inflationary bias of the federal reserve system the creation of the federal reserve system coincides with a turning point in the inflationary history of the united states before 1914 there was no overall trend in the price level generally during war time periods the consumer price index increased significantly but during the intervening periods prices gradually declined to approximately their former levels however since the creation of the fed there has been an unmistakable and almost continuous upward trend in prices l

statistical discrimination and the early career evolution of the black white wage gap this article develops and tests a simple dynamic model of statistical discrimination the model improves on earlier static models both by allowing ex ante uncertainty about worker productivity to be resolved as on the job performance is observed and by generating several testable empirical implications these predictions are tested using a sample of young men from the national longitudinal survey of youth producing mixed evidence for the model the main empirical result is that no black white wage gap exists at labor force entry but that one develops as experience accumulates mainly because blacks reap smaller gains from job mobility

minimum wages and training revisited theory predicts that minimum wages will reduce employer provided on the job training designed to improve workers skills on the current job but it is ambiguous regarding training that workers obtain to qualify for a job we estimate the effects of minimum wages on both types of training received by young workers exploiting cross state variation in minimum wage increases much of the evidence supports the hypothesis that higher minimum wages reduce formal training to improve skills on the current job but there is little or no evidence of offsetting increases in training undertaken to qualify for or obtain jobs

reconciling the old and new census bureau education questions recommendations for researchers beginning with the 1990 census and the january 1992 current population survey cps the bureau of the census changed the emphasis of its educational attainment question from years of education to degree receipt using a matched sample from the 1991 and 1992 march cps this article addresses how to reconcile the old and new questions the effects of those methods on the estimated return s to education are then examined both the estimated linear return and the estimated college high school wage differential are slightly larger using information from the new question

the market value of outstanding government debt 1919 1975 abstract several new series on the market value of outstanding government debt are reported and their methods of construction described the new series on federal debt are compared with other existing estimates and are shown to be markedly superior to them

the highs and lows of the minimum wage effect a time series cross section study of the canadian law we examine the effects of minimum wage legislation in canada over the period 1975 93 for teenagers we find that a 10 increase in the minimum wage is associated with roughly a 2 5 decrease in employment we also find that this result is driven by low frequency variation in the data at high frequencies the elasticity is positive and insignificant the difference in the elasticity across the bandwidth has implications for the interpretation of employment dynamics as a result of minimum wage policy and experimental design in minimum wage studies it also provides a simple reconciliation of the new minimum wage research which reports very small negative or positive elasticities

the use of inputs by the federal reserve system reply in our 1983 paper we offered evidence that the law of demand operates inside the federal reserve in particular the fed faces a requirement that it return all revenues in excess of operating expenses to the treasury and this constraint lowers the price of amenities in terms of foregone profits the monetary authority accordingly buys more of the wage and nonwage perquisites of office than otherwise because we treated amenities as a monotone transformation of federal reserve system employment our theory suggested that the fed would pad its operating expenses by increasing the number of employees on its payroll moreover given that expansionary open market operations raise the interest income earned by the fed on its securities portfolio bureaucratic incentives would impart an inflationary bias to monetary policy in subsequent tests of the theory we found a positive and significant ceteris paribus relationship between changes in the monetary base and the size of the fed this result suggested that one motivation for expansions in the money supply is to finance the growth in the fed s bureaucracy we also found evidence that employment causes money in the sense of christopher sims 1972 but not the reverse and that the growth in fed employment over time does not appear to have been due to the fact that more people are required to manage larger money stocks in their comments john boyd and john strong suggest that there are methodological and empirical problems with our paper both comments focus primarily on the causality tests but each raises other issues designed to cast doubt on the strength of our results in what follows we discuss the main points raised by our critics i causality

the federal reserve as a bureaucracy an examination of expense preference behavior in this paper the federal reserve system is viewed as a bureaucracy with a bureau s incentive to increase expenses beyond the profit maximizing point moreover the bureau consists of divisions the district banks that exhibit their own expense prefer ence behavior an empirical investigation of labor demand by the boar d and district banks reported in this paper demonstrates that the fed eral reserve has engaged in expense preference behavior and that the centralization of the monetary authority amplified this type of behav ior copyright 1988 by ohio state university press

import price elasticities reconsidering the evidence recent economic geography and trade empirical studies based on monopolistic competition suggest high levels of trade price elasticities between 3 and 1 1 however price elasticity estimations in trade equations using unit values as price proxies usually lead to lower values of around unity we show that those inconclusive results may be due to some misspecification in these equations as well as measurement errors in prices when suit able instrumental variables are used within a panel of industrialized countries we obtain high price elasticities the majority ranging from i to 13 the highest estimates correspond to industries producing homogeneous goods jel classification c2 c3 and f 1

the market value of u s government debt monthly 1942 1980 abstract the market value of outstanding united states treasury debt is calculated on a monthly basis using price and par value data from the treasury bulletin separate series for treasury bills bonds certificates of indebtedness notes and total treasury debt are presented along with estimates of privately held treasury debt and gross federal debt the calculated market value series is compared to par value and an existing annual market value series

the other margin do minimum wages cause working hours adjustments for low wage workers this paper estimates the impact of the introduction of the uk minimum wage on the working hours of low wage employees using difference in differences estimators the estimates using the employer based new earnings surveys indicate that the introduction of the minimum wage reduced the basic hours of low wage workers by between one and two hours per week the effects on total paid hours are similar indicating negligible effects on paid overtime and lagged effects dominate the smaller and less significant initial effects within this estimates using the employee based labour force surveys are typically less significant

