Search

Economic effects of public policy alternatives often are analyzed with simulation models. The value of simulation is enhanced when model parameters can credibly be estimated econometrically. But unrestricted estimation can be expected to result in problematic estimates, for example, estimated parameters contrary in sign to what economic theory dictates. The information contract curve (ICC), developed by Leamer, provides a flexible means to impose regularity on estimated parameters at minimum-likelihood cost. We extend the ICC methodology, using conically uniform priors, and apply it to measuring the welfare costs of environmental regulations in the U.S. pulp, paper, and paperboard industry. [ABSTRACT FROM AUTHOR]

With the development of the market economy, agricultural trade has become more and more significant for the development of the agricultural economy, which has triggered people's further thinking and exploration on the impact of agricultural trade on agricultural carbon emissions. This paper takes the measurement of trade implied carbon as the carbon dioxide emission index under the impact of agricultural trade and analyzes the impact of trade implied carbon and implied carbon balance on carbon emission. Taking the impact of Sino-US agricultural trade as an empirical background, this paper measures the impact of environmental changes in agricultural trade opening on China's agricultural development and its carbon emissions, so as to predict changes in China's regional agricultural carbon emissions performance. After calculation, it is found that the scale of China's exports has decreased by 0.089%, which is lower than the decline of 0.361% in the United States. The trade conflict has a significant impact on China's import and export structure. Under the scenario of mutual tariffs on agricultural products, China's exports to the United States are expected to decrease by 6.28%, while China's imports from the United States decreased by 13.02%. The Sino-US agricultural trade dispute will reduce China's carbon emissions by 0.013% and the United States' carbon emissions by 0.024%, which is related to the negative impact on the economy. Improving the performance of agricultural carbon emissions is not only the need for the green and sustainable development of the agricultural economy but also conducive to improving the international competitiveness of agricultural products. [ABSTRACT FROM AUTHOR]

This article discusses the effect on income of Phase II of the wage-price control program of the United States. Several discussants commented on the issue of income shares under the Phase II program. R. A. Gordon, William Branson, and others noted that, with productivity growing exceptionally fast because of the rapid cyclical expansion expected in the economy, profit margins would widen so much that some cost absorption by business would still permit the profit share to expand. Arthur Okun noted that Perry's neutrality was defined as the state of income shares that would prevail in the absence of the program and that the cyclical expansion of profit margins that we are experiencing would have occurred anyhow. Gardner Ackley argued that we did not know enough about what has happened to price-cost relations in recent years to take any strong position about what income shares should be. Therefore Perry's neutrality concept should not override the need to slow inflation, and some cost absorption was appropriate as a way to help accomplish this. James Duesenberry and Michael Posner felt that the most serious practical problem was not the question of existing income shares but rather delivering on the promise to slow prices noticeably. The trade unions are reluctant to accept wage controls because they have little faith that the inflation will slow down. Differing views were expressed on the use of profit margin ceilings in Phase II. Alan Greenspan pointed out that the application of the rules on the basis of the margins of individual firms would hold down overall prices and margins more than people thought.

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]

This paper considers the macroeconomics of the oil price for the United States. It investigates the impact of large oil price hikes in a standard VAR framework by introducing a new Markov switching based oil price specification. The explanatory power of this new specification is compared to that of a number of prominent non-linear specifications. The key findings are: (1) the new oil price specification is appropriate in both empirical and theoretical terms and allows for a well-founded distinction between "large" and "normal" oil price increases. (2) The observed impact of oil price shocks on real GDP growth is largely attributable to no fewer than three large oil price increases, namely those of 1973-74, 1979 and 1991, while variables such as consumer and import prices are also affected by normal oil price increases. [ABSTRACT FROM AUTHOR]

