hume s specie flow mechanism and classical monetary theory an alternative interpretation abstract hume s celebrated essay on the international distribution of money has always been criticized for ignoring the law of one price contrary to the traditional interpretation however hume actually maintains that law and argues for the stability of long run equilibrium putting money market equilibrium in the foreground his analysis is essentially founded on the same hypothesis as the modern monetary approach albeit focusing on the supply rather than on the demand side of the money market

the silent success of customs unions an earlier version of this paper is part of arevik gnutzmann mkrtchyan s thesis essays on the economics of trade agreements 2014 http hdl handle net 1814 34561

is gaming the optimal strategy the impact of gaming facilities on the income and employment of american indians this paper provides two stage estimates of the economic impact of indian gaming on tribal members gaming increases income among tribal members in all areas and increases employment by reducing the number of out of the labor force in rural areas

the indian gaming regulatory act and its effects on american indian economic development the indian gaming regulatory act igra passed by the us congress in 1988 was a watershed in the history of policymaking directed toward reservation resident american indians igra set the stage for tribal government owned gaming facilities it also shaped how this new industry would develop and how tribal governments would invest gaming revenues since then indian gaming has approached commercial state licensed gaming in total revenues gaming operations have had a far reaching and transformative effect on american indian reservations and their economies specifically indian gaming has allowed marked improvements in several important dimensions of reservation life for the first time some tribal governments have moved to fiscal independence native nations have invested gaming revenues in their economies and societies often with dramatic effect

evolution of the infant health production function michael grossman s seminal publication on the demand for health and health production grossman 1972 has spawned a substantial body of research focusing on the production of infant health this article provides a systematic review of the published literature to date on infant health production and how it has evolved over the past 3 4 decades as data have become more available computing has improved and econometric methods have become more sophisticated while empirical research in most fields has expanded in corresponding ways the infant health production research has become an important part of the broader and inherently multidisciplinary literature on intergenerational health the strongest and most robust findings are that policies matter for infant health particularly those affecting access to health care and that prenatal smoking and other chemical exposures substantially compromise infant health promising directions for future research include elucidating relevant pathways reconciling the largely inconsistent estimated effects of nutrition and education and exploring the roles of preconceptional and lifetime health care paternal factors social support housing complementarity and substitutability of inputs factors that modify effects of inputs and evolving medical technologies

a simple general equilibrium model of large excess reserves abstract in a general equilibrium macroeconomic model with a banking system that can hold large excess reserves and is subject to possibly binding capital constraints i study how the quantity of government provided monetary assets is related to the price level in steady state when the central bank does not pay interest on reserves the price level moves one for one with the monetary base if instead the central bank can pay interest on reserves at market rates the price level can decouple from the quantity of monetary assets in the economy a larger monetary base need not imply a higher price level however for large enough levels of reserves the capital constraint binds and the tight link between money and prices reemerges

the central american common market from closed to open regionalism abstract the central american common market cacm launched in 1960 was frequently held up as a model for other developing countries to follow its collapse in the 1980s led to a reconsideration of the role of regional integration in the development process as a result the relaunch of the cacm in the 1990s is designed to complement the region s promotion of nontraditional exports to the rest of the world this article charts the transition of the cacm from an instrument designed to foster importsubstituting industrialization closed regionalism to the open regionalism now favored throughout latin america while the rhetoric of integration has moved far beyond the reality the new cacm is significantly different from its predecessor and has the potential to play a positive role in the region s development

monetary information and monetary neutrality abstract the monetary theory of business fluctuations in market clearing models constructed under the rational expectations assumption as advanced by lucas and others involves the idea that suppliers and demanders will typically misinterpret movements in the general level of prices as representing more or less favorable relative opportunities for real activities the present paper examines the consequences of agents possessing contemporaneous monetary information of a potentially noisy variety for the non neutrality of unanticipated monetary events within such an equilibrium business cycle model this modification of the information structure has the strong testable implication that real activity will be uncorrelated with contemporaneous monetary data