inflationary bias of the federal reserve system a bureaucratic perspective abstract the federal reserve system does not receive a budget from congress but instead finances its operation from interest payments on its government security portfolio this peculiar financing arrangement provides the foundation for a bureaucratic model of federal reserve official behavior the empirical section tests the bureaucratic model by analysing the fed s expenditure record since 1947 and its policy actions during periods of constitutional revision

rent seeking over time the continuity of capture recently in this journal skaggs and wasserkrug 1983 presented a model of bureau monitoring and related it to federal reserve behavior central to their argument was that bureau constituencies may pressure congressmen in maintaining the monitoring status quo if competition is to be expected between self interested parties for the property rights associated with regulation and regulatory commissions then bureau monitoring or lack of it should have value the capture of a commission by others is made more costly when information on a bureau s activities is restricted in general the issues surrounding bureau monitoring bring out the dynamic nature of the capture theory of regulation once captured commissions must remain captured if benefits are to accrue to rent seekers over time empirical support for the capture perspective however only relates personal characteristics of the appointed regulators commissioners to characteristics preferred by the regulated to reveal the dynamic nature of capture one must also account for the continuity of commission membership a captured regulatory body can only remain captured if there is a continuity of desirable characteristics by compiling characteristics of appointed members previous studies have examined the output of the appointment process that resulted from competition for positions on regulatory boards however the lack of synchronization between appointments to federal regulatory commissions and presidential elections suggests that the distribution of influence among self interested groups in the selection process may vary over time thus continuous successful capture is more easily achieved if appointees remain on boards for full terms and if possible land reappointments but the process is complicated further because regulators

long term impact of minimum wages on workers careers evidence from two decades of longitudinal linked employer employee data i acknowledge the support of the spanish ministry of the economy severo ochoa programme for centres of excellence in r d sev20150563 the aei spain and feder ue grant eco2016 76734 p

is environmental policy a secondary trade barrier an empirical analysis should international trade agreements be extended to include negotiations over environmental policy the answer depends on whether countries distort levels of environmental regulations as a secondary means of providing protection to domestic industries our results suggest that they do previous studies of this relationship have treated the level of environmental regulation as exogenous and found a negligible correlation between environmental regulation and trade flows in contrast we find that when the level of environmental regulation is modelled as an endogenous variable its estimated effect on trade flows is significantly higher than previously reported jel classification fl f14 f18 est ce que la politique environnementale est une barriere commerciale secondaire une analyse empirique est ce que les accords commerciaux internationaux doivent etre etendus pour couvrir la politique environnementale la reponse depend du degre de distorsion que les pays introduisent dans leur politique environnementale pour proteger leurs industries nationales nos resultats suggerent que cet impact est important des etudes anterieures de cette relation ont traite la politique environnementale comme exogene et ont montre qu il existe une co relation negligeable entre politique envir onnementale et flux commerciaux au contraire nous revelons que quand la politique environnementale est consideree comme variable endoge ne son effet sur les flux com merciaux est plus eleve de maniere significative que ce qu on a note anterieurement

the use of inputs by the federal reserve system comment in a recent article in this review 1983 william shughart and robert tollison s t argue that an important motivation for expansion of the money supply is to finance the growth of the fed s bureaucracy specifically that the level of fed employment is a determinant of the nominal monetary base using a public choice framework they present a money supply equation which yields a positive and statistically significant relationship between the monetary base and the total employment of the federal reserve system while this conclusion is certainly interesting the analysis suffers from a number of important conceptual empirical and methodological problems shughart tollison point out that the revenue side of the federal reserve s budget is closely linked to its monetary policy operations through open market purchases of securities the fed generates a stream of interest payments because monitoring of this income stream is difficult and costly congress has elected to impose the constraint that excess revenues be returned to the treasury as a result the fed pays its current operating expenses out of this current interest income and then turns over the remainder to the treasury because the central bank cannot retain the profits it generates s t argue that the fed will exhibit a form of expense preference behavior in purchasing more amenities than are justified by costminimizing money production in particular by expanding fed employment in addition since expansionary monetary policy increases opportunities for this profit amenities tradeoff fed policies are likely to have a built in inflationary bias to test this hypothesis s t develop a regression model that estimates the monetary base as a function of fed employment real gnp a number of financial variables and linear and nonlinear time trend variables using annual time series data from 1915 to 1981 they find that the employment variable is a significant determinant of the money supply with their model explaining about 95 percent of the variation in the monetary base to check that employment causes monetary expansion and not the other way around s t employ the test of causality developed by c w j granger 1969 and christopher sims 1972 this test estimates two sided

bureaucracy altruism and monetary policy it has recently been argued that the fiscal relationship between the federal reserve and the treasury by which the fed keeps a portion of its earnings imparts an inflationary bias to monetary policy because that relationship gives the fed an incentive to increase its earnings by increasing the monetary base this hypothesis is tested within the framework of a federal reserve objective function incorporating bureaucratic and social goals and no evidence is found to support it

the economic impacts of minimum wage laws a new look at an old question this article uses a radically different methodology to address the question of the impact of minimum wage laws on employment and earnings the methodology uses the adult wage structure which exists prior to a change in the federal minimum wage to identify the members of the subminimum wage population this allows the parameterization of the disemployment effects of the minimum wage amendment on the subminimum population and the spillover employment effects on the above minimum population the members of the subminimum population are found to experience considerably reduced employment probabilities and annual hours worked conditional on employment some evidence of above minimum spillover effects is also found the paper evaluates the impact of the minimum on the earnings distribution and concludes that the burden of the minimum wage falls most severely on females this effect on adult females is surprisingly neutral with respect to race the greatest beneficiaries of the minimum among the adult populati

