Reconciling value estimates from the discounted cash flow model and the residual income model

This paper examines why practitioners and researchers get different estimates of equity value when they use a discounted cash flow (CF) model versus a residual income (RI) model. Both models are derived from the same underlying assumption -- that price is the present value of expected future net dividends discounted at the cost of equity capital -- but in practice and in research they frequently yield different estimates. We argue that the research literature devoted to comparing the accuracy of these two models is misguided; properly implemented, both models yield identical valuations for all firms in all years. We identify how prior research has applied inconsistent assumptions to the two models and show how these seemingly small errors cause surprisingly large differences in the value estimates. [ABSTRACT FROM AUTHOR]

Reconciling Globalisation and Technological Change: Growing Income Inequalities and Remedial Policies

From the mid-1970s through the 1980s and into the 1990s, wage inequality and skill differentials in earnings and employment increased sharply in OECD countries. After 1973 and especially in the 1980s, the US experienced a dismal real wage performance for the less skilled. Among the factors singled out by economists as possible major contributors to this development are economic globalisation processes and skill-biased technological change. Although these are most commonly considered as independent influences, after critically outlining views about these factors, this article argues that strong interdependence exists between them. The article then examines potential policy responses to this growing inequality.

Differential expression and distribution of syndecan-1 and-2 in periodontal wound healing of the rat

Cell-surface proteoglycans participate in several biological functions including interactions with adhesion molecules, growth factors and a variety of other effector molecules. Accordingly, these molecules play a central role in various aspects of cell-cell and cell-matrix interactions. To investigate the expression and distribution of the cell surface proteoglycans, syndecan-1 and -2, during periodontal wound healing, immunohistochemical analyses were carried out using monoclonal antibodies against syndecan-1, or -2 core proteins. Both syndecan-1 and -2 were expressed and distributed differentially at various stages of early inflammatory cell infiltration, granulation tissue formation, and tissue remodeling in periodontal wound healing. Expression of syndecan-1 was noted in inflammatory cells within and around the fibrin clots during the earliest stages of inflammatory cell infiltration. During granulation tissue formation it was noted in fibroblast-like cells and newly formed blood vessels. Syndecan-1 was not seen in newly formed bone or cementum matrix at any of the time periods studied. Syndecan-1 expression was generally less during the late stages of wound healing but was markedly expressed in cells that were close to the repairing junctional epithelium. In contrast, syndecan-2 expression and distribution was not evident at the early stages of inflammatory cell infiltration. During the formation of granulation tissue and subsequent tissue remodeling, syndecan-2 was expressed extracellularly in the newly formed fibrils which were oriented toward the root surface. Syndecan-2 was found to be significantly expressed on cells that were close to the root surface and within the matrix of repaired cementum covering root dentin as well as at the alveolar bone edge. These findings indicate that syndecan-1 and -2 may have distinctive functions during wound healing of the periodontium. The appearance of syndecan-1 may involve both cell-cell and cell-matrix interactions, while syndecan-2 showed a predilection to associate with cell-matrix interactions during hard tissue formation.

Saving, productivity and national income: a discrete-time geometric framework

This paper proposes an alternative geometric framework for analysing the inter-relationship between domestic saving, productivity and income determination in discrete time. The framework provides a means of understanding how low saving economies like the United States sustained high growth rates in the 1990s whereas high saving Japan did not. It also illustrates how the causality between saving and economic activity runs both ways and that discrete changes in national output and income depend on both current and previous accumulation behaviour. The open economy analogue reveals how international capital movements can create external account imbalances that enhance income growth for both borrower and lender economies. (C) 2002 Elsevier Science B.V. All rights reserved.

