This paper studies the effects of budget deficits in a two-country OG model where the rates of time preference differ across countries. It is shown that time preference plays an important role in the determination of the effects of budget deficits on the trade and current account deficits. If the time preferences are identical, then a domestic tax-increase will unambiguously increase its trade surplus, and will decrease (increase) its current account surplus when the real interest rate is greater (less) than the growth rate; but if the time preferences are not identical, then a domestic tax-increase can yield completely different results. In addition, this paper clearly demonstrates that a tax-increase will unambiguously lower the real interest rate.

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In this paper, following Tiao, Tan and Chang (1977), we consider a constrained bivariate linear regression model and introduce two types of estimators after a preliminary test of independence of two equations. One of them is a pre-test estimator using an unrestricted estimator of covariance matrix and the other is one using a restricted estimator of covariance matrix. We derive their risks and compare sampling performances of several estimators.

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This paper reports the results of a selective review intended to evaluate the extent to which an integrated “public finance” perspective, incorporating both protection and revenue concerns, has guided World Bank recommendations to member countries in the atea of tariff reform. Such a perspective suggests that tariff reforms intended to reduce protection must often be accompanied by measures to develop alternative revenue sources in broad based domestic indirect taxes. Conversely, reforms to the structure of protection will often need to take account of the effect of domestic indirect taxes that discriminate between domestic and imported goods.
The review suggests that this integrated perspective is often absent from the analysis underlying typical Bank recommendations. The following broad conclusions are indicated: (a) revenue concerns are not adequately addressed in the design of tariff proposals and may, in some cases, have contributed to policy reversal; (b) the protective effect of some domestic indirect taxes is often not incorporated into the design of reforms intended to reduce protection; and (c) while a uniform tariff is sometimes recommended as a goal of tariff reform, and may be seen as a logical culmination of the attempt to narrow the range of nominal tariffs, there appears to be little consensus on a desirable tariff structure.

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In recent economic studies, Tobit models, in which the dependent variables cannot be negative, have been widely used. Although these models are usually estimated by the Tobit Maximum Likelihood Estimator (Tobit MLE), the Tobit MLE is not robust with respect to heteroskedasticity and non-normality of the error terms.
Powell (1984) proposed a modified least absolute deviations estimator which is consistent under heteroskedasticity and non-normality. One of the major problems with Powell's estimator is its computational difficulty. Nawata (1992) proposed a new algorithm which makes possible to calculate Powell's estimator. However, Nawata's method is incomplete and sometimes gives wrong results. In this paper, I modify the algorithm and evaluate Powell's estimator by the Monte Carlo experiments styled after Paarsch (1984).

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This note analyses product diversity under increasing returns to scale. We employ, in a general equilibrium framework, the model of Perloff and Salop (1985), which synthesizes Hotelling-type and Chamberlin-type models. The main result in the paper provides an instance of the excess diversity of a product, and its interpretation is illustrated diagrammatically.

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