An Iterated-Nonlinear-Seemingly-Unrelated-Regression Model with derived-macroeconomic factors was used to test the Arbitrage Pricing Theory. These derived macroeconomic factors (exogenous variables) were estimated by applying Principal-Components Analysis to a set of ten macroeconomic time-series residuals and five sets of residual portfolio returns (constructed to be orthogonal to the macroeconomic residuals). This specification reduces errors-in-variables that result when macroeconomic factors are estimated through the factor structure of security returns or defined by macroeconomic variables. / The Arbitrage Pricing Theory was tested over the three periods 1972-1987, 1972-1979, and 1980-1987. The results of these tests were consistent with the Arbitrage Pricing Theory over the subperiods 1972-1979 and 1980-1987, and less conclusive over the period 1972-1987, suggesting that the macroeconomic factor structure may be unstable over long time periods. In all three time periods, the sensitivity of a security to the macroeconomic factors was a significant determinant of security returns; in addition, security returns were not significantly affected by nonlinear factor risk. The implication of the Arbitrage Pricing Theory, that security returns are a linear combination of a security's sensitivity to a small set of macroeconomic factors, was strongly supported by the results of this study. / Source: Dissertation Abstracts International, Volume: 51-07, Section: A, page: 2442. / Major Professor: Elton Scott. / Thesis (Ph.D.)--The Florida State University, 1990.

acase@tulane.edu

acase@tulane.edu

acase@tulane.edu

acase@tulane.edu

In his 1932 book, The Theory of Wages, J. R. Hicks introduced two concepts of endogenous technical change. The first of these is induced technical change which occurs as the firm's response to an increase in the relative price of a factor of production. The basic premise of this view is that the firm will direct its technical change efforts toward saving on the factor which has become relatively more expensive The second concept is what Hicks termed autonomous technical change. This refers to all endogenous technical change that is not in response to changes in relative factor prices This dissertation considers several theoretical models of endogenous technical change and the inducement properties possessed by each. These models build upon and extend the works of Kennedy, Samuelson, Ahmad, Binswager and Kamien and Schwartz which were reviewed in Chapter 2 Chapters 3, 4, and 5 present the theoretical models of endogenous technical change. These models possess two common features. The first is that the firm's production technology is represented by a neo-classical factor augmenting production function. The second common feature is that the augmentation parameters can be changed through directed research efforts applied according to technological production functions In Chapter 3 the firm is assumed to maximize the reduction in costs subject to the technology production functions and an R & D budget constraint. The equilibrium conditions are derived and it is shown that these conditions correspond to those in the Kennedy and Samuelson approaches. In addition it is shown that the Kennedy-Samuelson Innovation Possibilities Frontier (IPF) is derivable from this framework and exists solely because of the R & D budget constraint. The induced technical change hypothesis is found to hold as long as the elasticity of substitution between inputs is not equal to one. In addition the system will converge to a state of Hick's neutral technical change for all values of the elasticity of substitution less than two and for some values greater than two. This is in direct conflict with the usual results which require that the elasticity of substitution be less than one Chapter 4 considers the case of a profit maximizing firm whose current decisions with respect to capital and R & D expenditures affect profits one period in the future. The equilibrium conditions are derived and compared to the result of the previous model. The effects of changes in the discount rate, equipment costs, and the wage rate on the level of investment in capital and R & D and on the level of employment are determined The inducement properties of the model are found to be obscured by profit-maximizing effects so an alternative approach treating the firm as a cost minimizing entity is used. The results show that Hicksian induced technical change is only one possible response to a change in relative factor prices Chapter 5 considers a firm in a certain world with an infinite horizon. The firm is assumed to maximize the discounted present value of net revenues subject ot the technology production functions and a given initial level of technology. The equilibrium conditions require the equality of the discounted marginal revenues and marginal costs of technical change. The conditions for the non-trivial steady state solution are derived and found to be rather strong so an alternative steady state is defined in terms of the ratios of the purchased factor inputs and the augmentation parameters. This modified steady state requires Hick's neutral technical change and is stable under the assumptions of the model for all values of the elasticity of substitution less than or equal to two and possibly stable for some values greater than two. Finally the inducement properties of the model are considered and it is shown that the Hicksian induced technical change hypothesis can not be ruled out / acase@tulane.edu

This dissertation is composed of two essays on international aspects of public finance. The objective is to carry the theoretical analysis of income tax evasion, and fiscal competition into an international context The first essay models income tax evasion as a part of a portfolio choice between domestic and foreign investment. The latter is termed as 'capital flight' because of its illicit character. As opposed to the previous models of tax evasion, this model recognizes the non-simultaneity of tax evasion and portfolio decisions in a two-stage setting. The transactions costs are explicitly modelled, and the uncertainty about the returns of domestic and foreign investments is introduced, as an addition to the audit uncertainty. It is found that an increase in government enforcement might be ineffective at reducing tax evasion and capital flight; it might even exacerbate the problem under some specified conditions. The change at the tax revenue of the government and the change at the amount of tax evaded are also unpredictable, and depend on the relation between the individual's risk-taking characteristics and the enforcement parameters The second essay models fiscal competition for a multinational corporation (MNC) as a game between two host countries. In a world of certainty, the size of the host's tax increases with the ratio of the site's inherent profits to the MNC's zero; the winning host must subsidize the MNC to the extent of its benefits. When the countries are not sure of the value of their sites, then they decrease their subsidy offers to the MNC as their uncertainty increases. The intuition is that each country can lower its subsidy offer without the certain knowledge that it will drive the firm to its rival. Like the silent master of a cartel, uncertainty prevents fiscal competition between similar countries from driving their returns to zero / acase@tulane.edu

This dissertation examines some of the economic efficiency implications of decentralized public decision-making. It ignores direct spillovers of public goods and services and focuses instead on so-called fiscal-externalities, which are said to occur when tax and spending decisions in one community affect another community's fiscal sector (e.g. by expanding or contracting its tax base) The study begins by reviewing some of the work that provides the foundation for this line of inquiry. It then concentrates on describing the economic inefficiency that can occur when local-welfare-maximizing governments make tax and spending decisions in the face of capital mobility. It is argued that some of the results in this area are incorrect or incomplete, and a more thorough analysis is provided The study then goes on to argue that governments tax capital for various reasons, and that, fiscal-externalities from the taxation of capital may be a more general phenomenon than previously recognized. In the penultimate chapter on attempt is made to describe the total welfare loss when communities with differing preferences for public goods use capital taxes to finance those goods. In the process, a synthesis of previous work is provided. The final chapter provides a summary and some further thoughts / acase@tulane.edu

acase@tulane.edu

This dissertation first conducted a literature review for both the theoretical developments and the empirical studies of the Heckscher-Ohlin theory of trade; then employing the Leontief methodology and regression analysis investigated the factor contents and commodity compositions of the U.S. interregional trade flows. In accord with theoretical developments, the factor contents of regional trade were studied in forms of the Leamer hypothesis, the Vanek rank order hypothesis, the trade as a substitute for factor movement hypothesis and the Horiba triangular trade hypothesis; the commodity compositions of regional trade were studied by the OLS and Probit analysis. The advantageous attributes of regional approach over the international approach were stressed and its implications to the past and future empirical studies were discussed / acase@tulane.edu