D ESPITE acute interest in Monetary Approach to Balance of Payments (MBOP) over past several years, both as an explanation of worldwide inflationary epidemic of late 1960s and early '70s (Johnson, 1972b) and as a simple and manageable theoretical basis for policy recommendations by groups like IMF (Rhomberg and Heller, 1977), no general consensus has been reached as to validity of monetary model. One reason for this is that task of interpreting results of plethora of empirical tests of monetary approach' has been complicated by controversy over accuracy of exogeneity assumptions underlying MBOP that are implicit in those studies. These include exogeneity with respect to reserve flows of determinants of demand for nominal money balances-the domestic price level, interest rate and level of real income-as well as domestic credit component of a country's money supply. Exogeneity makes task of interpretation difficult, for if MBOP assumptions regarding exogeneity are incorrect, then, to borrow Geweke's (1978, p. 163) words (and to add studies in MBOP literature to which they would apply), the otherwise identifying restrictions imposed on structural equations may not be sufficient to identify those equations (Argy and Kouri, 1974; Genberg, 1976), estimation procedures will be inconsistent (e.g., Bean, 1976; Zecher, 1976), and model cannot adequately portray dynamics of system it seeks to describe. This last problem transcends any issue of estimation (although it is not unrelated) for it implies that theoretical specification of MBOP is incorrect to begin with, thus invalidating putative reduced forms of MBOP that have come to represent approach and form basis for policy recommendations alluded to earlier. Historically, exogeneity was simply assumed as something not amenable to testing. Recently, however, Geweke (1978) has demonstrated that specification of exogeneity is a hypothesis with testable implications. The purpose of this paper is to test formally exogeneity hypothesis underlying empirical tests of MBOP specifically, and theoretical specification of model in general, using Geweke's methods. It is found that hypothesis that variables mentioned above are in fact exogenous can be rejected for each and every country in sample. This finding casts some doubt on theoretical validity of MBOP and even more doubt on accuracy of much of empirical evidence garnered in its support. The plan of paper is as follows. In section II a MBOP model is briefly presented and its exogeneity restrictions are highlighted. In section III formal test of exogeneity is discussed, and then in section IV results of tests using data from Australia, France, Germany, Norway and Sweden are presented. Section V contains some conclusions.

faces, however elastic it may be. But it is necessary to look beyond the elasticity of the curve to determine whether or not this is the case. Or consider two demand estimation situations, identical in terms of the supply elasticities involved. Differences in the variability of supply could make for large differences in the quality and appropriateness of OLS estimates. Yet a researcher relying on elasticity would be totally unaware of the differences in OLS bias in the two situations. Finally, concern about elasticities turns attention from the central question in choosing an estimator in the face of possible OLS bias: the relative shifting in the equations involved. That this is an important factor is well known, having been pointed out by Working as long ago as 1927, and by many others since. However, this essential factor is often overlooked in empirical situations.

LIKE any livestock industry, the Canadian beef and dairy cattle industry is characterized by a cyclical pattern in terms of the number of cattle on farm, the number of cattle slaughtered and the number of cattle exported. Traditionally, the analysis and forecast of cattle stocks are based either on econometric models which often include the biological life cycle of cattle or on the pure biological nature of cattle.' In this paper, we investigate the behavior of the cattle industry through the use of a third approach-the Markov chain technique. The Markov chain technique is by itself a very mechanical procedure, but one which can incorporate economic justifications. It can then, in our view, provide a very fruitful view of the industry. Basically, the Markov chain technique allows us to construct flow matrices of beef and dairy cattle according to their biological sequences. For instance, a male calf born during any time period t can, in the same period, be slaughtered, exported, die or remain on farm as a calf. The decision to retain a calf as a steer (for future slaughter) or as a bull (for future reproductive purposes), to export the calf, or to slaughter the calf (for veal), is basically an economic decision. The outcome of such decisions is translated into the elements of the Markovian transition flow matrix. Based upon the biological sequences of the different categories of cattle and the structure of the beef and dairy cattle industry, we can set up transition matrices for Western and Eastern Canada. Table I indicates the structure of such matrices for Western Canada. Cells representing possible flows are identified by numbers while cells representing impossible flows are left blank.2 Transition probability matrices of cattle movement can be constructed by dividing each row element in the matrix by its corresponding row total. These probabilities reflect the probabilities of cattle moving from one category to another. It is also through the use of such probabilities that we will carry out our simulation analysis. This paper is divided into seven sections. In the second section a model of demand, supply and inventory for beef and dairy cattle is presented. Section III discusses some general empirical results based on the transition probability matrices. Section IV discusses the procedures for simulation using the conditional transition probability matrices. Section V presents the results of the historical simulation while section VI presents the results of some sensitivity analysis experiments. The last section is for concluding remarks.

The purpose of this paper is to examine demographic and socioeconomic determinants of migration for both employed and unemployed. Hypotheses concerning effects of age education and public services are developed and tested using data on interstate migration of U.S. labor force from 1965 to 1970. For individuals at-risk to either primary or repeat migration age and education selectivity of migration were in general confirmed. However for unemployed potential primary migrants education selectivity was not observed. It was also found that the provision of welfare services have little or no impact on migration decision of unemployed....However unemployment was shown to significantly affect role played by educational quality and training accessibility within migration decision. (EXCERPT)

An Engel curve is derived for the direct and indirect household consumption of oil and, hence, estimating the income elasticity for the demand for oil. Comparison with other studies is difficult as they have, in general, relied on time-series data. However, studies by Houthakker and Taylor (1970) and by Phlips (1972) derive short-run income elasticities close to the estimated value of 0.58 obtained in this study. Two points must be emphasized. First, the income elasticity is a short-run value and, therefore, indicates a lower bound for the long-run elasticity. Second, although this study takes account of both the direct and indirect demand for oil, it does pertain to consumer tastes and production technologies current in the early 1960s. On the latter point, an obvious extension of this study would be to update it using the 1972-73 Consumer Expenditure Survey. 23 references, 2 tables.