cyclical analysis of key us aggregates during a period of macroeconomic stability 1953 1965 the cyclical response patterns of major financial and macroeconomic aggregates to money shocks in the us economy is estimated the data set is limited to the 1953 1965 period the nature of this temporal window is rare in us economic history growth was stable and noninflationary and there was a marked absence of major downturns inflationary expectations and supply shocks these facts permit a more reliable portrayal of the dynamics associated with conventional monetarism than would otherwise be the case instead of a formal structural model the methodology employs a four variable vector autoregression variables are chosen according to the traditional is lm model and include money the index of industrial production the cpi and various interest rates while the method is a theoretical the variables accord with accepted orthodoxy and the results allow theoretically plausible interpretation significant patterns of persistence are found in major macrofinance aggregates over the period money shocks p

investigating diesel market integration in france evidence from micro data abstract we use station level daily price observations collected over a period of eight years to study the extent of diesel market integration in france the empirical analysis starts off by examining the time series properties of diesel price ratios and then assesses how geographical separation and petrol station characteristics affect the speed of adjustment of prices to exogenous shocks our findings reveal that the great majority of diesel price ratios maintain stable long run relationships we also find that while price ratios take longer to adjust for pairs of petrol stations that are farther apart adjustment is quicker when pairs of petrol stations provide the same range of services and when they belong to the same owner

the incidence and efficiency costs of corporate taxation when corporate and noncorporate firms produce the same good one difficulty confronting harberger s celebrated model of the corporate income tax is how to treat noncorporate production in primarily corporate sectors and corporate production in primarily noncorporate sectors the paper presents a two good model with corporate and noncorporate production of both goods the incidence of corporate tax in our mutual production model can differ markedly from that in the harberger model the difference between the two models in deadweight loss is also striking with losses in the mutual production model many times larger than those in the harberger model

price discrimination and retail configuration the hypothesis that price discrimination based on willingness to pay for quality can occur in multifirm markets is confirmed using microdata on gasoline retailing a test that discriminates between price structures associated with discrimination and with cost driven competitive differentials is developed and implemented with controls for variation in outlet and market characteristics a second test based on profitability variation rejects a competitive peak load pricing explanation for the observed price dispersion the data suggest that price discrimination at the retail level adds at least 9 a gallon to the average price of full service gasoline

oil industry consolidation and refined product prices evidence from us wholesale gasoline terminals abstract our objective in this paper is to quantify the impact of petroleum industry consolidation on refined product prices controlling for other important factors that could also impact prices our empirical analysis focuses on the us petroleum refining industry using data on industry consolidation and wholesale gasoline prices collected over the interval 2000 2008 we match refinery units to wholesale city terminal gasoline markets and then estimate pooled cross section time series regressions to quantify the impact of petroleum industry consolidation on wholesale gasoline prices at city specific terminals the results of the empirical analysis of mergers are mixed showing that some petroleum industry mergers resulted in statistically significant increases in refined product prices others resulted in statistically significant declines and still others had no statistical impact at all our analysis of the effects of measures of market concentration one at the level of city specific wholesale terminals and another at the level of regional spot markets found evidence that less concentrated markets are associated with lower price levels

the impact of the corporate income tax evidence from state organizational form data abstract by taxing the income of corporate firms at a different rate than non corporate firms taxes can play an important role in a firm s choice of organizational form the sensitivity of the organizational form decision to tax rates provides a key indicator of the distortion created by the corporate income tax this paper uses new cross sectional data on organizational form choices across states compiled in the census of retail trade to estimate this sensitivity the results document a significant impact of the relative taxation of corporate to personal income on the share of real economic activity that is done by corporations and that the impact is many times larger than has been found in the previous empirical literature based on time series data the results show little impact however on the actual operations of firms such as their labor intensity wages and the like they do indicate that firms are able to exploit the progressivity of the corporate income tax system by dividing into numerous firms

on the dynamics of gasoline market integration in the united states evidence from a pair wise approach abstract this paper employs a pair wise approach to examine regional integration in the us gasoline market using gasoline price data at the state level over a period of more than two decades we find strong support for the view that the law of one price holds in regional markets as more than 80 of bivariate price differentials turn out to be stationary furthermore we uncover evidence that the speed at which prices converge to the long run equilibrium depends upon the distance between states asymmetries are also present in this relationship our findings suggest that the more similar are states with respect to taxation gas stations and refining capacity the faster is the speed of adjustment towards the long run equilibrium

