the role of aggregation in estimating the effects of private school competition on student achievement abstract this paper investigates possible reasons for the disparity in results in the private school competition literature in particular the focus is on the data set the grade range and level of aggregation of the competition variable and on the choice of ols or iv estimation strategies the results show that the size and significance of the competition variable depends on each of these attributes although the grade range of the competition variable has a slightly smaller impact than the others private school competition does not have a consistently positive significant effect on student achievement

a paper economy of faith without faith in paper a reflection on islamic institutional history this article contributes to the literature on islamic institutional history by examining how the discounting of documents in islamic legal practice constrained the organization of early modern muslim trade it is argued that the reliance on literacy on the one hand and an islamic legal framework on the other gave early modern muslim traders a comparative advantage in economic organization but the lack of faith in paper as documentary evidence in islamic law posed fundamental constraints to the development of muslim economies

how vouchers could change the market for education small probability that vouchers will in the foreseeable future be adopted on a large scale in any school district or state at the moment only three states have adopted publicly funded voucher programs and all of these programs are limited in scale nonetheless in recent years over 40 state legislatures have considered proposals to provide some type of voucher program or tuition tax credit for at least some families in a given state or school district and the children s scholarship fund see http www scholarshipfund org has helped create or expand privately funded voucher programs in numerous cities as vouchers become a more significant part of education policy debates the time is right to consider what we know and do not know about the likely effects of adopting various voucher schemes in the balance of this paper i describe both empirical and theoretical work on education that speaks to this topic i argue that we cannot confidently predict the outcomes that would result from various voucher schemes and i also stress that debates over vouchers per se are not informative details concerning funding targeting and discretion in the use of vouchers should greatly affect the outcomes associated with any particular voucher program still empirical evidence on the performance of public versus private schools as well as numerical results from existing simulation models suggest that policymakers should be able to design voucher programs that would be helpful to minority students in large cities public schools in large cities often perform poorly in minority neighborhoods and this is especially true in economically disadvantaged areas

money and the dispersion of relative prices a price dispersion equation is tested with data from the german hyperinflation the equation is derived from a version of lucas s and barro s partial information localized market models in this extension different excess demand elasticities across commodities imply a testable dispersion equation in which the explanatory variable is the magnitude of the unperceived money growth in order to test this hypothesis a price dispersion series is constructed and a measure of the unperceived part of money growth is estimated the model receives support from the empirical analysis although it is evident that unincluded variables have important effects on price dispersion

students today teachers tomorrow identifying constraints on the provision of education with an estimated 115 million children not attending primary school in the developing world increasing access to education is critical resource constraints limit the effectiveness of demand based subsidies this paper focuses on the importance of a supply side factor the availability of low cost teachers and the resulting ability of the market to offer affordable education the authors first show that private schools are three times more likely to emerge in villages with government girls secondary schools gss identification is obtained by using official school construction guidelines as an instrument for the presence of gss in contrast there is little or no relationship between the presence of a private school and girls primary or boys primary and secondary government schools in support of a supply channel the authors then show that for villages that received a gss there are over twice as many educated women and that private school teachers wages are 27 percent lower in these villages in an environment with poor female education and low mobility gss substantially increase the local supply of skilled women lowering wages locally and allowing the market to offer affordable education these findings highlight the prominent role of women as teachers in facilitating educational access and resonate with similar historical evidence from developed economies the students of today are the teachers of tomorrow

relative price variability inflation and the allocative efficiency of the price system abstract this paper develops a theory of the relationship between aggregate and relative price variability based on the inability of people even in a rational world to identify permanent changes in relative demands whether caused by real or by monetary variability and relative productivities as soon as they occur the theory implies that the variance of the rate of inflation and the variance of relative price change are positively related although expectations are rational and markets always clear production decisions respond sluggishly to changes in relative prices temporary shocks to relative demands cause prolonged changes in the structure of production available information is used so as to maximize the efficiency of the price system however this efficiency decreases when any of the underlying variances increases this decrease is more pronounced when the production lag is longer

a new approach to decomposition of economic time series into permanent and transitory components with particular attention to measurement of the business cycle abstract this paper introduces a general procedure for decomposition of non stationary time series into a permanent and transitory component allowing both components to be stochastic the permanent component is shown to be a random walk with drift and the transitory or cyclical component is a stationary process with mean zero the decomposition methodology which depends only on past data and therefore is computable in real time is applied to the problem of measuring and dating business cycles in the portwar u s economy we find that measured expansions and contractions are of roughly equivalent duration and that our dating of cyclical episodes tends to lead the traditional nber dating and to a lesser extent the growth cycle chronology of zarnowitz and boschan 1977

