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A stochastic framework for coordination of macroeconomic policies is introduced in this paper. It is suggested that: (i) measures of policy accountability should allow for the climate of uncertainty that surrounds policy decisions, and (ii) most models of aggregate economic activity impose arbitrary specifications of uncertainty that do not appear to be empirically justifiable. Ambiguities in interpreting the Humphrey-Hawkins reports of policy authorities are sketched in section II; a proposal for maximizing the ex ante prospects of policy objectives is illustrated in section III; finally, nonstationary allocations of uncertainty are discussed in sections IV and V. This paper provides a brief survey of ongoing work by members of the Federal Reserve Board staff on the role of uncertainty in policy forecasts. It suggests that policy discussion could be improved by more explicit consideration of the allocation of uncertainty. [ABSTRACT FROM AUTHOR]

The article comments on a paper published within the issue, "Capital Formation and the Recent Productivity Slowdown," by Peter Clark. The author also discusses results from his own research in "Accounting for United States Economic Growth, 1929-1969," and applies it to Clark's paper. It is suggested that an abrupt rise in energy prices may have affected growth rates during the mid-1970s. The author also looks at a similar analysis made by John Kendrick, who focuses on the U.S. postwar period of 1948-1966.

This paper considers the historical record and time series properties of United States' industrial production for the period 1860 to 1991, utilizing unit root tests and measures of persistence. The results identify a segmented trend model which is used to assess the time-series simulation performance of four well-known models of economic growth: Solow (1957); Mankiw, Romer and Weil (MRW, 1992); Barro and Sala i Martin (BSM, 1992); and Rebelo (1991). Both the MRW and BSM models dominate the Solow model in accounting for twentieth century industrial growth, high-lighting the importance of human capital, and the paper suggests a new measure related to higher education. However, the Rebelo model explains the post-1973 slowdown more successfully than either of the 'augmented-Solow' approaches. The paper concludes with a discussion of the impact of shocks on US industrial growth. [ABSTRACT FROM AUTHOR]

Published QUARTERLY in the interest of constructive synthesis in the social sciences, under grants from the FrancisNeilsonFund and the RobertSchalkenbachFoundation.Founded in 1941Volume 64 April, 2005 Number 2 [ABSTRACT FROM AUTHOR]

The article profiles Barry K. Goodwin, a Fellow of the American Agricultural Economics Association in 2006. Goodwin's various affiliations and awards are presented. He is William Neal Reynolds Distinguished Professor at the Departments of Agricultural and Resource Economics and Economics from 2003 and up to the present in 2006. He is also the Associated Editor of the "American Journal of Agricultural Economics" from 1999 to 2001. He develops a deep interest in the quantitative analysis of markets and policy issues important to agriculture.

Research and development (R&D) has a large effect on both state output and total factor productivity in the long run. Our estimates for the private sector of the U.S. states from 1963 to 2007 show that the R&D elasticity averages 0.056-0.143. The implied returns to state Gross Domestic Product (GDP) from R&D spending are 82-211%. There are also positive R&D spillovers, with 70-80% of the total returns accruing to other states. We also find that states with more human capital have higher own- and other-R&D elasticities, and those in lowest tier of economic development have the least own-state R&D elasticity but the highest other-R&D elasticity. In addition, we find that the positive effect of R&D spillovers across states is larger when we consider R&D spillovers across states based on economic similarity of R&D across sectors. [ABSTRACT FROM AUTHOR]

This study identifies the determinants of growth for male and female business ownership in a subset of U.S. counties. The results indicate that there are important characteristic and behavioral differences between the male and female populations in each county that affect regional changes in business ownership for each gender. In particular, the education level of males and females as well as the local family structure impact the propensity for firms owned by each gender differently. A Blinder-Oaxaca type decomposition, a novel approach in the context of regional outcomes, demonstrates that although the effect of characteristic differences is larger, the behavioral differences are key to narrowing the gender disparity in business ownership. ( JEL L26, R2, R3) [ABSTRACT FROM AUTHOR]

We modify the standard nutritional efficiency wage model to allow for the fact that employers can directly provide calories to their workers rather than paying a higher wage to induce employees to spend more on their own caloric consumption. We derive the various theoretical outcomes that are possible depending on the assumptions about the transaction costs of directly providing calories. We argue that in most real-world situations the ability of employers to directly provide calories undermines the traditional efficiency wage theory as a cause of equilibrium unemployment. [ABSTRACT FROM AUTHOR]

