drawn into violence evidence on what makes a criminal from the vietnam draft lotteries draft lottery number assignment during the vietnam era provides a natural experiment to examine the effects of military service on crime using exact dates of birth for inmates in state and federal prisons in 1979 1986 and 1991 we find that draft eligibility increases incarceration for violent crimes but decreases incarceration for nonviolent crimes among whites this is particularly evident in 1979 where two sample instrumental variable estimates indicate that military service increases the probability of incarceration for a violent crime by 0 34 percentage points and decreases the probability of incarceration for a nonviolent crime by 0 30 percentage points we conduct two falsification tests one that applies each of the three binding lotteries to unaffected cohorts and another that considers the effects of lotteries that were not used to draft servicemen jel k42 h56

the effect of concealed weapons laws an extreme bound analysis i introduction in a recent paper lott and mustard 1997 provide evidence on the relationship between concealed handgun laws often called right to carry or shall issue laws and crime they examine 16 years 1977 1992 of county level crime data from the fbi s uniform crime reports ucr and compare crime rates before and after the introduction of right to carry laws controlling for demographic factors and county level arrest rates they find that introducing right to carry laws resulted in significant reductions in the violent crimes of murder rape aggravated assault and robbery and increases in some property crimes such as burglary larceny and auto theft the latter increase is attributed to a substitution effect suggesting that potential criminals will at the margin switch from violent crimes that have now become more risky to them to property crimes where the probability of encountering an armed victim is much lower comparing these two effects coupled with a slight increase in accidental gunshots from individuals owning concealed handguns lott and mustard conclude that the social benefits of these laws exceed their costs economists who present one set of empirical results are always vulnerable to criticism that they could have selected another group of right hand side variables or modeled them in a different way lott and mustard s analysis has been criticized by black and nagin 1998 who re examine the data set choosing a different set of controls and a different model and reach different conclusions about the effects of the right to carry laws uncertainty about what to control for and how to do it has been called model uncertainty by leamer 1983 who suggests estimating the size of model uncertainty by testing the sensitivity of the particular results to many different possible model specifications this methodology is called extreme bound analysis in this paper we report extreme bounds from nearly 20 000 estimated regressions that vary the modeling choices made by lott and mustard we find support for the deterrence result from a broad set of specifications in particular we find strong support for the hypothesis that the right to carry laws are associated with a decrease in the trend in violent crime rates we do not find much support for a substitution effect into property crimes in what follows we first describe some econometric issues related to the problem of estimating the effect of the right to carry laws on crime rates we then report our extreme bound analysis and offer concluding remarks ii extreme bound analysis although behavioral theories can provide general guidance about the kinds of factors that should influence the crime rate they do not specifically determine which variables should be included in a regression analysis in addition conflicting theories typically suggest alternate model specifications in the context of crime rates for example we might expect higher crime rates in counties with higher unemployment and a larger percentage of young men age 18 30 following convention we call this a supply effect nagin 1978 however it is also possible that higher unemployment leads to the passage of right to carry laws or that right to carry laws are less likely to be enacted in areas with high percentages of young men age 18 30 we call this a demand effect omitted or unobserved demand or supply variables may induce a spurious correlation between the adoption of the right to carry laws and crime rates that has nothing to do with the supply of crime leamer 1983 suggests a formal specification search or extreme bound analysis to estimate the size of such model uncertainty surrounding certain regression results for example by including different right hand side variables in a supply of crime equation for murder leamer estimates an extreme bound interval for the deterrent effect of capital punishment that ranges from 29 to 12 murders prevented for every execution

measuring positive externalities from unobservable victim precaution an empirical analysis of lojack lojack is a hidden radio transmitter device used for retrieving stolen vehicles because there is no external indication that lojack has been installed it does not directly affect the likelihood that a protected car will be stolen there may however be positive externalities due to general deterrence we find that the availability of lojack is associated with a sharp fall in auto theft rates of other crime do not change appreciably at least historically the marginal social benefit of an additional unit of lojack has been fifteen times greater than the marginal social cost in high crime areas those who install lojack however obtain less than 10 percent of the total social benefits leading to underprovision by the market