reservation wages an analysis of the effects of reservations on employment of american indian men american indians have experienced a large degree of difficulty in the labor market they have lower levels of labor force participation higher levels of unemployment and lower wages than the rest of the population which in turn leads to lower median household income and higher poverty rates despite the fact that these economic problems are particularly acute for indians living on reservations no previous research has examined the effects of reservations on individual employment rates controlling for other observable attributes in this paper we examine the effects of reservations on employment using a sample of young males from the national longitudinal survey of youth 1979 nlsy79 we compare outcomes for indians with those of a nationally representative cross section of the same birth cohort controlling for i contemporaneous proximity to a reservation and ii whether the respondent lived at age 14 in a county with a reservation controlling for other factors including local labor market conditions proximity to a reservation reduces the probability of employment among indian men by 11 percentage points having lived in a county with a reservation at age 14 reduces the probability of employment among indian men by 5 10 percentage points neither measure of proximity to a reservation reduces employment of other groups

money and liquidity effects separating demand from supply in the canonical monetary policy model money is endogenous to the optimal path for interest rates and output but when liquidity provision by banks dominates the demand for transactions money from the real economy money is likely to contain information for future output because of its impact on financial spreads and so we decompose broad money into primitive demand and supply shocks we find that supply shocks have played a significant role in the time series in each of the usa uk and eurozone in the short to medium term we further consider to what extent the supply of broad money is related to policy or to liquidity effects from financial intermediation

the rational expectations hypothesis in retrospect the rational expectations hypothesis is at the center of current debates in economic theory the importance of this theoretical innovation has stimulated a number of studies including analyses in the unfashionable field of the history of thought the 1979 article by brian kantor being a first example historical investigations on the subject of rational expectations are of interest since it is held that this theory has revived the teachings of the classics inasmuch as it provides the cornerstone of the recently developed approach known as new classical macroeconomics the present note examines some specific aspects as yet pot emphasized in the literature concerning the relationship between rational expectations and classical monetary theory in particular the following results will be shown the fundamental implication of the rational expectations hypothesis that is that only unexpected changes in the money stock influence the real sector of the economy is a basic tenet of classical monetary theory as well and is founded upon the very argument according to which agents efficiently use the available information in order to take account of the consequences of policy measures section i this common analytical framework notwithstanding classical analysis of the role to be assigned to the monetary authority reflects a different appraisal of the dimension of the information set section ii

the distribution of money balances and the nonneutrality of money recent monetary models with explicit microfoundations are made tractable by assuming that agents have access to centralized markets after one round of decentralized trade given quasi linear preferences this makes the distribution of money degenerate which keeps the models simple but precludes the discussion of distributional effects of monetary policy we generalize these models by assuming two rounds of trade before agents can readjust their money holdings to study a range of new distributional effects analytically we show that unexpected symmetric lump sum money injections may increase short run output and welfare whereas asymmetric injections may increase long run output and welfare

inflation output and welfare this paper studies the effects of anticipated inflation on aggregate output and welfare within a search theoretic framework we allow money holders to choose the intensities with which they search for trading partners so inflation affects the frequency of trade as well as the quantity of output produced in each trade we consider the standard pricing mechanism for search models i e ex post bargaining as well as a notion of competitive pricing if prices are bargained over the equilibrium is generically inefficient and an increase in inflation reduces buyers search intensities output and welfare if prices are posted and buyers can direct their search search intensities are increasing with inflation for low inflation rates and decreasing for high inflation rates the friedman rule achieves the first best allocation and inflation always reduces welfare even though it can have a positive effect on output for low inflation rates

bureaucrats and indians principal agent relations and efficient management of tribal forest resources abstract under pl 638 indian tribes can contract with the bureau of indian affairs to take over the management and marketing of tribal timber resources when indian principals replace bureau agents in these tasks both the quantity of timber harvested relative to potential and the price obtained increase tribes participation in the program is related both to their levels of economic development and the pecuniary gains available from improved incentives

nobel laureate robert e lucas jr architect of modern macroeconomics in 1995 robert e lucas was awarded the nobel memorial prize for economic science this review places lucas s work in a historical context and evaluates the effect of this work on the economics profession lucas s central contribution is that he developed and applied economic theory to answer substantive questions in macroeconomics economists today routinely analyze systems in which agents operate in complex probabilistic environments to understand interactions about which the great theorists of an earlier generation could only speculate this sea change is due primarily to lucas

