Harvey Lapan

Iowa State University, Economics, Faculty Member

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Papers by Harvey Lapan

International Economics: Theory and Policy

RePEc: Research Papers in Economics, 1987

Stochastic Disturbances and Exchange Rates

Journal of Economics, 1978

One of the central issues in the ongoing debate concerning fixed versus flexible exchange rates i... more One of the central issues in the ongoing debate concerning fixed versus flexible exchange rates is the comparative stabilizing properties of monetary changes as opposed to exchange rate changes. Fixed and flexible exchange rate regimes have been differentiated according to the ability of the private sector of an economy to alter the nominal value of its domestic money supply via the balance of payments. A disturbance which would lead a nation to experience a balance of payments deficit (surplus) in a fixed rate regime would lead to a depreciation (appreciation) of that nation's currency in a flexible exchange rate regime .2 In order to determine whether monetary or exchange rate changes--and, as a consequence, fixed or flexible exchange rates--best stabilize an economy from a given disturbance, it is necessary to consider the source of the disturbance, the nature of the economic system in question, and the variable(s) to be stabilized. Disciplines Economic Theory | Macroeconomics | Other Economics Comments This is an article from Journal of Economics 4 (1978): 73. Posted with permission. This article is available at Iowa State University Digital Repository: http://lib.dr.iastate.edu/econ_las_pubs/156

Labeling Regulations and Segregation of First- and Second-Generation Genetically Modified Products: Innovation Incentives and Welfare Effects

American Journal of Agricultural Economics, 2005

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activi... more The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation, and marital or family status. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.

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Inflation and Asset Life: The Darby versus the Fisher

Optimal Buffer Stocks in Neumann-- Economies under Uncertainty

There exists side-by^side substantial literatures on von Nuemann economies-especially their turnp... more There exists side-by^side substantial literatures on von Nuemann economies-especially their turnpike properties-(7, 8],-and on optimal growth theory under uncertainty (1, 2» 6]. Typically, the von Neumann models, although deterministic, have a fairly complicated product technology, while the optimal growth models rely on fairly rudimentary product technologies. The present work attempts to bring these two literatures together with the confines of a two-sector von Neumann model under uncertainty. For ease of interpretation, and as the primary application, the model is considered as one of an optimally planned economy [3, 4].

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Productivity, Export, and Environmental Performance: Air Pollutants in the United States

American Journal of Agricultural Economics, Dec 14, 2015

This paper studies the firm-level relationship among productivity, decision to export, and enviro... more This paper studies the firm-level relationship among productivity, decision to export, and environmental performance. The emerging theoretical and empirical literature suggests that trade has an important role in determining firms' heterogeneity: increased openness to trade induces a reallocation effect that increases within-industry efficiency, thereby linking firms' decisions to export and adopt newer (and cleaner) technology. We argue that this framework provides the following empirically-relevant predictions: there is an inverse relationship between firm productivity and pollution emissions per unit output; exporting firms have lower emissions per unit output; and larger firms have a lower emission intensity. To examine these implications empirically, we have assembled a uniquely detailed dataset of the U.S. manufacturing industry for the years 2002, 2005, and 2008 by matching facility-level air emission data from the U.S. Environmental Protection Agency with the facility's economic characteristics contained in the National Establishment Time Series database. The strategy is to first estimate a facility-level total factor productivity parameter as a plant-specific fixed effect. We then investigate how this estimated productivity parameter correlates with emission intensity on a pollutant-by-pollutant basis. Our empirical findings support the hypotheses suggested by the conceptual model. For each criteria air pollutant considered, we find a significant negative correlation between estimated facility productivity and emission intensity. Conditional on a facility's estimated productivity and other controls, exporting facilities have significantly lower emissions per value of sales than non-exporting facilities in the same industry. We also find that plant size is negatively and significantly related to emission intensity for all pollutants.

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Production, Hedging, and Speculative Decisions with Options and Futures Markets: Reply

American Journal of Agricultural Economics, Aug 1, 1993

A hypothesis that hedging will not be an important factor for risk-averse investors when uncertai... more A hypothesis that hedging will not be an important factor for risk-averse investors when uncertainty is caused by futures prices and when basis risk is not associated with futures price is defended. Under a condition of constant absolute risk aversion (CARA), increments in futures prices will result in additional futures sales due to the output effect and speculative effects. The independence of speculation and output decision making is, however, feasible under CARA.

The Assignment Problem and the Speed of Adjustment

Mundell [20] demonstrated that in order to achieve balance of payments equilibrium and full emplo... more Mundell [20] demonstrated that in order to achieve balance of payments equilibrium and full employment, monetary policy should be paired with external balance and fiscal policy with Internal balance. The fundamental problem posed by Mundell concerned the methods governmental authorities should utilize to insure that both internal and external balance would be achieved when the underlying structural parameters of the economy were unknown. Mundell argued that the assignment of monetary policy to external balance and fiscal policy to Internal balance followed from the Principle of Effective Market Classification [20, p.76j: "Policies should be paired with objectives on which they have the most direct effect." Disciplines

format_quoteMonetary policy targeting balance of trade does not affect adjustment speeds, contrasting with literature assumptions on sterilization's effects.format_quote

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An Overlapping Generational Model With Capital Accumulation in a Small Open Economy

In this paper we develop a portfolio balance model which can be used to make an equitable compari... more In this paper we develop a portfolio balance model which can be used to make an equitable comparison of alternative exchange rate regimes. Our point of departure from standard portfolio models is that we derive all asset demand functions from microeconomic behavior. As Helpman and Razin (1979) and Lapan and Enders (1980) have observed, all asset demand and expenditure functions used in a comparison of exchange rate systems must be consistent with individual optimizing behavior. This seemingly innocuous observation implies that many of the macroeconomic comparisons of fixed and flexible exchange rates are not legitimate. Inherent in any portfolio balance model is the implication that asset demand functions depend upon the joint distribution of asset yields. As long as there are different risks in different exchange regimes, portfolio allocation rules will change when the exchange rate regime changes.

