the retrenchment hypothesis and the extension of the franchise in england and wales does an extension of the voting franchise always increase public spending or can it be a source of retrenchment we study this question in the context of public spending on health related urban amenities in a panel of municipal boroughs from england and wales in 1868 1871 and 1886 we find evidence of a u shaped relationship between spending on urban amenities and the extension of the local voting franchise our model of taxpayer democracy suggests that the retrenchment effect was related to enfranchisement of the middle class through nation wide reforms and that these reforms might have been pareto inferior in the average borough

comparative estimates of a macroeconomic disequilibrium model france germany the u k and the u s a the paper gives comparative estimates of a macroeconomic disequilibrium model for four countries first a theoretical mini disequilibrium model close to the barro grossman formulation is presented the productivity cycle is linked with the changes in regimes a new technique allows to compute comparative estimates of the model for france germany the u k and the u s a on the sample period 65 iv to 85 iv the results are used to assess the wage gap doctrine according to which the difference in the unemployment rates of europe and the u s a can be explained by a larger discrepancy between the real wage and the marginal productivity of labor on the eastern side of the atlantic

democratisation and tax structure in the presence of home production evidence from the kingdom of greece abstract this paper examines the impact of democratisation on tax structure in an agrarian economy where goods can be produced at home for self consumption we first develop a model of optimal taxation with heterogeneous agents where the good produced in the market is subject to a consumption tax whereas the homogeneous good produced at home is burdened by a direct tax such as land tithes contrary to conventional theory our model suggests that extension of the voting franchise to poorer segments of the population exerts a negative impact on the share of direct to indirect taxes using unique national and regional tax data for the kingdom of greece a typical agrarian economy where universal male suffrage was established in 1864 we provide consistent empirical evidence greek governments adjusted tax policy in order to meet the preferences of the newly enfranchised electorate that constituted mostly peasants and farmers this group was harmed substantially by direct taxes on land but was able to avoid indirect taxes through self consumption we also analyse a sample of 12 european countries over the same period and provide evidence for a similar change in the tax structure when the agricultural sector dominates the economy

partisan competition growth and the franchise we present an argument for changes in the franchise in which an elite split along economic interests uses the suffrage to influence implemented policies through the influence of these policies on the character of industrialization we analyze the effects of franchise changes on economic growth we identify in the social structure of society an explanation for the connection between enfranchisement and growth when 1 there exists an economic conflict among the elite 2 landed classes are not politically strong and 3 there exists a critical mass of industrial workers we observe both growth and democratization the lack of conditions 1 or 2 resolves in stagnant autocracies while the absence of condition 3 drives growth deterring democratic expansions we provide historical support for our argument by analyzing the experience of eleven countries

public versus private investment in human capital endogenous growth and income inequality in this paper we present an overlapping generations model with heterogeneous agents in which human capital investment through formal schooling is the engine of growth we use simple functional forms for preferences technologies and income distribution to highlight the distinction between economies with public education and those with private education we find that income inequality declines more quickly under public education on the other hand private education yields greater per capita incomes unless the initial income inequality is sufficiently high we also find that societies will choose public education if a majority of agents have incomes below average

rain and the democratic window of opportunity according to the economic approach to political transitions negative transitory economic shocks can give rise to a window of opportunity for democratic change we examine this hypothesis using yearly rainfall variation over the 1980 2004 period in 41 sub saharan african countries we find that a 25 drop in rainfall increases the probability of a transition to democracy during the following two years by around 3 percentage points a 5 fall in income due to low rainfall raises the probability of democratization by around 7 percentage points we also find that rainfall does not affect transitions from democracy to autocracy