This section introduces the articles which appeared in the March 1972 issue of the "Brookings Papers on Economic Activity." In the first article, William Branson estimates that the 1971 currency re-alignment, when fully effective, will bolster the United States merchandise trade balance by $7 billion to $8 billion a year. The effect of the devaluation of the U.S. dollar on the trade balance depends on how much it raises the dollar prices of U.S. imports, how much it lowers the prices of U.S. exports in terms of the currencies of buyers, and how responsive both buyers and sellers are to price changes -- that is, how large their price elasticities are. As Branson views the process, exporters set the price tags on tradeable goods in terms of their own currency. The paper by F. Thomas Juster and Paul Wachtel examines the effects of inflation and of transitory changes in income on consumer saving and spending behavior, with particular reference to the inflationary experience of recent years. The authors seek to explain consumer demand in several different ways, relying on both subjective data drawn from surveys of households and objective economic variables such as income, relative prices, and the rates of unemployment and of inflation. In the third article, Arthur Okun reaffirms analytically the desirability of an activist fiscal-monetary strategy. Like other Keynesian economists, Okun believes that fiscal and monetary policy should be shifted toward stimulus or restraint in light of observed and predicted economic fluctuations.

The article focuses on the important issues related to ethanol industry in the U.S. These issues includes the implications of alternative incentive schemes for renewable fuels production, impact on the country's agriculture of producing 10-60 gallons of ethanol in 2010-2030 respectively and a comparison between two organizational methods for production and energy crop harvesting. The five main objectives of the incentive scheme includes the consumer cost of fuel, food prices, safety net improvement for the renewable fuel industry , national security and emission control management. The primary purpose of the issues are to examine the significance of bioenergy technology for the improvement of the agriculture economics in the country.

This article comments on a paper that uses a unified analytical framework to assess the relevance of several proposed hypotheses which explain the real effects of exchange-rate-based stabilization in the U.S. Sergio Rebelo and Carlos A. Végh proposed a kind of horse race--they propose to study the quantitative implications of alternative hypotheses within a common framework. By doing so, they hope to be able to shed light in which theories perform well when confronted with data on a wide range of economic variables. For example, if a particular theory was designed to explain a post reform consumption boom and real exchange-rate appreciation, Rebelo and Végh will also examine the predictions of the theory for output, investment, the current account, and others. These predictions will then be compared with a set of stylized facts developed from examination of a group of recent stabilization attempts. In any investigation of this kind, there is an inevitable tension between keeping the model simple enough so that the key mechanisms remain transparent, and making the model look realistic, which of course involves additional complexity. Furthermore, the researchers acknowledged that many of the theories of the effects of stabilization policy incorporate expectations in a nontrivial way.

This article responds to comments made in a paper which addressed the designing of monetary policy for controlling inflation in the U.S. Stephen Cecchetti responded to a criticism concerning the absence of more explicitly structural models from his paper. He argued that he intentionally avoided building a structural model because of the general lack of agreement about which model was the most appropriate. Further, he indicated that in this work, he was primarily interested in high-frequency events and the appropriate policy responses to those events, and not so much in the longer-term trends in inflation and economic activity about which structural models have the most to say. Another critic, Jim Stock, pointed out that the root-mean-square errors of regression forecasts of inflation appeared to be much larger than those of contemporaneous U.S. Federal Reserve forecasts. Carlos Végh felt that a more explicit theoretical framework was needed; in particular, there was some inconsistency between the standard theoretical analysis, which treats money as exogenous and interest rates as endogenous, and the empirical work, which treats the interest rate as exogenous policy instrument.

This paper presents an approximate analytical solution to the optimal consumption and portfolio choice problem of an infinitely lived investor with Epstein-Zin-Weil utility who faces a constant riskless interest rate and a time-varying equity premium. When the model is calibrated to U. S. stock market data, it implies that intertemporal hedging motives greatly increase, and may even double, the average demand for stocks by investors whose risk-aversion coefficients exceed one. The optimal portfolio policy also involves timing the stock market. Failure to time or to hedge can cause large welfare losses relative to the optimal policy. [ABSTRACT FROM AUTHOR]