monetary policy theory and practice in respect of the theory of monetary policy i am reminded of the comment that jacob viner made many years ago at a meeting of the american economic association about alfred marshall s economics what is new is highly unlikely at this late date also to be true and significant 1 consequently i shall restrict my remarks on theory to trying to summarize what i regard as the present intellectual position

impact of environmental regulations on trade in the main eu countries conflict or synergy in an increasingly integrated world with declining trade barriers environmental regulations can have a decisive role in shaping countries comparative advantages the conventional wisdom about environmental protection is that it comes at an additional cost on firms imposed by the government which may erode their global competitiveness however this paradigm has been challenged by some analysts in particular porter 1991 and porter and van der linde 1995 argue that pollution is often associated with a waste of resources and that more stringent environmental policies can stimulate innovations that may over compensate for the costs of complying with these policies this is known as the porter hypothesis while there is a broad empirical literature on the impact of trade on environment the empirical literature on the impact of environmental regulations on trade flows is relatively scarce very heterogeneous and presents mixed results the innovative feature of this paper is its attempts to estimate in a gravity setting augmented with a proxi of environmental stringency the impact of three major multilateral environmental agreements meas on 15 eu countries bilateral exports according to our estimates in the period 1988 2008 to be member of meas had a positive average impact on eu15 bilateral exports this evidence can be partly explained by a possible trade diversion effect with respect to countries that did not sign meas and a corresponding trade creation effect among members of the environmental agreements furthermore evidence coming from interaction effects estimates seems to show that for exporting countries having signed the unfccc and the montreal agreements partly mitigates by the amount of the estimated coefficient the negative impact of having a relatively more stringent environmental regulation on bilateral trade this result could have important policy implications for the future international trade environmental negotiations

sweatshops economic analysis and exploitation as unfairness the economic and moral defense of sweatshops given by powell and zwolinski j bus ethics 107 449 472 2012 has been criticized in two recent papers coakley and kates j bus ethics 117 553 558 2013 focus on putative weaknesses in the logic of powell s and zwolinski s argument preiss bus ethics quart 24 1 55 82 2014 argues that even granting the validity of their economic argument powell s and zwolinski s defense is without force when viewed from a kantian republican viewpoint we are concerned that sweatshop critics have misinterpreted the economic literature and overstated the conclusions that follow from their ethical premises we show that the best understanding of the current economic literature supports powell s and zwolinski s conclusions about the negative effects of sweatshop wage regulation and that it is unreasonable to reject economic analysis in moral argument against sweatshops even from a kantian perspective additionally we defend the theory of exploitation as unfairness given by wertheimer exploitation 1996 and show how economic analysis can be applied to that theory to identify cases of sweatshop exploitation

environmental regulation and french firms location abroad an economic geography model in an international comparative study abstract in this study we re examine the pollution haven hypothesis by a fresh take on both its theoretical and empirical aspects the originality of our work is twofold first we apply an economic geography model with the aim of deriving a rigorous specification for the impact of environmental regulation on firms location choice second we test a conditional logit model using french firm level data in an international comparative study we confirm evidence of a strong pollution haven effect for our pooled sample of countries receiving french direct investments however through a sensitivity analysis we validate this finding for developed countries and most of emerging economies and central and eastern european countries but not for most countries of the commonwealth of independent states and developing countries where a more stringent environmental regulation seems to attract investments furthermore we highlight a forward looking behavior of firms in terms of their location decision making

government borrowing and monetary accommodation this paper re examines the relationship between treasury borrowing and monetary growth examined previously with annual data by barro niskanen and hamburger and zwick our analysis based on quarterly data produces evidence of a positive and significant impact of total treasury borrowing upon the growth of the monetary base for the 1954 i 1961 ii and 1961 iii 1974 iv periods but an insignificant coefficient for the barro expenditure variable when the coefficient instability during the 1961 iii 1980 iv period is corrected by a dummy variable technique thy debt coefficient is positive and significant and remains stable for this two decade period

minimum wage policy and employment effects evidence from brazil the international literature on minimum wages greatly lacks empirical evidence for latin america in brazil not only are minimum wage increases large and frequent but they also have been used as both a social policy and an anti inflationary policy this paper estimates the effects of the minimum wage on wages and employment using panel data techniques and brazilian monthly household data from 1982 to 2000 a number of conceptual and identification questions are discussed for example the paper summarizes various strategies on how best to measure the effect of a constant national minimum wage presenting a menu of minimum wage variables that are then used to estimate wage and employment effects the paper also uses an employment decomposition that separately estimates the effect of the minimum wage on hours per worker and on the number of jobs robust results indicate that an increase in the minimum wage strongly compresses the wages distribution with small adverse effects on employment

what are the impacts of climate policies on trade a quantified assessment of the paris agreement for the g20 economies abstract following the paris agreement climate policies have been developing rapidly consequently affecting all economic agents to this extent trade implications and competitiveness effects have been of prime concern to energy and climate policy makers in this study we employ the gem e3 hybrid cge model to quantify the regional and sectoral trade impacts of climate mitigation scenarios in line with the paris agreement we assess a global implementation of ndcs and a global mitigation action consistent with the 2 c target the scenarios differ in both effort sharing and mitigation stringency yet we find a reduction of global trade activity under both policy regimes the key driver is the sharp decline of global demand for fossil fuels fossil fuels a highly traded good are substituted by domestically produced goods like electricity or by capital equipment that is traded with lower intensity decarbonization policies have an important impact on trade flows affected by the relative stringency of action and the key characteristics of the regional economies we identify regions that benefit from the emergence of new markets for clean energy goods contrary to the fossil fuel exporters as well as regions that achieve a comparative advantage due to their preparedness from early mitigation action

