the market value of outstanding government debt 1919 1975 abstract several new series on the market value of outstanding government debt are reported and their methods of construction described the new series on federal debt are compared with other existing estimates and are shown to be markedly superior to them

seasonality and the estimation of dynamic demand systems some exploratory results abstract this note presents empirical comparisons of alternative ways of introducing seasonal fluctuations in theoretically plausible dynamic demand systems derived from non separable utility functions

on the substitutability between private consumer expenditure and government spending in canada the purpose of this paper is twofold first to examine whether there is any substitutability between private consumer expendit ure and government spending in canada second to test the ricardian equivalence principle both hypotheses are nested within the life cyc le rational expectations model the results indicate that the joint h ypothesis of rational expectations and ricardian equivalence can not be rejected by the data moreover they suggest that government spend ing substitutes poorly for private consumer expenditure these result s imply that temporary increases in government spending will result i n an expansion of real output

likelihood estimation of consumer preferences in choice based conjoint analysis abstract in marketing research the measurement of individual preferences and assessment of utility functions have long traditions conjoint analysis and particularly choice based conjoint analysis cbc is frequently employed for such measurement the world today appears increasingly customer or user oriented wherefore research intensity in conjoint analysis is rapidly increasing in various fields or ms being no exception although several optimization based approaches have been suggested since the introduction of the hierarchical bayes hb method for estimating cbc utility functions recent comparisons indicate that challenging hb is hard based on likelihood maximization we propose a method called lm and compare its performance with hb using twelve field data sets performance comparisons are based on holdout validation i e predictive performance average performance of lm indicates an improvement over hb and the difference is statistically significant we also use simulation based data sets to compare the performance for parameter recovery in terms of both predictive performance and rmse a smaller number of questions in cbc appears to favor lm over hb

electoral uncertainty fiscal policy and macroeconomic fluctuations abstract in this paper we study the link between elections fiscal policy and aggregate fluctuations the setup is a stylized dynamic stochastic general equilibrium model incorporating both technology and political re election shocks the latter are incorporated via a two party model with elections the main theoretical prediction is that forward looking incumbents with uncertain prospects of re election find it optimal to follow relatively shortsighted fiscal policies and that this hurts capital accumulation our econometric estimation using u s data finds a statistically significant link between electoral uncertainty and policy instruments and in turn macroeconomic outcomes

an empirical model of labor supply in a life cycle setting this paper formulates and estimates a structural intertemporal model of labor supply using theoretical characterizations derived from an economic model of lifetime behavior a two step empirical analysis yields estimates of intertemporal and uncompensated substitution effects which provide the information needed to predict the response of hours of work to life cycle wage growth and shifts in the lifetime wage path

the effects of general price controls in the united states during world war ii this paper estimates a general equilibrium model of suppressed inflation using quarterly u s data for the sample period 1942 iv 48 ii it finds that the pricelevel was reduced by at least 30 4 percent and that this suppression of inflation reduced employment by at least 11 7 percent and output by at least 7 1 percent it also finds that monetary policy could have been equally successful in combating inflation but would not have had the side effect of reducing employment and output

on the impact of government spending on consumption patterns abstract this study examines the impact of government spending on private consumer expenditure via a theoretically plausible static demand system our results are fully consistent with the evidence presented in studies based on macroeconomic models

issues in the use of ratings based versus choice based conjoint analysis in operations management research conjoint analysis has played an important role in helping make a number of operations management decisions including product and service design supplier selection and service operations capacity many recent advances in this area have raised questions about the most appropriate form of conjoint analysis for this research we review recent developments in the literature and provide new evidence on how the choice between ratings and choice based conjoint models might affect the estimates of customer demand used in operations management models the biggest systematic difference between ratings based rb and choice based cb parameters is consistent with the compatibility effect i e some enriched attributes like brand name tend to be more important in rb models and some comparable attributes like price are likely to be more important in cb models still there were reasonably small differences between choice and ratings based parameters parameter similarity was also seen in the lack of differences both in the choice share validations when the keep on shopping alternative was not considered and in the profiles that were predicted to maximize choice shares this suggests that the two approaches will produce similar estimates of the relative importance of various attributes in spite of demonstrated success with each method several reasons lead us to recommend the use of hierarchical bayesian choice based conjoint models first the slightly higher individual hit rate validations give us greater confidence in predictive accuracy overall as well as an increased ability to target individual customers additionally the greater ease of modeling both changes in market size and competitive reactions are attractive benefits of choice based models

