Title

Expectation Formation and Financial Ratio Adjustment: A Reply

Publication Type

Journal Article

Publication Date

1993

Abstract

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.

Discipline

Finance and Financial Management

Research Areas

Finance

Publication

Accounting Review

Volume

68

Issue

4

First Page

953

Last Page

955

ISSN

0001-4826

Publisher

American Accounting Association