war and natural resource exploitation abstract we build a theoretical framework that allows for endogenous conflict behaviour i e fighting efforts and for endogenous natural resource exploitation i e speed ownership and investments while depletion is spread in a balanced hotelling fashion during peace the presence of conflict creates incentives for rapacious extraction as this lowers the stakes of future contest this voracious extraction depresses total oil revenue especially if world oil demand is relatively elastic and the government s weapon advantage is weak some of these political distortions can be overcome by bribing rebels or by government investment in weapons the shadow of conflict can also make less efficient nationalized oil extraction more attractive than private extraction as insecure property rights create a holdup problem for the private firm and lead to a lower license fee furthermore the government fights less intensely than the rebels under private exploitation which leads to more government turnover without credible commitment to future fighting efforts private oil depletion is only lucrative if the government s non oil office rents are large and weaponry powerful which guarantees the government a stronger grip on office and makes the holdup problem less severe

malthus living in a slum urban concentration infrastructure and economic growth abstract the link between urban concentration primacy and economic growth at country level is not straightforward as there are benefits as well as costs associated with urban primacy recent empirical evidence suggests a differential negative effect of concentration in sub saharan africa compared to the rest of the world this paper revisits the literature on urban concentration and economic growth to shed some light on these recent results the main contribution of the paper is to show how differentiated effects of urban primacy on economic growth can be accounted for by considering a role for the quality of the urban environment in terms of urban infrastructure the role of urban infrastructure is found to be robust to a long list of controls different specifications different estimation techniques and potential bias from simultaneity and measurement error

commodity price shocks and civil conflict evidence from colombia how do income shocks aect armed con ict theory suggests two op posite eects if labor is used to appropriate resources violently higher wages may lower con ict by reducing labor supplied to appropriation this is the opportunity cost eect alternatively a rise in contestable income may increase violence by raising gains from appropriation this is the rapacity eect our paper exploits exogenous price shocks in inter national commodity markets and a rich dataset on civil war in colombia to assess how dierent income shocks aect con ict we examine changes in the price of agricultural goods which are labor intensive and natural resources which are capital intensive we focus on coee and oil the two largest exports we nd that a sharp fall in coee prices in the 1990s increased violence dierentially in regions growing more coee by lower ing wages and the opportunity cost of joining armed groups in contrast a rise in oil prices increased violence dierentially in the oil region by in creasing municipal revenue siphoned through rapacity this pattern holds in several other agricultural and natural resource sectors providing robust evidence that price shocks aect con ict in opposite directions depending on the factor intensity of the commodity

the impact of minimum wages on youth employment in portugal textabstractfrom january 1 1987 the legal minimum wage for workers aged 18 and 19 in portugal was uprated to the full adult rate generating a 49 3 increase between 1986 and 1987 in the legal minimum wage for this age group this shock is used as a natural experiment to evaluate the impact of the minimum wage change on teenagers employment by using a large firm level micro data set it is shown that by comparing the employment growth of 18 19 year old workers with their 20 25 year old counterparts one can identify the employment effects of the minimum wage hike the same comparisons are done with 30 35 year old workers this study finds that the rise in the minimum wage significantly reduced employment this conclusion is reinforced by evidence showing that these employment effects are concentrated in firms more likely to be affected by the change in the law

the macroeconomic consequences of raising the minimum wage capital accumulation employment and the wage distribution we study the quantitative impact of a rise in the minimum wage on macroeconomic outcomes such as employment the stock of capital and the distribution of wages our modeling framework is the large firm search and matching model our comparative statics are in line with previous empirical findings a moderate increase in the minimum wage barely affects employment while it compresses the wage distribution and generates positive spillovers on higher wages the model also predicts an increase in the stock of capital next we perform the policy experiment of introducing a 10 dollar minimum wage our results suggest large positive effects on capital 4 0 and output 1 8 with a decrease in employment by 2 8 the introduction of a 9 dollar minimum wage would instead produce similar effects on capital accumulation without harming employment