This article discusses issues associated with central banking and monetary policy in the U.S. Responding to A. Alesina's comments on the construction of the effective freedom of information (FOI) index, Adam Posen agreed that fractionalization and federalism might influence inflation through mechanisms other than the one explored in his paper; he indicated that in future work, he would consider alternative reasons why the various components of the FOI index might affect inflation. With respect to the issue of whether institutions matter, given array of political forces, Posen suggested that the time span under consideration is very important. The literature on central bank independence looks at correlations over periods from 10 to 40 years in length. Over such long periods, it seems most reasonable that social preferences and political forces determine inflation rates, whereas over one business cycle or electoral cycle institutions may well have an effect. Stanley Fischer disagreed with Posen's conclusion that the financial sector's opposition to inflation completely determines inflation outcomes. He conceded that the issue is quite complicated but argued that law and the institutions chosen by society can make a difference for inflation performance.

This paper uses a number of perspectives to analyze the causes of the strong correlation between fiscal policy variables and the Japanese current account surplus in the 1980s. The paper finds that the price elasticities of trade flows and the interest rate elasticities of investment are fairly low. Accordingly, the paper argues that the popular Mundell-Flemming approach somewhat overemphasizes the causality from fiscal policy to the current account. Conversely, the importance of U.S. fiscal policy and the decrease in oil prices may have been understated in previous explanations of the increase in the Japanese current account surplus. The decline in the budget deficits through the traditional income-expenditure mechanism were also important. From a longer-term perspective, the sharp slowdown in private investment in the 1970s and its relative stability in the 1980s, despite large fluctuations in oil prices, is an important cause of both the surplus and the strong correlation between fiscal policy and the current account. Such a perspective helps to understand the developments in the 1985-87 period as well. [ABSTRACT FROM AUTHOR]

This article focuses on three papers on the regulated industries. Economist George Wilson seeks to appraise the effect of regulation upon resource allocation in transportation. Economist Roger C. Cramton seeks to test the efficiency of regulation in certain subject-matter areas. Economist Richard E. Caves poses questions with respect to the market performance of the regulated industries and seeks to explore methods by which answers may be sought. In Wilson's discussion of regulatory attitudes toward discrimination he ignores, although he has elsewhere recognized, the tendency for the relatively uniform treatment of distance despite varying conditions of density, terrain, and other factors which affect cost to create a reverse discrimination akin to the type imposed by reluctance to countenance reduced rates for shipments in excess of carload lots. It is, perhaps, surprising that in his discussion of the share-the-traffic criterion he does not call attention to the consequences of enforcing a division of traffic between competing modes when the differences in cost levels are sharp.

Milton Friedman and Anna J. Schwartz published A Monetary History of the United States: 1867 to 1960 with Princeton University Press in 1963, to critical acclaim. Since then the book's reputation has grown and it clearly has become one of the most influential volumes in economics in the twentieth century. In this paper we document the extraordinary impact of A Monetary History and argue that the key to this success was the use of the "narrative approach" to the problem of identifying the effects of monetary policy on economic activity. [ABSTRACT FROM AUTHOR]

This article stylizes the monetary policy features applied during the chairmanship of Mr. Alan Greenspan and condenses statistical discussion into the "low interest rate trap" in the U.S. economy. Data from the U.S. in the decade prior to the 2008 financial crisis are used. A monetarist solution to the "low interest rate trap" is provided. The paper challenges the theoretical discussion on the Keynes' interest rate -- output relationship, and poses the question whether difference in investment returns would present a different picture in output growth. [ABSTRACT FROM AUTHOR]

This paper examines the price response of wireless carriers to the introduction of number portability in the U. S. I find that wireless prices decreased in response to number portability, but not uniformly across plans. Average prices for the plans with the fewest minutes decreased by only $0.19/month (0.97%), but average prices for medium and high-volume plans decreased by $3.64/month (4.84%) and $10.29/month (6.81%), respectively. The results suggest that higher-volume users in the wireless market benefited more from the policy-induced reduction in switching costs. [ABSTRACT FROM AUTHOR]