monetary policy actions intervention and exchange rates a reexamination of the empirical relationships using federal funds rate target data the authors reexamine the relationships among federal reserve monetary policy actions u s interventions in currency markets and exchange rates using an alternative measure of monetary policy actions the federal reserve s federal funds rate target they find that exchange rates generally respond immediately to u s monetary policy actions and that these responses are usually consistent with the overshooting hypothesis the authors also find evidence of signaling and leaning against the wind u s intervention policies over the sample however controlling for such interventions do not alter their estimates of exchange rate responses to federal funds rate target changes copyright 1998 by university of chicago press

the deterrent effect of capital punishment evidence from a judicial experiment i introduction the contemporary debate over capital punishment involves a number of important arguments based on either moral principles or social welfare considerations the primary social welfare issue viewed as the most important single consideration for both sides in the death penalty controversy is whether capital punishment deters capital crimes see for example zimring and hawkins 1986 this issue is also of great interest to several states that are currently considering a change in their death penalty laws 1 psychologists and criminologists studied the death penalty initially and reported no deterrent effect see for example sellin 1959 and eysenck 1970 economists joined the debate later with ehrlich s 1975 and 1977 studies that report a significant deterrent effect applying regression analysis to u s aggregate data for 1933 69 and state level data for 1940 and 1950 ensuing studies use either ehrlich s data with different regression specifications different regressors functional form or endogenous variables or postmoratorium data with a variant of ehrlich s regression model results range from a substantial deterrent effect to no effect or a small adverse effect 2 this study uses a new approach to advance the deterrence literature we exploit an important characteristic that other studies have not considered the experimental nature of the moratorium that the supreme court imposed on executions during the 1970s the moratorium can be viewed as an exogenously imposed judicial experiment the experiment s effect on murder rates provides evidence about the deterrent effect of capital punishment we compare the murder rate for each state immediately before and after it suspended or reinstated the death penalty many factors that affect crime for example law enforcement judicial demographic and economic variables change only slightly over a short period of time therefore changes in a state s murder rate quickly following a change in its death penalty law can be attributed to the legal change also there are considerable cross state variations in the timing and duration of the moratorium that began and ended in different years in different states ranging from four to thirty years see tables 1 and 2 3 these variations can strengthen our comparison based inference because observing similar changes in murder rates immediately after the same legal change in different years and in various states provides compelling evidence of the moratorium s effect on murder moreover our analysis benefits from the experiences of the states that suspended and reinstated their death penalty statutes several times 4 for states that experience similar murder rate changes after suspensions or reinstatements in different crime economic and demographic environments the contribution of the legal change to murder is paramount we supplement the before and after comparisons with time series and panel data regression analyses unlike most existing studies we use both pre and postmoratorium data the regressions disentangle the effect of having death penalty laws on murder from the effect of actual executions on murder basing our inference on two different approaches allows us to corroborate our findings and also detract from the modeling concerns voiced at previous studies that use only regression analysis we also apply a battery of tests to examine the robustness of the findings these include regression sensitivity checks with 89 additional regression equations that differ from our base models in regressors functional form data and estimation method in addition we test whether the moratorium has an effect on property crimes that are not punishable by death if the relationship between the moratorium and these crimes is similar to the relationship between the moratorium and murder then we should suspect that murder rate changes are the result of broader trends in criminal behavior affecting all crimes

corporate taxes and the location of intangible assets within multinational firms intangible assets like patents and trademarks are increasingly seen as the key to competitive success and as the drivers of corporate profit moreover they constitute a major source of profit shifting opportunities in multinational enterprises mnes due to a highly intransparent transfer pricing process this paper argues that for both reasons mnes have an incentive to locate intangible property at affiliates with a relatively low corporate tax rate using panel data on european mnes and controlling for unobserved time constant heterogeneity between affiliates we find that the lower a subsidiary s corporate tax rate relative to other affiliates of the multinational group the higher is its level of intangible asset investment this effect is statistically and economically significant even after controlling for subsidiary size and accounting for a dynamic intangible investment pattern

the strategic bequest motive although recent research suggests that intergenerational transfers play an important role in aggregate capital accumulation our understanding of bequest motives remains incomplete we develop a simple model of strategic bequests in which a testator influences the decisions of his beneficiaries by holding wealth in bequeathable forms and by conditioning the division of bequests on the beneficiaries actions the model generates falsifiable empirical predictions that are inconsistent with other theories of intergenerational transfers we present econometric and other evidence that strongly suggests that bequests are often used as compensation for services rendered by beneficiaries

