Donald H. Dutkowsky

Sweep Programs: The Fall of M1 and Rebirth of the Medium of Exchange

This paper investigates the effect of sweep programs on M1 using dynamic simulations of money demand over 1994-2000. The postsample period constitutes when sweep programs have been in effect. All models generate predictions systematically above reported M1. Using data on newly initiated programs, test findings indicate that sweeps account for the overprediction within the conventional money demand model with a long-term interest rate. We construct a medium of exchange measure, M/S, equal to M1 plus estimated holdings of sweep balances. M/S velocity compares favorably with that of broader aggregates. Evidence indicates cointegration within M/S money demand.

The Effect of Cigarette Taxation on Prices: An Empirical Analysis Using Local-Level Data

This article combines new, author-collected tax data with data both from the American Chamber of Commerce Researchers Association cost of living index and from the Tax Burden on Tobacco to measure the relative effects of city, county, and state excise cigarette taxation on cigarette prices. The results indicate that a

Labor adjustment costs in a destination country: the case of Mexico

1 increase in the state excise cigarette tax increases cigarette prices between

The Demand For Money: A Structural Econometric Investigation

1.10 and

The Demand for Money: A Rational Expectations Approach

1.14, but that a

Intertemporal Substitution, Money, and Aggregate Labor Supply

1 increase in a city- or county-level excise tax increases prices by

Money, output and prices in Turkey

1.07. These findings are similar between premium and generic cigarette brands. Additionally, urban areas located near states with lower cigarette taxes tend to have lower cigarette prices relative to urban areas located near states with the same or higher tax rates.

SHOULD A HIGH SCHOOL ADOPT ADVANCED PLACEMENT OR A CONCURRENT ENROLLMENT PROGRAM? AN EXPECTED BENEFIT APPROACH

Abstract Rodrik [Rodrik, D., 1997. Has Globalization Gone Too Far? Institute for International Economics, Washington, DC.] argues that firms use the threat of moving to low-cost (generally developing) markets to make employment more flexible at home. Although a large literature documents significant adjustment costs in developed countries, we know little about their size and importance in developing countries that receive capital. We employ monthly Mexican data from the GATT–NAFTA period to estimate adjustment costs in Mexico. We consider adjustment costs for production and non-production workers and allow for asymmetry. While patterns of adjustment costs are similar as in developed countries, adjustment costs in Mexico are generally an order of magnitude smaller.

Dynamic implicit cost and Discount Window borrowing: An empirical investigation

This study empirically investigates dynamic microfoundations for the conventional static money demand equation. An intertemporal substitution model with the addilog utility function yields a money demand relationship that closely approximates the double log specification. Results from previous empirical studies largely support the derived equation. Estimations with quarterly U.S. data support cointegration among real per capita M1 and consumption, and an after-tax long-term interest rate for the post-1980 period. Estimated short-run intertemporal interest rate elasticities of consumption vary from ?0.26 to ?0.93. Estimated long-run elasticities of substitution between consumption and money range from ?0.26 to ?0.41.

Teaching college economics in the high schools: The role of concurrent enrollment programs

The authors derive a model of money demand for an optimizing consumer with rational expectations in a discrete time infinte hortizon framework under uncertainty. Mone y demand responds to unanticipated changes in income, one period expe ctations of future bond and money interest rates, unanticipated curre nt interest rates, and past anticipations of current rates. The deriv ed consumption function mirrors money demand behavior. Joint estimati on of the consumption and money demand equations by weighted nonlinea r least squares corroborates the predicted effects, particularly inco me neutrality. This money demand model substantially outperforms a co nventional specification in post-sample simulation over 1975-85. Copyright 1988 by MIT Press.