Economist, Federal Reserve Bank of New York. The opinions expressed are those of the author and do not necessarily reflect the views of the Board of Governors of the Federal Reserve System or the Federal Reserve Banks. This paper is based on the author's doctoral dissertation submitted to Clark University in 1971. The author would like to thank Howard Nicholson, David Ott and Frank Puffer, his dissertation advisors, his colleague George Juncker, as well as the Journal reviewer, Dennis Starleaf, for their helpful comments. The author is solely responsible for any mistakes that remain.