tax disturbances and real economic activity in the postwar united states abstract this paper investigates the macroeconomic effects of cyclical fluctuations in marginal tax rates it finds that systematically including tax variables in a standard real business cycle model substantially improves the model s ability to reproduce basic facts about postwar u s business cycle fluctuations in particular modeling fluctuations in personal and corporate income tax rates increases the model s predicted relative variability of hours and decreases its predicted correlation between hours and average productivity fluctuations in tax rates produce large substitution effects that alter the leisure labor supply decision

incentive aligned conjoint analysis abstract because most conjoint studies are conducted in hypothetical situations with no consumption consequences for the participants the extent to which the studies are able to uncover true consumer preference structures is questionable experimental economics literature with its emphasis on incentive alignment and hypothetical bias suggests that more realistic incentive aligned studies result in stronger out of sample predictive performance of actual purchase behaviors and provide better estimates of consumer preference structures than do hypothetical studies to test this hypothesis the authors design an experiment with conventional hypothetical conditions and parallel incentive aligned counterparts using chinese dinner specials as the context the authors conduct a field experiment in a chinese restaurant during dinnertime the results provide strong evidence in favor of incentive aligned choice conjoint analysis in that incentive aligned choice conjoint outperforms hypothetical choice conjo

seasonal fluctuations and the life cycle permanent income model of consumption this paper examines a new possible explanation for the recent rejections of the life cycle permanent income model of consumption the treatment of seasonal fluctuations the paper shows that when the seasonal fluctuations in consumption purchases are included in an analysis of the life cycle permanent income model there is no evidence in the aggregate data against the model the estimates of the parameters of agents utility functions obtained with seasonally unadjusted data are plausible and the unadjusted data do not reject the overidentifying restrictions on the model

output effects of government purchases the theoretical analysis focuses on the distinction between temporary and permanent movements in government purchases under plausible conditions the temporary case involves an output response that is positive less than one to one with the change in government purchases and larger than that generated by an equal sized but permanent shift in purchase the equilibrium real rate of return rise in the temporary case but changes little in the permanent one defense purchases are divided empirically into permanent and temporary components by considering the role of temporary wars no temporary shifts in nondefense purchases were isolated empirical results verify an expansionary output effect for temporary purchases that exceeds that of permanent purchases the results for some other expectational hypotheses are found to be generally supportive of the theory

augmenting conjoint analysis to estimate consumer reservation price consumer reservation price is a key concept in marketing and economics theoretically this concept has been instrumental in studying consumer purchase decisions competitive pricing strategies and welfare economics managerially knowledge of consumer reservation prices is critical for implementing many pricing tactics such as bundling tar get promotions nonlinear pricing and one to one pricing and for assessing the impact of marketing strategy on demand despite the practical and theoretical importance of this concept its measurement at the individual level in a practical setting proves elusive we propose a conjoint based approach to estimate consumer level reservation prices this approach integrates the preference estimation of traditional conjoint with the economic theory of consumer choice this integration augments the capability of traditional conjoint such that consumers reservation prices for a product can be derived directly from the individuallevel estimates of conjoint coefficients with this augmentation we can model a consumer s decision of not only which product to buy but also whether to buy at all in a category thus we can simulate simultaneously three effects that a change in price or the introduction of a new product may generate in a market the customer switching effect the cannibalization effect and the market expansion effect we show in a pilot application how this approach can aid product and pricing decisions we also demonstrate the predictive validity of our approach using data from a commercial study of automobile batteries

estimating choice probabilities in multiattribute decision making the bradley terry luce btl model is adapted and applied to choice problems arising in multiattribute decision making and is compared with three other models in an experiment dealing with employer choice in a job seeking context results of the experiment indicate that the btl adaptation provides a reasonably accurate model of subjects subjective probabilities as elicited by the constant sum scaling technique

