlation between the market reaction and the firm s abnormal stock price runup over the three months just prior to the proxy mailing date for the subsample of firms with a relatively large prior runup the precommitment not to pay greenmail is value enhancing if the prior runup reflects takeover rumors then this evidence is consistent with the proposition that greenmail pay ments amidst takeover speculations are value decreasing

retrospectives the lost art of economics economists generally divide economics into two distinct categories positive and normative but how applied economics fits within these categories is unclear this paper argues that applied economics belongs in neither normative nor positive economics instead it belongs in a third category the art of economics currently many economists are trying to use a methodology appropriate for positive economics to guide their applied work work that properly belongs in the art of economics this three part distinction is not mine but dates back to a classic book the scope and method of political economy 1891 by john neville keynes in his book keynes argued that economists failure to distinguish the art of economics as a separate branch from positive and normative economics would lead to serious problems one hundred years later he has turned out to be clairvoyant

market rationality and dividend announcements abstract we investigate stock market rationality by examining the timeliness and unbiasedness of the market s response to dividend announcements our initial findings for market timeliness show a sluggish market reaction to dividend announcements however when the ex dividend effect is controlled for we find no evidence of a sluggish market reaction we examine the unbiasedness of the market s response by testing whether the net announcement effect across a sample that is devoid of ex post selection bias sums to zero we observe a significant positive net announcement effect and examine several plausible conjectures for this puzzling phenomenon but none provides a satisfactory explanation

investigating security price performance in the presence of event date uncertainty abstract this paper introduces an event study method that incorporates the possibility of a random event date consistent with empirical evidence we assume an event may affect not only the conditional mean of a security s return but also its conditional variance we compare the statistical power and efficiency of our maximum likelihood method with the standard application of traditional event study methods to multiday security returns assuming a two day event period our empirical results provide evidence that the multiday approach is robust we use our maximum likelihood method to investigate the valuation effects of stock splits and stock dividends

investment opportunities and market reaction to capital expenditure decisions abstract in this study we argue that share price reaction to a firm s capital expenditure decisions depends critically on the market s assessment of the quality of its investment opportunities we postulate that announcements of increases decreases in capital expenditures positively negatively affect the stock prices of firms with valuable investment opportunities contrarily we predict that announcements of increases decreases in capital spending negatively positively affect the share prices of firms without such opportunities our empirical results are generally consistent with these predictions overall empirical evidence supports our conjecture that it is the quality of the firm s investment opportunities rather than its industry affiliation which determines the share price reaction to its capital expenditure decisions

some pitfalls in the conventional treatment of aggregate demand in recent years the aggregate demand aggregate supply model has replaced the is lm framework as the dominant pedagogical tool for teaching macroeconomics of course the is lm model is still used but its primary function has been relegated to that of providing a convenient vehicle for deriving the aggregate demand curve in the conventional derivation price induced changes in the real money supply shift the lm curve along a fixed is schedule absent wealth effects on consumption and map out levels of output where aggregate demand and output are equal implicit in this approach is the assumption that output supplied by firms responds passively to aggregate demand whatever the price level but this passive response necessarily implies firms raise output in response to a decrease in the price level and lower output in response to an increase in the price level a strikingly odd result that is fundamentally inconsistent with modem theories of aggregate supply our argument is that for internal consistency the aggregate demand curve must be derived using the aggregate supply curve that will eventually be paired with the aggregate demand curve to determine equilibrium price and output the conventional aggregate demand curve does not meet this consistency test because the keynesian assumption which generates the aggregate demand curve i e that output responds passively to demand is at variance with the supply response that is later paired with this aggregate demand curve the inconsistency is obvious firms cannot both raise and lower output in response to a change in the price level clearly the conventional approach to aggregate demand neglects serious consideration of the crucial role played by aggregate supply since output influences consumption expenditures the aggregate demand curve cannot be derived independently of the supply side of the economy therefore rather than use the keynesian assumption that output responds passively to demand we derive the aggregate demand curve by incorporating a lucas type supply response which

risk aversion uncertain information and market efficiency abstract this paper develops and tests the uncertain information hypothesis as a means of explaining the response of rational risk averse investors to the arrival of unanticipated information the theory predicts that following news of a dramatic financial event both the risk and expected return of the affected companies increase systematically and that prices react more strongly to bad news than good an empirical investigation of over 9000 marketwide and firm specific events produces results consistent with these predictions we conclude that the market reacts to uncertain information in an efficient if not instantaneous manner

