interest rates inflation and the aggregate consumption function this paper reports on an empirical study of the effects of interest rates and inflation on aggregate consumption in the united states empirical evidence based on quarterly u s data from the postwar period is first presented in support of the hypothesis that the real rate of interest varies inversely with the rate of inflation at least in the short run regression estimates of an aggregate consumption function for the united states also based on quarterly data from the postwar period are then presented these estimates indicate that the propensity to consume varies inversely with interest rates and directly with the rate of inflation

research development and firm growth empirical evidence from european top r d spending firms abstract following recent literature we present a model of endogenous firm growth with r d investment as one of the main mechanisms of growth our study evidences a positive effect of r d intensity on the sales growth by using ols quantile regressions and gmm system estimators for a sample of 754 european firms for the 2003 2007 period we also find this association is more intense in high growth firms and is especially significant when referring to high technology sectors this paper gives empirical support to those recommendations from policy makers and business leaders for maintaining the r d expenditures especially in high technology sectors even when facing a recession

does direct democracy reduce public debt evidence from swiss municipalities although some countries have managed toobtain balanced budgets or even budgetsurpluses in recent times public debts ofmany oecd countries remain at high levels since structural reforms of public spendinghave only infrequently taken place in mostcountries fiscal pressure will increaseagain in the future due to society s ageingand the accompanying increases in socialtransfer spending constitutionalrestrictions on debt levels and legal rulesof the budgetary process such as a strongrole of the minister of finance aresupposed to be helping against the debtbias inherent in political decision makingprocedures in addition to such top downbudgetary procedures this paperinvestigates the impact of referendumapproval of budget deficits by the voterson the level of public debt in a crosssection of the 134 largest swissmunicipalities in 1990

on the transfer of technology from universities the impact of the bayh dole act of 1980 on the institutionalization of university research abstract while the academic and policy literature has focused on patent counts and patent quality as possible outcome measures to evaluate the impact of the u s bayh dole act of 1980 we argue that the impact of the act on university effort to transfer its technology to the private sector might be seen more accurately by examining the trend in the initial establishment of technology transfer offices ttos using an econometric framework to identify the presence of multiple structural breaks in data on the annual number of university ttos we find multiple break dates over the period 1925 to 2014 one break date was in the late 1960s and a second break date occurred about 1982 we suggest in contrast to previous findings in the literature that the act did have an impact on the formal internal transfer of technology from universities through patenting by providing an incentive for universities to invest in a tto research infrastructure we also suggest that our empirical methodology is applicable to an assessment of the impact of legislation similar to the bayh dole act in the many countries with such legislation

are contributions to public pension programmes a tax on employment many studies describe the potentially adverse impact on employment of the payroll costs of financing public pension programmes conventionally empirical studies treat contributions to public pension programmes as a pure tax in for example calculations of the tax wedge by oecd but this approach ignores any future rights to benefits that are perceived by contributors in fact public pension programmes contain both an actuarial and a redistributive component the former closer to saving the latter a tax the paper constructs indicators of the tax component of pension programmes both between and within generations across a range of oecd countries and time periods it uses these measures in a cross country panel analysis of the determinants of age and gender specific economic activity rates the results reveal robust evidence that when public pension programme contributions are broken down into a tax component and a savings component the tax component of the payroll contribution reduces economic activity rates among women while a higher retirement saving component has the opposite effect there is little evidence that average tax rates however constructed have any adverse impact on the economic activity rates of men richard disney

the evolving state of the art in technology transfer research revisiting the contingent effectiveness model the purpose of our study is to review and synthesize the rapidly evolving literature on technology transfer effectiveness our paper provides a lens into relatively recent work focusing particularly on empirical studies of us technology transfer conducted within the last 15 years in doing so we update and extend the contingent effectiveness model of technology transfer developed by bozeman 2000 specifically we include the growing interest in social and public value oriented technology transfer and thus the contingent effectiveness model is expanded to consider this literature we categorize studies according their approaches to measuring effectiveness draw conclusions regarding the current state of technology transfer evaluation and offer recommendations for future studies

