investigating first stage exchange rate pass through sectoral and macro evidence from euro area countries in this paper we evaluate the first stage pass through namely the responsiveness of import prices to the exchange rate changes for a sample of euro area ea countries our study aimed to shed further light on the role of microeconomic factors versus macroeconomic factors in influencing the extent of the exchange rate pass through erpt as a first step we conduct a sectoral analysis using disaggregated import prices data we find a much higher degree of pass through for more homogeneous goods and commodities such as oil and raw materials than for highly differentiated manufactured products such as machinery and transport equipment our results confirm that cross country differences in pass through rates may be due to divergences in the product composition of imports the higher share of imports from sectors with lower degrees of pass through the lower erpt for an economy will be in a next step we investigate for the impact of some macroeconomics factors or common events experienced by ea members on the extent of pass through using the system generalised method of moments within a dynamic panel data model our estimates indicate that decline of import price sensitivity to the exchange rate is not significant since the introduction of the single currency our findings suggest instead that the weakness of the euro during the first 3 years of the monetary union significantly raised the extent of the erpt this outcome could explain why the sensitivity of import prices has not fallen since 1999 we also point out a significant role played by the inflation in the eurozone as the responsiveness of import prices to exchange rate fluctuations tends to decline in a low and more stable inflation environment overall our findings support the view that the extent of pass through is comprised of both macro and microeconomic aspects that policymakers should take into account

does additional campaign spending really hurt incumbents the theoretical importance of past investments in political brand name the existing literature ignores the fact that the marginal return to current campaign expenditures depends on the candidate s stock of brand name this simple observation is then used to provide a possible explanation for the negative empirical relationship observed between an incumbent s campaign spending and how well he does

gerrymandering and the voting rights act of 1982 a public choice analysis of turnover in the u s house of representatives the present paper uses various data sets and statistical techniques to examine the outcome of gerrymandering under the voting rights act of 1982 on turnover rates in the u s house of representatives as well as the competitiveness in party primaries for house seats evidence presented here suggests that political redistricting at the federal level namely for u s house seats has tended to favor incumbents in both the party primaries and general elections in fact some results suggest that turnover rates for 1988 are between 8 9 and 10 3 percentage points lower within states that engaged in such redistricting efforts our findings generally support the main tenets of the public choice view of legislator behavior

the exchange rate pass through to import and export prices the role of nominal rigidities and currency choice abstract using both regression and var based estimates the paper finds that the exchange rate pass through to import prices for a large number of countries is incomplete and larger than the pass through to export prices previous studies have reported similar results which give rise to the puzzle that while local currency pricing is needed to account for incomplete import price pass through it would not imply a lower export price pass through recent explanations of this puzzle have emphasized markup adjustment in response to exchange rate changes this paper suggests an alternative explanation based on the presence of both producer and local currency pricing using a dynamic general equilibrium model the paper shows that a mix of producer and local currency pricing can explain the pass through evidence even with a constant markup the model can also explain the observed variability of key variables as well as the fact that the regression and var estimates tend to be similar

macroeconomic management and the division of powers in brazil perspectives for the nineties the federal authority for macroeconomic management in brazil has experienced a profound change as a result of the institutional changes that culminated with the promulgation of a new federal constitution in october of 1988 this paper examines the implications of the new fiscal arrangements for the exercise of macroeconomic policies by the federal government it examines how recent changes in the division of powers among federal state and local governments in brazil have affected the conditions for macroeconomic management in that country this examination gains an added significance given that the erratic character of macroeconomic performance in brazil has often been blamed on macroeconomic mismanagement it focuses on how federal control of the policy variables has been affected by the latest development in brazilian institutions

exchange rate pass through into import prices revisited what drives it a large sample of developed and emerging economies is utilized to investigate import exchange rate pass through panel models reveal that various economic aspects of the destination country can explain about one third of the total variation in pass through elasticities and the remaining variation comes largely in the form of unobserved country specific effects inflation exchange rate volatility openness and relative wealth play a clear role as drivers of emerging markets pass through whereas the output gap and protectionism appear influential more generally nonlinearity regarding large versus small changes in the exchange rate is quite pervasive our evidence challenges the widely held view that pass through has been universally falling in developed markets and that it is higher for emerging markets the economic drivers are shown to play a role as out of sample predictors of pass through the findings confirm pricing to market theories and have implications for the optimal conduct of monetary policy

