To test a model of rational addiction, we examine whether lower past and future prices for cigarettes raise current cigarette consumption. The empirical results tend to support the implication of addictive behavior that cross price effects are negative and that long-run responses exceed short-run responses. Since the long-run price elasticity of demand is almost twice as large as the short-run price elasticity, the long-run increase in tax revenue from an increase in the federal excise tax on cigarettes is considerably smaller than the short-run increase.

U.S. beef cattle stocks are among the most periodic economic time series. A theory of cattle cycles is constructed on the basis of breeding stock inventory decisions. The low fertility rate of cows and substantial lags and future feedback between fertility and consumption decisions cause the demographic structure of the herd to respond cyclically to exogenous shocks in demand and production costs. Known demographic parameters of cattle imply sharp numerical benchmarks for the resulting dynamic system and closely compare with independent econometric time-series estimates over the 1875-1990 period. The model fits extremely well.

U.S. beef cattle stocks are among the most periodic economic time series. A theory of cattle cycles is constructed on the basis of breeding stock inventory decisions. The low fertility rate of cows and substantial lags and future feedback between fertility and consumption decisions cause the demographic structure of the herd to respond cyclically to exogenous shocks in demand and production costs. Known demographic parameters of cattle imply sharp numerical benchmarks for the resulting dynamic system and closely compare with independent econometric time-series estimates over the 1875-1990 period. The model fits extremely well.