This paper examines the variance of hourly market returns during 1964–1989. Results indicate that return volatility falls from the opening hour until early afternoon and rises thereafter and is significantly greater for intraday versus overnight periods. Market variance is also shown to change significantly over time, rising after NASDAQ began in 1971, rising after trading in stock options began in 1973, falling after fixed commissions were eliminated in 1975, rising after trading in stock index futures was introduced in 1982, and falling after margin requirements for stock index futures became larger in 1988.

In an intertemporal economy where both risk (stock beta) and expected return are time varying, the authors derive a linear relation between the unconditional beta and the unconditional return under certain stationarity assumptions about the stochastic process of size‐portfolio betas. The model suggests the use of long time periods to estimate the unconditional portfolio betas. The authors find that, after controlling for the betas thus estimated, a firm‐size proxy, such as the logarithm of the firm size, does not have explanatory power for the averaged returns across the size‐ranked portfolios.

Introduction: Multinational Enterprise and Multinational Financial Management. PART ONE: ENVIRONMENT OF INTERNATIONAL FINANCIAL MANAGEMENT. The Determination of Exchange Rates. The International Monetary System. The Balance of Payments and International Economic Linkages. The Foreign Exchange Market. Currency Futures and Options Markets. Parity Conditions in International Finance and Currency Forecasting. PART TWO: FOREIGN EXCHANGE RISK MANAGEMENT. Measuring Accounting Exposure. Managing Accounting Exposure. Measuring Economic Exposure. Managing Economic Exposure. PART THREE: MULTINATIONAL WORKING CAPITAL MANAGEMENT. Financing Foreign Trade. Current Asset Management. Managing the Multinational Financial System. PART FOUR: FINANCING FOREIGN OPERATIONS. International Financing and International Financial Markets. Special Financing Vehicles. International Banking Trends and Strategies. The Cost of Capital for Foreign Investments. PART FIVE: FOREIGN INVESTMENT ANALYSIS. International Portfolio Investment. Corporate Strategy and Foreign Direct Investment. Capital Budgeting for the Multinational Corporation. The Measurement and Management of Political Risk. Glossary of Key Words and Terms in International Finance.

Climate policy has favored costly measures that implicitly or explicitly subsidize lowcarbon fuels.We simulate four transportation sector policies: cap and trade (CAT), ethanol subsidies, a renewable fuel standard (RFS), and a lowcarbon fuel standard. Our simulations confirm that alternatives to CAT are 2.5 to 4 times more costly but are amenable to adoption due to right-skewed distributions of gains. We analyze voting on the Waxman-Markey (WM) CAT bill. Conditional on a district’s CAT gains, a district’s RFS gains are negatively correlated with the likelihood of voting for WM. Our analysis supports campaign contributions as a partial mechanism.

Many price indices must be constructed without quantity data at the elementary level. The paper shows that for some consumer goods in the United States and other countries, one can approximate expenditure shares using weights derived from the retail distribution of sellers. These weights are based on the share of outlets selling an item, or the share of outlets adjusted by the total number of items sold in each. Relative to using no weights, the paper finds that using such imputed weights substantially reduces bias in the frequency of price changes, in annual inflation, and in price comparisons across countries.

We study a repeated game of price leadership in which a firm proposes supermarkups over Bertrand prices to a coalition of rivals. Supermarkups and marginal costs are recoverable from data on prices and quantities using the model’s structure. In an application to the beer industry, we find that price leadership increases profit relative to Bertrand competition by 17 percent in fiscal years 2006 and 2007, and by 22 percent in 2010 and 2011, with the change mostly due to consolidation. We simulate two mergers, which relax binding incentive compatibility constraints and increase supermarkups. These coordinated effects arise even with efficiencies that offset price increases under Bertrand competition.

We study reforms of nonlinear income tax systems from a political economy perspective. We present a median voter theorem for monotonic tax reforms, reforms so that the change in the tax burden is a monotonic function of income. We also provide an empirical analysis of tax reforms, with a focus on the United States. We show that past reforms have, by and large, been monotonic. We also show that support by the median voter was aligned with majority support in the population. Finally, we develop sufficient statistics that enable to test whether a given tax system admits a politically feasible reform.

Results of recent empirical and theoretical research have shown the applicability of consumer demand theory in describing and predicting choices of nonhuman consumers (see A. Covich, D. Rapport and J. Turner, Battalio et al., Kagel et al., 1975, 1980). Commodities used in these studies have been largely limited to different kinds of edibles: food grains, water, and sweet tasting (preferred) fluids. A natural extension of the commodity choice model is to consider leisure as a good. This paper presents results of experiments showing that nonhuman workers (pigeons) are willing to trade off income for leisure if the price is right. More specifically our results show that the Slutsky-substitution effect is positive for (exactly) compensated wage decreases, and that leisure is a normal good at all points in the choice space. In addition to demonstrating the pervasiveness of income-leisure tradeoffs, the experiments show strong regularities in the size of the substitution and income effects at varying wage rates; with increases in real wages both income and substitution effects get smaller, but the substitution term decreases more rapidly than the income term resulting in a backward bending labor supply curve at higher wages. The plan of the paper is as follows. In Section I we characterize the procedures employed in the laboratory for studying labor supply, and summarize well-established characteristics of this behavior as it is relevant to the present experiments. Sections II and III describe the hypotheses tested and the experimental procedures employed in the tests. Results of the experiments are given in Section IV. Some of the implications of these results are discussed in a brief concluding section. Space considerations do not permit a detailed discussion of the reasons why economists should take seriously the investigation of economic theories using nonhuman subjects (see Kagel and Battalio for this argument). For the more skeptical reader we simply note that if one defines economics as .. . .the study of the allocation of scarce resources among unlimited and competing uses (Albert Rees, 1968, p. 472), then animal psychologists, ecologists and biologists have been involved in studying economic behavior for some time now (Rapport and Turner; Jack Hirschleifer; H. Rachlin). It is but a small step to take the technologies of these related disciplines and apply them to behavior of interest to economists, for example labor supply behavior. At a minimum, such studies expand considerably the scope for comparative economic analysis. At a maximum they provide a laboratory for identifying, testing, and better understanding general laws of economic behavior. Use of this laboratory is predicated on the fact that behavior as well as structure vary continuously across species, and that principles of economic behavior would be unique among behavioral principles if they did not apply, with some variation, of course, to the behavior of nonhumans.