This paper constructs a simple, two-country, stochastic equilibrium macro-model. I model OPEC as a Hotelling (1931) monopolist.

This paper derives the optimal response of domestic oil prices to OPEC oil-price and other shocks for a small-open economy which may be an oil producer. It is found that oil's domestic price should not be tied to world oil prices. Rather, it should be indexed to final goods prices.

Forming a rational anti-AIDS policy--guided, say, by a cost-benefit analysis--is difficult (if not impossible) without knowing the cost involved. Presumably, AIDS currently imposes substantial cost on Canadian society. The direct costs of AIDS are relatively small. The principle cost is...