out of control what can we learn from the end of massachusetts rent control abstract this paper uses the sudden end of rent control in massachusetts in 1995 to estimate the effects of rent control i examine boston msa data from the american housing survey years 1985 1998 to determine how rent control affected the quantity price and quality of rental housing my results suggest rent control had little effect on the construction of new housing but did encourage owners to shift units away from rental status and reduced rents substantially rent control also led to deterioration in the quality of rental units but these effects appear to have been concentrated in smaller items of physical damage i also examine specifications that allow rent control to affect rent levels both directly through controlled status and indirectly through spillover effects from nearby rent controlled units these estimates imply that rent control may have small effects on the price of the non controlled rental housing stock

economists capitalists and the making of globalization north american free trade in comparative historical perspective why did globalization happen current explanations point to a variety of conditions under which states have made the free market policy changes driving international economic integration since the 1980s such accounts disagree however about the key actors involved this article provides a reconciliation showing how two different combinations of actors and two different political economic pathways have led to globalization in recent decades in developed countries mobilization by business has been central elsewhere technocrats both constrained and empowered by international finance have pursued globalization more independently of business in both contexts economists technical authority has helped legitimate liberalization despite the limited diffusion of their ideas the article validates and elaborates this model using a comparative historical study of how the united states canada and mexico proposed negotiated and ratified agreements for free trade in north america

a retrospective look at the u s productivity growth resurgence it is widely recognized that information technology was critical to the dramatic acceleration of u s labor productivity growth in the mid 1990s this paper traces the evolution of productivity estimates to document how and when this perception emerged early studies concluded that information technology was relatively unimportant only after the massive information technology investment boom of the late 1990s did this investment and underlying productivity increases in the information technology producing sectors come to be identified as important sources of growth although information technology has diminished in significance since the dot com crash of 2000 and observed growth rates have slowed recently we project that private sector productivity growth will average around 2 4 percent per year for the next decade only moderately below the average of the post 1995 period

productivity and long term growth potential in the uk economy 1924 1968 this paper examines the long term structural determinants of labour productivity for the uk economy using a panel data set from 1924 to 1968 trade union product market competition and human capital explanations are embedded within the model and compared labour quality or human capital is found to be the most important of the explanations considered

divided opinion on the fair minimum wage act of 2013 random or systematic differences this paper analyses economists support for the fair minimum wage act of 2013 i find systematic differences between those supporting the legislation and those opposing it with support higher among females young labour economists and those located further from chicago

labour productivity in spain 1977 2002 this study examines the evolution of labour productivity across spanish regions during the period from 1977 to 2002 applying the kernel technique we estimate the effects of the transition process on labour productivity and its main sources we find that spanish regions experienced a major convergence process in labour productivity mostly driven by human capital in the 1977 1993 period conversely the dynamics of investment in physical capital appear to be neutral with respect to the transition dynamics of labour productivity finally from 1995 to 2002 no dynamic processes seemed to have taken place spanish regions exhibit a persistent relative position with established convergence clubs the human capital effect is less important and the investment in physical capital seems not to have a triggering effect on labour productivity growth

skill mismatch and unemployment in oecd countries marco manacorda this paper uses evidence on employment labour force and wage differentials by education from oecd countries to investigate the characteristics and the consequences of a skill biased shift in the structure of labour demand and supply the empirical analysis shows that there has been some increase in skill mismatch in a few oecd countries over the past two decades but this has not been a generalized phenomenon moreover the rise in mismatch cannot explain much of the rise in unemployment in continental europe while it does explain a significant proportion of the increase in the rate of joblessness in britain

is there a consensus among economists in the 1990 s in a 1976 survey kearl et al 1979 hereafter the 1976 survey concluded that the then widespread perception that there was little agreement among professional economists on matters of theory or policy was simply wrong however the most casual empiricism namely the continuing popularity of jokes about disagreements among economists suggests the perception of noneconomists has not changed much since the 1970 s what is the present state of consensus among economists this question is of interest because more than a decade has elapsed since the 1976 survey and during this time many issues confronting economists and the composition of the profession have changed 1 benjamin m friedman and lawrence h summers 1991 p ix for example have asserted that economic thinking in many subfields of the discipline now differs markedly from what it was in 1970 consensus among european economists has been examined by bruno s frey et al 1984 martin ricketts and edward shoesmith 1990 1992 focus exclusively on british economic opinion this paper provides the first general analysis of opinions of u s economists in more than a decade i the survey and questionnaire