the relationship between relative prices and the general price level it is very nearly a truismi amaong neoclassical economists that the public is wont to confuse changes in the general price level with relative price changes correspondingl y one might speak of the independence between the two as one of the central postulates of the neoclassical tradition william stanley jevons was aml ong the first to identify this basic dichotomin economic life as well as to attempt to explain the ordinary citizen s seenming incapacity to understand it

causal inference on education policies a survey of empirical studies using pisa timss and pirls the identification of the causal effects of educational policies is the top priority in recent education economics literature as a result a shift can be observed in the strategies of empirical studies they have moved from the use of standard multivariate statistical methods which identify correlations or associations between variables only to more complex econometric strategies which can help to identify causal relationships however exogenous variations in databases have to be identified in order to apply causal inference techniques this is a far from straightforward task for this reason this paper provides an extensive and comprehensive overview of the literature using quasi experimental techniques applied to three well known international large scale comparative assessments such as pisa pirls or timss over the period 2004 2016 in particular we review empirical studies employing instrumental variables regression discontinuity designs difference in differences and propensity score matching to the above databases additionally we provide a detailed summary of estimation strategies issues treated and profitability in terms of the quality of publications to encourage further potential evaluations the paper concludes with some operational recommendations for prospective researchers in the field

inflation expectations real rates and risk premia evidence from inflation swaps this paper develops a model of the term structures of nominal and real interest rates driven by state variables representing the short term real interest rate expected inflation inflation s central tendency and four volatility factors that follow garch processes we derive analytical solutions for nominal bond yields yields on inflation indexed bonds that have an indexation lag and the term structure of expected inflation unlike prior studies the model s parameters are estimated using data on inflation swap rates as well as nominal yields and survey forecasts of inflation the volatility state variables fully determine bonds time varying risk premia and allow for stochastic volatility and correlation between bond yields yet they have small effects on the cross section of nominal yields allowing for time varying volatility is particularly important for real interest rate and expected inflation processes but long horizon real and inflation risk premia are relatively stable

are changes in inflation expectations capitalized into stock prices a micro firm test for the nominal contracting hypothesis unlike earlier studies the author finds empirical support using microfirm data for the nominal contracting hypothesis that is changes in expected inflation create a wealth redistribution between creditors bondholders and debtors shareholders the author is able to improve model specification by 1 recognizing explicitly that a firm s asset and capital structure variables are balance sheet constrained and 2 controlling for individual firm risk differences and capital gains taxation copyright 1989 by mit press

a note on the variability of inflation and the dispersion of relative price changes abstract the relationship between the variance of inflation and the variability of relative price changes is analyzed empirically a strong positive association is found for 1948 1969 and 1948 1975 application of chow s test indicates structural instability and granger s test suggests a feedback effect between these variables

price and output responsiveness to nominal changes under differential information abstract the paper considers how changes in nominal income are transmitted into price and output changes within a setting where the traditional assumption of instantaneous market clearing costless coordination is given up in favour of a more realistic setting where price decisions are made by numerous agents firms acting independently on their private decentralized information the responsiveness of firm specific prices is considered and it is shown how absolute or nominal price rigidity can be explained building this into a theory of the general price level it is proved that heterogenously perceived nominal changes affect the price level less than proportionally moreover it is shown how a phillips curve relation between inflation and output can be rationalized within the model finally the issue of relative price variability is considered and related to misallocation of economic resources under differential information

comovements in aggregate and relative prices some evidence on neutrality abstract this paper develops an alternative test of the neutrality of anticipated monetary policy a multi good equilibrium model along the lines of barro and hercowitz is used to derive a neutrality proposition for anticipated movements in the aggregate price level and to demonstrate its equivalence econometrically to the exogeneity of relative prices with respect to the aggregate price level multivariate causality tests provide a basis for testing these restrictions the empirical results provide mixed evidence for the equilibrium models while the variation in the findings across industries suggests a role for supply side disturbances in explaining comovements in aggregate and relative prices

relative price variability and inflation in europe the relationship between inflation and the relative variability of prices has been the subject of careful investigation in the united states using data for product groups at the city level yet in europe where the relationship could have profound effects on the viability of monetary integration no attempt has been made to study the relationship this paper fills the gap by examining data disaggregated to the commodity level across 10 eu countries evidence is found for logistic smooth transitions in the relative price variability measures within countries and within product groups when this deterministic component is removed the stochastic element is not persistent and does not always have the positive relationship with inflation commonly found in us city data