minimum wages and economic outcomes in europe abstract in this paper we review the arguments and consider evidence on the economic effects of minimum wages in europe we begin by outlining the systems of minimum wages that currently operate in european countries and then consider some evidence on the economic effects of minimum wages in four countries france the netherlands spain and the united kingdom we consider the relation between minimum wage floors and two economic outcomes employment and the distribution of income in working households we find little evidence that minimum wages have a bad effect on jobs and some evidence that they have an equalising impact on the distribution of income among families with someone in work

from maize to haze agricultural shocks and the growth of the mexican drug sector understanding how economic incentives affect illegal drug production is essential for crafting policies in response to the international drug trade policymakers typically face a choice between two strategies targetingcriminalgroupsvialawenforcement andofferingproducersincentivestoengage in alternate activities yet little is known about how the returns to alternate legal activities affect drug supply we contribute to this literature by examining how shocks to legal commodity prices affect the drug trade in mexico our analysis exploits exogenous movements in the mexican maize price stemming from weather conditions in u s maize growing regions as well as exports of other major maize producers using data on over 2200 municipios spanning 1990 2010 we show that lower prices differentially increased the cultivation of both marijuana and opium poppies in municipios

food security in less developed countries 1970 to 1990 despite a global food surplus almost half of the worlds less developed countries suffer significant problems concerning food most social science and policy discussions of food security make the food availability assumption that increased food supply is the key to reducing hunger critics argue however that increased food supply has little impact on hunger and that the primary culprits are entrenched inequality and militarism a lagged panel analysis of food supply and child hunger rates 1970 90 shows that the food supply has only modest effects on child hunger rates and that food supply is structurally rooted in development processes domestic investment urban bias foreign capital penetration while child hunger is politically based in arms imports internal violence and political democratization population pressure tapped by increased age dependency undermines both the supply of food and the populations access to it and culturally dualism magnifies the effects of population pressure on child hunger the effects of economic growth trickle down to affect food both supply and child hunger and economic growth is also positively correlated with political democratization suggesting there is no short term trade off between growth democratization and social equity authors

effects of the minimum wage on the employment status of youths an update the large decline in the relative value of the minimum wage during the 1980s makes that period a valuable one for identifying the impact of variation in the minimum wage on youth employment this study produces the robust finding that when the experience of the 1980s is included a 10 percent increase in the minimum wage is estimated to reduce teen employment by less than 1 percent the lower end of the range of previous estimates because this small employment effect is offset by a labor force withdrawal effect the study finds no discernible effect on measured unemployment the study also finds no apparent effect of the minimum wage on the employment of young adults aged 20 24

the effects of minimum wages on wage dispersion and employment evidence from the u k wages councils using data on wages council coverage from the united kingdom new earnings survey the authors examine the impact of mandated minimum wages on wage dispersion and employment in the united kingdom in the 1980s they find evidence that a dramatic decline in the toughness of the regulation imposed by the wages councils through the 1980s a decline that is in the level of the minimum wage relative to the average wage significantly contributed to widening wage dispersion over those years there is however no evidence of an increase in employment resulting from the weakening bite of the wages council minimum pay rates instead consistent with the conclusions of several recent u s studies the findings suggest that the minimum wage had either no effect or a positive effect on employment

long term impact of minimum wages on workers careers evidence from two decades of longitudinal linked employer employee data i acknowledge the support of the spanish ministry of the economy severo ochoa programme for centres of excellence in r d sev20150563 the aei spain and feder ue grant eco2016 76734 p

happy birthday you re fired the effects of an age dependent minimum wage on youth employment flows in the netherlands the dutch minimum wage for workers aged 15 to 23 is defined as a stepwise increasing function of a worker s calendar age using dutch administrative records the author shows that the birthday disc

critique and transformation on the hypothetical nature of ecosystem service value and its neo marxist liberal and pragmatist criticisms abstract ecosystem service valuation esv attempts to transform the opposition of human economic necessity and ecological conservation by valuing the latter in terms of the services rendered by the former however despite a number of esv inspired sustainability initiatives since the 1990s global ecological degradation continues to accelerate this suggests that esv has fallen far short of its goals of sustainable social transformation a failure which has generated considerable criticism this paper reviews three prominent lines of esv criticism 1 the neo marxist criticism which emphasizes the fictitious character of ecosystem commodities 2 the liberal criticism through friedrich hayek s concept scientistic objectivism and 3 the pragmatist criticism of value monism although each form of criticism provides insight into the limitations of esv all share esv s inability to discern what kind of social transformation is possible unable to provide an account of their own immersion in social and historical context these approaches operate in the hypothetical in light of these shortcomings this paper advances a critical theory approach which we contend provides conceptual tools uniquely well suited to more adequately address the question of social transformation

