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Transfer Pricing In The Decentralized Multinational Corporation, Peter C. Dawson, Stephen M. Miller
Transfer Pricing In The Decentralized Multinational Corporation, Peter C. Dawson, Stephen M. Miller
Economics Working Papers
This paper considers how the multinational corporation's transfer price responds to changes in international corporate effective tax rates. It extends the decentralized decision-making analysis of transfer pricing in the context of different tax rates. It adopts and extends Bond's (1980) model of the decentralized multinational corporation that assumes centralized transfer pricing. The direction of transfer price change is as expected, while the magnitude of change is likely to be less than predicted by the Horst (1971), centralized decision-making model. The paper extends the model further by assuming negotiated transfer pricing, where the analysis is partitioned into perfect and imperfect information …
The Long-Run Relationship Between Money, Nominal Gdp, And The Price Level In Venezuela: 1950 To 1996, Victor Olivo, Stephen M. Miller
The Long-Run Relationship Between Money, Nominal Gdp, And The Price Level In Venezuela: 1950 To 1996, Victor Olivo, Stephen M. Miller
Economics Working Papers
This paper explores whether a significant long-run relationship exists between money and nominal GDP and between money and the price level in the Venezuelan economy. We apply time-series econometric techniques to annual data for the Venezuelan economy for 1950 to 1996. An important feature of our analysis is the use of tests for unit roots and cointegration with structural breaks. Certain characteristics of the Venezuelan experience suggest that structural breaks may be important. Since the economy depends heavily on oil revenue, oil price shocks have had important influences on most macroeconomic variables. Also since the economy possesses large foreign debt, …
Knowledge, Consumption, And Endogenous Growth, Richard N. Langlois
Knowledge, Consumption, And Endogenous Growth, Richard N. Langlois
Economics Working Papers
The recent efflorescence of interest in "endogenous" theories of economic growth has focused attention on the nature and role of knowledge in the growth process (Romer 1986, 1990; Grossman and Helpman 1990, 1994). Unlike earlier models of growth (Solow 1956; Swan 1956) in which technological change appeared as an exogenous parameter, this New Growth Theory (NGT) has sought to "endogenize" technical change by folding its production more fully into the neoclassical positive heuristic. Knowledge no longer appears as manna from heaven, but is now produced just as are bananas and tires: as the result of the rational optimizing behavior of …
Monetary Policy Delegation, Contract Costs, And Contract Targets, Georgios E. Chortareas, Stephen M. Miller
Monetary Policy Delegation, Contract Costs, And Contract Targets, Georgios E. Chortareas, Stephen M. Miller
Economics Working Papers
We reconsider the optimal central banker contract derived in Walsh (1995). We show that if the government's objective function places weight (value) on the cost of the contract, then the optimal inflation contract does not completely neutralize the inflation bias. That is, a fraction of the inflation bias emerges in the resulting inflation rate after the central banker's monetary policy decision. Furthermore, the more concerned the government is about the cost of the contract or the less selfish (more benevolent) is the central banker, the smaller is the share of the inflation bias eliminated by the contract. No matter how …
Optimal Central Banker Contracts And Common Agency, Georgios E. Chortareas, Stephen M. Miller
Optimal Central Banker Contracts And Common Agency, Georgios E. Chortareas, Stephen M. Miller
Economics Working Papers
This paper considers the contacting approach to central banking in the context of a simple common agency model. The recent literature on optimal contracts suggests that the political principal of the central bank can design the appropriate incentive schemes that remedy for time-inconsistency problems in monetary policy. The effectiveness of such contracts, however, requires a central banker that attaches a positive weight to the incentive scheme. As a result, delegating monetary policy under such circumstances gives rise to the possibility that the central banker may respond to incentive schemes offered by other potential principals. We introduce common agency considerations in …
Redlining, The Community Reinvestment Act, And Private Mortgage Insurance, Stephen M. Miller, Geoffrey M.B. Tootell
Redlining, The Community Reinvestment Act, And Private Mortgage Insurance, Stephen M. Miller, Geoffrey M.B. Tootell
Economics Working Papers
This paper examines whether neighborhood racial or income composition influences a lender's treatment of mortgage applications. Recent studies have found little evidence of differential treatment based on either the racial or income composition of the neighborhood, once the specification accounts for neighborhood risk factors. This paper suggests that lenders may favor applicants from CRA-protected neighborhoods if they obtain Private Mortgage Insurance (PMI) and that this behavior may mask lender redlining of low income and minority neighborhoods. For loan applicants who are not covered by PMI, this paper finds strong evidence that applications for units in low-income neighborhoods are less likely …