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On 26 November 2001, the National Bureau of Economic Research announced that the US economy had officially entered into a recession in March 2001. This decision was a surprise and did not end all the conflicting opinions expressed by economists. This matter was finally settled in July 2002 after a revision to the 2001 real gross domestic product showed negative growth rates for its first three quarters. A series of political and economic events in the years 2000-01 have increased the amount of uncertainty in the state of the economy, which in turn has resulted in the production of less reliable economic indicators and forecasts. This paper evaluates the performance of two very reliable methodologies for predicting a downturn in the US economy using composite leading economic indicators (CLI) for the years 2000-01. It explores the impact of the monetary policy on CLI and on the overall economy and shows how the gradualness and uncertainty of this impact on the overall economy have affected the forecasts of these methodologies. It suggests that the overexposure of the CLI to the monetary policy tools and a strong, but less effective, expansionary money policy have been the major factors in deteriorating the predictions of these methodologies. To improve these forecasts, it has explored the inclusion of the CLI diffusion index as a prior in the Bayesian methodology. Copyright (C) 2004 John Wiley Sons, Ltd.

We examine the spillover wealth effects of the Orange County, California bankruptcy announcement in December 1994 on municipal bonds, municipal bond funds, and bank stocks. This bankruptcy is prominent because of unprecedented losses and because it was caused by a highly leveraged derivatives strategy rather than a shortage of tax revenues and excess spending. We find contagion in the bond market with significantly negative abnormal returns for municipal bond funds without direct exposure to Orange County and for non-Orange County municipal bonds. In addition, our findings suggest the contagion spills over to the common stocks of investment and commercial banks that deal in or use derivatives; however, the equities of banks unexposed to derivatives are not affected. © 2004 Blackwell Publishing Ltd.

Currency substitution represents a shift from domestic currency to foreign currency and is often related to times of high and variable inflation. In this paper, we investigate the extent of currency substitution in Argentina, Brazil and Mexico using a vector error correction (VEC) model. We empirically test this hypothesis by introducing artificial shocks to the system of equations and find that M1 response to a one standard deviation increase in that country's interest rate is negative and significant for Argentina and Brazil but not for Mexico. An artificially introduced one standard deviation increase in nominal exchange rate results in a statistically significant increase in M1 in Argentina and Brazil but again not for Mexico. Based on the patterns of the impulse response functions (IRFs) and the magnitude of the coefficients, we conclude that currency substitution occurs to a greater extent in Argentina and Brazil than Mexico. This is reflective of the implementation of relatively more credible macroeconomic policies in Mexico after the December 1994 crisis. Thus from a policymaking perspective, it is important to consider that the greater the degree of currency substitution, the more sensitive a country's monetary aggregates are to sudden movements in exchange rates, productivity and interest rates. (C) 2003 Society for Policy Modeling. Published by Elsevier Science Inc. All rights reserved.

This paper estimates the demand for money (M2) in Ghana for the period 1960 to 1996. The hypothesis is that the different macroeconomic adjustment policies (privatization, removal of foreign exchange controls etc.) which began in the mid 1980s would alter the demand for money function. The results of the study clearly show a structural break in the demand for money function in 1983.

The author developed a simple computer program for the in-class simulation of the repeated prisoner's dilemma game with student-designed strategies. He describes the basic features of the software and presents two examples for the use of the program in teaching the problems of cooperation among profit-maximizing agents.

This paper develops a model of exchange rate determination in partially liberalized post-socialist economy that operates under soft budget constraints in nontradable sectors. The model captures the factors that determine the evolution of a country's external balance during the initial phase of economic liberalization. Three types of disturbances are the center of analysis: liberalization of trade and foreign exchange regime, devaluation, and price liberalization. We show that the real exchange rate appreciation may either improve or worsen the trade balance depending on the sources of this appreciation. Thus, we argue that the real exchange rate cannot reflect true country's competitiveness unless all sectors are equally exposed to hard budget constraints. The model implications are further analyzed through the empirical evidence on the relationship between the real exchange rate and trade balance in three selected East European countries.

In an experts-assisted decision making paradigm, the information collection design becomes a strategic variable under a weak assumption that the final decision is dependent on the design used to collect information as well. As a result, the same information of the experts and the decision maker about the problem can potentially produce different final decisions for different information collection designs. The implication is that a decision maker can strategically select a design which serves his/her objective. This paper uses a Bayesian estimation methodology for combining experts' information with the decision maker's prior. An information collection process is designed by setting constraints on this model. Several designs are developed here using such controlled factors as a one-stage versus a two-stage decision process, experts' rank ordering, and group versus individual lobbying/consultation. An example is provided to illustrate the applicability of the concept. It is shown that the information produced in the process of producing a decision can also give insights into the impacts of the decision maker and the experts on the decision.