Has the progress of output convergence changed within the United States? This article examines the output convergence among U.S. states for the last five decades by making several improvements over the extant literature. By applying a battery of convergence tests designed to capture nonlinear transitional dynamics to real output per worker data (i.e., nominal values deflated by state-level price), we find that output convergence has not been a feature of the continental United States since the 1970s. Instead, output convergence has proceeded among four subgroups within which constituent states have certain characteristics in common. Our regression analysis suggests that state-level characteristics related to technology and human capital play a crucial role in accounting for the formation and composition of convergence clubs, in agreement with the recent theoretical models of growth and development (e.g., Aghion et al. 2009; Gennaioli et al. 2013b). The level of technology, proxied by patents, turns out to be a consistently significant determinant even after controlling for endogeneity, suggesting that frictions in the diffusion of technology and human capital may have led to clustering of states with different levels of productivity. Our results therefore cast doubt on the common view that diffusion of knowledge and technology across state borders is frictionless. ( JEL O47, O51) [ABSTRACT FROM AUTHOR]

Increased turnover among legislators can make them short-sighted, affecting fiscal policy and economic growth. We exploit the exogenous variation in legislative turnover induced by term limit laws and by redistricting in the 50 U.S. states, finding that increased turnover increases capital spending by state governments, which may be designed to constrain future governments. The changes may cause long-run distortions in the economy, reducing long-term economic growth. ( JEL H72, H73, H76) [ABSTRACT FROM AUTHOR]

Few studies explore the linkages between health behaviors and macroeconomic outcomes. This study uses 1971-2007 state-level data from the United States to estimate the impact of beer consumption on economic growth. We document that beer consumption has negative effects on economic growth measures once the endogeneity of beer consumption is addressed. Our estimates are robust to a range of specification checks. These findings run parallel to a large body of literature documenting substantial social and economic costs stemming from alcohol use. ( JEL I1, O4) [ABSTRACT FROM AUTHOR]

Studies of the development of local economies often point to large-scale Second World War military spending as a source of economic growth, even though spending declined sharply after demobilization. We examine the relationship between war spending per capita and the changes in economic activity in US counties between 1939 before the war and a period several years after the war. In the longer term counties receiving more war spending per capita during the war experienced greater population growth, but growth in per capita measures of economic activity showed little relationship with per capita war spending. [ABSTRACT FROM AUTHOR]

We argue that financial market development contributed to the rise in the skill premium and residual wage inequality in the United States since the 1980s. We present an endogenous growth model with imperfect credit markets and establish how improving the efficiency of these markets affects modes of production, innovation, and wage dispersion between skilled and unskilled workers. The experience of U.S. states following banking deregulation provides empirical support for our hypothesis. We find that wages of skilled workers increased by between 0.5% and 6.3% following deregulation while those of unskilled workers fell by between 3.5% and 8.7%. Similarly, residual (or within-group) inequality increased; the 90-50 percentile ratio of residuals from a Mincerian wage regression and their standard deviation increased by 4.2% and 1.7%, respectively. [ABSTRACT FROM AUTHOR]

The article discusses the global economy, which the article asserts is suffering from serious imbalances characterised by a deterioration of the U.S. current account deficit, rapid increases in oil and raw material prices, and excessive international liquidity. The article compares these issues with the rapidly growing Chinese economy, which is suffering from serious imbalances of another kind, characterised by rapid increases in the so-called "twin surpluses" (current account and capital account surpluses), persistence of excessive investment, acute energy shortages, deterioration of the environment, and the rapid widening of income gaps. Programs adopted by the Chinese government aimed at achieving a more balanced and sustainable growth pattern are discussed.

The article aims to present a conceptual framework for the analysis of ecosystem services (ES) supply in the U.S. It will also discuss some of the data and modeling issues that arise in predicting farmers' participation in ES contracts and the supply of ES resulting from them. To frame the discussion, the researchers outline a model of the supply of ES that illustrates the ways that spatial and system complexity can affect it. This model is used to discuss the data and modeling issues that arise in empirical implementation.

We reconsider the out-of-sample forecasting ability of a large number of financial variables with respect to real output growth over the 1985:1-1999:4 period We show that models including financial variables display almost no forecasting ability relative to an autoregressive benchmark model over this period according to a mean squared forecast error metric. However, tests based on forecast encompassing indicate that many financial variables do, in fact, contain information that is useful for forecasting real output growth over the 1985:1-1999:4 out-of-sample period. Our results suggest that the extant literature exaggerates the demise of the forecasting power of financial variables with respect to real activity since the mid-1980s. [ABSTRACT FROM AUTHOR]

Examines the external debt of Mexico and its impact on the country's agricultural trade with the U.S. Effects of the external debt on the country's economic growth; Assessment of the macroeconomic policies and agricultural sector behavior in the country; Changes in Mexican-U.S. agricultural trade.

The article reflects on the timeliness of the topic of ecosystem services (ES) in the arena of agricultural policy in the U.S. According to the author, policies and programs founded in ES science and economics can provide genuine alternatives to decades of commodity-based federal farm policy. The evolution of agricultural policy as it transforms to incorporate ES measures and transactions is uncertain. It will be marked by analytic challenges and policy retreats to old ways. ES assessments will enable budget allocation, planning and priority setting on the part of public agencies.