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This paper examines the differences in characteristics of federal and state chartered banks by using individual commercial bank's data sets from 1984 to 2006. The findings indicate significant differences between these two groups of banks in terms of their asset and liability management strategies. In line with these differences, credit channel of monetary policy is found to work differently for state and federal banks. Federal banks are found to be more responsive to monetary policy changes. [ABSTRACT FROM AUTHOR]

This paper presents new findings from the World Top Incomes Database and discusses some of their policy implications. In particular, the paper provides updated top income series for the United States-including new estimates through 2010, showing a strong rebound of the top 1 percent income share, following the 2008-09 sharp fall. It also presents updated income series for other developed countries (including the United Kingdom, France, Germany, and Japan) and new series on wealth-income ratios. In light of this extended set of country series, the paper analyzes the relative importance of market and institutional forces in explaining observed cross-country trends, and the likely impact of the Great recession on these long-term evolutions. It discusses the policy implications of the findings, both in terms of optimal tax policy and regarding the interplay between inequality and macroeconomic fragility. [ABSTRACT FROM AUTHOR]

This paper uses a global input-output framework to quantify U.S. and European Union (EU) demand spillovers and the elasticity of world trade to GDP during the global recession of 2008-09. Cross-border intermediate goods linkages have implications for the transmission of shocks and the relationship between demand, trade, and production across countries. This paper finds that 20-30 percent of the decline in U.S. and EU final demand was borne by foreign countries, with the North American Free Trade Agreement (NAFTA) and emerging Europe hit hardest. Allowing final demand to change in all countries simultaneously, the framework presented here delivers an elasticity of world trade to GDP of 2.8. Thus, demand forces alone can account for roughly 70 percent of the trade collapse. Large changes in demand for durables play an important role in driving these results. [ABSTRACT FROM AUTHOR]

Using historical, theoretical and empirical arguments, this paper puts forth the notion that it was the rise of US national TV networks in the late 1960s that led to the expansion of federal social regulation and a simultaneous decline of federal economic regulation in the 1970s. The paper argues that national TV networks changed the relative position of national versus local and regional producers and sellers of goods and services. Instead of preferring state and local social regulation, the emerging national firms preferred federal social regulation. Since national markets were emerging, the same national firms lobbied for regulatory reform in transportation and communication services. The rise of national markets associated with national TV networks also stimulated a demand for mergers and consolidations. Data describing these various phenomena are provided in the paper. [ABSTRACT FROM AUTHOR]

The question addressed in this paper is whether there is an annual net gain to the state economy on a per student basis as a result of state subsidies to private institutions of higher education. In addition, the annual economic impact of adding a student at a private institution is compared to the impact of an additional student at a public institution. Because of Maryland's 40-year history of direct appropriations to private non-profit institutions, the analysis focuses on the state of Maryland and employs input-output methodology. Due to the high percentage of out-of-state students and high tuition, the typical new student in a private higher education institution adds significant new spending to the state leading to a net positive tax payback on the subsidy. [ABSTRACT FROM AUTHOR]

This paper examines the impact of economic freedom on income inequality using cross-sectional data for U.S. states. While previous research has explored this relationship internationally, the results have been conflicting. In addition, while it seems obvious that the large institutional differences across countries will impact income inequality, it isn’t so obvious that the smaller variation in policies among U.S. states can have a measurable impact. Can improvements in income inequality be used as a justification for marginal pro-market policy reforms at the state level, or is this argument applicable only to national-level institutional reforms? [ABSTRACT FROM AUTHOR]

The paper presents a critical analysis of the Bretton Woods 2 (BW2) hypothesis. According to this view China, other Asian economies and other emerging market economies follow mercantilist policies of maintaining fixed pegs to the US dollar at undervalued levels as a way to pursue export-led growth. The view in the paper is that there is indeed a BW2 regime in some regions of the world. But it is argued that BW2 is different from the first Bretton Woods system: BW2 is structurally unstable and fragile and will unravel over the horizon of the next few years, not a decade or longer. This unraveling could lead to a sharp fall for the US dollar and the US bond market with high real collateral costs with a disorderly rebalancing of the global economy. [ABSTRACT FROM AUTHOR]