the impact of the introduction of the u k minimum wage on the employment probabilities of low wage workers this paper uses longitudinal data from three contrasting data sets matched labor force surveys the british household panel survey and matched new earnings surveys to estimate the impact of the introduction of the u k minimum wage in april 1999 on the probability of subsequent employment among those whose wages would have needed to be raised to comply with the minimum a difference in differences estimator is used based on position in the wage distribution no significant adverse employment effects are found for any of the four demographic groups considered adult and youth men and women or in any of the three data sets used jel j38 j23

bureaucracy altruisme and monetary policy a note from a forecasting perspective sets over the period 1916 1987 their structured critique is consistent with the earlier work of strong 1984 boyd 1984 allen mccrickard cartwright and delorme 1988 mester 1994 and others in general all question the findings of toma 1982 shughart and tollison 1983 boyes mounts and sowell 1988 and others that bureaucratic effects and institutional incentives have had a significant impact on the development and conduct of monetary policy an underlying issue in this debate is whether variables proxying bureaucratic or institutional effects emanating from the incentives contained in the structure

minimum wages on the job training and wage growth using data from the employment opportunities pilot project we examine the relationships between minimum wages wage growth and on the job training we find that minimum wage jobs exhibit less wage growth than other jobs particularly for men we find no evidence however of a unique minimum wage effect on training opportunities we conclude that indirect methods of proxying training with wage growth can be misleading as they fail to distinguish whether the reduced wage growth of workers on minimum wage jobs results from their receiving less training than other workers or whether it is strictly a result of the wage determination process

toward a new conception of the environment competitiveness relationship accepting a fixed trade off between environmental regulation and competitiveness unnecessarily raises costs and slows down environmental progress studies finding high environmental compliance costs have traditionally focused on static cost impacts ignoring any offsetting productivity benefits from innovation they typically overestimated compliance costs neglected innovation offsets and disregarded the affected industry s initial competitiveness rather than simply adding to cost properly crafted environmental standards can trigger innovation offsets allowing companies to improve their resource productivity shifting the debate from pollution control to pollution prevention was a step forward it is now necessary to make the next step and focus on resource productivity

discontinuous distributions and missing persons the minimum wage and unemployed youth the employment and earnings effects of the minimum wage on youth are analyzed by parameterizing the relationship between the distribution of market wage rates individuals would receive in the absence of the minimum and the observed distribution with the minimum estimates are based on individual data most econometric analysis rests on the assumption that random variables have continuous distributions but government programs and legislation often impose constraints on individual choice so that empirically observed distributions are discontinuous the minimum wage has such an effect on the distribution of observed wage rates most analysis of the effect on the minimum however is based on inferences from aggregate employment data and disregards these effects to evaluate the results of the minimum wage it is necessary to take account if its effect on employment and its effect on wage rates our analysis accounts explicitly for the effects of the minimum on observed distributions of employment and wage rates and makes these effects an integral part of the process by which the employment and wage impacts of the minimum are estimated the effect of the minimum is commonly presumed to be greater the higher it is relative to the distribution of wages that would be paid in absence of a minimum indeed most time series and cross section analysis of the effects of the minimum are based on relationships between employment and the ratio of the minimum wage to an average or median wage often an average adult wage but sometimes the average wage paid to employed youth 2 our analysis differs from these approaches in at least two respects first it is based on individual wage and

asymmetric industrial energy prices and international trade this paper measures the response of bilateral trade flows to differences in industrial energy prices across countries using a panel for the period 1996 2011 including 42 countries 62 sectors and covering 60 of global merchandise trade we estimate the short run effects of sector level energy price asymmetry on trade we find that changes in relative energy prices have a statistically significant but very small impact on imports on average a 10 increase in the energy price difference between two country sectors increases imports by 0 2 the impact is larger for energy intensive sectors even in these sectors however the magnitude of the effect is such that changes in energy price differences across time explain less than 0 01 of the variation in trade flows simulations based on our model predict that a 40 65 tco2 price of carbon in the eu ets would increase europe s imports from the rest of the world by less than 0 05 and decrease exports by 0 2

minimum wage effects throughout the wage distribution this paper provides evidence on a wide set of margins along which labor markets can adjust in response to increases in the minimum wage including wages hours employment and ultimately labor income not surprisingly the evidence indicates that low wage workers are most strongly affected while higher wage workers are little affected workers who initially earn near the minimum wage experience wage gains nevertheless their hours and employment decline and the combined effect of these changes on earned income suggests adverse consequences on net for low wage workers

footloose and pollution free in numerous studies economists have found little empirical evidence that environmental regulations affect trade flows in this paper we propose and test several common explanations for why the effect of environmental regulations on trade may be difficult to detect we demonstrate that whereas most trade occurs among industrialized economies environmental regulations have stronger effects on trade between industrialized and developing economies we find that for most industries pollution abatement costs are a small component of total costs and are unrelated to trade flows in addition we show that those industries with the largest pollution abatement costs also happen to be the least geographically mobile or footloose after accounting for these distinctions we measure a significant effect of pollution abatement costs on imports from developing countries and in pollution intensive footloose industries

three new empirical tests of the pollution haven hypothesis when environmental regulation is endogenous the validity of existing empirical tests of the pollution haven hypothesis phh is constantly under scrutiny due to two shortcomings first the issues of unobserved heterogeneity and measurement error in environmental regulation are typically ignored due to the lack of a credible traditional instrumental variable second while the recent literature has emphasized the importance of geographic spillovers in determining the location choice of foreign investment such spatial effects have yet to be adequately incorporated into empirical tests of the phh as a result the impact of environmental regulations on trade patterns and the location decisions of multinational enterprises remains unclear in this paper we circumvent the lack of a traditional instrument within a model incorporating geographic spillovers utilizing three novel identification strategies using state level panel data on inbound u s fdi relative abatement costs and other determinants of fdi we consistently find i evidence of environmental regulation being endogenous ii a negative impact of own environmental regulation on inbound fdi in pollution intensive sectors particularly when measured by employment and iii larger effects of environmental regulation once endogeneity is addressed neighboring environmental regulation is not found to be an important determinant of fdi

