income distribution in agriculture a unified approach this paper develops a class of partial equilibrium models capable of analyzing in a unified way a number of market transmitted distributional consequences of a variety of exogenous shocks in agriculture the shocks include technical change neutral or biased changes in the supply of agricultural inputs or in the demand for agricultural outputs and government interventions the models accommodate more than two primary factors of production and more than one region with or without constraints on factor mobility

the influence of private contractual failure on regulation the case of oil field unitization an analysis of the interdependence between regulation and private contractual failure reveals that the feasible range of regulation is restricted by the same forces that block private agreement the focus of the study is oil field unitization regulation in oklahoma texas and wyoming federal lands from 1948 through 1975 despite large potential gains from unitization private negotiations fail because of lease heterogeneities and information problems regarding lease value estimates in response the federal and state governments have adopted strikingly different policies to encourage unitization with different results only the federal government s regulations are effective because they surmount information problems texas has the least successful regulation the paper argues that the policy differences are due to the political influence of small firms that benefit from nonunitized production 25 references 2 tables

store wars the chain tax movement nothing to about 25 percent in only a couple of decades chains had become particularly important in the grocery business where by 1929 they accounted for almost 40 percent of retail grocery sales 1 in an earlier article in this journal i discussed in some detail the struggles between independent retailers and the chains of this period 2 there my main concern was with how these struggles produced the robinson patman act of 1936 here i want to focus on the chain tax movement that began a number of years earlier this paper studies the cross sectional pattern of these taxes in order to answer two specific questions first why did some states pass chain taxes while others did not second did these taxes have any real effect on chain growth to answer the first question i test a simple model based on the economic theory of regulation this may seem like a somewhat ambitious

contractual responses to the common pool prorationing of crude oil production this paper examines bargaining among firms to mitigate rent dissipation following the major oil discoveries of 1926 35 because of high bargaining costs firms chose prorationing instead of consolidation and unitization and success varied the analysis also shows that prorationing took the form it did because concession such as per well quotas were required to draw in small operations and the quotas led to predictable responses regarding rent dissipation prorationing despite its costs controlled total field production and costs conserved natural reservoir energies and lengthened field life when private agreements failed the parties successfully appealed for state enforcement since similar heterogeneities influnce regulations elsewhere in the economy detailed analysis of bargaining among firms is essential for insight into the emergence of various institutional forms 33 references 3 tables

anti corporate farming laws and industry structure the case of cattle feeding nine midwestern states have laws that restrict the involvement of publiclyheld corporations in agriculture opponents argue that the laws direct efforts to regulate ownership structure may have an adverse indirect impact on size structure restricting corporate involvement might stifle the emergence and growth of efficient large scale establishments if corporations have advantages over other organizational forms in meeting capital requirements since 1982 nebraska has had an anticorporate farming law that prohibits corporate ownership of feedlots we test whether the implementation of the nebraska law had an impact on the stochastic process governing the evolution of the state s feedlot size distribution nine states iowa kansas minnesota missouri nebraska north dakota oklahoma south dakota and wisconsin have laws that restrict corporate involvement in agricultural production haroldson 1992 the specific provisions of these laws commonly known as anti corporate farming laws stayton 1991 vary from state to state limitations on the size of corporations agricultural landholdings are a common provision in some states corporations are virtually prohibited from owning farmland or operating farms other states simply outlaw corporate involvement in specific agricultural activities edmondson and krause 1978 the laws in all of the nine states include an exemption for the authorized family farm corporation which is defined in various ways but generally means an incorporated farm enterprise with a limited number of stockholders at least one of whom resides on or operates the farm 1 most observers seem to agree with

testing for indeterminacy an application to u s monetary policy reply this paper considers a prototypical new keynesian model in which the equilibrium is undetermined if monetary policy is passive the likelihood based estimation of dynamic equilibrium models is extended to allow for indeterminacies and sunspot fluctuations we construct posterior weights for the determinacy and indeterminacy region of the parameter space and estimates for the propagation of fundamental and sunspot shocks according to the estimated model u s monetary policy post 1982 is consistent with determinacy whereas the pre volcker policy is not we find that before 1979 indeterminacy substantially altered the propagation of shocks