resource curse an analysis of causes experiences and possible ways forward abstract higher prices for oil gas and mineral resources have again raised questions about how exporting countries can counter the challenges of resource curse international experience managing the risks of resource curse has varied summarising the continuing discussion on meeting the challenges of the resource curse this paper addresses four questions what are the positive and negative effects of high oil gas and mineral prices on exporters what have been the experiences with managing natural resource revenues can good institutions ensure that natural resource revenues have a positive impact on development and what is the direction for the way forward we argue that the current emphasis on institutions as a potential solution has largely ignored under what conditions institutions are formed and changed

disease and development evidence from hookworm eradication in the american south this study evaluates the economic consequences of the successful eradication of hookworm disease from the american south the hookworm eradication campaign c 1910 began soon after i the discovery that a variety of health problems among southerners could be attributed to the disease and ii the donation by john d rockefeller of a substantial sum to the effort the rockefeller sanitary commission rsc surveyed infection rates in the affected areas eleven southern states and found that an average of forty percent of school aged children were infected with hookworm the rsc then sponsored treatment and education campaigns across the region follow up studies indicate that this campaign substantially reduced hookworm disease almost immediately the sudden introduction of this treatment combines with the cross area differences in pre treatment infection rates to form the basis of the identification strategy areas with higher levels of hookworm infection prior to the rsc experienced greater increases in school enrollment attendance and literacy after the intervention this result is robust to controlling for a variety of alternative factors including differential trends across areas changing crop prices shifts in certain educational and health policies and the effect of malaria eradication no significant contemporaneous results are found for adults who should have benefited less from the intervention owing to their substantially lower prior infection rates a long term follow up of affected cohorts indicates a substantial gain in income that coincided with exposure to hookworm eradication i also find evidence that eradication increased the return to schooling

does increased access increase equality gender and child health investments in india increases in access to social services are often thought to decrease inequality in the level of these services between advantaged and disadvantaged groups this is an issue in the developing world where policy makers often argue that increasing the level of health care for example will decrease gender inequality however increases in access to services often have empirically ambiguous eects on inequality increasing it in some cases and decreasing it in others this paper argues that this is not surprising and simple economic theory suggests that we should expect a non monotonic relationship between access and inequality at low levels of access to investments there is no investment for either the advantaged or disadvantaged group producing equality increases in access increase investment for the advantaged group rst generating inequality further increases in access increase investment in the disadvantaged group decreasing inequality i test the predictions of this theory using data on the availability of health camps or distance to health centers and gender dierences in vaccinations in india i nd strong support for a non monotonic relationship between access and gender equality

adaptive learning and monetary exchange abstract this paper investigates three classic questions in monetary theory how can an intrinsically worthless asset such as fiat money maintain value as a medium of exchange what are the short run and long run effects of a change in the money supply what is the social cost of inflation i answer these questions using a microfounded model of monetary exchange that replaces the rational expectations assumption with an adaptive learning rule first i show that monetary exchange is a robust arrangement in the sense that agents are able to learn the stationary monetary equilibrium while the non monetary equilibrium is unstable under learning second an unanticipated monetary injection has real effects in the short run because learning the value of money takes time in the long run agents successfully learn the value of money hence money is neutral third under a constant money growth policy an increase in the growth rate of money increases output in the short run producing a short run phillips curve a ten percent increase in the money growth rate has a social cost of 0 41 percent of output per year alternatively a ten percent decrease in the money growth rate has a social benefit of 0 37 percent of output per year

spring cleaning rural water impacts valuation and property rights institutions the brief summarizes the spring cleaning rural water impacts valuation and property rights institutions the first two rounds of spring protection occurred in january april 2005 and august november 2005 the author measure health impacts of spring protection an investment that improves source water quality the author also estimate households valuation of spring protection and simulate the welfare impacts of alternatives to the current system of common property rights in water which limits incentives for private investment spring infrastructure investments reduce fecal contamination by 66 percent but household water quality improves less due to recontamination child diarrhea falls by one quarter travel cost based revealed preference estimates of households valuations are much smaller than both stated preference valuations and health planners valuations and are consistent with models in which the demand for health is highly income elastic the author estimate that private property norms would generate little additional investment while imposing large static costs due to above marginal cost pricing private property will function better at higher income levels or underwater scarcity and alternative institutions could yield pareto improvements