on the efficiency of intra industry information transfers the dilution of the overreaction anomaly abstract we revisit the stock market anomaly documented by thomas and zhang 2008 and show that the apparent mispricing of information transfers has decayed over time as the us markets experienced rapid improvements in the efficiency of the underlying price formation processes utilizing recent advancements in market microstructure research to estimate firm specific proxies for market efficiency we demonstrate that the existence of the overreaction anomaly where stock prices of late announcers in response to the earnings reported by early announcers in the same industry are negatively related to subsequent price responses of late announcers to their own earnings reports is specific to an earlier sample period and results from the inefficient incorporation of information into prices largely attributable to an environment with high barriers to arbitrage our results indicate that the pricing efficiency of intra industry information transfers has increased in the recent years of increased liquidity and markedly higher trading activity

beyond microfoundations post walrasian macroeconomics about the authors preface 1 overview david colander part i the post walrasian macroeconomic vision 2 taking markets seriously groundwork for a post walrasian macroeconomics robert clower and peter howitt 3 towards a not too rational macroeconomics axel leijonhufvud 4 the macrofoundations of micro david colander part ii the underpinnings of post walrasian macroeconomics 5 the evolution of macroeconomics the origins of post walrasian economics perry mehrling 6 chaos theory and post walrasian macroeconomics j barkley rosser jr 7 marshallian general equilibrium analysis david colander part iii modelling a post walrasian economy 8 heterogeneity aggregation and a meaningful macroeconomics robert j martel 9 walras complexity and post walrasian macroeconomics david m reaume 10 team coordination problems and macroeconomic models john bryant 11 competitive market disequilibrium a post walrasian analysis of investment john bryant part iv new structuralist macroeconomics vs post walrasian macroeconomics 12 endogenizing the natural rate of unemployment phelps s structural slumps and the post walrasian framework hans van ees and harry garretsen 13 post walrasian macroeconomic policy david colander and hans van ees part v appendix literature survey an annotated bibliography on the macro foundation of post walrasian economics hans van ees and harry garretsen name index subject index

differential interpretation of public signals and trade in speculative markets most models of trade in speculative markets assume that agents interpret public information identically we provide empirical evidence on the relation between the volume of trade and stock returns around public announcements and we argue that the evidence is inconsistent with this assumption we then develop a model of trade around public announcements that incorporates differential interpretations and is consistent with the observed volume return relation then we test the standard model of belief revision underlying most models of trade using stock brokerage research analysts earnings forecasts the hypthesis of identical interpretations seems inconsistent with the forecast revisions in these data

wage discrimination in the nba evidence using free agent signings this article takes a step toward understanding potential causes of wage discrimination in an economy highly dependent on the service industry traditionally categorized within the service industry professional sport leagues such as the national basketball association nba provides a unique setting to examine the potential impact of race on salary we analyze free agency contract signings which allow us to better capture the determinants of players wages from 2011 to 2017 to investigate the prominence of wage discrimination in the nba using weighted linear regression models and the oaxaca blinder decomposition we find that black athletes are paid significantly less than their counterparts in addition we also identify the presence of consumer discrimination after controlling the exposure of a player to the audience which is observed through the interaction term between the share of msa population which is white and an identifier for whether a player is black

a reexamination of analysts earnings forecasts for takeover targets abstract we examine analysts earnings forecasts for a sample of takeover targets and document that the announcement month forecasts are systematically revised upward supporting the hypothesis that a takeover announcement conveys favorable information about the target firm in addition we find that abnormal forecast revisions of future stand alone earnings are significantly greater for targets with low tobin s q ratios relative to targets with high q ratios lending further support to the information hypothesis finally we provide evidence that managerial resistance to the takeover does not destroy value our results are in direct contrast to pound 1988

on the efficiency of least squares regression with security abnormal returns as the dependent variable monte carlo procedures are used to compare the finite sample performance of several estimators that may be used in cross sectional regressions with security abnormal returns as the dependent variable alternative models of event induced increases in stock return variance are examined for the event clustering scenario event clustering implies crosssectional correlation and heteroskedasticity in market model prediction errors violating one of the fundamental ordinary least squares ols assumptions i i d disturbances nonetheless provided that the conditions for asymptotic validity derived by greenwald 1983 are met the ols estimator is well specified in finite samples further for sufficiently large cross sections there is no advantage to several other more complex estimators