monetary policy trend inflation and the great moderation an alternative interpretation with positive trend inflation the taylor principle does not guarantee a determinate equilibrium we provide new theoretical results on determinacy in new keynesian models with positive trend inflation and new empirical findings on the federal reserve s reaction function before and after the volcker disinflation to find that i while the fed likely satisfied the taylor principle before volcker the us economy was still subject to self fulfilling fluctuations in the 1970s ii the us economy switched to determinacy during the volcker disinflation and iii the switch reflected changes in the fed s response to macroeconomic variables and the decline in trend inflation jel e12 e23 e31 e32 e52

trend inflation taylor principle and indeterminacy positive trend inflation shrinks the determinacy region of a basic new keynesian dynamic stochastic general equilibrium model when monetary policy is conducted by a contemporaneous interest rate rule neither the taylor principle which requires the inflation coefficient to be greater than one nor the generalized taylor principle which requires that the nominal interest rate to be raised by more than the increase in inflation in the long run is a sufficient condition for local determinacy of equilibrium this finding holds for different types of taylor rules inertial policy rules and price indexation schemes therefore regardless of the theoretical setup the monetary literature on interest rate rules cannot disregard average inflation in both theoretical and empirical analyses

monetary fiscal policy interactions and fiscal stimulus abstract increases in government spending trigger substitution effects both inter and intra temporal and a wealth effect the ultimate impacts on the economy hinge on current and expected monetary and fiscal policy behavior studies that impose active monetary policy and passive fiscal policy typically find that government consumption crowds out private consumption higher future taxes create a strong negative wealth effect while the active monetary response increases the real interest rate this paper estimates markov switching policy rules for the united states and finds that monetary and fiscal policies fluctuate between active and passive behavior when the estimated joint policy process is imposed on a conventional new keynesian model government spending generates positive consumption multipliers in some policy regimes and in simulated data in which all policy regimes are realized the paper reports the model s predictions of the macroeconomic impacts of the american recovery and reinvestment act s implied path for government spending under alternative monetary fiscal policy combinations

causes of u s farm commodity programs this paper i s an attempt to explain variations by commodity in producer protection afforded by farm price support programs since the1930s particularly emphasized are theideas that these programs are essentially income redistributional measures and that given political forces the programs are attempts to redistribute efficiently variables associated with the cost to producers of generating political pressure and the social cost deadweight losses of redistribution are both found to be empirically important copyright 1987 by university of chicago press

employment and poverty during economic restructuring the case of bogota colombia bogota is seemingly a positive example of what restructuring and sensible macroeconomic policy can bring to latin america despite liberalisation and a vast increase in the number of people seeking work unemployment rates have fallen large numbers of new jobs have been created principally in the informal sector there seems little real doubt that since 1970 poverty in bogota has become both less common and less serious however if there is less poverty it is principally because of demographic change adults form a larger proportion of the labour force and more of those adults are working poverty has been cut by the huge rise in labour participation fewer people are hungry but people are also a great deal busier nor has the degree of income inequality been reduced

stepping on a rake the role of fiscal policy in the inflation of the 1970s abstract the inflation of the 1970s in the us is often discussed as if the only type of policy action that could have prevented the inflation were monetary policy actions and the only type of policy errors that might have induced the inflation were monetary policy errors yet fiscal policy underwent dramatic shifts in the 1970s and economic theory makes clear that in an environment of uncertainty about future fiscal policy monetary policy instruments may lose potency or have perverse effects this paper documents the vagaries of fiscal policy in this period and argues that people at the time must have been uncertain about fiscal policy s future course it also lays out a theoretical framework for understanding the effects of fiscal uncertainties on monetary policy and shows that fiscal variables have predictive value in dynamic models even if traditional monetary policy indicators are included in the system

high trend inflation and passive monetary detours abstract does the long run taylor principle davig and leeper 2007 hold when both monetary and fiscal policies can switch and there is positive trend inflation we find that with high trend inflation passive monetary detours are no longer possible whatever fiscal policy is in place this has important policy implications in terms of flexibility and monetary fiscal authorities coordination