does the disclosure of gun ownership affect crime evidence from new york abstract while the social costs of gun violence are high opponents of gun restrictions argue that gun ownership deters crime and creates a positive externality by increasing unobserved risk to criminals this paper investigates the evidence for these two deterrence channels exploiting the sudden disclosure of all handgun permit holders names and addresses in two new york counties permit holders have more crime incidents at their homes relative to non permit holders in the baseline which is not driven by selection into neighborhoods i find little evidence in favor of direct deterrence and little evidence of peer deterrence instead i find that victimization is associated with a higher likelihood of future gun ownership

testing for the effects of concealed weapons laws specification errors and robustness abstract in 1997 john lott and david mustard published an important paper in which they found that right to carry concealed weapons laws reduce violent crime although lott and mustard appear to do all possible variations of the analysis a closer reading reveals that the study might suffer from several possibly important errors i reestimate the model and check for incorrect functional form omitted variables and possible second order bias in the t ratios lott and mustard s basic conclusions are generally robust with respect to these potential econometric problems overall right to carry concealed weapons laws tend to reduce violent crime the effect on property crime is more uncertain i find evidence that these laws also reduce burglary

model uncertainty and the effect of shall issue right to carry laws on crime in this paper we explore the role of model uncertainty in explaining the different findings in the literature regarding the effect of shall issue right to carry concealed weapons laws on crime in particular we systematically examine how different modeling assumptions affect the results we find little support for some widely used assumptions in the literature e g population weights but find that allowing for the effect of the law to be heterogeneous across both counties and over time is important for explaining the observed patterns of crime in terms of model uncertainty we find that there is substantial variation in the estimated effects for each model across all dimensions of the model space this suggests that one should be cautious in using the results from any particular model to inform policy decisions

a markov chain monte carlo analysis of the effect of two rate property taxes on construction abstract the paper examines the effect of taxing structures at a lower rate than land on the level of construction in 15 pennsylvania municipalities between 1972 and 1994 these municipalities are compared with 204 similar pennsylvania municipalities that tax land and structures at the same rate to reduce the standard errors of estimate below those of a quasi maximum likelihood estimation the model parameters are estimated with a markov chain monte carlo method the gibbs sampler in contrast to earlier tax analyses the estimates indicate that cities with two rate taxes enjoy significantly higher levels of construction than they would with one rate taxes

more guns more crime this paper examines the relationship between gun ownership and crime previous research has suffered from a lack of reliable data on gun ownership i exploit a unique data set to reliably estimate annual rates of gun ownership at both the state and the county levels during the past two decades my findings demonstrate that changes in gun ownership are significantly positively related to changes in the homicide rate with this relationship driven almost entirely by an impact of gun ownership on murders in which a gun is used the effect of gun ownership on all other crime categories is much less marked recent reductions in the fraction of households owning a gun can explain one third of the differential decline in gun homicides relative to nongun homicides since 1993

the social costs of gun ownership abstract this paper provides new estimates of the effect of household gun prevalence on homicide rates and infers the marginal external cost of handgun ownership the estimates utilize a superior proxy for gun prevalence the percentage of suicides committed with a gun which we validate using county and state level panels for 20 years we estimate the elasticity of homicide with respect to gun prevalence as between 0 1 and 0 3 all of the effect of gun prevalence is on gun homicide rates under certain reasonable assumptions the average annual marginal social cost of household gun ownership is in the range 100 to 1800

abortion and crime unwanted children and out of wedlock births legalizing abortion can either increase or decrease investments in children s human capital this article finds that abortion increases the number of out of wedlock births using data that more directly links the criminal with age when the crime was committed not age when arrested and fixing the assumption in previous research that no abortions took place prior to the roe v wade decision in the 45 states affected by that decision we find consistent significant evidence that legalizing abortions increased murders by over 7 linear estimates indicate that legalization increased total annual victimization costs by at least 3 2 billion jel k42 k14 j24

