Expectation Formation and Financial Ratio Adjustment: A Reply
In a reply, Cheng and Wu note that Tung and Crowe (1993) in their comment on Lee and Wu (1988) suggest an alternative method based on the distributed lag form of adaptive expectations for estimating the parameters of the partial adjustment and adaptive expectations model. Tung and Crowe claim the method has resolved the ambiguity problem of parameter estimation. The reply indicates the pitfalls of the proposed statistical procedure and suggests a possible extension.
Finance and Financial Management
American Accounting Association
Lee, Cheng F. and WU, Chunchi.
Expectation Formation and Financial Ratio Adjustment: A Reply. (1993). Accounting Review. 68, (4), 953-955. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/807