Forecasting with an econometric model: Some recent results using the national institute model

It is widely believed that the large econometric models cannot be used for forecasting without considerable intervention on the part of the forecaster. In this paper we challenge this view by reproducing a number of recent forecasts published by the National Institute but without the ad hoc interventions used at the time. We show that in no case would the forecast, produced by the model used mechanically, have been radically different from that actually published. Further, in an ex-post comparison against actual out-turns, the mechanical model forecast is not obviously dominated by the published version.     

Endogenous Growth,Taxes and Government Spending: Theory and Evidence*

This paper provides a theoretical and empirical investigation of the simultaneous effects of taxes and government spending on long‐run economic growth in an endogenous growth framework. A two‐sector model is considered: one sector produces physical output and the other produces human capital. Government expenditure is divided into several categories, and several types of taxes are included. The property tax is especially interesting because it is a major source of revenue for local government. The theoretical model is estimated using annual panel data from North Carolina counties. This study finds that state‐level fiscal policies affect economic growth but county‐level fiscal policies do not.     

Trade liberalization, foreign ownership, and the environment in a small open economy

This paper examines the effects of trade liberalization on firm ownership and the environment for a small open economy. It is found that trade liberalization via tariff reductions can result in a dramatic switch in firm ownership from domestic to foreign, coupled with a lower pollution tax.     

Competition to international satellite communications services

Rapid construction of transoceanic fiber optic cables and the successful establishment of private satellite companies with inter-regional or global coverage have fundamentally altered the environment in which international telecommunications capacity is provided. This article presents industry data and discusses market developments which document substantial competition that has emerged in international facilities-based telecommunications. Intelsat, historically the largest provider of international telecommunications capacity, has seen its market position decline rapidly for all services and all major geographic market areas worldwide.     

Strategy-Proof Voting on Compact Ranges

Strategy-proof social choice functions are characterized for societies where the space of alternatives is any full dimensional compact subset of a Euclidean space and all voters have generalized single-peaked preferences. Our results build upon and extend those obtained for cartesian product ranges by Border and Jordan (1983). By admitting a large set of non-Cartesian ranges, we give a partial answer to the major open question left unresolved in this pioneering article. We prove that our class is composed by generalized median voter schemes which satisfy an additional condition, called the intersection property [Barberà, Massó, and Neme (1997)].Journal of Economic LiteratureClassification Number: D71.     

Retail pricing and clearance sales: the multiple product case

This paper deals with the phenomenon of clearance sales of fashion type goods which have an intertemporal aspect similar to durable goods. Using the Van Praag and Bode (1992) model, the case of clearance sales in a store selling more than one commodity is analyzed. Conditions and rules of thumb are shown in which it is optimal to increase the price of one product while decreasing the price of another. A linear demand model and a numerical example are presented, showing that the price of one product decreases while the price of the other product may increase or decrease in different periods.