property rights and water access evidence from land titling in rural peru summary insecure land tenure and property rights are an impediment to infrastructure access and services for households in many developing countries this paper explores whether alleviating this impediment through a land titling program in rural peru is associated with improvements in household water sources as well as sanitation and electricity services the economics literature on the links between property rights and investment decisions has amassed yet due to the necessity of water for life the high fixed costs associated with water infrastructure construction and the positive externalities that can result from water provision it is not obvious how water services might respond to land tenure improvements utilizing the phased in program timing in a quasi experimental design we exploit the differences in implementation timing across space in conjunction with the differences in program impact across households that held property titles prior to the project and those that did not results from this modified difference in differences method indicate that land titling is associated with small in magnitude but statistically significant increases in water access larger gains in sanitation and electricity services are found we investigate the channels through which this improved access occurs and find evidence of investments in all three services via either government or water utilities we find evidence of individual household investment only in the case of sanitation taken together these results indicate that land titles are important but not sufficient to increase access to water and other services

nonneutrality of money in dispersion hume revisited for a class of standard and widely used preferences a one shot money injection in a standard matching model can induce a significant and persistent output response by dispersing the distribution of wealth decentralized trade matters for both persistence and significance in the presence of government bonds the injection has a liquidity effect and the inflation rate right following the injection may be below the steady state rate level

chronicle of a deflation unforetold suppose the nominal money supply could be cut literally overnight by say 20 what would happen to prices wages output the answer can be found in 1720s france where just such an experiment was carried out repeatedly prices adjusted instantaneously and fully on one market only that for foreign exchange prices on other markets such as commodities as well as prices of manufactured goods and industrial wages fell slowly over many months and not by the full amount of the nominal reduction coincidentally or not the industrial sector as represented by manufacturing of woolen cloths experienced a contraction of 30 when the government changed course and increased the nominal money supply overnight by 20 prices responded much more and the woolen industry rebounded

the role of monetary shocks in equilibrium business cycle theory three examples abstract we study three equilibrium business cycle models that differ according to the mechanism through which monetary growth shocks affect the economy these include models with inflation tax effects with staggered nominal wage contracts and with unanticipated inflation effects we review some monetary features of business cycles in postwar us data and compare these with the same properties computed for the artificial economies our goal is to identify the features of the business cycle that these mechanisms help to explain the features that remain puzzling and how the form of the mechanism matters

public health investments and the infant mortality gap evidence from federal sanitation interventions on u s indian reservations abstract to what extent do differential levels of investment in public health inputs explain observed differences in health outcomes across socioeconomic and racial groups this study investigates the impact of 3700 projects that were part of a widespread federal initiative to improve sanitation infrastructure on u s indian reservations starting in 1960 sanitation investment substantially reduced the cost of clean water for households leading to sharp reductions in both waterborne gastrointestinal disease and infectious respiratory disease among native american infants the sanitation program was quite cost effective in part because improvements in the overall disease environment also reduced infectious respiratory disease among nearby white infants despite the health externalities federal sanitation interventions explain almost forty percent of the convergence in native american and white infant mortality rates in reservation counties since 1970

a reinterpretation of classical monetary theory relevance to current policy issues is usually not the motivation for studying the history of economic theory however questions about the practicality of conducting monetary policy in a deregulated financial system by controlling the monetary aggregates are stimulating interest in convertibility as an alternative to our present monetary arrangements 3 6 66 since classical writers were mainly concerned with monetary theory and policy under a gold standard it is to be expected that renewed attention will be devoted to classical monetary theory my aim in this paper is to show that contrary to received views about classical monetary theory it was not based on the quantity theory of money on the contrary it was based on a theory of a convertible competitively produced money supply that was fundamentally different from the quantity theory using the modern theory of a competitive money supply we can now rigorously derive many of the basic propositions of classical monetary theory that have been denied or misunderstood by modern theorists operating within the framework of the quantity theory received views about classical monetary theory can be summarized by the following propositions

retrospectives hume on money commerce and the science of economics david hume 1711 1776 is arguably the most esteemed philosopher to have written in the english language during his lifetime however hume was as well if not better known for his contributions to political economy particularly for the essays published as the political discourses 1752 hume left his mark on the economic thought of the physiocrats the classical economists and the american federalists adam smith who met hume circa 1750 was his closest friend and interlocutor for some 25 years among modern economists hume s essays on money and trade have informed theorists of both keynesian and monetarist persuasions in this essay we begin by discussing hume s monetary economics and then spell out his theory of economic development noting his qualified enthusiasm for the modern commercial system we end with an assessment of his views on the scientific standing of economics specifically his counterintuitive argument that economics could be epistemologically superior to physics

