CONTACT INFORMATION
Office:	302 Kalkin  FIND OFFICE
Phone:	656-8298
E-Mail:	Gatti@bsad.uvm.edu
Office Hours:	TTH 8:00 a.m. 12:00 p.m. or by appointment

• BSAD 184 - Financial Institutions and Markets
  Section A, 003 Kalkin 12:30-1:45 MW
  Section Z1, 003 Kalkin 12:30-1:45 MW
   
• BSAD 288 - Finance Honors Seminar
  Section A, 322 Kalkin 3:30-4:45 MW

Publication History

Journal Article, Academic Journal

• Gatti, J. F.; Grinnell, D. - "Joint Cost Allocations: Measuring and Promoting Productivity and Quality Improvements" (Refereed) - Journal of Cost Management - 2000 - v. 14, no. 4, pp. 13-21
• Gatti, J. F. - "The Taxpayer Subsidy of Freddie Mac" (Refereed) - Illinois Real Estate Letter - 2000 - pp. October
• Gatti, J. F.; Grinnell, D.; Jensen, O. W. - "Replicating a Free Market for Internal Transactions: An Alternative Approach to Transfer Pricing" (Refereed) - The Journal of Economics and Business Studies - 1997 - v. 3, no. 2 (Winter/Spring 1996-97), pp. 43 - 62 [View publication] [Show/Hide Abstract]
  Abstract: Short-run maximization of firm profits provides the sole justification for transfers at marginal cost. This conclusion is based, however, on a theory of the firm that ignores precisely those information and agency costs that make transfer pricing necessary. An alternative approach is to replicate free market forces within the firm, allowing buying and selling divisions complete freedom to negotiate prices. We refer to this as "laissez-faire" transfer pricing. While short-run profits are suboptimized, this approach provides superior measures of divisional performance, reduces many of the agency costs associated with marginal cost pricing, and is more likely to lead to the maximization of long-run firm profits. In this paper, a neoclassical model of the firm is used to compare firm and divisional profits under both marginal-cost and laissez- faire transfer pricing. The differences in the level and allocation of these profits under the two systems quantifies the trade-off between profit losses due to sub-optimization costs and improved performance measurement associated with deviating from the marginal cost rule. Our results indicate that transferring above marginal cost will significantly reduce total firm profits only when there are few outside customers for the transferred product. However, these results also indicate that when there are few outside customers, transfers at marginal cost will seriously distort divisional profit allocations. As a result, the firm faces a serious dilemma. It can maximize short-run profits, seriously distort divisional profit measurement and incentives, and, consequently, increase the probability that long-run profits will fall. Alternatively, it can sacrifice some short-term profits, obtain superior measures of divisional contributions to firm profits, and improve the chances of maximizing shareholder wealth in the long-term.
  
• Dempsey, S. J.; Gatti, J. F.; Grinnell, D.; Cats-Baril, W. L. - "The Use of Strategic Performance Variables as Leading Indicators in Financial Analysts' Forecasts" (Refereed) - The Journal of Financial Statement Analysis - 1997 - v. 2, no. Summer, 4, pp. 61-79 [View publication] [Show/Hide Abstract]
  Abstract: The emerging view among managers and academicians argues for an expanded reporting system to provide more comprehensive information about organizational performance, including internal strategic performance variables. Little systematically-gathered evidence is available, however, concerning the views of the analyst community on this matter. This paper reports the results of a survey of 420 senior investment officers, directors of research and financial analysts regarding the frequency of use, predictive value, and ease of acquisition of a variety of financial and non-financial performance measures. The patterns of use that emerge from the study paint a picture in which analysts go well beyond the traditional financial measures and use a broad range of strategic leading indicators to assess long-term organizational success. The results contribute to our understanding of (1) the extent to which analysts currently use or are interested in using various strategic performance variables in addition to traditional financial performance measures, (2) the linkage between the use of performance measures and their predictive value and ease of acquisition, and (3) the information gaps which currently exist between various measures predictive usefulness and external accessibility.
  