choice at sixteen the proportion of sixteen year olds in britain who stay on at school is low by oecd standards this paper examines the probability of completing education at the minimum legal age using micro data on individuals parameter estimates of a reduced form logit model of the leaving probability are obtained for both boys and girls the rich data set used allows the separate effects of family school and ability to be assessed family background in the form of class and parental education is shown to have a large effect even when ability and school type are controlled for copyright 1989 by the london school of economics and political science

using regional variation in wages to measure the effects of the federal minimum wage the imposition of a national minimum wage standard provides a natural experiment in which the treatment effect varies across states depending on the fraction of workers initially earning less than the new minimum the author exploits this fact to evaluate the effect of the april 1990 increase in the federal minimum wage on teenagers wages employment and school enrollment comparisons of grouped and individual state data confirm that the rise in the minimum wage increased teenagers wages there is no evidence of corresponding losses in teenage employment or changes in teenage school enrollment

employment effects of minimum and subminimum wages panel data on state minimum wage laws using panel data on state minimum wage laws and economic conditions for the years 1973 89 the authors reevaluate existing evidence on the effects of a minimum wage on employment their estimates indicate that a 10 increase in the minimum wage causes a decline of 1 2 in employment among teenagers and a decline of 1 5 2 in employment for young adults similar to the ranges suggested by earlier time series studies the authors also find evidence that youth subminimum wage provisions enacted by state legislatures moderate the disemployment effects of minimum wages on teenagers

is there a negative effect of minimum wages on youth employment in france abstract it is often claimed that the national minimum wage has been a major cause of unemployment in france however econometric studies using time series data have been unable to identify any substantial impact in this paper we analyse what happened to the employment of young persons using sectoral data following the 10 increase in the minimum wage that took place in june 1981 we find that there was a statistically significant negative effect on youth employment

international commodity prices growth and the outbreak of civil war in sub saharan africa to learn more about the effect of economic conditions on civil war we examine whether sub saharan civil wars are more likely to start following downturns in the international price of countries main export commodities the data show a robust effect of commodity price downturns on the outbreak of civil wars we also find that sub saharan countries are more likely to see civil wars following economic downturns in their main oecd export destinations

measuring poverty in a growing world or measuring growth in a poor world the extent to which growth reduces global poverty has been disputed for 30 years although there are better data than ever before controversies are not resolved a major problem is that consumption measured from household surveys which is used to measure poverty grows less rapidly than consumption measured in national accounts in the world as a whole and in large countries particularly india china and the united states in consequence measured poverty has fallen less rapidly than appears warranted by measured growth in poor countries one plausible cause is that richer households are less likely to participate in surveys but growth in the national accounts is also upward biased and consumption in the national accounts contains large and rapidly growing items that are not consumed by the poor and not included in surveys so it is possible for consumption of the poor to grow less rapidly than national consumption without any increase in measured inequality current statistical procedures in poor

unemployment and female labour supply the definition of labour force participation in the standard labour supply model stands in sharp contrast to that used in compiling the labour force statistics in the labour supply models only those supplying positive hours of work are considered to be labour force participants on the other hand participation in the labour force statistics is often defined to include not only those supplying positive hours but also those actively searching for work this paper is an attempt to reconcile these concepts by allowing unemployed workers to enter a generalisation of the standard labour supply model this turns out to be a convenient way to enter demand side factors directly into the determination of an individual s labour market position the model is applied with some success to the working behaviour of married women in the uk family expenditure survey

evaluating the minimum wage exemption of the long term unemployed in germany the authors evaluate the exemption of long term unemployed job seekers from germany s national minimum wage using linked survey and administrative micro data they rely on a regression discontinui

