financial intermediation reserve requirements and inside money a general equilibrium analysis abstract reserve requirements are examined in a general equilibrium context the paper develops a simple general equilibrium model that includes diverse opportunities for investment and a role for financial intermediaries two versions of the model are considered one is a thought experiment in which currency serves purely to satisfy legal reserve requirements the other is more realistic the model is used to analyze the comparative static effects of changes in reserve requirements the effects of changes in other parameters of the economy in the presence of reserve requirements and some qualitative issues raised by reserve requirements

valuing english primary schools this paper provides the first empirical evidence for the uk on the effect of primary school performance on property prices we find that on average a one percentage point increase in the neighbourhood proportion of children reaching the government specified target grade pushes up neighbourhood property prices by 0 67 at 2000 property prices we calculate the social valuation of a sustained 1 improvement in primary school performance to be up to 90 per child per year our instrumental variable and semi parametric approach avoids the problems of school quality endogeneity and omitted neighbourhood variables that occur in typical property value models

the cost of fear shadow pricing the intangible costs of crime this study employs a cross sectional crime survey of uk residents to estimate the shadow price of victimization with respect to fear of crime particular attention is paid to the relationship between household income and fear of crime and potential mediating variables such as neighbourhood deprivation and neighbourhood crime rates a robust relationship between fear of crime and income is demonstrated having controlled for deprivation and crime rate further analyses suggest that a substantial increase in household income is required to offset the threat of physical violence however actual victimization burglary physical violence and car crime do not significantly influence fear of crime

agricultural payments and land concentration a semiparametric spatial regression analysis over the last twenty years both crop production and agricultural payments have shifted toward larger operations this study examines whether payments from federal farm programs contributed to increased concentration of cropland and farmland using zip code level data constructed from the microfiles of the 1987 2002 agriculture censuses we examine the association between government payments per acre and subsequent growth in land concentration a semiparametric generalized additive model gam controls for location and historical concentration sales per acre and ratio of cropland area to zip code area findings indicate both with and without nonparametric controls government payments are strongly associated with subsequent concentration growth copyright 2008 oxford university press

optimal seigniorage and financial liberalization abstract this paper analyzes the effect of financial integration for countries relying on the taxation of their domestic financial system a two country model with overlapping generations and explicit financial intermediation is used goverments derive revenues from seigniorage and set optimally but non cooperatively the rate of inflation and the level of required reserves on bank deposits a financial liberalizations leads to lower reserve ratios higher inflation rates and larger stocks of government debt when the liberalization is anticipated governments may temporarily increase the reserve ratios before the liberalization occurs jel f30 e60

identifying the impacts of rail transit stations on residential property values abstract prior studies that have empirically investigated the impact of rail station proximity on property values have not fully investigated the factors that may account for this relationship stations may raise the value of nearby properties by reducing commuting costs or by attracting retail activity to the neighborhood possibly countering these positive effects are negative externalities emitted by stations and the access to neighborhoods that stations provide to criminals this paper sorts out these effects by presenting the results from estimating a hedonic price model and auxiliary models for neighborhood crime and retail activity results show that all four effects play a role in defining the relationship between property values and rail stations but the relative importance of these effects varies with distance from downtown and the median income of the neighborhood

the costs of urban property crime this paper estimates the impact of recorded domestic property crime on property prices in the london area crimes in the criminal damage category have a significant negative impact on prices a one tenth standard deviation decrease in the local density of criminal damage adds 1 to the price of an average inner london property burglaries have no measurable impact on prices even after allowing for the potential dependence of burglary rates on unobserved property characteristics one explanation we offer here is that vandalism graffiti and other forms of criminal damage motivate fear of crime in the community and may be taken as signals or symptoms of community instability and neighbourhood deterioration in general

safe and satisfied external effects of homeownership in rotterdam the article analyses the impact of homeownership on neighbourhood safety and neighbourhood satisfaction using a unique panel dataset for the city of rotterdam the results show that there are significant but economically small effects of homeownership on safety and satisfaction moreover the relation between ownership and satisfaction is significantly moderated by neighbourhood safety the paper examines whether the marginal impact of increases in homeownership on external effects diminish once ownership levels are higher according to the data this seems to be the case the results are robust to alternative specifications the findings provide insights for the evaluation of housing market policies that subsidise or stimulate homeownership

