the speculative attack on the peso and the real exchange rate argentina 1979 1981 abstract this article applies a speculative attack model to argentina during its pre announced exchange rate system from january 1 1979 to june 30 1981 the model attempts to verify a rule whereby if domestic credit growth exceeds the rate of currency depreciation two things occur first the domestic price of non traded goods rises relative to the price of traded goods second foreign reserves decline until a point when a sudden speculative attack depletes remaining reserves causes a precipitous fall in the relative price of non tradables and forces the country onto a floating exchange rate regime in some important respects the model captures the argentinian experience yet in other respects if fails to do so

sex differences in tenure profiles effects of shared firm specific investment this article employs a model of masanori hashimoto with extensions by donald parsons to analyze variation in tenure by sex age and firm type fixed wage contracts eliminate postcontractual opportunism associated with firm specific human capital investment however such contracts result in inefficient quits and terminations calibration of the sharing of this investment between workers and employers minimizes the costs of these inefficient separations moreover this optimal sharing rate varies systematically with the characteristics listed above these tenure slope implications are tested with favorable results

firm specific human capital as a shared investment reply as edwin leuven and hessel oosterbeek 2001 point out rather than performing the comparative statics analysis on the effect of increasing uncertainty my original study limited the analysis to degenerate cases and refrained from inferring a possible monotonic relationship between uncertainties and the share ratio hashimoto 1981 pp 479 80 leuven and oosterbeek do not dispute my conclusions for degenerate cases donald o parsons 1986 p 826 later asserted such a monotonic relationship without reporting a comparative statics analysis leuven and oosterbeek use a uniform distribution of productivity to dispute parsons assertion hashimoto and jeong geon lee 1994 reached a similar conclusion to theirs given the hashimoto lee comparative statics analysis i view the most significant contribution of leuven oosterbeek to be not so much their comparative statics as their explicit formulation to account for what has become known in the literature as enforceability of contracts in the 1981 paper i was concerned with the enforceability issues so i adopted a certaintyequivalent approach to the fixed wage formulation in the face of double informational asymmetry between the employer and worker i then focused on the becker type share determination of specific human capital returns gary s becker 1962 leuven and oosterbeek directly formulate the enforceability of employment contracts in terms of a fixed wage rather than in terms of the sharing ratio by considering the enforceability or the incentive compatibility issues in a fuller perspective i conclude that the certainty equivalent formulation i adopted in my 1981 model has an internal infirmity in my opinion this infirmity is a point that a serious comment on hashimoto 1981 should underscore i do not think that leuven and oosterbeek s comment 2001 is sufficiently articulate or structured to highlight this point space does not permit a full discussion so let me remark briefly on an important point that leuven and oosterbeek should have highlighted but did not the explicit and direct determination of the incentive compatible fixed wage w leads me to conclude that the joint maximand is not the unconditional expectation ev s 2 ey s as i originally formulated rather it is the conditional expectation estay v s 2 y s conditional on both parties not separating in the latter formulation the determination of the fixed wage w implies an ex ante determination of the share parameter to be a 5 estay w 2 y s estay v s 2 y s which is equivalent to leuven and oosterbeek s definition of a in spite of the difference in formulation between leuven oosterbeek and hashimoto lee the two studies obtain essentially the same comparative statics results this is because both formulations rely on incentive compatibility conditions for separation decisions where the forces at work are basically the same thus leuven and oosterbeek confirm the accuracy of the degenerate results reported in hashimoto 1981 for nondegenerate cases the comparative statics are generally ambiguous using a uniform distribution leuven and oosterbeek do find that the optimal wage decreases with the uncertainty in the market and increases with the uncertainty in the firm p 345 these findings are equivalent to what hashimoto and lee 1994 found that the optimal share ratio decreases with the uncertainty in the outside productivity and increases with the uncertainty in the inside productivity the leuven oosterbeek comment contributes a technical advance but it retains the essential economic logic department of economics 410 arps hall ohio state university 1945 north high street columbus oh 43210 i am grateful to hajime miyazaki for extensive discussions that elucidated theoretical issues in modeling information asymmetric employment relations and for improving the exposition and to teresa schoellner for her very competent research assistance however i bear full responsibility for any remaining shortcomings 1 further analytical details are available upon request

