bluuebunny/crossref_metadata_2025_split huggingface dataset:
THE TAX REFORM ACT OF 1986: CONCENTRATED COSTS, DIFFUSE BENEFITS—AN INVERSION OF PUBLIC CHOICE
Authors: RABUSHKA ALVIN 
Published: January 2010

The public choice paradigm asserts the superior force of concentrated benefits over diffuse costs in the political marketplace. Vote‐seeking politicians exchange favors for support to members of special interest groups, whereas the public at large places fewer demands on and have less clout with politicians. The historical evolution of the federal income tax fits the public choice paradigm. Each provision in the tax code benefits primarily a narrow interest. Little incentive exists for anyone to represent such general interests as a broad‐based, low‐rate, simple tax system.The Tax Reform Act of 1986 inverted the public choice paradigm. The general interest, in the form of lower tax rates, prevailed over legions of special interests—which lost their prized deductions. The reason for this inversion lay in the power of an idea—the political and economic appeal of a low top rate. Deductions were simply worth less at lower deductible rates, and the benefits of higher after‐tax income were readily apparent. A coalition of liberals seeking the abolition of special breaks for the rich and conservatives favoring the enhanced incentives in sharply lower tax rates together defeated the community of special interest groups.
EQUALITY AND EFFICIENCY: ANTIDISCRIMINATION POLICIES IN THE LABOR MARKET
Authors: LUNDBERG SHELLY J. 
Published: January 2010

Some have criticized government antidiscrimination programs for causing efficiency losses both by devoting public resources to monitoring and enforcement and by distorting personnel decisions. This paper examines the efficiency consequences of such programs when discrimination is caused by a market failure and when regulators are imperfectly informed about individual firms' personnel policies.This paper outlines a simple model of “statistical discrimination” and shows that an equal opportunity rule, which constrains employers from offering different wage schedules to different groups, will improve the efficiency of this economy. Employers will attempt to evade such regulation, and the paper describes an evasion strategy in which employers search for worker “qualifications” that can act as proxies for race or sex. The paper discusses problems involved in monitoring and enforcing compliance, and considers two possible responses by the regulatory agency. The first is analogous to “disparate impact” judgments in which the type of information that employers can use in personnel decisions is regulated. The second is an affirmative action‐type policy that monitors the outcomes, rather than the process, of hiring and compensation decisions. Affirmative action policies have some advantages since they permit employers to use information more efficiently than do policies that attempt to regulate personnel decisions directly. However, affirmative action policies are likely to lead to charges of preferential treatment.
THE ROLE OF CRIMINAL SANCTIONS IN ANTITRUST ENFORCEMENT
Authors: COHEN MARK A. 
Published: January 2010

Recently enacted sentencing guidelines were designed to reduce disparity and to increase the average sanction for white‐collar offenders. Whether these outcomes will be achieved, however, depends on how closely judges adhere to the new guidelines. We cannot yet determine how the guidelines will be implemented but can learn much about judicial behavior by studying past sentencing practice.This paper examines sentences imposed on criminal antitrust offenders from 1955 to 1980. Judges are appointed for life and ostensibly are “independent” of the political process. The data suggest, however, that judges do not operate in apolitical vacuum. When Congress increased the status of antitrust violations from misdemeanor to felony in 1974, judges responded by doling out higher penalties–even for offenders not subject to new higher statutory maximums. In addition, the paper shows that Republican judges tend to impose harsher antitrust penalties than do Democratic judges, and that sentencing behavior apparently is influenced by a judge's prospect of promotion to a higher court position. These findings have important policy implications both for the judicial selection process and for ensuring that the judicial branch follows congressional wishes.
MILITARY RECRUITING PROGRAMS DURING THE 1980s: THEIR SUCCESS AND POLICY ISSUES
Authors: WARNER JOHN T. 
Published: January 2010

This paper examines trends in military recruiting during the 1980s and estimates the contribution of various policy tools—pay, recruiters, advertising, and educational benefits—to military recruiting. The paper finds that using recruiters and advertising, for the Army at least, is the most cost‐effective means of varying high‐quality enlistments. The costs of educational benefits are more difficult to determine, but the paper finds that educational benefits have a significant effect on high‐quality enlistments—particularly those for the Army.The paper also examines the relationships among the different services' recruiting programs. The evidence is somewhat mixed but generally supports the view that positive spillovers exist among the services' recruiting programs.
THE ECONOMICS OF ALTERNATIVE FUEL USE: SUBSTITUTING METHANOL FOR GASOLINE
Authors: LAREAU THOMAS J. 
Published: January 2010