corporate tax incidence and inefficiency when corporate and noncorporate goods are close substitutes i introduction in 1992 the treasury department released a study of corporate tax integration stressing the potential welfare gains of reducing or eliminating the differentials between taxation of capital in the corporate and noncorporate sector while this study was not accompanied by a specific tax recommendation such proposals have been made in the past and are likely to be made in the future for example the 1984 treasury proposals for tax reform included a partial dividend deduction and corporate tax integration was considered by the carter administration until recently the standard model used to study the corporate tax was the harberger 1962 model an important deficiency in this model is its inability to consider both corporate and noncorporate production of the same good empirical applications of the harberger model assume all firms producing a particular good or collection of goods face the same tax on capital namely the average tax on capital of firms actually producing the good collection of goods in question this procedure accommodates differential taxation of capital used in the production of different goods collections of goods but it totally ignores the differential taxation of capital of corporate and noncorporate firms producing the same good collection of goods hence the harberger approach precludes analysis of within industry substitution of noncorporate for corporate production in response to the corporate income tax such within industry substitution has potentially major implications for both the excess burden and incidence of the corporate tax the first rigorous critique of the harberger model was that of ebrill and hartman 1982 who point out that in the harberger model corporate firms cannot compete with noncorporate firms in producing the same good in the presence of the corporate income tax the common finesse in empirical work using the harberger model is to assume that all firms in a sector are identical and face the average rate of taxation in the industry since some corporate firms operate in the noncorporate sector and some noncorporate firms operate in the corporate sector the difference between these average tax wedges will typically be smaller than the actual corporate tax wedge in the extreme case where both industries are equally corporate intensive the tax wedge would be zero even though a corporate tax exists and corporate firms within an industry face a tax not faced by noncorporate firms secondly this approach does not allow within industry substitution of capital between corporate and noncorporate firms in a numerical application of his model harberger 1966 classifies industries into a noncorporate sector composed of housing agriculture and oil and gas that was subject to relatively low taxes and a corporate sector composed of the remaining industries that was subject to relatively high taxes gravelle and kotlikoff 1989 show that these two aggregated sectors are characterized by a mix of corporate and noncorporate production as well as a significant change in shares over time in the so called noncorporate sector 6 percent of output in 1957 and 20 percent of output in 1982 was produced by corporate firms oil and gas although classified in the noncorporate sector by harberger was and is primarily corporate it is however subject to low tax burdens because of very generous tax breaks similarly in the so called corporate sector 24 percent of output in 1957 and 14 percent of output in 1982 was produced by noncorporate firms two recent responses to this critique of the harberger model are gravelle and kotlikoff 1989 and fullerton and henderson 1989 fullerton and henderson simply introduce two capital inputs corporate capital and noncorporate capital in the production function of each industry these capital inputs along with labor are substitutable while this approach introduces some substitutability between corporate and noncorporate capital it is an ad hoc approach and does not model the separate production in each sector that actually occurs

market integration in us gasoline markets this paper analyses the degree of market integration in the retail gasoline markets in the united states after it was completely deregulated in 1981 the monthly average prices of unleaded regular gasoline excluding taxes from january 1983 to december of 1998 for five us petroleum administration defense districts were considered in the analysis there is evidence of a high degree of market integration in the gasoline markets as evidenced by the engel and granger and johansen cointegration tests but perfect market integration is rejected in all but a few cases

coveting thy neighbor s manufacturing the dilemma of state income apportionment abstract this paper investigates the economic impact of the apportionment formulae used to divide corporate income taxes among the states most apportionment formulae by including payroll turn the state corporate income tax at least partially into a payroll tax using panel data from 1978 1994 the results show that this distortion has an important effect on state level employment for the average state reducing the payroll weight from one third to one quarter increases manufacturing employment around 1 1 concentrated in durable goods manufacturing and with larger effects in the long run the results also suggest that apportionment changes have important negative externalities on other states on average the aggregate effects of apportionment formula changes are close to zero

reserves announcements and interest rates does monetary policy matter the author provides evidence on the perceived existence of strong liquidity effect the analysis is based on the response of the term structure of interest rates to the weekly federal reserve announcements of bank reserves during the post october 1979 period it is shown that unanticipated changes in the mix between borrowed and nonborrowed reserves cause expected real interest rates to change after the announcement because they provide information about a future change in the supply of money a precise model is developed and tested during subperiods of nonborrowed and borrowed reserves targeting by the fed

estimating the long run equilibrium relationship the case of city gate and residential natural gas prices this paper examines market cointegration of city gate and residential natural gas prices cointegration of gas prices across different segments of the industry provides evidence that deregulation has resulted into a more integrated competitive natural gas industry where gas prices converge into a long run equilibrium our results indicate prices further down the distribution line the final two points of consumption are cointegrated for a majority of the us states post open access and retail unbundling although we find little evidence of perfect market integration the two price series likewise converge to the long run equilibrium faster post open access and retail unbundling results relative to state level unbundling choice programs reveal mixed outcomes with a few states without retail unbundling exhibiting market integration while some states with full unbundling exhibiting non cointegration

corruption as a gamble abstract in the following model of corruption a simple game is set up whose players are a government official granting a permit conditional on a test and a candidate requesting the permit the game is solved under different assumptions as to the information sets of the players perfect information asymmetric information and imperfect information on both sides in the latter case after characterizing the solution and presenting some important comparative statics results the paper moves on to show the emergence of multiple equilibria in corruption illustrating the interaction of corruption at different hierarchical levels of an administration

