the expected inflation channel of government spending in the postwar u s abstract there exist sticky price models in which the output response to a government spending change can be large if the central bank is nonresponsive to inflation according to this expected inflation channel government spending drives up expected inflation which in turn reduces the real interest rate and leads to an increase in private consumption this paper examines whether the channel was important in the post wwii u s with particular attention to the 2009 recovery act period first we show that a model calibrated to have a large output multiplier requires a large response of expected inflation to a government spending shock next we show that this large response is inconsistent with structural vector autoregression evidence from the federal reserve s passive policy period 1959 1979 then we study expected inflation measures during the recovery act period in conjunction with a panel of professional forecaster surveys a cross country comparison of bond yields and fiscal policy news announcements we show that the expected inflation response was too small to engender a large output multiplier

optimal dynamic pricing of inventories with stochastic demand over finite horizons in many industries managers face the problem of selling a given stock of items by a deadline we investigate the problem of dynamically pricing such inventories when demand is price sensitive and stochastic and the firm s objective is to maximize expected revenues examples that fit this framework include retailers selling fashion and seasonal goods and the travel and leisure industry which markets space such as seats on airline flights cabins on vacation cruises and rooms in hotels that become worthless if not sold by a specific time we formulate this problem using intensity control and obtain structural monotonicity results for the optimal intensity resp price as a function of the stock level and the length of the horizon for a particular exponential family of demand functions we find the optimal pricing policy in closed form for general demand functions we find an upper bound on the expected revenue based on analyzing the deterministic version of the problem and use this bound to prove that simple fixed price policies are asymptotically optimal as the volume of expected sales tends to infinity finally we extend our results to the case where demand is compound poisson only a finite number of prices is allowed the demand rate is time varying holding costs are incurred and cash flows are discounted the initial stock is a decision variable and reordering overbooking and random cancellations are allowed

optimal joint pricing and lot sizing with fixed and variable capacity this paper examines previously unexplored fixed and variable capacity problems of jointly determining an item s price and lot size for a profit maximizing firm facing constant but price dependent demands over a planning horizon we apply geometric programming to these constrained nonlinear maximization problems with nonconcave objective functions and obtain global optimal solutions using kuhn tucker condition marginal and sensitivity analyses we investigate model interactions provide managerial implications on the optimal capacity decisions and explore the postoptimal behavior of the price lot size and capacity expansion and reduction size some findings cast interesting insights different from previous just in time management studies without pricing consideration

revenue management for a multiclass single server queue via a fluid model analysis motivated by the recent adoption of tactical pricing strategies in manufacturing settings this paper studies a problem of dynamic pricing for a multiproduct make to order system specifically for a multiclass mn m 1 queue with controllable arrival rates general demand curves and linear holding costs we study the problem of maximizing the expected revenues minus holding costs by selecting a pair of dynamic pricing and sequencing policies using a deterministic and continuous fluid model relaxation of this problem which can be justified asymptotically as the capacity and the potential demand grow large we show the following i greedy sequencing i e the c rule is optimal ii the optimal pricing and sequencing decisions decouple in finite time after which iii the system evolution and thus the optimal prices depend only on the total workload building on i iii we propose a one dimensional workload relaxation to the fluid pricing problem that is simpler to analyze and leads to intuitive and implementable pricing heuristics numerical results illustrate the near optimal performance of the fluid heuristics and the benefits from dynamic pricing

pricing and lot sizing polices for perishable goods when the demand depends on selling price displayed stocks and expiration date abstract price is a major factor on the demand based on marketing and economic theory in addition the demand for perishable products also depends on its freshness moreover it is a well known fact that increasing stock display e g fresh fruits vegetables baked goods may encourage consumers to purchase more this paper first proposes an inventory model that stipulates the demand explicitly in a multivariate function of price freshness and displayed stocks it may be profitable to have a closeout sale at a markdown price and always keep on hand displayed stocks fresh and plentiful if the demand is freshness and stock dependent hence the traditional assumption of zero ending inventories is relaxed to a non zero ending inventory as a result the objective is to determine three decision variables i e unit price cycle time and ending inventory level in order to maximize the total profit then it is demonstrated that the total profit is strictly pseudo concave in those three decision variables which reduces the search for solutions to a unique local maximum finally numerical examples to illustrate the theoretical results and to highlight managerial insights are presented

