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This paper examines the evidence for stability in the income-velocity of money by allowing for the effects of the housing and stock markets. It is shown that much of the hitherto unexplained behavior of the income velocity (the so-called "velocity puzzle") can be explained by housing transactions as well as the returns on housing. Stock market transactions and wealthy effects of changes in stock prices are also shown to have a statistically significant effect on the income-velocity of money.

In a recent article in this journal, Berument, Dogan, and Onar (2010) challenged the existence of the previously documented daylight-saving effect. Kamstra, Kramer, and Levi's original finding (2000) was that average stock market returns on Mondays following time changes are economically and statistically significantly lower than typical Monday returns. Kamstra, et al. hypothesized that the effect may arise due to heightened anxiety or risk aversion on the part of market participants after they experience a 1-hr. disruption in their sleep habits, in accordance with prior findings in the psychology literature linking sleep desynchronosis with anxiety. Berument, et al. replicated the original findings using ordinary least squares estimation, but when they modeled the mean of returns using a method prone to producing biased estimates, they obtained puzzling results. The analysis here, based on standard, unbiased modeling techniques, shows that the daylight-saving effect remains intact in the U.S. DOI 10.2466/03.07.PR0.107.6.877-887

This paper argues that FDI is plagued by information asymmetries and moral hazard problems which can be ameliorated by face-to-face interaction. An equilibrium model of FDI indicates that better ability to discriminate among alternative projects in a foreign country through personal contact will increase foreign investment into that country, and spur more investment back From that country. We examine the relationship between FDI and three proxies for personal interaction: distance, language and travel. We find strong evidence supporting the importance of the human dimension in FDI, particularly that associated with travel. The direction of influence appears to be of travel on FDI, rather than FDI on travel. JEL classification: D 82; F 21; G 15 Keywords: Foreign direct investment; Information asymmetries; Personal interaction

The criticism leveled by J. Michael Pinegar on the study of daylight savings because of sleeping patterns is countered.

A survey in the area of regulation is done to distinguish between the freely determined and regulated components of the United States' CPI and to establish regulation that would provide an important source of price stickiness in the economy as a whole. The stickiness was judged against the benchmark of unfettered prices, which revealed there existed stickiness that was brought about by price regulation.

A study on the effects of housing and stock markets on the behavior of the income-velocity of money shows that previously unexplained activity can be attributed to housing transactions. The monetary settlement of the transactions affect money demand and velocity. Meanwhile, stock market transactions affect money on different aspects, specially with the presence of significant returns. These implications explain the behavior of money velocity in the 1980s.

A study defined and explained the factors that affected the level of involvement of foreign banks in the US. There are three types of involvement. Representative offices are affected by exports, private lending and the magnitude of the foreign capital market. Agencies are affected by exports and magnitude of the foreign capital market. Branches are affected by the magnitude of the foreign capital market. An equilibrium model was used to validate these conclusions. Limitations are presented.

In the ongoing Canadian debate on confederation, variations across the country are almost invariably viewed as conditions that must be removed or at best tolerated. This paper provides an alternative view and model of confederation that builds on portfolio notions of diversification. Here, instead of seeing regional differences as barriers to a strong confederation, we envision building solidly on these differences and encouraging regions to differentiate themselves. Canada's diverse regions might then realize futures that are most appropriate to their resource endowments and human aspirations and that at the same time improve the economic growth and growth-volatility characteristics of the nation as a whole. Regions might pursue their comparative advantages rather than having to forego their distinctness in striving for a 'national mean' - a mean all too frequently defined by values at the centre of economic and political power. The ensuing discussion expands this argument and applies it using two specific examples: securities regulation and housing policy. The paper concludes with some suggestions for instituting a more differentiated, diversified and decentralized form of confederation. (Reprinted by permission of the publisher.)