bequest motives and fertility decisions abstract we compare altruistic and strategic bequest motives and examine which one induces the higher demand for children although parents with strategic bequests have the stronger demand for filial attention they choose to have fewer children than those with altruistic bequests

the impact of gun laws a model of crime and self defense abstract we develop a model of crime and self defense that provides a rationale both for the right to bear arms and for regulating this right it also suggests that a severe punishment for gun crime might best guarantee both the security and freedom of potential victims

guns laws and public shootings in the united states abstractsince the late 1990s there have been increasing numbers of public shootings carried out with firearms in the united states these tragedies continually renew the regulatory debate concerning public safety while considering civil liberties using a unique data set we investigate whether laws correspond to whether an event occurs and the effects of event specific characteristics on public shooting outcomes in particular we analyse how state specific gun laws the types of firearms the shooting venues and the mental health of the gunman impact the outcomes of public shootings results show that most gun laws are unrelated to whether an event occurs in addition common state and federal gun laws that outlaw assault weapons are unrelated to the likelihood of an assault weapon being used during a public shooting event moreover results show that the use of assault weapons is not related to more victims or fatalities than other types of guns however the use of hand guns shot guns and high capac

why do t bill rates react to discount rate changes a number of alternative explanations for the response of t bill rates to discount rate changes have been offered in the literature this paper investigates cook and hahn s 1988 hypothesis that discount rate changes signal a change in the fed s federal funds rate target which in turn induce changes in t bill rates after showing that the evidence that theyt claim supports their view cannot be used to differentiate their hypothesis from equally plausible alternatives we show that a valid alternative test fails to provide support for their view and that discount rate changes do not appear to signal changes in the target for the funds rate copyright 1994 by ohio state university press

does drug illegality beget violence evidence from the crack cocaine wave in sao paulo mimicking the so called great american crime decline violent crime in the state of sao paulo dropped sharply in the 2000s after rising steadily throughout the 1980s and 1990s this paper evaluates the role of crack cocaine in explaining the aggregate dynamics in violence four facts are established first the aggregate data show a tight comovement between the prevalence of crack cocaine and homicides second using city level apprehension and possession data i find a strong elasticity of violent crime with respect to crack cocaine after controlling for year fixed effects city effects and many time varying covariates i use the estimated elasticity to compute the contribution of crack cocaine to aggregate violence crack explains 30 percent of time series variation in the data third only drug trafficking not drug possession has an impact on homicides finally i find no impact on property crimes a weaker impact on attempted murder and interestingly a weak negative impact on aggravated assault the theory suggests that both facts only trafficking matters and crack affects only homicides not property crime can be rationalized only if drug induced crime is driven by systemic violence induced by illegality itself these results are important for policy because they suggest that violence will not follow the legalization of both the possession and trade of powdered cocaine or crack cocaine

do state minimum wages affect the incarceration rate because of historically unprecedented increases in the prison population since the late 1970s the united states has the highest incarceration rate in the world using becker s 1968 framework on crime this study investigates the causal relationship between incarceration rates and state minimum wages our identification strategy consists of a state level fixed effects model and autor and dorn s 2013 two stage least squares 2sls approach using the historical local industry structure we predict the change in employment shares of manual task intensive occupations and use those as an instrument for state minimum wages the fixed effects and 2sls estimates suggest that a one dollar increase in state minimum wage leads to approximately 12 25 fewer incarcerations per 100 000 state residents estimates of the heterogeneous impacts by race and gender indicate that the aggregate impact of state minimum wages is entirely driven by men

the impact of discount rate changes on market interest rates evidence from three european countries and japan abstract this paper examines the impact of official discount rate odr changes on market interest rates of four countries germany france japan and the uk during the period from 1980 through 1997 the overall results indicate that short term rates are more responsive than long term rates for all countries the magnitude of the changes is country specific market rate responses are lower for germany and japan which have fewer changes in odr these results are consistent with expectations that there is less uncertainty under such regimes consistent with the pace of regulatory reforms the results of odr changes are strongest in uk and weakest in japan when monetary policy is changed or reversed interest rate responses are shown to be larger for countries with frequent changes in discount rates