a new approach to modeling early warning systems for currency crises can a machine learning fuzzy expert system predict the currency crises effectively abstract this paper presents a hybrid causal model for predicting the occurrence of currency crises by using the neuro fuzzy modeling approach the model integrates the learning ability of the neural network with the inference mechanism of fuzzy logic the empirical results show that the proposed neuro fuzzy model leads to a better prediction of crisis significantly the model can also construct a reliable causal relationship among the variables through the obtained knowledge base compared to neural network and the traditionally used techniques such as logit the proposed model can thus lead to a somewhat more prescriptive modeling approach based on determinate causal mechanisms towards finding ways to prevent currency crises

the persistence of the peso problem when policy is noisy abstract the peso problem the market s belief that a discrete event may occur has frequently been blamed for the persistence of on average mistaken forecasts of macroeconomic variables this paper demonstrates how beliefs that a policy process may have switched can induce apparent ex post biased forecasts of exchange rates even after the switch has occurred furthermore during this peso problem period exchange rates may appear to contain a speculative bubble component since they will systematically deviate from the levels implied by observing fundamentals ex post and the conditional variance of exchange rates will exceed the variance implied by observing fundamentals

governing a groundwater commons a strategic and laboratory analysis of western water law we examine strategic behavior in groundwater depletion within the setting of state governance of groundwater resources in the american west solving a dynamic common pool resource model for its optimal solution and its subgame perfect equilibrium provides benchmarks for behavior observed in laboratory experiments three forms of legal rules common pool depletion with a rule of capture to establish ownership absolute ownership doctrine entry restrictions prior appropriation doctrine and stock quotas correlative rights doctrinekre examined in terms of their impact on individual strategic behavior in laboratory experiments

the excess sensitivity of layoffs and quits to demand excessive layoffs in bad times and excessive quits in good times both stem from the same weakness in practical employment arrangements the specific nature of worker firm relations creates a situat

on the optimal order of natural resource use when the capacity of the inexhaustible substitute is limited consider a general equilibrium framework where the marginal cost of extraction from several deposits of an exhaustible resource is constant in terms of an inexhaustible perfect substitute and differs between deposits the instantaneous rate of production form the inexhaustible resource is subject to a capacity constraint

extraction capacity and the optimal order of extraction the least cost first extraction rule for deposits with different extraction costs previously has been shown to be invalid in general equilibrium this paper demonstrates that this rule also does not hold in partial equilibrium when extraction capacity is limited necessary and sufficient conditions for several surprising extraction orders are presented if extraction from a high cost resource is constrained it may be optimal to begin extraction from a high cost deposit or backstop strictly before extracting from a lower cost deposit if extraction from a low cost resource is limited it may be optimal to exhaust a high cost deposit strictly before the low cost deposit is exhausted or to abandon extraction temporarily from a high cost deposit and then to exhaust it later the analysis demonstrates how extraction constraints affect the order of extraction and shows that certain cost reversals are caused by limited extraction capacity rather than by the general equilibrium definition of extraction costs

balance of payments crises and devaluation the collapse of a fixed exchange rate is typically marked by a sudden balance of payments crisis in which speculators fleeing from the domestic currency acquire a large portion of the central bank s foreign exchange holdings faced with such an attack the central bank often withdraws temporarily from the foreign exchange market allowing the exchange rate to float freely before devaluing and returning to a fixed rate regime this paper links the timing of the initial speculative attack to the magnitude of the expected devaluation and to the length of the transitional period off loating an implication of the analysis is that there exist devaluations so sharp and transition periods so short that acrisis must occur the moment the market first learns that the current exchange parity will eventually be altered for sufficiently long transition periods the floating exchange rate overshoots its new peg before appreciating back toward it for shorter periods the rate depreciates monotonically to its new fixed level accordingly the central bank s return tothe foreign exchange market can occasion a capital outflow or a capital inflow this abstract was borrowed from another version of this item

