A central question in industrial organization is why profit rates differ so dramatically across firms and industries. One of the many explanations offered for this phenomenon is the failure of conventional accounting methods to adjust for intangible capital stocks, i.e., it is argued that profit rates do not differ dramatically when capital stocks are correctly calculated to include intangible R&D and advertising capital. To test this hypothesis individual advertising capital stocks are calculated for firms in the toys, distilled beverages, cosmetics, and pharmaceuticals industries, and R&D stocks are calculated for the pharmaceuticals firms. The adjustments do not eliminate the wide dispersion in profit rates.

This study investigates the stability of long-run log-linear demand functions for narrowly defined monetary aggregates (M1, Monetary Base) in the U.S. during the post World War II period. The hypotheses that the individual time series which appear in such equations (real M1, real Monetary Base, real Personal Income and short-term and long-term nominal interest rates) all have unit roots cannot be rejected. The primary conclusion of this study is that with proper attention to the time series properties of the available data, there exists strong evidence in support of a stable equilibrium demand function for real balances in the post-World War II U.S. economy. The hypothesis of a unitary equilibrium real income elasticity (a velocity function) cannot be rejected. Further, the estimates of equilibrium interest elasticities are approximately -.5 to -.6 for real M1 and -.4 to -.5 for real monetary base. The estimated interest elasticities are significantly different statistically depending on whether long- term or short-term interest rates are used, but the observed differences in these estimates are not of economic significance.

The ability of individuals to move freely from one jurisdiction to another is generally seen as a constraint on the amount of redistribution that each jurisdiction within a system of governments can undertake. In this paper, we look at this proposition by developing a positive analysis of income redistribution by local governments in a federal system. We ask how much redistribution occurs when only local governments can have tax/transfer instruments, individuals can move freely among jurisdictions, and voters in each jurisdiction are fully aware of the migration effects of redistributive policies. Local redistribution is shown to induce sorting of the population, with the poorest households located in the communities that provide the most redistribution. While the threat of out-migration affects the potential for redistribution, our results suggest that significant local redistribution is nonetheless feasible. Numerical computations indicate that the proportion of residents who are renters is a major factor affecting the local choice of level of redistribution.

Numerous articles have investigated the distribution of share prices, and find that the returns are fat tailed. Nevertheless, there is still controversy about the amount of probability mass in the tails, and hence about the most appropriate distribution to use in modeling returns. This controversy has proven hard to resolve, as the alternatives are non-nested. We employ extreme value theory, focusing exclusively on the larger observations in order to assess the tail shape within a unified framework. We find that at least the first two moments exist. This enables one to generate robust probabilities on large returns, which put the recent stock market swings into historical perspective.

Examination of 1,600 seasoned equity offerings reveals little evidence that underwriters systematically set offer prices below the market price on the major exchanges, though they may do so for NASDAQ issues. Quick round-trip transactions in seasoned offerings are not profitable, but subscribing to an offering and holding the stock for 30 days seems to be very profitable, especially in the NASDAQ market. In addition to seasoned offerings, we analyze 250 issues of new classes of preferred stock. These issues are not underpriced.

The ability of individuals to move freely from one jurisdiction to another is generally seen as a constraint on the amount of redistribution that each jurisdiction within a system of governments can undertake. In this paper, we look at this proposition by developing a positive analysis of income redistribution by local governments in a federal system. We ask how much redistribution occurs when only local governments can have tax/transfer instruments, individuals can move freely among jurisdictions, and voters in each jurisdiction are fully aware of the migration effects of redistributive policies. Local redistribution is shown to induce sorting of the population, with the poorest households located in the communities that provide the most redistribution. While the threat of out-migration affects the potential for redistribution, our results suggest that significant local redistribution is nonetheless feasible. Numerical computations indicate that the proportion of residents who are renters is a major factor affecting the local choice of level of redistribution.