infant governments and the fiscal role of tariffs inflation and reserve requirements a welfare analysis abstract import duties and inflation taxes generate significant tax revenues for many developing nations these taxes involve low collection costs relative to income taxes and generate distinct types of distortions so their use can be reconciled with ramsey taxation principles a small open overlapping generations economy is presented in which optimal tariffs and inflation taxes are positive both when home currency has no good substitutes and when inflation gives rise to currency substitution compared with a regime of tariffs and direct taxes on foreign assets welfare is lower in the optimal inflation tariff equilibrium

term premiums in bond returns abstract this paper examines expected returns on u s treasury bills and on u s government bond portfolios expected bill returns are estimated from forward rates and from sample average returns both estimation methods indicate that expected returns on bills tend to peak at eight or nine months and never increase monotonically out to twelve months reliable inferences are limited to treasury bills and thus to maturities up to a year the variability of longer term bond returns preempts precise conclusions about their expected returns

are adjustments in the default risk premium asymmetric this article employs threshold cointegration and error correction models to the default risk premium the approach allows asymmetry in the dynamic process that has not been captured in previous studies of corporate credit spreads the results indicate that the adjustment process is asymmetric and would be beneficial to investors and macroeconomic forecasters as the default risk premium may signal future business cycles

yield spreads as predictors of industrial production expectations on short rates or term premia this paper reconsiders information in the us t bill term structure for predicting movements in real monthly industrial production it is shown that although t bill spreads contain little or no predictive content increases in term premia estimated from a garch m model of the term structure do since these estimated premia are linear functions of the conditional variance of excess returns the implication is that increases in interest rate variability are associated with reductions in industrial production this evidence is robust to the inclusion of the spread between the 10 year tbond yield and one month t bill yields the t bill term structure therefore contains information which is independent of the long end of the term structure

the allocation of seigniorage in a common currency area this paper considers the allocation of seigniorage in a common currency area with an independent central bank it is shown that if the central bank retains autonomy in the allocation of seigniorage inflation will be suboptimally high and taxes and government spending will be suboptimally low constitutionally mandating the rate of money growth will result in optimal inflation but taxes and government spending will be too low as long as consumers do not put too much weight on public good consumption relative to private it is better to constitutionally mandate seigniorage allocation shares than the level of money growth

monetary policy banking and growth i introduction fischer and modigliani 1978 exhaustively list the costs associated with inflation in recent years a growing body of evidence is consistent with the notion that slower output growth may be added to the fischer modigliani list specifically analyses by kormendi and meguire 1985 fisher 1991 degregario 1992 gomme 1993 wynne 1993 barro 1996 and others find a negative correlation between the inflation rate and output growth both across countries and over time 1 moreover the studies consistently find that the growth rate response to a change in the inflation rate is quite large the different studies produce a range of correlation coefficients a country in which the inflation rate is 10 will grow between 1 4 and 3 4 percentage points slower than a country in which the inflation rate is 0 the purpose of this paper is to determine whether a reasonably calibrated model economy can account for the size of the regression coefficients the model economy is a modified version of a member of the ak class in which bank deposits are used to finance capital accumulation in this model economy fiat money is valued because the bank is required to hold reserves against its deposits throughout this paper bank deposits is used in a narrow sense to include only those deposits against which a reserve requirement applies because monetary policy has two tools at its disposal it is possible to conduct two separate policy experiments the results from these experiments particularly the inflation rate experiment sheds light on the potential importance on the share of investment financed through bank deposits researchers have long been interested in the interaction between financing and growth schumpeter 1911 argued that the financial sector more specifically its stage of development affected a country s growth rate 2 cameron 1967 described financial development in scotland england and france in the late 18th and early 19th centuries cameron concluded that scotland and england entered the industrial revolution ahead of france because it had the financial infrastructure capable of financing capital accumulation on the needed scale king and levine 1993 find that countries with more developed financial sectors tend to grow faster than countries with less developed financial sectors it seems natural therefore to investigate whether the means of financing can yield any insights into the inflation growth relationship other researchers have also quantified the effect that movements in the inflation rate has on the growth rate in particular jones and manuelli 1995 use several variants of economies in which people hold fiat money to satisfy a cash in advance constraint they demonstrate that large growth rate effects cannot be accounted for in these model economies in these models inflation does not materially alter capital accumulation rates affecting instead the allocation between the credit good and cash good purchases jones and manuelli find small growth rate effects in an economy in which the tax code has nominally denominated depreciation rates in two papers that focus on inflation and growth chari jones and manuelli 1995 1996 consider economies in which capital accumulation can be financed through either bank deposits or directly as in the economy specified in this paper reserve requirements are applied against bank deposits agents can avoid the inflation tax by using the direct financing means more intensively consequently the growth rate effects are muted in the chari jones manuelli model economies and are too small to account for the size of the regression coefficients reported in kormendi and mcguire fischer and barro in this paper i assume that all investment is financed through bank deposits with this extreme assumption the model economy can account for the size of the growth rate effects observed in the data 3 thus there is a potentially useful lesson learned from the quantitative results in the all bank financing economy and those reported in chari jones manuelli