inequality and democratization a contractarian approach scholars continue to grapple with the question of the relationship between economic development and democratization prominent recent research has focused on the effects of economic inequality boix suggests that democratization is likelier when inequality is low whereas acemoglu and robinson argue that democratization is likelier when inequality is at middling levels both assume that democratization is a function of autocratic elites fear of the extent to which a future median voter would redistribute under different levels of inequality drawing on contractarian political theory the authors suggest that democratization is instead a function of demands by rising economic groups for protection from the state this alternative approach suggests that land and income inequality affect democratization differently autocracies with equal land distribution are indeed more likely to democratize but contrary to the conventional wisdom income inequality is more likely to promote democratization

inequality democracy and the protection of property rights motivated by the observed relevance of institutional quality such as strong property rights for economic performance this research considers the emergence of property rights protection as a political outcome it argues that the support for such protection is greater the more equal income distribution and the smaller political bias when these conditions initially hold the politically influential rich elite may prefer to relinquish its power through democratisation in order to commit future policy makers to the enforcement of property rights thus ensuring larger investment and faster growth along the transition path in a very unequal economy however such democratisation will not take place

diffusion and the international context of democratization democracy does not evolve sui generis the spatial clustering in democ racy and transitions suggests that international factors play a prominent role in forg ing democracies as well as influencing their durability we argue that democracy often comes about as a result of changes in the relative power of important actors and groups as well as their evaluations of particular institutions both of which are often influenced by forces outside the country in question the scope and extent of con nections with other democratic countries in a region can strengthen support for dem ocratic reform and help sustain institutions in transitional democracies results from a transition model demonstrate that international factors can exert a strong influence on the prospects for transitions to democracy and the spatial clustering in democ racy and transitions cannot adequately be explained by the hypothesized domestic social requisites of individual countries

why did the elites extend the suffrage democracy and the scope of government with an application to britain s age of reform a new rationale is presented for why an elite may want to expand the franchise even in the absence of threats to the established order expanding the franchise can turn politicians away from particularistic politics based on ad personam redistribution within the elite and foster competition based on programs with diffuse benefits if these programs are valuable a majority of the elite votes in favor of an extension of the franchise despite the absence of a threat from the disenfranchised we argue that the evolution of public spending and of political competition in nineteenth century britain is consistent with our model i introduction at the beginning of the nineteenth century in most countries narrow elites had a disproportionate influence on public affairs even in england where parliament was an influential institution suffrage was mostly the privilege of the wealthy and some members of parliament were elected in boroughs with as few as 100 voters while cities such as manchester did not have any representative a century later most western countries had universal male suffrage with female suffrage to arrive shortly thereafter what brought about this democratic revolution in many cases the elites were forced out of power after violent revolutions however there are important examples such as england where democratization took the form of gradual extensions of the suffrage and these were accompanied by little overt violence it is the peculiar pride of england that the record of social and political reform is to be found on the statute book not in the annals of revolution cheyney 1931 p vii such peaceful democratizations are difficult to rationalize within the benchmark political economic models in those models extending the franchise dilutes the elite s power to influence policy and results

environment health and human capital in this review we discuss three major contributions economists have made to our understanding of the relationship between the environment and individual well being first in explicitly recognizing how optimizing behavior particularly in the form of residential sorting can lead to nonrandom assignment of pollution economists have employed a wide range of quasi experimental techniques to develop causal estimates of the effect of pollution second economic research has placed a considerable focus on the role of avoidance behavior which is an important component for understanding the difference between biological and behavioral effects of pollution and for proper welfare calculations lastly economic research has expanded the focus of analysis beyond traditional health outcomes to include measures of human capital including labor supply productivity and cognition our review of the quasi experimental evidence on this topic suggests that pollution does indeed have a wide range of effects on individual well being even at levels well below current regulatory standards given the importance of health and human capital as an engine for economic growth these findings underscore the role of environmental conditions as an important factor of production jel i12 i31 j24 q51 q53