ethnic fractionalization in an african labour market abstract we find evidence of ethnic fractionalization and its consequences in an african labour market we consider earnings differentials between members of different ethnic groups and between employers relatives unrelated co ethnics and other workers in the ghanaian manufacturing sector variations in a standard set of observed workers characteristics explain a large proportion of the earnings differentials between ethnic groups however the greatest proportion is explained by the ethnic fractionalization of the labour market combined with variations in employers characteristics workers who are related to their employers earn a premium and there is statistical discrimination in favour of inexperienced co ethnic workers

understanding the native immigrant wage gap using matched employer employee data evidence from germany in this article the author proposes a new method for measuring wage discrimination that builds on the methodology first developed by hellerstein and neumark 1999 the author s method has three m

the after tax rate of return affects private savings level of savings and the rate of capital formation are of central concern to both economists and policymakers although the welfare effects of tax reforms do not directly depend on their impact on savings the effects of taxes on savings is crucial to considerations of tax incidence and equity and to the issue of long run growth the impact of the rate of return on consumption and savings decisions also bears on questions regarding the appropriate government discount rate the short run crowding out effects of fiscal policy and the effects of public indebtedness on capital intensity the traditional view among economists is that changes in the rate of return are likely to have only a small effect on the savings rate this consensus is supported by theoretical arguments pointing to the opposing income and substitution effects associated with changes in the rate of return the ambiguous implications of theory are matched by empirical studies which yield conflicting estimates as to the size of the impact of changes in the rate of return the polar empirical estimate is michael boskin s 1978 suggestion that the interest elasticity of savings is 4 this estimate is widely regarded as too high

employer learning statistical discrimination and occupational attainment statistical discrimination plays a prominent role in theoretical discussions of the return to education as well as race and gender differences building on some earlier work by henry farber and robert gibbons 1996 hereafter fg and others on employer learning in the labor market altonji and pierret 2001 hereafter ap provide a test for statistical discrimination in an environment in which firms are learning about characteristics of workers over time however that model assumes that the rate at which employers learn about a given worker is independent of the type of job that he or she is in consequently the ap framework cannot readily be used to study statistical discrimination in hiring or how statistical discrimination and employer learning influence the skill level of the initial occupation and progression over a career in this paper i extend the ap analysis in three key respects first as in robert gibbons et al 2004 the sensitivity of output to worker skill is assumed to depend on the skill level of the job second the rate at which employers learn about the worker s skill is assumed to depend on the skill level of the job finally the probability of being hired into a given job depends on expected productivity relative to the wage i show that statistical discrimination influences initial employment rates wage levels and job type and that employers initial estimate of productivity influences wage growth even in an environment in which access to training is not an issue the implication is that the market may be slow to learn that a worker is highly skilled if the worker s best early job opportunity given the information available to employers is a low skill level job that reveals little about the worker s talent i close with a brief discussion of directions for empirical work suggested by the analysis

public technology transfer commercialization and business growth abstract this study analyzes the conditions for the commercialization of public technologies transferred to the private sector and the subsequent effect on business growth we focus on the commercial exploitation of technologies transferred by universities and public research institutes u pris to companies the empirical analysis uses detailed information regarding an extensive set of actual instances of public private technology transfer in korea 514 cases of technologies transferred by 43 major u pris to highlight the role of company absorptive capacity and internal innovation capabilities cooperation with u pris and the intensity of market competition in determining commercialization success and business growth we find that the intensity of market competition significantly influenced the paths along which absorptive capacity and internal innovation capacity affected successful commercialization and successful commercialization in turn affected business growth effective partnership is a key factor of the successful commercialization of transferred technologies irrespective of market situations absorptive capacity contributes to their short term success and long term growth when market competition is strong

estimating a public school expenditure model under binding spending limitations abstract a model explaining desired expenditure on education is estimated for a sample of new jersey school districts because the limit on annual increases in school spending is binding for a subsample of jurisdictions the tobit estimation procedure is used we test for equality of the pre and postlimitation structures and find substantial similarity the cap on expenditure increases was part of a court ordered reform of new jersey school finance law the results can be used to explain the failure of the existing school finance laws in lessening expenditure disparities at the lower end of the distribution

