bluuebunny/crossref_metadata_2025 huggingface dataset:
INCREASED INDUSTRIAL USES OF AGRICULTURAL COMMODITIES POLICY, TRADE AND ETHANOL
Authors: LEE HYUNOK , GLAUBER JOSEPH W. , SUMNER DANIEL A.
Published: January 2010

Using agricultural feedstocks for industrial products affects domestic and international agricultural markets, all of which are encumbered with complex policies. This article examines the interaction of three seemingly unrelated policies: the Clean Air Act, the U.S. corn program, and European Union agricultural subsidies. More ethanol production, resulting from new regulations associated with the Clean Air Act, increases the use of U.S. corn and increases the supply of corn gluten feed, an ethanol co‐product. Corn gluten feed is primarily exported to Europe under a loophole in European Union trade barriers. But recent reform of European Union farm policy will lower the price of the European grain for which corn gluten feed is a substitute. This development lowers prices for a major ethanol co‐product and thus makes ethanol itself less profitable just as the demand for the fuel is expanding. NAFTA, GATT, and new technologies also play cameo roles in the story.
HARM REDUCTION, RATIONAL ADDICTION, AND THE OPTIMAL PRESCRIBING OF ILLEGAL DRUGS
Authors: STEVENSON RICHARD
Published: January 2010

Harm reduction (HR) policy is designed to reduce the social, medical and economic cost of illegal drug use to users and to society at large. It is the most important recent development in international drug policy. However, in the United States and elsewhere, some fear that HR facilities such as needle exchanges and methadone maintenance programs may increase drug consumption and the risk of addiction. This is most likely if users are rational, forward‐looking utility maximizers as in the Becker‐Murphy model (1988). The tendency for HR policy to increase drug consumption may be strong or weak, depending on the type of drug and the elasticity of demand with respect to the full cost of drug use. The model predicts that the effects will differ between social groups and that there is an optimal prescribing policy for addicts who legally receive drugs in treatment programs. Evidence suggests that clinicians tend to prescribe sub‐optimally.
EFFECT OF SURVEY CONDITIONS ON SELF‐REPORTED SUBSTANCE USE
Authors: HOYT GAIL MITCHELL , CHALOUPKA FRANK J.
Published: January 2010

This paper examines the impact of survey conditions on the self‐reported use of marijuana, cocaine, and alcohol in the 1984 and 1988 waves of the National Longitudinal Survey of Youth (NLSY). The analysis obtains probit estimates of lifetime and current participation rates and ordered probit estimates for the current frequency of use. The results clearly indicate that the manner in which the NLSY survey is administered significantly affects the self‐reported substance use data. The presence of others at administration, self‐administration, and data collection by telephone interview are particularly important influences.
CAN CHINA'S “MINI‐BANG” SUCCEED?
Authors: Lin Justin Yifu
Published: January 2010

Despite the phenomenal success of China's economic reform, the Chinese economy encounters a series of increasingly perilous problems, such as the recurrence of a “boon‐and‐bust” cycle, inflation, corruption, and regional disparity. This paper argues that the root of these problems is the discrepancy between the reforms in the macropolicy environment and the reforms in the micro‐management institution and resource allocation system. In October 1993, the Chinese government introduced a reform package in a bid to make the macro‐policy environment more consistent with the liberalized micro‐management institution and resource allocation system. However, the traditional macro‐policy environment was formed endogenously to facilitate implementing the “catching‐up and forging‐ahead” development strategy. Unless, the Chinese government abandons that strategy, it cannot complete the reforms in the macro‐policy environment and it cannot uproot the problems appearing in the reform process.
MARKETS AND THE ENVIRONMENT: A CRITICAL REAPPRAISAL
Authors: Smith Fred L.
Published: January 2010

The environmental problem is no different from any other economic problem. The basic problem is scarcity. Wants are unlimited while resources are limited. Once we recognize our inability to satisfy all of our ecological wants, how do we decide which wants we will satisfy? Most efforts to address environmental concerns have used political institutions to answer this question and to devise policy responses. Environmental concerns have been addressed in the same manner that socialist nations sought to address broader economic concerns.

This paper argues that such policies cannot succeed in the environmental realm any better than they did in the broader economic realm. Whether the political approach chosen relies on command‐and‐control or “market‐based” mechanisms (eco‐taxes or eco‐quotas) matters little in resolving government's inability to prioritize. The dispersed nature and enormity of information needed to prioritize risks and the inability of government to create the rich system of incentives necessary to mobilize human ingenuity renders effective government controls infeasible.

