Perhaps because of the prolonged stock market boom of the 1990's most macro principles textbooks have increased their coverage of the stock market, but there is very little analysis of how the economy affects the stock market. The present paper suggests a "GDP demand-side" approach to predicting...

Most industrialized countries subsidize private sector R&D, even under some circumstances when the firm is owned by foreigners. The present paper, using a simple theoretical analysis of a monopoly firm selling only to the U.S. market, argues that such subsidies are welfare enhancing - as long,...

The paper considers a monopoly firm with two possible R&D projects, one improving the product itself and the second reducing the customers' costs associated with product failure. The firm must choose one project or the other, and has a fixed budget for R&D expenditures. A condition on parameters...