endogenous enfranchisement when groups preferences conflict in their seminal paper aumann kurz and neyman found the surprising result that the choice of levels of public goods in a democracy is not affected by the distribution of voting rights this implies that groups of individuals may not value the franchise this conclusion however does not correspond to what we commonly observe we propose a new model to address the question of enfranchisement the main feature of our model is that it takes into account natural affinities such as religion or class that may exist between voters this allows us to show that while individuals may not value the vote they nonetheless value the franchise we also show that in the presence of nonconvexities it is more likely that the group in power will grant the franchise when preferences are severely opposed

human development at risk economic growth with pollution induced health shocks risks to human health stemming from polluted air water and soil are substantial especially in the rapidly growing economies the present paper develops a theoretical framework to study an endogenously growing economy which is subject to pollution induced health shocks with the health status being an argument of the welfare function pollution arising as a negative externality from production adversely and randomly affects the regeneration ability of a human body leading to a decline in the overall health status of the population we include two types of uncertainty surrounding the health status continuous small scale fluctuations driven by the wiener process and large scale shocks or epidemics driven by the poisson process we derive closed form analytical solutions for the optimal abatement policy and the growth rate of consumption devoting a constant fraction of output to emissions abatement delivers the first best allocation this fraction is an increasing function of total factor productivity polluting intensity of production and damage intensity of both continuous and jump type shocks a higher frequency of jumps also calls for more vigorous abatement policies by contrast the optimal growth rate of the economy is decreasing in the frequency and intensity of shocks and in the polluting intensity of output the efficiency of abatement technology has in general an ambiguous bearing on both the growth rate and on the abatement share due to the opposing forces of the direct and indirect effects

wage and price adjustment in a multimarket disequilibrium model the estimation of wage and price adjustment equations rests heavily on the use of tension variables that aim at capturing the disequilibria in the labour and goods markets disequilibrium models therefore provide a natural way of endogenizing these tension variables this paper estimates jointly a two market disequilibrium model and a wage and price adjustment block where price and wage growth react to excess effective demands the estimation is carried out using the simulated pseudo maximum likelihood methods developed by laroque and salanie 1989 the results look promising as regards the estimation of even more sophisticated models

effective climate policies in a dynamic north south model abstract the paper develops a two region endogenous growth model with climate change affecting the countries capital stocks negatively we compare two different policies aimed at supporting less developed countries climate mitigation by developed countries which moderates the increase in stock pollution and hence capital depreciation and income transfers in the tradition of development aid under a mild set of assumptions we find that active climate policies are more efficient for developed economies and also remarkably better for developing countries than additional development aid the main reason is the difference between the two policies with respect to their effects on economic growth the results are robust with respect to possible model extensions

workers of the world unite franchise extensions and the threat of revolution in europe 1820 1938 abstract we test the hypothesis that the extension of the voting franchise in europe was related to the threat of revolution we contend that international diffusion of regime contention and information about revolutionary events happening in neighboring countries generate the necessary variation in the perceived threat of revolution using two samples of european countries covering the period from 1820 to 1938 we find robust evidence which is consistent with the threat of revolution hypothesis we also find some evidence that war triggered suffrage reform

one money one market the effect of common currencies on trade currency unions their dramatic effect on international trade a gravity model is used to assess the separate effects of exchange rate volatility and currency unions on international trade the panel data bilateral observations for five years during 1970 90 covering 186 countries includes 300 observations in which both countries use the same currency i find a large positive effect of a currency union on international trade and a small negative effect of exchange rate volatility even after controlling for a host of features including the endogenous nature of the exchange rate regime these effects statistically significant imply that two countries sharing the same currency trade three times as much as they would with different currencies currency unions like the european emu may thus lead to a large increase in international trade with all that that entails andrew rose

political regimes and foreign intervention abstract we present a theory of endogenous political regimes that emphasizes foreign direct investment as a motive for foreign governments to either induce regime transitions or promote regime consolidations we characterize different forms of foreign intervention and identify the conditions under which they occur we highlight new channels through which economic factors affect political regime choices foreign intervention is most likely to originate from countries where the government has a substantial pro investor bias and to be directed at destinations where fdi is highly profitable and where income inequality is high foreign sponsored coups d etat are more likely to be directed at democratic governments of poor countries in destinations where fdi is highly profitable but the domestic elite is weak foreign intervention tends to be aimed at stabilizing dictatorships we relate the analysis to evidence on foreign intervention from around the world