This paper argues for greater attention to environmental problems but concludes that we can better address environmental quality by integrating ecological resources into the economy via ecological privatization. This property rights approach to environmental policy—“free market environmentalism”—may entice more economists to address the important environmental questions and devise more appropriate solutions.
IMPROVING ENVIRONMENTAL POLICY: ARE MARKETS THE SOLUTION?
Authors: Hanemann W. Michael
Published: January 2010

While market approaches are clearly valuable for improving U.S. environmental policy, they cannot solve all of the problems, and not necessarily the most difficult ones. They can ensure that a given total abatement is achieved at minimum cost. But, if pollution damages depend on how abatement effort is allocated among polluters, this is not necessarily the most desirable outcome. One also needs to be sure that the potential gains from trade implicit in market solutions will actually be realized within some given time; the empirical evidence here is not necessarily promising. Rather than how aggregate abatement should be distributed among polluters, the chief difficulty often lies in determining how much overall abatement is required. A key factor that economists tend to overlook is the difficulty of ascertaining just how benefits vary with abatement effort. Uncertainty and risk aversion in connection with the marginal benefit curve may explain regulatory actions that are otherwise hard to justify.
THE GLOBALIZATION OF INVESTMENT
Authors: Koechlin Timothy
Published: January 2010

This paper questions the commonplace assumption that the accumulation of capital has become a global phenomenon. Evidence suggests that, far from transcending the boundaries of the nation state, productive investment remains an essentially national phenomenon. The great bulk of investment is domestic investment undertaken by domestic firms. Little evidence exists to support the claim that investment decisions are sensitive to international profit rate differentials. Furthermore, strong evidence suggests that the nationality of a multinational corporation significantly influences its likely pattern of foreign investment. Data indicate that sweeping assertions about the globalization of capital provide a poor basis for understanding both the process of capital accumulation and its implications for workers, communities, and policymakers.
A SECURITIES TRANSACTIONS TAX AND CAPITAL MARKET EFFICIENCY
Authors: Kupiec Paul H.
Published: January 2010

This paper revisits the debate on the securities transaction tax (STT). The analysis uses Tobin's (1984) taxonomy of financial market efficiency to examine the potential effects of such a tax and concludes that a STT probably would not enhance the overall functioning of financial markets.
THE IMPACT OF CIGARETTE ADVERTISING ON CONSUMER SURPLUS, PROFIT, AND SOCIAL WELFARE
Authors: Tremblay Carol Horton , Tremblay Victor J.
Published: January 2010

This study estimates the effect of U.S. cigarette advertising on social welfare. Because economists hold different beliefs about the nature of advertising, the analysis uses three different empirical models to test the welfare implication of cigarette advertising. Each model employs estimates of a demand equation and a supply relation to calculate a single point estimate of the impact of advertising on profit, consumer surplus, and total surplus. Bootstrapping generates confidence intervals for each welfare estimate. The results indicate that the cigarette industry is not competitive and that advertising significantly increases market power. Further, advertising significantly reduces consumer surplus if it is either purely persuasive or purely informative but has no significant effect on total surplus.
WHAT CAN ECONOMIC ANALYSIS CONTRIBUTE TO THE ‘SUSTAINABILITY’ DEBATE?
Authors: Lesser Jonathan A. , Zerbe Richard O.
Published: January 2010

Economics generally, and benefit‐cost analysis in particular, are not substitutes for values. They are tools of analysis that rest on assumptions about values. The primary role for economics in normative analysis is to provide information about efficiently achieving that which is valued, not to make the decision. The major economic tool for analyzing normative issues is benefit‐cost analysis. This paper considers the role of benefit‐cost analysis in addressing the sustainability debate. The notion of “sustain‐ability” raises concerns about values held by society. The analysis here addresses several issues within the sustainability debate: concerns about intergenerational equity including the appropriate discount rate for projects with environmental consequences; implications for burdens on future generations; and the moral basis for benefit‐cost analysis. The authors argue that the correct discount rate for all such projects is the social rate of time preference, and that suggestions for using lower discount rates result from attempting to prevent inequities by adjusting prices. Additionally, the authors argue that economic analysis, especially benefit‐cost analysis, can play a useful role in providing information to decision makers, who ultimately will face resource allocation issues as they seek to implement policies promoting sustainability.
TYING, BANKING, AND ANTITRUST: IT'S TIME FOR A CHANGE
Authors: White Lawrence J.
Published: January 2010

The anti‐tying section (Sec. 106) of the Bank Holding Company Act of 1970 severely limits U.S. banks' or bank holding companies' ability to link one product or service to another. Though the provisions of Sec. 106 resemble the anti‐tying provisions of the U.S. antitrust laws, the latter are considerably less restrictive and more flexible. Sec. 106 represents a misguided legislative effort to deal with a perceived problem of banks' market power. Though tying can be a manifestation of market power, it is more likely—especially for banking—to represent efficient combinations of complementary components. Regulatory and judicial enforcement of Sec. 106 surely has seriously inhibited the flexibility and efficiency of bank pricing and product offerings. A simple solution to this legislative over‐regulation is to repeal Sec. 106 and instead extend the reach of the antitrust laws to cover abusive tying by banks.
COMPARING PARTIAL AND GENERAL EQUILIBRIUM ESTIMATES OF THE WELFARE COST OF INFLATION
Authors: Gillman Max
Published: January 2010