race segregation and postal employment new evidence on spatial mismatch abstract the spatial mismatch hypothesis posits that employment decentralization isolated urban blacks from work opportunities this paper focuses on one large employer that has remained in the central city over the twentieth century the u s postal service we find that blacks substitute towards postal work as other employment opportunities leave the city circa 1960 the response is particularly strong in segregated areas where black neighborhoods are clustered near the central business district furthermore this pattern only holds for non mail carriers many of whom work in central processing facilities more recently the relationship between black postal employment and segregation has declined suggesting that spatial mismatch has become less important over time

firm sponsored training in regulated labour markets evidence from spain using data from the 1994 european community household panel survey the author examines who receives formal firm sponsored training in spain the author finds that the distribution of firm sponsored training in the work force is uneven and concentrated among more skilled workers in the upper deciles of the wage distribution the data show that the likelihood of receiving firm sponsored training for a low education employee is much lower also the better educated employees in high wage occupations of the largest establishments have higher probabilities of receiving specific training spain has a highly regulated labour market and the labour market frictions and institutions compress and distort the structure of wages however the results suggest that the highly compressed wage structure do not provide firms with the incentive to invest in general training

are all economic facts greatly exaggerated theory competition and selectivity there is growing concern and mounting evidence of selectivity in empirical economics most empirical economic literatures have a truncated distribution of results the aim of this paper is to explore the link between publication selectivity and theory contests this link is confirmed through the analysis of 87 distinct empirical economics literatures involving more than three and a half thousand separate empirical studies using objective measures of both selectivity and contests our meta meta analysis shows that publication selection is widespread but not universal it distorts scientific inference with potentially adverse effects on policy making but competition and debate between rival theories reduces this selectivity and thereby improves economic inference

the impact of human capital on labour productivity in manufacturing sectors of the european union the effects of human capital on both the level and growth of labour productivity in manufacturing sectors in seven member states of the european union are analysed distinguishing between four effects of human capital worker allocative diffusion and research human capital is represented by the shares of intermediate and highly skilled workers in the workforce of a sector it is shown that the manufacturing sectors can be divided into three classes of sectors with different intensities of highly skilled workers low medium and high skill sectors the estimation results show that both intermediate and highly skilled labour have a positive effect on the labour productivity of a sector although the effect is only significant for highly skilled labour moreover there are indications of underinvestment of human capital in some manufacturing sectors these sectors could improve their competitive position by raising the employment shares of intermediate and highly skilled labour finally intermediate sk

inequality and convergence in europe s regions reconsidering european regional policies europe s regions income disparities and regional policies in this paper we take a critical look at current european regional policies first we document the motivation for such policies that is the large income disparities across the regions of the eu15 large disparities are certainly present second we illustrate the various instruments adopted and discuss their underpinnings in established economic theories next we look at available data searching for three kinds of evidence 1 if disparities are either growing or decreasing we conclude they are neither 2 which are the major factors explaining such disparities and in particular if they are the factors predicted by the economic models adopted by the commission to justify current policies we conclude this is most certainly not the case 3 if there are clear signs that eu policies as opposed to other social and economic factors are actually reducing such disparities we cannot find any clear sign of such desired impact our conclusion is that regional and structural policies serve mostly a redistributional purpose motivated by the nature of the political equilibria upon which the european union is built they have little relationship with fostering economic growth this casts a serious doubt on their social value and furthermore strongly questions extending such policies to future members of the european union a successful eu enlargement in our view calls for an immediate and drastic revision of regional economic policies michele boldrin and fabio canova

measuring the effects of price controls using mixed complementarity models abstract government involvement in managing domestic prices of energy and other commodities is a major issue in emerging economies we examine one aspect of the problem price controls when governments set or cap prices we show how a mixed complementarity problem mcp formulation can be used to model and assess the impacts of price controls in multi sector economic equilibrium models both the gains from deregulation and the consequences of imposing new or altering existing regulations can thus be measured we present three distinct models that capture different price control situations firms have to meet demand and receive an implicit subsidy demand rationing occurs due to an associated price control constraint and subsidies limit demand rationing we present an approach to measuring the effects on the equilibrium in the first case and the levels of disequilibrium induced by price controls in the other cases we also show how to determine the most efficient allocation program when a government engages in rationing we illustrate the cases described by these models using markets that have or had price controls

views among economists professional consensus or point counterpoint to what degree do economists disagree about key economic questions we provide evidence by using the responses to a series of questions posed to a distinguished panel of economists put together by the chicago school of business based on our analysis we find a broad consensus on these many different economic issues particularly when the past economic literature on the question is large any differences are unrelated to observable characteristics of the panel members other than men being slightly more likely to express an opinion these differences are idiosyncratic with no support for liberal versus conservative camps