firm specific human capital as a shared investment comment employment relationships typically involve the division of surplus surplus can be the result of a good match a monopoly rent or a quasirent that arises because of a specific investment the division of this surplus is of economic interest as it is a determinant of turnover investment and wages gary s becker 1962 argued in the context of specific human capital investments that the incumbent employee and firm will share the surplus this notion was formalized in a prototypical model of surplus sharing as first proposed by masanori hashimoto 1981 the model has been studied extensively among others by h lorne carmichael 1983 robert e hall and edward p lazear 1984 and donald o parsons 1986 while elizabeth becker and cotton m lindsay 1994 provide an empirical application the key feature of the model is the existence of transaction costs both the employee and the firm have ex ante uncertain private information on which they cannot write a contingent contract this makes that they write a nonrenegotiable contract that specifies a fixed wage after this the firm learns the value of the employee s marginal product whereas the employee learns the value of his outside option both parties then decide unilaterally whether to separate or not and inefficient separations may occur the wage is set in such a way as to maximize the expected total surplus the present analysis will consider the role of uncertainty in this model this has not been done before in a rigorous way hashimoto considered only degenerate cases his analysis suggests that the wage will be low when the uncertainty of the market conditions is small and high when the uncertainty of the conditions inside the firm is small parsons 1986 makes a claim that this is actually the case without deriving the result this paper shows that the comparative statics are ambiguous and may well be the opposite of those suggested by hashimoto and claimed by parsons it also provides the intuition that is behind this result namely that uncertainty not only influences turnover but also the option value of the match and its opportunity cost section i briefly summarizes hashimoto s model and shows that without further assumptions the comparative statics are ambiguous section ii derives an explicit solution of the wage section iii briefly considers alternative wage setting schemes and section iv concludes

the economics of dams dams provide a host of benefits to societies helping to balance variability in water availability with demand for multiple uses allowing power generation providing and enhancing recreation opportunities and offering protection against damaging floods yet dams are often controversial due to their high investment requirements unequal distributional effects and concerns over the irreparable harm they may cause to free flowing rivers and ecosystems this paper considers the economic case for such projects organized around a review of what we know about their value and impacts though heterogeneity across contexts is a common feature of interventions in many sectors we argue that it is particularly acute in the case of dams and that this creates difficulties for drawing general conclusions about their social value still evidence suggests that investment in additional surface water storage may not always be the best solution for addressing water scarcity furthermore a number of biases and blind spots exist in economic frameworks used to evaluate dams and these often challenge analysts ability to correctly identify which projects will be most attractive perhaps due to some of these perceived deficiencies policy makers do not appear to make much use of economic analyses for decision making about dams if progress is to be made in avoiding costly mistakes related to construction and removal of such infrastructures in the future economists need to improve the realism and methods underlying their analyses of the value of dams and offer more useful interpretations of the results that these approaches produce

cadillac desert revisited property rights public policy and water resource depletion to alleviate arizona s dependence on groundwater the federal government subsidized construction of the central arizona project cap to import water from the colorado river in exchange for the subsidy arizona reformed its groundwater law to eliminate common property pumping and to ban groundwater mining after the year 2025 we build a model of water resource development in which imported water is a capacity constrained backstop the model is applied to quantify the welfare effects of alternative cap construction dates and arizona groundwater laws we reach two general conclusions first cap was completed 86 years too early in 1987 at a deadweight loss of 2 612 billion ironically construction in 1987 yielded lower surplus than never constructing cap second the political exchange of reform for subsidy introduced a greater loss 2 612 billion than it corrected 0 810 billion the exchange was worse than doing nothing at all

