[An embargo probability leads to private adjustments to curtail consumption and expand production, raising marginal value of consumption less than of production. If there are unemployment or foreign policy externalities, there is an optimal tariff which is proportional to foreign dependence, is inversely proportional to elasticity of external embargo loss, varies directly with embargo probability, and depends more complexly on other parameters. Stockpiling should limit embargo price rise to unit cost of storage divided by embargo frequency. With low embargo frequency, the price rise based on the stockpiling criterion may be greater than with no stockpiling. is then unwarranted.]

An embargo probability leads to private adjustments to curtail consumption and expand production, raising marginal value of consumption less than of production. If there are unemployment or foreign policy externalities, there is an optimal tariff which is proportional to foreign dependence, is inversely proportional to elasticity of external embargo loss, varies directly with embargo probability, and depends more complexly on other parameters. Stockpiling should limit embargo price rise to unit cost of storage divided by embargo frequency. With low embargo frequency, the price rise based on the stockpiling criterion may be greater than with no stockpiling. is then unwarranted.

Concern with the effects of aid by higher units of government to cities and other localities has ranged from enumeration of geographical distribution of aid (see, for example, T. L. Muller, 1982) to various attempts to identify and take into consideration local reactions that influence the ultimate effects. The latter include studies that focus on particular programs (see, for example, the analyses included in N. J. Glickman, 1980), effects on local government expenditures (see, for example, R. C. Fisher, 1982; P. N. Courant et al., 1979; and M. B. Johnson, 1979), and broader issues such as the concern with urban decline in many areas (see, for example, K. L. Bradbury et al., 1981, 1982). In this paper we attempt to contribute to the analysis of intergovernmental aids and other federal programs by suggesting a general framework for analyzing their effects and utilizing the framework to estimate some of the impacts. The framework concerns first the values of aid to localities and persons as affected by in-kind restrictions. Based on the values of aid, the geographic redistributions of income among areas due to all federal actions are considered, requiring estimation of the geographic distribution of nonaid items including taxes, place of federal purchases of goods and services, and the location of benefits of the purchases-along with attendant interregional multiplier effects due to induced changes in demand for local goods and services.