Reserve banks worldwide have been moving towards zero inflation policies. Confusion clouds the welfare cost of maintaining such inflation policies despite the best attempts at clarification. Monetary theory research has shifted from partial to general equilibrium economies. This shift has left the partial equilibrium estimates of the welfare cost of inflation below most of the general equilibrium estimates. Put on a comparable basis, partial equilibrium estimates compare more closely with the general equilibrium estimates. Furthermore, evidence suggests that integration under the money demand function appears applicable in general equilibrium economies. Finally, the estimates depend on the elasticities of money demand and the underlying structural parameters.
TIME, MONEY, AND OPTIMAL CRIMINAL PENALTIES
Authors: Baum Sandy , Kamas Linda
Published: January 2010

The economic approach to optimal criminal penalties measures the welfare effects of crime and punishment in dollar terms, ignoring differences in the marginal utility of money among people. This paper alternatively proposes using time as the unit of measure in determining optimal criminal penalties, measuring the costs and benefits of crime in hours or days instead of dollars. The policy implications differ substantially from those in the existing economic literature. Equal prison terms impose similar time costs on all individuals rather than being more costly for those with higher foregone earnings. Equal fines impose the same cost on all individuals in the dollar‐based economic models but in a time‐denominated system are costlier to those who require more time to earn the money to pay the fines. In principle, one can use either money or time in setting penalties. However, time‐based penalties are more consistent with the fundamental and widely held principles of justice on which the U.S. legal system rests.
ANALYZING POSTSECONDARY RETURNS: DOES EDUCATIONAL LOAN DEFAULT PLAY A ROLE?
Authors: Boyd Laura A.
Published: January 2010

The economic benefits of a traditional college education relative to a high school degree are well known to students and economists alike. However, little is known about the economic returns associated with associate and vocational degrees. Using a large micro‐data set of former guaranteed student loan borrowers, this paper analyzes post‐schooling returns for bachelors as well as associates and vocational students. The analysis further extends the existing literature by controlling for individual characteristics that income studies typically do not measure. By including the default status of the educational loan used to finance the postsecondary education, the intrinsic individual characteristics of commitment and initiative are controlled for and are found to significantly increase earnings.
EXTERNAL ECONOMIES IN TAIWAN'S MANUFACTURING INDUSTRIES
Authors: Chan Vei‐Lin , Chen Been‐Lon , Cheung Kee‐Nam
Published: January 2010

This paper presents estimates of indexes of internal returns to scale and external economies for two‐digit manufacturing industries in Taiwan. Estimating the returns to scale indexes involves using both SUR and 3SLS estimation procedures. The data strongly support the presence of external increasing returns to scale. The findings indicate no evidence of internal increasing return in all two‐digit manufacturing industries. According to the endogenous growth literature, the existence of externalities in production bears important economic implications in some aspects of economic growth, even though the data cannot distinguish the transmission mechanism.
THE GREAT DEPRESSION RECONSIDERED: IMPLICATIONS FOR TODAY
Authors: WALLACE WILLIAM MCDONALD
Published: January 2010

This paper reexamines the Great Depression of 1929–1933 within an analytical framework based on the terms of employment for labor. It shows that in areas such as the U.S. farm and Japanese industrial sectors where labor was employed organically—that is, as partners in common enterprise—costs proved flexible, prices fell, and output and employment held up in line with the predictions of Say's Law. Where labor was not employed organically—that is, labor was hired—output collapsed, unemployment mounted, and Say's Law failed. The apparent reason is that any hired input, capital or labor, demands downwardly rigid rates of pay. When demand softens, cost rigidity constrains price cuts, and firms must instead lay off labor. The paper also shows that given organic labor, even oligopolistic rivalry is sufficient to assure that prices will fall enough to sustain output and employment.
PROFIT SHARING AND EMPLOYEE OWNERSHIP: POLICY IMPLICATIONS
Authors: MITCHELL DANIEL J. B.
Published: January 2010

Various arguments extol public encouragement of profit sharing and Employee Stock Ownership Plans (ESOPs). Generally, advocates of public intervention cite externalities (market failure), provision of merit goods, or social transformation as bases for their arguments. To the extent that profit sharing and ESOPs increase productivity or reduce employer costs, no case exists for public intervention, since such advantages are internalized. Although Congress views retirement saving as a merit good, deferred profit sharing and ESOPs are no more deserving of public subsidy on that basis than are other forms of saving, such as pensions. Finally, the notion that ESOPs promote a social transformation by redistributing equity is untenable. One can make a case for government efforts to spread data and information about these plans. The potential macro stabilizing effects of profit sharing—but not ESOPs—provide a rationale for a tax subsidy to the former.
GOVERNMENT SUPPORT FOR PROFIT SHARING, GAINSHARING, ESOPs, AND TQM
Authors: KAUFMAN ROGER T. , RUSSELL RAYMOND
Published: January 2010