estimating the marginal willingness to pay function without instrumental variables abstract the hedonic model of rosen 1974 has become a workhorse for valuing the characteristics of differentiated products despite a number of well documented econometric problems including a source of endogeneity that has proven difficult to overcome here we outline a simple likelihood based estimation approach for recovering the marginal willingness to pay function that avoids this endogeneity problem using this framework we find that marginal willingness to pay to avoid violent crime increases by sixteen cents with each additional incident per 100 000 residents accounting for the slope of the marginal willingness to pay function has significant impacts on welfare analyses

the slope of the yield curve and real economic activity tracing the transmission mechanism abstract the slope of the yield curve in the us and the uk is strongly associated with the temporary rather than the permanent components of real economic activity suggesting that the yield curve affects economic activity primarily through the demand side

estimating the peace dividend the impact of violence on house prices in northern ireland this article exploits data on the pattern of violence across regions and over time to estimate the impact of the peace process in northern ireland on house prices after establishing a negative correlation between killings and house prices we estimate the parameters of a markov switching model with conflict and peace as latent states we use the model to estimate the size of the peace dividend as captured in house price changes jel d74 r23 r31 conflict in ireland has a long history even after the republic of ireland was created as an independent state in 1920 the status of the mainly protestant north remained contested from the late 1960s a violent conflict flared up which claimed around 3 500 lives only more than two decades later from 1993 onwards emerged a peace process which while initially fragile culminated in a cessation of violence and a return to devolved government by 2007 the conflict was a major source of social and economic dislocation but as peace took hold this has begun to be repaired this paper assesses the impact of peace by using variation in violence within northern ireland to study one important economic aspect of the peace process and the dividend that it brought to residents of northern ireland the impact on house prices houses are assets whose prices reflect the present and future expected attrac tiveness of living in an area even during the height of the conflict in northern ireland violence was not uniform for example belfast the capital city of the province of northern ireland was particularly hard hit looking for economic consequences of the peace process we would therefore expect benefits to be concentrated among areas where violence was most prevalent we exploit within region variability in violence and house prices over time having such variation is rare in studies of the economic consequences of conflict our specific measure of violence is conflict related deaths these have been well documented by sutton 1994 and the conflict archive on the

hedonic price indexes for residential housing a survey evaluation and taxonomy every house is different it is important that house price indexes take account of these quality differences hedonic methods which express house prices as a function of a vector of characteristics such as number of bedrooms and bathrooms land area and location are particularly useful for this purpose i consider here some developments in the hedonic methodology as it is applied in a housing context that have occurred in the last three decades a number of hedonic house price indexes are now available however it is often difficult to see how these indexes relate to each other for this reason i attempt to impose some structure on the literature by developing a taxonomy of hedonic indexes and then show how existing indexes fit into this taxonomy also discussed are some promising areas for future research in the hedonic field in particular greater use needs to be made of spatial econometric and nonparametric methods to exploit the increased availability of geospatial data the main criticisms of the hedonic approach are evaluated and compared with those of the repeat sales and stratified median methods the overall conclusion is that the advantages of the hedonic approach outweigh its disadvantages

neighborhood crime and young males job opportunity abstract a puzzling aspect of america s crime problem is the concentration of crime in poor inner city neighborhoods the economic model of crime suggests that this concentration may be caused by a dearth of legitimate earnings opportunities for young males living in these neighborhoods while studies on spatial mismatch in the low skilled labor market have documented the relatively poor job opportunity possessed by youth in these neighborhoods there exists no evidence on the role job opportunity plays in explaining the dramatic spatial variation in crime within urban areas using a unique panel of neighborhood crime and employment data for atlanta i estimate models that control for time and fixed effects as well as the possible endogeneity of job opportunity the results suggest that young males job opportunity plays a key role in resolving the enigma surrounding the high variation in crime across urban neighborhoods