money the rate of devaluation and interest rates in a semi open economy colombia 1968 1982 most empirical studies on interest rate behavior have made extreme assumptions regarding the degree of openness of the economy under consideration generally it has been assumed that the economy in question is either completely closed to the rest of the world or that it is fully open and that there are no controls to capital movements in reality however most cases and especially those of developing countries correspond to an intermediate situation where the capital account of the balance of payments is partially open and there exist some controls to capital movements under these circumstances it would be expected that in the short run the domestic rate of interest will respond both to external factors i e world interest rates and to internal monetary conditions i e excess supply or demand for money the purpose of this paper is to develop an empirical model to analyze the behavior of nominal interest rates in a small semiopen economy the model specifically considers the role of open economy factors world rate of interet and expected rate of devaluation for example and the role of more traditional domestic monetary conditions in explaining interest rate behavior

the impact of global warming on agriculture a ricardian analysis reply we measure the economic impact of climate on land prices using cross sectional data on climate farmland prices and other economic and geophysical data for almost 3 000 counties in the united states we find that higher temperatures in all seasons except autumn reduce average farm values while more precipitation outside of autumn increases farm values applying the model to a global warming scenario shows a significantly lower estimated impact of global warming on u s agriculture than the traditional production function approach and in one case suggests that even without co sub 2 fertilization global warming may have economic benefits for agriculture 16 refs 5 figs 5 tabs

collapsing exchange rate regimes shocks and biases abstract patterns in domestic credit creation stemming from inconsistent fiscal policies have received widespread attention for their role in aggrevating speculative attacks on central bank foreign exchange reserves and contributing to the collapse of exchange rate regimes this paper acknowledges the importance of monetary and fiscal discipline but also emphasizes the importance of other random shocks to the domestic money market most notably shocks from external credit supplies and relative prices policies of the domestic fiscal authorities are only partial catalysts for speculative attacks on a currency expansion of domestic credit stemming from the monetization of fiscal imbalances may be dominated by involuntary domestic credit expansions which are necessitated by surprise shortages in supplies of external capital further the unexpected availability of external capital translates into a lower net critical reserve floor making the depletion of central bank reserves by a speculative attack more difficult to accomplish relative price shocks also randomize the demand for nominal money balances and therefore may also have a strong direct influence on the probability of an exchange regime collapse empirical studies of exchange rate crises that neglect these considerations will produce biased estimates of both expected collapse probabilities and anticipated post collapse exchange rates

economic implications of climate change for u s agriculture assessing recent evidence recent studies estimate potential economic impacts of climate change on u s agriculture while results are not directly comparable several big picture lessons can be drawn these broader findings are developed and put into a policy context while the estimated impacts on u s agriculture and the u s economy do not yet justify costly adaptation or mitigation strategies some regional and environmental impacts could be quite severe current policy efforts should focus on reducing climate change uncertainties and increasing farm sector flexibility from a national perspective future agreements to limit greenhouse gas emissions could be partially met through adjustments of farm practices

coherence and the credibility of convertibility announcements abstract the recent devaluation crisis in mexico and its tequila effect elsewhere illustrate that two credibility problems associated with convertibility policies currency boards are announcements that violate truth telling and a non zero probability of policy failure we derive the trade off between these problems when announcements resemble cheap talk the strategic uncertainty created by this trade off implies that both the government and investors should recognize the presence of fed watchers who exploit any policy inconsistency for their own gain in this context credibility can be restored if the policy is coherent if it eliminates the marginal benefits for fed watching jel e63 e58 f40 1997 published by elsevier science ltd

benefits from groundwater management magnitude sensitivity and distribution empirical estimates of benefits from groundwater management are reported for an area in california with heavy reliance on groundwater supplies benefits are quite sensitive to the water demand schedule and interest rate but less sensitive to other parameters however in all cases considered the increases in welfare from groundwater management are less than ten percent tax revenues received under a system of pump taxes are four to five times as large as the benefits from management thus groundwater users gain under a system of quotas but may suffer substantial welfare losses under pump taxes

