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A diagnosis of the laws and balance sheets of the monetary authorities in Argentina, Bosnia, Bulgaria, Estonia, Hong Kong and Lithuania is presented. With the exception of Bosnia, all employ active monetary policies and engage in sterilization. Accordingly, they are not currency boards. The methods used to dismantle the Argentine system in 2001, prior to its eventual abandonment, are presented. An evaluation of the Hong Kong system (1997)(1998) suggests that its so-called currency board was not a party to counter-speculation in the stock market. Evidence is presented to show how deception was employed by the US and the IMF during the Indonesian currency board debate (1998) as a means to engineer a political regime change.

Shortcoming associated with past water demand studies are evaluated. To overcome these shortcomings, pooled, time series, cross section data from ‐6, Sweden, are used in an ordinary Least squares analysis to estimate the demand for residential water. Elasticities for five variables, including price and income, are estimated. An approach for the conduct of future water demand studies is suggested.

An empirical analysis of the effects on residential water use of changing from a flat rate price structure to a metered one is presented. Time series data, for the first time, are used to study the dynamics of residential water demand. The results include the observations that: (1) sprinkling demands were reduced by the introduction of meters, with actual sprinkling being greater than the calculated ideal under flat rates and less than ideal under metered rates; (2) sprinkling use not only declined with the introduction of meters but subsequently continued to decline; (3) domestic demands (in-house) were reduced by 36% after meter installation; and (4) domestic demands stabilized at these lower levels. The evidence generated by the analysis demonstrates that water users do not return to their old use patterns after meters are installed, and that metering results in a permanent and significant improvement in water use efficiency. INTRODUCTIONThe urban water industry is one of the oldest and largest industries in the United States. Nevertheless, the attention given to this industry by economists can be characterized as being both cursory and sporadic. The present investigation has attempted to analyze the demand for residential water in Boulder, Colorado, under dynamic conditions. Numerous responses can induce movements toward equilibrium in an urban water market that is in a state of temporary disequilibrium because of water 'shortages.' These responses can be classified into two broad groups, the first representing those that affect the supply and the second representing those that affect demand. The first set of adjustments is primarily technical in nature and attempts to bring about an eqUilibriUm in the market by increasing the supply. This increase can be accomplished by developing local potentials, importing water from other areas, developing reuse facilities, engaging in weather modification, pursuing activities in evaporation and leakage control, and constructing desalination facilities. The second set of adjustments induces a movement toward equilibrium in the water market by affecting consumers' behavior and choice. Included in this set of adjustments are restrictions on water use, changes from flat rate to commodity charges through metering, and modifications in the eommodity's price where meters exist. This paper focuses on the demand side of the market and represents an empirical analysis of the effects of changing from a flat rate price structure to a metered one. 200 150 o •_ I00 z 5O METERED RATE CUMULATIVE SPRINKLING AVERAGE ROUTES 70-71-72 ß ß ß ß ß JOJAJOJAJOJAJOJAJOJAJOJ J 0 J A J 0 J A J 0 J A J 0 J A J 0 J A J 0 J A J 0 J A J'•)",•"•'•J"(•"•

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Rules for correctly dealing with price and interest rate projections when one conducts benefit-cost analysis during inflation are derived. Recommendations of the Water Resources Council and those adopted in the Water Resources Development Act of 1974 are critiqued. The use of real prices and real opportunity cost interest rates is recommended as an improvement over the present practice of employing real prices and nominal financial interest rates.The current inflation in the United States, one of the most severe since the turn of the century, has stimulated a great deal of debate among academic, business, and government economists.. This debate has centered on the causes of this inflation, its consequences, and its cures. Our concern in this paper is not with these issues but rather with the proper approach to be used when benefit-cost analyses of water resource projects are to be pdrformed using data which reflect expected inflation.A survey of the benefit-cost literature reveals that the problems associated with project evaluation during inflation have been largely neglected or incorrectly handled. Such classics in the water resources field as Eckstein [1958] and Krutilla and Eckstein [1958] did not mention the problem. In most of the more well-known recent literature the analytical and practical issues surrounding evaluation for periods of inflation have remained conspicuously absent [see Harberger et al., 1972; Haveman et al., 1974; Little and Mirrlees, 1968; Mishan, 1971; Niskanen et al., 1973]. When inflation has been discussed, it has often been analyzed improperly [Hirshleifer et al., 1960; McKean, 1958; Posner, 1972; Stocktisch, 1969; Federal Register, 1973]. Howe's [1971] book in the water resources field and Hirshleifer's [1970] theoretical analysis of capital theory are particularly noteworthy as they correctly, although briefly, discuss the problems of evaluating projects during inflation.The purposes of this paper are to clarify the issues associated with evaluating projects when data which incorporate expectations of inflation are used and to present some recommendations for improving the evaluation of federal water projects. First, we present the principles for conducting evalua-Stocktisch, J. A., Measuring the 9pportunity cost of government investments, Res.

Demand management through pricing is assessed as a means to control use and influence ipvestment in water resources. In the a•essment of various pricing policies, trade offs are cPnsidered' economic efficiency, investment information, administrative and transaction Costs, equity, and political acceptability. On the basis of these trade offs, eight water re-Source areas are evaluated for their potential for improved pricing. Four areas in water resources show promise for using improved pricing policies' municipal water services, industrial and municipal sewerage, navigation, and flood damage reduction and shoreline protection. Four other areas for various reasons present serious problems' outdoor recreation, fish and wildlife habitat, irrigation, and hydroelectric power.An increase in the consumption of a commodity produces a benefit to the consumer. Every expansion in output usually requires, however, the withdrawal of resources from the production of some other item. Therefore the expansion of output entails a cost to the would-be consumers of forgone alternate products and services. The general role of prices is to balance benefits and costs at the margin, i.e., to assert proper checks and balances on both production and consumption in any economy. Therefore prices have two functions' to dis-.:courage excessive consumption of a commodity and to induce the desired supply of that commodity. Prices can act not only in the marketing of private goods but also in regulating the production and consumption of certain commodities produced by governments.In a perfectly competitive economy free from the problems associated with externaltries and public goods, prices are determined by an automatic, impersonal market mechanism that adjusts prices so that the quantity of goods demanded equals that of goods supplied. When prices are determined in this setting, all economic choices are efficient; i.e., real income is Copyright (•) 1973 by the American Geophysica, 1 Union. maximized. Therefore under conditions of perfect competition a pricing policy is not required. Pricing policies are reserved for the cases in which perfect competition is not approximated.Various forms of market failure provide the rationale for providing public water services [Bator, 1958]. Therefore the central issue in water resource management should be the design of a proper pricing policy. Of the many pricing policies available, marginal cost pricing is most conducive to the efficient allocation of resources. The efficiency with which the nation's water resource services are produced and consumed can be improved considerably if the general principles of marginal cost pricing are used as a guide in evaluating water pricing policies.The authors have reviewed the current pricing practices and prospects for improvement in major areas in which water services are provided today [Davis and Hanke, 1971b]. These include federal, state, and local agencies and public utilities such as water companies and irrigation districts. We have concluded that the areas of na...