the effect of changes in the federal funds rate target on market interest rates in the 1970s abstract this paper examines the influence of monetary policy on interest rates by estimating the effect of changes in the federal funds rate target the federal reserve s policy instrument on market interest rates in the 1970s we find that changes in the target caused large movements in short term rates and smaller but significant movements in intermediate and long term rates we hypothesize that the similarity of the reactions of three six and twelve month rates to changes in the target offers a possible explanation for the lack of support for the expectations theory from studies that have tested the theory using these rates

privately produced general deterrence in this study we use county data on private security establishments and employment for 1977 92 to test two hypotheses first we test whether private security deters crime second we test whether john lott and david mustard s estimates of the impact of shall issue laws on crime are biased because of a lack of controls for private security we find little evidence that private security reduces the crime rates for assault or larceny some estimates suggest murder robbery and or auto theft may be deterred by private security although these results are not robust of all the index crime categories only rape is estimated to have a consistent negative relationship with private security in addition we find little evidence that the lott and mustard results are biased because of a lack of controls for the private security measures employed in this study

the occupations of regulators influence occupational regulation evidence from the us private security industry licensing requirements for us private security firms and guards differ substantially from state to state state regulatory institutions for this industry also vary considerably some states have specialized regulatory boards with industry personnel guards firm owners and or public police as board members while others rely on non specialized regulators such as departments of commerce state professional regulation or consumer affairs these cross state variations in licensing requirements and regulatory institutions provide an opportunity to explore relationships between the two private security regulation is of particular interest in this context because previous empirical research implies that allocating more resources to private security reduces crime and that relatively stringent licensing requirements limit entry thereby increasing crime a panel of 1991 2010 state data is employed to see if particular regulatory institutions are associated with particular licensing requirements empirical results suggest that requirements for entry into this market tend to be relatively strict when active private security personnel are in control of licensing and that different patterns of regulation generally apply when police or non specialized agencies control licensing therefore both public interest and private interest explanations for the observed relationships between the structure of regulatory institutions and resulting licensing requirements are discussed

the impact of mass shootings on gun policy abstract there have been dozens of high profile mass shootings in recent decades this paper presents three main findings about the impact of mass shootings on gun policy first mass shootings evoke large policy responses a single mass shooting leads to a 15 increase in the number of firearm bills introduced within a state in the year after a mass shooting this effect increases with the extent of media coverage second mass shootings account for a small portion of all gun deaths but have an outsized influence relative to other homicides third when looking at bills that were actually enacted into law the impact of mass shootings depends on the party in power the annual number of laws that loosen gun restrictions doubles in the year following a mass shooting in states with republican controlled legislatures we find no significant effect of mass shootings on laws enacted when there is a democrat controlled legislature nor do we find a significant effect of mass shootings on the enactment of laws that tighten gun restrictions

asset returns discount rate changes and market efficiency the primary purpose of this paper is to reconcile the previous findings of discount rate endogeneity with the presence of discount rate announcement effects in securities markets the crux of this reconciliation is the distinction between technical discount rate changes that are endogenous and nontechnical changes which contain some informative policy implications in essence we attempt to separate expected discount rate changes from unexpected changes or equivalently the expected component of discount rate changes from the unexpected component if markets are efficient the former should have no announcement effects while the latter may be associated with an announcement effect accordingly the focus of the empirical analysis is on the interaction between discount rate exogeneity the specific monetary policy regime and accouncement effects in addition we examine whether the behavior of these markets in the postannouncement period is consistent with the rapid price adjustment implied by market efficiency