government debt and the demand for money an extreme bound analysis m keivan deravi charles e hegji and h dean moberly the article provides evidence that there is a relationship between government debt and interest rates via the demand for money this relationship is examined through the wealth effect of government debt on money demand and the robustness of the results is tested by the use of extreme bound analysis in addition to standard econometric techniques we find that ols regression shows government debt affecting the demand for money positively implying that federal government debt is net wealth in addition the extreme bound analysis shows that the estimates of the government debt coefficient are robust under alternative specifications of the goldfeld model i introduction this paper studies the relationship between government debt and interest rates the approach used in this paper differs from previous studies in two ways first this relationship is examined through the wealth effect of government debt on the demand for money second the robustness of the results is tested by use of extreme bound analysis as an alternative to standard econometric techniques theoretically there is no clear cut consensus as to whether or not government debt should be net wealth the argument used most often is that government debt will be net wealth if future tax liabilities to service the debt are for the aggregate economy only partially discounted two explanations for this partial discounting are offered first in dealing with finite lived individuals thompson 1967 assumes that the average remaining lifetime of current taxpayers is shorter than for future interest payments on the federal debt in this situation the net present value of a stream of equal interest payments and taxes will be positive as a counter argument barro 1974 has shown that current generations can act effectively as if they are infinite lived when they are linked to future generations through a series of pairwise transfers of wealth here the realization by current generations that tax liabilities will be left to future generations extends the lifetime of the relevant stream of tax liabilities for debt service government debt is then wealth neutral mundell 1971 provides a second reason for partial discounting by assuming that capital markets are imperfect and that the relevant discount rate for tax liabilities is higher than the rate for interest payments these discount rates are respectively thought of as applying to high risk of loan default and low risk of loan default individuals this difference in discount rates creates a positive wealth effect since under mundell s assumptions government debt held by taxpayers involves a loan from low discount rate to high discount rate individuals as barro 1974 has again countered this wealth effect will exist only to the extent that the government is more efficient at providing such a loan than the private sector finally barro 1974 kormendi 1983 and later aschauer 1985 advance an argument as to why government debt might be negative net wealth suppose there is considerable uncertainty about the intertemporal and cross sectional burden of the future tax liability necessary to service the debt in this case the certainty equivalent value of these future taxes might exceed the certainty equivalent value of the future income stream of the debt so that government debt would be negative net wealth the majority of the empirical studies of the net wealth induced linkage between government debt and interest rates have attempted to measure this relationship using consumption functions if privately owned government debt is net wealth the wealth effect of this debt working through a keynesian consumption function will be positive so that increased government borrowing will result in increased current consumption and interest rates several studies have assessed the relationship between government borrowing and consumption or interest rates via this mechanism

modeling competitive pricing and market share anatomy of a decision support system even with today s high emphasis on management decision support systems relatively little has been published on the motivations tribulations and post mortems that generally accompany the development of such systems this paper reports in a mixture of narrative style and more formal model exposition how a computerized decision support system for optimal price determination was developed implemented and finally applied to a broad range of industry problems

temporary and permanent government spending in an open economy some evidence for the united kingdom abstract this paper investigates the effects of government spending changes on a small open economy in an intertemporal substitution framework if agents internalize the government s budget constraint temporary and permanent spending have different implications for wealth and consequently different effects on output and the balance of trade estimation of these effects isolates the different channels through which government spending can influence economic activity main findings for the united kingdom are that government spending i crowds out private spending ii is directly productive and iii when rising permanently leads to a negative wealth effect which induces a large rise in work effort

the permanent income hypothesis estimation and testing by instrumental variables the permanent income hypothesis with rational expectation is restated estimated and tested by an instrumental variables technique on the postwar u s aggregate time series data the hypothesis is accepted on a consumption series which includes service flows from consumer durables if the consumption series is the one in the national income and product accounts the hypothesis is decisively rejected an explanation is suggested to reconcile the conflicting test results

