[This paper investigates whether agents can learn how to form rational expectations using standard econometric techniques in the case of a linear stochastic supply and demand model with a production lag. This model has a unique rational expectations equilibrium in which the expected price is a linear function of an observable exogenous random variable. Outside of rational expectations equilibrium agents predict the price by using a regression of past prices on the exogenous random variable where the regression is estimated by either ordinary least squares or Bayesian methods. If the agents are Bayesians, they may have diverse prior beliefs on the mean of the estimated parameter, but all have the same precision. This estimation procedure would be appropriate for an outside observer estimating the parameters of the model in rational expectations equilibrium the coefficient of the equation relating the mathematical conditional expectation of the price to the exogenous variable is constant through time. Outside rational expectations equilibrium this coefficient, which changes each time new data change the regression coefficient. The data are generated by a time-varying parameter model where the varying parameter is determined by past data and the estimation procedure. Agents fail to take this feedback into account and so are estimating a misspecific model.]

In this paper we provide an integrative treatment of the welfare effects of trade and industrial policy under oligopoly, and characterize qualitatively the form that optimal intervention takes under a variety of assumptions about the number of firms, their conjectures about the response of their rivals to their actions, the substitutability of their productsand the markets in which they are sold. We find that when no domestic consumption occurs optimal policy under duopoly with a single home firm depends on the difference between firms' actual responses to their rivals and the response that their rivals' conjecture. If conjectures are consistent , free trade is optimal. A tax or subsidy is indicated depending on the sign of the difference between the conjectured and the actual reponse.With more than one home firm but still no domestic consumption, an export tax is indicated if conjectures are consistent. Production subsidies and export tax-cum-subsidies can raise national welfare in the presence of domestic consumption, because these policies can mitigate the extent of the consumption distortion implicit in the deviation of price from marginal cost.

This paper brings some empirical evidence to the construction of a more disaggregated view of disequilibrium. Individual data on firms collected by INSEE through periodic Business Surveys are used to construct the distribution of firms over the four possible disequilibrium regimes. Then the behavior of this distribution over time is analyzed by estimating dynamic conditional logit models on panel data.

This paper proposes a simple decomposition of the widely used DRC measure of international competitiveness into three distinct elements: (1) changes in international prices, (2) changes in production techniques and (3) total factor productivity change. The decomposition provides a clear analytical link between two largely separate methodologies for assessing economic performance, cost-benefit indicators based on the world price rule and total factor productivity analysis. The methodology is applied to evaluate changes in measured comparative advantage of industries in Thailand for the period 1963-76. The results broadly indicate that changes in price competitiveness and in total factor productivity are the major sources of changes in DRC ratios for Thai industries.

This paper presents estimates of the distributional welfare impacts of the actual price rises of energy and nonenergy commodities during the 1970-80 decade in the United States. Measures of welfare change based on net compensating variations are computed for different types of families. These show that welfare differences due to changes in commodity prices are minor compared to welfare differences due to different income growth patterns over the decade.

As its central feature, a bimetallic standard grants nominal debtors an option to deliver either of two metals. With results from the option pricing literature, construction of a formula to evaluate the bimetallic option in debt instruments is straightforward. With this formula, one can compute the option value in a wide range of nineteenth-century U.S. Treasury securities. Posession of the option values permits an adjustment of the yields on U.S. securities to make them comparable to yields on nonmetallic European securities. Evaluating the option allows the estimation of transfers from debtors to creditors. Copyright 1986 by American Economic Association.

This paper presents estimates of the distributional welfare impacts ofthe actual price rises of energy and nonenergy commodities during the1970-80 decade in the United States. Measures of welfare changes basedon net compensating variations are computed for families that differ with respect to demographic characteristics, initial total expenditurelevels, and total expenditure growth profiles over the decade. For comparison, measures of welfare change based solely on the changes inenergy prices are computed. The author shows that welfare differencesdue to initial expenditure levels or demographic profiles are minor incomparison to welfare differences due to different expenditure growthprofiles. Copyright 1986 by American Economic Association.

A bimetallic standard grants nominal debtors an option to deliver either of two metals. Construction of theoretical bimetallic option values allows the computation of the option value implicit in nineteenth-century U.S. securities. Appropriate yield adjustments permit a comparison of U.S. and monometallic European security yields. Yields on antebellum U.S. securities are close to British yields. Evaluating the option also allows the estimation of wealth transfers from shifts in the monetary standards during the nineteenth-century silver agitation.

While the value of listing equity securities has been researched extensively, no studies have examined the market reaction to the decision to list corporate debt. Since the listing of corporate bonds on the major exchanges is a significant corporate activity, this study examines the impact of bond listing on shareholder wealth. Using a variety of possible announcement dates as well as cumulative abnormal returns between dates, no detectable market reaction to debt listing is found. Therefore, the listing of corporate bonds does not appear to be valued by the common shareholders of those same firms.