wage relationship informal sector and employment policy in south america in advanced capitalist countries the shaping of a relatively homogeneous wage earning class was a slow process that lasted at least three generations this gradual transition to a wage earning economy does not seem to have taken place in developing countries where the existence of a wide informal sector encompasses a series of consecutive phases in advanced capitalist countries in a complex way more than a form of transition the informal sector appears as a particular type of economic organisation this sector internally and when joined with the formal economy develops a special rationality that cannot be explained by interpretations underlying the policies directed towards this sector such a rationality suggests a new type of policy that of taking the sector s pecularities into account and goes beyond the plain assistence treatment and simplifying attempts of formalising the informal

partial enclosure of the commons abstract we examine the efficiency distributional and environmental consequences of assigning spatial property rights to part of a spatially connected natural resource while the remainder is competed for by an open access fringe we refer to this as partial enclosure of the commons we obtain sharp analytical results regarding partial enclosure of the commons including 1 while second best it typically improves welfare relative to no property rights 2 all resource users can be made better off 3 positive rents arise in the open access area and 4 the resource maintains higher stocks under spatial heterogeneity we also characterize spatial regions that are ideal candidates for partial enclosure typically society should seek to enclose those patches with high environmental productivity and high self retention but whether high economic productivity promotes or relegates a patch may depend on one s objective

monetary and fiscal policy switching a growing body of evidence finds that policy reaction functions vary substantially over different periods in the united states this paper explores how moving to an environment in which monetary and fiscal regimes evolve according to a markov process can change the impacts of policy shocks in one regime monetary policy follows the taylor principle and taxes rise strongly with debt in another regime the taylor principle fails to hold and taxes are exogenous an example shows that a unique bounded non ricardian equilibrium exists in this environment a computational model illustrates that because agents decision rules embed the probability that policies will change in the future monetary and tax shocks always produce wealth effects when it is possible that fiscal policy will be unresponsive to debt at times active monetary policy like a taylor rule in one regime is not sufficient to insulate the economy against tax shocks in that regime and it can have the unintended consequence of amplifying and propagating the aggregate demand effects of tax shocks the paper also considers the implications of policy switching for two empirical issues

the nature of the farm abstract using a model based on a trade off between moral hazard incentives and gains from specialization this paper explains why farming has generally not converted from small family based firms into large factory style corporate firms nature is both seasonal and random and the interplay of these qualities generates moral hazard limits the gains from specialization and causes timing problems between stages of production by identifying conditions in which these forces vary we derive testable predictions about the choice of organization and the extent of farm integration to test these predictions we study the historical development of several agricultural industries and analyze data from a sample of over 1 000 farms in british columbia and louisiana in general seasonality and randomness so limit the benefits of specialization that family farms are optimal but when farmers are successful in mitigating the effects of seasonality and random shocks to output farm organizations gravitate toward fa

the household and employment in small scale nonfarm enterprises abstract this paper investigates the elasticity of hired labor demand in malawian small scale nonfarm enterprises to illustrate some key issues in considering employment policy in the less developed country ldc context where such enterprises comprise a large share of the labor market it is argued that recognizing the household character of production has important bearing on the estimation and understanding of the hired labor demand function a variant of the household production models which have become prevalent in analyses of underdeveloped agriculture is used to demonstrate conceptual differences from conventional studies of labor demand of particular relevance is the conclusion that the disemployment effect of wage hikes is likely to be smaller than in the more conventional enterprise and that the demographic composition of the household will affect employment patterns

environmental regulation whose self interests are being protected special interest can explain why environmental policy limits economic activity in areas where air quality is above minumum standards locational competition among region helped create a policy that raised factor mobility cost from slower to faster growing regions analysis of votes shows greater support for this policy was received from northern urban constituencies and the greatest opposition came from the south and the west pollution abatement costs per unit of output are higher in areas with higher not lower air quality

policy regimes policy shifts and u s business cycles abstract using an estimated dsge model with monetary and fiscal policy interactions and allowing for equilibrium indeterminacy we find that a passive monetary and passive fiscal policy regime prevailed in the pre volcker period this gave rise to self fulfilling beliefs and unconventional transmission mechanisms of policy shifts unanticipated increases in interest rates increased inflation and output while unanticipated increases in lump sum taxes decreased inflation and output we show that had the monetary policy regime of the post volcker era been in place pre volcker inflation volatility would have been lower by 25 and the rise of inflation in the 1970s would not have occurred