constructive consumer choice processes consumer decision making has been a focal interest in consumer research and consideration of current marketplace trends e g technological change an information explosion indicates that this topic will continue to be critically important we argue that consumer choice is inherently constructive due to limited processing capacity consumers often do not have well defined existing preferences but construct them using a variety of strategies contingent on task demands after describing constructive choice consumer decision tasks and decision strategies we provide an integrative framework for understanding constructive choice review evidence for constructive consumer choice in light of that framework and identify knowledge gaps that suggest opportunities for additional research

how mainstream consumers think about consumer rights and responsibilities this article examines how mainstream consumer thinking is structured in order to form opinions about consumer rights government regulation and individual responsibility in the credit card setting a broader political ideology one that intertwines consumption practices with a causal narrative of business society and state infuses consumer opinions the article finds that four sociohistorically shaped political myths compete in this ideological space individual autonomy social equality consumer sovereignty and corporate dominance consumers negotiate tensions between each of these four myths for example individual autonomy versus social equality and consumer sovereignty versus corporate dominance this ideology triggers moral judgments among consumers about self and others that inform their perceptions of deservedness and apportions degrees of responsibility and blame across consumer business and government participants

countervailing market responses to corporate co optation and the ideological recruitment of consumption communities from a conventional theoretical standpoint the corporatization of the organic food movement is an example of co optation co optation theory conceptualizes the commercial marketplace as an ideological force that assimilates the symbols and practices of a counterculture into dominant norms our alternative argument is that co optation can generate a countervailing market response that actively promotes the oppositional aspects of a counterculture attenuated by the process of commercial mainstreaming to develop this theoretical argument we analyze community supported agriculture which has emerged in response to the corporate co optation of the organic food movement we conclude by discussing how tacit political ideologies structure consumption communities

social security and private saving new time series evidence in an important article in the journal of political economy martin feldstein 1974 estimated that the introduction of the social security system had reduced personal saving by 50 percent with serious consequences for capital formation and output his conclusion was based on a consumer expenditure function estimated with u s time series data and incorporating a social security wealth variable of his construction this paper presents new evidence that casts considerable doubt on feldstein s conclusion first the social security wealth variable used by feldstein was seriously flawed as a result of a computer programming error simply correcting this error substantially changes the estimated effect of social security on saving second the statistical evidence depends upon assumptions which are embedded in the construction of the social security wealth variable assumptions that are not demonstrably preferable and are in some cases inferior to alternative assumptions these assumptions relate first to how individuals form their expectations about the social security benefits they expect to receive and the social security taxes they expect to pay and second to estimates of the number of workers dependent wives and surviving

aggregate consumption function and public social security the first time series study for a developing country turkey this article is the first attempt in the literature to investigate the effects of public social security on aggregate consumption in a time series setting for a developing country turkey that has one of the most generous social security systems in the organization for economic cooperation and development oecd region in order to quantify the social security variable this article uses the social security wealth ssw series calculated for turkey in a separate study this study indicates that ssw is the largest part of the household wealth in turkey and therefore should not be ignored in the aggregate consumption studies the results show that its effect on consumption is positive and robust

demographic variables in demand analysis in this paper the authors discuss five procedures for incorporating demographic variables into theoretically plausible demand systems translating scaling and the gorman reverse gorman and implicit prais houthakker procedures these five procedures are used to incorporate a single demographic variable the number of children in a household into the generalized ces demand system using household budget data for the united kingdom for the period 1966 1972 excerpt

goal based construction of preferences task goals and the prominence effect preferences inferred from choice are more likely to favor the alternative that is superior with respect to the prominent most important or salient attribute than are preferences inferred from matching direct tradeoff judgments this prominence effect violates standard models of rational choice and complicates the task of measuring preferences in this article we propose a new task goal hypothesis regarding the prominence effect the prominent attribute receives more weight in tasks whose goal is to differentiate among options than in tasks whose goal is to equate options we use this hypothesis to generalize the prominence effect beyond choice and matching to several additional tasks including the choice based matching and difference comparison methods that are widely employed in decision analysis the results of three studies provide strong support for the task goal account of the prominence effect and cast doubt on competing explanations we discuss the implications of these findings for descriptive decision theory and for preference measurement in decision analysis public policy and marketing