exogeneity tests of market boundaries applied to petroleum products us antitrust law makes market definition and the calculation of marketshare statistics an integral part of the determination of the anticompetitive impact of a merger because markets frequently overlap however market definition is rarely an easy task a statistical test that can be used as an aid in defining markets is proposed here time series techniques are used to test if price in one region is exogenous to the process that determines price in another the rejection of exogeneity can be an indication that the two regions are economically linked and thus may belong to a common geographic market the test is applied to petroleumproduct prices from various regions of the united states time series techniques have long been appreciated by macroeconomists the uses to which they have been put range from testing for the exogeneity of variables used in the construction of macroeconomic models sims 1972 for example to discovering empirical regularities in macroeconomic data without imposing a priori structure on the observations ashenfelter and card 1982 for example in contrast these techniques have not been so

monetary policy and short term interest rates an efficient markets rational expectations approach this paper is an application of efficient markets rational expectations theory to analyze empirically the relationship of money supply growth and short term interest rates a hotly debated issue in the literature this approach has the advantage over earlier research on this subject in that it imposes a theoretical structure that allows easier interpretation of the empirical results as well as more powerful statistical tests the empirical results uniformly do not support the proposition that increases in money growth are correlated with declines in short rates the relationship between money supply growth and nominal interest rates is a hotly debated issue in the literature one view associated with keynesian structural macromodels has an increase in money growth leading at least in the short and medium runs to a decline in interest rates 2 an alternative view associated with milton friedman 6 7 indicates that interest rates might rise in response to higher money growth because there is a rise in inflationary expectations and hence a rise in interest rates through a fisher 5 effect

on the extent of the market wholesale gasoline in the northeastern united states this paper develops the classical view of the extent of markets by introducing explicitly in the analysis the concept of arbitrage costs arbitrage or transaction costs imply that market boundaries are essentially stochastic while a set of products or regions may have binding arbitrage conditions i e may be in the same market at a given point in time they may not at another thus in defining a market the probability that a set of agents or regions would h3ve binding arbitrage conditions has to be assessed this paper develops an econometric methodology to estimate the transaction costs required to arbitrage among a given set of products as well as the probability that that set of products would be bound by binding arbitrage condi tions finally the methodology is applied to wholesale gasoline in the northeastern part of the united states address for communications pablo t spiller herbert hoover memorl l bldg 9348 stanford ca 94305

how policies affect international biofuel price linkages abstract we estimate the role of biofuel policies in determining which country is the price leader in world biofuel markets using a cointegration analysis and a vector error correction vec model weekly prices are analyzed for the eu us and brazilian ethanol and biodiesel markets in the 2002 2010 and 2005 2010 time periods respectively the us blender s tax credit and brazil s consumer tax exemption are found to play a role in determining the ethanol prices in other countries for biodiesel our results demonstrate that eu policies the consumer tax exemption and blending target tend to determine the world biodiesel price

economic integration across latin america evidence from labor markets 1990 2013 combining macroeconomic and microeconomic data and three indicators of international market integration this paper assesses the degree to which latin american labor markets are integrated the results suggest that relative to east asia latin american labor markets are somewhat more integrated but considerable differences across countries persist in addition the evidence indicates that the degree of labor market integration across latin american borders is significantly less than that of labor markets within mexico and within the united states in two of the three indicators these differences may suggest opportunities for efficiency gains from further labor market integration

monetary policy and short term interest rates new evidence on the liquidity effect abstract there is evidence of a strong liquidity effect in the period october 1979 october 1982 when the federal reserve targeted the growth rate of m 1 and thus monetary surprises were more exogenous than they were in other periods

the impact of money on short term interest rates this study reviews empirical evidence from four research methods related to the impact of money on short term nominal rates the studies consistently fail to find evidence supporting the much hypothesized short term negative relationship between money and nominal rates since at least april 1975 reasons for the absence of a negative relationship include the tendency of financial markets to anticipate corrective action by the fed whenever ml deviates from targeted growth ranges and a rapid adjustment of inflationary expectations to changes in money growth

taxes financial decisions and organizational form evidence from publicly traded partnerships abstract publicly traded partnerships ptps also known as master limited partnerships are similar to u s corporations yet they are not subject to corporate taxes given their mixture of corporate and partnership characteristics ptps provide an experiment for studying taxation and firm financial decisions this paper compares the financial structure and dividend policies of ptps and corporations in the oil and gas exploration industry the results are consistent with hypotheses about taxes and financial decisions controlling for other factors ptps pay more dividends and borrow less than similar corporations

open access and the evolution of the u s spot market for natural gas federal regulations promoting open access transportation dramatically altered the organizational structure of the u s market for natural gas in the 1980s generally unbundling the merchant and transport functions of interstate pipelines an empirical analysis of wellhead spot prices is undertaken to examine the effect of open access on the geographic scope of the spot market using monthly spot price data from 1984 91 three statistical tests are applied and compared price correlations granger causality and cointegration we find that open access integrated the regional wellhead markets into a national competitive market for natural gas the effects of unbundling on contracts for natural gas are then investigated incentives for long term contracts between pipelines and producers are shown to be effectively removed by the introduction of competitive buying and selling of gas at the wellhead through open access