Soumodip Sarkar
This paper builds a static framework model to demonstrate the interrelationship between the black and formal market for foreign exchange. There is fungibility in the two markets with a demand spillover from the formal to the black market. There are also reverse linkages through portfolio demand for foreign currency. The framework allows for policy analysis and shows that the black market rate should not be taken as an indicator of the underlying market exchange rate. The importance of remittances and portfolio demand for foreign exchange in the premium are clearly demonstrated. The model also points to various government policy tools that could reduce the significance of the black market for foreign exchange. (F31, F41, O11)
Linda Y. Wong
This paper studies the role of the mating taboo (distaste for intermarriage) in explaining the narrowing mean wage gaps between intermarried and intramarried black men. A search framework is extended to incorporate agents' races. To offset the mating taboo, agents who intermarry raise selection criterion; such selection behavior implies that the conditional expected intermarriage output can exceed the conditional mean intramarriage output. Samples of newlyweds from the 1970-1980 Census are used to examine the wage gap response to the mating taboo. After controlling for self-selection, the predicted positive mean wage gap for college educated black men diminishes from 1970 to 1980, while it rises for high-school dropouts. The mating taboo accounts for most of the mean wage gap for all education levels between 1970 and 1980. In particular, the magnitude of the mating taboo declines from 1970-1980 for college graduates but increases for high-school dropouts. (D10, J15, J12)
John F. R. Harter
The effects of a patent system on the chosen strategies of duopolists in an Hotelling's line game are examined. It is found that even a patent which is not designed to reward inventors with monopoly power will increase the range of costs to R&D from which a monopoly will result. Wider patents will increase the range of costs which give rise to a patent race as the unique equilibrium. (O3, L1)
James Barker, Shannon Bryant, Marcus Glass, Janelle Wehmeyer, Bruce Domazlicky
The retail trade sector is important to the economic fortunes of a region. A declining retail trade sector means loss of jobs and tax revenue. The purpose of this paper is to identify the factors that determine the size of the retail trade sector in southeast Missouri counties. It is found that a county's trade sector, as measured by its pull factor, increases as its per capita income, population and incommuting increase and decreases with higher unemployment rates. (R12, O18)
Seid Y. Hassan
The results of this paper show that per capita income disparities rose in the U.S. in the last twenty years. We calculated per capita income by major components and industry sectors to account for the disparities. The Wage and Salary Disbursements and the Dividend, Interest, and Rental Income of Persons contribute to increased income disparities while the Transfer Income and Other Labor Income components ameliorate income disparities. These results, which are consistent with the findings that mushroomed recently in this area, also negate the so-called "inverted U-shaped Kuznets' hypothesis" which suggests deterioration in income disparities in the early stages of economic development and an eventual convergence in per capita incomes at higher stages.
Dr. Lisa Wilder, Dr. Mary Ellen Benedict, Dr. John Hoag
In this paper we propose a series of homework problems that extend the international coverage in economics courses. The homeworks require students to decide which former Soviet Bloc countries should join the European Monetary Union. We argue that while there are some class time costs associated with these homeworks, they extend the international understanding of the students and at the same time build on core economic concepts. (A2)