government debt government spending and private sector behavior a current period tax reduction financed by issuing government debt shifts the timing of tax collection from the current period to the future if the future taxes implied by government debt are not fully perceived and discounted by the private sector there will be a net wealth effect that increases private sector consumption thus reducing capital accumulation and growth if on the other hand the implied future taxes are perceived and discounted by the private sector the current period tax reduction will be used to increase private saving to pay for the future taxes and government debt will be absorbed without any real effects on the economy the effects of government spending financed by current period taxation also depend upon private sector perceptions 2 if the benefits of government spending are ignored private sector consumption will decrease in accordance with the reduction in permanent disposable income to the extent that government spending is on consumption type goods that are perceived as substitutes for privately provided consumption goods there will be a relatively greater reduction in private sector consumption to the extent that government spending is on investment type goods yielding future goods and services that are perceived as substitutes for future privately provided consumption goods there will be a relatively smaller reduction in private sector consumption the standard approach to modeling private sector consumption saving behavior involves a rather asymmetric set of assumptions as to how the private sector perceives the various elements of government fiscal policy 3 current period taxes are assumed to be fully perceived but current period government spending is implicitly assumed to be completely ignored by the private sector in considering permanent personal disposable income the private sector is assumed to be forward looking in its assessment of income and taxation the stock of government debt is nevertheless included as part of the stock of private wealth the implicit assumption associate professor of economics graduate school of business university of chicago 1101 east 58th street chicago il 60637 i thank eugene fama levis kochin michael mussa paul evans and an anonymous referee for helpful comments i am particularly grateful to daniel benjamin for contributing many hours of discussion and laura lahaye who was a research assistant and valuable adviser on earlier drafts the theoretical debate on the burden of the debt has been long standing gerald o driscoll 1977 documents ricardo s nineteenth century position robert barro 1974 reopened the debate by introducing the fundamental issue of intergenerational transfers also discussed in merton miller and charles upton 1974 the empirical side of the debate was initiated by levis kochin s 1974 attempt to test for the effects of deficits on consumption and by martin feldstein s 1974 attempt to test for the effects of social security wealth on consumption other empirical contributions include jess yawitz and laurence meyer 1976 myself 1978 and j earnest tanner 1978 1979 with respect to the effects of government deficits and debt and barro 1978 michael darby 1979 and dean leimer and selig lesnoy 1982 with respect to social security wealth see also interesting recent papers by john seater 1982 who generates detailed tests of the effects of deficits and debt on consumption charles plosser 1982 who explores the effects of government spending and debt shocks on interest rates and feldstein 1982 who attempts tests similar to some in this paper see fn 29 2martin bailey s 1962 1971 development of the effects of government spending on private consumption and aggregate economic activity is the seminal contribution paul david and john scadding 1974 extend bailey s ideas and provide some supporting empirical evidence more recently willem buiter 1977 and myself 1978 developed models based on bailey s earlier work barro 1981 has an interesting paper on related issues see also david aschauer 1982 3the standard approach incorporates fiscal policy through the concept of personal disposable income and by including the stock of government debt as part of personal wealth see for example the empirical specification of albert ando and franco modigliani 1963 which has been the basis of most empirical consumption studies since and feldstein 1974 for one of the more influential papers based on the ando modigliani specification

labor supply taxes and government spending a microeconometric analysis the effect of government spending on labor supply behavior is critical to predicting the balanced budget effect of income taxes and to estimating the marginal social cost of public funds yet its very existence not to mention direction and magnitude has not been empirically investigated this research estimates a labor supply function that incorporates income taxation and government spending using microeconomic data for men and women the empirical results suggest that public sector spending may have a significant effect on labor supply thereby leading to estimates of the marginal social cost of public funds that differ from those typically calculated

