JN a recent article Hall (1972) examined the relationship between wage and unemployment rates in twelve cities. He observed a positive relationship between the two: high hourly wages were paid in high unemployment rate cities, low hourly wages were paid in low unemployment rate cities. Moreover, this relationship, he argued, was a characteristic of equilibrium of the aggregate economy. The empirical results obtained by Hall were based on twelve observations for the year 1966. Since his model was designed to study the characteristics of equilibrium, the question may justifiably be raised as to whether the year 1966 represented an equilibrium state of the economy; might it not be possible that what Hall observed was a characteristic of disequilibrium instead of equilibrium? This is a particularly important issue, for Tobin (1972, p. 10) has tended to regard the aggregate economy to be in a state of perpetual disequilibrium. Furthermore, as Robert A. Gordon has pointed out, since Hall's results were obtained on the basis of only twelve observations, could not his results be reversed if some of the cities were excluded from his study?' Hall's conclusions were based on the results of the least squares regression of the wage rate on the unemployment rate, an appropriate procedure if the direction of causality runs from the latter to the former. Yet his theoretical analysis (correctly) implied that the two variables were jointly determined, an issue to which we will return in section II. But if the unemployment and wage rates are jointly determined then orthogonal regression should be used in order to determine, the quantitative relationship between them. The aim of this work is to re-examine and extend Hall's empirical results so as to determine the extent to which they are affected by his estimation technique, his selection of the cities and the year 1966. Although the necessary data for a direct, straightforward extension of Hall's work are not available, data do exist that permit us to look into these issues.

Automatic fuel adjustment mechanisms (FAM), which allow utilities to charge higher rates as fuel costs increase, are shown to disrupt the balance of economic efficiency provided for by regulatory lag. A model is developed to analyze efficiency changes caused by asymmetrical inputs and to examine the economic implications of broadening FAM to include the cost of labor, supplies, and purchased power. The conclusions are reached that efficiency is promoted by regulatory lag and formal hearings and that policies that circumvent these procedures reward inefficient behavior in terms of utility investment decisions. 13 references.

T HEORETICAL work on job search views unemployment as productive search activity. By remaining unemployed, a worker acquires labor market information that helps him/ her maximize lifetime utility. Different models have different predictions with regard to the relation between search time and the resulting wage. For example, under one set of assumptions, the expected resulting wage may increase with increasing search time, while under a different set of assumptions, the relationship may be negative. These two possibilities imply differing relationships of the job searcher to the labor market. In the first case (increasing expected resulting wage), the worker weighs a typical offer against the high probability that a better one will come along later. In the second case (decreasing expected resulting wage), because future offers are likely to be worse than the typical present offer, the worker is more likely than otherwise to take whatever job is available. This paper estimates the relationship between search time and resulting wage. A simultaneous equations framework is used in which search time is endogenous (as well as the resulting wage). It is found that the expected resulting wage declines as search time increases. This result is consistent with the ranking by a searcher of firms according to expected wage offers, with the high wage firms sampled first (Salop, 1973). Further, the determinants of the duration of unemployment are investigated by race-sex groups.