the human capital stock a generalized approach this paper presents a new framework for human capital measurement the generalized framework can i substantially amplify the role of human capital in accounting for cross country income dierences and ii reconcile the existing con ict between regression and accounting evidence in assessing the wealth and poverty of nations one natural interpretation emphasizes dierences across economies in the acquisition of advanced knowledge by skilled workers

carbon pricing technology transition and skill based development abstract we analyze the impact of carbon prices on human capital accumulation sectoral change and economic growth in our framework output is produced with dirty and or clean technologies using skilled and unskilled labor as inputs carbon policy affects technology selection which transmits incentives for human capital formation we show that a temporary policy may be sufficient for a transition to a clean economy and that such a policy also stimulates economic growth moreover in the presence of inter country knowledge spillovers a carbon policy in the north helps human capital formation in the south and induces south s transition to the clean steady state

the taxman tools up an event history study of the introduction of the personal income tax abstract the introduction of income taxation was a landmark in the historical development of the fiscal state of the now developed world this paper presents an event history study of the adoption of the income tax in 17 countries from western europe north america oceania and japan between 1815 and 1939 we find evidence that spending pressures reductions in tax collection costs and to a lesser extent social learning played a significant role for the adoption decision we also find evidence that the extension of the franchise at first reduced the likelihood of adoption of the income tax but eventually as universal suffrage was approached increased the likelihood

the extent of the market and the supply of regulation we present a model in which setting up and running a regulatory institution takes a fixed cost as a consequence the supply of regulation is limited by the extent of the market we test three implications of this model first jurisdictions with larger populations affected by a given regulation are more likely to have it second jurisdictions with lower incremental fixed costs of introducing and administering new regulations should regulate more this implies that regulation spreads from higher to lower population jurisdictions and that jurisdictions that build up transferable regulatory capabilities should regulate more intensely consistent with the model we find that higher population u s states have more pages of legislation and adopt particular laws earlier in their history than do smaller states we also find that the regulation of entry the regulation of labor and the military draft are more extensive in countries with larger populations as well as in civil law countries where we argue that the incremental fixed costs are lower

selection on observed and unobserved variables assessing the effectiveness of catholic schools in this paper we measure the effect of catholic high school attendance on educational attainment and test scores because we do not have a good instrumental variable for catholic school attendance we develop new estimation methods based on the idea that the amount of selection on the observed explanatory variables in a model provides a guide to the amount of selection on the unobservables we also propose an informal way to assess selectivity bias based on measuring the ratio of selection on unobservables to selection on observables that would be required if one is to attribute the entire effect of catholic school attendance to selection bias we use our methods to estimate the effect of attending a catholic high school on a variety of outcomes our main conclusion is that catholic high schools substantially increase the probability of graduating from high school and more tentatively attending college we find little evidence of an effect on test scores

the diffusion of regime contention in european democratization 1830 1940 this article goes beyond the established literature s focus on domestic conditions by examining the impact of external impulses on european democratization from 1830 to 1940 specifically it analyzes the diffusion of regime conflict that arose from the cross national spread of situational judgments about the feasibility of political change striking precedents of regime collapse such as the overthrow of french kings in 1830 and 1848 tended to produce dramatic waves of political contention across europe but because the actual distribution of power in polities that experienced such externally stimulated episodes of regime contention often differed from the front runner these conflicts produced various types of results the article distinguishes four outcomes of diffusion namely a successful replication b preemptive reform c abortive replication and d blockage of replication efforts the latter two outcomes help explain why in european history not only did political liberalism and democracy