climbing the property ladder an analysis of market integration in london property prices we investigate the long run convergence of house prices across the london boroughs based on a pairwise unit root probabilistic testing procedure in sharp contrast to the earlier literature we emp

what s different about banks abstract negotiable certificates of deposit cd s trade in the capital market in competition with other securities like commercial paper and bankers acceptances if cd s must pay lenders competitive monetary interest the reserve tax on cd s is borne by bank borrowers viability of the tax means there must be something special about bank loans that makes some borrowers willing to pay higher interest rates than those on other securities of equivalent risk moreover there must be something special about banks that prevents other intermediaries from competing to assure that it never pays to finance loans with cd s

local public expenditures and housing prices this paper estimates a hedonic price model which makes it possible to determine how the price of a unit varies with the set of attributes it possesses in the spanish housing market concretely and by means of capitalisation hedonic price models can be used as an instrument to capture how local public expenditures influence housing prices and by extension how homeowners can indirectly receive benefit from local public investment using individual data for dwellings from the city of barcelona spain for the period 1998 2001 it is found that local policies aimed at enhancing the quality of life or the location specific characteristic of the city of barcelona have a positive impact on housing values

measuring the impact of crime on house prices this paper uses data on over 2800 house sales in jacksonville fl to estimate the impact of crime on house prices a gis programme is used to develop neighbourhood characteristics that are unique t

immigration regional conditions and crime evidence from an allocation policy in germany after the collapse of the soviet union more than 3 million people with german ancestors immigrated to germany under a special law granting immediate citizenship exploiting the exogenous allocation of ethnic german immigrants by german authorities across regions upon arrival we find that immigration significantly increases crime the crime impact of immigration depends strongly on local labor market conditions with strong impacts in regions with high unemployment similarly we find substantially stronger effects in regions with high preexisting crime levels or large shares of foreigners

homeownership community interactions and segregation the authors consider a multi community city where community quality is linked to residents civic efforts such as being proactive in preventing crime and ensuring the quality of publicly provided goods homeownership increases incentives for such efforts but credit market imperfections force the poor to rent within community externalities can lead to segregated cities with the rich living with the rich in healthy homeowner communities and the poor living with the poor in dysfunctional renter communities the pattern of tenure segregation across communities in the united states accords well with the study s prediction the authors analyze alternative tax subsidy policies to alleviate inefficiencies in the housing market and identify the winners and losers under such policies

ten new propositions in uk housing macroeconomics an overview of the first years of the century in the mid 1990s meen set out a series of propositions concerning the relationship between housing and the macro economy during the 1980s and early 1990s this paper provides 10 further propositio

valuing rail access using transport innovations this paper uses a powerful empirical method to evaluate the benefits of rail access to consumers we study the effects on house prices of a transport innovation that altered the distance to the nearest station for some households but left others unaffected the transport innovation we study is the construction of new stations in london in the late 1990s using this innovation we implement a quasi experimental approach that allows us to avoid the biases inherent in cross sectional valuation work our evidence on distance station effects on local prices identified through distance changes induced by the transport innovation suggests that households value rail access and that these valuations are large compared to the valuations of other local amenities

predicting u s recessions financial variables as leading indicators this paper examines the out of sample performance of various financial variables as predictors of u s recessions series such as interest rates and spreads stock prices and monetary aggregates are evaluated individually and in comparison with other financial and nonfinancial indicators the analysis focuses on out of sample performance from one to eight quarters ahead results show that stock prices are useful with one to three quarter horizons as are some well known macroeconomic indicators beyond one quarter however the slope of the yield curve emerges as the clear individual choice and typically performs better by itself out of sample than in conjunction with other variables

the effects on output of money growth and interest rate volatility in the united states in october 1979 the federal reserve began a policy of disinflation and also stopped stabilizing interest rates subsequently interest rates became much more volatile using a methodology advanced by barro this paper estimates what this change in policy did to output in the united states the paper finds that the stagnation of the u s economy since 1979 stemmed almost as much from increased interest rate volatility as from reduced money growth the paper also assesses the extent to which increased volatility of money growth has contributed to stagnation it finds no evidence of any appreciable contribution the paper concludes that stabilizing interest rates is probably sensible monetary policy

