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We examine the relative importance of the growth of physical and human capital and the growth of total factor productivity (TFP) using newly organized data on 145 countries that spans more than 100 years for 23 of these countries. For all countries, only 14% of average output growth per worker is associated with TFP growth. We use priors from theories to construct estimates of the relative importance of the variances of aggregate input growth and TFP growth across countries. Much of the importance of the variance of TFP growth across countries is associated with negative TFP growth. (JEL O47, O50, O57, O30, N10), How much of growth in output per worker is associated with growth in physical and human capital per worker, and how much is due to technology, institutional change, and other [...]

Free banking in the United States used to be interpreted as dramatic evidence that relatively unregulated banking would operate badly (for example, Hammond 1957, ch. 18). The period was said [...]

STABILIZATION POLICY CAN LEAD TO CHAOS Nonlinearities in economies, as elsewhere, can generate chaotic equilibria. The presence of Pareto-inferior chaotic equilibria might seem reason enough to use stabilization policy to [...]

Working Paper 2008-21 September 2008 Abstract: We examine the returns to investors in publicly traded stock in new industries. We examine data from the United States on sellers of own-brand [...]

Working Paper 2008-14 May 2008 Abstract: We examine the relationship between real and financial integration. Real integration is measured by productivities of capital and labor from trade data for 1982 [...]

The article focuses on federal deficits, interest rates, and issues regarding monetary policy. The article seeks to summarize the available information on the effects of government deficits on the economy. Particular attention is given to the relationship between the monetary authority and the fiscal authority, as well as the effect of deficits on the current account. Additional article topics include a selective review of theoretical developments regarding the monetary authorities' behavior and the capital-inflow hypothesis.

The article focuses on a bank capital investment model and the effects that the U.S. Banking Acts of 1933 and 1935 have had on bank capital. It states that stock demand for capital and capital flow supply are elements that a simple version of a demand factor model is based on. It mentions that as the cost of capital a bank pays increases, the quantity of capital demanded decreases as banks can adjust to greater capital costs through increases in pecuniary rates and nonpecuniary rates that the bank pays to depositors.

The method of elicitation has an important effect on valuations. We investigate the effect of perspective on decision makers' elicited values. We conduct experimental sessions in which participants act as sellers or buyers, and replicate the disparity between willingness to accept and willingness to pay: sellers want to collect more, and buyers want to pay less. We conduct additional sessions in which endowed decision makers provide values that are used to determine a price at which anonymous others transact. In these sessions, decision makers' experimental earnings are not affected by valuations but, rather, are determined by their endowment. Decision makers appear to consider their standing relative to anonymous others in providing valuations (i.e., decision makers' endowments affect their valuations). The results indicate that the disparity between willingness to accept and willingness to pay disappears when decision makers' endowments ensure that they are at least as well off as anonymous others. [ABSTRACT FROM AUTHOR]

Discusses the relationship between money growth and inflation. One possible explanation between the relationship of money growth and inflation; Details on the quantity theory of inflation; Information on money and prices in the United States since 1953.

Focuses on the importance of considering spending and taxes when analyzing the federal government's budget. Perspective on the surplus; Trends in federal government spending; Implications of policies for future spending and tax policies.

Examines instances of wildcat banking equated with the free banking system in the United States, from 1837 to 1865. Features of wildcat banking; Overview of free banking; Characteristics of free banking; Comparisons of early experiences with free banking; Free banking in selected states. INSETS: Free banks' notes and electronic money.;Valuation of bonds deposited as security..

Examines the certain aspects of the operation of the gold standard before World War I in Great Britain. Analysis of fixed exchange rate regimes; Determination of interest-rate; Relationship between the behavior of income, prices and interest rates.

The article tests the hypothesis that subjects' forecasts are not predictably different than rational expectations in an experiment with stark environment. The experimental design and procedures are described. The hypotheses and tests are discussed. No evidence of systematic bias or inefficient use of available information was found. For 50% of the subjects, an external observer who knows the process generating the data cannot forecast the subjects' deviations from forecasts consistent with the process generating the data.

This paper is concerned with two general questions related to the fact that market demand curves are negatively sloped with respect to own-price effects. Negatively sloped demand curves need not result from any explicit utility-maximising process but could be an incidental by-product of some other behavioural process in conjunction with changes in the opportunity set. The most prominently cited example of such a behavioural-process model in the economics literature is Becker's (1962) irrational-choice model, in which essentially random behaviour controls choices. Another prominently cited example, this one from the psychology literature, is the matching law (Herrnstein, 1970). We extend and generalise these models, considering four specific possibilities. An explicit utility-maximising formulation may embody any one of a variety of motivational processes. Some biologists and psychologists have argued that behaviour is motivated by attempts to minimise deviations from some optimal state values (Houston and McFarland, 1980; Staddon, 1979). We consider a generalised version of this model which we refer to as the generalised minimum-distance hypothesis, the most familiar member of which is the quadratic utility function. The antithesis of the generalised minimum-distance hypothesis is a motivational process in which subjects attempt to meet 'minimum' survival requirements first, after which they are free to allocate expenditure in any fashion desired. This is a common theme in much of the applied consumer demand theory literature (see Deaton and Muellbauer, 1980). The generalised constant elasticity of substitution utility function provides a convenient first approximation to employ in characterising this process. [ABSTRACT FROM AUTHOR]

A fallacious consensus seems to be emerging on the subject of Giffen goods. The potato famine experienced in Ireland in 1845-49 is increasingly being cited as a likely instance of the occurrence of this logical exception to economist Alfred Marshall's "Law of Demand." Some even attribute the Irish potato example to economist Robert Giffen himself. This is odd since, if he made it, Giffen apparently failed to commit his suggestion to print. In any case, Marshall's version of Giffen's paradox was presented in terms of bread. With all this conjecture concerning an appearance of the rare upward-sloping demand curve in nineteenth-century Ireland, historical investigation of the question is long overdue. An early statement of the "potato paradox" by Paul Samuelson says: "When the 1845 Irish famine greatly raised the price of potatoes, families who consumed a lot of potatoes merely because they were too poor to consume much meat might have ended up consuming more rather than less of the high-price potatoes. Why? Because now they had to spend so much on potatoes, the necessary of life, as to make it quite impossible to afford any meat at all and hence were forced to become even more dependent than before on potatoes. In brief, the substitution-effect was here overcome by the perverse income-effect applicable to a peculiar "inferior" good such as the potato, which tends to decrease in the poor man's budget when incomes rise."

There is a pronounced positive correlation of inflation and government deficits in the United States since World War II. The purpose of this paper is to test the three leading explanations of this correlation. These three explanations are: (a) a deficit increases prices through a wealth effect; (b) a deficit results in the Federal Reserve purchasing debt, thus increasing the money supply and prices; and (c) expected inflation increases the deficit (which is the change in the nominal value of bonds). No support is found for either of the first two hypotheses. The results indicate that expected government deficits have no significance for future inflation. [ABSTRACT FROM AUTHOR]

Focuses on the relation between saving and rate of interest. Effects of a compensated price increase to the demand for a good; Information on government policies that alter the market rate of interest; Effects of a continuing subsidy on saving.

The purpose of this paper is to answer these questions and to test the ability of one version of Fisher's hypothesis to explain it. In the first section, data on interest rates and price levels are examined for evidence of a positive correlation of the two series. In the second section, the stability of any such relationship is examined. In the third section, a test of Fisher's hypothesis using rational expectations is outlined; a summary of the results is then presented. INTRODUCTION. [ABSTRACT FROM AUTHOR]