A test can be said to ‘detect’ an alternative hypothesis only if its power against this alternative exceeds its size. We use this principle to define the implicit null and alternative for a test. We analyze the performance of several tests for location and scale parameters. We show that...

Consider an exchange economy with multiple competitive equilibria. Agents know the set of equilibria, but not which will be selected. To insure against unfavorable equilibrium outcomes, they trade on markets for commodities contingent on the equilibrium price vector. Such price-contingent...

We use panel data for fourteen Indian states to assess the influence of public infrastructure on industrial activity, namely productivity, employment, real wages and investment, at the state level and over the period 1974-1998. Our results indicate that the length of national highways has on...