sewers diffusion and the decline of mortality the case of paris 1880 1914 it is common to argue that water infrastructure innovations improve life expectancy yet the benefits of clean water depend on a mechanism to dispose of waste water we draw on the historical experience of a large industrial city to estimate the impact of the spread of the sewer system using a longitudinal data set on mortality and rents for each of paris 80 neighborhoods we show that sanitation contributed several years to life expectancy these results point out the multiplicity of infrastructure needed to help decrease mortality

the present relevance of hume s open economy monetary dynamics david hume s monetary economics has remained a source of sustained controversy rival interpretations situate his work at the fountainhead of the quantity theory of money the monetary approach to the balance of payments and the post keynesian analysis of inflation recent contributions to the literature have explicitly modeled several aspects of his monetary writings but have not placed his controversial discussion of output and monetary dynamics within all open economy analysis this paper does so and contrasts rival specifications and interpretations of humean open economy output dynamics copyright 1995 by royal economic society

cantillon and hume on money and banking the foundations of two theoretical traditions the distinction between the classical monetary theory and quantity theory has been proposed in literature on money and banking the overall feature of the classical theory of money is that it holds one principle of regulation for each kind of issue metallic money bank issues and paper money whereas the quantity theory applied the causality and proportionality postulates for all kinds of monies without claiming to adjudicate the validity of such a distinction the paper investigates the foundation of each tradition in this respect this paper respectively examines and provides a survey of the secondary literature on cantillon s essai and the hume s discourses

water for life the impact of the privatization of water services on child mortality while most countries are committed to increasing access to safe water and thereby reducing child mortality there is little consensus on how to actually improve water services one important proposal under discussion is whether to privatize water provision in the 1990s argentina embarked on one of the largest privatization campaigns in the world including the privatization of local water companies covering approximately 30 percent of the country s municipalities using the variation in ownership of water provision across time and space generated by the privatization process we find that child mortality fell 8 percent in the areas that privatized their water services and that the effect was largest 26 percent in the poorest areas we check the robustness of these estimates using cause specific mortality while privatization is associated with significant reductions in deaths from infectious and parasitic diseases it is uncorrelated with deaths from causes unrelated to water conditions

sticky goods prices flexible asset prices monopolistic competition and monetary policy a monetary general equilibrium asset pricing model with sticky goods prices is developed goods prices are set by monopolistically competitive firms that maximize stock market value equilibria with underutilization of resources excess capacity in some states result in contrast to previous monetary asset pricing models the degree of competition affects capacity utilization monetary policy can affect output and resource utilization in addition to real asset prices depending upon the amount of information available to the monetary authority

cross regime evidence of macroeconomic rationality rational expectations macromodels predict that the short run effects of monetary shocks on real output x should be negatively related across policy regimes to the variability of such shocks this paper presents cross regime tests of this and related propositions based on a sample of 47 countries the within regime estimates reveal a consistent pattern of positive short run real output effects with neutrality of money holding in the long run the cross regime tests show that x is negatively related to the variance of monetary shocks positively related to the variance of real output shocks negatively related to the variance of velocity shocks and unrelated to either the mean or variance of anticipated money growth

