Business Economics ®- October 2000

To download the entire October issue in one large file (383 K) right click the link below, and choose Save to Disk. Articles can also be viewed individually online or downloaded. All articles are in Adobe Acrobat format (pdf), and selected articles are in HTML, also. To get a free Adobe Acrobat reader, please see the Adobe site. Selected articles, as noted, are available to the public October 2000 Issue (383K) (Note: To save the entire issue, or any of the individual articles, directly to disk so that you can view them later, right-click on its link. Then select "Save Target As" in Internet Explorer, and "Save Link As" in Netscape Navigator, in the pop-up menu.) Most articles are available for members only. Non-members can purchase articles at the NABE Document Store online.
	Front Matter -- Masthead, Board of Editors, Guidelines, From The Editor (PDF, 23 K)
Diane C. Swonk	The Challenge of Affluence If economic policymakers behave prudently, the good times in the U.S. can roll on for several more years. The future, however, is likely to be very different from the past, as the expansion’s momentum shifts from Wall Street to Main Street. (PDF, 27K) Public
Albert M. Wojnilower	Life Without Treasury Securities The U.S. Treasury debt may soon be paid off. However, Treasury securities perform vital and difficult-to-replace roles: as riskless assets in portfolios; benchmarks in the pric-ing of private securities; reliable hedges for marketmakers in debt securities and derivatives; safe havens for funds; and, as was formerly the case with gold, the chief international money. If and when Treasury debt is paid off, the loss of Treasuries in these roles means that securities markets will shrink, while banking-type intermediaries gain. The perceived probability of governmental bail-out for vari-ous kinds of debt in case of trouble will determine winners and losers among candidates for replacements, with foreign central banks making the pivotal choices. Retirement of Treasuries—especially short-term bills—is monetary destruction. What instruments take their place and how completely and smoothly, will have profound worldwide repercussions. Thus, the U.S. Treasury should maintain some debt, despite the budget surplus. (PDF, 35 K) Public
David M. Jones	The Demise of the 30-Year Treasury Bond as a Benchmark for Pricing Fixed-Income Securities With all the drama and finality that the prestigious Wall Street Journal could muster, it declared this past May 3 that the reign of the 30-year Treasury bond as the bench-mark for pricing fixed-income securities in the $14.7 tril-lion U.S. bond market had ended. Without missing a beat the Wall Street Journal shifted the “benchmark” crown to the brow of the 10-year Treasury note, already the basis for the rate that is charged on most home mort-gages. This article will examine the reasons for the demise of the 30-year Treasury bond as the U.S. bond market benchmark and consider possible substitutes to be used as the new benchmarks for pricing fixed-income securities. This search for a new benchmark is important because of the crucial role that long-term interest rates play as an influence on aggregate demand, particularly business investment and housing activity, and in timely portfolio shifts between bonds and stocks. (PDF, 58 K) Members only
Steven A. Zamsky	Diminishing Treasury Supply: Implications and Benchmark Alternatives Over the last year, the fixed income markets have become increasingly subject to technical distortions as the devel-opment of a U.S. government surplus has resulted in a diminishing supply of U.S. Treasury securities. This technical pressure has substantially inverted the yield curve, increased levels and volatility in yield spreads between government bonds and other fixed income securities, and created a great deal of confusion among market partici-pants regarding appropriate benchmarks. The supply-induced inversion affects corporate finance, risk management, valuation and asset allocation, and will force the adoption of alternative benchmarks. (PDF, 65 K) Members only
Wayne Hamra	Bribery in International Business Transactions and the OECD Convention: Benefits and Limitations This article reviews common reasons why multinational firms have given questionable payments to foreign offi-cials, noting that unsavory business practices have been extremely difficult to change. In-depth interviews with academics and executives examine the anticipated impact of the OECD’s Convention on Combating International Bribery of Foreign Public Officials in International Business Transactions on the flow of these illicit payments and the pact’s likely effects on American firms’ foreign operations. The paper also gleans strate-gies that firms have used to handle requests for corrupt payments and explores ways that governments and inter-national bodies might help them cope more effectively with these issues. (PDF, 107K) Members only
Patricia M. Getz	Focus on Statistics: Implementing the New Sample Design for the Current Employment Statistics Survey (PDF, 28K) Members only
William Baumgartner and Andrew Gross	Focus on Industries and Markets: The Global Market for Electric Vehicles Worldwide sales of electric vehicles are slated to increase at the rate of sixty percent per annum in the coming years. We project global sales of more than one million such vehicles valued at $24 billion in the year 2007. The number of such vehicles on the roads of six continents that year should reach the four million mark. Most of the units will be cars and light trucks, though a growing number of buses and sanitation trucks will be evident as well. Despite rapid growth, electric vehicles as a whole will constitute only 1.5 percent of global motor vehicle production in 2007 and only 0.5 per-cent of the worldwide number of motor vehicles on the road in that year. Clearly, we are looking at a narrow, albeit fast-growing market. (PDF, 38K)
Matthew A. Elrod-Erickson and William F. Ford	Forum on Emerging Issues: Economic Implications of the Human Genome Project (PDF, 29 K) Members only
Book Reviews	Henry Kaufman, On Money and Markets: A Wall Street Memoir by Robert V. DiClemente Willis Emmons, The Evolving Bargain: Strategic Implications of Deregulation and Privatization by Gerald Musgrave (PDF, 37 K) Public
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