Fiscal retrenchment is on the political agenda in the U.S. as well as in the EU. Utilizing Diamond's [] classic OLG growth model with internal debt, this paper focuses on temporarily adjusting the ratio of the primary budget surplus to GDP to achieve a target debt to GDP ratio lower than its initial level in the case of dynamic efficiency. The transitional dynamics of the debt to GDP and of the capital–output ratios are rigorously analyzed. It is shown that reducing the public debt to GDP ratio diminishes private capital intensity too. [ABSTRACT FROM AUTHOR]

This paper argues that it is essential to explicitly consider how the government spends tax revenues when assessing the effects of tax rates on aggregate hours of market work. Different forms of government spending imply different elasticities of hours of work with regard to tax rates. I illustrate the empirical importance of this point by addressing the issue of hours worked and tax rates in three sets of economies: the US, Continental Europe and Scandinavia. While tax rates are highest in Scandinavia, hours worked in Scandinavia are significantly higher than they are in Continental Europe. I argue that differences in the form of government spending can potentially account for this pattern. [ABSTRACT FROM AUTHOR]

This paper develops and tests the theory that fiscal rules limit politicians' ability to manipulate the budget for electoral gain. Using panel data from the American states, I find evidence suggesting that stringent balanced budget rules dampen the political business cycle. That is, while spending rises before and falls after elections in states that can carry deficits into the next fiscal year, this pattern does not exist in states with strict “no-carry” rules. Neither binding gubernatorial term limits nor the partisan composition of government appear to significantly affect the magnitude of the political business cycle. [ABSTRACT FROM AUTHOR]

This paper proposes the creation of a common currency for the industrialized democracies, notably the United States, the European Union, and Japan. A common currency implies a common monetary policy; institutional arrangements for which are discussed. The rationale rests on the assumption that asymmetrical financial shocks will become more important than asymmetrical real shocks for these large, diversified economies, and that one of the growing sources of financial shocks will be changing expectations about exchange rate movements among national currencies. These financial shocks will in turn disturb real economies, such that flexible exchange rates among major currencies will increasingly become sources of shock more than shock absorbers. Such a common currency would also make it much easier for emerging markets to frame their monetary and exchange rate policies. [ABSTRACT FROM AUTHOR]

This paper examines the recent history of State-level policies in the United States for knowledge-based economic development, and identifies an emerging model based on technology creation. This new model goes beyond traditional investments in technology transfer and prioritizes cutting-edge scientific research in economically relevant fields. As research-intensive universities are indispensable for technology creation, these policies have yielded substantial new investments in university science. [ABSTRACT FROM AUTHOR]

Focuses on fiscal preference and balanced budget fiscal policy in the U.S. Analysis of tax expenditure fiscal policy alternatives in terms of a model of individual fiscal preferences; Details of how individual purchases of the public good are affected by various ways of creating budget deficits; Examination of the case of balanced budget fiscal policy.

This study evaluates how economic policy uncertainty (EPU) affects firm shareholder wealth. It further investigates the moderating roles of marketing, operations, and R&D capabilities in this relationship. Analysis of longitudinal data, collected from a large sample of firms across multiple industries in the United States, reveals a complex picture. Results show that although EPU lowers firm value (i.e., Tobin's Q and stock returns), it also reduces firm idiosyncratic risk. In addition, high marketing capability is observed to attenuate the loss in firm value arising from EPU, whereas high operations capability is seen to amplify this loss, with R&D capability not playing a significant moderating role. On the other hand, the reduction in idiosyncratic risk of firms facing EPU is marginally strengthened by operations and R&D capabilities, but not by marketing capability. Together, the conceptual framework and findings provide novel insight into the role of marketing capability in dealing with EPU. [ABSTRACT FROM AUTHOR]