money output and inflation in the longer term major industrial countries 1880 2001 i introduction the empirical role of money growth in the macroeconomy has been studied by many researchers using different data and methods the most prominent studies focusing on the quantity theory of money are those of friedman and schwartz 1963 1982 using data averaged over the phases of the business cycle in order to capture longer run movements with u s and u k data back to 1867 the study by mccandless and weber 2001 is a representative example for a different approach for 110 countries in the post wwii period longer run growth rates are approximated by growth of a variable over a 30 year period average growth rates 1 the problem with phase averaging is that it does not deal with possible nonstationarity of the data 2 the problem with growth averages over long periods while informative to a degree is that they have limitations too it is impossible to assess the timing of movements in these variables 3 in the frequency domain the long run is associated with frequency zero which in our terminology is the long run trend previous studies in the frequency domain on the long run neutrality of money at zero frequency include the studies of lucas 1980 and geweke 1986 the theory of spectral analysis provides a rigorous framework for extracting specific frequency bands from the data instead of considering only frequency zero stock and watson 1998 applied the band pass filter of baxter and king 1999 to extract cycles frequency bands for u s data and focused on the business cycle and on mostly the post wwii period christiano and fitzgerald 2003 proposed an improved band pass filter and provided an application to the longer run relation of money and inflation for bands of 8 20 years and 20 40 years in the united states from 1900 to 1997 4 the usefulness of monetary aggregates for conducting monetary policy has been seriously called into question because of the instability of money demand a prominent empirical study is that of estrella and mishkin 1997 recent mainstream new keynesian models have no explicit role for money woodford 2008 a contrasting view is that the longer term role of money is still of relevance for monetary policy the european central bank explicitly emphasizes a supporting role that monetary aggregates should play in order to provide an anchor for inflation expectations hafer haslag and jones 2007 issing 2006 king 2002 nelson 2003 christiano motto and rostagno 2007 provided a theoretical new keynesian model where inflation expectations lose their anchor unless money is monitored and reacted to also beck and wieland 2008 presented a new keynesian model where cross checking with money growth movements improves inflation control similarly assenmacher wesche and gerlach 2006 2007 found a significant role for a low frequency low pass filtered component of money in the empirical new keynesian phillips curve equation 5 in the spirit of friedman 1961 we use long time spans so that our results are unlikely to be because of a specific policy rule in place in a given period we have 122 years of annual data from 1880 to 2001 before the introduction of the euro in 2002 we have real gross domestic product gdp money and consumer price indices cpis with no gaps for 11 industrialized countries 6 the countries included in our study differ in such terms as their institutions fiscal and monetary policies and economic growth rates nonetheless at least in peace time they were similar in generally having comparatively free markets in which prices and interest rates were determined our aim is to apply analytic methods that are free from economic and statistical models as much as possible in order to explore empirical regularities or stylized facts in the data also the focus of our research is the longer run we employ band pass filters to pick out cycles from each time series that last 8 40 years that is the longer term component

the economics of casino gambling america s casino industry expanded rapidly in the 1990s spreading from nevada and atlantic city to mining towns riverboats race tracks and tribal lands and moving from isolated resort settings to urban and suburban venues this article examines economic characteristics of the casino industry including the evolution of major casino markets pricing of gaming products market structures regulatory constraints and social and economic impacts attributable to casinos when competitive casinos show strong economies of scale and scope but many new jurisdictions limit the number or size of operations thus creating substantial economic rents allocation of these rents are fundamentally politically determined

where does economic development really come from constitutional rule among the contemporary sioux and apache governments are public goods that provide the organizational and legal structures by which societies arrange and enforce rules of the game that enable divisions of labor exchange and collective action we argue that shared pre constitutional cultural norms of political legitimacy among rational individuals provide the foundations of effective self government the performance of contemporary apache and sioux economies on indian reservations governed by common federally imposed constitutions is examined to test the framework unlike the impoverished sioux the relatively successful apaches are found to have pre existing political norms that serendipidously match the structure of their formal constitution

using mandated speed limits to measure the value of a statistical life in 1987 the federal government permitted states to raise the speed limit on their rural interstate roads but not on their urban interstate roads from 55 mph to 65 mph since the states that adopted the higher speed limit must have valued the travel hours they saved more than the fatalities incurred this institutional change provides an opportunity to estimate an upper bound on the public s willingness to trade off wealth for a change in the probability of death our estimates indicate that the adoption of the 65 mph limit increased speeds by approximately 4 percent or 2 5 mph and fatality rates by roughly 35 percent together the estimates suggest that about 125 000 hours were saved per lost life when the time saved is valued at the average hourly wage the estimates imply that adopting states were willing to accept risks that resulted in a savings of 1 54 million 1997 dollars per fatality with a sampling error roughly one third this value we set out a simple model of states decisions to adop

the adjustment of prices to monetary shocks when trade is uncertain and sequential trade is both uncertain and sequential money surprises are not neutral because prices at the beginning of the trading process cannot depend on its end in contrast with fixed price models in this paper sellers can change prices during trade in contrast with lucas s article here there is no asymmetry in the information about the money supply the price quoted by individual sellers may adjust slowly to changes in the targeted money supply but the distribution of quoted prices adjusts perfectly to these changes and the real price distribution is independent of the anticipated rate of change in the money supply

