Sean Michael Snaith
Using monthly and quarterly data from a sample of up to 741 real exchange rate series, we examine several factors to explain the failure of the Law of One Price and Purchasing Power Parity. The factors are often excluded or assumed away in traditional analysis of these theorems. The main findings include a positive significant relationship between real exchange rate variability and distance between countries, real output growth rate differentials and nominal exchange rate variability. A significant negative relationship exists with membership in trade groups such as the EEC and EFTA, and in countries that are islands (F31, F10)
Richard W. Douglas, Jr.
This paper develops a model to extend the analysis of the well known "time consistency" problem based on the proposition that supply shocks can alter the natural rate of output, which can induce a central bank to be time inconsistent. The effects of inflation targets and price targets are compared, and the use of both kinds of targets are shown to improve the response of the central bank under certain conditions. The analysis suggests that a flexible approach to targeting, as is practiced in countries which have tried inflation targets, has certain advantages. (E42, E52)
Tin-Chun Lin
In this paper, I modify the model of Glomm and Ravikumar (1992) and extend their work. In particular, I examine the link between income growth and inequality in a setting in which public and private education can coexist. In this setting, households are free to opt out of public education in favor of a private alternative. Majority voting determines the level of funding for public education. I find that income inequality declines over time under the mixed public/private regime and that, in the long run, a balanced growth path can exist. (O11; O40; I20)
Md. Kamar Ali
Enrollment levels are often considered as one of the success indicators of college programs. To design a focused and targeted incentive program for attracting students, enrollment managers need information on specific external factors that affect college choices. This paper asks whether income, distance, or geographic locations of potential students are important determinants of student migration and sheds light on the expected patterns of spatial distribution of student enrollment if these factors are controlled. The analysis employed spatial-interaction or gravity models, which treat enrollment levels as interactions of a college or university with the student population in surrounding states or counties. By comparing the model predicted enrollment estimates with the actual levels, it is possible to identify the states or counties that are under- or over-supplying students to the intended college. With this information, enrollment administration bodies can design effective promotional packages for the under-supplying regions for future enrollment enhancement. The method is illustrated with limited data for West Virginia University but can be applied to any university with appropriate data. (R120, R190, C250, I210)
W. Robert Brazelton
This paper deals with the general concept of the Full Employment Budget (FEB) usually associated with Walter W. Heller as its originator and popularizer. Herein, however, an investigation will be made as to its earlier development by Leon H. Keyserling. This paper will be divided into five parts: a brief biographical sketch relevant to our purposes herein of both men; the main points of the FEB concept; an investigation of Keyserling's development of the FEB concept; Heller's path to his own utilization of the FEB concept, including a statement by Heller contributing the FEB concept to the earlier works of Keyserling in the Truman Administration; and a concluding summary (B20, B31, E20, E5, E6)