bailouts budget constraints and leviathans comparative federalism and lessons from the early united states recent research on federations particularly in the developing world emphasizes the importance of hard budget constraints and a strong central government to attenuate intergovernmental economic conflicts such research fails on two counts first it does not explain how hard budget constraints emerge or become self enforcing second it does not take into account the insight of the market preserving federalism literature that central governments strong enough to impose restraint on regions are likely too powerful to be checked in a manner consistent with the longterm health of markets unfortunately the market preserving federalism literature itself provides little insight into how to move from a market distorting to a market preserving equilibrium this article answers these theoretical shortcomings with reference to the evolution of political competition at the regional level and the representation of those regions at the national level more specifically whereas regional competition determines the s

an analysis of congressional voting on legislation limiting congressional campaign expenditures congressional voting on proposed floor amendments concerned solely with setting the level of the election campaign expenditure ceiling provision of the house administration committee s broad campaign finance reform bill of 1974 is analyzed for consistency with either the public interest or economic theories of regulation the benefit or cost to the individual congressman of a given ceiling is defined as the implied increase or decrease in his probability of reelection under the ceiling logit regression analysis provides the preponderant support for the economic theory of regulation by indicating that the likelihood of voting for a given ceiling varies directly with the implied change in reelection probability under the ceiling and is quite sensitive to the implied change

low inflation pass through and the pricing power of firms abstract recently there has been a significant decline in the degree to which firms pass through changes in costs to prices a decline that is frequently characterized as a reduction in the pricing power of firms the decline appears to be associated with the decline in inflation in many countries the decline has important implications for monetary policy because it affects both forecasts of inflation and the effects of changes in monetary policy on inflation some have argued that the decline in pricing power helped to keep inflation low in the face of apparently strong demand pressures in the united states in the late 1990s this paper puts forth the view that the decline in pass through or pricing power is due to the low inflation environment that has recently been achieved in many countries first a microeconomic model of price setting is used to show that lower pass through is caused by lower perceived persistence of cost changes evidence is then presented showing that inflation is positively correlated with persistence of inflation suggesting that the low inflation itself has caused the low pass through an economy wide model consistent with the micromodel is then presented to illustrate how such changes in pricing power affect output and inflation dynamics in favorable ways but can disappear quickly if monetary policy and expectations change

fiscal transparency political parties and debt in oecd countries abstract many believe and argue that fiscal or budgetary transparency has large positive effects on fiscal performance however the evidence linking transparency and fiscal policy outcomes is less compelling to analyze the effects of fiscal transparency on public debt accumulation we present a career concerns model with political parties this allows us to integrate as implications of a single model three hitherto separate results in the literature on deficit and debt accumulation that transparency decreases debt accumulation at least by reducing an electoral cycle in deficits that right wing governments at least for strategic reasons tend to have higher deficits than left wing governments and that increasing political polarization increases debt accumulation to test the predictions of the model we construct a replicable index of fiscal transparency on 19 country oecd data simultaneous estimates of debt and transparency strongly confirm that a higher degree of fiscal transparency is associated with lower public debt and deficits independent of controls for explanatory variables from other approaches

divided government fiscal institutions and budget deficits evidence from the states does partisan control of american state government have systematic effects on state spending and taxing levels does divided control affect the government s ability to make hard decisions do institutional rules like legal deficit carryover restrictions matter using a formal model of fiscal policy to guide empirical analysis of data covering the american states from 1968 to 1987 we conclude that 1 aggregate state budget totals are driven by different factors under democrats and republicans the net result being that democrats target spending and taxes to higher shares of state level personal income 2 divided government is less able to react to revenue shocks that lead to budget deficits particularly where different parties control each chamber of the legislature and 3 unified party governments with restricted ability to carry deficits into the next fiscal year outside the south have sharper reactions to negative revenue shocks than those without restrictions