the 2009 recovery act stimulus at the extensive and intensive labor margins abstract this paper studies the effect of government stimulus spending on a novel aspect of the labor market the differential impact of spending on the total wage bill versus employment we analyze the 2009 recovery act via instrumental variables using a new instrument the spending done by federal agencies that were not instructed to target funds towards harder hit regions we find a moderate positive effect on jobs created saved i e the extensive margin and also a significant increase in wage payments to workers whose job status was safe without recovery act funds i e the intensive margin our point estimates imply that roughly one half of the wage payments resulting from the act were paid at the intensive margin to provide a theoretical underpinning for the estimates we build a micro founded dynamic model in which a firm meets new government demand with a combination of new hiring and increasing existing workers average hours faced with hiring costs and an overtime premium the firm responds by increasing hours along both margins our model analysis also provides insight into how government spending policy should be structured to lower the cost of generating new jobs finally we catalogue survey evidence from recovery act fund recipients that reinforces the importance of the intensive labor margin

the impact of permanent residency delays for stem phds who leaves and why abstract this paper assesses whether delays in obtaining permanent residency status can explain recent declines in the share of chinese and indian phd graduates from us stem programs who remain in the us after their studies we find that newly binding limits on permanent visas for those from china and india with advanced degrees are significantly associated with declines in stay rates the stay rate of chinese graduates declines by 2 1 percentage points for each year of delay while indian graduates facing delays of at least 5 years have a stay rate that is 10 6 percentage points lower the per country permanent visa cap affects a large share of stem phds who are disproportionately found in fields of study that have been crucial in stimulating us economic growth yet enroll relatively few natives finally results suggest that the growth of science in countries of origin has an important influence on stay rates while macroeconomic factors such as gdp per capita affect stay rates only via their impact on science funding we conclude that per country limits play a significant role in constraining the supply of highly skilled stem workers in the us economy

how successful was the new deal the microeconomic impact of new deal spending and lending policies in the 1930s the new deal during the 1930s was arguably the largest peace time expansion in federal government activity in american history until recently there had been very little quantitative testing of the microeconomic impact of the wide variety of new deal programs over the past decade scholars have developed new panel databases for counties cities and states and then used panel data methods on them to examine the impact of new deal spending and lending policies for the major new deal programs in most cases the identification of the effect comes from changes across time within the same geographic location after controlling for national shocks to the economy many of the studies also use instrumental variable methods to control for endogeneity the studies find that public works and relief spending had state income multipliers of around one increased consumption activity attracted internal migration reduced crime rates and lowered several types of mortality the farm programs typically aided large farm owners but eliminated opportunities for share croppers tenants and farm workers the home owners loan corporation s purchases and refinancing of troubled mortgages staved off drops in housing prices and home ownership rates at relatively low ex post cost to taxpayers the reconstruction finance corporation s loans to banks and railroads appear to have had little positive impact although the banks were aided when the rfc took ownership stakes

endogenous federal grants and crowd out of state government spending theory and evidence from the federal highway aid program contrary to simple theoretical predictions existing evidence suggests that federal grants do not crowd out state government spending a legislative bargaining model with endogenous grants documents a positive correlation between grant receipts and preferences for public goods this correlation has likely biased existing work against measuring crowd out to correct for such endogeneity the model motivates instruments based on the political power of state congressional delegations exploiting this exogenous variation in grants the instrumental variables estimator reports crowd out that is statistically and economically significant this endogeneity may explain the flypaper effect a nonequivalence between grant receipts and private income jel d70 h40 h77

skilled immigration and innovation evidence from enrolment fluctuations in us doctoral programmes we study the contribution of foreign science and engineering talent to the creation of new knowledge in the u s economy using panel data on 2300 science and engineering s e departments at 100 large american universities from 1973 to 1998 we use macroeconomic shocks and policy changes in source countries that differentially affect enrollments across fields and universities to isolate exogenous variation in the supply of students at specific departments both foreign and domestic graduate students are central inputs into knowledge creation and the marginal foreign student contributes more to the production of scientific publications and citations a 10 decrease in the foreign share of doctoral students lowers s e research output at u s universities by 5 6 a theoretical model of university admissions and scholarships helps us infer the productivity effects of student quality and econometric results indicate that any visa restrictions limiting entry of highquality foreign students is most costly for u s innovation increased diversity appears to be the primary mechanism by which foreign students improve research outcomes the impact of more restrictive immigration policies depends on how they affect the quality margin and diversity of incoming foreigners

