A firm may acquire additional capital input by purchasing new capital or by increasing the utilization of its current capital. The margin between capita accumulation and capital utilization is studied in a model of dynamic factor demand where the firm chooses capital, labor, and their rates of...

Much recent work emphasizes the joint nature of the consumption decision and the portfolio allocation decision. In this paper, we compare two formulations of the Capital Asset Pricing Model. The traditional CAPM suggests that the appropriate measure of an asset's risk is the covariance of the...

A mass-economy is one with many, many agents where each agent is negligible and each trading group is also negligible with respect to the mass-economy. Feasible allocations are those which are virtually attainable by trades only among members of coalitions contained in feasible...

This paper studies the statistical properties of vector autoregressions (VAR's) for quite general multiple time series which are integrated of order one. Functional central limit theorems are given for multivariate partial sums of weakly dependent innovations and these are applied to yield first...

This paper provides a choice theoretic, general equilibrium account of the balance of payments adjustment process and the determination of national price levels in a world comprised of countries populated by rational households. Balance of payments adjustment dynamics arise in the equilibrium of...

This paper introduces a highly simplified version of "sudden-death" scoring. The basic game is as follows. With equal probability the teams toss to see who gets the ball. The team with the ball can either run or try to kick a field goal. The first team to score wins the game.

This paper provides an analytical study of spurious regressions involving the levels of economic time series. As asymptotic theory is developed for regressions that relate independent random walks. It is shown that the usual t ratio significance tests do not possess limiting distributions but...

We show that the monotonicity property of optimal paths (or, equivalently, the uniform boundedness of the marginal propensity of consumption by unity) is a necessary condition for local (as well as for global) optimality, and is also sufficient for local optimality, but not for global...

We investigate the conventional wisdom that competition among interested parties attempting to influence a decision maker by providing verifiable information brings out all the relevant information. We find that, if the decision maker is strategically sophisticated and well informed about the...

This paper and its sequel, Andrews [4], extend the Pearson chi-square testing method to non-dynamic parametric econometric models, in particular, models with covariates. The present paper introduced the test and discusses a wide variety of applications. Andrews [4] establishes the asymptotic...