a game level analysis of salary dispersion and team performance in the national basketball association using game level panel data on the national basketball association nba we examine the causal effect of within team salary dispersion on team performance we exploit three measures of salary dispersion and examine the effect at three levels whether the outcome of the game is influenced by salary dispersion among 1 players participating in the current game active players 2 players who played more than half of their team s games in a season regular and occasional players and 3 the entire player population regardless of the measures used we find that salary dispersion does not influence team performance

the effect of professional sports on the earnings of individuals evidence from microeconomic data this article examines the impact of professional sports franchises in labour markets using data from the march supplement to the current population survey cps for workers employed in specific occupational groups in all large us cities from 1983 to 2002 results from a standard wage model suggest that professional football franchises increase average hourly and weekly earnings of males employed in these occupations but professional baseball franchises reduce them these results support growing evidence that professional sports affect labour markets however the mixed nature of the association between sport and earnings provides little economic justification for government subsidies for professional sport

the impact of ceo turnover on equity volatility this study investigates the effect on stock price volatility of a significant event in the life of the firm a change in its ceo we find significant long lived increases in volatility following ceo turnover after controlling for firm characteristics and marketwide volatility these increases are larger after forced departures and outside successions following voluntary departures stock prices also respond more strongly to earnings announcements following turnovers these results are consistent with more informative signals of value driving the increased volatility helping resolve two sources of uncertainty possible changes in the firm s strategy and doubt about the successor ceo s ability

the intraday speed of stock price adjustment to major dividend changes bid ask bounce and order flow imbalances abstract this paper examines the intraday stock price reaction to substantial shifts in dividend policy the results indicate the price reaction to be slower than that previously found by patell and wolfson 1984 and closer to that found with earnings announcements by woodruff and senchack 1988 possible order flow imbalances are examined by looking at the proximity of transaction prices to contemporaneous bid and ask quotes while order flow imbalances are evident for bad news announcements this is not the case for the dividend increase sample this is interpreted as evidence that the price reaction to major dividend increases are in general anticipated fifteen minute holding period returns are computed to measure the movement of equilibrium prices during the announcement period results show a rapid adjustment of prices to positive announcements with adjustment to negative announcements taking up to 75 minutes finally fifteen minute lagged bid ask returns are calculated to determine whether an investor could respond to the announcement and earn positive returns these results are found to be dependent on the transaction cost assumptions being made

predictable events and excess returns the case of dividend announcements abstract this paper hypothesizes that the risk per unit of time and the required rate of return are higher than normal during an event period whose timing can be predicted consistent with this hypothesis this paper presents empirical evidence indicating that the unconditional mean rate of return the variance of stock returns and their systematic risk are higher than usual during dividend announcement periods however the documented increases in the systematic risk are not large enough to fully explain the excess returns this finding is puzzling and hard to reconcile with existing theory

the spinoff and merger ex date effects this article shows that some of the wealth gains from financial decisions involving changes in security form occur on predictable ex dates for a sample of 113 spinoffs during 1964 to 90 we document an average excess return of 3 0 percent on ex dates roughly the same magnitude as the average announcement date return we conjecture that the spinoff ex date return arises because the parent and subsidiary stocks attract different investors who prefer to buy the separated shares after the ex date we also document that on average the target shareholders in stock for stock mergers earn an excess return of 1 5 percent on merger ex dates recent years have witnessed a large increase in restructuring programs that include divestitures for example kaplan and weisbach 1992 report that 44 percent of a sample of large acquisitions completed in the 1970s and early 1980s had already been divested by the end of the 1980s most divestitures are accomplished by selling an unwanted subsidiary or division to another company or a group of investors for cash based on a casual survey of transactions reported in the mergers and acquisitions magazine this divestiture form is commonly known as a selloff in many cases however the parent company relinquishes control of a subsidiary by simply distributing the subsidiary shares as a nontaxable stock dividend to current stockholders this latter divestiture form is known as a spinoff and has been gaining

a note on reit bankruptcy and intraindustry information transfers an empirical analysis abstract this paper examines the capital market response to the bankruptcy of residential resources res res a real estate investment trust reit we find a significant event day value decline for a broad portfolio of reits reits whose portfolios are most similar to res res experienced both a significant value decline and an increase in bankruptcy risk on the event day reits with dissimilar portfolios experienced neither of these effects among the reits with similar portfolios to res res leverage ratios explain 84 of the event day value declines our findings suggest that ignoring intraindustry firm differences can lead to spurious conclusions