crime and social interactions the high variance of crime rates across time and space is one of the oldest puzzles in the social sciences this variance appears too high to be explained by changes in the exogenous costs and benefits of crime we present a model where social interactions create enough covariance across individuals to explain the high cross city variance of crime rates this model provides an index of social interactions which suggests that the amount of social interactions is highest in petty crimes moderate in more serious crimes and almost negligible in murder and rape

is there a compensating wage differential for high crime levels first evidence from europe abstract this paper investigates whether high regional crime levels lead to a compensating wage differential paid by firms in the respective region using data from german social security records official police statistics and official statistics for 2003 2006 i consider both violent and non violent crimes and use three way error components estimators to control for individual and regional heterogeneity the findings suggest that wages are practically unrelated to changes in crime rates this result is robust over a wide range of subgroups there is however some evidence that crime rates influence land prices

officials versus thieves is public or private expropriation more harmful to small firms abstractcorruption and crime are factors that regularly affect firms yet few papers compare the two impacts this is largely due to a lack of data something i overcome using recent surveys of microenterprises in mexico after instrumenting for individual firm level incidence i find that thieves are much more harmful to microenterprises than officials the incidence of robbery and extortion is associated with declines in income and employees while the incidence of bribery and fines are associated with increases in both this highlights that crime can be a larger deterrent to firm growth than corruption in certain environments

tight money policies and inflation revisited in this paper we reconsider the link between tight money policies and inflation in the spirit of sargent and wallace s 1981 influential paper some unpleasant monetarist arithmetic a standard neoclassical model with capital bonds and return dominated currency is used the potential for tight money policies to be inflationary unpleasant arithmetic exists even when the real interest rate is below the growth rate of the economy additionally the likely observability of unpleasant arithmetic in real world economies is shown to depend crucially on the type of monetary policy rule that is used jel classification e52 e63 un autre coup d il sur la relation entre politiques monetaires restrictives et inflation ce memoire re examine la relation entre politiques monetaires restrictives et inflation dans l esprit du travail de sargent et wallace 1981 some unpleasant monetarist arithmetic les auteurs utilisent un modele neo classique standard avec capital debentures et une monnaie dont les rendements sont domines par ceux d autres reservoirs de valeur la possibilite que les politiques monetaires restrictives soient inflationnistes existe meme quand le taux d interet reel est plus petit que le taux de croissance de l economie de plus on montre que l obtention de ces resultats deplaisants dans les economies concretes depend fondamentalement du type de regle monetaire qu on utilise

is reserve ratio arithmetic more pleasant does it matter in a revenue neutral setting if the government changes the inflation tax base or the inflation tax rate we answer this question within the context of an overlapping generations model in which government bonds capital and cash reserves coexist we consider experiments that parallel those studied in sargent and wallace s unpleasant monetarist arithmetic the government uses seigniorage to service its debt choosing between changing either the money growth rate the inflation tax rate or the reserve requirement ratio the inflation tax base in the former case we obtain standard unpleasant arithmetic in the long run a permanent open market sale results in higher money growth and higher long run inflation somewhat surprisingly it turns out that for a given money growth rate lower reserve requirements fund the government s interest expense associated with the lower reserve requirements is lower long run inflation and higher welfare compared with the money growth case the broad message is that reserve ratio arithmetic can be pleasant even when money growth arithmetic is not

life satisfaction dynamics with quarterly life event data using life satisfaction responses from australian panel data we examine the questions of when and to what extent individuals are affected by major positive and negative life events including changes in financial situation marital status death of a close relative and being the victim of crime the key advantage of our data is that we are able to identify these events on a quarterly basis rather than on the yearly basis used by previous studies we find evidence that life events are not randomly distributed that individuals anticipate major events to a large extent and that they fully adapt to many events within 12 months the estimates can be used to calculate monetary values needed to compensate individuals for life events using a new valuation methodology that incorporates these dynamic factors produces considerably smaller compensation valuations than those calculated using the standard approach

probability predictions of rising real gdp growth and inflation the usefulness of monetary indicators several recent studies have focused on the predictive power of the yield spread for future economic activity the current paper reformulates the work of estrella and mishkin 1998 by focusing on the usefulness of monetary variables for generating probability predictions of rising or falling real gdp growth and inflation besides redefining the dependent variables the independent monetary variables are allowed to include lagged information also the current paper considers the usefulness of the divisia monetary aggregates in the context of probit models for predicting the probability that real gdp growth or inflation will be increasing

