INTERNATIONAL PRICE BEHAVIOR AND THE DEMAND FOR MONEY

Oil prices, commodity prices and American monetary policy, the last operating through a variety of channels, have all figured prominently in explanations of the international inflation process in the late 1960s and early 70s. OUT major purpose in this paper is to test these various hypotheses. We do so in the context of a reduced-form rational-expectations price equation which we estimate for the United States and seven other industrial countries using quarterly data for the period 1955 through 1976.
The principal conclusion that emerges from this exercise is that movements in domestic money in these countries served as the key link in the inflation process. The factors that produced these monetary changes, however, differed among countries. Price shocks of various sorts were clearly of secondary importance.
The other important set of conclusions concerns the demand for money. In place of a traditional stock adjustment model, we used GLS with a second-order correction for autocorrelation. We believe this produced more plausible estimates of the parameters of the long-run demand function and of the adjustment process itself.     

Canonical Correlation as an Exploratory Technique of Attitude Scale Correlation

Concept measurement and the determination of unidimensionalityare usually based upon techniques which depend on the relationsbetween the items measuring the concept or concepts: a set ofitems having the same relations with one another is inferredto be unidimensional. However, an additional criterion for unidimensionalityis that these items also have the same relations with a setof predictors. One multivariate technique which explicitly considersthese relations between predictors and items is canonical correlation.In this study, after analysis of a set of items with factoranalysis, canonical correlation is applied. The results demonstratethe promise of the technique for exploratory data analysis.     

EQUILIBRIUM PATTERNS OF COMPETITION IN OCS LEASE SALES

An equilibrium model of bidding behavior is developed that accounts for observed fluctuations in the degree of competition to acquire offshore petroleum leases. As one might expect, such fluctuations are related to the heterogeneity of geological prospects that are offered for sale, with a relatively high degree of competition to acquire tracts of the highest quality. The equilibrium configuration of bids is also shown to reflect structural characteristics, such as capital market constraints, that may restrict competition in the lease auction. Empirical evidence is presented which tends to confirm our general theory of bidding equilibria, but which contradicts the popular notion that capital constraints have restricted competition in OCS lease sales. Policy implications are discussed in the concluding section.     

SULPHUR AND THE U.S. GOVERNMENT: PRICE FIGHTING IN THE 1960s*

The interaction between the domestic sulphur industry and the executive branch of the U.S. Government during the Johnson administration suggests that this important extractive industry was sensitive to governmental “moral suasion.” A narrative is provided of the relationship between the industry and the administration's economists, lawyers and departmental politicians. This narrative is followed by an appropriate least squares price model. It is shown that the administration was successful in its efforts to suppress sulphur prices during 1965-66, that is, during the early stages of the commitment of U.S. forces to combat in Southeast Asia.     

SUBJECTIVE ELEMENTS IN RAWLSIAN CONTRACTUAL AGREEMENT ON DISTRIBUTIONAL RULES

Rawls (1971) argued that individuals choosing institutions from behind the veil of ignorance would unanimously agree on institutions that maximized the imputations of the least advantaged persons in the post-choice social outcome. Critics have argued that the Rawlsian contract requires risk averse individuals. Our paper focuses on the contractual element inherent in constitutional choice when individuals have differing subjective estimates of the working properties of different institutions. We show that in genuinely Rawlsian contractual settings there may exist a general bias toward the selection of institutions that embody maximin solutions without the assumption of risk aversion.