capital subsidies versus labor subsidies a trade off between capital and employment this paper investigates regime switching in the response of u s output to a monetary policy action we find substantial statistically significant time variation in this response that corresponds to high response and low response regimes we then investigate whether the timing of the regime shifts are consistent with three particular manifestations of asymmetry by modeling the transition probabilities governing the switching process as functions of state variables we find strong evidence that policy actions taken during recessions have larger effects than those taken during expansions we find less evidence of asymmetry related to the direction or size of the policy action

innovation and firm growth does firm age play a role this paper explores the relationship between innovation and firm growth for firms of different ages we hypothesize that young firms undertake riskier innovation activities which may have greater performance benefits if successful or greater losses if unsuccessful using an extensive spanish community innovation survey sample for the period 2004 2012 we apply panel quantile regressions to study the effect of r d activities on firm growth i e sales growth productivity growth and employment growth our results show that young firms face larger performance benefits from r d at the upper quantiles of the growth rate distribution but face larger decline at the lower quantiles r d investment by young firms therefore appears to significantly riskier than r d investment by more mature firms which suggests some policy implications

a test of screening discrimination with employer learning this paper tests for the presence of screening discrimination a type of statistical discrimination that occurs when employers are less able to evaluate the ability of workers from one group than from another using data from the 2000 release of the nlsy79 the author examines wage equations in a framework of employer learning to test the hypothesis that the market receives less reliable productivity signals at labor market entry from black men than from white men the estimation results support this hypothesis variables that are difficult for employers to observe such as the afqt score had less influence on the wages of black men and easily observed variables had more influence than on the wages of white men the influence of hard to observe variables on wages however increased faster with experience for black men

does affirmative action work caste gender college quality and academic success in india public policy in modern india features affirmative action programs intended to reduce inequality that stems from a centuries old caste structure and history of disparate treatment by gender we study the effects of one such affirmative action program an admissions policy that fixes percentage quotas common across more than 200 engineering colleges for disadvantaged castes and for women we show that the program increases college attendance of targeted students particularly at relatively higher quality institutions an important concern is that affirmative action might harm intended beneficiaries by placing them in academic programs for which they are ill prepared we find no evidence of such adverse impacts

will affirmative action policies eliminate negative stereotypes a key question concerning affirmative action is whether the labor market gains it brings to minorities can continue without it becoming a permanent fixture in the labor market the authors argue that this depends on how the policy affects employers beliefs about the productivity of minority workers they study the joint determination of employer beliefs and worker productivity in a model of statistical discrimination in job assignments the authors prove that even when identifiable groups are equally endowed ex ante affirmative action can bring about a situation in which employers correctly perceive the groups to be unequally productive ex post copyright 1993 by american economic association

the power to tax analytical foundations of a fiscal constitution preface 1 taxation in constitutional perspective 2 natural government a model of leviathan 3 constraints on base and rate structure 4 the taxation of commodities 5 taxation through time income taxes capital taxes and public debt 6 money creation and taxation 7 the disposition of public revenues 8 the domain of politics 9 open economy federalism and taxing authority 10 toward authentic tax reform prospects and prescriptions epilogue notes selected bibliography index

