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Empirical models of retrospective voting primarily employ standard monetary and financial indicators to proxy for voters’ utility and to explain voters’ behavior. We show that subjective well-being explains variation in voting intention that goes beyond what is captured by these monetary and financial indicators. For example, individuals who are satisfied with their life are 1.6% more likely to support the incumbent; by contrast, a 10% increase in family income leads to a 0.18% increase in an individual’s support of the incumbent. We use difference-in-differences analysis to identify how voter intention is affected by a negative shock to well-being: the death of a spouse. Individuals who experience the death of a spouse are around 10% less likely than those in the control group to support the incumbent. The results hold even if elected officials’ policies (health care, social welfare) cannot reasonably be blamed for the death.

The aim of the study is to present the changes in US merger control policy at different stages of development of competition theories and views on pro- and anti-competitive effects of mergers (especially Harvard, Chicago, and Post-Chicago Schools of Competition). The research methods used in the study include literature review as well as the in-depth analysis of US legislation, antitrust agencies' enforcement policy and federal courts' adjudication practice with focus on changes in the economic analysis of mergers and their impact on market competition. This part of the study covers the period from the mid 1970s to the present time and comprises two stages of the development of US policy towards mergers. In the 1980s the Chicago School theories, efficiency primacy and minimum intervention principle prevailed in US antitrust policy. From the 1990s under the influence of Post-Chicago approach which no longer assumes that markets work perfectly the antitrust agencies have been more eager to intervene to block some (even vertical) mergers with potential anticompetitive effects (though the level of this intervention could be hardly compared with that of the 1960s). US merger enforcement policy has become more interdisciplinary with a more flexible approach to economic analysis as regards applied methodology which should be tailored to each transaction and supported by empirical evidence. Apart from consumer welfare its priority is protecting competitive process in the market.

The paper discusses the interpretation of the Great Depression and the policy decision making by four Harvard economists: Lauchlin B. Currie, Jacob Viner, John H. Williams, and Harry D. White. All were eminent scholars in the field of monetary and international economics, and were deeply involved in policy decisions during the New Deal. We will discuss how their Harvard training provided them with a common methodological and analytical perspective, and how this common perspective translated into specific policies when they moved from the academia to public service in the US administration. Their interpretation of the causes of the Great Depression and their policy proposals show the eclectic approach that these four economists had to monetary, fiscal, and economic analysis, and the points of contact with both the US monetarist tradition and the work of John Maynard Keynes. At the same time, this very eclecticism, far from making them part of the monetarist or the Keynesian schools, characterized them as a group of their own: a network of scholars who, by virtue of their studies and the evolution of their professional careers, developed a style of analysis and policy prescriptions that deeply influenced the nature of the New Deal.

Some bank reforms of the 1930s in the United States may have been overvalued. The Glass-Steagall Act of 1933 actually created new endogenous risks involving potential systemic effects. Deposit insurance failed to address the main cause of banking panics, and rather strengthened inefficient unit banks, while the prohibition of interstate bank branching continued to hinder banks to diversify idiosyncratic risks. The separation of commercial and investment banking put an end to certain conflicts of interest but it created an opportunity cost by preventing universal banking from developing effectively. Finally, an untimely intervention in a duopolistic conflict made the regulator a captive figure. By contrast, major innovations covering bailout processes and prudential regulation appear to have been underestimated. The Reconstruction Finance Corporation of 1932 established the foundations of an investor of last resort, giving the Treasury the authority to recapitalize insolvent financial institutions deemed too big to fail. The newly established banking regulator, the Federal Deposit Insurance Corporation of 1933, was given a special bank-closure rule, separate from the usual bankruptcy proceedings, which opened a way towards orderly resolution of failing banks in order to protect the economy from the spread of systemic risk.

The 1951 Treasury–Federal Reserve Accord is an important milestone in central bank history. It led to a lasting separation between monetary policy and the Treasury's debtmanagement powers and established an independent central bank focused on price and macroeconomic stability. This paper revisits the history of the Accord and elaborates on the role played by Marriner Eccles in the events leading up to the Accord. As chairman of the Board of Governors since 1934, Eccles was also instrumental in drafting key banking legislation that enabled the Federal Reserve System to assume a more independent role following the Accord. The global financial crisis has generated renewed interest in the Accord and its lessons for central bank independence. This paper shows that Eccles' support for the Accord—and central bank independence—was clearly linked to the strong inflationary pressures in the US economy at the time, and that he was equally supportive of deficit financing in the 1930s. This broader interpretation of the Accord holds the key to a more balanced view of Eccles's role at the Federal Reserve, where his contributions from the mid-1930s up to the Accord are seen as equally important. Accordingly, the Accord should not be viewed as the final triumph of central bank independence, but rather as an enlightened vision for a more symmetric policy role for central banks, with equal weight given to fighting inflation and preventing depressions.