Differential requirements for COPI coats in formation of replication complexes among three genera of Picornaviridae

Picornavirus RNA replication requires the formation of replication complexes (RCs). consisting of virus-induced vesicles associated with viral nonstructural proteins and RNA. Brefeldin A (BFA) has been shown to strongly inhibit RNA replication of poliovirus but not of encephalomyocarditis virus (EMCV). Here, we demonstrate that the replication of parechovirus 1 (ParV1) is partly resistant to BFA, whereas echovirus 11 (EV11) replication is strongly inhibited. Since BFA inhibits COPI-dependent steps in endoplasmic reticulum (ER)-Golgi transport, we tested a hypothesis that different picornaviruses may have differential requirements for COPI in the formation of their RCs. Using immunofluorescence and cryo-immunoelectron microscopy we examined the association of a COPI component, beta-COP, with the RCs of EMCV, ParV1, and EV11 EMCV RCs did not contain beta-COP. In contrast, beta-COP appeared to be specifically distributed to the RCs of EV11 In ParV1-infected cells beta-COP was largely dispersed throughout the cytoplasm, with some being present in the RCs. These results suggest that there are differences in the involvement of COPI in the formation of the RCs of various picornaviruses, corresponding to their differential sensitivity to BFA. EMCV RCs are likely to be formed immediately after vesicle budding from the ER, prior to COPI association with membranes. ParV1 RCs are formed from COPI-containing membranes but COPI is unlikely to be directly involved in their formation, whereas formation of EV11 RCs appears to be dependent on COPI association with membranes.

Cross-national comparison of internal migration: issues and measures

Our objectives are to identify the issues that researchers encounter when measuring internal migration in different countries and to propose key indicators that analysts can use to compare internal migration at the 'national' level. We establish the benefits to be gained by a rigorous approach to cross-national comparisons of internal migration and discuss issues that affect such comparisons. We then distinguish four dimensions of internal migration on which countries can be compared and, for each dimension, identify a series of summary measures. We illustrate the issues and measures proposed by comparing migration in Australia and Great Britain.

Boundary value problems for systems of difference equations associated with systems of second-order ordinary differential equations

We study difference equations which arise as discrete approximations to two-point boundary value problems for systems of second-order ordinary differential equations. We formulate conditions which guarantee a priori bounds on first differences of solutions to the discretized problem. We establish existence results for solutions to the discretized boundary value problems subject to nonlinear boundary conditions. We apply our results to show that solutions to the discrete problem converge to solutions of the continuous problem in an aggregate sense. (C) 2002 Elsevier Science Ltd. All rights reserved.

Difference equations associated with fully nonlinear boundary value problems for second order ordinary differential equations

We study the continuous problem y"=f(x,y,y'), xc[0,1], 0=G((y(0),y(1)),(y'(0), y'(1))), and its discrete approximation (y(k+1)-2y(k)+y(k-1))/h(2) =f(t(k), y(k), v(k)), k = 1,..., n-1, 0 = G((y(0), y(n)), (v(1), v(n))), where f and G = (g(0), g(1)) are continuous and fully nonlinear, h = 1/n, v(k) = (y(k) - y(k-1))/h, for k =1,..., n, and t(k) = kh, for k = 0,...,n. We assume there exist strict lower and strict upper solutions and impose additional conditions on f and G which are known to yield a priori bounds on, and to guarantee the existence of solutions of the continuous problem. We show that the discrete approximation also has solutions which approximate solutions of the continuous problem and converge to the solution of the continuous problem when it is unique, as the grid size goes to 0. Homotopy methods can be used to compute the solution of the discrete approximation. Our results were motivated by those of Gaines.

Urbanization, population transition, and growth

This paper analyzes a dual economy consisting of urban market areas and less developed rural areas with or without local markets. Urban areas have better opportunities for earnings and education than rural areas. Rural families choose whether to move to urban areas at costs that differ from location to location. As per capita output grows relative to the moving cost, urbanization proceeds, leading to lower fertility, more investments in human and physical capital per child relative to output per worker, and faster economic growth. These impacts are stronger if rural areas have no access to markets.