health and hunger disease energy needs and the indian calorie consumption puzzle india s experience presents a puzzle at odds with a basic fact of household economics amidst unprecedented economic growth average per capita daily calorie consumption has declined in recent decades does an improving disease environment explain the calorie decline a diminished burden of infectious disease could lower energy needs by increasing absorption and effective use of calories we document a robust effect of disease exposure measured as infant mortality and as poor sanitation on calorie consumption similar effects are found using multiple datasets and empirical strategies disease can account for an important fraction one fifth or more of india s calorie decline

institutional assets for negotiating the terms of development indigenous collective action and oil in ecuador and alaska abstract case studies of two oil fields with superficial similarities same company same time period similar anticipated scale of production similar remote field design similarly situated in indigenous territory show radically different benefits for the adjacent indigenous communities this analysis finds that the major differences driving these results are institutional primarily differences in property rights regimes and secondarily in local institutional development in the alaska context the community was able to negotiate a direct share of the royalties while the ecuadorian community was entitled only to an indirect revenue share from the national government both communities also negotiated for various community assistance projects from the company the ecuadorian communities likely would have succeeded in instituting their sustainable development proposal if they had stronger local organization comparative analysis of the factors for local institutional development fit well in the conceptual

does global liquidity help to forecast u s inflation we construct a measure of global liquidity using the growth rates of broad money for the g7 economies global liquidity produces forecasts of us inflation that are significantly more accurate than the forecasts based on us money growth phillips curve autoregressive and moving average models the marginal predictive power of global liquidity is strong at three years horizons results are robust to alternative measures of inflation

regional integration and agricultural trade in central america abstract the renewed movement toward regional integration in central america has adopted for the first time a multisectoral approach in which agriculture has been included the liberalization of regional trade in basic agricultural products and the establishment of a common protection scheme with respect to agricultural imports are the main components of the program of agricultural integration this article assesses the impact of freeing agricultural trade within the region with maize rice and sorghum being the case studies selected a partial equilibrium model of pure trade creation is adapted to the data available and applied empirically to each central american country

resource rents universal basic income and poverty among alaska s indigenous peoples abstract the alaska permanent fund dividend pfd program provides universal basic income ubi to all residents from investment earnings of a state sovereign wealth fund created from oil rents this paper evaluates the effect of the pfd to mitigate poverty among the state s rural indigenous alaska native peoples a population with historically high poverty rates living in a region with limited economic opportunities errors in recording pfd income in data used to calculate official poverty statistics cause them to misrepresent poverty in alaska and understate the effect of the pfd estimating poverty rates with and without pfd income therefore requires reconstruction of family incomes from household level data estimated poverty rates from reconstructed income show that the pfd has had a substantial although diminishing mitigating effect on poverty for rural indigenous families the pfd has had a larger effect on poverty among children and elders than for the rural alaska native population as a whole alaska native seniors who receive additional sources of ubi derived primarily from resource rents besides the pfd have seen a decline in poverty rates while poverty rates for children have increased evidence has not appeared for commonly hypothesized potential adverse social and economic consequences of ubi

money inflation and output under fiat and commodity standards we examine the behavior of money inflation and output under fiat and commodity standards to better understand how changes in monetary policy affect economic activity using long term historical data for 15 countries we find that under fiat standards the growth rates of various monetary aggregates are more highly correlated with inflation and with each other than under commodity standards money growth inflation and output growth are also higher in contrast we do not find that money growth is more highly correlated with output growth under one standard than under the other