advertising as information further evidence in the past 30 years the economics of information has become an important feature of the revolution in modern microeconomic theory the seminal literature includes theoretical advances by stigler 10 nelson 7 8 spence 9 and darby and karni 1 in an original approach laband 3 tests the proposition that the supply of product quality signals increases with a rise in the expected marginal return to consumers utilizing yellow pages advertisements in various urban settings in later expositions laband 4 5 provides further evidence of the durability of the informational content and the differences in information provision of television and commercial advertisements for different types of goods the present paper extends and provides alternatives to laband s tests of the impact of time costs faced by consumers on the informational content of advertising this study employs a supplementary category to laband s of credence goods developed in the literature 2 6 and analyzes the impact of income as a proxy for time and information costs with a unique intra city data set from new york city and los angeles

some evidence on the effect of the separation of spending and taxing decisions it is often argued that separation of public spending and taxing decisions engenders in the voter overoptimistic hopes that someone else will bear the cost of public services thereby inducing an increase in the size of government but are perceived tax prices systematically and persistently reduced by separation although in stock markets all agents expectations may be unbiased they may or may not be unbiased in political markets this paper analyzes the separation created in federal states when the central government finances local expenditures evidence from a dynamic decisive voter model is presented that indicates that the separation introduced by federal grants to canadian provinces did in fact reduce the perceived tax price of provincial public services and raise provincial expenditures the results suggest also that the effect of separation diminished over time

the politics of federalism in argentina and its implications for governance and accountability summary this paper contributes to an agenda that views the effects of federalism and decentralization as dependent on the incentives of national and subnational political actors it studies the mechanisms by which subnational actors affect decisions at the central level in the context of a highly decentralized middle income democracy argentina in this federal country provincial actors and concerns weigh heavily on national decisions most argentine provinces are dominated by entrenched elites with limited political competition weak division of powers and clientelistic political linkages provincial dominance and national relevance reinforce each other dragging argentine politics toward the practices and features of its most background regions

globalisation pass through and the optimal policy response to exchange rates abstract in this paper we examine how monetary policy should respond to nominal exchange rates in a new keynesian open economy model that allows for a non trivial role for sterilised intervention the paper develops the argument against the backdrop of the evolving policy making environment of asian economies sterilised intervention can be a potent tool that offers policymakers an additional degree of freedom in maximising global welfare we show that the gains to sterilised intervention are greater when goods market integration is low and exchange rate pass through is high however increased financial internationalisation reduces the effectiveness of sterilised intervention as the international policy trilemma becomes more relevant unsterilised intervention may also have a role to play although the potential welfare gains from this are generally smaller most central banks in asia have actively used sterilised foreign exchange intervention as a policy tool to smooth exchange rates but over time declining exchange rate pass through and the increasing international integration of financial and goods markets will tend to reduce the efficacy of sterilised intervention given the limited effectiveness of unsterilised intervention our model implies that the role of exchange rate movements in the optimal setting of monetary policy in asia is decreasing

presidential campaign expenditures evidence on allocations and effects this paper analyzes the impact of presidential campaign spending on election results analyses of expenditures and voting are often plagued by simultaneity between campaign spending and expected vote share however game theoretic models of resource allocation decisions made by a central actor i e a presidential campaign suggest that candidates will spend more in close races and in races likely to be pivotal we provide empirical support for this theory using federal communications commission data from the 1972 presidential election we find that expenditures were higher in states where the election was expected to be closer and in states likely to be pivotal we use these two factors as instruments in a two stage least squares model to estimate the effect of spending on votes we find that contrary to previous theory and research presidential campaign spending significantly increases a candidate s vote share

politics institutions and fiscal performance in a federal system an analysis of the argentine provinces abstract we posit that the fiscal behavior of argentine provinces is determined by a common pool game at two levels within each province and across political units in the latter game the national government has a greater incentive than the provincial governments to internalize the negative externality of fiscal imprudence given relatively strong party discipline the president is able to induce governors from his party to internalize a portion of the externality to a greater extent than opposition governors in argentina party matters for fiscal behavior but it does so for reasons different from those identified in studies of oecd countries

