Since 1999, gasoline prices in California, Illinois and Wisconsin have spiked occasionally well above gasoline prices in nearby states. In May and June 2000, for example, gasoline prices in Chicago rose twenty eight cents per gallon to $2.13, while prices nationally rose only nine to $1.73. Several qualitative studies identify unique gasoline formulations in California, Illinois and Wisconsin a...

The macroeconomic implications of oil price fluctuations vary according to their sources. Our estimated two-country DSGE model distinguishes between country-specific oil supply shocks, various domestic and foreign activity shocks, and oil efficiency shocks. Changes in foreign oil efficiency, modeled as factor-augmenting technology, were the key driver of fluctuations in oil prices between 1984 ...

The aim of this paper is to examine the interaction between stock prices and exchange rates in Australia. During the period of the study, the value of the stock market increased by two-thirds and the Australian dollar exchange rate appreciated by almost one-third. The empirical analysis employed provides evidence of a positive co-integrating relationship between these variables, with Granger ca...

This paper addresses the issue of both domestic and cross border systemic risk for 8 countries in Southeast Asia (Hong Kong, Indonesia, Korea, Malaysia, The Philippines, Singapore, Taiwan and Thailand). We use weekly data on individual bank stock prices from 2000 to 2005 to construct bank contagion measures based on the exponential weighted average correlations of the residuals of the market mo...

Consequences of the WTO ruling on the Brazilian cotton case for commodities in the U.S. in addition to cotton are of concern. This paper uses the global GTAP model to provide a preliminary assessment of the consequences for U.S. rice if the ruling had applied in 2001. Two scenarios are estimated with a 36% and 100% elimination in the PSE on U.S. rice in 2001. The results show that if loan defic...

Financial crises in countries are often accompanied by an out‡ow of foreign portfolio investment and an in‡ow of foreign direct investment (FDI). We provide an agency-theoretic framework that explains this phenomenon. During crises, agency problems a¤ecting domestic …rms are exacerbated, and, in turn, external …nancing constrained. Direct ownership can circumvent these problems, but during cris...

The paper develops a method for producing current quarter forecasts of gross domestic product growth with a (possibly large) range of available within-the-quarter monthly observations of economic indicators, such as employment and industrial production, and financial indicators, such as stock prices and interest rates. In light of existing evidence of time variation in the variances of shocks t...

One of macroeconomists’ major concerns is GDP volatility, and understanding what causes this volatility is essential when attempting to reduce it. For decades, the automotive industry has been a major component of US GDP. Therefore, understanding the driving forces behind this industry indirectly contributes to the study of GDP volatility. This paper focuses on CAFE standards and how they chang...

Until the Uruguay Round Agreement (URAA) domestic support received less attention and it was URAA explicitly addressed the trade distortions arising out of domestic support policies in agriculture. The theories on trade distortions however claim the supremacy of border measures in distorting trade. A number of empirical studies also hold the same line of view. There are a number of reasons for ...

The objective of this study has been to develop a typical specification of the Almost Ideal Demand System (AIDS) for Iran’s composition of imports including capital, intermediate and consumer goods. Accordingly, we first test the hypotheses that import demand is homothetic, homogeneous, symmetric, and depends on domestic prices. Then, we estimate the long-run elasticities of the composition o...