the march of an economic idea protectionism isn t counter cyclic anymore conventional wisdom holds that protectionism is counter cyclic tariffs quotas and the like grow during recessions while that may have been a valid description of the data before the first world war it is now inaccurate since the second world war protectionism has not been counter cyclic tariffs and non tariff barriers simply do not rise systematically during downturns i document this new stylised fact with a panel of data covering over 180 countries and 40 years using over a dozen measures of protectionism and six of business cycles i test and reject a number of potential reasons why protectionism is no longer counter cyclic a diagnosis of exclusion leads me to believe that modern economics may well be responsible for the decline in protectionism s cyclic behaviour economists are more united in their disdain for protectionism than virtually any other concept this in turn leaves one optimistic that the level of protectionism will continue to decline along with its cyclicality andrew k rose

systematically biased beliefs about economics robust evidence of judgemental anomalies from the survey of americans and economists on the economy differences between the general public s positive economic views and economists resemble other judgemental anomalies laypeople and experts systematically disagree i analyse this puzzle using data from the survey of americans and economists on the economy the paper first tests and decisively rejects the hypothesis that the differences solely reflect economists self serving bias then it examines whether economists political ideology and party loyalties explain the disagreement if anything this slightly increases their magnitude the effect of economic training clearly falls but remains large after adding education to the set of control variables apparent biases robustness suggests that the anomaly is real

is economics useful for public policy economists have always played an important role in major public policy debates even so i believe that the role of economists in these public policy discussions has often been misguided because it has typically relied upon best practices stated in the form of general guidelines or even universal principles however best practices are not best if the specific situation does not conform with the assumptions that underlie the advice so my first conclusion is a cautionary and negative one specific circumstances differ so profoundly across individuals firms markets countries and time that most any attempt to define best practices that apply in all circumstances will lead to profoundly misleading public policy recommendations however even if economics cannot identify the truth it can often identify a truth so my second conclusion is a more positive one economists should continue to develop multiple theories that inform public policies but we should also focus our efforts on identifying and testing the critical assumptions that drive the results of these theories recognizing that the validity of any assumptions will depend intimately on specific circumstances i illustrate these two main conclusions with specific examples from my own work i conclude with some best practices recommendations of my own recognizing the obvious irony of such an effort

time for revisionism on rent control economists traditional hostility to rent contols is based on models that treat the housing market as perfectly competitive and on the experience with hard controls in new york city and many european countries following world war ii the current soft rent control systems in north america are varied and qualitatively different from earlier hard controls the theoretical case against them is weak particularly when the housing market is viewed as imperfectly competitive the empirical case against them is weak too economists should reconsider their blanket opposition to current rent control systems and evaluate them on a case by case basis

economists views about parameters values and policies survey results in labor and public economics specialists in labor economics and public economics at 40 leading research universities provided opinions of policy proposals quantitative best estimates and 95 percent confidence intervals for economic parameters and answers to values questions regarding income redistribution efficiency versus equity and individual versus social responsibility their positions on policy are more closely related to their values than to their estimates of relevant economic parameters average best estimates of the economic parameters agree well with the relevant literature but individual best estimates are usually widely dispersed the individual 95 percent confidence intervals are much narrower than the substantial cross respondent variation in estimates would warrant

housing market spillovers evidence from the end of rent control in cambridge massachusetts we measure the capitalization of housing market externalities into residential housing values by studying the unanticipated elimination of stringent rent controls in cambridge massachusetts in 1995 pooling data on the universe of assessed values and transacted prices of cambridge residential properties between 1988 and 2005 we find that rent decontrol generated substantial robust price appreciation at decontrolled units and nearby never controlled units accounting for a quarter of the 7 8 billion in cambridge residential property appreciation during this period the majority of this contribution stems from induced appreciation of never controlled properties residential investment explains only a small fraction of the total

explaining the us eu productivity growth gap structural change vs intra sectoral effect abstract this paper proposes a decomposition of labour productivity growth in the eu15 and the the us since the mid 1990s the results suggest that the eu s relative slowdown is due to modest pure gains of productivity within sectors