minimum wages and labor market prospects of women in recent years the field of labor economics has witnessed growth of interest in causes and consequences of female labor force participation principal areas of research include determinants of female wages and labor supply many empirical issues remain unresolved and research continues to focus on the likely ranges of such parameters as the own wage elasticity of hours supplied the cross elasticity with respect to spouse s income the rate of return to female schooling and the issue of self selection in observed earnings of working women one area which remains relatively unexplored is the impact of minimum wage legislation on employment prospects of females the issue of minimum wages is of special interest in the case of women first the proportion of labor force nonparticipation by females exceeds that of males consequently institution of an effective minimum wage plays to a larger audience of nonparticipating females than males it is likely that a significant portion of the positive labor supply response to minimum wages is in the form of previously nonparticipating females second as is well known female wages tend to be lower than those of males owing in part to 1 lower levels of female schooling and experience 2 intermittent life cycle patterns of labor supply and human capital accumulation 3 sorting of females into occupations that are conducive to intermittent behavior and 4 as several researchers suggest gender discrimination consequently women are more likely than men to experience wages that fall short of the legal minimum this study examines the consequences of minimum wages on female employment prospects of special interest is the likelihood of successful job search for women whose wages in the absence of legislation would be below the minimum it is commonly argued that minimum wages in competitive labor markets have the effect of hindering employment prospects of low wage workers this study based on a sample of microdata from the public use sample of the 1980 census proposes a simple framework in which this issue can be addressed in the context of a conventional model of labor supply

the impact of environmental policy on international competitiveness in manufacturing the aim of this study is to test the hypothesis that environmental stringency adversely affects the international competitiveness net exports in manufacturing sectors the model follows the standard factor endowment approach to explain the effects of environmental regulatory policy on net exports in different product based industries an econometric model is constructed which includes factor endowments and environmental regulations to examine how strict environmental policies impact export competitiveness a panel dataset of 10 organisation for economic co operation and development oecd countries over 17 years 1987 2003 was constructed for the modelling effort the study finds that environmental regulations can be a way to combat the flight of manufacturing out of developed countries if the output from these industries can be identified as environmentally friendly a positive relationship between net exports and environmental regulations was found for paper products wood products and textile prod

the effect of implicit contracts on the movement of wages over the business cycle evidence from micro data in this paper we address the question of whether wages are affected by labor market conditions in a manner more consistent with a contract approach than with a standard spot market model from a simple implicit contract model we derive implications about the links between wages and past labor market conditions using individual data from the current population survey and the panel study of income dynamics we find that an implicit contract model with costless mobility describes these links better than either a simple spot market model or an implicit contract model with costly mobility

historical considerations property rights and budgets a comment on the use of inputs by the federal reserve when considered in an alternative historical setting with a property right perspective the extended public choice model found in amcd offers strong confirmation for the s t view of monetary authority behavior

of finance and development neglected and unsettled questions abstract the article analyzes some of the neglected and still unsettled issues on the interrelationship of finance and development and in the subdiscipline of finance notably the implications of the dichotomy of formal and informal finance the modalities and sequencing of financial reform the challenge of maintaining competition in oligopolistic systems the scope for market related monetary policy instruments the case for autonomy of central banks and divestiture of their developmental role and revamping of their prudential functions it argues for a sharply focused country specific issues oriented research agenda

trade the pollution haven hypothesis and the environmental kuznets curve examining the linkages abstract this paper examines the extent to which the ekc inverted u relationship can be explained by trade and specifically the migration or displacement of dirty industries from the developed regions to the developing regions the pollution haven hypothesis phh using detailed data on north south trade flows for pollution intensive products the evidence for the phh is assessed emissions of 10 air and water pollutants are then estimated controlling for trade openness structural change and dirty north south trade flows evidence of pollution haven effects is found although such effects do not appear to be widespread and appear to be relatively small compared to the roles played other explanatory variables

the effect of minimum wages on youth employment in canada a panel study previous u s panel estimates of minimum wage effects have been criticized on the grounds that their identification rests on comparisons of low wage and high wage workers using canadian panel data for 1988 90 i compare estimates based on the traditional u s methodology with those based on samples of low wage workers exclusively the results would appear to vindicate the critics the minimum wage effect from the latter approach is virtually zero yet estimates from different subgroups of low wage workers indicate that there is a significant disemployment effect for those with longer low wage employment histories this highlights the heterogeneity within low wage workers and the importance of carefully defining the target group not solely based on workers wages

deficits and money growth in the united states a comment joines 1985 argues that the federal reserve accommodates war induced deficit spending but not non war induced deficit spending using a first difference form of a reaction function to obtain a stationary time series of the monetary base we find that the federal reserve has accommodated federal government deficit spending in the post world war ii period

the influence of elections on federal reserve behavior a political business cycle is tested in a monetary reaction function positive evidence is a result of the 1930s and 1940s and not post war elections in addition there is no evidence of such a cycle in a rational expectations model

minimum wages and teenagers enrollment employment outcomes a multinominal logit model this paper tests the hypothesis that the effect of minimum wage legislation on teenagers education decisions is asymmetrical across family income classes with the legislation inducing children from low income families to reduce their levels of schooling and children from higher income families to increase their educational attainment we use data from the national longitudinal surveys nls and exploit the fact that although the minimum wage is fixed at a point in time its value relative to adult wages varies across areas multinomial logit models of teenagers enrollment employment outcomes are estimated the hypothesis appears to be confirmed for white teens however the evidence for nonwhites is more ambiguous

