The sequential nature of activities like research, development, or exploration requires optimal funding criteria to take account of the fact that subsequent funding decisions will be made throughout the future. Thus, there is a continual possibility of reviewing a project's status, based on the latest information. After setting up a model to capture this feature, optimal funding criteria are investigated. In an important special case, an explicit formula is derived. As well as throwing light upon the nature of development activities, the analysis is also relevant to the general theory of information gathering processes.

Richard W. Olshavsky, Bruce L. Jaffee, Responsiveness of Consumer Expectations and Intentions to Economic Forecasts: An Experimental Approach, The Review of Economics and Statistics, Vol. 63, No. 2 (May, 1981), pp. 298-302

Edgar L. Feige, Kenneth J. Singleton, Multinational Inflation under Fixed Exchange Rates: Some Empirical Evidence from Latent Variable Models, The Review of Economics and Statistics, Vol. 63, No. 1 (Feb., 1981), pp. 11-19

Robert M. Conroy, Robert L. Winkler, Informational Differences Between Limit and Market Orders for a Market Maker, The Journal of Financial and Quantitative Analysis, Vol. 16, No. 5 (Dec., 1981), pp. 703-724

L. G. Godfrey, M. R. Wickens; Testing Linear and Log-Linear Regressions for Functional Form, The Review of Economic Studies, Volume 48, Issue 3, 1 July 1981, Pa

ABSTRACT A growing number of large U.S. banks have used artificial Eurodollar transactions in connection with the heavier weighting of Fridays in the calculation of required reserves to significantly reduce the impact on them of that requirement. This reserve avoidance behavior bestows an unintended and inequitable benefit on those banks engaging in it, unnecessarily increases risks from credit exposures and potentially distorts money stock measures. The incentive for this activity and hence its practice can best be removed by paying interest on required reserves or weighting Fridays equally with all other business days in the reserve requirement calculations.

A growing number of large U.S. banks have used artificial Eurodollar transactions in connection with the heavier weighting of Fridays in the calculation of required reserves to significantly reduce the impact on them of that requirement. This reserve avoidance behavior bestows an unintended and inequitable benefit on those banks engaging in it, unnecessarily increases risks from credit exposures and potentially distorts money stock measures. The incentive for this activity and hence its practice can best be removed by paying interest on required reserves or weighting Fridays equally with all other business days in the reserve requirement calculations.

Richard L. Peterson, Credit Unions: Theory, Empirical Evidence and Public Regulation: Discussion, The Journal of Finance, Vol. 36, No. 2, Papers and Proceedings of the Thirty Ninth Annual Meeting American Finance Association, Denver, September 5-7, 1980 (May, 1981), pp. 550-552