state failure and success in uganda and zimbabwe the logic of political decay and reconstruction in africa abstract this article uses the post colonial experiences of uganda and zimbabwe to demonstrate both the strengths and weaknesses of competing theoretical explanations for problems of state and economic failure in africa it shows that they all explain some but not all of these processes it demonstrates the crucial role of contextual circumstances and ongoing structural changes in each country in determining the success or failure of policy regimes and of current prospects for a long term transformation to liberal democratic capitalism

does globalisation affect crime theory and evidence globalization skeptics argue that trade liberalization has high social costs including an increase in expropriative behavior such as civil conflict coercion of labor and crime we show that a theoretical relationship between trade and expropriation exists but the sign differs for developed and developing economies we verify this empirically using data on crime rates specifically we find trade liberalization as measured by both higher openness and lower import duty rates tends to increase burglaries and theft in very labor abundant countries for other countries however we find that trade liberalization has either a small negative effect on crime or no effect depending on the country s capital abundance

the new internationalization of agriculture a reformulation abstract our research on the new internationalization of agriculture builds on analyses of the internationalization of capital and the new international division of labor but reformulates internationalization as a contingent political and economic process we argue that shifts in the institutional structure of capitalism in the 1980s profoundly altered national policy options and agro food markets states such as mexico puerto rico and the dominican republic have been compelled to promote agricultural exports typically at the expense of national food security while southern states pursue a common goal of international competitiveness this involves a varied process of domestic restructuring and differentiates states within the world economy

married women s hours and participation revisited elasticity estimates are presented for participation and hours of work for a sample of married women in the social change and economic life initiative sceli 1986 data set a logit model is used to estimate the participation function and a tobit model is employed to estimate an hours of work equation the results are in agreement with the evidence available for the uk the own wage hours of work elasticity is found to be relatively elastic with negligible effects detected for non labour income and the husband or spouse s wage the effects on participation of an unemployed husband or spouse were examined and found to have a strong negative effect

food riots and protest agrarian modernizations and structural crises summary food riots in the developing world have re gained momentum coinciding with converging financial food and global energy crises of 2007 08 high staple food prices across the world and increasingly un regulated food markets have highlighted among other things the political dimensions of food related protests this has been the case especially in the mena region but also in sub saharan africa east asia and latin america where food related protests have often been catalysts to contest wider processes of dissatisfaction with authoritarian and corrupt regimes after many years of silence food related struggles have begun to receive more attention in the academic literature this has mostly been in the context of emerging debates on land grabbing food security sovereignty and social movements yet there have been few attempts to provide a systematic enquiry of existing analytical perspectives and debates or a clear assessment of what some of the political and economic implications may be for what now seem to be persistent food protests and social struggles this article tries to fill this gap by mapping and reviewing the existing and emerging literature on urban and rural food related protests it also explores theories and methodologies that have shaped debate by locating these in an alternative world historical analysis of political economy the article includes but also goes beyond a critical review of the following authors and their important contribution to ongoing debate farshad araghi henry bernstein henrietta friedmann and philip mcmichael jason moore vandana shiva the world bank and fao publications and recent special issues of review journal of agrarian change and journal of peasant studies

benefits and the labour supply of women married to unemployed men this paper seeks to explain the low labor force participation rates of women married to unemployed men in the reducing the net increment to household income that would result from the wife s employment simple probit models of the participation and part time full time decisions are estimated using a large cross sectional data set the results confirm the importance of severe disincentive effects controlling for labor market conditions income related benefits are found to create worse problems than national insurance benefits both types impede part time work in particular copyright 1990 by royal economic society

growth and violence argument for a per capita measure of civil war the economics literature typically uses counts of casualties as a measure of conflict intensity despite the fact that the units of observation vary considerably in population size when analysing the impact of conflict on economic growth the use of counts relies on the assumption that a given number of casualties affects large and small populations in the same way using within and between country evidence this paper demonstrates that this standard assumption can be rejected a per capita model of conflict intensity that captures local effects of violence provides a more consistent empirical framework for both between country and within country studies