Defense and commercial trade offsets (also known as countertrade or industrial participation) are valued in the tens of billions of dollars each year andoften accompany the export of advanced technological goods. An offset is any type of non-monetary compensation that a procuring government requires an exporting firm to provide as a condition of the sale and generally commits the exporting firm to spend a certain percentage of the value of the sale in the procuring country. This paper examines 1) how procuring governments use offsets to achieve their goals, and 2) the economic and national security implications of offsets. [ABSTRACT FROM AUTHOR]

Practical monetary policy concerns and recent theoretical developments have revived interest in the concept of a "natural" equilibrium real interest rate. The natural real interest rate is potentially an important concept for monetary policy makers and some researchers have suggested that the concept of a "real interest rate gap" can be used to evaluate the stance of monetary policy or even set policy. Obtaining an estimate for the equilibrium real interest rate, however, is not straightforward, and the existence of alternative approaches to this task generates uncertainty about those estimates. In this paper, we discuss some conceptual, policy, and modeling issues pertaining to the U.S. equilibrium interest rate. Such issues include the distinction between "natural" and "neutral" real interest rates, the determination of the natural real interest rate in an open economy context, the different ways that productivity may affect the natural equilibrium real interest rate, and the sensitivity of theoretical measures of the natural equilibrium real interest rates to various parameterizations. [ABSTRACT FROM AUTHOR]

This paper considers a prototypical New Keynesian model, in which the equilibrium is undetermined if monetary policy is "passive. " The likelihood-based estimation of dynamic equilibrium models is extended to allow for indeterminacies and sunspot fluctuations. We construct posterior weights for the determinacy and indeterminacy region of the parameter space and estimates for the propagation of fundamental and sunspot shocks. According to the estimated model, U.S. monetary policy post-1982 is consistent with determinacy, whereas the pre-Volcker policy is not. We find that before 1979 indeterminacy substantially altered the propagation of shocks. [ABSTRACT FROM AUTHOR]

In this paper, authors have made an attempt to understand why various economic changes occurred in the U.S. between 1887 and 1917. Along with this the authors have developed a theory of law enforcement in which private litigation, government regulation, a combination of the two and doing nothing are considered as alternative institutional arrangements to secure property rights. In the theory, whatever law enforcement strategy the society chooses, private individuals will seek to subvert its workings to benefit themselves. The efficiency of alternative institutional arrangements depends in part on their vulnerability to such subversion. The theory leads to predictions as to what institutions are appropriate under what circumstances. Authors have used this theory to explain at least some of the changes in law enforcement strategies in the progressive era but also to examine appropriate law enforcement institutions for transition economies and emerging markets. Traditional economic theories of regulation do not explain the progressive movement. The standard public interest theory holds that regulation deals with market failures and externalities, but does not explain why neither contract nor tort law could successfully address these problems in the first place. The paper argues that establishing law and order is itself an economic problem.

This article profiles Russian-American economist Andrei Shleifer, winner of the 1999 John Bates Clark Medal presented by the American Economic Association. The award singles out his contributions to three fields: corporate finance (corporate governance, law and finance), the economics of financial markets (deviations from efficient markets), and the economics of transition. One could add a fourth area, an early but then spurned love, macroeconomics (the role of increasing returns in cycles and growth). In each area that Shleifer has touched, his contributions have shaped the basic paradigm and have triggered considerable follow-up research. The reason in that he focuses on the big issues of economics. A recurring theme of his research is the respective role of markets, institutions, and governments. In his work, markets do not work perfectly and institutions are of the essence. But one should not trust governments always to do the right thing, be it in the design of institutions or in direct interventions. Governments are not perfect and sometimes they can be quite bad indeed. In the hands of others, such themes could lead to ideological blabber or to banal generalities.