ethnicity and conflict an empirical study this paper examines the impact of ethnic divisions on conict the empirical specication is informed by a theoretical model of conict esteban and ray 2011 in which equilibrium conict is related to just three distributional indices of diversity ethnic polarization ethnic fractionalization and a greenberg gini index constructed across ethnic groups our empirical ndings verify that these distributional measures are signicant correlates of conict the underlying theory permits us to use these results to make inferences about the relative importance of public goods in conict as well as the extent of within group cohesion in conictual activity these eects are further strengthened as we introduce country specic measures of group cohesion and the relative importance of public goods and combine them with the distributional measures exactly as specied by the theory

carbon prices for the next hundred years this paper examines the socially optimal pricing of carbon emissions over time when climate change impacts are unknown potentially high consequence events the carbon price tends to increase with income but learning about impacts or their absence decouples the carbon price from income growth the price should grow faster than the economy if the past warming is not substantial enough for learning the true long run social cost it grows slower than the economy as soon as the warming generates information about events that could have arrived but have not done so a quantitative assessment shows that the price grows roughly at the rate of the economy for the next 100 years

optimal taxes on fossil fuel in general equilibrium we analyze a dynamic stochastic general equilibrium dsge model with an externality through climate change from using fossil energy our central result is a simple formula for the marginal externality damage of emissions or equivalently for the optimal carbon tax this formula which holds under quite plausible assumptions reveals that the damage is proportional to current gdp with the proportion depending only on three factors i discounting ii the expected damage elasticity how many percent of the output flow is lost from an extra unit of carbon in the atmosphere and iii the structure of carbon depreciation in the atmosphere thus the stochastic values of future output consumption and the atmospheric co2 concentration as well as the paths of technology whether endogenous or exogenous and population and so on all disappear from the formula we find that the optimal tax should be a bit higher than the median or most well known estimates in the literature we also formulate a parsimonious yet comprehensive and easily solved model allowing us to compute the optimal and market paths for the use of different sources of energy and the corresponding climate change we find coal rather than oil to be the main threat to economic welfare largely due to its abundance we also find that the costs of inaction are particularly sensitive to the assumptions regarding the substitutability of different energy sources and technological progress

the impact of international trade on democracy a long run perspective the likely endogeneity between democracy and trade is addressed with an instrumental variables strategy in this article about whether international trade fosters democracy the authors use a measure of natural openness to obtain estimates of the causal impact of openness on democratization in three separate samples spanning the last 130 years a positive impact of openness on democracy is apparent in the data over the long run the post world war ii results suggest that with a rise in trade with other countries equal to a one standard deviation increase countries such as indonesia russia and venezuela could eventually become as democratic as the u s great britain or france there is some variation in the impact of openness by region that may be because trade seems to have a positive impact only when the capital to labor ratio is sufficiently high this is consistent with the idea that openness promotes democracy when it strengthens the economic fortunes of the middle class

human capital and the wealth of nations we reevaluate the role of human capital in determining the wealth of nations we use standard human capital theory to estimate stocks of human capital and allow the quality of human capital to vary across countries our model can explain differences in schooling and earnings profiles and consequently estimates of mincerian rates of return across countries we find that effective human capital per worker varies substantially across countries cross country differences in total factor productivity tfp are significantly smaller than found in previous studies our model implies that output per worker is highly responsive to changes in tfp and demographic variables jel e23 i25 j24 j31 o47 no question has perhaps attracted as much attention in the economics literature as why are some countries richer than others much of the current work traces back to the classic work of solow 1956 solow s seminal paper suggested that differ ences in the rates at which capital is accumulated could account for differences in output per capita more recently following the work of lucas 1988 human capital disparities were given a central role in the analysis of growth and development however the best recent work on the topic reaches the opposite conclusion klenow and rodriguez clare 1997 hall and jones 1999 parente and prescott 2000 and bils and klenow 2000 argue that most of the cross country differences in output per worker are not driven by differences in human capital or physical capital rather they are due to differences in a residual total factor productivity tfp in this paper we revisit the development problem in line with the earlier view we find that factor accumulation is more important than tfp in accounting for relative incomes across countries the key difference between our work and previous analyses is in the measurement of human capital the standard approach largely inspired by the work of mincer 1974 takes estimates of the rate of return to schooling as building blocks to directly measure a country s stock of human capital implicitly this method assumes that the marginal contribution to output of one additional year