optimal pricing policy in the presence of experience effects i introduction in this paper we analyze the problem of optimal intertemporal pricing for a monopolist when cur rent and past output affect future cost and or demand conditions through experience in production and or in consumption learning by doing the experience curve contagion habit formation bandwagon and snob effects are all examples of terminologies used to describe such situations we call these experience effects for convenience and explore profit maximizing pricing behavior when such effects exist in the traditional profit maximization model a firm chooses the price output combination so as to maximize short run i e current profits the familiar mc mr equality given that price is higher than average variable cost and a nonbind ing capacity constraint is a necessary condition for price takers as well as price makers this as sumes that the current pricing decision has no bearing on the future so that long run profit is maximized by a series of short run maximizing

the flypaper effect what happens to a state s spending when it receives an unconditional grant from the federal government the standard theoretical analysis predicts that the increase in spending will be the same as that generated by an equivalent increase in local incomes or roughly 5 10 percent for most states in contrast numerous empirical analyses have found that spending increases by much more with some estimates near 100 percent this result is known as the flypaper effect since the money appears to stick where it hits the authors review this evidence as well as other studies that find similar behavior in firms

a new product growth for model consumer durables this article originally appeared in management science january 1969 volume 15 number 5 pp 215 227 published by the institute of management sciences a growth model for the timing of initial purchase of new products is developed and tested empirically against data for eleven consumer durables the basic assumption of the model is that the timing of a consumer s initial purchase is related to the number of previous buyers a behavioral rationale for the model is offered in terms of innovative and imitative behavior the model yields good predictions of the sales peak and the timing of the peak when applied to historical data a long range forecast is developed for the sales of color television sets

did the 2008 tax rebates stimulate spending in an effort to bolster economic performance in light of a looming downturn in economic activity on february 13 2008 president george w bush signed the economic stimulus act of 2008 more than two thirds of the 152 billion bill consisted of economic stimulus payments to be sent beginning in may to approximately 130 million households to qualify recipients had to have a valid social security number an income tax liability or at least 3 000 of qualifying income that included earned income and some benefits from social security veterans affairs or railroad retirement and have filed a 2007 federal tax return for the most part those who filed as single individuals received between 300 and 600 while those who filed jointly received between 600 and 1 200 additionally parents with children under 17 who were eligible for a child tax credit and had a social security number received an extra 300 per child the tax rebate phased out at higher levels of income as the payment was reduced by 5 percent of the amount of adjusted gross income over 75 000 for singles or over 150 000 for married couples the treasury remitted payments either by direct deposit mainly in the first half of may or by mail mainly from mid may through mid july the effect of these stimulus payments depends on how much was spent this paper reports new survey evidence on the propensity of consumers to spend the 2008 rebate it also relates the survey evidence to aggregate data and to evidence about spending from the 2001 tax rebate

simple policies for dynamic pricing with imperfect forecasts we consider the classical single product dynamic pricing problem allowing the scale of demand intensity to be modulated by an exogenous market size stochastic process this is a natural model of dynamically changing market conditions we show that for a broad family of gaussian market size processes simple dynamic pricing rules that are essentially agnostic to the specification of this market size process perform provably well the pricing policies we develop are shown to compensate for forecast imperfections or a lack of forecast information altogether by frequent reoptimization and reestimation of the instantaneous market size

congestion based lead time quotation for heterogenous customers with convex concave delay costs optimality of a cost balancing policy based on convex hull functions we consider a congestible system serving multiple classes of customers who differ in their delay sensitivity and valuation of service or product customers are endowed with convex concave delay cost functions a system manager offers a menu of lead times and corresponding prices to arriving customers who then choose the lead time price pair that maximizes their net utility value minus disutility of delay and price we investigate how such menus should be chosen dynamically depending on the system backlog to maximize welfare we formulate a novel fluid model of the problem and show that the cost balancing policy based on the convex hulls of the delay cost functions is socially optimal if the system manager can tell customer types apart if types are indistinguishable to the system manager the cost balancing policy is also incentive compatible under social optimization finally we show through a simulation study that the cost balancing policy does well in the context of the original stochastic problem by testing it against various natural benchmarks

activist fiscal policy during and after the great recession that began in december 2007 the u s federal government enacted several rounds of activist fiscal policy in this paper we review the recent evolution of thinking and evidence regarding the effectiveness of activist fiscal policy although fiscal interventions aimed at stimulating and stabilizing the economy have returned to common use their efficacy remains controversial we review the debate about the traditional types of fiscal policy interventions such as broad based tax cuts and spending increases as well as more targeted policies while there have been improvements in estimates of the effects of broad based policies much of what has been learned recently concerns how such multipliers might vary with respect to economic conditions such as the credit market disruptions and very low interest rates that were central features of the great recession the eclectic and innovative interventions by the federal reserve and other central banks during this period highlight the imprecise divisions between monetary and fiscal policy and the many channels through which fiscal policies can be implemented

