Evolving Market Efficiency with an Application to Some Bulgarian Shares

With new technically advanced methods and computers at our disposal, the efficient market hypothesis is once again being debated. At the same time, we are witnessing an unprecedented growth in both existing and new financial markets. These new markets are often in economies which have just recently embraced free market economics; we term these stock markets infant markets. Such stock markets are obviously not efficient in allocating the supply of savings to productive capital. We do not test whether or not these infant markets are informationally efficient, but instead examine whether and how they are becoming more efficient. We propose modelling the excess returns of individual securities using a multi-factor model with time-varying coefficients and generalised auto-regressive conditional heteroskedastic (GARCH) errors. If the markets are becoming more informationally efficient or the agents are learning, we would expect this to manifest itself as the time-varying coefficients becoming more stable as time increases. We test our model using data on four Bulgarian shares. First, we estimate an AR(2) model and a GARCH-M(1,1) model for the shares. Then, we estimated our AR(2) model with time varying coefficients and GARCH type errors. We find varying levels of efficiency and varying speeds of movement towards efficiency within our sample of four shares.     

Managing the Environment: Rhetoric, Policy and Reality

This article argues that, despite environmental issues climbing higher on the political agenda and considerable recent policy activity, rhetoric is not matched by reality in our efforts to manage the Australian environment. We integrate the imperatives emerging from the policy and sustainability literatures and from actual policy, with detailed work on wildlife conservation in Victoria's Central Highlands. Our analysis demonstrates that, rather than undertaking the more intensive policy and 'adaptive management' that is needed, governments are often doing less and may actually be 'taking their hands of their wheel'. Some public policy and administration implications of the emerging policy field of sustainability are illustrated.