This paper presents an empirical reassessment of the relationship between the real exchange rate and the trade balance, using the multivariate cointegration approach. Based on bilateral trade between the U. S. and the other G7 countries, we find evidence that the trade balance is unresponsive to...

Previous studies of the stability of the demand for money have been largely conducted in the context of individual countries. To the extent that these countries have control over their monetary policies, such an approach is well justified. However, for monetary unions, where the control over...

Employing three alternative measures of ability to pay, the authors find support for the Lintner hypothesis that firms pursue a long-run target payout ratio and also that current earnings better explain long-run dividends than cash flows or stock prices. The evidence further indicates that...