Empirical evidence suggests that profit sharing, gainsharing, employee ownership, worker participation, and Total Quality Management (TQM) may increase productivity and firm performance. Nevertheless, one needs to ground the case for government intervention in support of each of these programs on arguments concerning externalities or merit goods. This paper argues that no one yet has offered a convincing case of this nature. It also discusses the U.S. government's support for ESOPs and suggests reasons for its disappointing results in the hope that future policy experiments will not repeat these mistakes.
DO TAX AND EXPENDITURE LIMITATIONS AFFECT THE SIZE AND GROWTH OF STATE GOVERNMENT?
Authors: SHADBEGIAN RONALD J.
Published: January 2010

This paper focuses on citizens' ability to restrict the size and growth of state government through the use of tax and expenditure limitations (TELs). Most TEL laws are not designed to stop public sector growth but are intended to cap it relative to personal income growth. Evidence indicates that the design of TEL laws increases the elasticity of government size (and growth) with respect to income. Thus, TEL laws, as they currently are written, allow states with high income growth to keep increasing the size of the public sector. Meanwhile, they prevent states with low income growth from doing likewise. While TELs restrict government size and growth in states with below average income, in general they have no significant effect on the size or growth of government. Therefore, as long as income growth is high, TELs end up as little more than political cover for state legislatures.
IMPLICATIONS OF LIBERALISED EUROPEAN LABOUR MARKETS
Authors: BROWN SARAH , BUTTON KENNETH , SESSIONS JOHN
Published: January 2010

This paper reviews the alternative labour market scenarios open to European policymakers in the current movement towards enhanced economic and political integration. To clarify the various issues, the paper dichotomises the policy alternatives into two camps: “euro‐liberalists” and “euro‐regulators.” The paper concludes that the latter offers the best path towards convergence, with the proviso that the subject of regulation is a Pan‐European system of labour market objectives rather than institutions.
AVIATION DEREGULATION IN THE EUROPEAN UNION: DO ACTORS LEARN IN THE REGULATION GAME?
Authors: BUTTON KENNETH J.
Published: January 2010

The United States has led the market liberalisation that has occurred over the past 15 years. Changes in the United States have not been trouble free. However, according to most impartial academic studies, changes in sectors such as aviation have generated net welfare gains. Other countries and industries liable to regulatory reform can learn from the United States. Governments have the scope to develop policies with fewer pitfalls, and industry can adopt strategies for retaining their market power. This paper looks specifically at how the aviation policymakers of the European Union have learned from the U.S. experience and how European airlines have equally adjusted their game.
WELFARE LOSS OF WETLANDS DISINTEGRATION: A LOUISIANA STUDY
Authors: FARBER STEPHEN
Published: January 2010

This study estimates the loss in welfare of projected Louisiana coastal wetlands disintegration. Various programs have initiated costly projects to terminate this disintegration process. But can these projects succeed, and will their benefits exceed their costs? This study addresses the benefits issues and estimates reductions in incomes and consumption opportunities and increases in costs that would be avoided if restoration and enhancement projects are successful. Estimated welfare losses that would be avoided do not include non‐user and lifestyle losses, which may be very important, and they do not include the costs of dismantling coastal infrastructure. These exclusions make the estimates of this study minimum estimates of welfare losses. Future economic welfare losses represent a 1990 present value in a range between $5.9 and $24.3 billion, depending upon discount rates and whether low or high loss estimates are used. In order to make these estimates more meaningful, the implied wetlands values were calculated on a per acre basis. These values ranged from $8,437 to $15,763 per acre.
CERCLA AND DEEP POCKETS: MARKET RESPONSE TO THE SUPERFUND PROGRAM
Authors: HARPER RICHARD K. , ADAMS STEPHEN C.
Published: January 2010

This paper uses event study methods to estimate wealth effects upon shareholders who are named by the U.S. Environmental Protection Agency (EPA) as potentially responsible parties at a Superfund site. Impacts appear to be divided into three periods: an initial program period where stock market effects depend largely on prior visibility of the site, a second period where likely financial impact is more important, and a third period where notification has little association with either visibility or financial measures. However, the expected remediation cost burden is not borne evenly. “Deep‐pocket” firms appear to be disproportionately penalized by the market during the second period.
BALANCED BUDGETS: ECONOMIC NIRVANA OR FISCAL CHAOS?
Authors: DAY RICHARD H.
Published: January 2010

This paper investigates the effect of a pay‐as‐you‐go, balanced budget policy on macroeconomic performance. It uses a simple model of the aggregate demand for money and goods, with temporary monetary equilibrium and quantity adjustments on goods markets. Within this framework, if the monetary/real interaction is strong enough, a balanced budget with sufficiently high tax rates (≡ sufficiently high government expenditures) is consistent with typical bounded fluctuations around a relatively high income, low unemployment equilibrium. Lower tax rates (≡ lower government expenditures) can trigger a sharp decline in revenues, expenditures, employment, and output.
SEVERITY OF ECONOMIC FLUCTUATIONS UNDER A BALANCED BUDGET AMENDMENT
Authors: WEISE CHARLES L.
Published: January 2010