public safety through private action an economic assessment of bids private actions to avoid and prevent criminal victimisation and assist public law enforcement are vital inputs into the crime control process one form of private action the business improvement district bid appears particularly promising a bid is a non profit organisation created by property owners to provide local public goods usually including public safety our analysis of 30 los angeles bids demonstrates that the social benefits of bid expenditures on security are a large multiple about 20 of the private expenditures crime displacement appears minimal crime reduction in the bid areas has been accompanied by a reduction in arrests suggesting further savings given the vital role of private individuals and firms in determining the effectiveness of the criminal justice system and the quality and availability of criminal opportunities private actions arguably deserve a more central role in the analysis of crime and crime prevention policy 1 but the leading scholarly commentaries on the crime drop during the 1990s have largely ignored the role of the private sector blumstein and wallman 2000 levitt 2004 zimring 2007 the potentially relevant trends include growing reporting rates the growing sophistication and use of alarms monitoring equipment and locks the considerable increase in the employment of private security guards and the decline in the use of cash cook and macdonald 2010 private actions can be encouraged or discouraged through regulation of the insurance industry reducing the costs of private co operation with police and courts gun control measures and other means the justification for such measures is the reasonable presumption that many sorts of private action to avoid mitigate and respond to crime generate substantial externalities business improvement districts bids are a particularly promising institution for harnessing private action to cost effective crime control a bid is a non profit organisation created by neighbourhood property owners to provide local public goods including public safety the organisation has the power to tax all the owners in the district including those who did not sign the original petition previous evaluations of bids in los angeles la indicate that they are successful in reducing crime rates brooks 2008 macdonald et al 2009 we provide a further analysis of the costs and benefits including the effect on arrests and spillovers and we estimate a dose response

the information content of discount rate announcements and their effect on market interest rates this paper presents evidence that throughout the 1973 85 period the federal reserve systematically used certain types of discount rate a nnouncements to signal changes in its policy instrument the federal funds rate market participants understood the signals contained in d iscount rate announcements and used them to revise their expectations of the funds rate these revisions in funds rate expectations caused movements in treasury bill rates copyright 1988 by ohio state university press

guns violence and the efficiency of illegal markets in economics the standard mechanism for allocating scarce resources is the market a smoothly functioning market however is built upon legally enforceable contracts and property rights in the absence of law it is likely that violence or the threat thereof rather than prices is the means by which resources will be allocated interactions among animals provide clear evidence for this claim dominance hierarchies based on fighting ability also sometimes known as pecking orders have been documented across a wide variety of species e g primates chickens and other birds reptiles lobsters and a broad range of resources including food nesting sites and access to mates warder c allee 1938 john alcock 1993 evidence suggests that violence also plays a critical role in human interactions when property rights are not legally enforceable e g drug dealing and extortion see e g peter reuter 1983 geoffrey canada 1995 in this paper we analyze the determinants of the efficiency with which illegal markets allocate scarce resources we develop a stylized model in which players compete for a fixed prize with the winner determined by fighting ability efficiency in this context is determined by the amount of resources spent on fighting two factors affecting efficiency emerge from the model lethality and predictability perhaps surprisingly the use of more lethal mechanisms for resolving disputes does not have a clear impact on the social costs of violence the intuition underlying this result is that as the costs of losing a fight rise the willingness to fight falls we show that holding other factors constant the resources spent on fighting are lowest when the cost of losing is either very low or very high e g nuclear deterrence but over a wide range of lethality levels the overall social costs of fighting are fairly stable in contrast the costs of violence are critically linked to the predictability of dispute outcomes i e the certainty with which potential combatants know who will be victorious ex ante when the outcome of a conflict is highly correlated with observable characteristics such as strength or size there is little need to actually fight thus unpredictability all else equal increases the expected payoff to fighting for the lower ranked member leading to more conflicts

interest rate targeting and the dynamics of short term rates a feature of u s monetary policy has been active targeting of overnight fed funds rates the authors show that during a period of tight targeting 1989 96 term fed funds spreads from the target displayed pronounced volatility and persistence which increase with the maturity of the loan they show that the increase in persistence is consistent with a model of infrequent but predictable revisions of the target in the authors model the autoco variance of the spreads of term fed funds rates from the target increases with the maturity because longer term rates reflect persistent expectations of the next target change coauthors are giuseppe bertola silverio foresi and leora klapper

does the right to carry concealed handguns deter countable crimes only a count analysis can say abstract an analysis of the effects of right to carry laws on crime requires particular distributional and structural considerations first because of the count nature of crime data and the low number of expected instances per observation in the most appropriate data least squares methods yield unreliable estimates second use of a single dummy variable as a measure of the nationwide effect of right to carry laws is likely to introduce geographical and intertemporal aggregation biases into the analysis in this paper we use a generalized poisson process to examine the geographical and dynamic effects of right to carry laws on reported homicides rapes and robberies we find that the effects of such laws vary across crime categories u s states and time and that such laws appear to have statistically significant deterrent effects on the numbers of reported murders rapes and robberies

