Dynamic Modeling and Testing of OPEC Behavior
Mine Yücel and Carol Dahl
Published as: Yücel, Mine K. and Carol Dahl (1991), "Testing Alternative Hypotheses of Oil Producer Behavior," Energy Journal 12 (4): 117-138.
Abstract: Although conventional wisdom suggests that OPEC is a cartel, many studies since 1973 have considered other underlying forces in order to understand and forecast OPEC behavior. Using the most general model to date on quarterly data from 1971:1 to 1986:4, we econometrically test a variety of hypotheses. We find that the various OPEC countries have quite dissimilar ways suggesting that a cartel hypothesis is not appropriate. Under our specification, there was no evidence for dynamic optimization or a strong target revenue model. There was some evidence that a form of target revenue may be included in the goals for Iran, Libya, Saudi Arabia and the UAE. Iraqi behavior was most consistent with a static competitive market structure, while a static noncompetitive market structure was not rejected for Algeria, Nigeria, Saudi Arabia Kuwait and Venezuela. However, given their divergence in behavior, we do not conclude in favor of a weak cartel but that there is a noncompetitive core of swing producers that each swing to their own rhythm.


The Location Quotient and Central Place Theory
R. W. Gilmer, S. R. Keil and R. S. Hack


Are the Permanent Income Model of Consumption and the Accelerator Model of Investment Compatible?
Evan F. Koenig
Abstract: The permanent–income model implies that consumption will be rising when the real interest rate is high. The accelerator model implies that investment will be greater, the greater is the rate of increase of sales. In combination, the permanent–income and accelerator models imply that a money–induced rise in interest rates is expansionary—a prediction at variance with the relationship between monetary policy and economic activity that we observe in the real world.


Nominal GNP Growth and Adjusted Reserve Growth: Nonnested Tests of the St. Louis and Board Measures
Joseph H. Haslag and Scott E. Hein
Published as: Haslag, Jospeh H. and Scott E. Hein (1995), "Quasi Balance–Sheet Measures of U.S. Monetary Policy: A Closer Look," Journal of Money, Credit and Banking 27 (1): 124-139.


Do Maquiladoras Take American Jobs? Some Tentative Econometric Results
William C. Gruben
Published as: Gruben, William C. (1990), "Do Maquiladoras Take American Jobs? Some Tentative Econometric Results," Journal of Borderlands Studies 5 (1): 31-45.


A Dynamic Comparison of An Oil Tariff, a Producer Subsidy, and a Gasoline Tax
Mine Yücel and Carol Dahl
Abstract: Recent increases in oil imports have spawned a variety of suggestions aimed at protecting the domestic oil industry. if implemented, these policies including an oil tariff, a domestic producer subsidy, and a gasoline tax, would result in income transfers involving billions of dollars, Since they would have immediate as well as tong term implications which might differ winthin and across policies, we provide policy makers with a qualitative comparison of these policies using a dynamic optimal control model. Fifty year price and output paths for OPEC and the U.S. are simulated assuming that U.S. producers are competitive and OPEC is a dominant firm, maximizing its profits, taking U.S. output as given. We then compare the effects of these policies on U.S. vulnerability and security, macroeconomic activity, the federal government budget deficit, and welfare issues.


Are Reserve Requirement Changes Really Exogenous? An Example of Regulatory Accommodation of Industry Goals<
Cara S. Lawn and John H. Wood


The Clearing House Interbank Payments System: A Description of Its Operation and Risk Management
Robert T. Clair


Macroeconomic Policy and Income Inequality: An Error-Correction Representation
Joseph H. Haslag and Daniel J. Slottje
Abstract: This paper investigates whether fiscal and monetary policy actions are co–integrated with inequality in the size distribution of income. The effects of monetary policy on the size distribution of income have generally been ignored in the literature. We find that aggregate monetary and fiscal policy measures are co–integrated with various measures of income inequality. Indeed, teh evidence from the error–correction specification implied by co–integrating regression suggests that impacts of monetary policy actions on the size distribution of income are statistically significant.