on the real effects of short and long run inflation and relative sector price variability some empirical evidence using the kalman filter this paper evaluates empirically the effects of sector relative price variability and short run and long run inflation on the growth rate of real output in the united states since 1947 also permanent and transitory estimates are constructed to evaluate the effects of unanticipated movements in sector relative price on the growth rate of real output the results show a statistically significant inverse relationship beween the growth rate of real output and transitory sector relative price variability and anticipated long run inflation and a direct relationship between the growth rate of real output and unanticipated short run inflation

robustness of the relationship between price variability and inflation for us manufacturing we study the relationship between relative price variability and inflation in two different ways we first look at product class census unit values for five time periods between 1958 and 1982 and find evidence of a positive relationship between variability and inflation then we directly update the vining and elwertowski 1976 study for the period 1974 91 using individual commodity series from the bureau of labor statistics we conclude by discussing differences across industries in price stickiness

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

teacher quality in public and private schools under a voucher system the case of chile chile is unusual in having long term experience with nationwide school vouchers a key criticism of school voucher systems is that they make it easier for private schools to attract better teachers to the detriment of public schools this paper uses longitudinal data from chile to estimate a discrete choice dynamic programming dcdp model of teacher and nonteacher labor supply decisions and to explore how wage policies affect the composition of the teacher labor force in public and private schools in the model individuals first decide whether to get a teaching degree and then choose annually from among five work home sector alternatives empirical results show that private voucher schools attract better teachers than public schools however the existence of the private voucher sector also draws higher productivity individuals into the teaching profession

private school vouchers and student achievement an evaluation of the milwaukee parental choice program in 1990 wisconsin began providing vouchers to a small number of low income students to attend nonsectarian private schools controlling for individual fixed effects i compare the test scores of students selected to attend a participating private school with those of unsuccessful applicants and other students from the milwaukee public schools i find that students in the milwaukee parental choice program had faster math score gains than but similar reading score gains to the comparison groups the results appear robust to data imputations and sample attrition although these deficiencies of the data should be kept in mind when interpreting the results

the environmental and macroeconomic effects of socially responsible investment abstract we analyze the effects of socially responsible investment and public abatement on environmental quality and the economy in a continuous time dynamic growth model featuring optimizing households and firms environmental quality is modeled as a renewable resource consumers can invest in government bonds or firm equity since investors feel partly responsible for environmental pollution when holding firm equity they require a premium on the return to equity we show that socially responsible investment behavior by households partially offsets the positive effects on environmental quality of public abatement policies

the state socialization and private schooling when will governments support alternative producers abstractunderstanding the institutional features that can improve learning outcomes and reduce inequality is a top priority for international and development organisations around the world economists appear to have a good case for support to non governmental alternatives as suppliers of schooling however unlike other policy domains freer international trade or privatisation economists have been remarkably unsuccessful in promoting the adoption of this idea we develop a general positive model of why governments typically produce schooling which introduces the key notion of the lack of verifiability of socialisation and instruction of beliefs which makes third party contracting for socialisation problematic we use the model to explain variations around the world in levels of private schooling we also predict the circumstances in which efforts to promote the different alternatives to government production like charter voucher and scholarship are likely to be successful

on international equity weights and national decision making on climate change abstract estimates of the marginal damage costs of carbon dioxide emissions require the aggregation of monetised impacts of climate change over people with different incomes and in different jurisdictions implicitly or explicitly such estimates assume a social welfare function and hence a particular attitude towards equity and justice we show that previous approaches to equity weighting are inappropriate from a national decision maker s point of view because domestic impacts are not valued at domestic values we propose four alternatives sovereignty altruism good neighbour and compensation with different views on concern for and liability towards foreigners the four alternatives imply radically different estimates of the social cost of carbon and hence the optimal intensity of climate policy

relative price variability evidence from supply and demand events abstract previous studies of relative price variability assume that all supply changes are unanticipated or that supply elasticities are equal across markets in this paper we extend these models by relaxing these restrictive assumptions our resulting theoretical expression for relative price dispersion reveals an independent role for unanticipated and anticipated supply events subjecting our model to empirical testing we find that this dichotomy of supply shocks is not rejected by the data for the period 1970 1981

the neutrality properties of competing relative price models tests using linear feedback this article uses a variant of geweke s 1982 linear feedback measure to test common characterizations of monetary neutrality implicit in classes of relative price models the neutrality properties are defined in terms of relative price changes response to monetary policy shocks in a system including average price changes an interest rate and industrial production growth the magnitude and patterns of monetary feedback found in u s relative price data provide no support for any of the structurally neutral models