when do changes in consumer preferences make forecasts from choice based conjoint models unreliable forecasting the sales or market share of new products is a major challenge as there is little or no sales history with which to estimate levels and trends choice based conjoint cbc is one of the most common approaches used to forecast new products sales however the accuracy of forecasts based on cbc models may be reduced when consumers preferences for the attributes of products are labile despite this there is a lack of research on the extent to which lability can impair accuracy when the coefficients estimated in cbc models are assumed to be constant over time this paper aims to address this research gap by investigating the prevalence of lability for consumer durable products and its potential impact on the accuracy of forecasts there are reasons to expect that lability may be particularly evident where a product is subject to rapid technological change and has a short product life cycle we carried out a longitudinal survey of the preferences of 161 potential consumers relating to four different types of products we established that for both functional and innovative products i the cbc models vary significantly over time indicating changes in consumer preferences and ii such changes may cause large differences in forecasts of the probabilities that consumers will purchase particular brands of products hence employing models where coefficients do not change over time can potentially lead to inaccurate market share forecasts for high tech short life cycle products that are launched even a short time after the choice based modelling has been conducted

aggregate consumption and deficit financing an attempt to separate permanent from transitory effects many previous empirical studies of the ricardian equivalence hypothesis have found a relatively high degree of future tax liability discounting such that current deficits appear to have relatively little or no influence on current consumption demand however the validity of these empirical estimates can be questioned as they may not have adequately distinguished between permanent and transitory income flows this paper attempts to address this problem by using cycle averaging as a simple method of capturing the permanent path of income over time the empirical evidence generated in this paper rejects the strict debt neutrality proposition of the ricardian equivalence hypothesis

sensitivity of consumption to income and to government purchases some specification and estimation issues the paper derives a nonlinear error correction model ecm for consumption and shows that existing models that are based on quadratic utility combine permanent income and current income consumption and nest or could nest the hypothesis of substitutability between private consumption and government purchases are special cases of the ecm the importance of some econometric issues that have not received proper attention in the literature is demonstrated by estimating the models using us aggregate quarterly data 1953 1 1992 4 the evidence suggests that the ecm produces more reliable estimates than do the existing restrictive models

government debt economic activity and transmission of economic disturbances this paper analyzes the effects of government debt on output and the trade bala nce in a two country rational expectations model of the world economy it is shown that perceived changes in government debt do not affect the level of economic activity but unperceived changes in the home country s government debt are correlated positively with its output and negatively with its trade balance unperceived increases in the foreign country s government debt however have a positive impact on the home country s output and the trade balance empirical evidence from the u s is consistent with most of the implications of the model copyright 1987 by ohio state university press

product development decisions a review of the literature this paper is a review of research in product development which we define as the transformation of a market opportunity into a product available for sale our review is broad encompassing work in the academic fields of marketing operations management and engineering design the value of this breadth is in conveying the shape of the entire research landscape we focus on product development projects within a single firm we also devote our attention to the development of physical goods although much of the work we describe applies to products of all kinds we look inside the black box of product development at the fundamentaldecisions that are made by intention or default in doing so we adopt the perspective of product development as a deliberate business process involving hundreds of decisions many of which can be usefully supported by knowledge and tools we contrast this approach to prior reviews of the literature which tend to examine the importance of environmental and contextual variables such as market growth rate the competitive environment or the level of top management support

ricardian equivalence and the public and private saving nexus in india abstractthis study tests the ricardian equivalence theorem ret and examines the responsiveness of private saving to public saving in india most estimators do not provide support for the empirical validity of ret and long run cointegration between public and private saving the increases in household saving hhs seem to have been engendered by the provision of saving incentives institution of saving schemes self driven motivation to save and the precautionary accumulations induced by uncovered uncertainties in incomes rather than by ricardian behaviour of households the self imposed aversion to debt and debt bequest borrowing and liquidity constraints and the intertemporal smoothing of consumption have been the added catalysts that contributed to the increases in hhs the households with binding borrowing constraints inadequate or no insurance and uncovered uncertainties in incomes seem to have been saving more to pay for higher inflation tax the fiscal consolidation and generation of public s

