Showing papers by "Federal Reserve System published in 1977"
TL;DR: Bargains and Ripoffs: A Model of Monopolistically Competitive Price Dispersion, this paper, is a model of price dispersion that is based on Salop and Stiglitz's model.
Abstract: Bargains and Ripoffs: A Model of Monopolistically Competitive Price DispersionAuthor(s): Steven Salop and Joseph StiglitzSource: The Review of Economic Studies, Vol. 44, No. 3 (Oct., 1977), pp. 493-510Published by: The Review of Economic Studies Ltd.Stable URL: http://www.jstor.org/stable/2296903Accessed: 15/09/2009 15:43
1,092Â citations
TL;DR: In this paper, the authors classify the possible causality relationships between two series X and Y, using an analogy to events in a sample space, and present some new results on alternative characterizations of the more important causality events.
638Â citations
TL;DR: In this article, the authors show that many economic variables which are generally regarded as being strongly interrelated may with equal validity, based on recent empirical evidence, be regarded as independent or only weakly related.
Abstract: Extensions of time-series modeling procedures of Box and Jenkins [5] reveal that numerous economic variables which are generally regarded as being strongly interrelated may with equal validity, based on recent empirical evidence, be regarded as independent or only weakly related. Differences between these results and the bulk of econometric literature are attributed to the failure of the latter to satisfactorily account for autocorrelation. Due to limitations in the data, it is concluded that in many instances where economic relationships clearly do exist, econometric or other empirical means cannot reliably enable their existence to be ascertained.
335Â citations
TL;DR: In this paper, the authors argue that when consumers differ in their information-generating efficiencies and costs, dispersion serves as a device for splitting up the market to permit price discrimination, since less efficient information gatherers will search less and thus will pay a higher price than will efficient searchers.
Abstract: Although economists often assume that commodities form homogeneous categories with a single price, there are in fact heterogeneities within commodity groupings. Many markets for apparently identical commodities are characterized by dispersion in price and differences in durability and other quality measures. The information a buyer requires in order to obtain the lowest price or " best buy must be produced at a cost. For example, various activities for producing this information are reading magazines such as Consumer Reports, consultations with friends and sales personnel, scanning newspaper advertisements and directly sampling store prices. Consumers' search techniques and the efficiency with which they gather information varies. This heterogeneity leads to differences in optimal information-gathering strategies. Those consumers who are more efficient information-gatherers and searchers obtain better buys on average. Although there are clearly private returns to information-gathering, dispersion appears socially wasteful. If there were no dispersion, consumers would not need to engage in this costly learning activity. It is only the failure of the market to price correctly that allows the private returns to search. This waste leads to the suspicion that a monopolistically controlled market will be characterized by a smaller degree of dispersion than a more competitive one. Stigler [19, p. 223] argues that " From the manufacturer's viewpoint, uncertainty concerning his price is clearly disadvantageous, the cost of search is a cost of purchase, and consumption will be smaller the greater the dispersion of prices and the greater the optimum amount of search ". On the other hand, when consumers differ in their information-generating efficiencies and costs, dispersion serves as a device for splitting up the market to permit price discrimination. The basic idea is as follows. Suppose that demand conditions are such that the monopolist would like to price discriminate against the less efficient informationgatherers; that is, suppose the submarket consisting of inefficient consumers is more price inelastic. Given these potential gains from discrimination, the monopolist must also discover some method of identifying the inefficient, price inelastic consumers. Simply permitting dispersion is such a method since less-efficient information gatherers will search less and thus on average pay a higher price than will efficient searchers. The very presence of dispersion both splits the market and charges a higher purchase price to the submarket of inefficient searchers. Thus, dispersion acts as a costly device for sorting consumers into submarkets to permit price discrimination. If it is not too costly and demand elasticities vary in the " correct " direction so that the feasible price discrimination is profitable, then dispersion is more profitable than a single price.
326Â citations
TL;DR: The pure sorting model implied by job-search theory has been investigated empirically in this paper, showing that the pure sorting process can be explained by sampling from length-biased populations.