are reserve requirements relevant for economic stabilization abstract the level of the required reserve ratio and the payment of interest on required reserves are irrelevant for economic stability 1 when the central bank appropriately adjusts its interest elasticity of supply of reserves or currency to offset changes in the required reserve ratio or in the interest rate paid on required reserves or 2 when economic agents form their price level expectations rationally conditional on the current interest rate

introduction to feature the price of access to better neighbourhoods paul cheshire and stephen sheppardseeing a feature concerned with house prices in this journal would probably leadmost economists to expect a set of papers focusing on houses as nancial assetsand the impact of house prices on consumption behaviour or they might expectto nd a real estate economics feature analysing what particular aspects of a housereally in uence its price at one level this feature is concerned with all theseissues although perhaps rather more with what contributes to the price of a housethan to the more nancial and macroeconomic issues collectively we think thesepapers support a much more ambitious claim however they show how the con sumption of a wide range of local public goods and amenities normally thought ofas being independent of income is in fact conditioned on household income inmuch the same way as is the consumption of normal private market goods moreover this process provides an important insight into the extent and incidenceof social segregation in cities and into how this essentially articulates spatially theoverall distribution of incomes in society certainly all three articles are concerned with house prices viewed in this waythe papers collectively add important insights to our understanding of the deter minants of house prices and how rapidly housing markets adjust to shocks theresults presented in clapp and ross 2004 strongly suggest house prices adjustrapidly to exogenous changes in demand this is reassuring in the context of thetwo other papers since the methodology of both implicitly assumes that there isequilibrium in housing markets similarly the paper by cheshire and sheppard 2004 shows how nonlinear the price functions are with respect to the attributesof houses it is only the very few best schools that generate substantial priceimpacts but in the case of the best schools the price premia they command can bereally very substantial indeed similarly the paper by gibbons 2004 providesvaluable evidence on the impact of local crime rates on house prices as the authorskilfully devises a methodology to avoid the pitfalls while being parsimonious withhis demands on data he shows that price discounts arise from visible neigh bourhood crime and social disorder rather than burglary an invisible crime butone that is more obviously harmful we argue however that together these papers support a more ambitious claim house prices are about much more fundamental economic and social issues thandinner party conversations or estate agents talk would credit the way in which the

an equilibrium analysis of central bank independence and inflation a dynamic equilibrium model is constructed to analyze the implications of different degrees of central bank independence in the main model agents are permitted to vote on the desired inflation and labor taxes to finance government spending multiple perfect foresight equilibria arise and one of them exhibits fluctuations in output investment and the inflation rates as a result of permitting agents to vote if instead of having agents vote each period on these parameters inflation and labor taxes in the model are set at fixed levels these fluctuations do not arise and a lower inflation rate can appear

optimal reserve requirements deposit taxation and the demand for money abstract we study welfare and equivalence relationships between two schemes for financing a recurrent real expenditure reserve requirement augmented seigniorage rrs and seigniorage deposit tax combinations sd the model we employ includes overlapping generations fiat currency and a risky physical asset its implications depend critically on whether it is specified so as to be diversifying so that fiat currency has value when the expenditure is financed via optimal taxation of asset returns if the specification is diversifying rrs is broadly equivalent to sd and an interior reserve ratio can be part of an optimal financing scheme if it is not the best rrs scheme involves an extreme reserve ratio produces a hyperinflation and is pareto dominated by a pure deposit tax scheme

valuing school quality better transport and lower crime evidence from house prices housing prices within urban areas exhibit highly localized variation that cannot be explained solely by differences in the physical attributes of dwellings we consider the role of local amenities and disamenities in generating price variation within urban areas focusing on three highly policy relevant urban issues transport accessibility school quality and crime our survey of the recent empirical literature highlights what is known and what is not known on these issues and considers the relevance and reliability of this evidence for policy design and evaluation although there are serious empirical challenges we argue that research on housing values based on careful research designs can offer credible estimates of the social value of place specific attributes and amenities

