Cross-section data often show that the wealth of the elderly increases with age, suggesting that the life cycle hypothesis of consumption should include a bequest motive for saving. I propose a model of bequests, and a test for a bequest motive. Empirical findings are that in a ten-year panel data set, the elderly dissaved, in contradiction to most cross-section results. The test offers no support for a bequest motive.

The paper tests the null hypothesis of ex ante purchasing power parity. The empirical evidence obtained is inconsistent with the null for major industrialized countries over the current floating exchange rate regime. Expected nominal exchange rate changes appear to deviate systematically from expected inflation rate differentials over the same holding period even though real exchange rate changes appear to be serially uncorrelated. This supports the presence of time-varying risk premia in foreign exchange markets and real determinants of exchange rate movements as suggested by equilibrium theories of international asset markets.

The paper tests the null hypothesis of ex ante purchasing power parity. The empirical evidence obtained is inconsistent with the null for major industrialized countries over the current floating exchange rate regime. Expected nominal exchange rate changes appear to deviate systematically from expected inflation rate differentials over the same holding period even though real exchange rate changes appear to be serially uncorrelated. This supports the presence of time‐varying risk premia in foreign exchange markets and real determinants of exchange rate movements as suggested by equilibrium theories of international asset markets.

Public goods can be financed by direct taxation or a subsidy to private spending. This paper examines the relative efficiency and distributional consequences of the two methods. Efficiency is shown to depend on the price elasticity of private spending and the trade- off between public and private spending. When this trade-off is dollar for dollar, however, a subsidy is always more efficient than direct taxation. The gains from a subsidy are larger for a mixed good than for a pure public good. Looking a t distributional effects, the author shows when richer taxpayers may prefer a tax credit to deductibility, even though they face lower prices with deductibility, and also shows when richer taxpayers prefer direct taxation to either type of subsidy.

Previous analyses have shown that if a point is to be a core of a majority rule voting game in Euclidean space, when preferences are smooth, then the utility gradients at the point must satisfy certain restrictive symmetry conditions. In this paper, these results are generalized to the case of an arbitrary voting rule, and necessary and sufficient conditions, expressed in terms of the utility gradients of "pivotal" coalitions, are obtained.

This paper examines possible motives for and consequences of voluntary corporate liquidations. Specifically, the procedural and tax differences between voluntary liquidations and other control-changing transaction devices are analyzed. An empirical investigation of successful liquidations shows that the announcement of liquidation reduces the risk of liquidating shares, that the shareholders receive substantial gains from successful liquidations, and that the average gains to the acquiring shareholders are not significantly different from zero. These findings suggest that the liquidating firms' assets have been underutilized before liquidation and that voluntary liquidations lead to higher-valued reallocations of corporate resources.