is exchange rate pass through symmetric evidence from us imports this study addresses the question of whether exchange rate pass through into the import price is symmetric between appreciation and depreciation of the home currency the dramatic increase of the dollar in the early 1980s and the subsequent decline provided a necessary setting for testing whether there was a structural change in the exchange rate pass through examining import price data for 98 disaggregated sic industries in the us manufacturing sector and the us import price for all commodities mixed evidence is found regarding the stability of exchange rate pass through

fiscal decentralization a political theory with latin american cases theories of fiscal federalism explain the efficiency and other economic gains from decentralization but do not explain its extent and nature in practice the authors develop a political theory of decentralization that focuses on the lines of political accountability between politicians at different levels of government the more accountable central level politicians presidents and legislators are to subnational politicians the greater the extent of decentralization and the more it will conform to the preferences of subnational politicians for example with respect to the degree of the center s discretion the model is tested on five latin american countries that although formally decentralized in fact exhibit wide differences in the distribution of spending and revenue responsibilities the theory also helps explain a number of problems governments have encountered in decentralizing including subnational debt crises and a mismatch between responsibilities and resources

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

the political economy of benefits and costs a neoclassical approach to distributive politics this essay offers a rational political explanation for the notorious inefficiency of pork barrel projects with an optimization model of legislative behavior and legislative institutions the model emphasizes the economically arbitrary from a welfare point of view importance of the geographic incidence of benefits and costs owing to the geographic basis for political representation we explore the implications of a legislator s objective function and derive conditions under which a representative legislature will select an omnibus of projects each of which exceeds the efficient scale

campaign spending in congressional elections campaign spending in congressional elections i introduction empirical studies of the effects of campaign spending on the outcome of congressional elections have found that campaign spending by incumbents is not as effective as that of their challengers indeed kau and rubin 1982 and jacobson 1985 1987 find that incumbent spending reduces the number of votes they receive and netter 1983 that it increases the challenger s votes incumbents seeking reelection however are very successful winning nine times out of ten in the postwar era if their campaign spending is so inefficient why do incumbents continue to outspend their challengers in a majority of elections we argue that these researchers counterintuitive findings are the result of using models which do not adequately correct for the simultaneous determination of the election outcome and campaign contributions and which do not include an electoral check on incumbent behavior 1 in their studies jacobson and netter as well as lott 1986 and laband and lentz 1985 assume the incumbent s ability to repel challengers is independent of his or her behavior while in office few would agree that the electoral check is so ineffective we develop a simultaneous model to correct these deficiencies it captures the effects of campaign expenditures tenure the consistency of the incumbent s votes with his constituents preferences and the size of the voter turnout on the votes received by incumbents and challengers in four congressional elections between 1978 and 1984 the model is very robust over these four elections the use of primary election data insures model identification ii model and empirical measures we assume that the platforms of any two candidates for a political office can be measured along a single left right spectrum voters know their preferred position on the dimension but cannot observe the positions of the two candidates with certainty because of rational ignorance a theory accepted since downs 1957 following congleton 1986 we assume voters are risk averse and receive more utility from candidates with positions closer to the voters preferred position but lose utility as the candidate s position becomes more uncertain voters compare the candidates and vote for the one that provides them greater expected utility voters can observe the incumbent s performance and are thus less uncertain of his views and credibility uncertainty should decrease with an incumbent s tenure in office tenure provides voters with knowledge of the incumbent s position and the incumbent with political capital this accumulation of political capital may make it more difficult for challengers to mount a successful campaign in this sense tenure acts as a barrier to entry 2 if all incumbents were at the same point on the spectrum as the median voter of their districts all incumbents would win reelection if all potential challengers were aware of this fact they would not challenge since campaigns are costly but one observes many challengers and some defeated incumbents so we proceed from the hypothesis that challengers enter the race when they perceive a gap between the position of the incumbent and that of the median voter and assume this position as their platform a large difference between the incumbent s position and the median voter s position increases the likelihood of a successful challenge if voters were certain of the positions of both candidates and the challenger s assessment was correct the challenger would win but challengers are usually less well known than incumbents and this additional uncertainty gives incumbents an advantage thus the challenger must convince the voters that his or her position is closest to the median voter s position and advertising is the primary means to that end 3 repetition of the message reduces the voters uncertainty over a challenger s position