disentangling the minimum wage puzzle an analysis of worker accessions and separations changes in the legislation in the mid 1980s in portugal provide remarkably good conditions for analysis of the employment effects of mandatory minimum wages as the minimum wage increased sharply for a very specific group of workers relying on a matched employer employee panel data set we model gross worker flows accessions and separations in continuing firms as well as in new firms and those going out of business using a count regression model applied to proportions employment trends for teenagers the affected group are contrasted to those of older workers before and after the raise in the youth minimum wage the major effect on teenagers of a rising minimum wage has been the reduction of separations from the employer which during the period under analysis has compensated for the reduction of accessions to new and continuing firms in this sense our results can reconcile some of the previous evidence in the empirical literature when analyzing the aggregate impact of the minimum wage on youth employment without decomposing it by type of worker flow jel d21 j23 j38

the political economy of government responsiveness theory and evidence from india the determinants of government responsiveness to its citizens is a key issue in political economy here we develop a model based on the solution of political agency problems having a more informed an politically active electorate strengthens incentives for governments to be responsive this suggests that there is a role both for democratic institutions and the mass media in ensuring that the preferences of citizens are reflected in policy the ideas behind the model are tested on panel data from india we show that public food distribution and calamity relief expenditure are greater controlling for shocks where governments face greater electoral accountability and where newspaper circulation is highest

employment and the introduction of a minimum wage in britain there has been and will continue to be a lot of controversy regarding the introduction of a minimum wage in britain much has been said about the economic effects of a minimum wage about the level at which it should or could be set about how other workers would be affected and about how a minimum wage may interact with the benefit system as the labour or liberal democrat parties will if they win the next election introduce a minimum wage it is evident that a clear and informed discussion of the economic effects is important most of the existing debate has concentrated on its impact on jobs and here the discussion varies from pure ideology to consideration of the statistical evidence the former is typified by the comments of a number of government ministers a recent example is that by ian lang the independent i3 september i995 who said that a minimum wage set at f4 i5 an hour would cost at least 950 000 jobs this comes from assuming large knock on effects from a minimum wage by asserting that the average worker would claim a pay increase of half the magnitude of the increase received by low paid workers when their pay is raised to the minimum and then that this wage increase has to transmit into job loss the qualitative prediction of job loss is of course entirely in line with orthodox models of the labour market which unambiguously predict that increases in minimum wages price workers out of jobs 1 it is also in line with the sentiments outlined in the recent oecd jobs study of i994 which stresses that minimum wages cause job loss in the member countries for example the jobs study argues that governments should ensure sufficient differentiation in wage rates by age and region to prevent the minimum wage from harming employment prospects for young people or low productivity regions oecd jobs study p 46 however a more recent body of work questions this conventional view quite a lot of empirical evidence has been accumulated in recent years that fails to find any evidence ofjob loss associated with minimum wages the emphasis seems to have shifted from how negative are the employment effects to is there an employment effect and in some circles what potential is there for a positive effect after a brief review of the history of minimum wages in britain we discuss this recent work in the next section of the paper on the

the dilemma of cheap food and self sufficiency the case of wheat in iran self sufficiency in wheat has been one of the major goals of iranian agricultural policies since the revolution of 1979 even so the country failed to achieve this goal by the early 2000s despite a satisfactory growth in wheat production this paper addresses this failure and the political difficulties in introducing reforms that would reduce the need for import first the production and consumption of wheat are examined the conclusion is that the cheap bread policy has mainly been responsible for the imbalances between domestic supply and demand and the continued reliance on wheat imports moreover the paper argues that the subsidy program is an expensive safety net for the needy and shows that the iranian government has intended to reform the program since the early 1990s however subsidy reforms are politically sensitive especially in developing countries where subsidies are considered very important both for supporting the poor and for political stability an analysis of the iranian attempts at subsidy reform suggests that they have not yet succeeded mainly due to such political considerations

the effect of the minimum wage on the fast food industry using a longitudinal survey of fast food restaurants in texas the authors examine the impact of recent increases in the federal minimum wage on a low wage labor market less than 5 of fast food restaurants were using the new youth subminimum wage in july august 1991 even though the vast majority paid a starting wage below the new hourly minimum wage immediately before it became effective although some restaurants increased wages beyond the level needed to comply with higher minimum wages in both 1990 and 1991 those federal minimum wage increases greatly compressed the distribution of starting wages in the texas fast food industry two findings at variance with conventional predictions are that 1 employment increased more in those firms likely to have been most affected by the 1991 minimum wage increase than in other firms and 2 price changes were unrelated to mandated wage changes