This paper uses a vector autoregression model to estimate the role of fiscal and monetary policy stabilizers during the last four U.S. recessions. The data show that both types of stabilizers have had a large stabilizing effect. These results imply that adopting a balanced budget rule would increase greatly the severity of future recessions and require the Federal Reserve to respond much more strongly to economic fluctuations than is currently the case.
TIME PREFERENCE, ABATEMENT COSTS, AND INTERNATIONAL CLIMATE POLICY: AN APPRAISAL OF IPCC 1995
Authors: KHANNA NEHA , CHAPMAN DUANE
Published: January 2010

This paper appraises current economic methodologies used in analyzing the social rate of time preference and discounting, abatement costs, and value of life estimates as they relate to climate change. It makes a case for choosing an appropriate rate of time preference when assessing climate policies, including both positive and normative considerations. Furthermore, the paper argues that the currently estimated disparity in the cost of greenhouse gas abatement between developed countries and developing countries may be inaccurate. Integrating discount rates, abatement costs, and value of life estimates highlights important and contrasting implications of international climate policy for developing and high‐income countries. The context of the paper is the forthcoming Second Assessment Report of Working Group III of the Intergovernmental Panel on Climate Change.
THE IMPACT OF PROVIDER AVAILABILITY ON ABORTION DEMAND
Authors: BROWN ROBERT W. , JEWELL R. TODD
Published: January 2010

Variations in the availability of abortion providers may impact the demand for abortions since greater provider availability reduces the travel cost associated with acquiring an abortion. This paper applies a fertility‐control model to estimate the responsiveness of abortion demand to travel‐cost variations using county‐level data on the state of Texas. Abortion rates as well as pregnancy rates appear to be sensitive to availability‐induced variations in the travel cost of abortion services. In particular, the results suggest that residents in counties with longer travel distances to the nearest abortion provider have lower abortion rates and lower pregnancy rates.
THREE ASPECTS OF CORRUPTION
Authors: LUI FRANCIS T.
Published: January 2010

This paper examines corruption from three perspectives—market imperfections, illegality, and investment in socially unproductive human capital. It argues that corruption is an optimal response to market distortions and may improve allocative efficiency. The paper discusses possible market structures that induce illegal, corrupt activities and identifies some principles for deterring corruption. To acquire more corruption opportunities, an individual must invest in some form of human capital. The paper also addresses the implications of corruption for economic growth and reform.
ENVIRONMENTAL COMMODITIES MARKETS: ‘MESSY’ VERSUS ‘IDEAL’ WORLDS
Authors: MCCANN RICHARD J.
Published: January 2010

Adopting tradable permit market (TPM) programs to address air quality and water supply problems has become increasingly popular. However, economists evaluating these proposals have erred in comparing “ideal” permit markets with “messy” existing regulatory structures. In fact, permit markets also are likely to be “messy” due to the existing institutions and market imperfections. The physical and technological nature of these environmental commodities have and will continue to impose barriers to creating such markets. In addition, the analyses often do not adequately define the legal, management, and exchange institutions so as to capture how transaction costs and uncertainty will affect these markets. This paper identifies some specific factors that influence permit markets in environmental commodities and discusses the potential magnitudes of these effects.
ENERGY‐EFFICIENT LIGHTING: MARKET DATA, MARKET IMPERFECTIONS, AND POLICY SUCCESS
Authors: KOOMEY JONATHAN G. , SANSTAD ALAN H. , SHOWN LESLIE J.
Published: January 2010

Many economists question engineering‐economic studies aimed at demonstrating anomalously slow diffusion of energy‐efficient technology and the benefits of regulations to promote such technology. One argument against such studies is that standard techniques of engineering economics are either inappropriate or are routinely misapplied in assessing the performance of the market for energy efficiency. This paper takes account of such critiques in presenting engineering‐economic evidence on the diffusion of energy efficiency improvements. It examines the engineering and economic characteristics of standard and energy‐efficient magnetic ballasts for fluorescent lighting. Efficient magnetic ballasts represent an excellent investment for 99 percent of the commercial building floor stock and a moderately good investment for 0.7 percent of the commercial floor stock. Still, in the 1980s these ballasts were being adopted only at a rate commensurate with the enactment of appliance efficiency standards in various states. In this case, solid empirical evidence supports skepticism about the effectiveness of the market mechanism in promoting cost‐effective energy efficiency improvements and about the benefits of regulation to counteract this shortcoming.
SALMON STOCK VARIABILITY AND THE POLITICAL ECONOMY OF THE PACIFIC SALMON TREATY
Authors: MILLER KATHLEEN A.
Published: January 2010

Since the mid‐1970s, changes in the marine environment along the west coast of North America and in the Northeastern Pacific appear to have greatly enhanced the productivity of Alaskan salmon runs while contributing to declining runs of some salmon spawning in Washington, Oregon, and California. These inverse fluctuations in northern and southern salmon stocks may have aggravated a recent break‐down in cooperation between the United States and Canada in setting harvest allocations under the Pacific Salmon Treaty. This paper examines the establishment of fishing regimes by the Pacific Salmon Commission. A game theoretic model is used to analyze the possible contribution of stock variability to the current conflict. Shifts in the parties' incentives to manage the fishery cooperatively, together with significant transaction costs, explain much of the recent difficulty in negotiating mutually acceptable fishing regimes. The paper concludes by addressing the question of whether the regime‐setting process can be made more resilient to such stresses.
NEW ESTIMATES OF THE U.S. ECONOMY'S POTENTIAL GROWTH RATE
Authors: KAHN GEORGE A.
Published: January 2010