How much have the dynamics of US time series and in the particular the transmission of innovations to monetary policy instruments changed over the last century? The answers to these questions that this paper gives are "A lot." and "Probably less than you think.", respectively. We use vector autoregression with time-varying parameters and stochastic volatility to tackle these question. In our analysis we use variables that both influenced monetary policy and in turn were influenced by monetary policy itself, including bond market data (the difference between long-term and short-term nominal interest rates) and the growth rate of money.

This paper argues that limited asset market participation is crucial in explaining U.S. macroeconomic performance and monetary policy before the 1980s, and their changes thereafter. We develop an otherwise standard sticky-price dynamic stochastic general equilibrium model, which implies that at low asset-market participation rates, the interest rate elasticity of output (the slope of the IS curve) becomes positive - that is, "non-Keynesian." Remarkably, in that case, a passive monetary policy rule ensures equilibrium determinacy and maximizes welfare. Consequently, we argue that the policy of the Federal Reserve System in the pre-Volcker era, often associated with a passive monetary policy rule, was closer to optimal than conventional wisdom suggests and may thus have remained unchanged at a fundamental level thereafter. We provide institutional and empirical evidence for our hypothesis, in the latter case using Bayesian estimation techniques, and show that our model is able to explain most features of the "Great Inflation."

This paper analyses the causes of banking crises by the way of a historical comparative case study. Moreover, the analysis draws on theories elaborated by the economist Hyman Minsky. The evidence presented suggests that the fundamental causes of the compared crises are found in the macroeconomic boom-bust fluctuation and the building up of asset market bubble(s) preceding the breakdown and the crisis. We also find boom-bust cycles as depicted in a basic Minsky-cycle, where financial instability and the outbreak of crisis is a consequence of an unbalanced mix of hedge, speculative and Ponzi financial positions. In both cases we have observed a pattern where stabilizing or thwarting institutions, as Minsky denoted them, were eroded over time. Each case demonstrates that structural economic shifts were interacting with major institutional changes and created processes that effectively removed institutional stabilizers. Hence, systemic risk was allowed to fill up the financial system. These processes were essential for building up financial imbalances of such a magnitude that the particular booms ended in systemic banking crises.

“Reaganomics” is a popular term used to refer to the economic policies of Ronald W. Reagan, the 40th U.S. President (1981–1989), which called for widespread tax cuts, decreased social spending, increased military spending, and the deregulation of domestic markets. In this paper, we analyze American economic policy during the Eigh-ties. After a brief introduction, where a general economic context of that country is shown, we discuss and revise the economic literature about these issues. Afterwards, we present an augmented IS-LM model for Reagan years, estimated bay VAR techniques., https://www.researchgate.net/publication/235981790_The_Economic_Policy_of_Ronald_Reagan_Between_Supply-Side_and_Keynesianism

This paper examines Jacob Viner's contribution to the debate and the policy decision-making concerning international monetary policy from the Great Depression to the Bretton Woods agreements. An outstanding member of the so-called 'early Chicago School of Political Economy', Viner was actively engaged in the debate over the causes and cures of the Depression, emphasizing the important role international economic problems played in producing its onset and in reinforcing its duration. During the 1930s Viner was an outspoken supporter of international monetary cooperation, set up to secure exchange rates stability, which he regarded as a paramount factor in restoring business confidence and fostering recovery. As a close assistant to Secretary of the Treasury Henry Morgenthau, Jr, Viner was able to exert a positive influence on the administration's foreign economic policy, from the Gold Stabilization Act of 1934 to the Tripartite Agreement of 1936. Although not directly involved in the Bretton Woods Conference, he played a role in preparing the ground for the establishment of multilateral agencies such as the International Monetary Fund and the International Bank for Reconstruction and Development. By means of his unpublished papers and other archival sources, as well as his writings, I shall examine Viner's analysis of the Great Depression, his contribution to the debate over American foreign economic policy and his work as economic adviser from 1930 to 1945. © 2011 Taylor & Francis.

This paper develops a new method to uncover the causal effect of trust on economic growth by focusing on the inherited component of trust and its time variation. We show that inherited trust of descendants of US immigrants is significantly influenced by the country of origin and the timing of arrival of their forebears. We thus use the inherited trust of descendants of US immigrants as a time-varying measure of inherited trust in their country of origin. This strategy allows to identify the sizeable causal impact of inherited trust on worldwide growth during the twentieth century by controlling for country fixed effects. (JEL N11, N12, N31, N32, O47, Z13)

Two dynamic general equilibrium economies compete in explaining the United States' interwar business cycles. Despite the demand driven contender's slight advantages, the results remain too close to call a clear winner.

This paper addresses the causes of the Roaring Twenties in the United States. In particular, we use a version of the real business cycle model to test the hypothesis that an extraordinary pace of productivity growth was the driving factor. Our motivation comes from the abundance of evidence of significant technological progress during this period, fed by innovations in manufacturing and the widespread introduction of electricity. Our estimated total factor productivity series generate artificial model output that shows high conformity with the data: the model economy successfully replicates the boom years from 1922 to 1929.