a model of female labour supply in which supply is dependent upon the chances of finding a job in this paper we extend a model of female labour supply by considering the impact of the local labour market thus in our model a woman supplies her labour if she has both made the decision to participate and found a job this extension is of particular importance in times of high unemployment when discouraged worker effects will be at their strongest we also consider the contribution of such a model to the debate concerning the labour supply of women married to men who are unemployed

the effect of minimum wage laws on the distribution of employment theory and evidence abstract recent research casts doubt on the view that minimum wage laws reduce employment we show that in a simple model of bilateral search with heterogeneous workers a minimum wage law increases employment however the increased competition from higher productivity workers makes lower productivity workers worse off without making higher productivity workers better off we provide evidence that minimum wage laws shift employment from adults to teenagers and students this raises concerns about the distributional consequences of minimum wages even when they increase employment

a reassessment of the new economics of the minimum wage literature with monthly data from the current population survey we estimate the employment effects of federal minimum wage increases using monthly current population survey cps data from 1979 through 1997 we find that the empirical differences in the new minimum wage literature based on cps data primarily can be traced to alternative methods of controlling for macroeconomic conditions we argue that the macroeconomic controls commonly included in models where no employment impact is found are inappropriate we consistently find a significant but modest negative relationship between minimum wage increases and teenage employment using alternative controls or allowing employer responses to the policy to occur with some delay

effects of international food price shocks on political institutions in low income countries evidence from an international food net export price index we examine the effects of variations in the international food prices on political institutions in low income countries our empirical analysis exploits that the economic impact of changes in the international food prices differs across countries depending on whether countries are net food importers or exporters we construct an international food net export price index that captures this heterogeneity our panel fixed effects analysis yields that in low income countries within country variations in the international food net export price index are significantly negatively related to democratic institutions we further explore the mechanisms driving this relationship along the economic and the conflict dimensions

the political economy of food the rise and fall of the postwar international food order the widespread perception of a food crisis since the early 1970s reflects a real turning point in the global structure of production and distribution of food grains scarcity is always an aspect of capitalist relations but its specific form is determined historically through the international food order the latter is a stable set of complementary state policies whose implicit coordination creates specific prices relative to other prices a specific pattern of specialization and resulting patterns of consumption and trade the social consequences of those orderly international arrangements make sense within a marxist conception of accumulation and class formation on a world scale i present a historical analysis of the rise of an international food order after world war ii whose principal axis was food aid from the united states to formerly self sufficient agrarian societies this order had contradictory effects both economic and political leading to a reorganization of aid and trade higher prices

a global interpretation of the rise of the east asian food import complex abstract the last quarter century explosion of consumer affluence in japan south korea taiwan and china accompanied a new phase in the organization of the global food economy it also conditioned the increasingly speculative capital investments in the region this paper argues that the restructuring of production and consumption relations involved a movement away from the us centered bilateral food surplus regime and toward a multilateral food regime based in wto led agricultural liberalization and the corporate restructuring of agriculture the east asian food import complex advances the neoliberal project of global free trade spawning agro export zones throughout southeast asia

the effects of minimum bargained wages on earnings evidence from spain abstract this paper provides an empirical evaluation of the effects of spanish sectoral collective bargaining on wages for this purpose we use a sample of workers for whom bargained wage rates and earnings are available using a variant of the meyer and wise approach we are able to estimate wage gains due to minimum bargained wages and their employment effects the most relevant conclusion is that there is evidence of a sword of justice effect by unions but this is limited by non compliance among unskilled workers and the non binding nature of bargained wages for skilled workers