domestic and external factors in the determination of the real interest rate the case of uruguay the high level of the real interest rates in the 1980s is not a phenomenon limited to small countries the united states and other industrial countries in europe have been confronted with a similar experience although numerous studies have aimed to explain the level of real interest rates within the framework of developed countries there is a lack of theoretical and empirical work about the determination of real interest rates in small open developing countries and about the process of transmitting variations in the real interest rates across countries

a critical evaluation of exchange rate policy in turkey abstract this paper reviews and critically evaluates the exchange rate policy followed in turkey in the post 1980 period during which a far reaching program of liberalization has been launched we conclude that the new exchange rate policy has been essential for turkey s regaining its creditworthiness furthermore it has positively contributed to growth of output and exports and to expansion of tradables production relative to nontradables persistence of inflation and weakness of private investment in tradables overshadow the successes recorded in other areas and cast doubt over the sustainability of turkey s outward orientation we argue that the root cause of these problems has been inconsistencies between overall economic policies rather than the exchange rate policy itself we compare the period of real appreciations since late 1998 with the earlier period of real depreciations and draw policy implications

learning large deviations and recurrent currency crises this article studies a version of obstfeld s journal of international economics 43 1997 61 77 escape clause model the model is calibrated to produce three rational expectations equilibria two of these equilibria are e stable and one is unstable dynamics are introduced by assuming that agents must learn about the government s decision rule it is assumed they do this using a stochastic approximation algorithm it turns out that as a certain parameter describing the sensitivity of beliefs to new information gets small the algorithm converges to a small noise diffusion process the dynamics of exchange rate changes are then characterized using large deviation techniques from freidlin and wentzell random perturbations of dynamical systems second edition berlin springer verlag 1998 these methods describe the sense in which the limiting distribution of exchange rate changes is approximated by a two state markov switching process where the two states correspond to the two e stable equilibria the model is calibrated to the exchange rate histories of argentina brazil and mexico currency crises in these countries resemble the predicted escape routes of the model a key feature of these escape routes is that expectations of a devaluation erupt suddenly without large contemporaneous shocks this is consistent with evidence showing that crises are often poorly anticipated by financial markets

groundwater use under incomplete information abstract this paper introduces a game theoretic model of groundwater extraction in a two cell aquifer under incomplete information a novel assumption is that individual users have incomplete knowledge of the speed of lateral flows in the aquifer although a user is aware that his neighbor s water use has some influence on his future water stock he is uncertain about the degree of this impact we find that the lack of information may either increase or decrease the rate of water use and welfare in a two period framework the relevant characteristic is the ratio of the periodic marginal benefits of water use depending on whether this ratio is convex or concave the average speed with which the aquifer is depleted decreases or increases when users learn more about the local hydrologic properties of groundwater in principle welfare may decrease even in cases when the groundwater allocation is closer to the efficient groundwater allocation

explaining the duration of exchange rate pegs abstract this paper is an empirical investigation of the duration of exchange rate pegs in 16 latin american countries and jamaica we identify factors that influence peg duration using logit analysis the real exchange rate and the level of international liquidity are significant determinants of the monthly likelihood of devaluation structural variables such as the openness of an economy and its geographical trade concentration and political variables such as changes in the executive also significantly affect the likelihood of a devaluation there is some evidence that the likelihood of a devaluation first rises and subsequently declines during the first year of a peg

groundwater focusing on the real issue most studies of the welfare economics of groundwater have focused mainly on the dichotomy between optimal control of groundwater use and no control at all this article argues that under circumstances that generally prevail in semiarid zones assigning property rights to groundwater and permitting the market to determine the allocation of water use can lead to a second best solution an argument is made that if potential users would be allowed to coase bargain with incumbent users on the issuance of new groundwater rights the second best solution is elevated to a pareto optimal solution this article is also a tale of two states water law and performance in new mexico and arizona