Polarised infrared and differential scanning calorimetry studies on oriented vinyl pipe materials

The molecular orientation in a conventionally extruded PVC pipe, a uniaxially oriented PVC pipe and a biaxially oriented PVC pipe has been studied via Infrared dichroism. The degree of order or crystallinity has also been studied by Differential Scanning Calorimetry and also via Infrared Spectroscopy. The fundamental structural difference between the conventional and oriented pipes was that polymer chains were preferentially aligning in the hoop direction for oriented pipes whereas they were fairly isotropic in the conventional pipe with a slight preferential alignment in the axial direction. Analysis of the C-Cl stretching mode indicated that the uniaxially oriented pipe had much higher alignment of the C-Cl bond in the axial direction than the biaxial pipe, which correlates with higher fracture toughness for circumferential cracking in the biaxial pipe. Both DSC and Infrared spectroscopy detected little change in the crystallinity or order in the oriented pipes compared to the conventionally extruded pipes. (C) 2002 Kluwer Academic Publishers.

Differential regulation of twitching motility and elastase production by Vfr in Pseudomonas aeruginosa

Vfr, a homolog of Escherichia coli cyclic AMP (cAMP) receptor protein, has been shown to regulate quorum sensing, exotoxin A production, and regA transcription in Pseudomonas aeruginosa. We identified a twitching motility-defective mutant that carries a transposon insertion in vfr and confirmed that vfr is required for twitching motility by construction of an independent allelic deletion-replacement mutant of vfr that exhibited the same phenotype, as well as by the restoration of normal twitching motility by complementation of these mutants with wild-type vfr. Vfr-null mutants exhibited severely reduced twitching motility with barely detectable levels of type IV pili, as well as loss of elastase production and altered pyocyanin production. We also identified reduced-twitching variants of quorum-sensing mutants (PAK lasl::Tc) with a spontaneous deletion in vfr (S. A. Beatson, C. B. Whitchurch, A. B. T. Semmler, and J. S. Mattick, J. Bacteriol., 184:3598-3604,2002), the net result of which was the loss of five residues (EQERS) from the putative cAMP-binding pocket or Vfr. This allele (VfrDeltaEQERS) was capable of restoring elastase and pyocyanin production to wild-type levels in vfr-null mutants but not their defects in twitching motility. Furthermore, structural analysis of Vfr and VfrDeltaEQERS in relation to E. coli CRP suggests that Vfr is capable of binding both cAMP and cyclic GMP whereas VfrDeltaEQERS is only capable of responding to cAMP. We suggest that Vfr controls twitching motility and quorum sensing via independent pathways in response to these different signals, bound by the same cyclic nucleotide monophosphate-binding pocket.

Predictor-corrector methods of Runge-Kutta type for stochastic differential equations

In this paper we construct predictor-corrector (PC) methods based on the trivial predictor and stochastic implicit Runge-Kutta (RK) correctors for solving stochastic differential equations. Using the colored rooted tree theory and stochastic B-series, the order condition theorem is derived for constructing stochastic RK methods based on PC implementations. We also present detailed order conditions of the PC methods using stochastic implicit RK correctors with strong global order 1.0 and 1.5. A two-stage implicit RK method with strong global order 1.0 and a four-stage implicit RK method with strong global order 1.5 used as the correctors are constructed in this paper. The mean-square stability properties and numerical results of the PC methods based on these two implicit RK correctors are reported.

A variable stepsize implementation for stochastic differential equations

Stochastic differential equations (SDEs) arise from physical systems where the parameters describing the system can only be estimated or are subject to noise. Much work has been done recently on developing higher order Runge-Kutta methods for solving SDEs numerically. Fixed stepsize implementations of numerical methods have limitations when, for example, the SDE being solved is stiff as this forces the stepsize to be very small. This paper presents a completely general variable stepsize implementation of an embedded Runge Kutta pair for solving SDEs numerically; in this implementation, there is no restriction on the value used for the stepsize, and it is demonstrated that the integration remains on the correct Brownian path.