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

trend inflation indexation and inflation persistence in the new keynesian phillips curve purely forward looking versions of the new keynesian phillips curve nkpc generate too little inflation persistence some authors add ad hoc backward looking terms to address this shortcoming we hypothesize that inflation per sistence results mainly from variation in the long run trend component of inflation which we attribute to shifts in monetary policy we derive a version of the nkpc that incorporates a time varying inflation trend and examine whether it explains the dynamics of inflation when drift in trend inflation is taken into account a purely forward looking version of the model fits the data well and there is no need for backward looking components jel e12 e31 e52 in this paper we consider the extent to which guillermo calvo s 1983 model of nominal price rigidities can explain inflation dynamics without relying on arbitrary backward looking terms in its baseline formulation the calvo model leads to a purely forward looking new keynesian

the dynamic efficiency costs of common pool resource exploitation we conduct the first empirical investigation of common pool resource users dynamic and strategic behavior at the micro level using real world data fishermen s strategies in a fully dynamic game account for latent resource dynamics and other players actions revealing the profit structure of the fishery we compare the fishermen s actual and socially optimal exploitation paths under a time specific vessel allocation policy and find a sizable dynamic externality individual fishermen respond to other users by exerting effort above the optimal level early in the season congestion is costly instantaneously but is beneficial in the long run because it partially offsets dynamic inefficiencies jel d24 q21 q22

monetary policy regime switches and macroeconomic dynamics this article considers the determinacy and distributional consequences of regime switching in monetary policy although switching in the inflation target does not affect determinacy switches in the inflation response can cause indeterminacy satisfying the taylor principle period by period is neither necessary nor sufficient for determinacy when inflation responses switch indeterminacy can arise if monetary policy responds too aggressively to inflation in the active regime inflation target switches primarily impact the level of inflation whereas inflation response switches primarily impact the volatility expecting an inflation target switch has minor effects on volatility whereas expecting an inflation response switch raises volatility more substantially

inflation dynamics the role of public debt and policy regimes abstract in a passive monetary and active fiscal policy regime changes in the value of public debt generate wealth effects on households then in contrast to the active monetary and passive fiscal policy regime inflation moves oppositely from the inflation target and a stronger reaction of interest rates to inflation increases the response of inflation to shocks moreover a higher level of public debt increases the response of inflation while a weaker reaction of taxes to debt decreases the response of inflation to shocks in a passive monetary and passive fiscal policy regime both monetary and fiscal policy parameters affect inflation