Abstract: I. An introduction to sampling from length-biased populations, 39.—II. The pure sorting model implied by job-search theory, 44.—III. Empirical estimation of the pure sorting model, 48.—IV. Determining the underlying process—a possible experiment, 53.—Appendix, 56.
218Â citations
TL;DR: The authors analyzes the role of technological transfers in an international capital movement model by assuming that these transfers depend on the extent of foreign ownership of a country's capital stock, and shows that multiple equilibria and cyclical approaches to the steady state can arise in a technological transfer model.
117Â citations
TL;DR: In this paper, an extension of Page's method is presented which tests for changes in the parameter values of autoregressive integrated moving average (arima) models, where the distributional properties of the statistics are approximated under the assumption that the series follows an integrated auto-gressive moving average model.
Abstract: Procedures are proposed for monitoring forecast errors in order to detect changes in a time-series model. These procedures are based on likelihood ratio statistics which consist of cumulative sums. An extension of Page's method is presented which tests for changes in the parameter values of autoregressive integrated moving average (arima) models. The distributional properties of the statistics are approximated under the assumption that the series follows an integrated autoregressive moving average model. This approximation is based on the limiting Wiener process. An example is also given.
94Â citations
TL;DR: In this article, the authors formulated a particular decomposition for the coefficient vector in a relationship to be estimated from a time series of cross sections, which they expressed as the sum of a common mean vector and two random vectors.
Abstract: In an earlier article (Swamy and Mehta 1975), we formulated a particular decomposition for the coefficient vector in a relationship to be estimated from a time series of cross sections. Specifically, we expressed the coefficient vector as the sum of a common mean vector and two random vectors. One of these random vectors differs among individuals both at a point in time and through time, while the other differs among individuals only. In this article, we state some conditions under which the estimators of the first two moments of the coefficient vector developed in Swamy and Mehta (1975) are weakly consistent and asymptotically normal.
50Â citations
TL;DR: In this paper, the authors derived necessary and sufficient conditions for the biased estimators analyzed by Swamy and Mehta (1976) to be better than the generalized least squares estimator of the coefficient vector in a standard linear regression model.
Abstract: In this note, we have derived a set of necessary and sufficient conditions for the biased estimators analyzed by Swamy and Mehta (1976) to be better than the generalized least squares estimator of the coefficient vector in a standard linear regression model.
41Â citations
33Â citations
TL;DR: The authors discusses the interpretation of linear Engel curves as reduced forms of the linear expenditure system (LES) and the extended linear expenditure systems (ELES), which can be made functions of the sociodemographic characteristics of the household.
Abstract: Analysis of consumption allocation with expenditure systems is well known in aggregate, time-series applications. Yet, until recently, studies of individual household behavior have not generally brought available demand theory to bear on the empirical estimates. Pollak and Wales cited two advantages of using complete demand systems for the study of demographic effects on consumption. Demand systems incorporate the budget constraint into the analysis and permit the separation of demographic effects from ownand cross-price effects as well as from income effects. Unless these effects are separated, the demographic effects estimated with one set of prices cannot be presumed to apply in a different price situation. This paper discusses the interpretation of linear Engel curves as reduced forms of the linear expenditure system (LES) and the extended linear expenditure system (ELES). Parameters of these systems can be made functions of the sociodemographic characteristics of the household. With constant prices, the marginal budget shares in the LES are identified, but the subsistence expenditures are not. The ELES, which uses income in place of total expenditure, is exactly identified; all its parameters can be estimated by indirect least squares. Subject to the assumption of additive separability underlying the LES and the savings behavior implicit in the ELES, price effects can be estimated with data from a single cross section.
TL;DR: In this paper, the authors extend the theory of forward exchange developed by S.C. Tsiang and Egon Sohmen by adding to it an important relationship between the speculative demands for foreign exchange.
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TL;DR: A heated debate over the role of monetary policy in restoring and maintaining economic stability can be found in this paper, where the authors argue that monetary policy plays a crucial role in economic stability.