determinants of democracy a panel study of over 100 countries from 1960 to 1995 finds that improvements in the standard of living predict increase in democracy as measured by a subjective indicator of electoral rights the propensity for democracy rises with per capita gdp primary schooling and a smaller gap between male and female primary attainment for a given standard of living democaracy tends to fall with urbnization and with a greater reliance on natrual resources democracy has little relation to country size but rises with the middle class share of income the apparently strong relation of democracy to colonial heritage mostly disappears when the economic variables are held constant similarly the allowance for these economic variables weakens the interplay between democracy and religious affiliation however negative effects from muslim and non religious affiliations remain intact

taking time seriously dramatic world change has stimulated interest in research questions about the dynamics of politics we have seen increases in the number of time series data sets and the length of typical time series but three shortcomings are prevalent in published time series analysis first analysts often estimate models without testing restrictions implied by their specification second researchers link the theoretical concept of equilibrium with cointegration and error correction models third analysts often do a poor job of interpreting results the consequences include weak connections between theory and tests biased estimates and incorrect inferences we outline techniques for estimating linear dynamic regressions with stationary data and weakly exogenous regressors we recommend analysts 1 start with general dynamic models and test restrictions before adopting a particular specification and 2 use the wide array of information available from dynamic specifications we illustrate this strategy with data on congressional approval and tax rates across oecd countries

information cascades and revolutionary regime transitions we combine acemoglu and robinson s model of the economic origins of democracy with lohmann s model of political mass protest this allows us to analyse the economic causes of political regime change based on the microfoundations of revolution we are able to derive conditions under which democracy arises peacefully when it occurs only after a revolution and when oligarchy persists we model these possibilities in a world of asymmetric information where information cascades are possible and where these cascades may involve errors in the sense that they make everyone worse off

unemployment disequilibrium and the short run phillips curve an econometric approach the paper specifies a disequilibrium model for the aggregate labour market consisting of demand and supply functions for labour an adjustment equation for wages as well as for prices a transactions equation and finally an equation that relates measured unemployment to vacancies and to excess demand the model has a more sophisticated treatment of dynamics than earlier disequilibrium models the parameter estimates and the goodness of fit are satisfactory and the model s implications for the behaviour of several important variables are sensible in particular excess demand estimates computed in various ways are reasonable

why did the west extend the franchise democracy inequality and growth in historical perspective during the nineteenth century most western societies extended voting rights a decision that led to unprecedented redistributive programs we argue that these political reforms can be viewed as strategic decisions by the political elite to prevent widespread social unrest and revolution political transition rather than redistribution under existing political institutions occurs because current transfers do not ensure future transfers while the extension of the franchise changes future political equilibria and acts as a commitment to redistribution our theory also offers a novel explanation for the kuznets curve in many western economies during this period with the fall in inequality following redistribution due to democratization i introduction the nineteenth century was a period of fundamental political reform and unprecedented changes in taxation and redistribution britain for example was transformed from an oligarchy run by an elite to a democracy the franchise was extended in 1832 and then again in 1867 and 1884 transferring voting rights to portions of the society with no previous political representation the decades after the political reforms witnessed radical social reforms increased taxation and the extension of education to the masses moreover as noted by kuznets inequality which was previously increasing started to decline during this period the gini coefficient for income inequality in england and wales had risen from 0 400 in 1823 to 0 627 in 1871 but fell to 0 443 in 1901 two key factors in the reduction in inequality were the increase in the proportion of skilled workers williamson 1985 and the redistribution of income toward the poorer segments of the society for example taxes rose from 8 12 percent of national product in 1867 to 18 8 percent by 1927 and the progressivity of the tax system increased substantially see lindert 1989