law enforcement and political participation italy 1861 65 abstract does tougher law enforcement positively affect political participation this paper addresses this question which hinges upon the causal impact of formal institutions on informal ones by using a historical event from 19th century italy this event was the pica law which was introduced in 1863 to fight a surge of criminal violence in southern italy and to ensure a safer environment for wealthy people the only ones allowed to vote at that time our main finding obtained using a spatial regression discontinuity technique in a diff in diffs framework is that voter turnout greatly increased in those areas where the pica law was applied compared with bordering and otherwise similar areas this result is confirmed by a number of robustness checks and placebo exercises and turns out to be persistent over time

reserve requirements and optimal seigniorage abstract this note presents a model of optimizing agents who chose to hold deposits at financial intermediaries which are required to hold fractional reserves of fiat money when the stock of fiat money is expanded the reserve requirement functions as a tax on deposits the combination of reserve requirements and inflation results in a lower steady state utility than a direct tax on deposits the optimal monetary policy when reserves are required is to minimize reserve requirements and inflate without limit the stock of fiat money

is murder bad for business evidence from colombia abstract this paper studies the effects of violent crime on market prices and size using plant level panel data in colombia to estimate causal effects i exploit reductions in violence driven by i

the role of money in two alternative models when is the friedman rule optimal and why abstract in models of money with an infinitely lived representative agent ilra models the optimal monetary policy is almost always the friedman rule in overlapping generations og models by contrast the friedman rule may not be optimal in this paper we use this difference in monetary policy prescriptions to help us identify and study the key difference between these two models as models of money we study the welfare properties of monetary policy in a simple og model under two very different money demand specifications and two alternative assumptions about the generational timing of taxes for money retirement we conclude that the key difference between ilra and og monetary models is that in the latter the standard method for constructing a monetary regime causes transactions involving money to become intergenerational transfers under alternative government fiscal monetary regimes that offset these intergenerational transfers the friedman rule is always optimal

competitive banks and the inflation tax abstract the purpose of this note is to show that the presence of a competitive banking sector has important quantitative implications for the revenue maximizing rate of inflation

monetary policy and bank regulations in an economy with financial innovations this is a study of financial innovations and moves towards the cashless society in a general equilibrium cash in advance model it is assumed that a subset of goods cash goods and check goods

estimates of the impact of crime risk on property values from megan s laws abstract we estimate the willingness to pay for reductions in crime risk using the location and move in dates of sex offenders we find significant effects of sex offenders locations that are geographically localized house prices within 0 1 miles of a sex offender fall by 4 percent on average we then use this finding to estimate the costs to victims of sexual offenses and find costs of over 1 million per victim far greater than previous estimates however we cannot reject the alternative hypotheses that individuals overestimate risks posed by offenders or that living near an offender poses significant costs exclusive of crime risk jel k42 r23 r31

the link between crime risk and property prices in england and wales evidence from street level data this paper uses street level data on property sales and crime rates for england and wales to investigate compensating differentials for crime risk my identification strategy relies on the use of non parametric regional time trends on various levels of spatial aggregation as well as various fixed effects for streets and wider areas to control for unobserved amenities and regional economic conditions the data comes from transaction data collected by the land registry and recently published crime maps for the whole of the uk my estimates which are robust to a range of sensible specification changes suggest that each case of anti social behaviour per ten population in the same street leads to an approximately 0 6 0 8 drop in property prices while a corresponding increase in violent crime decreases prices by roughly 0 6 1 6 and a corresponding increase in non violent crime by about 0 2 0 4 the majority of estimates are at the upper end of these intervals estimates for robbery burglary and vehicle c

macroeconomic activity and monetary policy actions some preliminary evidence monetary policy is conducted through open market operations loans at the discount window and changes in the reserve requirement structure the purpose of this paper is to formally investigate the notion that the effect of changes in reserve requirement ratios is different from the effect of other policy tools this is accomplished by decomposing the monetary base into those changes caused by changes in reserve requirement ratios and those caused by other monetary policy actions some preliminary evidence suggesting differential real effects from the policy tools is provided copyright 1992 by ohio state university press