environmental regulations in gravity equations evidence from europe one implication of the pollution haven hypothesis is that countries export more by applying more lenient environmental regulations most studies that apply gravity type equations do not find robust support for environmental regulations to affect bilateral exports in this paper we show that one can obtain robust negative effects of stringency as long as gravity equations are well specified with respect to theory our results based on the european data are both very consistent with us studies on environmental regulations and another line of very recent studies that infer non biased price or substitution elasticities from trade equations we show that more stringent environmental regulations when depicting a pure cost effect are reducing exports the coefficient is even larger in the case where exporting countries are central and eastern european countries comparing to the eu15 further we show that there is no significant difference in the impact of regulations on trade in case of dirty and clean sectors finally when using gmm estimation our environmental stringency coefficient gets significantly reinforced

impacts of the us dollar usd exchange rate on economic growth and the environment in the united states abstract this paper investigates the impact of the usd exchange rate on economic growth and the environment in the united states by using a structural vector autoregression svar model the analysis is based on quarterly country level data on the real trade weighted us dollar index petroleum consumption renewable energy consumption net imports of pollution intensive products real gdp and co2 emissions during the 1989 2015 the result shows that the usd exchange rate is positively related to petroleum consumption net imports of the united states in pollution intensive industries with major u s trading partners real gdp and co2 emissions moreover petroleum consumption increases real gdp and domestic co2 emission levels while net imports of pollution intensive products decrease real gdp and does not significantly affect co2 emissions

the use of inputs by the federal reserve system comment in a recent issue of this review 1983 william shughart and robert tollison s t hypothesize that the fed pursues a bureaucratic objective which results in an inflationary bias in monetary policy they test this hypothesis empirically and conclude that it is supported by the data this comment however shows that their statistical procedures are flawed and when corrected provide little support for the inflationary bias theory the data actually suggest a different but not very interesting or surprising interpretation

the use of inputs by the federal reserve system an extended model recently it has been argued that bureaucratic incentives play an important role in the formulation of policy and the inflationary bias of the federal reserve system shughart and tollison 1983 hereafter s t 1 in particular s t maintain that the fed can retain profits denominated in amenities but not in dollars as a result of the congressional constraint that excess profits be returned to the treasury this constraint provides bureaucratic incentives for the fed to purchase more amenities than a for profit organization and ex plains s t 1983 291 in part the fed s apparent inflationary bias expansionary monetary policy then enlarges the fed s profit amenities choices and allows it to pursue its goal of bureaucratic enhancement s t assume that the dollar value of these amenities is a monotonic transformation of fed employment using this public choice framework they develop a model in which the monetary base is a function of a number of variables including employment in the federal reserve system sysemp

the minimum wage and the great recession evidence of effects on the employment and income trajectories of low skilled workers abstract we estimate the minimum wage s effects on low skilled individuals employment and income trajectories following the great recession our approach exploits two dimensions of the data we analyze first we compare individuals in states that were fully bound by the 2007 to 2009 increases in the federal minimum wage to individuals in states that were not second we use variation in the minimum wage s bite across skill groups to separate our samples into target and within state control groups using the 2008 panel of the survey of income and program participation we find that binding minimum wage increases had significant negative effects on the employment and income growth of targeted workers although there are important limitations to our research designs our estimates are robust to adopting a range of alternative strategies to construct our analysis samples and to account for variation in the great recession s underlying severity across states in aggregate our estimates suggest that this period s minimum wage increases reduced aggregate employment rates by at least half of a percentage point in states that were bound by the federal minimum wage increases because our estimates are large relative to what one would infer from past research we emphasize the relevance of the historical episode we analyze

a reassessment of the new economics of the minimum wage literature with monthly data from the current population survey we estimate the employment effects of federal minimum wage increases using monthly current population survey cps data from 1979 through 1997 we find that the empirical differences in the new minimum wage literature based on cps data primarily can be traced to alternative methods of controlling for macroeconomic conditions we argue that the macroeconomic controls commonly included in models where no employment impact is found are inappropriate we consistently find a significant but modest negative relationship between minimum wage increases and teenage employment using alternative controls or allowing employer responses to the policy to occur with some delay

the political economy of the fair labor standards act of 1938 this paper examines the congressional passage of the american minimum wage law the fair labor standards act of 1938 voting on the act is modeled as a function of the concentration of the constituencies for minimum wage legislation north south differentials and legislator ideology it is shown that the house radically altered the final content of the bill abandoning a proposed wages and hours board with discretionary powers to determine minimum wages in favor of a flat rate following the objections of several interest groups north south divisions over the bill had little influence over congressional voting and the influence of constituent groups increased relative to legislators ideology as the bill became an important election issue

effects of the minimum wage on employment dynamics the voluminous literature on minimum wages offers little consensus on the extent to which a wage floor impacts employment we argue that the minimum wage will impact employment over time through changes in growth rather than an immediate drop in relative employment levels we show that commonly used specifications in this literature especially those that include state specific time trends will not accurately capture these effects using three separate state panels of administrative employment data we find that the minimum wage reduces job growth over a period of several years this finding is supported using several empirical specifications

the impact of minimum wages on job training an empirical exploration with establishment data human capital theory suggests that workers may finance on the job training by accepting lower wages during the training period minimum wage laws could reduce job training then to the extent they prevent low wage workers from offering sufficient wage cuts to finance training empirical findings on the relationship between minimum wages and job training have failed to reach a consensus previous research has relied primarily on survey data from individual workers that typically lack both detailed measures of job training and important information about the characteristics of firms this study addresses the issue of minimum wages and on the job training with a unique employer survey we find no evidence indicating that minimum wages reduce the average hours of training of trained employees and little to suggest that minimum wages reduce the percentage of workers receiving training

