#1999-013A "Income Inequality and Minimum Consumption: Implications for Growth"
by Donald S. Allen, and Leonce Ndikumana


We propose a model that recognizes hierarchical goods and income inequality among households. The model demonstrates that growth is impacted not by inequality per se, but "absolute" income distribution or the level of poverty underlying the income distribution. More...

#1999-004A "Seasonal Production Smoothing"
by Donald S. Allen


Empirical tests of the production-smoothing hypothesis have yielded mixed results. In this paper, Donald Allen looks for, and finds evidence of, seasonal production smoothing in 15 out of 25 manufacturing series and 8 out of 10 retail series, using detrended seasonally unadjusted data. More...

PUBLISHED: Federal Reserve Bank of St. Louis Review, September/October 1999, 81(5), pp. 21-40

#1998-004B "Financial Intermediation and Economic Growth in Southern Africa"
by Donald S. Allen, and Leonce Ndikumana


Using various indicators of financial development, this paper investigates the role of financial intermediation in stimulating economic growth for members of the Southern African Development Community (SADC). The results lend some support to the hypothesis that financial development is positively correlated with the growth rate of real per capita GDP. More...

#1997-017A "A State Space Forecasting Model with Fiscal and Monetary Control"
by Donald S. Allen, and Meenakshi Pasupathy


In this paper we model the U.S. economy parsimoniously in an atheoretic state space representation. We use monthly data for thirteen macroeconomic variables. More...

#1997-013A "The Efficiency of Residential Mortgage Guarantee Insurance Markets"
by Donald S. Allen, and Thomas S. Chan


Mortgage Guarantee Insurance (MGI) provides protection to lenders against default by borrowers who have less than 20 percent equity interest in the mortgaged property. The existence of this form of insurance helps to stimulate home ownership by allowing consumers with less than twenty percent down payment access to credit markets. More...

#1997-001A "Filtering Permanent Cycles with Complex Unit Roots"
by Donald S. Allen


Separating cyclical movement from trend growth at seasonal and business cycle frequencies is important to macroeconomic research. At business cycle frequencies, time trends, first differences and the more recent Hodrick-Prescott (HP) filter are used to separate trends from cycles. More...

#1996-009A "Forecasting with an Adaptive Control Algorithm"
by Donald S. Allen, Yang-Woo Kim, and Meenakshi Pasupathy


We construct a parsimonious model of the U.S. macro economy using a state space representation and recursive estimation. At the core of the estimation procedure is a prediction/correction algorithm based on a recursive least squares estimation with exponential forgetting. More...

#1996-003A "Aggregate Dynamics of Lumpy Agents"
by Donald S. Allen
March 1996

This paper identifies the criteria for dynamic synchronization of the movement of agents who make intermittent adjustment to inventory stocks, leading to "harmonic resonance" rather than cancellation. I use a discrete Markov process model of (S,s) inventory adjustment to establish a theoretical framework for the aggregate dynamics and use simulations to demonstrate the distribution effects of a discrete model of lumpy behavior. More...

PUBLISHED: International Journal of Production Economics, March 1999

#1995-012B "Trade, Growth and Capital: A Case Study of Jamaica"
by Donald S. Allen, and Michelle T. Gyles
September 1995

This is the first of two articles on the dynamics of the Jamaican economy over the last two and a half decades. It compares the overall macroeconomy of Jamaica in the areas of output, fiscal and monetary policy, capital formation and trade to that of Singapore and South Korea. More...

#1994-029A "Why Does Inventory Investment Fluctuate So Much During Contractions?"
by Donald S. Allen


Inventory investment appears to have a significant impact on the movement of aggregate output during business cycle contractions. Recent empirical evidence has raised doubts about the often used assumption of a buffer-stock/production-smoothing motivation for inventory. More...

PUBLISHED: Journal of Economic Behavior and Organization, January 1997