what students remember and say about college economics years later in his presidential address to the american economic association george stigler 1963 offered the provocative hypothesis that students would retain very little knowledge from principles courses in economics five years or more after taking the courses the few empirical studies that have been published on this topic generally found no or small lasting effects at least for those who took fewer than four courses see e g g l bach and phillip saunders 1965 gerald j lynch 1990 that raises even broader questions about the long term effects of studying economics in college in terms of individuals behavior as consumers workers and voters which we are now beginning to investigate using both survey and transcript data we have two major goals in this study first we want to learn how students perceive their classroom experience in economics courses years after leaving school both in absolute terms and compared to other courses they took we drew samples of economics business and other majors who attended our four universities in 1976 1986 and 1996 and asked which topics regularly covered in economics courses they now viewed as being most and least important we asked whether they now viewed the economics courses they took as interesting important too difficult or too abstract we also compared their perceptions of teaching methods and grading rigor in economics courses to those developed in other courses our second major goal represents an empirical test of the common claim that economics is a unique way of thinking if it is we might reasonably expect people with more training in economics to have different views on policy issues and to make different decisions as consumers workers savers investors and voters we collected survey data on many of these choices and by matching those responses with transcript data we plan to investigate whether there are observable behavioral responses associated with being an economics major or simply taking some minimum number of economics courses compared to students who took fewer courses or none at all there are other uses for these data they can likely be used to study choice of major and course taking behavior as well as common laboreconomics issues such as human capital versus screening in the labor market certainly the data can provide insight into curriculum development for economics departments and business schools as well there is obviously the potential for response biases in the analysis of these data but we expect that having transcript data for respondents and nonrespondents will allow us to deal with these issues econometrically this first brief report from this ongoing project addresses only the first goal of the project specifically how our former students evaluate their experience with economics courses and instructors what economic courses and concepts do they now believe are most important do they wish they had taken more or less coursework in economics what do they think now about various economic issues and allgood department of economics university of nebraska lincoln ne 68588 e mail sallgood unlnotes unl edu bosshardt department of economics florida atlantic university boca raton fl 33431 e mail wbosshar fau edu van der klaauw department of economics university of north carolina chapel hill nc 27599 e mail vanderkl email unc edu watts department of economics purdue university west lafayette in 47907 and while this paper was written the german international school of management and administration hanover germany e mail mwatts mgmt purdue edu we thank the board of the calvin k kazanjian economics foundation for the grant that made this work possible and the aea committee for economic education for bringing us together to write the proposal as described in michael salemi et al 2002 mike salemi provided helpful comments on an earlier draft of this paper april fidler provided major assistance in project coordination administration and data entry georg schaur worked extensively with data organization and preliminary tabulations

teaching tools teaching methods in undergraduate economics i introduction in 1970 nobel laureate george stigler argued that economics belongs in everyone s education once we have learned how to teach it but because the logic of economics is not easy to learn or teach he concluded that economics is not yet ready to be made a part of the basic curriculum of all educated men p 80 we now have new models for teaching economics in fact as in other areas of economics we have competing models with new approaches being offered to supplement extensively if not replace entirely the lecture pedagogy used nearly exclusively by economists at the time stigler s comments were published yet in major commission and committee reports and daily conversations held in faculty lounges around the world alternatives to the lecture approach in which the teacher often serves as a preacher and students as passive receptacles into which great thoughts and wisdom are poured still appear to be either unknown or tacitly dismissed as unworkable in this journal for example mccloskey 1992 tells of an exchange between george stigler and milton friedman friedman argued that while individuals pursue their self interest they are often ignorant and require education to see that something they thought was in their personal or national interest was not e g tariffs and quotas stigler called friedman a preacher he argued that people find their own self interest with or without education and that no amount of preaching or lecturing about economics would change that self interest in the report of the commission on graduate education in economics by krueger et al 1991 considerable attention was given to bringing real world issues into the classroom but the commission s assumed instructional mode was still the lecture it is our impression that most ph d programs devote little or no attention to teaching or encouraging the development of expository skills we suspect the lack of emphasis on communication in most ph d programs reflects partly the scarcity of teaching time partly instructors lack of confidence in their ability to teach communications skills and partly a judgment that the appropriate style of professional communication is something students can figure out for themselves by watching their teachers p 1049 the report of the committee on college faculty by kasper et al 1991 representing the nation s premiere liberal arts colleges emphasized the need for breadth in content coverage in economists graduate training but did not even mention the need for breadth in instructional methods or training in those areas despite these intentional or unintentional slights in literature from the past twenty five years we found that many economists have spent a great deal of time developing and applying new teaching methods to actively engage students in the learning process in what follows we summarize those alternative approaches to make it easier for others to consider and access these articles on innovative instructional methods in economics ii classroom games simulations and laboratories although edward chamberlin and others working in the area of imperfect competition were developing artificial markets in the classroom as early as the 1940s joseph and saunders 1970 were perhaps the first economists to publish an extensive account on how to use such games to teach basic economic concepts the approach soon proved to be quite popular at least with the developers of these activities the national council on economic education then known as the joint council on economic education published the first edition of its guide to games and simulations for teaching economics in 1971 written by lewis and wentworth with references to some ninety different activities and publications in recent years commercially published games and simulations in economics have continued to appear often featuring mainframe econometric models or microcomputer programs written specifically as a classroom simulation