Much economic policy is deliberately shifted away from direct political processes to administrative processes—political pressure deflection. Pressure deflection poses a puzzle to standard political economy models which suggest that having policies to ‘sell’ is valuable to politicians. The puzzle is solved here by showing that incumbents will favor pressure deflection since it can deter viability of a challenger, essentially like entry deterrence. U.S. trade policy since 1934 provides a prime example, especially antidumping law and its evolution. [ABSTRACT FROM AUTHOR]

In Spring 2003, a survey of 1000 economists was conducted using a randomly generated membership list from the American Economics Association. The survey contained questions about 18 policy issues, voting behavior, and several background variables. The response was 264 (nonblank) surveys. The responses show that most economists are supporters of safety regulations, gun control, redistribution, public schooling, and anti-discrimination laws. They are evenly mixed on personal choice issues, military action, and the minimum wage. Most economists oppose tighter immigration controls, government ownership of enterprise and tariffs. In voting, the Democratic:Republican ratio is 2.5:1. These results are compared to those of previous surveys of economists. We itemize a series of important questions raised by these results. [ABSTRACT FROM AUTHOR]

In accordance with the median voter theorem the median legislator is decisive in representative democracy. If the preferences of the median legislator differ from the preferences of the median voter in the polity, fiscal policy choices will predictably diverge from those favored by the median voter. This paper seeks to identify the median district (and therein the preferences driving the median legislator) in American State legislatures. Using economic characteristics of constituents, we find substantial differences between the median district and the statewide median. As the income of the median district rises above the median income of the polity, government expenditures increase. In addition, the degree to which income is skewed across legislative districts affects spending for redistribution programs. Finally, we find that direct democracy procedures, which allow the statewide median voter to check legislative decisions, limit the impact of differences between the district and polity medians. [ABSTRACT FROM AUTHOR]

In this paper we explore the intersection of the modern-stare and fieldwork practices within the social sciences. Our contention is that during the past decade or so there has been an expansion in forbidden or restricted research terrain that threatens the present and future conduct of social research. We argue that this restriction has been engendered by two related developments: privatization and human subjects regulations. The social and political implications of these trends are considered. [ABSTRACT FROM AUTHOR]

Abstract. The monetarist model of the exchange rate includes expectations of the future exchange rate as a determinant of the current exchange rate. This paper investigates whether expectations are a significant determinant of the exchange rate. An expectations process that is consistent with a basic monetarist exchange rate model is considered. Alternative measures of expectations are generated using this process. In the empirical tests, while the standard forward exchange premium measure of expectations is statistically insignificant, some of the alternative measures are observed to be statistically significant. [ABSTRACT FROM AUTHOR]

Abstract. Previous studies have analyzed the comovement of international stock returns during periods of fixed exchange rates [11, 15]. Results of these studies have indicated an increasing correlation between U.S. stock returns and foreign stock returns. This paper explores the weekly comovement of international equity and long-term bond returns for nine industrialized countries--United Kingdom, United States, West Germany, Netherlands, Belgium, France, Switzerland, Italy, and Japan--during the period of floating exchange rates, 1973-1977. Results of this study indicate: (1) a low correlation between U.S. and foreign stock and long-term bond returns; (2) The necessity for adjusting for exchange rate movement before analyzing relative return between countries; and (3) the importance of percentage changes in money supply, price levels, and real gross national product in determining unadjusted asset returns and exchange rate movement. [ABSTRACT FROM AUTHOR]

Analyzes the effectiveness, effects and scope for international coordination of short-run fiscal stabilisation policies under floating exchange rates under the European Monetary System and the economic and monetary union in Europe (EMU). Information on a short-run Keynesian two-country model; Discussion of the strategic interactions between the EMU and the U.S.; Effects of wage indexation within Europe.

