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This study has analyzed the long run determinants of the ratio of currency to M1 and M2 over the period 1920–80. For both ratios, its results confirm Cagan's well-known findings on the importance of deposit yields and tax rates. Unlike Cagan, who did not attempt to construct a proxy variable for the ratio of currency-intensive to total transactions, the ratio of spending on nondurables and services to total bank clearings was used in this study as such a proxy and found to be a better explanatory variable than expected real per capita income. At times, movements in this variable were an important contributor to changes in both money ratios. In addition, movements in the ratio of teenagers to total population, a variable not considered by Cagan, had a role in explaining the 1961–73 rise in C/M1.

Arthur Benavie's purpose inDeficit Hysteria [1998] is to argue how the U.S. aversion to deficits in the federal government's budget has been misguided. Chapter 2 ranges far and wide but basically consists of the argument that, left to itself, the private macroeconomy may fail to generate sufficient aggregate demand to provide full employment, and at such times, increased federal government spending can effectively boost demand and employment. Deficit hysteria should not prevent the use of this policy option. The purpose of Chapter 3 is to counter the arguments of deficit hawks that cutting the deficit will raise productivity. Much shorter subsequent chapters deal with issues of income distribution, Social Security, and the negative implications of the 1991 Maastricht Treaty provisions for Western European economies.

THE BANKING ACT of 1935 provided for greatly tightened federal regulation of entry into the bank industry. In a well-known study, Peltzman (1965) investigated whether this legislation, in fact, had affected the entry rate in the industry. He found a significant downward shift of the intercept in his model of the relation between the entry rate and its economic determinants in the post-1935 period. 1

In recent contributions, Kain and Quigley [4; 5] investigated the relationship between race and homeownership. Using a 1967 cross-section of St. Louis households, they concluded that blacks were significantly less likely to be homeowners than whites. This conclusion held not only for their entire sample but also for the subset of households that had moved recently. This is important since if discrimination is disappearing, one would expect this fact to show up in data using the latter subset much sooner than in the data for the entire sample. A subsequent paper by Roistacher and Goodman [10] estimated the parameters of Kain and Quigley's model using 1971 data from the Panel Study of Income Dynamics1 for the 24 largest SMSA's. They found that for the entire sample the difference between probabilities of black and white homeownership was almost twice as great as that estimated by Kain and Quigley, but that when the sample was restricted to the subset of families that