Eliminating the federal budget deficit, even assuming a correspondingly higher national rate, is likely to yield only a modest reduction in the U.S. international trade deficit. Balancing the federal budget will help improve the trade balance through the effects of lower levels of aggregate...

The econometrics literature contains many alternative measures of goodness of fit, roughly analogous to R2, for use with equations with dichotomous dependent variables. There is, however, no consensus as to the measures' relative merits or about which ones should be reported in empirical work....

Hedgers and a risk-neutral informed trader choose between a broker who takes a position in the asset (a capital broker) and a broker who does not (a discount broker). The capital broker exploits order flow information to mimic informed trades and offset hedgers' trades, reducing informed profits...

We investigate the implications of capital market imperfections for inventory investment in retail trade, using a new source firm-level data--the micro data underlying the published Quarterly Financial Reports. An error-correction model that includes internal funds and forward-looking...

In recent years, the sales reports of major retail chains have received increasing attention as timely indicators of consumer spending. Despite this attention, a close review of the literature on chain store indexes as macroeconomic indicators reveals that there is no literature! This paper...

We estimate and test a model of the U.S. term structure that fits both the time series of interest rates and the cross-sectional shapes of the yield and volatility curves. In the model, three unobserved factors drive a stochastic discount process that prices assets so as to rule out arbitrage...

The paper examines the evolution of U.S. external balances since 1980 and considers various explanations for the persistence of external deficits in the late 1980s and the 1990s. It also offers a general assessment of the medium-term prospects for U.S. current account deficits. The review of...

The privatization literature focuses on three related areas: productive efficiency, the government budget, and privatization techniques. Where competitive product and capital markets exist, privatization is likely to improve productive efficiency. Such improvement makes possible fiscal gains,...