Tholeiitic rocks of the Ferrar Large Igneous Province (FLIP) occur in a linear belt from the Theron Mountains to Horn Bluff in the Transantarctic Mountains and extend into southeastern Australasia. The FLIP was emplaced during the initial stages of Gondwana break-up from a source suggested to be in the proto-Weddell Sea region. Magma transport from its source (Weddell triple junction) was controlled by an Early Jurassic zone of extension. The FLIP comprises the Dufek intrusion, Ferrar Dolerite sills and dykes (sheet intrusions), and extrusive rocks consisting of pyroclastic strata overlain by Kirkpatrick Basalt lavas. The Dufek intrusion occurs in deformed supracrustal rocks of the foldbelt along the paleo-Pacific Gondwana margin. A few sills were emplaced in basement rocks, but the majority of the sheet intrusions occur in flat-lying Devonian to Triassic Beacon strata. Only in the central Transantarctic Mountains (CTM) and south and north Victoria Land (SVL, NVL) are extrusive rocks preserved overlying Beacon strata. The greatest cumulative thicknesses of magmatic rocks (ca. 2 km) occur in areas where lavas are preserved (CTM and SVL). Sheet intrusions have complex relationships. Dyke swarms (sensu stricto) are unknown and dykes cutting basement rocks are uncommon. Nevertheless, these dykes, including a 30-m-wide dyke in SVL, suggest that some magmas locally migrated up through basement rocks. In CTM and NVL the outcrop belt has a width of about 160 km. Sills originally extended farther toward the plate margin but have been cut out by erosion and Cenozoic faulting, most clearly in CTM; geophysical data suggest extension under the East Antarctic ice sheet for at least 100 km. Although Early Jurassic extension is documented in CTM, major rift-bounding faults have not been observed. Models for magma emplacement include transport along the axis of the Transantarctic Mountains and off-axis transport from major rift-bounding faults. Contrasts in geochemistry between lavas of NVL (MgO=6-7%) and CTM (MgO=2-4%) and the presence of massive dolerite bodies (CTM, SVL) suggest discrete episodes and locations of magma emplacement, and that there was no long range interconnection along the mountain range in supracrustal rocks.

The encrustation of Paleozoic rhynchonelliform brachiopods has been studied for decades, but modern brachiopods have not received similar scrutiny. The discovery of abundant subtropical brachiopods from the Southeast Brazilian Bight provides an unprecedented opportunity to assess epibiont abundance, diversity, and encrustation patterns in modern brachiopod assemblages. Across the outer shelf, encrustation frequencies vary among taxa, from mean values of 0.45% for Platidia to 9.3% for Argyrotheca. Encrustation frequencies for Bouchardia increase from 1.6% on the outer shelf to 84% on the inner shelf. Larger valves are encrusted more frequently, and epibionts preferentially colonize valve interiors. Increased encrustation on the inner shelf may reflect the greater surface areg of larger hosts, longer exposure of dead shells, water-mass characteristics, sedimentation rates, productivity, or other factors that vary with depth. Inner-shelf brachiopods exhibit encrustation frequencies comparable to those reported for epifaunal bivalves. The epibiont fauna is dominated by bryozoans and serpulids, with minor roles played by spirorbids, bivalves, barnacles, foraminifera, algae, and other taxa. Epibiont abundance at each site is highly variable, but sites are similar in rank importance of epibiont taxa. A different suite of epibionts colonized Paleozoic brachiopods, but similar patterns of encrustation have been observed, including preferential settlement according to valve morphology. These results provide a baseline for evaluating the encrustation of modern bivalves and ancient brachiopods, and may elucidate the macroevolutionary history of epibionts and their relationship to their hosts. © 2004, SEPM (Society for Sedimentary Geology).

In 1993, during the removal of a diesel and a gasoline underground storage tank at the municipal garage of the Village of Kohler, Sheboygan County, Wisconsin, soil testing revealed environmental contamination at the site. A site investigation revealed the possibility of a second on-site source of petroleum contamination. Limited historical data and the present usage of structures within the suspected source area precluded the use of most invasive sampling methods and most geophysical techniques. A fluxgate magnetometer survey, followed by confirmatory excavation, was conducted at the site. The fluxgate magnetometer survey identified nine possible magnetic anomalies within the 18 × 25 m area. The subsequent excavation near the anomalies revealed the presence of five paired and two individual 2000 L underground storage tanks. The fluxgate magnetometer survey, although affected by the proximity of buildings, was able to detect the buried tanks within 3 m of the brick structures, using a 1.5 × 1.5 m sampling array.

Children in today's society face many stresses from a variety of sources that have a major impact on thier psychosocial adjustment and academic performance in school. These stressful events and thier consequences on the quality of life and academic success are particularly significant among low-income and ethnic minority students in American society. Many schools have adopted strategies to help students who are impacted by stressful life events to deal affectively with their problems in an attempt to reduce school failure and school dropout rates among these students. Most notable among these strategies are school-based mental health programs including the establishment of school-based mental health teams which seek to proactively address individual student concerns while improving the general climate of schools. The evidence seems to support the claim that these school-based services have a positive impact on students' social and emotional well-being as well as on their academic achievements. However, with more careful monitoring and much more consistent support from administrators and policy makers, these school-based approaches can more fully realize their potential to enhance the quality of life and to positively impact the future of many poor and ethnic minority students.