Using an Okun's law framework, the analysis here estimates potential growth for the 1990s as measured by both fixed‐ and chain‐weighted GDP. It then decomposes estimated potential growth rates into labor productivity growth (LPG) and labor input growth (LIG) using a regression analysis to separate secular from cyclical changes. It compares estimates of potential output and trend productivity growth for the 1990s with estimates from earlier periods. Results indicate that eliminating the substitution bias associated with fixed‐weight measures of real GDP raises estimated potential GDP growth in the 1980s but lowers it in the 1990s. A slowdown in labor force growth, with little or no change in long‐term productivity growth, largely accounts for the implied slowdown in potential growth.
EFFECTS OF PERSONAL INCOME TAX ON INCOME DISTRIBUTION: EXAMPLE FROM BULGARIA
Authors: HASSAN FAREED M. A. , BOGETIĆ ŽELJKO
Published: January 2010

This study utilizes the 1992 Bulgarian household budget survey to analyze the distribution of income and income tax burden. Results indicate that the country is characterized by low income inequality, though this is changing rapidly. The findings also show that the present income tax system is progressive and that the urban sector pays much more relative to its income. Despite a steeply graduated statutory tax rate schedule, effective progression is rather modest, indicating significant tax evasion. However, one must view the results of progressivity and urban bias cautiously. As in‐kind income becomes monetized and as the economy becomes more market‐oriented, both progressivity and urban/rural differences will wane over time.
POLITICS AND LENGTH OF TIME TO BANK FAILURE: 1986–1990
Authors: BENNETT RANDALL W. , LOUCKS CHRISTINE
Published: January 2010

This paper extends research on the savings and loan (S&L) industry to the banking industry in order to determine whether political influence affects the length of time from initial undercapitalization until ultimate bank failure. Results suggest that undercapitalized banks with representation on the House banking committee were allowed to remain open longer than were other undercapitalized banks. These results provide evidence that membership on relevant House committees matters.
COMPETITIVE NEED LIMITS AND THE U.S. GENERALIZED SYSTEM OF PREFERENCE
Authors: DEVAULT JAMES
Published: January 2010

The United States uses competitive need limits to deny Generalized System of Preferences (GSP) treatment of imports from developing countries. The analysis here estimates in two ways the effect of competitive need limits on GSP imports. First, it uses ex post trade data to determine the effect on import values and shares. Second, it combines an ex ante model with trade and elasticity data to estimate the effect of competitive need limits. Results indicate that competitive need limits reduce affected imports by 10 to 17%. Benefits from this import reduction accrue almost exclusively to U.S. import competing firms.
CONSEQUENCES OF MINIMUM WAGE INDEXING
Authors: EVEN WILLIAM E. , MACPHERSON DAVID A.
Published: January 2010

During the 1980s, the minimum wage fell relative to prices and average wages in the U.S. economy. If the minimum to average wage ratio had been constant at the level maintained through the 1970s, the minimum wage would have been $5.51 in 1993. If the 1993 minimum wage had increased to $5.51, payments to minimum wage workers would have increased by an estimated $20.3 billion, and the number of people earning that wage would have risen from 2.0 million to 14.7 million. Elasticity estimates generated from other studies indicate that employment would have fallen 240,000 (4.4%) among 16–19 year olds and 349,000 (3.0%) among 20–24 year olds. Wage payments to minimum wage workers would have substantially increased, but the effect on family income distribution would have been small. Many minimum wage workers are children living with parents or adults in a family with other earners. Consequently, 75% of minimum wage workers account for less than half of their family's income.
RECENT TRENDS IN PART‐TIME EMPLOYMENT
Authors: LEVENSON ALEC R.
Published: January 2010

This study analyzes trends in part‐time employment in the United States for 1964–1993. The conventional wisdom holds that a permanent shift has occurred toward part‐time employment—particularly involuntary part‐time jobs—in recent years. The data show a cyclical increase during the latest recession, but no upward trend since 1984. A concurrent boom in temporary agency employment suggests a confusion between “part‐time” and “temporary” jobs.
CLIMATE CHANGE AND OVERLAPPING GENERATIONS
Authors: HOWARTH RICHARD B.
Published: January 2010

This paper examines the interplay between discounting and the distribution of welfare between generations in formulating climate change response strategies. The analysis shows that one can understand Nordhaus's (1994) standard representative agent model for climate policy analysis as a reduced form of an overlapping generations model that embodies more realistic demographic assumptions. In this setting, alternative Pareto efficient allocations may be supported as competitive equilibria given appropriate sets of income transfers between generations. Numerical simulations establish that increased intergenerational transfers entail reduced monetary discount rates and increased rates of greenhouse gas emissions abatement. Short‐run policy choices are highly sensitive to normative judgments concerning the relative weight attached to the welfare of future generations.
BLACK MARKET EXCHANGE RATES AND CAPITAL MOBILITY IN ASIAN ECONOMIES
Authors: WONG CLEMENT YUK PANG
Published: January 2010