Daylight Overdrafts: Who Really Bears the Risk?
Robert T. Clair
Published as: Clair, Robert T. (1991), "Daylight Overdrafts: Who Really Bears the Risk?,"in Governing Banking's Future: Markets vs. Regulation, ed. Catherine England (New York: Springer), 117-140.
Abstract: Numerous governmental and private-sector studies have addressed the problem of payment system risk in recent years. The consensus emerging from those studies is that daylight overdrafts are the primary source of risk in the U.S. electronic payment systems. The institutions that create overdrafts do not bear the full costs, and although recent regulation of the large-dollar transfer systems has reduced somewhat the risk associated with overdrafts, problems remain.


The Effects of Financial Deregulation on Inflation, Velocity Growth, and Monetary Targeting
W. Michael Cox and Joseph H. Haslag


Real Money Balances and the Timing of Consumption: An Empirical Investigation
Evan F. Koenig
Published as: Koenig, Evan F. (1990), "Real Money Balances and the Timing of Consumption: An Empirical Investigation," Quarterly Journal of Economics 105 (2): 399-425.
Abstract: This paper examines the correlation between changes in consumer spending on nondurables and services, and levels or changes in a variety of other variables that might be expected to enter directly as arguments of the household utility function or to serve as measures of household liquidity. Empirical results strongly suggest that an increase in real money balances raises the marginal utility of consumption. Once the influence of real balances is accounted for, there is little evidence that other variables have a direct impact on the timing of consumption.


Stock Returns and Inflation: Further Tests of the Proxy and Debt-Monetization Hypotheses
David Ely and Kenneth J. Robinson
Published as: Ely, David and Kenneth J. Robinson (1992), "Stock Returns and Inflation: Further Tests of the Role of the Central Bank," Journal of Macroeconomics 14 (3): 525-543.
Abstract: This study investigates the anomalous relationship between real stock returns and inflation. Specifically, we investigate hypotheses that claim the proxy relationship between inflation and expected real output is driven by the practice of debt monetization and/or countercyclical monetary policy carried out by the central bank. Using a rational expectations approach to the determination of stock returns, the equilibrium process in the monetary sector is not found to be a consistent explanation for the anomalous relationship. Also, the results do not favor the hypothesis that debt monetization lies behind the performance of the stock market during inflationary time periods.


Federal Reserve System Reserve Requirements: 1959–88—A Note
Joseph H. Haslag and Scott E. Hein
Published as: Haslag, Joseph H. and Scott E. Hein (1989), "Federal Reserve System Reserve Requirements: 1959–88—A Note," Journal of Money, Credit and Banking 21 (4): 515-523.


Asymmetric Information and the Role of Fed Watching
Nathan Balke and Joseph H. Haslag


Further Evidence on the Liquidity Effect Using an Efficient-Markets Approach
Kenneth J. Robinson and Eugenie D. Short
Abstract: The degree to which policy actions of the central bank affect market interest rates has been a much-debated issue in monetary theory. This paper updates and improves upon recent empirical estimates of the effect of monetary policy on interest rates. Interest rates are assumed to be determined in an efficient market in which expectations are formed rationally. Tests of the proposition that unanticipated increases in the money stock are correlated with declines in interest rates are then undertaken. The empirical results provide mixed evidence of the presence of a liquidity effect. One possible explanation for a negative influence of monetary poricy on interest rates is that financial deregulation has made money growth a less reliable indicator of inflationary pressures.


An Econometric Analysis of U.S. Oil Demand
S. P. A. Brown and Keith R. Phillips
Abstract: Recent history has lent casual support to theories that U.S. oil consumption is very insensitive to changing oil prices, that non-price conservation has reduced U.S. oil demand, and that U.S. oil consumption falls more when price rises than it rises when price falls. We find that econometric evidence does not support any of these theories. U.S. oil consumption is fairly responsive to changes in price over the long run, but it requires nearly a decade to adjust fully. That slow response accounts for the evidence that seems to support other theories. These findings suggest that lower oil prices will stimulate U.S. oil consumption considerably.