the enforcement of equal opportunity laws under imperfect information affirmative action and alternatives more than twenty years have passed since the enactment of the civil rights act during that period the enforcement of title vii with its broad prohibition of discrimination in employment and compensation has proved to be both difficult and controversial as part of any attempt to regulate economic activity we must be able to observe violations but unequal treatment in employment relationships is difficult to identify employers must always differentiate between individuals when making hiring and promotion decisions since applicants possess diverse skills and abilities this diversity creates a fundamental problem in monitoring the compliance or noncompliance of employers with equal opportunity laws this paper examines the enforcement of equal opportunity laws in a labor market that exhibits statistical discrimination this type of discrimination may arise as a rational response by profitmaximizing firms to imperfect information about individual productivity in lundberg and startz 1983 an equal opportunity policy prohibiting raceor sex specific wage schedules was shown to be an efficiency enhancing response to statistical discrimination section ii extends this model to allow information a role in allocating heterogeneous workers among jobs in this environment restricting firms use of information through an equal opportunity policy improves workers incentives to acquire human capital at the expense of production losses and its net effect on efficiency becomes ambiguous firms will attempt to evade an equal opportunity law presenting the government and the courts with the task of monitoring and enforcing compliance the regulators are likely to possess imperfect information not only about the relationship between worker characteristics and productivity but also about the actual personnel policies followed by firms in section iii a simple costminimizing evasion policy for firms in which other worker attributes are used as imperfect proxies for race or sex is outlined in the next two sections alternative policies for enforcing compliance

redistribution and affirmative action abstract the paper develops an integrated political economy model in which individuals are distinguished by earning ability and an ascriptive characteristic race the policy space is a transfer payment to low income workers financed by a flat tax on wages and an affirmative action constraint on firms hiring decisions the distribution of income and the policy are endogenous with the latter being the outcome of a legislative bargaining game between three legislative blocs the model provides support for the common claim that racial divisions reduce support for welfare expenditures even when voters have color blind preferences we show that relatively advantaged members of both the majority and minority group benefit from the introduction of a second dimension of redistribution while the less advantaged members of the majority are the principal losers

job discrimination market forces and the invisibility hypothesis the invisibility hypothesis holds that the job skills of disadvantaged workers are not easily discovered by potential new employers but that promotion enhances visibility and alleviates this problem then at a competitive labor market equilibrium firms profit by hiding talented disadvantaged workers in low level jobs consequently those workers are paid less on average and promoted less often than others with the same education and ability as a result of the inefficient and discriminatory wage and promotion policies disadvantaged workers experience lower returns to investments in human capital than other workers

the effectiveness of institutional borrowing restrictions empirical evidence from spanish municipalities the need for restrictions on borrowing by subnational governments is a generally accepted notion that is justified both by public choice theory and by the fact that such restrictions are in force in the majority of decentralized countries furthermore recent breaches of the stability and growth pact of the european union have led to the introduction of legislative tools aimed at balancing the budget at all levels of government have come to the forefront of interest in european public finance research this paper is concerned with the financial situation and debt level of spanish municipalities from 1988 to 2000 we have two main objectives the first is to assess the value of mandatory limitations on municipal borrowing and past trends in the borrowing policies adopted by spanish local authorities the second is to develop an econometric model using panel data stratified by population size to measure indebtedness in spanish municipalities these measures enable us to formulate a series of hypotheses to explain municipal borrowing practices which are then tested empirically the evidence thus obtained appears to support the effectiveness of institutional borrowing restrictions to introduce some financial discipline in the borrowing policies adopted by local governments in spain

does banning affirmative action lower college student quality banning affirmative action from college admissions cannot prevent an admissions office that cares about diversity from achieving it in ways other than explicitly considering race we model college admissions where candidates from two groups with different average quali cations compete for a xed number of seats under affirmative action an admissions office that cares both about quality and diversity admits the best quali ed candidates from each group under a ban it may promote diversity by partially ignoring candidates quali cations and therefore not admitting the best quali ed candidates from either group a ban always reduces diversity and may also lower quality jel j71 j 15 i28

