Browsing by Author "Huddle, Donald L."
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Item An economic evaluation of proposed copper buffer stock agreements on the optimal level of international reserves of Chile(1981) Wood, Dean; Smith, Gordon W.; Huddle, Donald L.; Soligo, RonaldIn the literature of optimal international reserves, a formula has been derived explaining the average level of reserves over a period as a function of the standard deviation of export earnings, the opportunity cost of reserves, the costs of adjusting to balance of payments imbalances, and the government's preferences between income levels and income variability. The formula represents 'optimal reserves' in that the government's utility function has been maximized subject to the constraints faced. It has been shown that LDCs experience greater export instability than do developed countries and many economists believe this puts them at a disadvantage for development purposes. As a partial solution, especially for countries which rely on only one or two primary commodities for the bulk of their export earnings, commodity buffer stock agreements have often been advocated as a way of decreasing this instability. Copper is one commodity under consideration for such an agreement while Chile relies on copper for approximately 75% of its export earnings. Using an econometric model of the world copper market, researchers have simulated price and production levels of copper over the period 1955 to 1974 had a buffer stock agreement been in effect. Using two of these simulations, the new standard deviation of Chile export earnings has been figured and inserted into the formula of optimal reserves. The results from the second and most important simulation used in this study, indicate that the average 'optimal' level of reserves would have decreased from $153.41 million to $18.78 million (US dollars of 197) for the twenty year period. This result indicates that a buffer stock operation for copper, with well chosen decision rules, would have enabled Chile to substantially reduce the average level of international reserves held from 1955 to 1974. It was estimated that Chile would have earned $287.65 million by the end of 1974 by investing funds which otherwise would have been held as reserves at their opportunity cost, assuming that the opportunity cost is 1%. If the opportunity cost of Chilean reserves had been only 5% during this period, the gain to the Chilean economy would have been $82.27 million, while if the opportunity cost of reserves had been 15%, the gain to the Chilean economy would have been $722.18 million (all dollar figures are in US dollars of 197).Item Economic planning, industrialization, and import substitution in Iran(1978) Azizi, Mohammad Reza; Huddle, Donald L.Iran attempted to set up a national economic plan after the second world war. After 1949, Iran has experienced five different development plans. The Fifth Five Year Plan is the one which is in operation at the present time. Before industrialization, the nation’s economy was dominated by oil and agriculture. There was a dual purpose for the intensive industrialization which started in the early 196’s - reducing the economy's dependence on exports of primary products, and increasing the rate of economic growth. The purpose of this thesis is to study the planning process and the process of import substitution in Iran. An attempt has been made to evaluate the different plans to determine the major problems involved in each particular plan and to evaluate the degree and extent to which each plan has succeeded in achieving the major targets of the plan, particularly in the industrial sector. An attempt also has been made to collect the set of available data on production, imports and exports of industrial goods at a somewhat disaggregated level to make some sensible analysis of the degree of import substitution and the patterns of industrial growth.Item Inflation and the Crawling Peg: the Peruvian case(1982) Choy, Ines Marylin; Blanco, Herminio A.; Huddle, Donald L.; Smith, Gordon W.It is suggested that in cases of frequent changes in the exchange rate, like in the Crawling Peg system, a vicious circle might develop: depreciation of the exchange rate may lead to increased domestic inflationary pressures and further rounds of changes in the exchange rate. This mechanism may be present in the Peruvian economy. A system of Crawling Peg has been adopted and although the deficit in the balance of payments was eliminated, the domestic rate of inflation is still very high. However, in the strict econometric sense, it is difficult to affirm that inflation causes changes in the exchange rate or vice versa because both variables are determined by factors such as the underlying monetary and fiscal policies. In order to examine the relationship between inflation and changes in the exchange rate a model is tested for the Peruvian case. In this model the exchange rate, international reserves and the rate of inflation are jointly determined. Although there is not a direct causality, in the econometric sense, there is a relationship between both variables. As long as the domestic rate of inflation is higher than the world rate of inflation there will be feedback between inflation and changes in the exchange rate.Item Japan's use of capital controls for exchange-rate management, 1975-1982(1983) Bennett, Sylvia K.; Smith, Gordon W.; Blanco, Herminio A.; Huddle, Donald L.Over the period of 1975-1982, Japan experienced substantial fluctuations in its currency and its current account position. With the oil price shocks and the evolution of the floating exchange rate system, much pressure was placed on the yen. A popular balance of payments policy used by Japan and several other countries has been to impose certain restrictions on capital exports and/or capital imports to offset or reinforce the relative currency demands related to merchandise and services trade. This thesis examines how Japan's use of capital controls changed over the years 1975-1982 to accommodate changes in the current account of the balance of payments. Examination of movements in components of the capital account and in covered interest differentials, in relation to changes in capital controls, demonstrates that there is presumption that the controls were largely effective in Japan's case, during most of the period under study. But as the general international climate for capital flows became more liberal, Japan's controls weakened. There is evidence that the controls were then not successful in stemming the desired capital flows.Item Scale effects in the Southern Electric Utility industry and the performance of Houston Lighting and Power relative to other southern utilities(1984) Krasner, Thomas P.; Young, Richard D.; Huddle, Donald L.; Blanco, Herminio A.Using an econometric, cost function analysis, the author found large economies of scale, and in some cases, large