This paper econometrically tests whether deficits financed by government borrowing “crowd out” business and consumer spending reductions by reducing credit availability. To test the hypothesis, the government deficit variables are added to consumption and investment models to see if they...

Using a simplified Klein/Fair structural model of the U.S. economy, estimated using 1960 – 2000 data, the paper finds that the 12.9% dollar decline 2000-2009 had a positive effect on exports, but mildly negative effects for domestically produced investment and consumer goods. It is shown that...

We develop the rectangular choice-of-technology model with factor constraints, or RCOT, for analysis of the economy of a single region, or of multiple regions in the context of a model of the world economy. RCOT allows for one or more sectors to operate more than one technology simultaneously,...

NSF’s “Dear Colleague Letter” reflects the widely perceived need to go beyond current economic theory in the formulation of public policy. At the same time, there is a profound lack of unity among the disciplines that comprise the behavioral, social, and economic sciences. This white paper...

Regression estimates of exchange rate total effects on aggregate demand are broken into separate income and substitution effects. Total effects estimates can seem contrary to theory. Separating them into their two components shows this is not the case. The separation method also provides a...

Declining consumer confidence is cited as a cause of declining consumer demand, independent of changes income, wealth, etc. If so, it may also affect demand for investment goods, as businesses adjust production to reflect changes in consumer confidence and its anticipated effect on demand. This...

Separate macroeconomic consumption demand functions are developed and tested for (1) durable goods, (2) nondurable goods and (3) services. These are compared for consistency with econometric studies of total consumer demand. Key factors determining demand for these goods are tested using U.S....

Declining consumer confidence is cited as a cause of declining consumer demand. If so, it may also affect business spending on investment goods, as businesses adjust production in response to changes in consumer confidence that will affect demand. This paper examines effects on consumption and...

This paper is a revision of Rensselaer Polytechnic Institute’s Working Papers in Economics Series, No. 803, entitled “How Falling Exchange Rates 2000 – 2007 Have Affected the U.S. Economy and Trade Deficit (Evaluated Using the Federal Reserve’s Real Broad Exchange Rate)”. It expands...

This paper compares the demand for the three individual components of aggregate investment demand: (1) demand by businesses for plant and equipment, (2) business inventory investment and (3) residential housing construction. The models tested are largely based on Keynesian theories of business...