Search results

This paper examines how accounting quality, as measured by earnings opacity, affects the stock market wealth effect, which in turn is shown to be linked to economic growth. Stock market wealth effect is negatively affected by earnings opacity. The data also indicate that the exogenous component of the stock market wealth effect — the component defined by earnings opacity‐ is positively associated with economic growth. The direct effect of earnings opacity on economic growth is, as expected negative, but insignificant.

The present study investigates the direction of causality between stock market development and economic growth in the case of the United States. We use the Johansen‐Juselius cointegration procedure followed by vector error‐correction modelling. We examine both the long‐run cointegrating relationships and associated causal orderings, and short‐run interactions among the variables. The results indicate that there are stable long‐run equilibrium relationships among the variables and that the stock market contains information about future changes in real income.

Rainy day stabilization funds (RDSFs) and local option sales taxes (LOSTs) are two strategies local governments deploy to combat fiscal stress. While the literature on both is robust, it has thus far failed to consider empirically that the two may be connected. One way the marginal LOST dollar could be spent is by saving it for future use. We test the connection with a sample of 414 counties and correct for selection bias with the Heckman correction technique. We find that each $10 increase in LOST revenue per capita is associated with a $0.10 increase in undesignated general fund balance. Though small, the positive effect size supports the theory that LOSTs contribute to a greater propensity to save.

The purpose of this postmortem is to assess whether the design, implementation, and maintenance of financial policies during the period from 1996 through 2006 were primary causes of the financial system's demise.

To draw conclusions about the policy determinants of the crisis, the paper studies five important policies: Securities and Exchange Commission (SEC) policies toward credit rating agencies, Federal Reserve policies concerning bank capital and credit default swaps, SEC and Federal Reserve policies about over‐the‐counter derivatives, SEC policies toward the consolidated supervision of major investment banks, and government policies toward two housing‐finance entities, Fannie Mae and Freddie Mac.

The evidence is inconsistent with the view that the collapse of the financial system was caused only by the popping of the housing bubble (“accident”) and the herding behavior of financiers rushing to create and market increasingly complex and questionable financial products (“suicide”). Rather, the evidence indicates that senior policymakers repeatedly designed, implemented, and maintained policies that destabilized the global financial system in the decade before the crisis. Moreover, although the major regulatory agencies were aware of the growing fragility of the financial system due to their policies, they chose not to modify those policies, suggesting that “negligent homicide” contributed to the financial system's collapse.

Although influential policymakers presume that international capital flows, euphoric traders, and insufficient regulatory power caused the crisis, this paper shows that these factors played only a partial role. Thus, current reforms represent only a partial and thus incomplete step in establishing a stable and well‐functioning financial system. Since systemic institutional failures helped cause the crisis, systemic institutional reforms must be a part of a comprehensively effective response.

The purpose of this paper is to discuss and provide new data and measures of bank regulatory and supervisory policies in 180 countries from 1999 to 2011.

The authors' approach is based upon the quantification of hundreds of questions, including information on permissible bank activities, capital requirements, the powers of official supervisory agencies, information disclosure requirements, external governance mechanisms, deposit insurance, barriers to entry, and loan provisioning, to form indices of key bank regulatory and supervisory policies.

It is found that the regulation and supervision of banks varies widely across countries in many different dimensions. Furthermore, there has not been a convergence in bank regulatory regimes over the past decade despite the worst global financial crisis since the Great Depression.

The data are based on survey responses and this requires that the answers be accurate. To better ensure this is the case, several checks were made to ensure greater accuracy in all the answers. Using this database one can perform various statistical analyses in attempt to determine which bank regulatory regimes work best to promote well‐functioning banking systems.

The authors' data and measures are new and unique so as enable policy makers and researchers to examine cross‐country comparisons and analyses of changes in banking policies over time.

The purpose of this paper is to study the viability of implementing a protocol-guided model designed to provide structure and focus for teacher collaboration from Shanghai in today’s US public schools. The authors examine whether the new model, Teacher Peer Excellence Group (TPEG), fosters the desired key features of productive communities of practice where teachers can jointly construct, transform, preserve, and continuously deepen the meaning of effective teaching. The authors also explore the extent to which existing school conditions – principal instructional leadership, trust, teacher efficacy, and teachers’ sense of school-wide professional community – enable or moderate the desired outcomes.

Data for this paper are drawn from a series of surveys administered to teachers from 24 pilot schools in six school districts over two school years. Descriptive and multilevel modeling analyses are conducted.

The findings provide encouraging evidence that, given sufficient support and guidance, teachers report higher levels of engagement in deprivatized practice and instructional collaboration. These findings also hold after controlling for key enabling conditions and school characteristics.

The TPEG approach challenges school leaders to take on the responsibilities of helping teachers make their practice public, sharable, and better – three critical objectives in the shift to develop the profession of teaching.

The indication of TPEG model’s positive impact on strengthening the features of communities of practice in selected public schools provides the impetus for further efforts in understanding the transformational changes needed and challenges ahead at the classroom, school, and district levels.

Using a sample of 86 countries over the 1960–1999 period, this paper investigates the differential growth effects of ethnic division across cultural regions. While the evidence supports a negative relationship between ethnic fragmentation and economic growth, this relationship is significant only for Africa and Latin America. This study also uses a religious measure of ethnic fragmentation, and finds that religious diversity has a positive impact on growth. This impact, however, is present only in the Middle East and East Asia. Some possible reasons behind the heterogeneous effects of ethnic diversity are also explored.

Reviewing the development of budgeting in America in the twentieth century, this article assesses where public budgeting is as it approaches the twenty-first century. Five periods are identified in American budgeting, drawing upon the work of Schick and Rubin: control, management, planning, prioritization and accountability. Budgeting in the 1990s is described as characterized by accountability and a “new” performance budgeting emphasis. The authors argue that the budget reform movement is still alive and well in American government, with local governments once more leading the way.

An analysis of domestic and foreign banks’ internal performance by investigating their financial ratios shows that banks in Bahrain, Oman, the United Arab Emirates (GCC countries) have improved their performance over the past several years. Commercial banks in these GCC economies are well capitalised and have adopted modern banking services. Most banks are found to be financially sound by international standards, measured by all key financial ratios. Their operations can be characterised by satisfactory asset quality, more than minimum BIS capital/asset ratio, and high level of profitability. External performance is measured by evaluating banks’ market shares, regulatory compliance and public confidence; and most of the banks show better progress. Harmonization of the banks’ supervisory and accounting systems towards IAS has contributed to the safety and competitiveness of the banking sector.

The transition countries have been pursuing a market economy since the early 1990s. Crucial reforms in the banking and financial sectors are necessary to provide a financial structure that supports a market economy, particularly the private and enterprise sector, leading to economic growth. This paper examines the banking and financial development in the transition countries. Arguments for banking reforms are made and the conditions for an efficient banking system are examined. A comparison in the progress of banking reforms and economic growth provides useful lessons not only for the transition countries but for developing and other emerging countries. Lastly, policy choices are suggested for the transition countries.