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Swofford and Whitney (1987, 1988, 1994) investigated the validity of two key assumptions underlying representative agent models of macroeconomics. These assumptions are utility maximization and weak separability. Using mixed integer programming, we check revealed preference conditions for these assumptions. We find that M1, money defined by Friedman and Schwartz (1963), and a broad aggregate are weakly separable. We find that consumption goods and leisure and nondurables and services are weakly separable. We find that M2, M3, and MZM are not weakly separable. Finally, we find three categories of consumption, durables, nondurables and services, do not form an aggregate.

The concept of an optimum currency area has previously been developed using macroeconomic policy results and factor mobility as the criteria for the optimum extent of a common currency area. In this paper, microeconomic foundations for an optimum currency area are set forth. These microeconomic foundations are requirements for a common currency area to exist. One can test for consistency with these microeconomic foundations. Procedures for such tests are discussed. Some preliminary results are presented from tests of whether or not the Euro Area economies constitute a common currency area. The test results tentatively suggest that the Euro Area countries may encounter problems in their attempt to establish a common currency.

PUBLIC FINANCE REVIEWTicket scalping is typically analyzed from the point of view of the demanders of the product. The question of why a profit-maximizing producer would let someone purchase its product for speculation or arbitrage has typically been ignored in the literature. There are at least three reasons why a profit-maximizing firm might permit purchase of its product for resale. One reason is that uncertainty and risk aversion on the part of the firm provides an opportunity for speculation in the product by a less risk averse firm. A second reason is that the producing firm may face different cost functions than the ticket scalper, permitting arbitrage or a middleman to exist and make a profit. The third reason is that the dynamic revenue function of the firm may differ from the ticket scalper's revenue function, creating an arbitrage opportunity. Finally, a public choice perspective suggests that producers are the likely source of inspiration for laws against ticket scalping.