contracting problems and regulation the case of the fishery the inefficiencies of common property fisheries are of continuing concern to economists the early work by scott gordon 1954 and anthony scott 1955 outlined the problem and later studies by james crutchfield and giulio pontecorvo 1969 and frederick bell 1972 provided empirical estimates of the losses that result those studies were followed by the dynamic models of colin clark 1976 and james quirk and vernon smith 1970 of optimal harvest rates and the use of corrective taxes or quotas to achieve them but in spite of a large and growing literature and the persuasiveness of the outlined efficiency criteria most fisheries retain common property aspects with overcapitalization and excessive labor input why those conditions persist and the failure of the regulatory response to them are the issues addressed in this paper we examine a number of fisheries but focus on the texas shrimp industry which is one of the nation s most valuable fisheries for a single species and which shares the common property characteristics observed elsewhere it is considered overcapitalized and catch per unit of effort is falling 2 examination of the fishery reveals the many margins along which rent dissipation occurs and the nature of the regulations necessary for controlling fishing effort to avoid those losses the regulatory environment in texas is complicated by conflict within the fishery between inshore and offshore fishermen the latter assert that bay shrimping reduces the number of shrimp that successfully migrate to the gulf the inshore fishery is highlighted by another issue the recent resettlement of some 30 45 000 vietnamese refugees including many fishermen along the texas coast marine advisory service paul starr their entry has been met by hostility and violence from existing shrimpers who recognize that they are in an environment characterized by the absence of property rights bay shrimpers have lobbied the texas legislature for broad limits on new entrants yet ironically the sale of additional boats by individual shrimpers to the vietnamese has facilitated entry of the refugees into the fishery regulations in the texas shrimp and other fisheries are incomplete leaving many options for rent dissipation uncontrolled because of high contracting costs among fishermen and political factors that mold government actions contracting costs are high among heterogeneous fishermen who vary principally with regard to fishing skill 3 montana state university and texas a m university respectively we benefitted from comments by terry anderson raymond c battalio gardner brown oscar burt micha gisser wade griffin john r moroney anthony d scott peter temin and participants in workshops at texas a m university and the university of washington research assistance was provided by scott barnhart and phil mizzi funding was provided by sea grant texas a m university throughout this paper we use the terms common property and open access interchangeably here the terms describe a situation where no property rights group or individual exist s for the resource 2catch per unit of effort in the inshore texas gulf and federal gulf waters is presented for 1963 77 by w l griffin c g tydlacka and w e grant they show catch per unit of effort generally falling in inshore and offshore waters while catch per unit of effort fluctuates from year to year it falls from approximately 360 kg shrimp per unit of effort to 220 kg from 1963 to 1977 the common property nature of the fishery is reflected in the following statistics since 1975 the number of vessels has grown by 23 percent nelson swartz for fish houses the record of entry is similar between 1970 a d 1977 the number of firms grew from 259 to 287 though during that period many left the industry as others entered the number of fish houses was calculated from license data supplied by the texas parks and wildlife department the record of entry by fish houses suggests that monopsony as discussed by colin clark and gordon munro is absent in the fishery 3there may be minor differences in labor leisure choices and capital but our statistical evidence and discussions with fishermen indicate that catch variations are largely due to skill government regulations in the texas bays restrict capital and our empirical evidence shows boats to be relatively homogeneous

explaining state bans on corporate farming state laws banning corporate farming present a puzzle for a rent seeking explanation of political outcomes since family farmer proponents may receive no direct benefit from these bans an explanation developed here is that these farmers benefit indirectly forestalling corporate entry preserves the farm political coalition structured around those cooperatives patronized by family farmers and so indirectly preserves federal subsidies and supply restrictions that the incidence of state bans is positively related to the importance of federal farm programs the importance of cooperatives and the homogeneity of farmers within a state is consistent with this indirect rent seeking explanation

winners and losers under the robinson patman act the 1936 robinson patman amendments to the clayton antitrust act prohibit differences in price that might be injurious to competition they also restrict certain practices for example brokerage payments unequal advertising allowances etc that could be used to give hidden discounts to favored buyers the robinson patman r p act has the distinction of being almost universally unpopular among antitrust scholars this is probably because it looks less like an antitrust measure than like legislated relief for small business 2 that the law wears an antitrust cloak is probably a measure of the cunning of its original proponents the statute s poor reputation owes more to theory than to evidence however there has been very little empirical work on the effects of the act and what there is has been largely concerned with the effects of individual prosecutions the purpose of this essay is to begin a broader empirical study i start by reviewing the act s history the impetus for the legislation came from the distributive wholesale and retail trades where a struggle had developed between the old wholesale retail order and the

public policies pressure groups and dead weight costs abstract this paper presents a model of competition among special interest groups for political influence each active group exerts pressure to affect its taxes and subsidies where activities of different groups are related by the equality between total tax collections and total tax subsidies the dead weight costs and benefits of taxes and subsidies play a major role in our model an increase in the dead weight cost of taxation encourages pressure by taxpayers while an increase in the dead weight costs of subsidies discourages pressure by recipients various applications of the analysis are discussed