Knowledge that Transforms

A relative direct cost measure of scale economies is developed to examine the hypothesis that market share increases profits through the benefits of scale economies. Minor support is found for the hypothesis. Copyright 1989 by MIT Press.

Ordered-probit analyses of National Federation of Independent Business survey data show that individual firms generally conform to the stock adjustment model of inventory investment, with the predicted response more likely when inventories are perceived as excessive than when deficient. Contrary to inferences about slow adjustment speeds from aggregate data, inventory adjustments by individual firms do not tend to take more than three months to complete. There is no evidence that price is used to achieve desired inventory targets, but prices are sticky in that changes set in motion one quarter tend to continue into the next quarter. Copyright 1989 by MIT Press.

The capital gains and losses on U.S. Treasury securities are calculated and reported on a quarterly basis over the 1942-87 period. These data are then used to calculate an adjusted measure of the federal budget deficit for the years 1975-87. Whereas the rising trend in interest rates over the 1975-81 period substantially reduced the federal deficit, this study shows that the reversal of that trend over the 1981-86 period contributed even more greatly to an increase in the deficit. Also calculated and reported are holding-period rates of return on overall marketable Treasury debt, providing a contrast to existing interest rate series. Copyright 1989 by MIT Press.

David J. Stockton, Charles S. Struckmeyer, Tests of the Specification and Predictive Accuracy of Nonnested Models of Inflation, The Review of Economics and Statistics, Vol. 71, No. 2 (May, 1989), pp. 275-283

Policy makers are showing increasing interest in employment and training programs as a means of reducing welfare costs, despite the evidence that welfare costs are reduced little by these programs. This paper examines the potential for increasing the welfare savings associated with such programs by targeting women for whom the attendant welfare reductions are likely to be the largest. It reanalyzes data from five programs and computes welfare impacts as if the programs had been selectively offered. The results suggest that targeting job-search assistance programs is not likely to be effective, but taht there is a potential for improving the effectiveness of subsidized employment and training programs. Copyright 1989 by MIT Press.

This study involves an empirical analysis of the effect of social security wealth on wealth accumulation. My analysis takes as its point of departure a study by Feldstein and Pellechio on this subject. Their study used the same data source as analysed in this paper. Feldstein and Pellechio found strong support for the notion that increases in social security wealth caused families to reduce their wealth accumulation. My resuts indicate the strong conclusions reached by Feldstein and Pellechio are not robust. In particular, first, when I excluded a group, of farmers from our sample increases in social security wealth did not result in families reducing their wealth accumulation. Second, Feldstein and Pellechio calculated social security wealth using income measures from a single year. When I applied their methodlogy to income measures from a different year results were markedly affected.

James E. Vestal, Evidence on the Determinants and Factor Content Characteristics of Japanese Technology Trade 1977-1981, The Review of Economics and Statistics, Vol. 71, No. 4 (Nov., 1989), pp. 565-571