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It is said that money makes the world go round, but it is the global systems of communication that allow money to go round the world. The conjunction of deregulatory policies and the convergence of computing, telecommunications and other electronic media since the 1970s led to a transformation in the way the global markets operate. The exponential increases in informatic processing capacity and the volume, velocity and extensity of electronic financial transactions has resulted in over $1.5 trillion per day being traded through international financial exchanges. Much of this is speculative capital, constantly seeking new configurations of investment to maximise returns and responding with real- time sensitivity to minor fluctuations in prices and other market data. At the same time, the increasing volatility of contemporary financial markets is underscored by a series of recent crises and panics. Moreover, concern about capital flight and the vulnerability of domestic economies to the shifting perceptions and sentiments of offshore traders increases the pressure on governments to adopt neoliberal fiscal policies and enter into trade agreements whereby economic decision-making is delegated to supra-national forums with minimal democratic accountability. The communication and information industries play a central role in sustaining the functions of the global economy. Accordingly, there is a significant tradition of political-economic studies of the media industries and

Net private capital flows to developing countries rebounded in 2002, after falling below $20 billion in 2000 and 2001. However, despite the recovery, such flows stayed at less than a quarter of the peak reached in 1996, before the outbreak of the East Asian financial crisis. Foreign direct investment (FDI) remained the only positive component among the broad categories of private capital inflows, but it was well below the historical high registered in 2001 (table 2.1). The other components, net portfolio investment and bank lending, were again negative. Net official flows, including IMF lending, were stable at the level attained in 2001. The picture is somewhat different for the

and that the contents of the paper not be cited without permission of the authors. No Accounting for Risk At the present time, the relation between accounting praxis and risk is not well understood. Accounting praxis does not appear to regard the risk it identifies with its activities as being different from “objective risk ” – the concept of risk found in positive financial and accounting research. Instead accounting praxis (as reflected in case studies, surveys and other empirical studies) reveal a collection of different, sometimes contradictory, conceptions and ‘taken for granted ’ understandings of risk that are invoked and applied on an ad hoc, case by case basis. The aim of this paper is to demonstrate that the conceptual disarray in accounting for risk is both costly and unnecessary. Taking an interdisciplinary approach to risk research, the authors review developments in risk thinking at the end of the 20th Century and highlight a way forward for accounting through New Paradigm Risk (NPR). Various illustrations and case study examples are drawn upon to reflect the relevance of NPR to accounting praxis.

Philosophy.

Web-based financial commentary, in which experts routinely express market-related thought processes, is proposed as a means for college students to learn vicariously about financial markets. Undergraduate business school students from a regional university were exposed to expert market commentary from a single financial Web site for a 6week period. When compared to a control group, students in the experimental group were found to possess higher levels of financial market awareness. Degree of engagement, as approximated by measures of project exposure time and effort, was significantly related to market awareness. Finance majors were found to be more engaged in the process than nonfinance majors. Although this study should be considered exploratory in nature, findings support the notion of using Web-based vicarious learning processes in financial education. Future research can extend the generalizability of these findings, as well as shape vicarious learning mechanisms for use across business disciplines.

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The mathematical model proposed by George Soros for his theory of reflexivity is analyzed under the framework of discrete dynamical systems. We show the importance of the notion of fixed points for explaining the behavior of a reflexive system governed by its cognitive and manipulative functions. The interrelationship between these two functions induces fixed points with different characteristics, which in turn generate various system behaviors including the so-called “boom then bust ” phenomenon in Soros’s theory. Key words: Soros’s theory of reflexivity, Discrete dynamical systems JEL classifications: B41, C69 1

The creation and annihilation of money and its economic effects are reviewed. Economic values appear “in the mind ” of the market participants; e.g., by pretending, maintaining and achieving a particular price for a certain asset. Upon its creation by banks, this kind of “value phantasy ” is converted into “real money ” often in terms of buyer’s debt accompanied by a simultaneous payment of fiat money to the seller. This money is then multiplied on the money market and is competing against other money supplies for the traded assets, goods and services, where it may cause dilution, inflation and reallocation of resources. PACS numbers: 01.60.+q

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