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The article develops supply and demand functions for the commercial paper market. Between 1965 and 1968 the value of short-term debt issued by corporations more than tripled. The author estimates equations for supply and demand using quarterly data for the period 1954-1968. Results for several different industries are presented and discussed. Although the model worked will within the sample time frame, it performed less well for the two subsequent quarters, owing to structural changes in the market.

We present the first evidence that initial ratings of commercial paper influence common stock returns. Highly-rated industrial issues of commercial paper, unaccompanied by bank letters of credit, are associated with significantly positive abnormal returns; lower-rated issues are not. The stock price effects of changes in commercial paper ratings also demonstrate the relevance of ratings to the financing of firms. Rating downgrades, especially those that imply an exit from the commercial paper market, produce significantly negative abnormal returns; upgrades have no effects. Initial commercial paper ratings and subsequent reratings appear to help investors sort firms by their future prospects. [ABSTRACT FROM AUTHOR]

Banks have a unique ability to hedge against market-wide liquidity shocks. Deposit inflows provide funding for loan demand shocks that follow declines in market liquidity. Consequently, banks can insure firms against systematic declines in liquidity at lower cost than other institutions. We provide evidence that when liquidity dries up and commercial paper spreads widen, banks experience funding inflows. These flows allow banks to meet loan demand from borrowers drawing funds from commercial paper backup lines without running down their holdings of liquid assets. We also provide evidence that implicit government support for banks during crises explains these funding flows. [ABSTRACT FROM AUTHOR]

Diamond (1991) argues that a firm's reputation determines whether it borrows directly or through an intermediary. We test the Diamond model by examining the quantity response of commercial paper issued by bank holding companies to a rating downgrade. From 1986 to 1991, cumulative abnormal declines averaged 6.69 percent in the first two weeks after the downgrade and 11.05 percent in the subsequent 12 weeks. In contrast to commercial paper issued by bank holding companies, large CDs issued by affiliated banks did not change significantly in the period around a downgrade, suggesting that deposit insurance may have removed market discipline from the CD market. [ABSTRACT FROM AUTHOR]

An abstract of the article "An Empirical Investigation of Commercial Paper Sub-Markets: 1955-1968," by Stephen E. Skomp is presented.

The abstracts are from papers presented at the American Finance Association meetings in 1993. "Option Valuation with Systematic Stochastic Volatility" is from Kaushik I. Amin and Victor K. Ng. "Influence Costs and Capital Structure" is by Laurie Simon Bagwell and Josef Zechner. "An Equilibrium Model Rationalizing "Swings" in Financial and Macroeconomic Time Series Data" is by Gurdip S. Bakshi.

The article presents a discussion of Arthur I. Bloomfield's research paper on a survey of central banking in developing countries. The reviewer said that his research was lucid and comprehensive and the author is in general agreement with Bloomfield on the various issues he discusses. The author adds to Bloomfield's paper by describing the various steps taken by the monetary authorities in India in the late 1940s and throughout most of the 1950s. The steps were taken to strengthen the banking and credit system.

The article presents the American Finance Association's 1989 yearly report from the managing editor of "Journal of Finance." The managing editor discusses the submission fee increases of 1989, noting an increase in the number of submissions to the periodical. "Journal of Financial Economics" is noted as the only other major finance journal to publish turnaround statistics. The journal's stylistic guidelines and acceptance policies are mentioned. Smith Breeden Associates donated to the American Finance Association to allow for the establishing of the Smith Breeden prizes for best papers.

This article investigates empirically the comovements of the conditional mean and volatility of stock returns. It extends the results in the literature by demonstrating the role of the commercial paper-Treasury yield spread in predicting time variation in volatility. The conditional mean and volatility exhibit an asymmetric relation, which contrasts with the contemporaneous relation that has been tested previously. The volatility leads the expected return, and this time series relation is documented using offset correlations, short-horizon contemporaneous correlations, and a vector autoregression. These results bring into question the value of modeling expected returns as a constant function of conditional volatility. [ABSTRACT FROM AUTHOR]

The article presents abstracts on financial topics which include the use of hedge funds, the performance of firms before acquisition, and the time-variation of exchange rate exposure. [ABSTRACT FROM AUTHOR]

The article discusses Richard H. Thaler, the American Finance Association’s (AFA’s) Fellow for 2009. Thaler became an assistant professor at the University of Rochester after receiving his doctorate there. While at Rochester he developed an interest in the work of psychologists Daniel Kahneman and Amos Tversky, with whom he later collaborated on research. After moving to Cornell University in 1978, Thalen worked with doctoral candidate Werner DeBondt to produce a paper on the stock market that generated considerable controversy. Another paper he co-wrote with Andrei Shleifer and Charles M. C. Lee prompted a dispute with Nobel Prize-winner Merton Miller and colleagues.

This article presents a discussion of E. M. Bernstein's paper about the financial problems of economic development. Bernstein discusses five facets of this problem: to decrease the size of the development program, to energize the inflow of foreign capital, to encourage domestic savings, to gather together the available resources, and to allocate the resources available to the private sector in a way that will stimulate the greatest increase in production. The author believes that this analysis leaves no room for argument.

This article presents the report of the Representative to the National Bureau of Economic Research (NBER). Founded in 1920, NBER works toward increasing economic understanding. It achieves this through programs, projects, working papers, books, periodicals, and its Summer Institute. Among the many programs sponsored by the Bureau are those focusing on Aging, Corporate Finance, and Industrial Organization. During 2000 NBER issued a total of 13 books. Periodicals include the monthly "NBER Digest," and the "Reporter."

This article presents the report of the editor of the "Journal of Finance," for the year 2000. The transition from the previous editor, Rene Stulz, and the Ohio State University office, to the current editor and new offices at Carnegie Mellon University has gone well. A temporary increase during the transition period in the number of printed pages of the "Journal of Finance" has been relaxed. As a result, approximately a dozen fewer papers will be published in 2001 than during the previous year. Submissions of prospective papers continue to be brisk.

The article presents a report from the American Finance Association's Representative to the National Bureau of Economic Research (NBER). The article reviews the mission of the organization, which focuses on economic research done by both individual economists and larger groups. The article provides information relative to NBER programs, projects, other conferences, Summer Institute, working papers, books, journals, periodicals, and fellowships. Martin Feldstein continues as President of NBER for 1996.

The article presents a series of abstracts of papers presented at the 1996 American Finance Association meeting, including "The Timing and Subsequent Performance of Seasoned Offerings: The Case of Rights Issues," "Testing Continuous-Time Models of the Spot Interest Rate," and "Bias in Analysts' Earnings Forecasts as an Explanation for the Long-Run Underperformance of Stocks Following Equity Offerings."

The abstracts of several papers from the 1994 American Finance Association meeting are presented. "An Experimental Examination of the Effects of Forecast Bias on Individuals' Use of Forecasted Information" is by Lucy F. Ackert, Bryan K. Church, and Mohamed Shehata. "Executive Careers and Compensation Surrounding Takeover Bids" is by Anup Agrawal and Ralph A. Walkling. "Return Volatility and Trading Volume: An Information Flow Interpretation of Stochastic Volatility" is by Torben G. Andersen.