diseconomies of scale associated with firm size. The regressions supported the findings of previous authors, which suggest the existence of constant returns to scale for fimrs above 4 MW. The effect of capacity factor proved to be minor. Input prices as well as regional and technological distinctions explained significant cost variation. Cost differences between Houston Lighting and Power and the other companies in the sample, whether positive or negative, seemed due to economies of scale and HL&P's wage structure. In most cases these cost differences were minor. HL&P’s recent nuclear and coal construction programs were also considered. HL&P initiated its nuclear construction program in national and regional environments which favored nuclear power. According to cost estimates in the 197s, nuclear generating costs would undercut those of coal or lignite. Like other utilities, HL&P seemed to not anticipate future nuclear cost escalation. Further contributing to its cost overruns, HL&P hired Brown & Root, a contractor without previous nuclear experience, and failed to provide adequate quality control. HL&P's coal construction costs appear reasonable. Its need for new coal plants, however, is debatable.Item Small-Scale and Traditional Industries: A Development Alternative(Rice University, 1975-10) Ho, Yhi-Min; Huddle, Donald L.; Electronic version made possible with funding from the Rice Historical Society and Thomas R. Williams, Ph.D., class of 2000.Item The role of monetary variables in the determination of the balance of payments. Theoretical analysis and empirical study: the Peruvian case(1980) Chiappori de Mendoza, Ana G.; Huddle, Donald L.; White, Kenneth J.; Wright, Neil R.The purpose of the thesis is to place in adequate perspective the role of monetary variables in the determination of the balance of payments of less developed countries and particularly of Peru. The monetary approach to the balance of payments, which hypothesizes that in the long run the balance of payments is determined by the demand for and the supply of money, is examined and evaluated. Two groups cf empirical studies analyze the role of monetary variables in balance of payments determination. The first group tests the long run propositions of the monetary approach by the estimation of the "reserve flow regression," which relates changes in international reserves to changes in the demand for money and changes in domestic credit. The second group specifies and estimates econometric models which elucidate the short run process by which monetary variables affect the balance of payments. The review of earlier results obtained from the estimation of the reserve flow regression for various less developed countries and the results here obtained for Peru indicate that increases in the rate of growth of domestic credit (for a given rate of growth of the demand for money) generate international reserves outflows and that increases in the rate of growth of the demand for money (for a given rate of growth of domestic credit) determine international reserves inflows. These results, however, are insufficient to rule out the possible rejection of the monetary approach to the balance of payments. Estimation biases may be present. In addition, the reserve flow regression cannot differentiate between the predictions of the monetary approach and those of other theories of the balance of payments. Even though the proposition that the balance of payments is solely a monetary phenomenon is not accepted, the role of monetary variables in the determination of the balance of payments should not be underestimated. Several short run econometric models of balance of payments determination for various less developed countries indicate that exports, imports and short term capital flows respond to conditions in the domestic money market. An excessive monetary expansion will tend to lead to a deterioration in the balance of payments which will partially correct the disequilibrium in the money market by reducing the supply of money. The results of the estimation of a monetary model of determination of the Peruvian balance of payments indicate that an excessive expansion of domestic credit increases real aggregate expenditure, real income and prices in the short run, which affect real imports through the income and price mechanisms. Exports, however, are mostly autonomous to monetary shocks in the short run.Item Undocumented workers in Houston's construction industry(1985) De Maria, Cristina; Huddle, Donald L.; Rimlinger, Gaston V.; Soligo, RonaldThe impetus to formulate immigration policy, recently evident in the Carter and Reagan Administrations, cornes from a growing awareness -- both public and private -- of the phenomenon of illegal migration, which nowadays has emerged as a most pressing issue. The same issue motivates the present study. The concern, however,is not with illegal migration at the national level, but rather at the local level specifically, undocumented workers in one of Houston's most powerful industries: Construction, The purpose of this study is to provide an insight into the demographic characteristics, country of origin, employment patterns, wage and working conditions, public services participation, duration of stay and ties in the U.S., in order to assess the impact of undocumented workers gainfully employed in Houston's labor market. The current study is unlike previous studies which considered only apprehended aliens. Undocumented workers in this sample were young, disadvantaged adults who came from Latin America to find employment. One out of three respondents had been in the U.S. for one or more years and their work had helped them to support at least one dependent in their homeland. Undocumented workers had significantly less education than their U.S. fellow workers and most of them had no technical training (the majority before coming to the U.S. had worked in agricultural and blue-collar activities). Most illegals were unskilled or semi-skilled workers in their most recent construction job. Undocumented workers prefer the kind of job that will allow them to earn the most money in the least possible time. By coming to Houston, the illegal worker encountered better job opportunities and less possibility of being detected by the Immigration and Naturalization Service (INS) than if they had stayed near the border or in small towns. The time of permanency for the majority of respondents is linked to their experience in avoiding detection and their ability to secure a job. Knowing about these characteristics and the illegal workers' performance in the labor market provides important leads on their impact or. U.S. society and in the formulation of a sensible immigration policy. This study propose a major emphasis on continuous cooperation with those countries which constitute the major source of undocumented workers, to improve their economies and their capacity to control their migrant's outflow.