Economic crises can be analyzed as part of the economic cycle and from different theoretical perspectives. The article considers economic crises or recessions, in general, as capitalism's own mechanisms to alleviate its contradictions and restore, at least partially, the previous accumulated imbalances. The period 1970 to 2020 covers eight economic crises, some of which determine changes in the internal structure, economic policy trends and the functioning of the U.S. economy, as the main center of the world economy. The purpose of this paper is to examine the set of economic crises of the last fifty years in a panoramic manner, to evaluate them as part of the process of major economic transformations and associated economic policies. [ABSTRACT FROM AUTHOR]

Two papers on the role and status of the U.S. in the world economy during 1940 are presented. The first paper examined the role that war played in the position of the U.S. in international economy. In the second paper, the impact of more than a year of war on the international economic relations of the U.S. is described. The author believes that the most important element in the country's economic relations with the rest of the world is foreign trade. Significant changes in imports and exports have occurred during the war.

This article presents the author's comments on the Phase II of the wage-price control program of the United States. I agree with so much of what Gardner Ackley has written about the Phase II program that I hesitate to take issue with his paper at all. Since the end of the freeze, prices have risen too rapidly, and the goal of bringing the inflation rate below 3 percent will not be reached unless the Phase II authorities get tougher. Some of the operating procedures of the Price Commission should be revised to accomplish this improvement; and I agree, in particular, that the commission should not rely on term-limit pricing arrangements and on cost estimates supplied by firms themselves. But I do disagree with Ackley's treatment of cost absorption. And that point is so central to the issue of income shares under Phase II -- an issue that, in turn, is so emotionally charged that it threatens to disrupt support for the overall program -- that a comment is in order. At another time, some cost absorption by business might have seemed both more necessary and more appropriate than it seems now. In early 1968, I proposed a new guidepost formula that called for absorption, as defined here, by both labor and business.' At that time, wages under the large number of long-term wage contracts that were coming up for negotiation clearly had fallen behind in the inflation that started in 1966. To ask a slowdown from wages in this environment was clearly to ask for a sacrifice, and some cost absorption by business seemed necessary as the other half of the bargain. Today's situation is not the same.

This article criticizes the Phase II of the wage-price control program of the United States. A number of issues concerning the present program of price and wage controls divide members of the Brookings Panel on Economic Activity, as they divide economists generally. This paper does not deal with the more basic of these issues. Rather, it takes as given the decisions to freeze prices and wages last August 1971, and to follow the freeze with a program for Phase II having essentially the objectives of the present one. It considers how well the program is achieving these objectives and whether and how they might be achieved more effectively. The treatment is selective rather than comprehensive. Assuming that the administration knew what it was getting into in adopting mandatory wage and price controls, it surely deserves credit at least for courage in electing to use them. And having taken that decision, it did some things well. First, it gave no indication that it was going to take this course; the public, business, and the unions were taken completely by surprise. The result is in sharp contrast with the terrible mess created in 1950, when discussion of a possible freeze was allowed to go on for nearly six months -- and government officials themselves actively contributed to it.

The article presents the author's comments on the research paper "Some Problems of Methodology in Modern Economic Theory" by professor Otto von Mering. The paper discusses the relation between economic theory and economic policy, with particular reference to the new developments arising from economist J. M. Keynes's The General Theory of Employment, Interest and Money. Von Mering's principal conclusion is that political trends largely determine important new developments in economic theory. The adaptation of theory to political trends may take place merely by shifting the emphasis on one or the other of the various data in the economic system. Without attempting to belittle the achievements of Keynes, von Mering attributes the great triumph of the General Theory to the fact that it lends scientific support to the important political trends of the time, whereas the body of doctrine Keynes attacks, so-called classical theory, is often out of line with the necessities of present- day economic interventionism. The author is surprised that in a discussion of methodology dealing particularly with the relation of theory to practice von Meting does not even mention pragmatism in the U.S.