macroeconomic effects from government purchases and taxes for u s annual data that include world war ii the estimated multiplier for temporary defense spending is 0 4 0 5 contemporaneously and 0 6 0 7 over 2 years if the change in defense spending is permanent gauged by ramey s defense news variable the multipliers are higher by 0 1 0 2 since all estimated multipliers are significantly less than 1 greater spending crowds out other components of gdp particularly investment the lack of good instruments prevents estimation of reliable multipliers for nondefense purchases multipliers in the literature of two or more likely reflect reverse causation from gdp to nondefense purchases increases in average marginal income tax rates measured by a newly constructed time series have significantly negative effects on gdp when interpreted as a tax multiplier the magnitude is around 1 1 the combination of the estimated spending and tax multipliers implies that the balanced budget multiplier for defense spending is negative we have some evidence that tax changes affect gdp mainly through substitution effects rather than wealth effects

a cup runneth over fiscal policy spillovers from the 2009 recovery act this article studies the effects of interregional spillovers from the american recovery and reinvestment act of 2009 the recovery act using cross county commuting data we cluster us counties into local labour markets each of which we further partition into two subregions we then compare differential labour market outcomes and recovery act spending at the regional and subregional levels among pairs of subregions we find evidence of fiscal policy spillovers according to our benchmark specification 1 of recovery act spending in a subregion increases its own wage bill by 0 64 and increases the wage bill in its neighbouring subregion by 0 50 during the first two years following the act s passage the spillover effect occurs in the service sector whereas the direct effect occurs in both the services and goods producing sector

general revenue sharing and public sector unions abstract in this paper i find that in the context of a large intergovernmental general revenue sharing program implemented from 1972 to 1986 cities increased expenditures one for one with federal grants which is suggestive of a large flypaper effect furthermore i find that cities in states with pro union collective bargaining laws spent more than half of the transfers on increased wages while cities in states without such laws spent a greater fraction on increased government services these latter findings suggest that public sector unions play an important role in determining the usage and impact of intergovernmental grants

clearance pricing and inventory policies for retail chains clearance pricing and end of season inventory management are challenging and important problems in retailing sales rates depend upon price seasonal effects and the remaining assortment of items available to customers there is little time to react to observed sales and pricing errors result in either loss of potential revenue or excess inventory to be liquidated this paper develops optimal clearance prices and inventory management policies that take into account the impact of reduced assortment and seasonal changes on sales rates versions of these policies have been tested and implemented at three major retail chains and these applications are summarized and discussed

the american recovery and reinvestment act solely a government jobs program abstract this paper estimates the private and government sector employment effects of american recovery and reinvestment act arra spending via an instrumental variables strategy we argue that this aid was effectively fungible and states used it to offset declines in revenue this enables us to use exogenous variation in states budget positions to identify the act s employment effects we also exploit exogenous variation across states in arra highway funding according to our benchmark estimates average state and local government employment during the 24 months following the program s inception was between 156 000 and 563 000 persons greater as a result of arra spending 90 confidence interval the corresponding estimate for the private sector ranges from a loss of 182 000 to a gain of 1 1 million jobs our point estimate for the implied cost of creating a job lasting one year is 202 000 which is substantially larger than the corresponding estimate from the president s council of economic advisors

the aggregate effects of sectoral reallocations abstract can a one time permanent change in the fundamentals behind the sectoral composition of the economy prompt an aggregate downturn can this downturn be non negligible even if one uses us data to determine the relative size of gross vs net job flows and the importance of job creation costs can one consider the military build down of the 1990s as a plausible cause for the 1990 1991 recession do sectoral reallocations generate responses that are qualitatively similar to productivity shocks we use a variant of the mortensen pissarides 1994 review of economic studies 61 397 415 job creation destruction model calibrate it to us labor market data and run experiments that suggest one can answer yes to all these questions

attracting talent location choices of foreign born phds in the united states we analyze location choices of foreign born science and engineering students receiving phds from us universities foreign students who stay in the united states are positively selected on observables they tend to stay in the united states during periods of strong us economic growth and during periods of weak home country economic growth foreign students from higher income countries and from recently democratized countries tend not to remain in the united states education and innovation may therefore be part of a virtuous cycle by which education enhances a country s prospects for innovation and innovation makes the country more attractive for scientists and engineers

