In most models of bank portfolio selection, relations between the sources of bank funds and the way the funds are invested are ignored. A model is developed in which a bank competes for some of its deposits by offering loans to the depositors who demand loans at interest rates lower than the rates charged other borrowers. In a competitive banking industry, depositors will be offered better loan terms than non-depositors. The bank portfolio selection model is used to determine the effects of a tight money policy on the bank loan market. Under the assumptions used in constructing the model, bankers discriminate in favor of the borrowers who hold demand deposits at their banks as monetary policy becomes more restrictive. Banks are prohibited from paying interest on demand deposits. Since banks can increase their interest earning assets by increasing deposits, bankers have an incentive to compete for demand deposits by indirect means. One way to compete for demand deposits is to offer loans at reduced interest rates to the depositors who demand loans. The bank's revenue from business with a customer includes the interest payment on his loan and the interest income from investing his deposit. The opportunity cost of establishing such a relationship with a depositor is the market rate of interest times the loan to the depositor. Competitive banks reduce the loan interest rate for depositors until the profit from the total business with the depositor is zero. ...

The purpose of the report is to estimate a production function for U. S. manufacturing with the labor input disaggregated into production and nonproduction workers, and then to test whether a consistent aggregate labor index exists. It is found that nonproduction workers and capital are complements, while production workers and capital are substitutes. This authors conclude that even though production and nonproduction workers in U. S. manufacturing are highly substitutable, there is no way to consistently aggregate them. (Author)

A recent synthesis and development of the literature by Smith (1969) has greatly increased the power and generality of the economic theory of commercial fishing. In contrasting his own analysis with previous work, Smith suggests that the most serious deficiency in the received doctrine is that it "is not able to handle the situation in which a species may be exploited to the point of extinction. The theory implies that short of zero unit costs the equilibrium yield to competitive exploitation is never zero with an extinct population." As Smith observes, evaluation of this implication depends on whether one believes that commercial fishing has ever, or could ever, cause the extinction of a fishery a matter over which there is some controversy.' The theoretical question is one of importance from both positive and normative points of view. On the one hand, it would appear that, if convincing evidence of commercial extinction were discovered, then the received theory of fishing would be decisively refuted. On the other hand, policy makers cannot wait indefinitely for the results of future research, especially when concerned with irreversible changes such as the extinction of species. Their attitudes toward proposals for the regulation of fishing are bound to be colored by untested conclusions of current theory. For these reasons, it would seem important to reexamine the inference which Smith draws from the received theory, particularly because Smith does not explain which features of the theory are responsible for his conclusion.

[In this paper, the authors develop a simultaneous equation model of birth rates composed of four estimated equations. This work differs from past research in that it considers the simultaneous relationship between birth rates and income and includes the cost of fertility as an explanatory factor. This cost is measured by the female labor participation rate under the assumption that income foregone due to fertility is a significant opportunity cost.]

CONSUMERS' expenditure forms a major component of the Gross National Expenditure and the parameters of this function play a crucial role in the mechanism of income generation in a macro-model. Because of their importance, a considerable amount of care and attention should be devoted to the estimation of these parameters and their probable movement. This consideration becomes especially important in mediumand long-range forecasting because over a long-run horizon the consumer expenditure parameters may be strongly influenced by socio-economic factors such as female participation in the labour force, education level of the population, urbanization, etc. In this paper we make a beginning in the direction of estimating parameters of the consumption function which are shifting over time due to these socio-economic factors. The importance of taking into account the shifting parameters in a macro-equation can also be emphasized from another point of view. It is becoming increasingly clear that macroeconomic analysis and policy will be seriously inadequate in a medium-run horizon unless attention is paid to changes in the composition of aggregative units. One line of attack is, of course, to have disaggregative models. However, quite often the detailed time-series data are not available on all the variables concerned. Even when the data are available, they are somewhat unreliable at a disaggregate level and in statistical estimation the ratio of noise to signal tends to be high in such disaggregate equations. Moreover, there are often some overall macro-constraints which are difficult to take into account in disaggregate models. It is, therefore, desirable as a supplement (if not as an alternative) to the disaggregated models, to have a macro-equation capture the compositional effects as far as possible. Our DaDer is one example of an attempt to capture the influence of changing population composition in a macro-equation, by introducing shifting parameters. For purposes of estimating these shifting parameters, we make combined use of cross-section and time-series data. The lagged reaction path of consumption due to income and price changes is also considered, and we use the Almon technique (1965) for this purpose.