Market disruption or the threat thereof constitutes grounds for restraining countries under the U.S. Multifibre Arrangement (MFA). Since 1980, however, countries accounting for very small shares of U.S. imports have been restrained. This study estimates the determinants of U.S. voluntary export restraints under MFA I and MFA II-III using a bivariate probit model with sample selection. Results show a shift from targeting large developing country exporters to targeting those that are small but have rapidly growing sales. This raises the cost of the MFA to the United States. It also suggests that expansion of exports by developing countries will be met by restrictions on market access.

M. Ameziane Lasfer, Ex-Day Behavior: Tax or Short-Term Trading Effects, The Journal of Finance, Vol. 50, No. 3, Papers and Proceedings Fifty-Fifth Annual Meeting, American Finance, Association, Washington, D.C., January 6-8, 1995 (Jul., 1995), pp. 875-897

James M. Miller, John J. McConnell, Open-Market Share Repurchase Programs and Bid-Ask Spreads on the NYSE: Implications for Corporate Payout Policy, The Journal of Financial and Quantitative Analysis, Vol. 30, No. 3 (Sep., 1995), pp. 365-382

This paper investigates the effects of shocks to U. S. monetary policy on exchange rates. We consider three measures of these shocks: orthogonalized shocks to the federal funds rate, orthogonalized shocks to the ratio of nonborrowed to total reserves and changes in the Romer and Romer index of monetary policy. In sharp contrast to the literature, we find substantial evidence of a link between monetary policy and exchange rates. Specifically, according to our results a contractionary shock to U. S. monetary policy leads to (i) persistent, significant appreciations in U. S. nominal and real exchange rates and (ii) significant, persistent deviations from uncovered interest rate parity in favor of U. S. interest rates.

In this paper, we consider two measures of the relative effectiveness of public and Catholic schools: finishing high school and starting college. These measures are potentially more important indicators of school quality than standardized test scores in light of the economic consequences of obtaining more education. Single-equation estimates suggest that for the typical student, attending a Catholic high school raises the probability of finishing high school or entering a four-year college by thirteen percentage points. In bivariate probit models we find almost no evidence that our single-equation estimates are subject to selection bias.

The First Theorem of Welfare Economics rests on the assumption that individuals have neither price-making nor market-making capacities. We offer a revision in which individuals have such capacities. The revision emphasizes two keys for market efficiency: (i) the need to align private rewards with social contributions--called full appropriation, and (ii) the need for an assumption to counter the possibility of coordination failures in the choice of produced commodities--called noncomplementarily. We also emphasize that information about prices of unmarketed commodities involves decentralized knowledge available only to product innovators and that pecuniary externalities are important potential sources of market failure.

Suppose that an opportunity arises for two countries to negotiate a free-trade agreement (FTA). Will an FTA between these countries be politically viable? And if so, what form will it take? We address these questions using a political-economy framework that emphasizes the interaction between industry special-interest groups and an incumbent government. We describe the economic conditions necessary for an FTA to be an equilibrium outcome, both for the case when the agreement must cover all bilateral trade and for the case when a few politically sensitive sectors can be excluded from the agreement.

The time-series literature reports two stylized facts about output dynamics in the United States: GNP growth is positively autocorrelated, and GNP appears to have an important trend-reverting component. This paper investigates whether current real-business-cycle (RBC) models are consistent with these stylized facts. Many RBC models have weak internal propagation mechanisms and must rely on external sources of dynamics to replicate both facts. Models that incorporate labor adjustment costs are partially successful. They endogenously generate positive autocorrelation in output growth, but they need implausibly large transitory shocks to match the trend-reverting component in output.