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The theories about price-formation in competitive markets, that were available to economists at the time when Keynes was writing, had been the work of the so-called ‘neo-classics’ between 1870 and 1900. All accepted the distinction, that had come down from Adam Smith, between market value and ‘natural’ or normal value, natural value depending on cost of production, market value on supply and demand. Market value would ‘tend’ towards natural value by adjustment of supply. It was accordingly held, for nearly a century after Smith, that natural values were the only values that required attention. The whole of Ricardo's system, to take the most important example, runs in terms of natural values. The chief thing which happened at the ‘marginal revolution’ of Jevons and his contemporaries was a shift of attention to market values. They were determined, it was accepted, by supply and demand. This chapter addresses the question of just how market worked.

State and local US pension plans hold an estimated $3 trillion in assets, with market values regularly disclosed in plan financial statements. By contrast, public defined benefit pension liabilities are routinely reported at actuarial values that may differ substantially from market values. The authors propose that a more accurate way to value plan liabilities measures the present value of accrued benefits discounted at market interest rates for fixed income investments that are (or are nearly) default-free. They illustrate the difference between these measures for a set of public sector pensions using publicly available information.

This chapter discusses the application of the top-down and bottom-up duality of the real option frameworks to valuing serial acquisitions. It develops the market-based present value of growth options (PVGO) method into a framework that directly connects serial acquisition strategy to value creation on financial markets, and so helps to explain the full market value of companies in consolidating industries. In addition, in a bottom-up approach, it considers acquisitions as portfolios of interrelating acquisition options, each stage being an option on the next, which can develop the firm's asset base dynamically and opportunistically. This dual approach to value acquisition programs is called the market method for acquisitions.

Some arguments are examined for incorporating into accounting reports further estimates or predictions of the future, and items that embed future cash flows. After an introduction (Section 1), Section 2 outlines some of the common concerns of standard-setters with decision-orientated accounting (the essence of which is that accounting items should be measured using their economic values, which are founded on the cash flows they are expected to generate), and considers some of the general arguments for incorporating future-orientated accounting items into accounting reports. Looks at the strong movement toward ‘fair-value’ accounting in which asset and liability carrying values are based on the market prices that would result from arm’s length transactions between well-informed participants. In Section 3, as an example of this market value approach, some problems with suggestions for accounting for financial instruments (assets) are considered. Section 4 looks more briefly at the use of fair values with non-financial assets, and the final section gives a brief conclusion.

This chapter presents a detailed description of the management of the traders' huge portfolios. Traders of capital guarantee products (CGPs) sit at the intersection of several exchanges. This delicate position owes much to the design of the products they manage: CGPs involve complex combinations of underlying securities that traders are not expert in but must still buy and sell. The chapter introduces a crucial actor in the trading room: the pricer—a computational machine that provides traders with the market values of their contracts. In a market in which products are designed to create asymmetry between the bank and its clients or other competing banks, pricers that provide traders with values and risks produce the only knowledge available.

This chapter examines the implications of the ethics of care for political and social issues. It addresses the question of whether corporate and market ways of conducting a range of activities should be expanded through privatization and commercialization, or limited. Childcare, healthcare, education, and cultural activities are considered. The chapter shows how dominant moral theories lack the resources to deal with this question, and how the ethics of care provides strong arguments for limiting markets. Market values are not the appropriate ones to be accorded priority in various fields.

This chapter examines compensation in investment treaty arbitration. It shows the development of principles of compensation for expropriation in customary international law, and how investment treaties have treated compensation for expropriation and for other breaches. It outlines the treatment of both unlawful and lawful expropriation prior to the milestone ADC v Hungary decision, and how that award has impacted thought and practice on compensation for expropriation since then. The chapter also outlines how the amount of compensation has been determined in investment arbitrations, focusing on the concept of Fair Market Value. It discusses the determination of the date of the injury and the proper date of valuation, central to setting the amount of compensation, as well as the treatment of post-act events. It outlines a number of valuation methods used to set the amount of compensation, both for valuing investments and for contractual and business interruption damages.

This chapter tracks the economy of the 1970s as it began to decline after the prosperity of previous decades. Economic growth had defined human history for two hundred years, reaching a peak in the generation after 1945 when world economic growth averaged an extraordinary 5–7 percent per year. Americans rode that growth to a higher standard of living than anyone else. But in the 1970s it all seemed to be flowing away. Unemployment, oil shortages, a plunging stock market, recession, and, above all, inflation were apparently ending these golden years of unparalleled prosperity. Inflation hit everyone, and it hit the poor hardest of all. Persistent inflation undercut dreams and hopes for the future. The economic trauma of the 1970s threatened to destabilize Americans' understanding of how the world worked.

This chapter assesses the arguments for and against capital regulation. It shows that during the post-regulation period the assets generation of US banks halved while return on assets doubled and loss on assets increased by 2.5 times over the pre-regulation period. Capital regulation, therefore, resulted in higher risk of the banking industry. To protect the interests of the banks as well as their depositors, alternative strategies based on the concept of ‘value maintenance’ are presented, which upholds that a bank remains solvent as long as the market value of its assets is equal to the market value of its deposits.

Economic value added (EVA) is based on the concept of residual income. For the financial accountant, there is no cost for equity capital. However, for the financial economist, a cost is associated with the use of equity capital—the opportunity cost of these funds. After considering this cost, we have the residual income. Still, EVA is more than residual income; it is also intended to eliminate the “distortions” created by the financial accountant that make no economic sense. The primary purpose of EVA is to provide an answer to the question, is management creating value for its shareholders? However, to think that EVA is simply about calculating a number—as informative as that might be—would miss an important point. In short, the intent is to use EVA as a behavioral tool to alter capital utilization and other incentives rather than as a tool of financial analysis.