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

how to get the snowball rolling and extend the franchise voting on the great reform act of 1832 this paper suggests a new approach to analyzing the causes of franchise extension based on a new dataset it provides a detailed econometric study of the great reform act of 1832 in the united kingdom the analysis yields four main results first modernization theory receives limited support second the reform enjoyed some measure of popular support third the threat of revolution had an asymmetric impact on the voting behavior of the pro reform whigs and the anti reform tories while the threat might have convinced reluctant reformers among the whig politicians and among their patrons to support the bill it seems to have hardened the resistance to reform among the tories fourth ideology played a critical role nevertheless it also appears that self interest and political expedience explained the votes of many members of parliament

inequality and growth why differential fertility matters we argue that inequality and growth are linked through differential fertility and the accumulation of human capital we build an overlapping generations model in which dynasties differ in their initial endowment with human capital growth the income distribution and fertility are endogenous due to a quantiy quality tradeoff families with less human capital decide to have more children and invest less in education when initial inequality is high large fertility differentials lower the growth rate of average human capital since poor families who invest little in education make up a large fraction of the population in the next generation a calibrated model shows that this fertility differential effect is quantitatively important we also provide empirical evidence to confirm the links between inequality differential fertility and growth suggested by the model

revolt on the nile economic shocks religion and political power using centuries of nile flood data i document that during deviant nile floods egypt s highest ranking religious authority was less likely to be replaced and relative allocations to religious structures increased these findings are consistent with historical evidence that nile shocks increased this authority s political influence by raising the probability he could coordinate a revolt i find that the available data provide support for this interpretation and weigh against some of the most plausible alternatives for example i show that while nile shocks increased historical references to social unrest deviant floods did not increase a proxy for popular religiosity together the results suggest an increase in the political power of religious leaders during periods of economic downturn publication abstract

estimation of a quarterly macroeconomic model with quantity rationing we specify and estimate a small fix price model with quantity rationing on both the goods and labor markets the side of the market which is rationed is random the model is able to generate a productivity cycle and the degree of capacity utilization is endogenous the rationing scheme allocating supply between the various components of demand is estimated the probabilities of being in the various regimes the intensity of the dispquilibrium on the markets and the results of policy exercises are discussed

inventories and sticky prices more on the microfoundations of macroeconomics the role of inventories in making prices sticky is studied by analyzing a dynamic linear quadratic model of a monopoly firm facing stochastic demand but able to store its finished goods in inventory it is shown that in contrast to the usual presumption firms that exhibit the smallest output responses to demand fluctuations may also exhibit the smallest price fluctuations specifically firms which have very flexible inventory storage facilities or are subjected to very transitory demand shocks will rely on inventories as buffers and will change neither production nor price very much on the other hand firms which have very inflexible storage facilities or whose demand shocks are quite permanent will display large swings in both price and output the standard assumption about inventory carrying costs that has been used in the literature that they are linear is shown to imply that production is impervious to fluctuations in demand it is also established that prices may respond more strongly to positive demand shocks than to negative ones if it is impossible to hold negative inventories i e to have unfilled orders the model offers an explanation for stickiness in relative prices however under certain circumstances it may help explain the persistence of inflation this abstract was borrowed from another version of this item

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

inequality among world citizens 1820 1992 this paper investigates the distribution of well being among world citizens during the last two centuries the estimates show that inequality of world distribution of income worsened from the beginning of the 19th century to world war ii and after that seems to have stabilized or to have grown more slowly in the early 19th century most inequality was due to differences within countries later it was due to differences between countries inequality in longevity also increased during the 19th century but then was reversed in the second half of the 20th century perhaps mitigating the failure of income inequality to improve in the last decades jel d31 f0 n0 o0