Abstract: Accompanying the current recovery, now well into its third year, is a heated debate over the role of monetary policy in restoring and maintaining economic stability.
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TL;DR: Public interest in the monthly and weekly movements of the money supply has intensified since the early 1970s as mentioned in this paper, and has increased with the advent of the Internet and mobile phones, making it easier to access the data.
Abstract: Public interest in the monthly and weekly movements of the money supply has intensified since the early 1970s.
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TL;DR: In this article, a simple static equilibrium model of exchange rate determination is presented, and a static equilibrium is used for exchange rate prediction. But this model is not suitable for all exchange rates.
Abstract: This article constructs and tests a simple static equilibrium model of exchange rate determination.
TL;DR: This article reviewed the relations between econoraists and the monetary authorities of Britain, France and the United States during the discussions that led to the Tripartite Agreement and concluded that common views an exchange rate policy were shared by the authorities and the economists closest to them and concluded, as Keynes once suggested, that these views - which had become the conventional wisdom of the mid-1930s-originated in an earlier era.
TL;DR: In this article, differences in the capital ratios of member and non-member banks, holding other variables con-tecting the attractiveness of FRS membership were examined. But the authors focused on the opportunity cost of Federal Reserve System (FRS) membership attributable to differences between FRS and state reserve requirements.
Abstract: In recent years, questions of bank capital adequacy and the capital standards of bank regulatory agencies have attracted considerable attention. At the same time, much interest has also focused on the opportunity cost of Federal Reserve System (FRS) membership attributable to differences between FRS and state reserve requirements. One issue that has received little attention, however, is whether bank capital requirements may also vary between member and nonmember banks so as to offset or augment the cost of FRS membership due to FRS-state reserve requirement differences. Perhaps one reason why this issue has been largely ignored is that it presumes that capital requirements imposed by bank regulators are generally effective in influencing bank capital structures, a presumption which was seriously challenged by Peltzman [9]. Recently, however, Mingo [8] has refuted Peltzman's findings with evidence that bankers do respond positively to examiners' calls for additional capital. In that case, and in view of the recent accelerating pattern of membership attrition from the FRS, 1 it seems appropriate to give further consideration to the question of whether bank capital requirements may vary between member and nonmember banks with an attendant variance in the attractiveness of FRS membership. This paper explores this issue by looking at differences in the capital ratios of member and nonmember banks, holding other variables con-
TL;DR: In this article, Sweeney and Willett (S-W) discuss how to treat Eurocurrency deposits when constructing monetary aggregates and discuss the relationship between changes in international reserves and world inflation.
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TL;DR: In this paper, the major nations of the world decided to let their currencies float, jointly or individually, almost four years have passed since the major currencies in the world started to float.
Abstract: Almost four years have passed since the major nations of the world decided to let their currencies float, jointly or individually.
TL;DR: In this article, the authors argue that the simplified monetarist vision of the short-run wealth and current-account effects of devaluation is complicated by at least three factors: (1) diversification of private portfolios ; (2) anticipatory act ions which,
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TL;DR: The money supply is a widely watched statistic today as discussed by the authors, and it is one of the most widely used metrics for measuring economic performance. But it is difficult to measure accurately and time-consuming.
Abstract: The money supply is a widely watched statistic today.
TL;DR: In this article, the cross-section data on the purchases of four energy inputs by 11 U.S. manufacturing industries was used to compute Allen partial cross elasticities of input substitution and own price elasticity of demand.
Abstract: With cross-section data on the purchases of four energy inputs by 11 U.S. manufacturing industries, Allen partial cross elasticities of input substitution and own price elasticities of demand were computed. The sample set represents 85 percent of total manufacturing energy demand in 1962. The substitution elasticities between fuel oil and natural gas, fuel oil and purchased electricity, and between natural gas and electricity, were statistically significant for about half of the 11 two-digit SIC industries studied. These elasticities ranged between 12.9 and 1.7 with half of them less than 4.0.