every catholic child in a catholic school historical resistance to state schooling contemporary private competition and student achievement across countries nineteenth century catholic doctrine strongly opposed state schooling we show that countries with larger shares of catholics in 1900 but without a catholic state religion tend to have larger shares of privately operated schools even today we use this historical pattern as a natural experiment to estimate the causal effect of contemporary private competition on student achievement in cross country student level analyses our results show that larger shares of privately operated schools lead to better student achievement in mathematics science and reading and to lower total education spending even after controlling for current catholic shares

was weber wrong a human capital theory of protestant economic history max weber attributed the higher economic prosperity of protestant regions to a protestant work ethic we provide an alternative theory protestant economies prospered because instruction in reading the bible generated the human capital crucial to economic prosperity we test the theory using county level data from late nineteenth century prussia exploiting the initial concentric dispersion of the reformation to use distance to wittenberg as an instrument for protestantism we find that protestantism indeed led to higher economic prosperity but also to better education our results are consistent with protestants higher literacy accounting for most of the gap in economic prosperity

relative price variability real shocks and the stock market in this paper we investigate the effects of relative price variability on output and the stock market and gauge the extent to which inflation proxies for relative price variability in stock return inflation regressions the evidence shows that the negative stock returninflation relations proxy for the adverse effects of relative price variability on economic activity particularly during the seventies when the u s experienced oil supply shocks hence it appears that inflation spuriously affects the stock market in two ways the aggregate output link of fama 1981 and the supply shocks reflected in relative price variability a number of papers have attempted to explain the anomalous negative relations between stock returns and inflation witnessed in the post war period one hypothesis that has held up well in light of empirical evidence suggests that the negative relation between stock returns and unexpected inflation simply reflects the more fundamental positive relation between stock returns and future real variables see e g fama 1981 geske and roll 1983 and kaul 1987 1989 in this paper we investigate the effects of relative price variability on output and the stock market and gauge the extent to which inflation proxies for relative price variability in stock return inflation regressions first relative price variability can have detrimental effects on output and employment see e g friedman 1977 and barro 1976 second absolute relative price confusion models of the lucas 1973 type suggest that monetary shocks can induce a positive relation between inflation and relative price variability see e g cukierman 1983 hence the negative stock return inflation relations could simply be a reflection of the negative effects of relative price variability on the stock market we use data for the 1947 1985 period to test the various links of our hypothesis the results indicate that relative price variability is positively related to both expected and unexpected inflation measures relative price variability also has a significant negative effect on output and the stock market more importantly

the impact of urbanization on co2 emissions evidence from developing countries abstract this paper analyzes the impact of urbanization on co2 emissions in developing countries from 1975 to 2003 it contributes to the existing literature by examining the effect of urbanization taking into account dynamics and the presence of heterogeneity in the sample of countries the results show an inverted u shaped relationship between urbanization and co2 emissions indeed the elasticity emission urbanization is positive for low urbanization levels which is in accordance with the higher environmental impact observed in less developed regions among our contributions is the estimation of a semi parametric mixture model that allows for unknown distributional shapes and endogenously classifies countries into homogeneous groups three groups of countries are identified for which urbanization s impact differs considerably for two of the groups a threshold level is identified beyond which the emission urbanization elasticity is negative and further increases in the urbanization rate do not contribute to higher emissions however for the third group only population and affluence but not urbanization contribute to explain emissions the differential impact of urbanization on co2 emissions should therefore be taken into account in future discussions of climate change policies

which countries have state religions among 188 countries 72 had no state religion in 2000 1970 and 1900 58 had a state religion throughout and 58 had 1 or 2 transitions we use a hotelling spatial competition model to analyze the likelihood that the religion market would be monopolized similar forces influence a government s decision to establish a state religion consistent with the model the probability of state religion in 1970 and 2000 is increasing with the adherence rate to the main religion has a nonlinear relation with population and has little relation with per capita gdp the probability of state religion decreases sharply under communism but lagged communism has only a weak effect with costly adjustment for institutions the probability of state religion in 1970 or 2000 depends substantially on the status in 1900 this persistence is much stronger for countries with no major regime change than for countries with such a change

limits to alternative forms of capitalization the case of anatolian holding companies summary since the late 1960s alternative forms of capitalization have emerged in the absence of an effective capital markets regime in turkey we can see these alternative forms in the failed attempts to create anatolian holding companies through the direct investment of small savings this article shows how anatolian holding companies became victims of poor institutional and regulatory regimes and how the lack of institutions to promote impersonal trust in the economy in turn permitted widespread abuses we identify populist politics lax oversight and social norms that incorporated gambling as three interlinked reasons which hindered the genesis and development of viable capital market reform and regulatory institutions in turkey 2003 elsevier ltd all rights reserved