the effects of social security taxes and minimum wages on employment evidence from turkey using worker level panel data for the period from 2002 to 2005 the author analyzes the separate employment effects of increases in the social security taxes paid by employers and increases in the

market wages and youth crime to study the problem of widespread youth crime i analyze a timeallocation model in which consumers face parametric wages and diminishing marginal returns to crime the theory motivates an econometric model that i estimate using data from the national longitudinal survey of youth my estimates suggest that youth behavior is responsive to price incentives and that falling real wages may have been an important determinant of rising youth crime during the 1970s and 1980s moreover wage differentials explain a substantial component of both the racial differential in criminal participation and the age distribution of crime

is environmental efficiency trade inducing or trade hindering abstract global efforts to identify strategies for sustainable economic growth and development underline the need for understanding important links between environmental policies and international trade in this paper by constructing an environmental efficiency index for 111 countries from 1980 to 2009 we are able to empirically test for one such link an improvement in the environmental efficiency index in terms of carbon dioxide emissions reflects a decrease in the cost of efforts to mitigate the environmental costs associated with growth countries that improve their environmental efficiency are found to experience strong international trade effects both through increased exports and increased imports while the positive link between efficiency improvements and exports is supportive of the porter hypothesis the positive link between efficiency improvements and imports is supportive of strong positive income effects on account of environmental efforts these results which are robust to alternative estimation strategies lend strong support to global efforts to improve countries environmental efficiencies

are the effects of minimum wage increases always small new evidence from a case study of new york state the authors estimate the effect of the 2004 6 new york state nys minimum wage increase from 5 15 to 6 75 per hour on the employment rates of 16 to 29 year olds who do not have a high school diploma using data drawn from the 2004 and 2006 current population survey they employ difference in difference estimates to show that the nys minimum wage increase is associated with a 20 2 to 21 8 reduction in the employment of less skilled less educated workers with the largest effects on those aged 16 to 24 their estimates imply a median employment elasticity with respect to the minimum wage of around 0 7 large relative to previous researchers estimates the authors findings are robust to their choice of geographically proximate comparison states the use of a more highly skilled within state comparison group and a synthetic control design approach moreover their results provide plausible evidence that state minimum wage increases can have substantial adverse labor demand effects for low skilled i

minimum wage impacts on youth employment transitions 1993 1999 abstract the longitudinal nature of the master file of the survey of labour and income dynamics slid for the period 1993 9 enables comparing transitions from employment to non employment for individuals affected by minimum wage changes with appropriate comparison groups not affected by minimum wages this is based on the large number 24 of minimum wage changes that have occurred across the different provincial jurisdictions in canada over the 1990s the results indicate that the minimum wage increases have increased the transition from employment to non employment of employed low wage youths who are at risk of being affected by a minimum wage increase by around 6 percentage points ranging from 4 to 8 percentage points these disemployment effects in turn imply minimum wage elasticities of about 0 4 ranging from 0 3 to 0 5

environmental regulation and the export dynamics of energy technologies abstract the pollution haven hypothesis affirms that an open market regime will encourage the flow of low technology polluting industries toward developing countries because of potential comparative advantages related to low environmental standards in contrast the hypothesis suggested by porter and van der linde claims that innovating firms operate in a dynamic competitive situation which allows global diffusion of environmental friendly technologies environmental regulation may represent a relevant mechanism through which technological change is induced in this way countries that are subject to more stringent environmental regulations may become net exporters of environmental technologies this paper provides new evidence on the evolution of export flows of environmental technologies across different countries for the energy sector advanced economies particularly the european union have increasingly focused on the role of energy policies as tools for sustaining the development path the kyoto protocol commitments together with growing import dependence on energy products have brought attention to the analysis of innovation processes in this specific sector the analysis uses a gravity model in order to test the determinants and the transmission channels through which environmental technologies for renewable energies and energy efficiency are exported to advanced and developing countries our results are consistent with the porter and van der linde hypothesis where environmental regulation represents a significant source of comparative advantages what strongly emerges is that the stringency of environmental regulation supplemented by the strength of the national innovation system is a crucial driver of export performance in the field of energy technologies

the nature of minimum wages and their effectiveness as a wage floor in costa rica 1976 1991 abstract this study describes costa rica s complex minimum wage system and its evolution over 1976 1991 examines the trend in minimum wage to average wage in eight industries and compares the number and characteristics of workers who earn below the minimum wage over these 16 years in the covered and uncovered sectors we conclude that noncompliance is a major problem on average one third of the workers in the legally covered sector earn below the minimum wage over this period moreover the same proportion earns below the minimum wage in the uncovered sectors this evidence indicates that the law may fail its intent of assuring an adequate salary to workers without bargaining power

does host market regulation induce cross border environmental innovation this paper evaluates the effect of host country environmental policy stringency on the offshoring of environmental patents for 2000 top world r d performers it is shown that a more stringent environmental regulation triggers both the extensive and intensive margin of patent offshoring in the field of environmental technologies results are robust to various different specifications alternative definitions of innovation offshoring and of regulation restrictions and to the consideration of possible endogeneity of regulation it is suggested inter alia that r d subsidies and non market based regulatory measures are more important than market based instruments as drivers of cross border environmental innovation length 26 pages