This paper examines whether foreign exchange black markets have eroded the effectiveness of capital controls and contributed to an increase in the effective degree of capital mobility in a sample of Asian countries. Comparing the uncovered interest parity forecast errors between the official and black market exchange rates suggests that in those countries with more stringent capital controls, foreign exchange black markets have reached a maturity level to threaten the effectiveness of those controls.
OPTIMUM CURRENCY AREAS AND EUROPEAN MONETARY UNIFICATION
Authors: DIBOOGLU SELAHATTIN , HORVATH JULIUS
Published: January 2010

This paper examines the European experience from optimum currency areas perspective with a focus on the correlation of underlying aggregate shocks within a structural vector autoregression (VAR) framework. Appropriately identifying supply shocks, real fiscal shocks, and nominal shocks, the paper investigates the correlations of shocks and tries to evaluate the likely adjustment and other problems that may take place with the introduction of a single currency in Europe. Using data for 20 European market economies, the paper compares original members of the European Community to new members and non‐members. Shocks are mostly country‐specific, particularly for newer members and non‐members, suggesting the importance of alternative adjustment mechanisms other than national monetary policies after the introduction of a single currency.
TRADE BARRIERS IN THE PACIFIC FOREST SECTOR: WHO WINS AND WHO LOSES
Authors: PEREZ‐GARCIA JOHN , LIPPKE BRUCE , BAKER JANET
Published: January 2010

This study uses a global model of the forest sector to examine changes in log production, consumption, prices, and trade and discusses the impacts of changes on economic wealth transfers for log export ban and log export tax scenarios. The results indicate that trade barriers are inefficient in allocating logs to domestic processors when a supply shortage exists. The trade barrier produces economic losses that exceed the benefits to the processors. A log export ban reduces log prices in the Pacc North‐west by 8.5% and reduces timber harvests by 6.7%. The logs diverted to domestic mills save 1,208 more jobs than log export job losses but at an average annual cost of £230,463 per job saved. Economic transfers benefit lumber producers in the region under the ban. However, the benefits amount to 61% of regional timber producer losses including losses in the log export price premium, 39% of the loss to Asian processors, and 55% of the global consumer losses. Globally, lumber consumers lose £733 million. A log export tax scenario produces smaller impacts on prices and harvests since it does not eliminate total log exports. The tax scenario saves no jobs, and the average economic gain per job lost is £24,251 or about two‐thirds of the current average salary in the forest products sector in the region. A log tax has the ability to retain £78 million in tax revenues.
CONCENTRATION‐PROFITS MONOPOLY VS. EFFICIENCY DEBATE: SOUTH AFRICAN EVIDENCE
Authors: LEACH DANIEL F.
Published: January 2010

Using the new official measures of concentration, this study finds a strong and highly significant correlation between concentration and industry profitability for South African manufacturing industries. This correlation is consistent with both the monopoly hypothesis of the traditional structure‐conduct‐performance paradigm and Demsetz's efficiency hypothesis that concentration of industry reflects the dominance of superior low‐cost firms.

Using the four‐firm concentration ratio, this study applies Chappell and Cottle's extension of the Demsetz test to distinguish between the monopoly explanation of this correlation and the efficiency explanation. Using a conventional regression specification of the concentration‐profits relationship with no control for efficiency, this study finds a statistically significant coefficient only for the industry and large size class regressions. Because small firms should do at least as well as large firms, under the price umbrella provided by large firms, this result is inconsistent with the monopoly hypothesis but consistent with the efficiency hypothesis.

Specifying a variable that measures the efficiency of large plants relative to smaller plants—the cost advantage ratio—yields striking results. Similar to the results obtained by Chappell and Cottle for the United States, this study finds the efficiency variable to be highly significant in the industry and large size class regressions, while concentration becomes insignificant. Moreover, the efficiency variable is insignificant in the smaller size classes

Both the statistical insignificance of concentration and the pattern of the efficiency variable coefficients suggest that including concentration in the regression specification without the efficiency variable simply highlights the effect of the efficiency variable. Coming as they do from an environment as different from the United States as the South Africa of the 1980s, these results strongly support the Demsetz efficiency hypothesis.
GATE REVENUE SHARING AND LUXURY TAXES IN PROFESSIONAL SPORTS
Authors: MARBURGER DANIEL R.
Published: January 2010

This paper examines the impact of gate revenue sharing and luxury taxes on professional sports leagues within the context of a less restrictive demand function than those used in prior models. In contrast to previous studies, the analysis finds that the increased sharing of revenues may enhance competitive balance. Consistent with other models, the analysis finds that player salaries will diminish as the percentage of shared gate receipts rises. The analysis also explores several variations of luxury taxes. All have the effect of lowering salaries. The impact on league balance depends on how the tax is implemented and on how its proceeds are distributed. As with salary caps, enforcement problems exist with the tax.
FISCAL REFORM IN SWEDEN: WHAT GENERATIONAL ACCOUNTING TELLS US
Authors: HAGEMANN ROBERT P. , JOHN CHRISTOPH
Published: January 2010