federalism and the soft budget constraint the government s incentives to bail out inefficient projects are determined by the trade off between political benefits and economic costs the latter depending on the decentralization of government two effects of federalism are derived first fiscal competition among local governments under factor mobility increases the opportunity costs of bailout and thus serves as a commitment device the competition effect second monetary centralization together with fiscal decentralization induces a conflict of interests and thus may harden budget constraints and reduce inflation the checks and balance effect the authors analysis is used to interpret china s recent experience of transition to a market economy copyright 1998 by american economic association

federalism and central bank independence the politics of german monetary policy 1957 92 two channels of political control allow elected politicians to influence monetary policy first political threats to the status structure or very existence of the central bank may force central bankers to comply with politically motivated demands on monetary policy second politicians may use their powers of appointment to ensure that central bank appointees share their electoral and party political goals this paper derives the monetary policy outcomes obtained as a function of the degree of central bank independence zero partial or full and central bankers types partisans or technocrats based on a case study of the 1957 and 1992 institutional changes to the german central banking system and a regression analysis covering the period in between i argue that the formal independence of the system is protected by its embeddedness in the institutions of german federalism and by the federalist components of its decentralized organizational structure the behavioral independence of the german central bank fluctuates over time with the party control of federalist veto points the bundesbank is staffed with nonpartisan technocrats who are partially insulated from political pressures

has legislative television changed legislator behavior c span2 and the frequency of senate filibustering using data from 1959 1998 this study examines the impact of legislative television c span2 on the number of filibusters in the united states senate as previous work has sug gested the institutional rules of the federal legislative branch of government in the u s often allow for political grandstanding and posturing and these activities are enhanced with the presence of television cameras on the legislative floor like those previous studies the present work builds a theoretical model wherein political services are considered search experience goods and service providers federal legislators are expected utility maximizers who are concerned with promoting their policy preferences and their re election prospects poisson model estimates suggest that the presence of legislative television has worked to increase the filibuster count in the senate as a result such posturing and positioning on the issues by incumbents in front of television cameras is costly for challengers to replicate and likely contributes to lower turnover rates in the legislative branch

decentralization and inflation commitment collective action or continuity do political and fiscal decentralization make it easier or harder to control inflation statistical analysis of average annual inflation rates in a panel of 87 countries in the 1970s and 1980s found no clear relationship between decentralization and the level of inflation political decentralization however does appear to reduce change in countries relative inflation rates over time by creating additional veto players federal structure may lock in existing patterns of monetary policy whether inflationary or strict among the mostly developed countries that started with low inflation inflation tended to increase more slowly in federations than in unitary states among the mostly developing countries that started with high inflation inflation tended to increase faster in the federations there is evidence that political decentralization locks in a country s degree of practical central bank independence whether high or low and the relative hardness or softness of budget constraints on subnational governments

informative and persuasive campaigning in this paper we use a simple downsian spatial model to analyze the properties of campaign contributions we first consider campaign contributions that are intended to inform voters of candidate positions we show that it is difficult to construct arguments in a downsian spatial model for why some voters would choose to contribute to a candidateand the candidate would want to spend the money contributed to inform voters of his position we then define persuasive campaign expenditures as those that are intended to convince an individual to vote for a candidate regardless of the candidate s position on issues in the presence of persuasive campaign expenditures some voters have an incentive to contribute to one or both candidates and the candidates have an incentive to spend the money we show why the nature of persuasive campaign expenditures may explain both their growth in recent years and the increasing advantage of incumbency

beyond the fiction of federalism macroeconomic management in multitiered systems recent research on federalism is extremely divided while some tout the benefits of market preserving federalism others point to the fragmentation and incoherence of policy in federal states this research bridges the divide by analyzing the political and fiscal structures that are likely to account for the highly divergent economic experiences of federal systems around the world to test these propositions the authors use an original data set to conduct analyses of budget balance and inflation in fifteen federations around the world from 1978 through 1996 the empirical research suggests that the level of fiscal decentralization the nature of intergovernmental finance and vertical partisan relations all influence macroeconomic outcomes the findings have broad implications for the widespread move toward greater decentralization and for the theoretical literatures on federalism and macroeconomics