a brief review of some problems in using national accounts data in level of output comparisons and growth studies abstract after an initial burst of enthusiasm for establishing their national accounts 30 or 40 years ago some countries have made continuous improvements while others have done little to maintain even their initial system presently most developing countries make their basic estimate of gdp from the production side and most do not have adequate surveys to permit a consistency check of their production and expenditure side estimates the base surveys for expenditures and production are typically over ten years old and the lags in basic surveys for constructing constant price estimates are frequently longer a number of countries estimate their growth from a weighted average of volume indexes and make no attempt at direct deflation many of those that do deflate their current expenditure estimates do so at a very aggregate level users of national accounts should be aware of the varying quality of the estimates across countries and hopefully continual questioning of the numbers will help to encourage improvement

commodity prices and growth in africa a frican economies export primary commodities and most export little else policymakers as well as economists and historians of african economic development have seen these exports as both a hope and a curse the following parable tells the story once upon a time a servant of the ruler discovered a miraculous plant which grew readily in that country and whose seeds could be woven into fine cloth so desirable was this fabric that it became prized all over the world and fetched a high price after two score years the plant accounted for most of the country s trade with the world the ruler ordered the peasants to grow the plant paid them only a fraction of its price and he and his nobles became fabulously wealthy because the ruler wished to be remembered as a great ruler and as the father of his country he used his wealth to build a great army and brought machines from foreign countries to make the fine goods that previously could only be obtained from foreign merchants but the machines often broke down and the goods that they made were of poor quality and after the ruler died they were left to rust under the ruler s successor there was a war in a foreign land where the plant also grew so that there was a great shortage and its price increased threefold in only three seasons the new ruler spent his newfound riches on fantastic extravagance while immense sums were expended on public works after the manner of the east and on productive works carried out in the wrong way or too soon not even the threefold increase in prices could support these expenditures and the country soon found itself deeply in debt when the war ended and the price fell the country could no longer pay the interest on its debt or borrow more money even after it had sold its only useful public work to a foreign power so that power sent a mission to the country the publication of whose report from which the above

income and democracy existing studies establish a strong cross country correlation between income and democracy but do not control for factors that simultaneously affect both variables we show that controlling for such factors by including country fixed effects removes the statistical association between income per capita and vari ous measures of democracy we present instrumental variables estimates that also show no causal effect of income on democracy the cross country corre lation between income and democracy reflects a positive correlation between changes in income and democracy over the past 500 years this pattern is con sistent with the idea that societies embarked on divergent political economic development paths at certain critical junctures jel d7 e 1

the effects of minimum wages on employment theory and evidence from britain recent work on the economic effects of minimum wages has stressed that the standard economic model where increases in minimum wages depress employment is not supported by empirical work in some labor markets we present a general theoretical model whereby employers have some degree of monopsony power which allows minimum wages to have the conventional negative impact on employment but which also allows for a neutral or positive impact studying the industry based british wages councils between 1975 and 1992 we find that minimum wages significantly compress the distribution of earnings but do not have a negative impact on employment

effects of transitory shocks to aggregate output on consumption in poor countries this paper provides instrumental variables estimates of the response of aggregate private consumption to transitory output shocks in poor countries to identify exogenous unanticipated idiosyncratic and transitory variations in national output we use year to year variations in rainfall as an instrumental variable in a panel of 39 sub saharan african countries during the period 1980 2009 our estimates yield a marginal propensity to consume out of transitory output of around 0 2 to explain this result we show using instrumental variables techniques that there is a significant negative effect of transitory output shocks on net current transfers and a significant positive and quantitatively large effect on the trade balance an important implication is that frictions to private financial flows do not necessarily imply large effects of transitory shocks to aggregate output on private consumption in poor countries

comment on david neumark and william wascher employment effects of minimum and subminimum wages panel data on state minimum wage laws in their article published in the minimum wage research symposium in the october 1992 issue of this journal industrial and laborrelations review volume 45 number 1 pp 55 81 david neumark and william wascher claim to find empirical support for three propositions 1 a higher minimum wage leads to a lower teenage employmentpopulation rate 2 the effect of the minimum wage on employment can be seen within a year but becomes stronger after two years and 3 in states with legal subminimum wages a significant fraction of teenage employees are paid a subminimum wage and the availability of a subminimum wage blunts the disemployment effect of the minimum wage the same symposium contains three papers by us that present empirical evidence suggesting conclusions opposite those of neumark and wascher 1 since neumark and