Generational accounts answer the simple question of how much future generations will have to pay in net taxes as compared to today's generations. This paper briefly reviews the concept of generational accounting and provides estimates for Sweden, where public finances deteriorated significantly after 1990. The results suggest that the measures adopted since 1994 should improve dramatically the relative position of future generations, who may nevertheless be expected to face large net tax bills.
WHY SOUTH AFRICA'S APARTHEID ECONOMY FAILED
Authors: LOWENBERG ANTON D.
Published: January 2010

South Africa's apartheid system was enormously costly and ultimately collapsed because the inefficiencies created by apartheid policies escalated as the economy's structure changed. Labor market regulation and industrial decentralization policy inhibited efficient resource utilization, especially as the manufacturing sector became dominant. Apartheid educational policies generated skill shortages. A mercantilistic development strategy distorted trade patterns, exacerbated dependence on foreign capital inflows, and created chronic balance of payments difficulties. The administrative and defense costs of implementing apartheid were onerous and rising. These internal weaknesses enhanced South Africa's vulnerability to capital flight, changes in world prices and business cycle conditions, and political changes abroad. Ultimately, apartheid was abandoned because its costs came to exceed its benefits to white South Africans. The internal dynamics of the system dictated the retrenchment of apartheid, which in all probability would have occurred even without foreign sanctions
SUBSIDIES AND INEFFICIENCY: STOCHASTIC FRONTIER APPROACH
Authors: SAKANO RYOICHI , OBENG KOFI , AZAM G.
Published: January 2010

U.S. urban transit systems receive operating and capital subsidies from various levels of government. Each firm minimizes its cost net of subsidies subject to its production function. The first order conditions from this minimization give a set of equations that are estimated using a stochastic frontier approach. From the results are calculated technical and allocative inefficiencies. The allocative inefficiencies are further decomposed among two sources, subsidies and factors internal to the firm. The analysis reveals large allocative inefficiencies between labor, fuel, and capital. Furthermore, it finds that subsidies lead to excess use of labor relative to capital and excess use of fuel relative to capital and labor. Also, most allocative inefficiencies in firms are due to internal factors and not subsidies, and the sizes of the inefficiencies vary substantially among transit firms.
ENERGY EFFICIENCY AND ECONOMIC GROWTH
Authors: HOWARTH RICHARD B.
Published: January 2010

Recent contributions by Brookes (1990), Saunders (1992), and Inhaber and Saunders (1994) argue that cost‐effective improvements in energy efficiency may, in the long run, lead energy use to grow more rapidly than it would in a world of fixed technologies. Since efficiency improvements may be viewed as a form of technological change that both reduces the effective cost of energy services and stimulates economic activity, energy demand may, under some circumstances, rise even as energy productivity improves. This paper examines this hypothesis using a simple model that distinguishes the roles of energy and energy services in production activities. In this model, improved energy efficiency can‐not give rise to increased energy use unless: (i) energy costs dominate the total cost of energy services and (ii) expenditures on energy services constitute a large share of economic activity. Since neither of these assumptions is empirically plausible, the paper concludes that energy efficiency improvements will yield long‐run reductions in energy use under the assumptions of the model.
PROPERTY RIGHTS, REGULATORY TAKING, AND COMPENSATION: IMPLICATIONS FOR ENVIRONMENTAL PROTECTION
Authors: GOLDSTEIN JON H. , WATSON WILLIAM D.
Published: January 2010

The 104th Congress considered several proposals requiring compensation for regulatory actions that diminish property values. Aimed primarily at weakening environmental protection, the bills focus on property rights independent of the public benefits from regulation. By significantly broadening the constitutional standard for compensation, the bills generate a government liability well in excess of compliance costs and thus discourage regulatory agencies from carrying out their mandates. The bills would increase transactions costs and undermine the efficient provision of environmental quality, public safety, and other public goods.
ENDANGERED SPECIES CONSERVATION ON PRIVATE LAND
Authors: POLASKY STEPHEN , DOREMUS HOLLY , RETTIG BRUCE
Published: January 2010

This paper analyzes the effect of alternative institutional arrangements on the conservation of endangered species and economic activity on private land. Because a landowner does not capture the full value of species conservation, her preferences on land use will not coincide with social preferences. Under current law, the landowner has incentives to invest in lowering conservation value and to deny access to regulators in order to prevent collection of information. Paying compensation corrects many of these perverse incentives. An alternative approach is to limit the ability of landowners to affect the regulatory outcome. Whether it is better to entice landowners to make socially efficient decisions by paying compensation or to limit the ability of landowners to affect outcomes through changes in the regulatory regime depends on both practical implementation difficulties and distributive justice considerations.