Alternative fuel advocates recommend substituting methanol for gasoline since methanol cars potentially pollute less. However, because the substitution is costly and the reduction of ozone precursor emissions is relatively small, using methanol raises questions about cost effectiveness.This study demonstrates that the air quality benefits would be very expensive: The cost effectiveness usually would exceed tens or hundreds of thousands of dollars per ton of reduced volatile organic compound emissions. Only if all the cost and emissions assumptions lined up favorably would methanol substitution be desirable. Even then, it would be attractive only if the energy‐adjusted price difference between gasoline and methanol were just a few cents a gallon.
OFFSETTING NEW CO2EMISSIONS: A RATIONAL FIRST GREENHOUSE POLICY STEP
Authors: DUDEK DANIEL J. , LeBLANC ALICE 
Published: January 2010

This paper describes and assesses a policy to slow the increase of carbon dioxide (CO2) emissions in the atmosphere. Policy governing new CO2sources would either prevent emissions, procure compensating emissions reductions, or sequester emissions in sinks. The paper uses electric power plants to demonstrate the mechanics of the policy and the control or offset choices. Offset options include scrubbing, fuel switching, investments in energy conservation and efficiency, and afforestation.Costs per ton ofC02sequestered range from $1.35 for planting shade trees to $59.41 for scrubbing. All options except scrubbing cost less than $11.00, and the median cost is around $6.00 per ton removed. Planting trees on erodible cropland in conjunction with the Conservation Reserve Program combines the goals of reduced erosion, surplus agricultural production, and greenhouse warming. This policy is a first sane step toward reducing the accumulation of greenhouse gases. Having an international framework for managing emissions is most desirable. In the interim, however, the United States can demonstrate environmental leadership, generate substantial conservation benefits, and spark ingenuity in searching for alternatives, broadening the options, and lowering the ultimate costs of reducing CO2emissions.
FOUR REVOLUTIONS IN ELECTRIC EFFICIENCY
Authors: LOVINS AMORY B. 
Published: January 2010

Demand prospects for electricity are being altered profoundly by four synergistic types of revolutionary change: new technologies for improved end‐use efficiency, new ways to finance and deliver those technologies to customers, cultural change within utilities, and regulatory reforms to reward efficient behavior.Dramatic energy savings achieved so far have been largely in direct fuels and not in electricity, mainly due to price distortions and unique market failures. Resulting inefficient use of electricity is misallocating some $60 billion a year to unnecessary expansions of U.S. electric supply. Yet the best technologies now on the market could save about 92 percent of U.S. lighting energy, about half of motor energy, and much of the electricity used for other purposes. Complete retrofit could deliver equal or better services with only a fourth of the electricity now used. The levelized cost of that quadrupled end‐use efficiency averages about 0.6 cents/kWh– well below short‐run marginal cost. Analogous oil‐saving potential from the best demonstrated technologies is about 80 percent of present oil consumption at an average cost below $3/bbl, partly because two of the 9–10 prototype cars already tested at 67–138 miles per gallon are said to cost nothing extra to make.Many utilities already save large amounts of electricity very quickly and cheaply by financing customers' efficiency improvements through loans, gifts, rebates, or leases. Even more promising is an emerging “negawatt market” making saved electricity a fungible commodity subject to competitive bidding, arbitrage, derivative instruments, secondary markets, etc.Utilities can make more money selling less electricity and more efficiency. They can earn a spread on the difference in discount rates between themselves and their customers. They can save operating and capital costs while avoiding the associated risks and, under emerging regulatory reforms, can even keep as extra profit part of what they save. They also can generate tradeable emissions rights under the new Clean Air Act. Some utilities now properly ignore sunk costs and seek to minimize marginal variable costs. These utilities, driven by economic– not accounting–principles, find this approach both profitable and operationally advantageous.
REVENUE‐NEUTRAL INCENTIVES FOR EFFICIENCY AND ENVIRONMENTAL QUALITY
Authors: KOOMEY JONATHAN , ROSENFELD ARTHUR H. 
Published: January 2010

Recently, interest has grown in using monetary incentives as an efficient way to promote energy efficiency and environmental quality. This paper describes issues raised in designing revenue‐neutral incentive policies to achieve these goals. Such policies involve charging fees in proportion to undesirable characteristics and giving rebates in proportion to desirable characteristics. The fees pay for the rebates and for any administrative costs of the program.This paper analyzes the conceptual issues raised in designing such incentive policies to correct for externalities and to promote the efficiency of buildings and automobiles. The paper examines the nature and importance of externalities, presents the rationale for revenue‐neutral incentive policies, and describes six revenue‐neutral incentive programs for achieving these goals. In addition, it analyzes the criteria that one should use in determining the size of fees and rebates, in light of the large uncertainties. Finally, the paper addresses key implementation issues.
THE BANKING SYSTEM CRISIS IN LATIN AMERICA
Authors: TREBAT THOMAS J. 
Published: January 2010