This paper investigates regime switching in the response of U.S. output to a monetary policy action. We find substantial, statistically significant, time variation in this response that corresponds to "high response" and "low response" regimes. We then investigate whether the timing of the regime shifts are consistent with three particular manifestations of asymmetry by modeling the transition probabilities governing the switching process as functions of state variables. We find strong evidence that policy actions taken during recessions have larger effects than those taken during expansions. We find less evidence of asymmetry related to the direction or size of the policy action. [ABSTRACT FROM AUTHOR]

This paper investigates the nature of U.S. fiscal policy in the aftermath of 9/11. We argue that the recent declines in the government surplus and tax rates cannot be accounted for by either the state of the U.S. economy as of 9/11 or as the typical response of fiscal policy to a large exogenous rise in military expenditures. Our evidence suggests that, had tax rates responded in the way they 'normally' do to a large fiscal shock, aggregate output would have been lower and the surplus would not have changed by much. Our results do not bear directly on the desirability of the decline in tax rates or the surplus after 9/11. [ABSTRACT FROM AUTHOR]

This paper identifies a structural break in core U.S. inflation Phillips curves such that oil prices contributed substantially before 1981, but since that time pass-through has been negligible. This characterization is robust to a variety of re-specifications and fits the data better than asymmetric and nonlinear oil price alternatives. Evidence does not support the hypotheses that declining energy intensity or deregulation of energy-producing and -consuming industries played an important role. Monetary policy did not itself become less accommodative of oil shocks, but may have helped create a regime where inflation is less sensitive to price shocks more generally. [ABSTRACT FROM AUTHOR]

In reviewing the Challenger tragedy, Richard Feynman identified a flawed O-Ring as the proximate cause and NASA's flawed safety culture as a deeper cause. There has been no similar investigation of the mortgage mess, which has been baptized rather than understood. In part, this is due to committed ideological views in the public and press that eliminate the call for expert analysis and reform. Broader and deeper policy problems are identified and illustrated using NASA's past behavior and FHA's ongoing behavior. The Columbia tragedy sounds an ominous warning on the future stability of housing finance markets. [ABSTRACT FROM AUTHOR]

This article responds to comments made on Sergio Rebelo and Carlos Végh's paper which assessed hypotheses concerning the real effects of exchange-rate-based stabilization in the U.S. Végh pointed out that it was very important to draw a distinction between hyperinflationary and chronic-inflation countries. For the case of hyperinflation, as in Bolivia a decade ago or in many countries following the two world wars, it is possible to argue that at the time when a stabilization is implemented, the economy is completely out of steady state. Therefore, in countries with hyperinflation, it is relatively easy to explain why stabilization raises output. However, in chronic-inflation countries, the economies develop extensive indexation in all markets. In these countries, it is much more difficult to argue that the real effects that are observed after stabilization are just the recovery from a deep pre-stabilization recession. This difference between hyperinflation and chronic-inflation countries explained why the paper focused on dynamics around the steady state. To address criticisms that the model is too simple, Végh said that they had begun with a much larger and more complicated set of model variants.

The rising prominence of intra-industry trade and huge multinationals has transformed the way economists think about the gains from trade. In the past, we focused on gains that stemmed either from endowment differences (wheat for iron ore) or inter-industry comparative advantage (David Ricardo's classic example of cloth for port). Today, we focus on three sources of gains from trade: 1) love-of-variety gains associated with intra-industry trade; 2) allocative efficiency gains associated with shifting labor and capital out of small, less-productive firms and into large, more-productive firms; and 3) productive efficiency gains associated with trade-induced innovation. This paper reviews these three sources of gains from trade both theoretically and empirically. Our empirical evidence will be centered on the experience of Canada following its closer economic integration in 1989 with the United States-the largest example of bilateral intra-industry trade in the world-but we will also describe evidence for other countries. [ABSTRACT FROM AUTHOR]