combined pricing and inventory control under uncertainty this paper addresses the simultaneous determination of pricing and inventory replenishment strategies in the face of demand uncertainty more specifically we analyze the following single item periodic review model demands in consecutive periods are independent but their distributions depend on the item s price in accordance with general stochastic demand functions the price charged in any given period can be specified dynamically as a function of the state of the system a replenishment order may be placed at the beginning of some or all of the periods stockouts are fully backlogged we address both finite and infinite horizon models with the objective of maximizing total expected discounted profit or its time average value assuming that prices can either be adjusted arbitrarily upward or downward or that they can only be decreased we characterize the structure of an optimal combined pricing and inventory strategy for all of the above types of models we also develop an efficient value iteration method to compute these optimal strategies finally we report on an extensive numerical study that characterizes various qualitative properties of the optimal strategies and corresponding optimal profit values

the economic effects of public financing evidence from municipal bond ratings recalibration we show that the supply of local public financing can have important effects on local economies we identify these effects by exploiting exogenous variation on municipal bond ratings due to moody s recalibration of its scale in 2010 we find that local governments increase expenditures and employment due to an expansion of their debt capacity following an upgrade these increases in local government spending lead to multiplier effects on non tradable employment and income our findings suggest that debt financed increases in government spending can improve economic conditions during recessions

dynamic pricing in the presence of inventory considerations research overview current practices and future directions the benefits of dynamic pricing methods have long been known in industries such as airlines hotels and electric utilities where the capacity is fixed in the short term and perishable in recent years there has been an increasing adoption of dynamic pricing policies in retail and other industries where the sellers have the ability to store inventory three factors contributed to this phenomenon 1 the increased availability of demand data 2 the ease of changing prices due to new technologies and 3 the availability of decision support tools for analyzing demand data and for dynamic pricing this paper constitutes a review of the literature and current practices in dynamic pricing given its applicability in most markets and its increasing adoption in practice our focus is on dynamic intertemporal pricing in the presence of inventory considerations

production inventory and pricing under cost and demand learning effects abstract the paper considers a monopolist firm that plans its production inventory and pricing policy over a fixed and finite horizon the problem is represented by an optimal control model which combines elements from three streams of literature the first of these is a classical or area and deals with optimal production and inventory under exogenously given demand conditions the second is an area of marketing science which studies dynamic pricing under demand learning effects demand learning refers to the situation where current demand for a product is influenced by past demand the third area belongs to microeconomics and industrial organization and is concerned with the effects of learning by doing in a firm s production process learning is reflected in a unit production cost that decreases with cumulative production using a path synthezising procedure we obtain closed form characterizations of optimal production pricing and inventory policies

coordinating inventory control and pricing strategies with random demand and fixed ordering cost the finite horizon case we analyze a finite horizon single product periodic review model in which pricing and production inventory decisions are made simultaneously demands in different periods are random variables that are independent of each other and their distributions depend on the product price pricing and ordering decisions are made at the beginning of each period and all shortages are backlogged ordering cost includes both a fixed cost and a variable cost proportional to the amount ordered the objective is to find an inventory policy and a pricing strategy maximizing expected profit over the finite horizon we show that when the demand model is additive the profit to go functions arek concave and hence an s s p policy is optimal in such a policy the period inventory is managed based on the classical s s policy and price is determined based on the inventory position at the beginning of each period for more general demand functions i e multiplicative plus additive functions we demonstrate that the profit to go function is not necessarilyk concave and an s s p policy is not necessarily optimal we introduce a new concept the symmetrick concave functions and apply it to provide a characterization of the optimal policy

chapter 11 pricing models in marketing publisher summary this chapter brings together a set of diverse efforts in the recent literature on the modeling of price decisions and related questions in marketing there has been an impressive growth in the array of topics investigated in the literature various trends in the development of pricing models are evident from the foregoing review first one trend has been to develop theoretical models to describe observed pricing strategies in the marketplace and to derive conditions under which certain strategies are optimal this trend is clearly evident when one considers the area of dynamic pricing models another trend is an attempt to develop pricing models in which certain aspects of consumer behavior e g asymmetric response to price increases versus price decreases are incorporated this development is quite recent and does offer a large potential a third dominant direction is the use of game theoretic models for developing equilibrium pricing strategies