behavioral norms in the islamic doctrine of economics a critique abstract at the heart of the contemporary islamic doctrine of economics lies a set of behavioral norms derived from the first islamic society in seventh century arabia this paper demonstrates that these norms cannot be expected to serve as the spearhead of a drive for modern economic development for one thing the proposed norms are unlikely to enjoy widespread adherence in large societies where it is difficult to achieve a common perception of reality elicit generalized altruism and overcome the free rider problem secondly many islamic norms are ambiguous and some interfere with institutions designed to improve the workings of markets

sectoral employment variability and unexpected inflation this paper considers the relationship between the variability of sectoral employment and unexpected inflation the framework used is a multisector version of friedman s well known model of the business cycle the model suggests that sectoral employment variability is a quadratic function of unexpected inflation and the rate of growth in real gnp the model is tested using annual u s data on sectoral employment in the nonagricultural economy from 1901 to 1978 inflationary surprises and the rate of real growth are found to explain between 60 and 85 of the variability in relative sectoral employment performance

intercountry differences in the relationship between relative price variability and average prices this paper provides new evidence on the relationship between relative price variability and inflation the model uses a consistently defined data set for nine european countries it benefits from the inclusion and testing of the effects of macroeconomic variables and the incorporation into the measures of inflation and dispersion adjustments for timeliness appropriate formulas and proximity the general findings of an effect on relative price variability by the macroeconomic environment and negative coefficients on unexpected inflation are supported by their occurrence in models estimated by seemingly unrelated regression and a robust systems estimator

effects of unilateral climate policy on terms of trade capital accumulation and welfare in a world economy we present a two good two country overlapping generations model where emissions arise from production and each country has a domestic emission permit system when one country unilaterally reduces her cap on emissions her output available for domestic and foreign consumption diminishes more than in the other country with unchanged consumption expenditure shares for both goods the domestic terms of trade improve while capital stocks decline in the reducing and less strongly in the non reducing country improving terms of trade in the reducing country and falling capital stocks lead in total to welfare losses in both countries however if the country which unilaterally reduces her emission permits is a net creditor to the world economy and the golden rule applies her own welfare loss remains below that of the non reducing country

from farmers to merchants conversions and diaspora human capital and jewish history from the end of the second century ce judaism enforced a religious norm requiring fathers to educate their sons we present evidence supporting our thesis that this change had a major influence on jewish economic and demographic history first the high individual and community cost of educating children in subsistence farming economies 2nd to 7th centuries prompted voluntary conversions of jews that account for a share of the reduction from 4 5 to 1 2 million second the jewish farmers who invested in education gained the comparative advantage and incentive to enter skilled occupations during the urbanization in the abbasid empire in the near east 8th and 9th centuries and they did select themselves into these occupations third as merchants the jews invested even more in education a precondition for the mailing network and common court system that endowed them with trading skills demanded all over the world fourth the jews generated a voluntary diaspora within the muslim empire and later to western europe fifth the majority of world jewry lived in the near east when the mongol invasions in the 1250s brought this region back to a subsistence farming economy in which many jews found it difficult to enforce the religious norm and hence converted as it had happened centuries earlier jel j1 j2 n3 o1 z12 z13

money and price dispersion in the united states this paper reports an empirical test of a price dispersion equation using data on the u s after world war ii the equation derived elsewhere from a version of the partial informationlocalized market models relates price dispersion to the magnitude of the aggregate shocks in order to test the model a price dispersion series is computed using annual wholesale price indexes and weights for the period 1948 76 the data on money shocks are the unanticipated money growth series estimated by barro the tests also include a measure of aggregate real disturbances from the theoretical point of view the results are negative they do not detect an effect of money shocks on price dispersion but support the predicted effect of real shocks

finishing high school and starting college do catholic schools make a difference in this paper we consider two measures of the relative effectiveness of public and catholic schools finishing high school and starting college these measures are potentially more important indicators of school quality than standardized test scores in light of the economic consequences of obtaining more education single equation estimates suggest that for the typical student attending a catholic high school raises the probability of finishing high school or entering a four year college by thirteen percentage points in bivariate probit models we find almost no evidence that our single equation estimates are subject to selection bias

real business cycles and the lucas paradigm when the lucas paradigm is generalized to include real effects the effects of real factors and monetary factors on the business cycle are always interrelated furthermore in such models monetary factors can affect the long run behavior of real output contrary to the commonly held view that they cannot real business cycle models and lucas type models are different paradigms but not in the sense of real versus monetary rather interrelationships between real and monetary factors are intrinsic to the lucas paradigm whereas the real business cycle literature implies a dichotomy between real and monetary factors