From the editor - Editorial

Business Economics, April, 2002 by Robert Thomas Crow

This issue contains a couple of new features that I hope will be come permanent. The first is "Economics at Work." a revival of a popular feature of Business Economics, that had been allowed to lapse. In kicking off the revival, NABE Board member Jack Kleinhenz describes his work for the Greater Cleveland Development Association in helping to "support and accelerate the competitive position of Northeastern Ohio." The second new feature is a "Comment and Reply" section for readers to express themselves about articles in Business Economics and for authors to respond to those comments. In this issue, Francis H. Schott comments on Paula Stem's, "Making Trade Policy While Pursuing War on Terrorism" (also in the current issue), and Dr. Stem replies. I encourage all readers to follow Francis Schott's lead to comment on articles that they read in Business Economics. It is hard to believe that no Business Economics articles are controversial.

Two articles in this issue deal with the post-9/11 world. One, by Howard Kunreuther, deals with the problems of insuring against terrorist events, where both the risks of occurrence are unknown and the costs are highly uncertain. It describes the analytic considerations of offering and pricing such insurance and explores whether and how the public sector might have a role. The second, by Paula Stem (referenced above), describes the reality of making trade policy where support for broad, long-run objectives may require short-run compromise for reasons that have little to do with economic merits and much to do with non-economic political considerations. Also relating to world trade, China's joining the World Trade Organization represents a milestone in the global liberalization of trade. Penelope B. Prime examines the factors that influenced this event both within and outside China and the uncertainties that will influence China's trade in the future.

Although there is consensus about the general influence of monetary policy on short-term economic growth, there is uncertainty about the lags and sequence of response to monetary actions. Maurice Larrain uses spectral analysis to shed some light on the response of aggregate sales and inventories to changes in interest rates. His results also offer support for one of two competing theories of inventory behavior.

Bruce D. Phillips explores the impact on small businesses of potential expansion of the Family Medical Leave Act by the use of the National Federation of Independent Business' Regulatory Impact Model. His results suggest that such expansion be considered carefully lest its negative unintended consequences more than offset its benefits.

No one questions the importance of understanding the data that business economists use in their work. As the economic relations between the United States and the rest of the world become more extensive and more complex, the need to understand the data that describes them becomes increasingly important. Thus, Ralph H. Kozlow and Rosemary D. Marcuss describe the contents and concepts of the U.S. international economic accounts prepared by the U.S. Bureau of Economic Analysis. Of course, while vital, these accounts must be supplemented by other data to provide a clear picture of U.S. external economic relations. Thus, in this issue's "Focus on Statistics," Kozlow provides a guide to sources of international data that are available on the Worldwide Web.

This issue has two book reviews, both concerned with econometrics and forecasting. One, Financial Econometrics: Problems, Models and Methods by Christian Gourieroux and Joann Jasiak, is a unified treatment of the special issues that arise from applying quantitative methods--particularly time series methods--to financial topics. The second, Principles of Forecasting: A Handbook for Researchers and Practitioners, edited by J. Scott Armstrong, is a wide-ranging collection of articles on problems of forecasting in general.

Maurine A. Haver

Beginning with the January 2002 issue, Business Economics embarked on making readers better acquainted with the editors of its features: Focus on Industries and Markets, Focus on Statistics, and Book Reviews. This issue recognizes Maurine Haver, the co-editor (with Robert Parker) of the Focus on Statistics. Maurine is well known to many NABE members as a past President of NABE (1994-95), and she now chairs the NABE Campaign for Quality Economic Data, which she initiated during her year as President. As Chair of the NABE Statistics Committee, she testifies before Congress on statistical issues, conducts quarterly meetings that bring together producers and users of federal statistics, and organizes seminars to help users better understand the statistics available from government and private sources. In recognition of her contributions to business economics, she was made a NABE Fellow.

Maurine is President and founder of Haver Analytics Inc., an economic consulting and information services company. Prior to starting Haver Analytics in 1978, she was an economist in the economic forecasting group of General Electric in New York, a member of the International Staff of Companie Bull General Electric in Paris, and a consultant in the Foreign Currency Exposure Management Group of the Chase Manhattan Bank in London.