Purpose – During the Greenspan-Bernanke era, the responses of Federal Reserve officials to financial crises resulted in an extraordinary involvement of the US central bank in the non-banking financial sector. The purpose of this paper is to examine the informal and evolving conceptual framework that allows Federal Reserve officials to pursue a strategy of "constrained discretion" in responding to financial disturbances. Design/methodology/approach – Behavioural economics relies on designed psychological and economic experiments to predict behavioural biases at the group level. As an analogue applicable to understanding biases in the intuitive judgments of individual policymakers, a naïve behavioural economics approach relies on intuitive or naive psychology and the interpretation of historical events as natural experiments to explain why intuitive judgments of Federal Reserve officials will contain biases. Findings – Under the Greenspan-Bernanke conceptual framework, Federal Reserve officials exercise "constrained discretion" in responding to disturbances arising from macro structural changes in the financial sector. The two key concepts are the Greenspan-Bernanke doctrine on how the Federal Reserve officials respond to financial asset price bubbles and their collapses, and Bernanke's financial accelerator. Several examples are cited in which policy errors made by Alan Greenspan were attributable to identifiable biases in his intuitive judgment. In addition, Bernanke's response to the financial crisis of 2007-2009 was based on his interpretation of the Great Depression as a natural experiment. But that interpretation was heavily biased by the influence of Milton Friedman on Bernanke's intuitive judgment. While Federal Reserve officials will need to exercise discretionary judgment in responding to financial crises, the potential for errors due to biases in that judgment can be reduced through regulatory reforms that lessen the potential for financial crises to occur. Originality/value – While quantitative analyses of the effects of the Federal Reserve's actions on non-bank financial institutions and the financial markets are ongoing, little attention has been given to the psychological aspects of the intuitive judgment that influences the discretionary decisions of the policymakers. [ABSTRACT FROM AUTHOR]

Copyright of Desarrollo Económico is the property of Instituto de Desarrollo Economico y Social and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Graphical abstract Highlights • Technology cost and utility rate structure are key drivers of economic viability of solar and storage systems. • Solar-plus-storage systems are more often economical under time of use and demand charge rates. • Savings from storage-only projects come mainly from demand charge reductions; solar combined with storage also provides energy charge savings. • Savings from solar with storage is largely independent of building load variability, likely due to the energy cost reductions from the solar. Abstract This paper explores the economics of solar-plus-storage projects for commercial-scale, behind-the-meter applications. It provides insight into the near-term and future solar-plus-storage market opportunities across the U.S. We explore the impacts of location, building load profile, technology cost, utility rate structure, and policies on solar-plus-storage economic viability, and identify which factors are most significant to project economics. While savings from storage-only projects are largely derived from demand charge reductions, solar combined with storage also provides significant energy charge savings. A common assumption is that load profiles with peaks are likely candidates for savings from storage, due to the opportunity for demand charge reduction. Our results indicate that potential for savings from combining solar with storage is independent of building load variability, likely due to the energy cost reductions from the solar. Systems are more often economical under time of use and demand charge rates, particularly when demand charges are >$10 per kilowatt. Where systems were found to be economical, expected lifetime savings averaged between 7%–10%, with savings of 30% in numerous cases. Near term markets exist for solar-plus-storage in locations such as California and New York. As technology prices drop, the number of building types that can benefit increase, and additional markets appear in Colorado, New Mexico, and Alaska. All data from the study and interactive modeling results are available at: https://openei.org/wiki/Solar+Storage. [ABSTRACT FROM AUTHOR]

Copyright of Desarrollo Económico is the property of Instituto de Desarrollo Economico y Social and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

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]

The article presents an examination of the success of anti-inflation policies in the United States. The author notes the political climate in which this paper is being published, the fall of 1971, as the U.S., he claims, has just endured a failure in conventional stabilization policy to control inflation, marked by the use of aggregate fiscal and monetary policies in controlling economic demand. The article examines the past fiscal policy, asking which anti-inflationary policies were worth the cost and which were not. The author's conclusions note the tradeoff between inflation and unemployment, considers the new incomes policy, and addresses structural changes in the composition of employment.

