This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research

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1 This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Research in the Capital Markets Volume Author/Editor: Exploratory Committee on Research in the Capital Markets Volume Publisher: Journal of Finance, vol. 19, 2, part 2, supplement (reprinted) Volume URL: Publication Date: 1964 Chapter Title: Front matter to "Research in the Capital Markets" Chapter Author: Exploratory Committee on Research in the Capital Markets Chapter URL: Chapter pages in book: (p )

2 NATIONAL BUREAU OF ECONOMIC RESEARCH ALBERT J. HETTINGER, JR., Chairman ARTHUR F. BURNS, President W. FETTER, Vice-President DONALD B. WOODWARO, Treasurer SOLOMON FABRICANT, Director of Research 1964 OFFICERS GEOFFREY H. MOORE, Associate Director of Research HAL B. LARY, Associate Director of Research WILLIAM J. CARSON, Executive Director DIRECTORS AT LARGE ROBERT B. ANDERSON, New York City WALLACE J. CAMPBELL, Nationwide Insurance ERwiN D. CANHA.M, Christian Science Monitor SOLOMON FABRICANT, New York University MARION B. FOLSOM, Eastman Kodak Company CRAWFORD H. GREENEWALT, E. I. du Pont de Nemours & Company GABRIEL HAUGE, Manufacturers Hanover Trust Company A. J. HAYES, International Association of Machinists ALBERT J. HETTINGER, JR., Lcszard Frères and Company NICHOLAS KELLEY, Kelley Drye Newhall Maginnes & Warren H. W. LAIDLER, League for Industrial Democracy CHARLES G. M0RTrMIR, General Foods Corporation GEORGE B. ROBEWtS, Larchmont, New York HARRY SCHERMAN, Book-of-the-Month Club BORIS SHISHKIN, American Federation of Labor and Congress of Industrial Organizations GEORGE SOULE, South Kent, Connecticut Josnpn H. WJILITS, Langhorne, Pennsylvania B. WOODWARD, A. W. Jones and Company V. W. BLADEN, Toronto M. BODDY, Minnesota ARTHUR F. BURNS, Columbia LESTER V. CHANDLER, Princeton MELVIN G. DE CHAZEAU, Cornell FRANK W. FETTER, Northwestern R. A. GORDON, California DIRECTORS BY UNIVERSITY APPOINTMENT HAROLD M. GROVES, Wisconsin GOTrFRIED HIABERLER, Harvard MAURICE W. LEE, North Carolina LLOYD G. REYNOLDS, Yale PAUL A. SAMUELSON, Massachusetts Institute of Technology THEODORE W. ScHULTz, Chicago WILLIS J. WINN, Pennsylvania DIRECTORS BY APPOINTMENT OF OTHER ORGANIZATIONS PERCIVAL F. BRUNDAGE, American Institute of Certified Public Accountants NATHANIEL GOLDFINGER, American Federation of Labor and Congress of Industrial Organizations HAROLD G. HALCROW, American Farm Economic Association MURRIY SHIELDS, American Management Association WILLARD L. THORP, American Economic Association W. ALLEN WALLIS, American Statistical Association HAROLD F. WILLIAMSON, Economic History Association THEODORE 0. YNTEMA, Committee for Economic Development DIRECTORS SHEPARD MORGAN, Norfolk, Connecticut N. I. STONE, New York City JACOB VINER, Princeton, New Jersey MosES ABRIM0vITz GARY S. BECKER WILLIAM H. BROWN, JR. GERHARD BRY ARTHUR F, BURNS PHIELIi' CAGAN JOSEPH W. CONARD FRANK G. DICKINSON JAMES S. EARLEY A. EASTERLIN SOLOMON FABRTCANT ALBERT FIsHEOw MILTON FRIEDMAN RESEARCH STAFF VIc'roR R. FucHs H. G. GEORGIADIS RAYMOND W. GOLDSMITH CHALLIS A. HALL, JR. ['IIILLARD HASTAY DANIEL M. HOLLAND THOR HULTOREN F. THOMAS JUSTER C. HARRY KAHN IRVING B. KRAvIs HAL B. LARY ROBERT E. LIPSEY RUTH P. MACK JACOB Mn.tcER ILSE MINTZ H. MooRE ROGER F. RALPH L. NELSON G. WARREN NurrER T. SELDEN LAWRENCE H. SELTZER ROBERT P. SHAY GEORGE J. STIGLER NORMAN B. HERBERT B. WOOLLEY VIcToR ZARNOWITZ