• Gatti, J. F. - "Valuing the Implicit Government Guarantee of GSE Obligations: The Case of Freddie Mac" (Refereed) - Real Estate Economics - 1997 - v. 25, no. 3, pp. 107-139
• Gatti, J. F. - "Discounting Negative Cash Flows: Estimating the Value of Government Guarantees" (Refereed) - Public Budgeting and Financial Management - 1993 - v. 5, no. 3, pp. 551-572
• Gatti, J. F.; Grinnell, D. - "The Choice of Transfer Price and Profit Penalty" (Refereed) - Proceedings of the 1993 Annual Conference of the Northeast Business and Economics Assoc. - 1993 - pp. 13-15
• Gatti, J. F. - "The Costs of Resolving Failed Thrifts: Is FIRREA an Improvement" (Refereed) - Public Budgeting and Financial Management - 1993 - v. 5, no. 3, pp. 627-650
• Gatti, J. F.; Grinnell, D. - "Marginal Cost vs. Laissez Faire Transfer Pricing" (Refereed) - Northeast Regional Decision Sciences Annual Conference - 1989 - pp. Baltimore, MD, March
• Gatti, J. F.; Grinnell, D.; Cats-Baril, W. L. - "Making Transfer Pricing Fit Your Needs" (Refereed) - CMA: The Management Accounting Magazine - 1988 - v. 62, no. 5, pp. 40-49
• Gatti, J. F.; Grinnell, D.; Cats-Baril, W. L. - "Transfer Pricing Policy in a Dynamic Market" (Refereed) - Management Accounting - 1988 - v. LXIX, no. 8, pp. 30-33
• Gatti, J. F.; Grinnell, D.; Cats-Baril, W. L. - "Joint Product Costing in the Semiconductor Industry" (Refereed) - Management Accounting - 1986 - v. LXVII, no. 8, pp. 28-35 [Show/Hide Abstract]
  Abstract: Awarded Certificate of Merit 1986 Lybrands Awards Competition, National Association of Accountants.
  
• Gatti, J. F.; Tashman, L. - "Equalizing Matching Grants and the Allocative and Distributive Objectives of Public School Financing" (Refereed) - National Tax Journal - 1984 - v. 29, no. 4, pp. 461-476 [View publication] [Show/Hide Abstract]
  Abstract: Argues that typical Equalizing Matching Grant (EMG) systems for distributing state school aid cannot be expected to achieve the allocative and distributive goals of school finance. Derives a generalized EMG system and specific school aid formula that satisfy the allocative and distributive criteria. Available from: NTA-TIA, 21 East State Street, Columbus, Ohio 43215, $5.00 single copy.
  
• Gatti, J. F. - "Risk and Return on Corporate Bonds: A Synthesis" (Refereed) - Quarterly Review of Economics and Business - 1983 - no. Summer, pp. 53-70
• Gatti, J. F.; Mills, J. R.; McTague, P. J. - "The Feasibility of Small Denomination Consumer Note Issues as a Source of Funds for Non Financial Borrowers" (Refereed) - Financial Management/ Blackwell Publishing - 1981 - v. 10, no. No. 4/Autumn, pp. 41-53 [View publication] [Show/Hide Abstract]
  Abstract: Dramatic increases in interest rates have caused businesses to explore less traditional forms of financing in an effort to minimize capital costs. Early in 1976, a Vermont utility started to examine the possibility of raising short-term capital through the direct sale of securities to the household sector. This article reports on the planning and issue of the 360-day small denomination securities to consumers in 1979. Results show savings in interest expenses and the possibility of a greater market for the notes than had been anticipated.
  
• Shirland, L. E.; Gatti, J. F. - "An Application of a Multi-Tour Routing Problem" (Refereed) - Proceedings: 1980 Spring Annual Conference - American Institute of Industrial Engineers - 1980 - no. April, pp. 329-334
• Gatti, J. F.; Tashman, L. - "Wealth Neutrality and Local Choice in Public Education: Additional Evidence: Reply" (Refereed) - Journal of Education Finance - 1980 - v. 5, no. 3, Winter, pp. 329-330
• Gatti, J. F.; Tashman, L. - "The Wealth Neutrality of District Power Equalizing Grants in Public School Financing: Additional Evidence" (Refereed) - Journal of Education Finance - 1978 - v. 4, no. Fall, pp. 213-224 [View publication] [Show/Hide Abstract]
  Abstract: Report of research on consequence of introducing an income variable into a district power equalizing formula for state aid grants for education in Vermont. (PKP)
  
