Three essays in international and intraregional economics

This dissertation consists of three essays in international and intraregional economics. The first essay reports the results of estimates of an exchange rate determination equation for the U.S. dollar/Canadian dollar exchange rate. The estimated equation has a form that is similar to exchange rate equations derived from monetary models, but it is augmented by the inclusion of proxies for expected monetary variability for the United States and Canada. When the exchange rate equation was estimated for alternative specifications of expected monetary variability, the results gave strong support to the view that an increase in U.S. monetary variability will cause an appreciation of the exchange rate;A model of the Eurodollar market was developed in the second essay of this dissertation. The model followed the portfolio approach and was based on the assumption that the Eurodollar market is a perfectly competitive market for international funds. The model consisted of aggregate supply and demand functions for Eurodollar funds, one of which represented funds placed in the Eurodollar market by central banks. An instrumental variable technique was used to estimate the parameters of the system of structural equations that represented the Eurodollar market. The results were generally supportive of the portfolio approach;The third essay consisted of an investigation of the impacts of alternative energy price levels and erosion control policies on agricultural production and soil erosion. The study area comprised a two million acre river basin in North Central Iowa. A linear programming model was developed to represent crop and livestock production in the study area. The programming model was solved for various energy price levels and alternative erosion control policies. The solution results indicated that higher energy prices alone would induce a switch to agricultural production techniques that are less erosive and that require lower levels of fertilizer use. However, the ability of higher energy prices to bring about lower levels of nonpoint source pollution is limited, given present technology. Substantial reductions in soil erosion will occur only as the result of pollution control policies.