Manufacturers can stimulate sales by a temporary wholesale price reduction for the retailer, a rebate directed toward consumers, or a combination of both. The trade-offs between these price promotions are analyzed, providing insights about their roles, profitability, and welfare properties. Retailers' rebates are also studied. While price discrimination is a common explanation for rebates to consumers, when a product is sold through a distribution channel, the manufacturer may also use rebates to motivate retail participation in the promotion. This explains why rebates may be offered even when all consumers use them and price discrimination does not occur.

The value of the dollar appears to move in one direction for long periods of time. The authors develop a new statistical model of exchange rate dynamics as a sequence of stochastic, segmented time trends. They reject the null hypothesis that exchange rates follow a random walk in favor of their model of long swings. The authors' model also generates better forecasts than a random walk. The specification is a natural framework for assessing the importance of the "peso problem" for the dollar. The authors nonetheless reject uncovered interest parity.

This paper concerns the regulation of hazardous economic activities. Economists have generally viewed ex ante regulations (safety standards, Pigouvian fees) that regulate an activity before an accident occurs as substitutes for ex post policies (exposure to tort liability) for correcting externalities. This paper shows that where there is uncertainty, there are inefficiencies associated with the exclusive use of negligence liability and that ex ante regulation can correct the inefficiencies. In such a case it is efficient to set the safety standard below the level of precaution that would be called for if the standard were used alone.

[Was the Depression forecastable? After the Crash, how long should it have taken contemporary forecasters to realize how severe the downturn was going to be? Data assembled by the Harvard and Yale forecasters--together with modern historical data--are subjected to statistical analysis. Neither contemporary forecasters nor modern times-series analysts could have forecast the large declines in output following the Crash.]

helpful comments, and to Michael Cox for generously providing us with his data. The research reported here is part of the NBER's research program in Economic Fluctuations and project in Government Budget. Any opinions expressed are those of the authors and not