• Gatti, J. F. - "The Definition of Money: A Critique of the Conceptual Framework" (Refereed) - Eastern Economic Journal - 1975 - v. 2 (1975), no. 3 (July), pp. 235-242

Journal Article, Public or Trade Journal

• Gatti, J. F.; Spahr, R. W. - "The Value of Federal Sponsorship: The Case of Freddie Mac" - Real Estate Economics - 2003 - v. 25, no. 3, pp. 453-485 [View publication] [Show/Hide Abstract]
  Abstract: The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 attempts to limit the risk borne by the taxpayer due to federal sponsorship of the Federal Home Loan Mortgage Corporation (FHLMC) and the Federal National Mortgage Association by: (1) controlling their range of activities; (2) requiring a level of capital sufficient to absorb substantial losses; and (3) providing a mechanism for closure if capital is insufficient. This article estimates the impact of the capital standards on the value to the FHLMC of federal sponsorship. Although FHLMC's level of capital exceeds requirements, the federal government still bears a nontrivial portion of the FHLMC's risk.
  

Conference Proceeding

• Gatti, J. F.; Tashman, L. - "Equalizing Matching Grants and State Aid to Education" (Refereed) - Eastern Finance Association Annual Conference - 1976

Book, Chapter in Scholarly Book-New

• Gatti, J. F. - "Reindustrialization: A Cure Worse Than The Disease?" (Refereed) - The Limits of Government Regulation - 1981 - no. 10, pp. 167-86 , Academic Press

Book, Scholarly-New

• Gatti, J. F. - "The Limits of Government Regulation" (Refereed) - Academic Press - 1981 - no. 10, September, , New York

Research Report

• Gatti, J. F.; Dempsey, S. J. - "Fixed Income Sectors: A Primer on the High-Yield Bond Market" - Dwight Asset Management Company - 2006
• Gatti, J. F.; Tashman, L. - "Report of the Governor's Panel on State Aid to Education" - State of Vermont - 1975 [Show/Hide Abstract]
  Abstract: Evaluation of the Vermont system for distribution of state aid to local school districts and proposal for reform.
  

Working Paper

• Cats-Baril, W. L.; Gatti, J. F.; Grinnell, D. - "Strategic Performance Measurement: Identification of the Leading Indicators of Organizational Performance and Success" - Eastern Financial Association Annual Conference - 1999 [View publication] [Show/Hide Abstract]
  Abstract: The emerging view among managers and academicians argues for an expanded reporting system to provide more comprehensive information about organizational performance. Little systematically-gathered evidence is available, however, concerning the views of the investment community on this matter. This article reports the results of a survey of 420 senior investment officers, directors of research, and financial analysts regarding the use, predictive value, and ease of acquisition of a variety of financial and nonfinancial performance measures. The patterns of use that emerge from the study paint a picture in which analysts go well beyond the traditional financial measures and use a broad range of leading indicators to assess long-term performance.
  

Monograph

• Gatti, J. F.; Spahr, R. W. - "The Burden of Government Sponsored Enterprises: The Case of The Federal Home Loan Mortgage Corporation" (Refereed) - CATO Public Policy Studies - 1992 [Show/Hide Abstract]
  Abstract: Government-sponsored enterprises (GSEs) are private corporations that operate under congressional charter. They are the epitome of good intentions gone awry. All have been created to serve functions that, on the surface, are quite worthy. Few would object to improving access to services such as housing, education, and agricultural credit. Those are three of the most sacred cows of our public finances, and few members of Congress would vote against them. Unfortunately, GSEs have the potential to cripple the integrity of the federal fiscal system if their expansion is not checked. Like the proverbial camel's nose, once under the edge of the tent they have come to occupy an ever-larger place in our financial system and to determine the allocation of an ever-larger portion of our national wealth. This study examines the GSE as an institution, discusses the general manner in which its operations impose unrecognized costs on the taxpayer, estimates the magnitude of that cost in the case of the Federal Home Loan Mortgage Corporation, and presents a proposal for managing the burden in the future.
  

Book, Non-Scholarly-New

• Gatti, J. F. - "The Limits of Government Regulation" - New York, Academic Press - 1981