a critique of tiebout s theory of local public expenditures the last section of this paper presents a rigorous version of tiebout s theory of local public goods it is shown that equilibria exist and are pareto optimal this rigorous theory follows closely the more rigorous part of tiebout s work this rigorous theory makes a number of very special assumptions which make local public goods essentially private the body of this paper presents a series of examples which show that if one tries to generalize the rigorous version of tiebout s theory in a number of interesting directions then equilibria may no longer exist or may not be pareto optimal the conclusion is that tiebout s idea does not lead to a satisfactory general theory of local public goods the goal of this paper is to point out that tiebout s notion of equilibrium with local governments does not have the nice properties of general competitive equilibrium except under very restrictive assumptions tiebout 39 suggested that there are competitive forces which tend to make local governments allocate resources in a pareto optimal fashion consumers choose to live in those towns with the mix of taxes and public goods they prefer local governments choose this mix so as to attract inhabitants this idea may seem intriguing for it suggests that the invisible hand solves an important part of samuelson s perplexing public goods problem 32 tiebout in fact makes an argument which is nearly rigorous i give a rigorous version of his argument at the end of the paper however in this rigorous version so many restrictive assumptions are made that public goods become essentially private in the body of the paper i give a series of examples with which i try to convince the reader that one is forced to adopt tiebout s restrictive assumptions the idea is that if one changes any of his assumptions then either equilibria may not exist or may not be pareto optimal my examples are presented in the context of a general class of tiebout models i consider several subclasses one of which is the special case considered by tiebout in each of the subclasses except that considered by tiebout i give a counterexample either to the existence of equilibrium or to its pareto optimality the subclasses are so chosen that the difficulties they reveal would be shared by any reasonable tiebout model which differed from his special case i believe that my examples controvert tiebout s suggestion 39 last paragraph that his theory compares favorably with competitive equilibrium theory most of the examples in this paper have already appeared in the literature i cite related work as i go along what is new here is that i assemble the examples in a unified argument

in search of complementary assets the determinants of alliance formation of high tech start ups abstract why do new technology based firms ntbfs cooperate starting from teece s teece d j 1986 profiting from technological innovation implications for integration collaboration licensing and public policy research policy 15 285 305 conceptual framework and taking advantage of subsequent literature on alliance formation in the resource and competence based tradition and in the social structure perspective we derive an empirical model that aims at highlighting the inducements and obstacles that these firms face in alliance formation according to firm specific characteristics and the nature of the alliance in particular a distinction is made between exploitative commercial alliances and explorative technological alliances the econometric estimates based on a large sample of italian young high tech firms that are observed from 1994 to 2003 provide strong evidence supporting two key intuitions of teece s work first the combination of specialized complementary assets appears to be a key driver of the formation of exploitative commercial alliances by ntbfs more specifically patent holding affects positively the likelihood to establish commercial alliances but this propensity is found to rapidly decrease with firm size suggesting that as long as ntbfs become larger and possess specialized commercial assets their urge for commercial alliances diminishes second following the parallelism set forth by teece between search for alliance partners and access to external financing the analysis indicates that potentially beneficial alliances may not take place because of the high transaction costs faced by smaller ntbfs in this respect our results clearly support the view that sponsor institutions as public research organizations venture and corporate venture capitalists may sensibly reduce these costs and that their role crucially depends on both the identity of the sponsor and the type of alliance

the effect of statistical discrimination on black white wage inequality estimating a model with multiple equilibria this article presents the structural estimation of the parameters of a statistical discrimination model although the model is capable of displaying multiple equilibria an estimation strategy that identifies both the model parameters and the equilibrium selected by the economic agents is developed and empirically implemented a comparison between the selected equilibria and the other potential equilibria reveals that the decline in wage inequality experienced in the u s economy cannot be attributed to changes in the equilibrium selection nonetheless a counterfactual experiment shows that in a color blind society blacks wage would have been on average more than 20 higher

affirmative action in a competitive economy abstract we consider a model of endogenous human capital formation with competitively determined wages discrimination is sustainable in equilibrium in the presence of two distinguishable but ex ante identical groups of workers an affirmative action policy consisting of a quota may fail in the sense that there still may be equilibria where groups are treated differently however the incentives to invest for agents in the discriminated group are improved by affirmative action if the initial equilibrium is the most discriminatory equilibrium in the model without the policy the welfare effects are ambiguous it is possible that the policy makes the intended beneficiaries worse off even if the starting point is the most discriminatory equilibrium the expected payoff may decrease for all agents in the target group

