[This paper examines the effect of the capital gains tax on investors' optimal consumption and investment behavior and on equilibrium asset prices in an intertemporal economy. It explictly considers the fact that capital gains and losses on stock are taxed only when the investor sells the stock. Ownership of stock then confers upon the investor a timing option which enables him to realize capital losses immediately and defer capital gains. This option is a large fraction of the total benefit which accrues to the stockholder, and is the prime reason for the novel implications of capital gains taxation, discussed in this paper.]

This paper presents the necessary and sufficient conditions for determining the signs of the solution variables of a system of linear equations based only upon a knowledge of the signs of the coefficient matrix and the signs of the right hand side variables. This problem was initially formulated in economics due to the idea that the signs of an equation's derivatives might have a stronger empirical basis than that of a particular functional form. A new interest in qualitative problems has arisen in connection with the need to develop analytic measures in order to better manage the understanding and use of large, computer-based mathematical systems. The conditions for the qualitative determinancy of nonhomogeneous systems are developed in terms of a small number of necessary conditions which are jointly sufficient. Algorithmic approaches are given for testing a given system for qualitative determinancy. For nonhomogeneous systems algorithms are given for constructing all possible qualitatively determinate systems of a given size. For the homogeneous case conditions are also given for the qualitative invertibility of the (irreducible) coefficient matrix. These conditions are then related to the problem of partially qualitatively determinate systems and the signs in the qualitative inverse of a matrix.

[Under the assumption that demand behavior depends on intertemporal preferences as well as (point) expectations concerning future prices, it is demonstrated that under plausible conditions rationality imposes no observable restrictions on the demand function and expectations and preferences are observationally indistinguishable.]

Price elasticities are estimated for telephone calls and minutes of conversation using data from a experiment in central Illinois conducted by General Telephone and Electronics. The experiment charges separately for calls and for minutes. Using a model that is consistent with the theory of telephone demand, the authors estimate the effects of both prices. The nonlinear generalized least squares estimates of the elasticities are fairly small-about 0.1 or less in absolute value at experimental price levels-but they are estimated with high precision. The report briefly considers the application of these results to predict the effects of introducing measured service telephone rates in other cities. RESIDENTIAL TELEPHONE SUBSCRIBERS in the United States typically pay a flat monthly rate for with no extra charge for calls within the area. The alternative of explicitly charging for calls, commonly referred to as usage-sensitive pricing or local measured service, is of increasing interest to U.S. telephone companies and regulatory commissions (Cosgrove and Linhart [5]; Garfinkel and Linhart [8]; Baude, ed. [2]).3 Charging for calls that are now free clearly holds promise of increasing economic efficiency (Alleman [1]; Mitch

[An example is given of a sequence of labor managed economies with decreasing efficiency sizes for which a free entry Cournot equilibrium fails to exist.]

ARMAX systems in structural specification are considered. Topological and geometric properties of the parameter space and of the parameterization which are important for the properties of the estimators, regardless of their special form, are investigated and the specification of the maximum lag lengths is discussed.

[In this paper we develop a rational expectations exchange-rate model which is capable of confronting explicitly agents' beliefs about a future switch in exogenous driving processes. In our set-up the agents know with certainty both the initial exogenous process and the new process to be adopted when the switch occurs. However, they do not know with certainty the timing of future switch as it depends on the path followed by the (stochastic) exchange rate. The model is discussed in terms of the British return to pre-war parity, in 1925. However, our results are applicable to a variety of situations where process switching depends on the motion of a key endogenous variable.]

THIS PAPER BELONGS to that part of economic dynamics of which the consumption turnpike theorems are typical results. However, rather than the usual formulation of the problem as a mathematical programming problem, we study it in the framework of dynamic equilibrium models which were first studied in [9]. In [9] we considered finite equilibrium trajectories for which the technology as well as demand functions were assumed constant in time. Here a more general model will be described. It permits changing technology and demand functions and pays more attention to the exploration of the asymptotic properties of infinite trajectories. We define the class of efficient equilibrium trajectories and prove that, under certain conditions, infinite trajectories in this class converge to each other. Finite trajectories (which are always efficient) may differ essentially from them only at the beginning and at the end of the planning period. For a stationary model a strong turnpike theorem follows from these considerations. It is shown that nonefficient equilibrium trajectories are characterized by fast growth of prices and high levels of production. At the same time, the consumption, as a rule, goes to zero. Here we present conditions which imply the uniqueness of efficient trajectories and the absence of nonefficient ones. For the special case in which the equilibrium model is equivalent to an optimization model, efficient equilibrium trajectories are strongly optimal.