macroeconomic sources of time varying risk premia in the term structure of interest rates according to intertemporal capital asset pricing models icapm in finance merton 1983 risk premia are the prices of risk built in assets priced according to their hedging capabilities against the uncertainties related to the relevant state variables in the economy as the uncertainties of the state variables change over time the prices of the risk related to the state variables and consequently the risk premia on assets in general vary over time too following the growing evidence of the failure of the expectations hypothesis and the existence of time varying risk premia in the term structure see shiller 1990 for a survey on the literature these equilibrium asset pricing models have received economists attention as an attractive theoretical framework for modeling risk premia in the term structure of interest rates for example breeden 1986 campbell 1986 1987 several empirical studies attempted to test the validity of these equilibrium asset pricing models of the term structure however due to the failure of the theoretical icapm in finance to identify the important state variables most of the studies employed empirical models that do not require a complete explicit representation of the state variables consequently those studies do not reveal any information about the importance of different macroeconomic forcing variables in the determination of time varying risk premia this paper investigates explicitly the linkage between time varying risk premia in the term structure and macroeconomic state variables in that respect the study is

unlocking amenities estimating public good complementarity abstract public goods may exhibit complementarities that are essential for determining their individual value our results indicate that improving safety near parks can turn them from public bads to goods ignoring complementarities may lead to i undervaluing the potential value of public goods ii overestimating heterogeneity in preferences and iii understating the value of public goods to minority households recent reductions in crime have unlocked almost 7 billion in property value in chicago new york and philadelphia still two fifths of the potential value of park proximity 10 billion remains locked in

the expectations hypothesis term premia and the canadian term structure of interest rates in this paper monthly data are used over the period 1960 7 to 1995 12 to examine the determinants of term premia implicit in the canadian t bill term structure of interest rates in sharp contrast to u s evidence the conditional variances of canadian macroeconomic variables are found to be insignificant predictors of term premia in the canadian t bill term structure the conditional variances of u s macroeconomic variables however are found to be important determinants of canadian term premia jel classification e43 g1 l hypothese des anticipations les primes de temps et la structure temporelle des taux d interet canadiens ce memoire utilise des donnees mensuelles de juillet 1960 a decembre 1995 pour examiner les determinants des primes de temps implicites dans la structure des taux d interet pour les bons du tresor canadiens contrairement a ce que l on trouve aux etats unis il semble que les variances conditionnelles des variables macroeconomiques canadiennes ne sont pas des predicteurs utiles de ces primes cependant il appert que les variances conditonnelles des variables macroeconomiques des etats unis sont des determinants importants de ces primes

spatial housing economics a survey this introduction to the virtual special issue surveys the development of spatial housing economics from its roots in neoclassical theory through more recent developments in social interactions modelling and touching on the role of institutions path dependence and economic history the survey also points to some of the more promising future directions for the subject that are beginning to appear in the literature the survey covers elements of hedonic models spatial econometrics neighbourhood models housing market areas housing supply models of segregation migration housing tenure subnational house price modelling including the so called ripple effect and agent based models possible future directions are set in the context of a selection of recent papers that have appeared in urban studies nevertheless there are still important gaps in the literature that merit further attention arising at least partly from emerging policy problems these include more research on housing and biodiversity

interest rate variability and economic performance some international evidence using data for short term and long term interest rates across a major group of industrial countries his paper studies the impact of interest rate variability on the cyclical behaviour of real output and the price level in these countries theory predicts that the increased variability of the interest rate stemming from a rise in the level of uncertainty has a negaive impact on he ouput demanded and supplied and in turn an ambiguous impact on the price level the empirical evidence is generally consistent with this prediction next the investigation attempts to shed some light on major sources of uncertainty underlying the interest rate variability focus in on he variability of monetary growth the exchange rate and the energy price some evidence on he relative contribution of these sources of uncertainty of the variability of the interest rate and in turn to the cyclical behaviour of real output and the price level across countries is provided

what does the term structure tell us about future inflation abstract this empirical analysis indicates that for maturities of six months or less the term structure of nominal interest rates provides almost no information about the future path of inflation but does provide information about the term structure of real interest rates however as maturities lengthen to nine and twelve months the nominal term structure begins to contain information about future inflation but ceases to provide information about the real term structure these results are explained by differences in the relative variability of expected future inflation changes and real term structure slopes at different points in the term structure

money and banking in a cash in advance economy this paper studies banking and financial innovations in a stochasti c general equilibrium model assuming the existence of two distinct types of goods cash goods which can only be purchased by cash and check goods which can also be purchased by checks drawn against interest bearing bank accounts the authors analyze the effects of changes in the payment s structure i e the share of check goods reserve requirements on banks and changes in the supply of reserves the authors find e g that an increased share of check goods and a decrease of the bank reserve ratio in general both lead to a decrease in the variance of the price level copyright 1988 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association