dynamic pricing and lead time quotation for a multiclass make to order queue this paper considers a profit maximizing make to order manufacturer that offers multiple products to a market of price and delay sensitive users using a model that captures three aspects of particular interest first the joint use of dynamic pricing and lead time quotation controls to manage demand second the presence of a dual sourcing mode that can expedite orders at a cost and third the interaction of the aforementioned demand controls with the operational decisions of sequencing and expediting that the firm must employ to optimize revenues and satisfy the quoted lead times using an approximating diffusion control problem we derive near optimal dynamic pricing lead time quotation sequencing and expediting policies that provide structural insights and lead to practically implementable recommendations a set of numerical results illustrates the value of joint pricing and lead time control policies

pricing and capacity sizing for systems with shared resources approximate solutions and scaling relations this paper considers pricing and capacity sizing decisions in a single class markovian model motivated by communication and information services the service provider is assumed to operate a finite set of processing resources that can beshared among users however this shared mode of operation results in a service rate degradation users in turn are sensitive to the delay implied by the potential degradation in service rate and to the usage fee charged for accessing the system we study the equilibrium behavior of such systems in the specific context of pricing and capacity sizing under revenue and social optimization objectives exact solutions to these problems can only be obtained via exhaustive simulations in contrast we pursueapproximate solutions that exploitlarge capacity asymptotics economic considerations and natural scaling relations demonstrate that the optimal operational mode for the system is close to heavy traffic this in turn supports the derivation of simple approximate solutions to economic optimization problems via asymptotic methods that completely alleviate the need for simulation these approximations seem to be extremely accurate the main insights that are gleaned in the analysis follow congestion costs are small the optimal price admits a two part decomposition and the joint capacity sizing and pricing problem decouples and admits simple analytical solutions that are asymptotically optimal all of the above phenomena are intimately related to statistical economies of scale that are an intrinsic part of these systems

a multiproduct dynamic pricing problem and its applications to network yield management a firm has inventories of a set of components that are used to produce a set of products there is a finite horizon over which the firm can sell its products demand for each product is a stochastic point process with an intensity that is a function of the vector of prices for the products and the time at which these prices are offered the problem is to price the finished products so as to maximize total expected revenue over the finite sales horizon an upper bound on the optimal expected revenue is established by analyzing a deterministic version of the problem the solution to the deterministic problem suggests two heuristics for the stochastic problem that are shown to be asymptotically optimal as the expected sales volume tends to infinity several applications of the model to network yield management are given numerical examples illustrate both the range of problems that can be modeled under this framework and the effectiveness of the proposed heuristics the results provide several fundamental insights into the performance of yield management systems

local and aggregate fiscal policy multipliers abstract using a newly constructed panel of state level defense contracts this paper studies the effect of defense spending on the u s macroeconomy summing observations across states we estimate aggregate income and employment multipliers comparing these to local multipliers estimated with the panel provides evidence that local multiplier estimates may be reliable indicators of fiscal policy s aggregate effects furthermore evidence of small positive spillovers is found across several specifications we estimate income and employment multipliers between zero and 0 5 this result is reconciled with the greater than one multipliers found in nakamura and steinsson 2014 by analyzing the korean war years impact on the estimation

more cops less crime abstract i exploit a natural experiment to estimate the causal effect of police on crime the american recovery and reinvestment act increased funding for the community oriented policing services cops hiring grant program from less than 20 million over 2005 2008 to 1 billion in 2009 hiring grants distributed in 2009 were allocated according to an application score cutoff rule and i leverage quasi random variation in grant receipt by comparing the change over time in police and crimes for cities above and below the threshold in a difference in differences framework relative to low scoring cities those above the cutoff experience increases in police of about 3 2 and declines in victimization cost weighted crime of about 3 5 following the distribution of hiring grants the effects are driven by large and statistically significant effects of police on robbery larceny and auto theft with suggestive evidence that police reduce murders as well crime reductions associated with additional police were more pronounced in areas most affected by the great recession the results highlight that fiscal support to local governments for crime prevention may offer large returns especially during bad macroeconomic times

monopolist pricing with dynamic demand and production cost this paper deals with pricing of a new product over time by a monopolist who maximizes the discounted profit stream the interdependency of cost and demand on cumulative production makes the problem inherently dynamic cost is assumed to be declining with cumulative production learning curve effect while demand is a function of price and cumulative sales representing word of mouth and saturation effects the paper addresses this problem in a general framework that includes several previous results as special cases and provides new insights in other situations while the learning curve and word of mouth effect cause prices to be lower than the price that maximizes immediate revenues the saturation factor has the opposite effect the price path over time is affected by these factors and the interest rate we characterize the price path under several different situations and interpret the results for policy guidelines