3 RELATION OF THE DIRECTORS TO THE WORK AND PUBLICATIONS OF THE NATIONAL BUREAU OF ECONOMIC RESEARCH 1. The object of the National Bureau of Economic Research is to ascertain and to present to the public important economic facts and their interpretation in a scientific and impartial manner. The Board of Directors is charged with the responsibility of ensuring that the work of the National Bureau is carried on in strict conformity with this object. 2. To this end the Board of Directors shall appoint one or more Directors of Research. 3. The Director or Directors of Research shall submit to the members of the Board, or to its Executive Committee, for their formal adoption, all specific proposals concerning researches to be instituted. 4. No report shall be published until the Director or Directors of Research shall have submitted to the Board a summary drawing attention to the character of the data and their utilization in the report, the nature and treatment of the problems involved, the main condusions, and such other information as in their opinion would serve to determine the suitability of the report for publication in accordance with the principles of the National Bureau. 3. A copy of any manuscript proposed for publication shall also be submitted to each member of the Board. For each manuscript to be so submitted a special committee shall be appointed by the President, or at his designation by the Executive Director, consisting of three Directors selected as nearly as may be one from each general division of the Board. The names of the special manuscript committee shall be stated to each Director when the summary and report described in paragraph (4) are sent to him. It shall be the duty of each member of the committee to read the manuscript. If each member of the special committee signifies his approval within thirty days, the manuscript may be published. If each member of the special committee has not signified his approval within thirty days of the transmittal of the report and manuscript, the Director of Research shall then notify each member of the Board, requesting approval or disapproval of publication, and thirty additional days shall be granted for this purpose. The manuscript shall then not be published unless at least a majority of the entire Board and a two-thirds majority of those members of the Board who shall have voted on the proposal within the time fixed for the receipt of votes on the publication proposed shall have approved. 6. No manuscript may be published, though approved by each member of the special committee, until forty-five days have elapsed from the transmittal of the summary and report. The interval is allowed for the receipt of any memorandum of dissent or reservation, together with a brief statement of his reasons, that any member may wish to express; and such memorandum of dissent or reservation shall be published with the manuscript if he so desires. Publication does not, however, imply that each member of the Board has read the manuscript, or that either members of the Board in general, or of the special committee, have passed upon its validity in every detail. 7. A copy of this resolution shall, unless otherwise determined by the Board, be printed in each copy of every National Bureau book. (Resolution adopted October 25, 1926, as revised February 6, 1933, and February 24, 1941) 11

4 The Journal of FINANCE Vol. XIX SUPPLEMENT: MAY 1964 No. 2, Part 2 PREFACE, by ROGER F. CONTENTS V I. INTRODUCTION 1 II. RECOMMENDATIONS FOR FURTHER RESEARCH: THE CAPITAL MARKET AS A WHOLE 4 1. Role of the Capital Market in Attaining National Economic Objectives 4 2. Role of Government in the Capital Markets 5 3. Interrelations Among Sectors of the Capital Market 5 4. Portfolio Decision-Making and the Liquidity and Transferability of Financial Assets 6 5. Influence of Financial Markets on Real Expenditures 7 6. Comparative Studies of Financial Institutions and Market Structures 7. Integration of National Income and Flow-of-Funds Accounts Measurement and Flow of Saving Quality of Credit 11 III. RECOMMENDATIONS FOR FURTHER RESEARCH: PARTICULAR SECTORS OF THE CAPITAL MARKET.. 13 A. THE MARKETS FOR CORPORATE SECURITIES Demand for Equities Supply of Equities Investor Experience with Common Stocks Economics of the Securities Industry Comparison Between Listed and Over-the-Counter Markets Investment Banking and the New-Issues Market Determinants of Stock Prices 17 B. MORTGAGE MARKET Market for Multifamily and Commercial Mortgages Secondary Mortgage Market 18 C. MARKET FOR STATE AND LOCAL GOVERNMENT SECURITIES Tax Exemption Privilege Historical and Current Data 19 (Contents continued on following page) 111

5 D. MARKET FOR FEDERAL GOVERNMENT SECURITIES Extent of Market Segmentation and Substitutability Debt Management and Flows of Funds Through the System Speed of Reaction to Changes in Debt Structure 21 E. MARKET FOR SECTJRITIES Basic Data on Demand, Supply, and Prices Market Characteristics and Facilities Determinants of Foreign Flotations in the U.S. and Domestic Borrowing Abroad 22 IV. AN INVENTORY OF RECENT AND CURRENT RE- SEARCH 23 A. Tire CAPITAL MARKET AS A WHOLE General Financial Institutions Portfolio Decision-Making 33 B. MARKETS FOR CORPORATE SECURITIES The Stock Market The Bond Market Corporate Financial Management 37 C. THE MORTGAGE MARKET 39 D. THE MARKET FOR STATE AND LOCAL GOVERNMENT SECURITIES.. 41 E. THE MARKET FOR FEDERAL GOVERNMENT SECURITIES 42 F. THE MARKET FOR FOREIGN SECURITIES 43 - iv

6 2,005,927 National Bureau of Economic Research. Exploratory Committee on Research In the Capital Markets. Research in the capital markete. gnew p. 26 title. Journal M XIX, no. 2, part 2. Supplemelllt." 1.Capltal. I.Journal of finance, Ii. Title. NUC7O 9579 p MATERIAL SUBMITTED BY PUBLISH!R.

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