The article discusses the effects of U.S. government buying policies on commercial products and prices. The product policy of the U.S. government contrasts significantly with most other industrial buyers. Products are grouped into classes and bought either through sealed bids, if they pose direct price competition, or through individual contracts. Sealed bids appear to result in lower prices as compared with limited-competitive bids. Experts say this is a result of increased price competition and lower sales costs due to open bidding, single awards, and use of specification.

The economic theory of federalism is largely built around the premise that more heterogeneous preferences result in more decentralized policy making. Despite its prominence and importance, this central tenet of economic federalism has never been empirically evaluated. This paper presents the first formal test of the link between preference heterogeneity and endogenous policy decentralization using as a case study liquor control in the United States over the period 1934–70. The results are reassuring: States with more heterogeneous preferences are more likely to decentralize liquor control and allow for local government decision making. [ABSTRACT FROM AUTHOR]

This article focuses on the macroeconomic policy in the U.S. after World War II, which brought no steady improvement in the performance of the country's economy. Under the view that the economy has become increasingly difficult to manage, policy has prevented economic performance from deteriorating even though it has not been successful in bringing about a definite improvement. Although substantial disturbances have occurred in the past decades, such as assassinations and the Vietnam War, they have been no worse than the disturbances in the earlier postwar years. The end of World War II required an enormous reallocation of resources from wartime to peacetime uses. There were earlier instances in which the rate of inflation was slow to decline in the face of excess capacity. In the most infamous example, wages and prices stopped falling after 1933, in spite of continuous high unemployment. In the late fifties and early sixties, the inflation rate, which had risen to about 4 percent in 1956 decelerated only slowly before stabilizing at a little over 1 percent in 1962-63, in spite of two recessions and an unemployment rate continuously above 5 percent. The behavior of the inflation rate after 1969 is quite consistent with these earlier instances.

The article focuses on the contractarian political economy and constitutional interpretation. At the meetings in 1974, the author presented a paper entitled, "A Contractarian Paradigm for Applying Economic Theory." In that paper, along with others, the author argued that the subject matter is centrally a "science of exchange" or a "science of contract," and that the exchange paradigm should take precedence over the maximizing paradigm. This shift in the focus of positive inquiry carries normative implications. Conceptions such as aggregate efficiency in the allocation of resources become, at best, examples of functionalist error, along with the more explicitly normative variants of the social welfare function. The contractarian or catallactic approach to economic interaction suggests that systems or subsystems be evaluated in terms of the comparative ease or facility with which voluntary exchanges, contracts, or trades may be arranged between and among members of the community. This shift in normative political economy has implications for the issues of constitutional interpretation debated by legal scholars and philosophers.

This article discusses some aspects of U.S. government's macroeconomic policymaking for an open economy. A government policy is a rule associating observable aspects of an economy with government actions. A policy may be as simple as the setting of a fixed money growth rate, or it may be as complex as the Internal Revenue Code. The traditional viewpoint of open-economy macro policymaking was a framework in which goods prices were fixed rigidly, capital was perfectly substitutable and perfectly mobile, and expectations were ignored. The fundamental feature of an open economy is that its stochastic structure is affected by the existence of and interactions with other economies. It is typical in current analysis to model government macroeconomic policy as a linear rule describing a fairly precise relation ship between current values of government control variables, such as the money growth rate, and current and past values of macroeconomic variables, such as exchange rates or output levels.

This paper deals with the problems incident to restoration of peacetime activity in the United States in the first half of the decade of the twenties. It does not analyze the question whether and to what extent the depression of the thirties should be regarded as part of the "postwar" readjustment. [ABSTRACT FROM AUTHOR]

The article presents information on a research regarding foreign trade of Latin America during the World War I. Foreign exchange fluctuations have occurred in response to commercial and financial exchanges in Latin American countries during the war. Many countries started credit exchange conventions with a purpose of exchange stabilization without resorting to gold shipments. Argentina made such an arrangement with the U.S. Most of the Latin American nations including Brazil showed a low level of exchange rate during the war than the levels of pre-war years.