customer return policies for experience goods the impact of product price and consumer search costs on seller provided informational cues the present article provides an extension of previous theoretical arguments regarding customer return policies for experience goods logit regressions presented here suggest the importance of the full cost to consumers of a purchase mistake as proxied by experience goods prices and the time costs to consumers associated with search in the seller s decision to produce information in advertisements regarding return policies the evidence points out that sellers do respond in their decisions to produce information in a manner that reduces the total cost of voluntary exchange and maximizes seller profits

determinants of expenditure decentralization evidence from china summary this study is the first attempt to examine the determinants of expenditure decentralization at sub provincial levels in china the chinese central government gives detailed guidelines to local governments on public finance but ironically their expenditure assignment is far from being well regulated differences in fiscal decentralization on the expenditure side are enormous among local governments employing a panel dataset of 1995 2006 we provide empirical evidence that transfer dependency negatively affects expenditure decentralization in chinese local governments it suggests that intermediate governments i e provincial governments may have grabbed central grants for self interests

revisiting the pass through of exchange rate in the transition economies new evidence from new eu member states abstract this paper revisits the exchange rate pass through erpt for a set of transition economies namely for 10 new eu member states nms over the period 1996 2015 as the transition process has entailed a deep transformation in their economies and institutions the extent of pass through is expected to be regime dependent on this changing macroeconomic environment we propose to implement a nonlinear panel smooth transition regression pstr approach where transitional factors related to eu accession are captured properly from the data our empirical results suggest that the inflation regime is the main macroeconomic driver of the extent of erpt when inflation levels exceed the threshold of 4 56 i e within a high inflation environment the degree of pass through is higher and reaches a full erpt however with the shift towards a stable and low inflation regime i e when inflation levels are below a threshold of 4 56 the extent of pass through significantly declines in the nms group our findings shed further light on how the credibility gained through the commitment to euro area membership is beneficial and would ensure better control of inflation

a discrete time hazard model of the adoption of legislative television evidence from the us congress 1961 1986 the present study examines the probability of the adoption of legislative television over time 1961 1986 in the us congress using a discrete time hazard model against a theoretical construct where political services are modelled as search experience goods evidence is provided suggesting that constituent homogeneity relative power struggles involving the legislative branches of congress and the white house and the potential prowess of legislators in congress regarding skilful use of television are all important facets in this probability model use of alternative data sources and statistical techniques such as those presented here works to provide a greater foundation of knowledge regarding the relationship between representative democracy and modern means of communication

distributive politics and the costs of centralization this paper studies the choice between centralization and decentralization of fiscal policy in a political economy setting with centralization regional delegates vote over agendas comprising sets of region specific projects the outcome is inefficient because the choice of projects is insufficiently sensitive to within region benefits the number of projects funded may be non monotonic in the strength of project externalities the efficiency gains from decentralization and the performance of constitutional rules such as majority voting which may be used to choose between decentralization and centralization are then discussed in this framework weaker externalities and more heterogeneity between regions need not increase the efficiency gain from decentralization

global market integration and central political control foreign trade and intergovernmental relations in china prevailing economic theories predict that world market integration unleashes centrifugal forces from within and undermines domestic central political authority reversing the conventional bottom up demand side approach this article highlights the incentives of national level political actors it suggests that when institutionally empowered vis a vis the subnational units the center will seek to enhance political control over regions thriving in the global market to extract revenues remedy interregional disparity and maintain central rule through analyzing pooled cross sectional time series data for chinese provinces during 1978 to 2002 it shows that the chinese political center has manipulated its personnel monopoly power within the ruling communist party to exert a tighter grip over provincial party secretaries the top officials in the provinces more exposed to the international market furthermore provinces overseen by more controlled party secretaries actually received less favorable terms du

unstable politics fiscal space and electoral volatility in the indian states what explains variations in electoral volatility the authors argue that fiscal space availability of financial resources to enact policy initiatives and provide public programs possessed by govern