willingness to pay estimation with choice based conjoint analysis addressing extreme response behavior with individually adapted designs the increasing consideration of behavioral aspects in operations management models has prompted greater use of choice based conjoint cbc studies in operations research such studies can elicit consumers willingness to pay wtp a core input for many optimization models however optimization models can yield valid results only if consumers wtp is estimated accurately a simulation study and two field studies show that extreme response behavior in cbc studies such that consumers always or never choose the no purchase option harms the validity of wtp estimates reporting the share of consumers who always and never select the no purchase option allows for detecting extreme response behavior this study suggests an individually adapted design that avoids extreme response behavior and thus significantly improves wtp estimation accuracy

credit cards as lifestyle facilitators credit cards are an increasingly essential technology but they carry with them the paradoxical capacity to propel consumers along lifestyle trajectories of marketplace freedom or constraint we analyze accounts provided by consumers credit counselors and participants in a credit counseling seminar in order to develop a differentiated theory of lifestyle facilitation through credit card practice the skills and tastes expressed by credit card practice help distinguish between the lifestyles of those with higher cultural capital relative to those with lower cultural capital differences in lifestyle regulation practice are posited to originate in cultural discourses related to entitlement and frugality

fiscal policy and private investment expenditure a study of australia and the united states the effect of government spending on private sector s investment and profitability is examined within the context of an open economy macro model the empirical results of the study indicate that the private investment expenditure in australia and the united states is crowed out by government investment and government consumption respectively these results are in conflict with the hypothesis of fiscal neutrality in addition the empirical results of corporate profitability provide no support for the complementary relationship between public and private investment expenditure

government financing decisions and asset returns abstract this paper presents an empirical investigation of the relation between government financing decisions and asset returns in particular the focus is on whether a substitution of debt financing for tax financing of a given level of expenditures is associated with an increase in interest rates the paper brings a different perspective to empirical investigations of government fiscal policies by examining the response of asset prices in an efficient capital market to such policies rather than focusing on aggregate consumption behavior the results are consistent with the idea that asset prices are unrelated to how the government finances its expenditures the results however also indicate that the capital market is not indifferent with respect to the level of government expenditures as higher interest rates are associated with increases in government purchases

real world performance of choice based conjoint models conjoint analysis is one of the most important tools to support product development pricing and positioning decisions in management practice for this purpose various models have been developed it is widely accepted that models that take consumer heterogeneity into account outperform aggregate models in terms of hold out tasks the aim of our study is to investigate empirically whether predictions of choice based conjoint models which incorporate heterogeneity can successfully be generalized to a whole market to date no studies exist that examine the real world performance of choice based conjoint models by use of aggregate scanner panel data our analysis is based on four commercial choice based conjoint pricing studies including a total of 43 stock keeping units sku and the corresponding weekly scanning data for approximately two years an aggregate model serves as a benchmark for the performance of two models that take heterogeneity into account hierarchical bayes and latent class our empirical analysis demonstrates that in contrast to the performance using hold out tasks the real world performance of hierarchical bayes and latent class is similar to the performance of the aggregate model our results indicate that heterogeneity cannot be generalized to a whole market and suggest that aggregate models are sufficient to predict market shares author s abstract

fiscal policy and aggregate demand reply there appear to be two main conclusions of fred c graham s paper first he argues that the empirical evidence in aschauer 1985 supporting the permanent income hypothesis and a significant degree of substitutability between private consumption and government spending is specific to the sample period and to the limited nature of aschauer s unrestricted alternative model graham 1993 p 666 second after disaggregating government spending into various components he finds limited support for the hypothesis that federal nondefense spending as opposed to total federal state and local spending substitutes for private consumption the focus of my 1985 paper was on deriving a test of the ricardian equivalence theorem within an euler equation framework graham seems to have missed this point indeed there is no evidence in his paper to support the keynesian view that tax cuts stimulate private consumption and aggregate demand admittedly graham finds that changes in disposable income lead to changes in private consumption but this is not enough to support the standard keynesian analysis specifically it is necessary to determine whether tax changes per se induce changes in consumption spending consider a model similar to graham s equation 4 namely