affirmative action and dynamics of work ethic preferences this study examines the cultural transmission effects of compensatory discrimination affirmative action policies on work ethic preference dynamics for a population in a caste based segregated economy in which some high paid jobs are reserved for historically disadvantaged lower caste individuals cultural attitudes toward preferences for work loving and leisure loving traits evolve endogenously the compensatory discrimination policies affect differently the preference dynamics for insiders entitled to employment quota and outsiders not entitled to employment quota efficient and inefficient equilibria are possible with larger or smaller proportions of individuals with a work ethic among the insider and outsider populations the model shows that the commonly conceived conclusion that a job reservation policy benefits a disadvantaged group at the cost of efficiency and economic growth is not a necessary outcome jel a12 c62 j71

the economic case for limits to government in june of 1978 the voters of california approved proposition 13 restricting the rate of local property taxation to no more than 1 percent of 1975 market values in november 1978 the voters of michigan approved the headlee amendment which limited state revenues from own sources to a fixed share of state personal income in november of 1980 massachusetts voters followed the lead of california and required all cities and towns to limit their taxation to a rate of 22 percent of full and fair cash value numerous hypotheses have been advanced and analyzed to explain the emergence of these new restrictions on fiscal choice the results point to two explanations voters feel governments are too big providing more services than what they prefer or governments spend too much on redistributive activities to help the poor and through higher wages to help public employees themselves the response to this perceived failure of government has been to propose and in california michigan and massachusetts to approve absolute limits to government expenditures the question i wish to address here is whether a compelling economic argument can be advanced for such a policy response politics and personalities aside the answer i think is yes but particular preconditions must apply first and perhaps most importantly is the inability of citizens to directly control the provision of public services responsibility for providing public goods is delegated to agents of the voter and these agents be they bureaucrats or elected representatives have their own objectives and an ability to act upon them to the possible disadvantage of the voters second without direct control over public outputs voters must use indirect controls through the manipulation of their appointed agents these indirect controls take two general forms price incentives or quantity restrictions third the choice of either of these indirect controls must take place before the agent acts to provide public goods further voters must often make their choice of a price or quantity control before the benefits or costs of the public service are known to them with certainty agents however can wait to observe true benefits and coststhat is why we use agents and then provide a level of public services in response to costs benefits and the voters chosen control voter uncertainty over benefits and costs can be interpreted as placing the voter within a constitutional perspective where a voter s precise position in society that is his or her benefits and costs are unknown when choosing a control geoffrey brennan and james buchanan ch 1 were the first to really stress this important point fourth if benefit and cost uncertainty is predominantly over the position rather than slope of the marginal benefit and marginal cost schedules and if the marginal benefit schedule is relatively steep loosely an inelastic demand curve while the marginal cost schedule is relatively flat an elastic supply curve then quantity controls on agents behavior through tax or spending limitations will be the preferred control these four preconditions strike me as quite plausible rather than just an emotional reaction to a peculiar configuration of political and economic circumstances proposition 13 the headlee amendment and proposition 24 may be perfectly reasoned responses to a failure in the politi professor university of pennsylvania and research associate the national bureau of economic research inc an alternative hypothesis which has been tested and generally rejected attributes voter approval to a desire to alter the tax mix away from property taxation and towards other taxes what approving voters really want it seems is increased government efficiency and less redistribution see the recent studies by jack citrin paul courant edward gramlich and daniel rubinfeld and helen ladd and julie wilson

optimal r d investment strategies under the threat of new technology entry abstract this paper studies the r d investment decisions of a firm facing the threat of new technology entry the r d project is subject to technical uncertainty the incumbent can successfully prevent entry by innovating however in an entry deterrence situation the resulting monopoly is different from a monopoly without an entry threat because potential competition means that the monopolist completes the r d project which it otherwise would not have done greater technical uncertainty stimulates initiating exploratory r d and can result in implementation of more expensive research projects this is a result of the limited downside risk of the project it does not matter whether the outcome of an initial r d stage is disappointing or very disappointing since in both cases the firm will simply abandon the project the welfare analysis shows that the threat of entry may reduce welfare in case of entry deterrence