The article presents a reply to Dan Usher's comment regarding the model to physical public goods in political equilibrium in the U.S. The author discusses the use of the word overprovision when discussing the level of public transfers to the poor in political equilibrium. The example in the Appendix of an inefficiently low level of national defense in political equilibrium was to allow a discussion of the level of private provision.

The aim of this study is to investigate the dynamics of the co-movements of energy and banking sector credit default swaps (CDS) spreads with global financial and economic policy uncertainty and risk factors in the United States and Europe. We first employ the standard quantile regression approach to examine the co-movement dynamics under different credit market conditions. The empirical results show that the standard quantile regression fails to capture the co-movement between the U.S. and European CDS spreads and the economic policy uncertainty and risk factors for all quantiles. However, after decomposing the raw series at various scales of resolution, using the wavelet approach to capture the structure, we find that the financial and energy related CDS spreads co-move with the economic policy uncertainty and stock market risk in the intermediate and lower frequency domain. That is, there is a dependency in the intermediate and higher time scales or the intermediate and long investment horizons for both the United States and Europe. However, there are positive effects of the stock market risk index on the U.S. banking CDS spreads, which remain almost similar across quantiles, but the effects are asymmetric for the European banking spreads. The study also provides policy implications. [ABSTRACT FROM AUTHOR]

This article comments on a paper by Charles Baird which examined three sources of the adversarial union-management relations in the U.S., namely union history, the Norris-LaGuardia Act, and the Wagner Act, as amended. His recommendation to cancel the National Labor Relations Act (NLRA) and return to pre-1936 labor jurisprudence is not being criticized. The cases cited by Baird as illustrative of sound labor jurisprudence--Loewe versus Lawlor, Duplex Press Co. versus Deering, and Vegelhan V. Gunter--reflected a particular model of constitutional adjudication that has long since been abandoned by the Supreme Court. From 1897 to 1937, when many of these cases were decided, the court had embarked on substantive due process analysis to invalidate much social and economic legislation, ranging from minimum wage laws to price regulation to regulation of labor management relations. An adversarial relationship between employer and employee is not inherently bad. To the extent that increased cooperation between the two groups is desirable to meet changes in marketplace competition, however, such cooperation should be facilitated by changes in specific revisions to the NLRA and not, in essence as Baird has urged.

In the past two decades, although access to higher education for American students has improved, student persistence in 4-year institutions is far from assured. There have been a number of research studies on student persistence/dropout in higher education, but most have focused on the characteristics and behavior of students as illustrated by the 'student-centered research tradition'. This study focuses on what institutional characteristics contribute to conditions that reduce student dropout risks. By analyzing longitudinal and hierarchical data, this research proposes and tests a multilevel event history model that identifies the major institutional attributes related to student dropout risk in a longitudinal process. Evidence indicates that institutional expenditure on student services is negatively associated with student dropout behavior. Implications of the results for institutional practices and future research are discussed. [ABSTRACT FROM AUTHOR]

A well-intentioned and fully informed regulator may determine that the optimal policy is to deregulate the market, yet the regulator may be constrained from doing so. In this condition, deregulatory policies originate in exogenous shocks to the regulator’s choice environment. Entrepreneurship in political and economic markets is a primary source of institutional change that promotes deregulation. [ABSTRACT FROM AUTHOR]

Using data on members on the Council of Economic Advisors as well as US Treasury secretaries and OMB directors from 1952 through 2005, I investigate the effect of economic advisors’ educational and employment backgrounds on the time series performance of several policy variables. Ivy League advisors appear to raise non-defense government spending, although the size of the impact differs by president. While voter preferences appear to matter for a wider variety of policy variables (changes in federal regulation and marginal tax rates), the share of Ivy League advisors is at least as important as voter preferences in explaining non-defense spending. [ABSTRACT FROM AUTHOR]

Profiles Leon H. Keyserling, author of the Full Employment Act of 1946 and first vice chairman and second chairman of the Council of Economic Advisers to the President in the U.S. Role of Keyserling in the creation of economic policy; His views on inflation; Considerations in economic policy-making.