This chapter first explains the importance of using a single metric to manage the creation of a firm's value. While multiple-measure techniques such as the balanced scorecard can yield valuable information, they fail to provide managers with a means to make necessary tradeoffs. The question then becomes, what metric best measures value creation? The chapter discusses several shortcomings of traditional metrics, both market based (e.g., shareholder return) and accounting based (e.g., net income and return on invested capital). These deficiencies center around the failure of traditional metrics to provide any charge of nondebt financing, therefore leading to a faulty appearance of profitability. Economic profit metrics avoid these pitfalls because they incorporate the magnitude of both the return and the required investment, as well as the opportunity cost of capital. The decision rule becomes simple: Fund projects with expected positive economic profit, and reject the others.

One of the ways that the property market became visible in the nineteenth century was through new practices that allowed the public to calculate the market value of property and to consider as a whole the aggregate pattern and fluctuations of sales. There were many ways to do this, but this chapter argues that one of the most important was through new forms of print culture. The rise of specialized trade journals in the 1860s--journals like the Journal of Auctions, Estates Gazette and McWilliam's Property Circular--gave professional intermediaries a forum to compile sales data and debate how best to interpret it. These institutions were aided by other forms of professional coordination, like the Estate Exchange, which promised to provide a lasting archive of past and present properties for sale. From the 1880s, these specialized forms of knowledge began to influence the mainstream press. By the turn of the century, property market news had come of age, providing the reading public with daily, weekly and annual digests of the property market in abstract. This straightforward narrative of increasing abstraction and quantification, however, belied what was in fact a more contested process of trusting market numbers and the professionals who produced them.

This chapter looks at how greater inclusiveness and formal equality were accompanied by growing distrust of government and the rise of market values in the post-1970s world. Over more than three decades, the result was a more diverse public culture in the realm of employment, entertainment, and politics, on the one hand, and a more economically differentiated society, on the other. Class differences widened, as measured by the distribution of income and wealth. But Americans had long been loath to talk about class divisions, something associated for the past century with Marxist analysis. Rather than addressing growing economic inequality, Americans tended instead to celebrate racial and ethnic diversity. Here, cultural liberalism and economic conservatism had come to form a de facto alliance. It had become the contemporary American condition, the ground on which the vaunted American middle class continued to shrink.

This concluding chapter gives a brief overview of the dominant contemporary American values of formal equality and free-market economics after the 1970s. It also considers the relationship between two developments: the simultaneous flowerings of egalitarianism and free-market values. Both commitments had deep roots in the American past and had long helped shape the nation's politics and culture. The shedding of formal systems of social hierarchy was a continuing process, one that did not begin in the 1970s but did accelerate dramatically during that decade. In addition, the chapter considers other areas of American public life that has changed since the 1970s.

During the last decade of the 20th century, human resource management gained much interest in academic fields. Compared to earlier periods in which the focus was more on the business process of re-engineering, strategy, marketing, and other such aspects, the 1990s seemed to embrace the notion of ‘people management’. Discussing human resource management (HRM) is required for all executive development programmes as managing people proves to bring about improvements in an organization's competitive advantage. Much of the focus on HRM was initiated by Huselid's study that demonstrated how a substantial increase in market value and sales per employee could result from high performance work practices. Although HRM became popular in both management and academic fields during the 1990s, there was still much debate regarding the relations between HRM and performance.

This chapter deals with the financial analysts’ assumption that companies have a so-called intrinsic value that can be identified and is partly reflected in the stock price. It highlights the role the search for new information plays in the endeavor to define such intrinsic value. In explaining how analysts frame, select, and weight information, it shows that, rather than being a straightforward activity, financial analysis is heavily influenced by what analysts perceive to be valuable information.

This chapter starts with a brief outline of the pre-insolvency plan in the conceptual form proposed in this book. It then goes on to develop a normative foundation for pre-insolvency proceedings and formulates the boundary conditions that must be satisfied for their application. As part of the analysis the concepts of fair market value and liquidation value are examined and the differences between price and value are discussed. The chapter explains why pre-insolvency proceedings are to be conceived as a collective debt enforcement instrument of the creditors rather than a rehabilitation instrument of the debtor. The chapter concludes by defining pre-insolvency as the stage at which insolvency has become inevitable and argues that this is the earliest possible triggering event for the use of a collective enforcement procedure, such as the plan mechanism in the proposed form.

The chapter summarizes work conducted under the UK National Ecosystem Assessment and the ESRC SEER project. This synthesizes valuation studies of the effects of land-use change on agricultural output, greenhouse gases, open-access recreation, and urban greenspace. All effects are valued in economic terms and contrasted with an assessment of the costs of maintaining present levels of biodiversity. The valuation models are spatially explicit, revealing the effect that underlying variation in the natural environment has on mitigating or exacerbating effects. Various scenarios of change are appraised over an extended period of time. Results suggest that sole adherence to the maximization of market values can lead to net losses when other impacts are assessed. In contrast, changes which emphasize both market and non-market effects can yield substantially greater benefits for society.

This chapter examines what kind of labour-market-related values present-day young Dutch people espouse. It then interprets these data and investigates how the Dutch outcomes relate to developments in other European countries, and what they suggest for transition policies and further research. The chapter takes up a middle position in the ongoing modernization debate that oscillates between two differentiated clusters of labour-market values among Dutch young people – continuity and discontinuity. It then discusses recent developments in the Dutch and European youth-labour market in relation to changing demands for young people. The chapter continues with an assessment of available research on the subject of labour-market values, and presents a typology of young Dutch people's work values. Lastly, it reevaluates the research questions and provides some suggestions for an integration policy for young people.