the information content of discount rate announcements revisited cook and hahn 1988 have argued that discount rate change announcements were used by the federal reserve to signal market participants about movements in the federal funds rate throughout the 1973 79 federal funds rate targeting period they maintained that announced changes in the discount rate provided new information to market participants about subsequent actions of the federal reserve regarding the federal funds rate market participants understood these signals and used them to revise their expectations of the future path of the funds rate which also affected treasuw bill rates however roley and troll 1984 and smirlock and yawitz 1985 have argued that the federal reserve chose to implement policy changes exclusively through the federal funds rate during the funds rate targeting period hence the federal reserve s discount rate policy did not reveal any additional information and thus did not have an effect on market interest rates cook and hahn 1988 found evidence of discount rate announcement effects on bill rates in the pre october 1979 funds rate operating period while both roley and troll and smirlock and yawitz did not these three studies differed in several ways including their discount rate announcement classification procedures l mistiming of five event days 2 and diserent sample starting dates 3 as cook and hahn 1988 table 1 pp 170 171 published

the information content of discount rate announcements what is behind the announcement effect abstract a considerable volume of research shows that asset prices respond to changes in the federal reserve s discount rate while several competing hypotheses have been advanced to explain the market s response to discount rate announcements comparatively little effort has been made to differentiate among alternative hypotheses the result is an abundance of evidence establishing that asset prices respond to discount rate announcements but little if any agreement about why markets respond this article attempts to fill a void in the literature by pointing out how competing hypotheses differ and by constructing tests explicitly designed to differentiate among competing explanations the evidence suggests that the market s reaction to discount rate changes is purely an announcement effect i e a reaction to new information contained in the announcement that the direct effect of discount rate changes on market rates is nil that the announcement effect is invariant to the federal reserve s operating procedure and that generally speaking changes in the discount rate do not signal a change in monetary policy the announcement effect appears to vary with both the nature and extent of the information that the announcement of a discount rate change is believed to contain

causal parameters and policy analysis in economics a twentieth century retrospective the major contributions of twentieth century econometrics to knowledge were the definition of causal parameters within well defined economic models in which agents are constrained by resources and markets and causes are interrelated the analysis of what is required to recover causal parameters from data the identification problem and clarification of the role of causal parameters in policy evaluation and in forecasting the effects of policies never previously experienced this paper summarizes the development of these ideas by the cowles commission the response to their work by structural econometricians and var econometricians and the response to structural and var econometrics by calibrators advocates of natural and social experiments and by nonparametric econometricians and statisticians this paper considers the definition and identification of causal parameters in economics and their role in econometric policy analysis it assesses different research programs designed to recover causal parameters from data at the beginning of this century economic theory was mainly intuitive and empirical support for it was largely anecdotal at the end of the century economics has a rich array of formal models and a high quality database empirical regularities motivate theory in many areas of economics and data are routinely used to test theory many economic theories have been developed as measurement frameworks to suggest what data should be collected and how they should be interpreted econometric theory was developed to analyze and interpret economic data most econometric theory adapts methods originally developed in statistics the major exception to this rule is the econometric analysis of the identification problem and the companion analyses of structural equations causality and economic policy evaluation although an economist did not invent the phrase correlation does not imply causation 1 economists clari

the interaction between potential criminals and victims demands for guns abstract i develop a model with endogenous gun ownership and study the interaction between the demands for guns by heterogeneous potential offenders and victims i show that the interaction depends on pervasiveness of guns injury probabilities and in particular the impact of the gun on the probability of success against armed relative to unarmed adversaries while the sanction on armed offense is maximal under plausible conditions the sanction on unarmed offense balances direct deterrence benefits against marginal deterrence costs and corresponding net property losses optimal gun control policy disarms all offenders but allows the attractive potential victims to own guns the paper also discusses the effects of enforcement and price controls on the demands for guns and welfare

does private security affect crime a test using state regulations as instruments private security is employed to deter criminals from attacking specific targets presumably not to produce general deterrence indeed private security generates negative spillovers as criminals su

alcohol availability and crime lessons from liberalized weekend sales restrictions in february 2000 the swedish state monopoly alcohol retail company launched a largescale experiment in which all stores in selected counties were allowed to keep open onsaturdays we assess the ef

