FINANCIAL INNOVATION, PRICE SMOOTHING, AND MONETARY POLICY

This paper examines an unregulated transaction services market that is subject to financial innovation in an economy that experiences aggregate supply and demand shocks. The availability of this unregulated market to transactors smooths the price response to these shocks. However, financial innovations act as money supply shocks that increase price disturbances. If there is persistence in the real aggregate supply shocks and in the rate of adoption of financial innovations, then the central bank can forecast some portion of the changes in transaction requirements that accompany these shocks and damp the residual variation in prices by accommodating these anticipated needs.     

A bayesian test for a two-way contingency table using independence priors

One method of testing for independence in a two-way table is based on the Bayes factor, the ratio of the likelihoods under the independence hypothesis H and the alternative hypothesis H. The main difficulty in this approach is the specification of prior distributions on the composite hypotheses H and H. A new Bayesian test statistic is constructed by using a prior distribution on H that is concentrated about the “independence surface” H. Approximations are proposed which simplify the computation of the test statistic. The values of the Bayes factor are compared with values of statistics proposed by Gunel and Dickey (1974), Good and Crook (1987), and Spiegelhalter and Smith (1982) for a number of two-way tables. This investigation suggests a strong relationship between the new statistic and the p-value.     

Mortality of American Troops in the Iraq War

We estimate the death rate of United States troops deployed to Iraq from the beginning of the US invasion through 30 September 2006. Eighty percent of the deaths in Iraq were combat‐related. The death rate in Iraq is lower than that of the civilian population of the United States but substantially higher than that of young adults. It is much lower than the death rate of US troops in Vietnam, in part because a much smaller fraction die among those wounded in Iraq. We also estimate relative mortality levels for US troops according to numerous demographic variables through 30 November 2006. The risk of death in Iraq per deployment is shown to be highest for Marines; Naval and Air Force personnel in Iraq have lower death rates than the civilian population of comparable age. Other categories with above‐average mortality in Iraq are enlisted troops, males, younger persons, and Hispanics.     

Kurtosis and spread

An increase in kurtosis is achieved through the location- and scale-free movement of probability mass from the “shoulders” of a distribution into its centre and tails. We introduce a coherent structure of ordering and measures, requiring no symmetry assumption, that represent different formalizations of this movement. For this purpose spread functions and spread-spread plots are defined. The orderings impose growth patterns on the spread-spread plot of the distributions involved, and the weakest involve both a specific scale-matching technique and placement of “shoulders”. The role of existing kurtosis orderings and measures in this general context is identified and examples discussed throughout.     

Privatization—A cure for all ills?

Before a troubled State-owned company can be privatized, the management dimension must be examined. The privatization strategy must be closely linked with the overall business strategy to ensure that the opportunities afforded by the operation provide for long-term profit enhancement. The logic behind the state-owned enterprise is described and the objectives of privatization, the pros and cons, are analysed.     

The O. J. Simpson Trial: Challenges to Science and Society

The O. J. Simpson murder and civil trials riveted the nation and much of the world for more than two years. Of tremendous scientific and public interest was the gulf in attitudes, perceptions, and reactions to the not guilty verdict at the criminal trial. The collection of articles in this issue of The Journal of Social Issues converged on the idea that race is an inadequate explanatory variable in understanding these differences in attitudes, perceptions, and reactions. Instead, race is a marker for a variety of cultural and experiential issues that affect cognitive, affective, and behavioral processes. This concluding article debunks simplistic ideas of race and points to the broader problems of racism and discrimination, criminal injustice, and violence in social relations. The article concludes with suggestions for future research and a call for a broader transformation in societal institutions that affect the quality of social relations.     

Premium will continue to be on performance. Interview by Wesley Curry.

With a new name for its professional organization (the American College of Physician Executives) and a new certifying organization (the American Board of Medical Management), the profession of medical management is in the throes of significant and far-reaching change. At the College's National Conference in Washington, D.C. in May, we talked to two leaders of the profession, Michael B. Guthrie, MD, MBA, FACPE, and Robert H. Hodge, Jr., MD, FACPE about what the future holds for physician executives and what physician executives can do to position themselves for success. Dr. Guthrie, the Immediate Past President of the College is Vice President for Business Development, Penrose/St. Francis Healthcare System, Colorado Springs, Colo. Dr. Hodge, the new President of the College, is a Program Director, W.K. Kellogg Foundation, Battle Creek, Mich.