economists policy views and voting in spring 2003 a survey of 1000 economists was conducted using a randomly generated membership list from the american economics association the survey contained questions about 18 policy issues voting behavior and several background variables the response was 264 nonblank surveys the responses show that most economists are supporters of safety regulations gun control redistribution public schooling and anti discrimination laws they are evenly mixed on personal choice issues military action and the minimum wage most economists oppose tighter immigration controls government ownership of enterprise and tariffs in voting the democratic republican ratio is 2 5 1 these results are compared to those of previous surveys of economists we itemize a series of important questions raised by these results

human capital in spain an estimate of educational attainment in this article an alternative methodology is proposed for obtaining long time series data for a human capital indicator based on the average number of years of education of the working age population in contrast to previous studies we use labour force survey microdata relating to the level of education actually completed in order to construct temporal profiles of educational attainment and thus avoid the need to interpolate from censuses to illustrate the method proposed we evaluate the average number of years of education of the spanish working age population for the period 1910 to 2000

why are some people and countries more protectionist than others we analyze two cross country data sets that contain information on attitudes toward trade as well as a broad range of socio demographic and other indicators we nd that pro trade preferences are signi cantly and robustly correlated with an individual s level of human capital in the manner predicted by the factor endowments model preferences over trade are also correlated with the trade exposure of the sector in which an individual is employed individuals in non traded sectors tend to be the most pro trade while individuals in sectors with a revealed comparative disadvantage are the most protectionist third an individual s relative economic status has a very strong positive association withpro trade attitudes finally non economic determinants in the form of values identities and attachments play an important role in explaining the variation in preferences over trade high degrees of neighborhood attachment and nationalism patriotism are associated withprotectionist tendencies c

the role of spatial and skill mismatches explaining long term unemployment in paris in the paris region one can observe simultaneously the coexistence of a large and dynamic job pool with long lasting periods of unemployment this paradox reveals the importance of skill and spati

the economic future of europe after three years of near stagnation the mood in europe is definitely gloomy many doubt that the european model has a future in this paper i argue that things are not so bad and there is room for optimism over the last thirty years productivity growth has been much faster in europe than in the united states productivity levels are roughly similar today in the european union and in the united states the main difference is that europe has used some of the increase in productivity to increase leisure rather than income while the united states has done the opposite still not everything is well unemployment is still high and europe suffers from inefficient regulation here also however there is more action than often perceived and a wide ranging reform process is taking place this process is driven by reforms in financial and product markets reforms in those markets are in turn putting pressure for reform in the labor market reform in the labor market is slowly taking place but not without political tensions these tensions dominate the news but they are a symptom of change not a reflection of immobility

support for free trade self interest sociotropic politics and out group anxiety although it is widely acknowledged that an understanding of mass attitudes about trade is crucial to the political economy of foreign commerce only a handful of studies have addressed this topic these studies have focused largely on testing two models both of which emphasize that trade preferences are shaped by how trade affects an individual s income the factor endowments or heckscher ohlin model posits that these preferences are affected primarily by a person s skills the specific factors or ricardo viner model posits that trade preferences depend on the industry in which a person works we find little support for either of these models using two representative national surveys of americans the only potential exception involves the effects of education initial tests indicate that educational attainment and support for open trade are directly related which is often interpreted as support for the heckscher ohlin model however further analysis reveals that education s effects are less representative of skill than of individuals anxieties about involvement with out groups in their own country and beyond furthermore we find strong evidence that trade attitudes are guided less by material self interest than by perceptions of how the u s economy as a whole is affected by trade

positive versus normative economics what s the connection evidence from the survey of americans and economists on the economy and the general social survey previous research suggests that positive and normative beliefs about economics are largely unrelated using questions from two national surveys this study finds that a the underlying determinants of positive and normative beliefs are strikingly similar b education is by far the strongest overall determinant of both positive and normative beliefs and c the variables known to push positive beliefs in the same direction as formal economic training education male gender income growth and job security also push normative beliefs in the same direction these results strongly suggest that the positive normative connection has been underestimated