discount rate changes and the foreign exchange market abstract changes in the discount rate can have associated announcement effects on the foreign exchange value of the dollar only if these changes are not anticipated by the market this paper provides evidence to support this contention specifically discount rate changes made for reasons other than technical adjustments have not been anticipated fully and consequently their announcements have had a significant impact on the dollar s exchange rate furthermore results are obtained that support the hypothesis that unanticipated discount rate changes alter inflationary expectations

more sneezing less crime health shocks and the market for offenses abstract a large literature points out that exposure to criminal victimization has far reaching effects on public health what remains surprisingly unexplored is that role that health shocks play in explaining aggregate fluctuations in offending this research finds novel evidence that crime is sensitive to health shocks we consider the responsiveness of crime to a pervasive and common health shock which we argue shifts costs and benefits for offenders and victims seasonal allergies leveraging daily variation in city specific pollen counts we present evidence that violent crime declines in u s cities on days in which the local pollen count is unusually high and that these effects are driven by residential violence while past literature suggests that property crimes have more instrumental motives require planning and hence are particularly sensitive to permanent changes in the cost and benefits of crime we find that violence may be especially sensitive to health shocks

bequest motives social security and economic growth junxi zhang this article conducts a systematic analysis of four bequest motives in a simple model of endogenous growth it analyzes how bequest motives affect fertility savings growth and the effects of pay as you go social security it is found that altruistic and exchange motives give equivalent outcomes if the discount factors are set the same the outcome under the joy of giving motive may involve a higher bequest ratio higher saving and better growth rates than that under altruism if bequests are accidental the equilibrium values will depend on the probability of survival moreover the results provide testable implications on bequest motives jel d1 d9 h55 j1 i introduction although the importance of bequests in aggregate savings has been established by kotlikoff and summers 1981 who reported that 80 of u s household wealth is inherited wealth what bequest motives lead to inheritance remains an unsolved problem yet it is well known that bequest motives have important implications for the behavior of financial markets the macroeconomic impacts of fiscal policies and the intergenerational transmission of inequality in the distribution of wealth at least four hypotheses for the existence of bequests have been discussed in the literature 1 bequests may arise from intergenerational altruism that is parents obtain utility from their heirs utility as well as from their own consumption barro 1974 2 the prospect of bequests is used by parents to induce children to behave as desired by parents bernheim et al 1985 3 bequests may arise from the joy of giving that is parents leave bequests simply because they obtain utility directly from the bequest yaari 1964 1 and 4 bequests may be the unintentional by product of precautionary savings and a stochastic date of death in the absence of an annuity market abel 1985 following barro 1974 and becker 1974 the altruistic bequest motive has been used most frequently however the enormous empirical work using micro data has not led to conclusive evidence on the one hand bernheim et al 1985 cox 1987 and cox and rank 1992 show that bequests are more consistent with exchange than altruism altonji et al 1992 1997 also show that altruism is decisively rejected moreover wilhelm 1996 finds little support for an altruistic theory of bequests on the other hand a recent reexamination of the exchange motive by perozek 1998 shows that the finding of bernheim et al is not robust laitner and juster 1996 find some evidence of altruistic bequests therefore a definite conclusion on bequest motives seems far from over indeed though altruism has not been supported by most of those empirical studies it remains a plausible hypothesis and continues to be used frequently see e g coate 1995 and davies and zhang 1995 abel 1985 argues theoretically that although the simple life cycle model without bequest motives is an inadequate description of the savi ng behavior in the united states as found in kotlikoff and summers 1981 accidental bequests by selfish consumers can account for a sizable fraction of aggregate wealth however little formal empirical work has been done to test whether bequests are accidental or arise from joy of giving given the lack of consensus on bequest motives it is interesting to conduct a systematic theoretical analysis of different bequest motives in a particular context becker et al 1990 and caballe 1995 assume altruism in their models of economic growth wiedmer s 1996 analysis of social security and growth does not consider bequests except ihori 1994 there seems to be no analysis of other bequest motives in the context of economic growth the purpose of this article is to analyze how different bequest motives affect fertility savings and economic growth the article will also examine how the effects of pay as you go social security depend on bequest motives