index composition changes and the cost of incumbency abstract this paper provides evidence of information effects and portfolio rebalancing effects that occur when stocks are added to or excluded from the sp however the portfolio rebalancing effects dominate the industry information effects

stock market reaction to financial statement certification by bank holding company ceos in 2002 the sec mandated that the ceos of large publicly traded firms certify the accuracy of their company financial statements the sec s certi fication order provides a natural experiment that gives insight into the question of whether banks are opaque we find that the bhcs subject to the sec s order experienced positive and significant average abnormal returns from certification characteristics associated with greater opaqueness liquid asset holdings information intensive lending and split credit ratings are systematically associated with the size of abnormal returns

do privatized banks in middle and low income countries perform better than rival banks an intra industry analysis of bank privatization abstract this paper presents a comprehensive analysis of the pre and post privatization operating performance and stock market performance of privatized banks and their rivals in middle and low income countries first we find that privatization announcements elicit negative abnormal returns for rival banks the effects are more pronounced for subsequent tranche sales where the proportion of government ownership in the privatized bank is reduced second we observe that the privatized banks underperformed the benchmark index in the long run investors who bought shares of the privatized banks on the first day of trading and held them for 5 years instead of investing in the market index lost 24 of their wealth the underperformance is consistent with the negative long run returns that have been documented for initial public offerings third we document marginal improvements in the post privatization operating performance of the privatized banks though the privatized banks in middle and low income countries are better capitalized than rival banks they carry higher problem loans and are overstaffed relative to other private banks in the post privatization period since most of the sample firms are partially privatized we submit that perhaps the continued government ownership of the privatized banks might have hindered managers ability to restructure the firms

the payoff to consistency in performance this study investigates whether firms are willing to pay higher wages to workers who demonstrate consistent performance than to those whose performance is more volatile a formal model reflects a production technology view assuming the law of diminishing marginal product this model suggests that a more consistent worker produces higher expected output and therefore receives a higher wage the test of the model uses data from the national basketball association the empirical data support the model players whose performances were more consistent than the performances of other players received higher wages on average jel d41 j31 m52 z20

sins of the sons of samuelson vision pedagogy and the zig zag windings of complex dynamics abstract the standard economics text is centered on a vision of a naturally self regulated dynamically stable system with a unique global attractor this paper discusses how we got there and how recent developments in the study of dynamical systems allow us to go beyond that it traces the evolution of the teaching of economics from alfred marshall who built his supply and demand framework within a complexity vision of the economy it suggests that that complexity vision was lost as economists formalized the supply demand framework and extended it to the entire economy this paper argues that the current textbook presentation of economics should not and cannot serve as the only intellectual frame we provide to our students

event studies in management research theoretical and empirical issues we examined the use of event studies in management research and found that there was inadequate attention paid to theoretical and research design issues this lack of attention may lead to false in

the stories we tell a reconsideration of as ad analysis this paper explains that the as ad model as currently presented in the tests is seriously flawed it does not fulfill the minimum requirement of a model logical consistency its component parts are derived from models that reflect different and inconsistent models of the economy moreover the appropriate disequilibrium adjustment story that appropriately accompanies it is inconsistent with observed reality in this alternative model keynesian adjustment occurs through shifting as ad curves along institutionally determined price level vectors rather than through movements along the as ad curves

interpreting common stock returns around proxy statement disclosures and annual shareholder meetings numerous studies have analyzed the stock market reaction to information released in proxy statements two possible biases in proxy statement research are suggested frequently misspecification of the return benchmark and a sample selection bias from analyzing only clean events this paper presents evidence that most of the conclusions of existing studies are not affected by these potential biases a significantly positive abnormal return was found around a random sample of shareholder meeting dates the result indicates that interpreting event study results for announcements occurring around annual shareholder meetings must be conducted carefully the results are consistent with the findings of kalay and loewenstein 14 who argue that risk and expected return can increase around predictable information producing events alternatively the study can be viewed as being consistent with several recent studies that find anomalous results using daily return data and large samples

trading behavior and the unbiasedness of the market reaction to dividend announcements this article examines the price formation process during dividend announcement day using daily closing prices and transactions data we find that the unconditional positive excess returns first documented by kalay and loewenstein 1985 are higher for small firm and low priced stocks price volatility and trading volume also increase during this period examination of trade prices relative to the bid ask spread and volume of trades at bid and asked prices shows that the excess returns cannot be attributed to measurement errors or to spillover effects of tax related ex day trading rather the price behavior is related to the absorption of dividend information