Consideration was given to the optimal control of investments in the economic growth model. The basic construction of the model is the production function relating the growth of production with the dynamics of production factors, and the investments in the production factors are the control parameters. The integral indicator of the discounted consumption index is the optimization functional. The Pontryagin principle of maximum for problems on infinite horizon was used to construct the optimal investment control. For the corresponding Hamiltonian system, considered were its qualitative properties such as existence and uniqueness of the steady state, properties of the eigenvalues and eigenvectors of the linearized system, and characteristics of the saddle point. This analysis allows one to obtain an algorithm to construct the optimal growth trajectories. The model was calibrated for the USA macroeconomic indicators. [ABSTRACT FROM AUTHOR]

In this article, I argue that the cultivation of innocence in the United States, coupled with policies of free market expansionism, the acquisitiveness of capitalism, rising militarism, the hubris of democratic evangelism, free market fundamentalism, and the immense U.S. militaristic and economic power, is an especially fatal sin. In general, I contend that nurturing innocence involves overlooking the inadvertent and advertent destruction and suffering that has resulted from U.S. interventionist policies and actions in the 20th and 21st centuries. Finally, I argue that the cultivation of innocence, which is often supported by Christian theological language, contradicts central Christian beliefs. [ABSTRACT FROM AUTHOR]

We examine empirically whether asset prices and exchange rates may be admitted into a standard interest rate rule, using data for the United States, the United Kingdom, and Japan since 1979. Asset prices and exchange rates can be employed as information variables for a standard "Taylor-type" rule or as arguments in an augmented interest rate rule. Our empirical evidence, based on measures of the output gap proxied by marginal cost calculations, suggests that monetary policy- makers may use asset prices and exchange rates not only as part of their information set for setting interest rates, but also to set interest rates to offset deviations of asset prices or exchange rates from their equilibrium levels. These results are open to several alternative interpretations. [ABSTRACT FROM AUTHOR]

In this article, the author focuses on race and the underdevelopment of the so-called American "welfare state," based on the various essays and articles by different authors and researchers. Over the past decade, scholarship on the structure and development of social policy in the United States tended to treat race as little more than a mediating factor between class or institutional factors, on the one hand, and welfare state outcomes on the other. The emerging field of race and welfare politics contains three distinct nodes: first, historical analyses of the interaction between race and U.S. political institutions; second, analyses of the class or race and gender nexus, especially in regard to the political economy of the South America; and third, analyses of the impact of racial attitudes and racism on political beliefs and policy preferences. The American welfare state is described in three ways. First, that it contains few universal social programs of the type found in Europe. The U.S. has no system of national health insurance, but it also lacks a "safety net" for those without work, and many other types of programs found elsewhere. Second, that it is a uniquely decentralized welfare state, with numerous programs operated entirely or in large measure at the discretion of state or even local governments, a trend accentuated by the 1996 welfare reform. Third, that the U.S. devotes a very high percentage of its anti-poverty expenditures on "opportunity" programs designed to give members of disadvantaged groups a better change of competing within the labor market, as opposed to direct income transfers, specially since 1960s.

This article analyzes government deregulation of economic activity in the U.S. that depicts the complex motivations underlying the deregulation in different economic aspects. Regulations in many ways is the hallmark of the modern interventionist state. However, the nature of that intervention is subject to considerable debate. Traditional U.S. liberal theory has viewed the creation of regulatory agencies as a concrete expression of democratic reform. Liberal theory places emphasis on the historical genesis of regulatory agencies and of reform generally. In contrast to liberalism's emphasis on regulation as a triumph of democracy, conservative theory criticizes the operational effects of economic regulation as counterproductive. Liberals who find that regulatory agencies often do not function in the democratic public interest, blame various institutional shortcomings, including the close relationship between agencies and regulated industries. The Nader-spawned regulatory reform organizations and even some government-sponsored reports on regulatory agencies offer this outlook. The regulatory policies that emerged at the end of the nineteenth century constituted not only a new mode of coercive state activity but introduced a new body of law: administrative law.