the use of the exchange rate for stabilization a real interest arbitrage model applied to argentina we model interest rate and portfolio determination under the risk of real currency devaluation taking into account risk aversion on the part of investors a simple extension of the friedman savage analysis of consumer behavior under uncertainty to a two period two country setting allows us to explicitly solve for the interest rate premium paid in the risky asset the model is applied to the 1979 1980 argentinean experiment with the pre announced exchange rate empirical results suggest that a safety factor central bank reserves as a fraction of m2 is closely related to the net ex ante and ex post arbitrage differentials in favor of argentina relative to the united states jel d8

when is the standard analysis of common property extraction under free access correct a game theoretic justification for non game theoretic analyses analyses of common property extraction under free access follow two distinct paths traditional and game theoretic giving rise to two standard methodologies one methodology avoids game theoretic analysis by assuming that aggregate extraction in each period induces fel rent dissipation the second methodology solves for the marko perfect equilibrium of an n player extraction game investigating aggregate behavior over time as n we show by example that these coexisting standard methodologies can yield conflicting predictions we then provide conditions relatively easy to satisfy sufficient for the two approaches to yield the same predictions

speculative attack and the external constraint in a maximizing model of the balance of payments balance of payments models of speculative attack differ from non renewable resource models in that foreign exchange reserves may be borrowed from abroad this paper shows that in an idealized world where all private income is subject to lump sum taxation central bank reserves can become infinitely negative without violating the government s intertemporal budget constraint none the less a growth rate of domestic credit exceeding the world interest rate if maintained indefinitely leads to violation of the constraint in the paper s model given an assumed limit to official external borrowing the paper next analyses inevitable transitions between fixed and floating exchange rate regimes when individual preferences are explicitly specified in a discrete time deterministic model the collapse of a fixed rate may be characterized by two successive speculative attacks

financial policy and speculative runs with a crawling peg argentina 1979 1981 abstract in this paper we present a model of a balance of payments crisis and examine the argentine experiment with a crawling peg between december 1978 and february 1981 the approach taken allows us to examine the evolution of a crisis when a collapse is not perfectly foreseen and yields plausible estimates of one month ahead probabilities of a collapse of the crawling peg the results suggest that the viability of an exchange rate regime depends on the consistency of exchange rate policy with domestic credit policy if the two are not consistent confidence in exchange rate policy is undermined

rational and self fulfilling balance of payments crises speculative attacks on a pegged exchange rate must sometimes occur ifasset price paths are to be free of abnormal profit opportunities suchattacks are fully rational as they reflect the market s response to aregime breakdown that is inevitable the authors shows that under someexpectations about policy balance of payments crises can also be purely self fulfilling events in such cases even a permanently viableregime may collapse and the economy will possess multiple equilibriacorresponding to different subjective assessments of the probability ofa crisis the behavior of the domestic interest rate will naturally reflect the possibility of a speculative attack copyright 1986 by american economic association

policy fundamentals interest rates differential and expected devaluation in the presence of an active crawling peg system abstract one of the most interesting theoretical issues that comes up from the analysis of the tablita period in the southern cone economies argentina chile and uruguay is the interpretation of why interest rates on domestic currency loans were much higher than the rate on foreign currency loans adjusted for devaluation of the domestic currency even though the rate of devaluation was set by the monetary authorities six months ahead and published in a little table tablita this was particularly puzzling in the case of uruguay which had practically perfect capital mobility we show that the reason rational economic agents were willing to pay high domestic interest rates rather than borrowing in foreign currency was that they realized that policy fundamentals were inconsistent with the sustainability of the exchange rate policy using data for uruguay we show that a second systematic component of expectations of devaluation is what we call the policy risk factor and modeled as a function of the fiscal and monetary variables jel 41 31

the economics of private sector training a survey of the literature abstract this survey organizes and summarizes existing theoretical work on private sector training the theoretical models focus on investment efficiency finance and turnover recent developments in the on the job training literature are characterized by strategic interaction between employers and employees and emphasize market imperfections