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Dynamic Duopoly Theory and Rational Expectations

The determination of equilibrium prices and quantities in an oligopolistic market has been a trou... more The determination of equilibrium prices and quantities in an oligopolistic market has been a troublesome problem for economic theory# The intrinsic nature of the problem is the interdependence of firms-the profit level of any firm depends upon not only aggregate demand and its own output level, but also on the output level of other firms. Thus, each firm, in choosing its own output level, needs to make some behavioral assumption-or conjecture-about how other firms will respond to these changes in output.

format_quoteAs discount rates decrease, the outputs of firms converge towards the Cournot solution, demonstrating greater myopia in decision-making.format_quote

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Does Market Familiarity Bless Multinational in Strategic Competition

RePEc: Research Papers in Economics, Feb 17, 2008

This paper considers a competition between two multinationals (U, J) who compete in a third marke... more This paper considers a competition between two multinationals (U, J) who compete in a third market (K). The multinationals have identical cost structures, but differ in that J comes from a country that is "taste-similar" to K, and hence produces products that match more closely the preferences of K residents. This similarity gives J an advantage in K's market, and if only one firm enters, J can earn higher profits. However, we show: (i) K may benefit more from the entry of the market-familiar firm (U), and (ii) in a strategic competition between the two firms, the market-familiarity may be a strategic disadvantage.

Statistical Moments Analysis of Production and Profits in Multi-Product Cournot Oligopoly

RePEc: Research Papers in Economics, Nov 8, 2005

Our context involves Cournot oligopolists producing N M products at constant marginal costs when ... more Our context involves Cournot oligopolists producing N M products at constant marginal costs when preferences are quasi-linear. We identify relationships between second moments of unit costs and second moments of firm-level production. For example, a larger variance in unit costs of a product increases own output variance and the variance of any other output. We also investigate how second moments of unit costs affect industry cost efficiency. Industry costs can rise if the wrong firm secures a cost reduction. For quadratic preferences, it is shown that Zhao's (2001) share criteria for an increase in unit costs to increase welfare extend to the multiproduct setting.

format_quoteAn increase in cost covariance enhances profits while leaving consumer surplus unchanged, depending on whether goods are complements or substitutes.format_quote

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Production Hedging and Speculative Decisions with Options and Future Markets: Reply

RePEc: Research Papers in Economics, Feb 1, 1991

Quality Changes and the Volume of Trade: A Geometric Approach

RePEc: Research Papers in Economics, Nov 1, 1990

This paper investigates the relationship between product quality and the volume of trade using th... more This paper investigates the relationship between product quality and the volume of trade using the characteristic approach in the context of a simple general equilibrium trade model. It is shown that increasing the quality of the import good induces an increase (fall) in the volume of imports when the import demand is elastic (inelastic). It is also shown that the volume of trade is not necessarily reduced when the quality of the import good is uncertain. Given the situation in the world wheat market, these results provide some support for Canada's concerns over quality and the reliability of its grading and inspection services. Ce papier a pour but d'analyser les effets d'un changement dans la qualite des importations sur le volume des importations de mCme que sur la rtpartition de la production domestique. Le modkle utilisC en est un d'tquilibre gtntral et exploite les avantages d'une fonction d'utilitt ayant des caracttristiques comme arguments. I1 est dtrnontrt que I'effet d'un changement de qualit6 sur le volume des importations dipend de I'tlasticite pour la demande des importations. Le volume d'importations dans un environnement incertain n'est pas ntcessairement moins tlevt que dans une situation ou il n'y a pas d'incertitude dans la qualite des importations. Nos rtsultats, 1orsqu'appliquCs au march6 mondial du blC, supportent la position du Canada en ce qui a trait a la qualite de son ble et I'intCgritC de ses services d'inspection et de classement.

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Stochastic Trade Policy with Asset Markets: The Role of Tariff Structure

RePEc: Research Papers in Economics, Nov 1, 1993

This paper uses a Stockman-Dellas type two-country, two-good, stochastic general equilibrium mode... more This paper uses a Stockman-Dellas type two-country, two-good, stochastic general equilibrium model to consider the effects of commercial policy when asset markets are complete. We show that: (i) import and export tariffs do not have symmetric effects because interstate relative prices depend on the entire tariff structure; (ii) when commercial policy is random and exogenously determined, the ex post comparison of utility across states depends upon whether import or export tariffs are used; and (iii) when endowments are random, implying the optimal tariff varies across states, the introduction of asset markets may be welfare-reducing when only import tariffs are used.

format_quoteThe study reveals that tariff structure significantly influences consumption comparisons across states, challenging Lerner's symmetry in stochastic frameworks.format_quote