Manage, Neela D.

Federal government budget deficits and federal government
debt have been the cause of controversy and debate in
recent years. Economists have argued over the effects of
government debt and government deficits in the economy. Of
particular interest is the view that associates large
government deficits and government debt to higher rates of
interest and to reduced private investment in the economy.
An alternative view contends that federal budget deficits
and federal debt have no effect on interest rates and
private investment in the economy. Statistical techniques
were used to test both views regarding the effects of
budget deficits.

This thesis theoretically and empirically analyzes the determinants of Eurodollar
expansion observed in recent years. The Euro-dollar market is first
described in terms of its origin, development, geographical distribution and
institutional structure and regulation. The size, sources and uses of the market
are also illustrated. Alternative views and theories explaining Euro-dollar growth
are discussed in detail. A single stock adjustment model is first used to obtain the
determinants of Euro-dollar interest rates. Reduced form equations are utilized
to determine the factors for the equilibrium quantity of Euro-dollar deposits and
equilibrium Euro-dollar interest rate. Finally, the proportion of Euro-dollar
growth attributed to a multiplier expansion process as opposed to primary deposits
is empirically estimated for the time period 1973 - 1981. Almon and Koyck lag
structures are utilized to calculate the multiplier process associated with Eurodollar
expansion during this period.

This study analyzes the formulation of monetary policy in the Turkish
economy on the basis of intermediate policy targets. Two monetary aggregates
and four credit aggregates are identified as potential intermediate targets of
monetary policy. The causal relationship between these variables and GNP as
well as prices is estimated by utilizing Granger and Sims tests for causality. The
degree to which these targets are controlled by changes in the monetary base is
examined by using regression analysis. Finally, this study briefly examines the
major sources of the monetary base in the Turkish economy.

This thesis theoretically and empirically analyzes the effectiveness of
alternative monetary control procedures in the United States in recent years. The
overall strategy of monetary policy is described and the implications of the
federal funds rate and non-borrowed reserves targeting procedures for interest
rate volatility and money demand stability are discussed. Tests of linear
restrictions using dummy variable specifications as well as ex post forecasts
suggest that there has been a change in the interest elasticity as well as the
intercept of the money demand function in 1979. The empirical specifications
examined in this study use a partial-adjustment model and employ appropriate
econometric techniques to obtain consistent and efficient coefficient estimates.
Finally a reduced-form model of the money market is used to compare out-of-sample
forecasts from alternative operating procedures.

This thesis empirically analyzes the problem of
inflation in the Greek economy. The study is based upon
annual data for the period 1958 to 1980. The econometric
analysis is primarily based upon the Scandinavian model of
inflation for a small open economy. This model explains
inflation by structural differences in productivity between
sectors and a transmission mechanism which links world
inflation to domestic inflation. This study also examines
an extended Phillips curve model which considers both
excess demand variables and structural factors. The results indicate that the above models provide fairly good
explanations of the inflationary process in Greece.

This thesis analyzes the demand for money in the United
States during the period 1954:1 to 1981:4. A important issue
regarding the stability of money demand is addressed in terms
of the econometric problems that arise in money demand estimation.
A partial-adjustment mechanism is specified to describe
dynamic adjustments in the quantity of money. Such an
adjustment mechanism introduces a lagged dependent variable as
a regressor in the estimating equation. The presence of a
lagged dependent variable along with an autocorrelated error
term results in inconsistent and inefficient coefficient estimates.
The Hatanaka technique is utilized to yield consistent
and asymptotically efficient estimates of money demand.
Finally, an equation is also estimated to examine the role of
the entire term structures of interest rates in a money demand
function.

This thesis analyzes the impact of transnational corporate
investment patterns in five Latin American economies:
Mexico, Peru, Columbia, Venezuela, and Brazil. Two important
theories attributed to the dependencia and neoconventional
schools of thought are first described and then econometrically
tested for the above countries. The basic framework for
econometrically testing these theories consists of a model
specifying the domestic and foreign determinants of domestic
capital formation. Domestic determinants are formulated in
terms of the 'accelerator' and loanable-funds theories of
domestic investment behavior. Investment by multinational
corporations is then added to the model to see if it makes
any significant contribution towards indigenous investment.
In order to take into account the lagged effects of multinational
investment, an Almon lag estimation technique was
adopted.