exchange market mayhem the antecedents and aftermath of speculative attacks exchange market mayhem the antecedents and aftermath of speculative attacks this paper evaluates the causes and consequences of episodes of turbulence in foreign exchange markets using data from 1959 through 1993 for twenty oecd countries we consider the antecedents and aftermath of devaluations and revaluations flotations fixings and speculative attacks which may not be successful we find that realignments of fixed exchange rates are alike devaluations are preceded by political instability budget and current account deficits and fast growth of money and prices revaluations are mirror images of devaluations speculative attacks resemble devaluations but money growth and inflation are more endemic and there is no last minute attempt to tighten monetary policy in contrast few consistent correlations link regime transitions like flotations or fixings to macroeconomic or political variables transitions between exchange rate regimes are largely idiosyncratic and are neither consistently provoked ex ante by systematic imbalances nor typically justified ex post by subsequent changes in policy we conclude that there are no clear early warning signals of many speculative attacks and no easy solutions for policy makers barry eichengreen andrew k rose and charles wyplosz

collapsing exchange rate regimes some linear examples abstract we construct a pair of linear examples to study the collapse time of a fixed exchange rate regime the first example is a perfect foresight continuous time model which allows calculation of the exact collapse time and the tracking of reserves the second example is a discrete time stochastic model which yields an endogenous probability distribution over the collapse time and produces a forward discount of the exchange rate

the exact timing of the collapse of an exchange rate regime and its impact on the relative price of traded goods as of february 28 1983 ninety four countries are classified as having a fixed exchange rate regime 38 are pegged to the u s dollar 13 to the french franc 14 to the special drawing right and 24 to different baskets of currencies the choice of a fixed exchange rate peg implies a specific monetary discipline namely monetary growth equal to the growth rate of the currency or currencies to which a country is pegged monetary policy is thus subject to an exchange rate rule rather than to either a monetary growth rule or alternatively to discretionary policy a fixed exchange rate is a specific case of an active crawling peg where the preannounced rate of change in the exchange rate is zero active crawling peg rules whereby the exchange rate is adjusted downward by a preannounced amount over a specified period of time have been practiced in various places particularly in latin america recent experiments include argentina beginning december 1978 brazil during the 1980 calendar year chile from february 1978 to june 1979 jamaica from may 1978 to may 1979 portugal from august 1977 to june 1979 and uruguay beginning october 1978 1 at times the prean

foreign exchange futures prices under fixed exchange rates abstract this paper develops three models for the determination of foreign exchange futures prices under fixed exchange rates and expectations of devaluation these models show that certain characteristics of futures prices behavior that have been used as proof of inefficiency may be present even if the market is efficient they also have several implications that are consistent with the observed behavior of mexican pesos futures prices

unintended impacts of public investments on private decisions the depletion of forested wetlands by affecting relative economic returns infrastructure investments can induce major changes in private land use the authors find that 30 percent of forested wetland depletion in the mississippi valley has resulted from private decisions induced by federal flood control projects despite explicit federal policy to preserve wetlands the model aggregates individual land use decisions using a parametric distribution of unobserved land quality dynamic simulations are used to quantify the impacts on wetlands of federal projects and other factors copyright 1990 by american economic association

appropriative water rights and the efficient allocation of resources this paper investigates the allocative efficiency of the appropriative system of water rights within the context of a simplified model of a water using industry at a long run competitive equilibrium for the industry and with a prohibition on the transfer of water rights among firms it is shown that 1 senior appropriators claim and use more water than junior appropriators 2 senior appropriators bear less risk than junior appropriators 3 the allocation of water and diversion capacitie 6among firms is inefficient being dominated by an equal sharing among firms the equal sharing allocation which is pareto optimal when diversion capacities are supplied by a competitive leasing industry can be achieved under the appropriative system if there are competitive markets in water rights and in leases for the use of diversion capacities an application of the coase theorem