WORKING PAPER ABSTRACTS - 1981 Listed below are the abstracts for all of the working papers for this year. To see a list of paper titles (with links to available PDF files) click here. 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 01-81 no abstract 02-81 no abstract 03-81 no abstract 04-81 no abstract 05-81 no abstract 06-81 no abstract 07-81 Economists have often had a bad habit of preferring problems that were tractable to problems that were important. Some problems are both tractable and important, and so they are heavily studied and properly so. Some are tractable but unimportant, and they are often studied to an appalling degree. And some are intractable but important and these are largely neglected. That is more regrettable. Of these, one of the most important and least tractable is the problem of financial disorder. Aside from Hyman Minsky, it is the exclusive province of journalists and profit-seeking scare--mongers. Irwin Friend has never shied away from messy problems, if they were important. And frequently he has shown that messy problems are more tractable than many of his colleagues would have believed. If not for his example, we would not have had the courage to write this paper. This is an exploratory essay on the problem of financial disorder. It divides into three parts. The first part develops a general framework for analyzing disorder, the second applies the framework to the specific case of international banking, and the third examines whether lender of last resort facilities for dealing with international financial disorder are adequate. 08-81 no abstract 09-81 no abstract 10-81 no abstract 11-81 no abstract 12-81 no abstract 13-81 no abstract 14-81 no abstract 15-81 For a large sample of initial public offerings of common stock, insider holdings are positively related to market value/book value ratios. Three hypotheses are presented to explain this relation: (i) insider holdings signal relative firm value, (ii) an agency relation is present, so that firms with higher insider holdings have harder-working managers, and are thus worth more, and (iii) small firms with high values have wealthier managers, and these managers do not fully diversify their portfolios, so that the aforementioned statistical finding is merely a "wealth effect." A number of tests are performed on the implications of these hypotheses, with no single hypothesis by itself being fully consistent with the data. Insider holdings do appear to be a signal of firm value, but the wealth effect magnifies the relation. No evidence is found supporting the agency hypothesis. 16-81 no abstract 17-81 no abstract 18-81 no abstract 19-81 no abstract
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