the convergence in black white infant mortality rates during the 1960 s the dramatic reduction in the black white earnings gap from 1965 to 1975 represents the most significant period of economic progress for african americans in the post world war ii era after 25 years of contentious research economists have arrived at a consensus that title vii of the 1964 civil rights act which outlawed employment discrimination was a major factor underlying the post 1965 trend break in relative earnings john j donahue and james j heckman 1991 david card and alan krueger 1993 a key piece of supporting evidence is that most gains were concentrated among black workers in the south where title vii had its biggest impact the mortality rate of black infants relative to white infants is another clearly important measure of the relative well being of africanamericans surprisingly and in contrast to the relative earnings literature there are very few studies that focus on long run trends in the relative health of black infants over time in addition the existing research is based on highly aggregated data both across regions and over time which provide little information on the precise location and timing of infant mortality changes by race consequently the evidence on the specific factors underlying significant changes in black white infant health outcomes is sparse and often anecdotal an examination of infant death rates within a year of birth for whites and nonwhites and the nonwhite white infant mortality rate imr ratio from 1933 1990 in the united states reveals many striking patterns figure available from authors upon request immediately before world war ii about 4 1 percent of white infants and 7 5 percent of black infants died within a year of birth during world war ii there was a large decline in black infant mortality rates and in the black white ratio since world war ii there has been a secular increase in the black white imr ratio with one notable exception in the narrow period of 1965 1970 the black imr and the black white ratio declined sharply relative to preexisting trends relatively stable during 1961 1965 the black imr fell 30 percent from 4 0 per 100 live births in 1965 to 2 8 in 1971 at the same time the black white ratio fell from 1 9 to 1 65 the only prolonged convergence in the post world war ii era the national patterns suggest that 1965 1970 is the key period for improvements in the relative health of black infants over the past 50 years this study examines trends in black white rates of infant death during 1955 1975 to document the location of the improvements we collected data by race at the state and rural urban levels which has not been previously done using simple descriptive models we find discussants david meltzer university of chicago and nber kenneth chay university of california berkeley and nber jeffrey grogger university of california los angeles and nber dan black syracuse university

dynamic inconsistencies counterfactual implications of a class of rational expectations models a number of recent papers have developed dynamic macroeconomic models that incorporate rational expectations and optimizing foundations while the theoretical motivation behind these models is sound the dynamic implications of many of the specifications that assume rational expectations and optimizing behavior can be seriously at odds with the data for both inflation and real side variables exhibit gradual and hump shaped responses to real and monetary shocks for models that are intended for monetary policy analysis these dynamic shortcomings should be considered quite serious when monetary policy has only short run effects on real variables the inability to approximately capture the short run responses of inflation or real variables to policy shocks makes a model unsuitable for policy analysis this paper identifies a simple feature common to many dynamic specifications for prices and real variables that causes the problem the paper also discusses several potential solutions to the problem including alterations to the expectations assumption to the order of differencing implicit in the model and to the underlying behavioral assumptions this abstract was borrowed from another version of this item

expectational diversity in monetary economies abstract we investigate an overlapping generations monetary economy in which expectations depend upon backward looking predictors of the future price level we use discrete choice theory to model how agents select a predictor based on its past forecast error letting the number of available predictors tend to infinity we obtain the large type limit of the system taking the large type limit dramatically reduces the number of free parameters while maintaining the expectational diversity which we argue is necessary for constructing plausible learning based models the model s dynamics are strongly influenced by the intensity of choice which measures how sensitive an agent s predictor choice is to differences in forecast errors across predictors when the intensity of choice is low the monetary steady state is stable as the intensity of choice increases and if certain parametric restrictions are met the system undergoes a hopf bifurcation in which case we document the existence of highly irregular equilibrium price paths

inflation and monetary dynamics in the us a quantity theory approach in this article we investigate the long run link between inflation and money growth in the united states since 1960 a measure of the long run inflation trend is constructed which bears the interpreation of monetary inflation rate and is directly related to the excess nominal money growth process money growth less output growth as postulated by the quantity theory consistent with the memory characteristics of the series their fractional integration and cointegration properties are taken into account in empirical modelling the proposed measure is then compared with several existing measures of core inflation aimed at capturing long run inflation dynamics but unrelated to money growth the monetary long run inflation rate performs well in out of sample forecasting exercises especially over a 2 3 year horizon yielding valuable information to monetary policymakers

david hume s monetary theory revisited was he really a quantity theorist and an inflationist david hume s monetary theory has been controversial since its formulation lately the focus has been on hume s alleged misapplication of the quantity theory of money while he appears to subscribe to a simple quantity theory with money neutrality in a famously contested passage in the essay of money he violates the neutrality condition by claiming that an increase in the money stock has favorable output effects while most commentators argue about the persistence of the output effect this paper suggests that we can derive an alternative understanding of hume s monetary thinking by recognizing that he made an analytical distinction between endogenous and exogenous money realization that only the former has a favorable output effect forces us to overturn the long standing consensus that hume instructed the government to use monetary or trade policy to engineer a gradually increasing money stock