Discusses the popularity function estimates for presidents in the United States. Development of partisan voter model for rational choices; Prediction of economic outcomes from democratic and republican administration; Impact of political parties on unemployment and inflation.

Defends the hypothesis that the U.S. Federal Reserve Board has obtained benefits from the massive contraction in the money supply over which it presided between 1929 and 1933. Evidence used in supporting the hypothesis; Competition faced by member banks of the U.S. Federal Reserve System; Analysis of a sample of New York City bank stock prices; Ratio of bank stock price indexes.

Argues that the behavior of the share prices of publicly traded member banks of the U.S. Federal Reserve System during the 1929-1933 period conflicts with the hypothesis that the period was the result of rational rent-seeking by members. Analysis of the wealth accumulated by member banks after the period; Impact of the Federal Reserve's monetary policy on member bank share prices; Regression estimate of percentage changes in member bank share prices.

Examines the hypothesis that voter choice on the liberal-conservative continuum affects the income distribution in the U.S. Measurement of income inequality and political bipartisanship; Discussion of the evidence that periods in which conservative strength is high in the Congress are associated with increased inequality; Effects of political and macroeconomic policy on income inequality.

Analyzes the influence of state-level economic conditions on presidential elections in the U.S. Determination of which politicians are held responsible by the electorate for changes in general economic conditions; Identification of the economic conditions that influence the electorate's voting; Establishment of the time period that the electorate uses to assess economic policies.

From 1974 to 1980, many conservation and renewable energy policies were adopted at the state level in the United States. Some states were particularly active in enacting such policies while others were totally inactive. The variation in state policy activity is only modestly related to the slates" past policy innovation traditions and conservation/ renewable energy opportunities. Differences in energy vulnerability, and the relative hardship imposed by the energy crisis, have apparently had even less impact on the adoption pattern. These weak or insignificant relationships are typical of other efforts to explain state energy policy variations and are attributed to six qualitative factors: Federal preemption and inconsistency, ambivalent public opinion, conflicting values, lack of information on state energy conditions, and ignorance of the impacts of renewable energy and conservation policies. The findings identify several actions to increase sensitivity toward state energy conditions in policymaking. [ABSTRACT FROM AUTHOR]

Linear models are developed to determine the relative impact of 15 start-up processes on the annual regional birth rate of new business organizations for all industry sectors in the U.S. over 6 two-year periods. These stable linear models explained from 50-70% of the variation in regional firm birth and death rates up to 16 years into the future. Start-up processes that have the most impact involve regional economic diversity; population growth; greater personal wealth; presence of mid-career adults; low unemployment; and greater flexibility in employment relationships. There was a complete absence of any impact of regional variation associated with higher densities of customers, suppliers, workers, R&D resources; costs of production; or access to national transportation facilities. [ABSTRACT FROM AUTHOR]

Trends in labor force participation rates and the age of retirement are shown to be important of upward mobility. Reductions in age specific participation rates increase the speed of movement through the employment hierarchy. In conjunction with economic development, the falling labor force participation of older men acts to offset the adverse effects of slowing population growth on promotional prospects. These conclusions are reached by extending a model of employment status developed by Keyfitz to limit employment competition to only those actually in labor force. [ABSTRACT FROM AUTHOR]

Explores the relation between the extent of competition between the two major political parties in the U.S. and the dispersion of economic policies, measured primarily by benefit levels and recipient rates of various income maintenance programs. Discussion on some of the classical theory of political economy with theoretical work on resource allocation by public agencies; Information on the distribution of preferences of the electorate and the cost of elasticities of voter participation; Details of indirect relation between political competition and policy.