Financial Cycles, Business Activity, and the Stock Market

 

Volume 4, No. 1 (Spring 2001)

 

In this article, the prime concepts are based on the Mises-Hayek theory of the business cycle.  Using this model as the general framework for analysis, additions and modifications are introduced reflecting theoretical advances and current problems. Free markets and a strict profit-and-loss system are the best ways to signal erroneous action and induce the constant process of corrective adaptation to bring forth efficiency in the allocation of capital.

 

 

Do Entrepreneurs Make Predictable Mistakes? Evidence from Corporate Divestitures

 

Volume 4, No. 2 (Summer 2001)

 Do entrepreneurs make predictable mistakes? Theory and evidence suggest otherwise. Contrary to the conventional wisdom on mergers and sell-offs, divestitures of previously acquired assets do not necessarily indicate that the original acquisitions were mistakes. Indeed, empire-building motives do not seem to be systematically related to long-term merger performance.