gavel to gavel congressional television coverage as political advertising the impact of c span on legislative sessions kamal p upadhyaya this article examines the effect of television on the length of legislative sessions at the federal level in the united states data from the u s congress during the period 1972 96 are employed during part of which time each house of congress received significant television coverage by c span and c span2 evidence from a parks regression suggests that the presence of c span has increased house sessions by 88 250 hours and the presence of c span2 has increased senate sessions by a striking 252 431 hours other things constant additional estimates suggest that house sessions are about two minutes longer per bill introduced under the eye of c span and senate sessions are about four minutes longer per bill introduced in the presence of c span2 longer sessions which represent low cost forms of advertising for incumbents are not without costs to taxpayers we estimate that these costs lie somewhere between 16 million and 392 million in real terms per session of congress jel d72 h11 i introduction as grain and goff 1988 point out the number of political watchers c span junkies seems to be on the rise from a 1986 estimate of 40 million since 1986 the grain and goff 1988 study has been the only significant empirical study of the impact of television on representative democracy despite the potential availability of relevant data and statistical techniques the purpose of the present article is to partially fill the void concerning the impact of television on the democratic process by concentrating on the effect of television on the length of legislative sessions in the u s congress this study makes use of a voter shopping construct that analyzes political services as search experience goods and employs data from the u s house of representatives and the u s senate during the period 1972 96 during some of which time each branch of congress received significant television coverage by c span or c span2 ii product classifications and the provision of political services as grain and goff 1988 point out the theory of product advertising parallels the theory of information as in stigler 1961 and nelson 1970 1974 these articles define search goods as goods for which consumer judgments about quality or performance can be made prior to purchase and experience goods as those for which consumer judgments about product quality performance can be made only after purchase nelson points out that information regarding experience good search good quality can be obtained by consumers at high cost low cost for experience goods ads contain cues indirect on the reputation of the seller which is verifiable at low cost and from which the buyer can make inferences regarding product quality 1 crain and goff 1988 point out that one point of view in the literature holds that political services are like search goods because candidates records are available to voters for verification and evaluation at low cost on the other hand it might be costly for voters to gather information on candidates prior to an election and or difficult for voters to draw inferences about the future behavior of politicians which suggests that political services are experience goods crain and goff 1988 11 in this regard any technological advancement that changes the costs of information gathering by voters will alter the nature of political services as in crain and goff 1988 19 because televising legislative proceedings lowers the cost of evaluating a politician s advertised qualities against his or her actual qualities political services would be more like search goods it is within this framework that we analyze the impact of television on the length of legislative sessions however we argue that there are differences in this regard with state level legislatures which were analyzed by crain and goff 1988 and the u

fiscal stability during the great recession putting decentralization design to the test this paper provides an empirical analysis aimed at disentangling the roles played by decentralization level and design as well as the extended decentralized framework provided by subnational borrow

policy watch congressional campaign finance reform while campaign finance reform attracts a lot of attention it seems unlikely that such reform at least in it current guise will have a large impact on the functioning of the american political system recent studies have called into question the conventional wisdom that challenger campaign spending is especially effective suggesting that attempts to close the gap between incumbent and challenger spending will have a smaller than expected impact on election outcomes while it is safe to conclude that pacs wield some influence it is not clear that limiting cash contributions will have a substantial effect

federalism chinese style the political basis for economic success in china china s remarkable economic success rests on a foundation of political reform providing a considerable degree of credible commitment to markets this reform reflects a special type of institutionalized decentralization that the authors call federalism chinese style this form of decentralization has three consequences first it fosters competition not only in product markets but also among local governments for labor and foreign capital this competition in turn encourages local government experimentation and learning with new forms of enterprises regulation and economic relationships second it provides incentives for local governments to promote local economic prosperity finally it provides a significant amount of protection to local governments and their enterprises from political intrusion by the central government

trade linkages and the globalisation of inflation in asia and the pacific abstract some observers argue that increased real integration has led to greater co movement of prices internationally we examine the evidence for cross border price spillovers among economies participating in the pan asian cross border production networks starting with country level data we find that both producer price and consumer price inflation rates move more closely together between those asian economies that trade more with one another ie that share a higher degree of trade intensity next using a novel data set based on the world input output database wiod we examine the importance of the supply chain for cross border price spillovers at the sectoral level we document the increasing importance of imported intermediate inputs for economies in the asia pacific region and examine the impact on domestic producer prices of changes in costs of imported intermediate inputs our results suggest that real integration through the supply chain matters for domestic price dynamics in the asia pacific region