labor market search and schooling investment we generalize a search matching and bargaining model to allow individuals to acquire productivity enhancing schooling prior to labor market entry in general search frictions and weakness in bargaining position contribute to underinvestment in schooling from an efficiency perspective using estimates of a general equilibrium version of the model in which firm vacancy creation decisions are included we find that minimum wages and schooling subsidies improve aggregate welfare but have very different welfare impacts across the ability distribution in particular policies that maximize the average welfare of workers have strongly negative effects on the welfare of the least able

deficits and money growth in the united states 1872 1983 abstract this paper reports empirical evidence on the relation between government budget deficits and the growth of high powered money in the united states high powered money growth appears to be positively related to war spending during periods when such spending is a substantial fraction of gnp there is little evidence that the growth of high powered money is related to the non war government deficit measured either in cash or in real terms after controlling for the level of overall economic activity

factors affecting monetary policy in an era of inflation abstract a money supply reaction function is developed and estimated within the context of an is lm framework to test the responsiveness of the federal reserve to the government budget restraint and certain parameters of the model the results reveal that a large portion of the recent expansion of the monetary base may be attributed to increases in government debt and provide an essential first step in quantifying the inflationary impact of deficits the monetary base is also expanded in response to increases in inflationary expectations and previous increases in the monetary base but is not statistically correlated to changes in the unemployment rate or potential national income or to rises in interest rates caused by sources other than higher inflationary expectations previous monetary policy or the treasury borrowing requirement

lobbying for minimum wages using a common agency lobbying framework this paper illustrates how the minimum wage set reflects the interaction between economic and political factors and under what circumstances will the policymaker be induced through lobbying to change the minimum wage specifically when the labor demand elasticity is large lobbying is successful in inducing the policymaker to set the minimum wage in accordance with her political ideology however the paper also shows the conditions under which lobbying will reverse the ideological preference and induce a business friendly government to increase the minimum wage empirical analysis on a panel data for ten canadian provinces gives considerable support for theoretical predictions the real minimum wage decreases in skill adjusted union density and political ideology while larger labor demand elasticity reinforces the influence of political ideology in the presence of lobbying jel j38 d72 d78

the long term effects of youth unemployment using nlsy data we examine the long term effects of youth unemployment on later labor market outcomes involuntary unemployment may yield suboptimal investments in human capital in the short run a theoretical model of dynamic human capital investment predicts a rational catch up response using semiparametric techniques to control for the endogeneity of prior behavior our estimates provide strong evidence of this response we also find evidence of persistence in unemployment combining our semiparametric estimates with a dynamic approximation to the lifecycle we find that unemployment experienced as long ago as ten years continues to affect earnings adversely despite the catch up response

modelling the impact of environmental regulations on bilateral trade flows oecd 1990 1996 since the early seventies an increasing attention has been paid to the impact environmental polict nmight have on foreign trade one of the most important issues is whether countries with relatively strict environmental regulations tend to experience a deterioration of international competitiveness and thus a fall in exports and a rise in imports of the pollution intensive commodities or on the other hand benefit from the improvement in environmentally more sensitive industries so far most empirical studies have concluded that the proportion of environmental costs to the total production costs is still so marginal that environmental policies have hardly any effect on comparative advantage patterns and thus on foreign trade one of the few exceptions is van beers and van den bergh 1997 who found that stricter regulations have some negative impact on bilateral trade flows between oecd countries the aim of this paper is to show that tyhis outcome is partly due to model mis specification the analysis id based on a triple indexed model and on its variants it is found that as soon as both the importing and exporting country specific effects are taken into consideration the relationship between stricter regulations and foreign trade becomes statistically insignificant this suggests that environmental costs do not have a real impact neither negative nor positive on foreign trade

a re examination of the impact of the uk national minimum wage on employment early work on the national minimum wage nmw suggested that policymakers in the uk had succeeded in raising the pay of low paid workers without impairing their employment prospects this paper shows that when we focus on the most vulnerable workers part time females the nmw appears to be associated with reductions in employment retention these negative impacts were evident when the nmw was introduced and also when it was increased faster than average wages in the mid 2000s we also show that these falls in employment among part time females are exacerbated by the recession

minimum wage effects in the longer run exposure to minimum wages at young ages could lead to adverse longer run effects via decreased labor market experience and tenure and diminished education and training while beneficial longer run effects could arise if minimum wages increase skill acquisition evidence suggests that as individuals reach their late 20s they earn less the longer they were exposed to a higher minimum wage at younger ages and the adverse longer run effects are stronger for blacks if there are such longer run effects of minimum wages they are likely more significant than the contemporaneous effects on youths that are the focus of research and policy debate

are workers permanently scarred by job displacements this paper investigates whether workers suffer lasting scars following job displacements using david t ellwood s 1982 terminology scars represent persistent effects whereas blemishes are transitory adjustments which dissipate over time more precisely dislocated individuals are defined as scarred if they continue to earn less or to be unemployed more than their nondisplaced counterparts even after the conclusion of a several year adjustment period

criminal behaviour and youth in the labour market the case of the pernicious minimum wage this paper empirically tests the relationship between variations in uniform crime reports ucr index crime rates for teenagers 16 19 years of age with changes in the real minimum wage adjusted for industry coverage in the united states for the period 1960 1987 the analysis reveals that there exists a positive relationship between changes in the real minimum wage and teenage criminal homicide forcible rape and motor vehicle theft crime rates these findings are consistent with the empirical evidence concerning the impacts of the minimum wage on youth labour market opportunities and also with the theoretical ad empirical evidence regarding the incidence of criminal activity made as an occupational choice decision formulated under risk and uncertainty however the results indicate no impact of the minimum wage on the other teenage ucr index crime rates as found by hashimoto 1987 the evidence also suggests that variations in real criminal justice expenditures per capita reduce teenage propety crime ra