A major “bootstraps” challenge lies ahead for Latin America: finding enough savings capacity at home to finance needed increases in investment during the 1990s. The banking system throughout the region cannot carry out its role in this process, however, due to a ruinous process of internal debt accumulation and corporate bankruptcy—the domestic analog of the external debt crisis of the 1980s.This paper briefly reviews recent financial liberalization experiences in Latin America. It identifies three factors as contributing to the undermining of the banking system and the failure of liberalization in the region: (i) foreign exchange risks that the banking system has assumed, (ii) unsound lending and borrowing practices, and (Hi) inadequate regulatory and supervisory frameworks. A case study of Chile illustrates the dynamics of frustrated reform and privatization in the financial markets.The paper concludes that Latin America has no real choice but to pursue liberalization and to rely more on the private sector in the financial markets. The path to deeper financial markets is extremely complex, however, and Latin America must continue seeking the proper balance between state sector supervision and intervention and an increased role for the private sector. An agenda for research points to some thorny issues awaiting empirical investigation.
RATIONALE FOR DISSENT: THE CASE OF FOMC MEMBERS
Authors: BELDEN SUSAN 
Published: January 2010

This paper investigates monetary policymakers' rationale for dissent to test for a hypothesized difference in policy preferences between bank presidents and members of the Board of Governors. The paper analyzes the cited reasons for dissent, the identity of the dissenter, and uses multiple regression to make inferences regarding the differences.Examining the identity of dissenters and the given reasons for dissent yields four conclusions, (i) A broad base of bank presidents dissent for tighter policy because they want to control inflation by keeping monetary aggregates within targeted ranges. (ii) On the other hand, board members' dissent for tighter policy is dominated by one man–Henry Wallich—who apparently was disturbed by the inflationary outbreak during the late 1970s and early 1980s. (Hi) Several board members dissent for looser policy to stimulate the real economy, (iv) But only a few bank presidents, primarily from the Northeast, dissent for looser policy with the same objective.Regression analysis supports the assertion that bank presidents dissenting for tighter policy do so to keep monetary aggregates on target in order to control inflation. The analysis confirms Wallich's focus on inflation during the late 1970s and early 1980s. It also allows for the possibility that the various board members dissenting for looser policy either have an inherent preference for looser policy or have diverse reasons for dissent.
BILATERAL TRADE RELATIONSHIP BETWEEN THE UNITED STATES AND CANADA: IMPLICATIONS OF THE FREE TRADE AGREEMENT
Authors: KOO WON W. , UHM IHN HO , GOLZ JOEL T. 
Published: January 2010

This study's primary objective is to evaluate empirically the economic effects of the U.S.‐Canada Free Trade Agreement (FTA). The paper emphasizes bilateral trade flows of agricultural and industrial products between the United States and Canada, given that the FTA removes tariff and non‐tariff barriers. It evaluates the FTA's impact on the two countries' trade with third countries. The paper specifies a traditional log‐linear trade model consisting of import demand and export supply equations for both agricultural and industrial products. It uses quarterly time‐series U.S. and Canadian trade data for 1972–1985.The study uses the two‐stage least‐squares estimator to estimate the models. The models had R coefficients ranging from 0.78 to 0.99, indicating that the models' explanatory variables explain most causes of variations in the dependent variable. This study reveals that U.S. imports of agricultural and industrial products from Canada were more sensitive than were Canadian imports not only to import and domestic prices but also to world prices. This is because Canadian consumers have less domestic substitutes than do their U.S. counterparts. Also, Canada has a smaller internal market than does the United States. The study estimates that U.S. imports from Canada will increase $2.8 billion while Canadian imports from the United States will increase $1.2 billion. The impact on the two countries' trade with third‐party countries will be insignificant.
LIBERALIZATION WITHOUT DEREGULATION: U.S. TELECOMMUNICATIONS POLICY DURING THE 1980s
Authors: CRANDALL ROBERT W. 
Published: January 2010

During the past 20 years, the U.S. telephone industry has undergone a remarkable evolution from a set of government‐enforced monopolies to a much more competitive environment. Long‐distance service, private‐line service, data communications, and terminal equipment once were available only from the telephone monopolist. Now they are freely available from numerous competitive suppliers due to a series of regulatory and judicial decisions. But despite this veritable explosion in competition, the telephone industry still is regulated at both the federal and state levels. Only the provision of terminal equipment is totally deregulated.Regulating telephone rates has created a highly inefficient rate structure replete with cross‐subsidies. Legislators' and state regulators' reluctance to eliminate these cross‐subsidies remains the most important hurdle to transforming the telephone industry to a fully competitive market. Nevertheless, liberalizing entry has generated some economic efficiencies through its effect on productive efficiency and on regulated rates. Productive efficiency gains may have reached $3 billion by 1988, and the welfare gains from the limited rationalization of rates caused by entry are nearly $1 billion per year.Fully deregulating long‐distance and local service requires that regulators abandon their policies of cross‐subsidizing rural residences at the expense of businesses and of cross‐subsidizing local service at the expense of long‐distance service. Movement toward deregulation is progressing at the federal level and in some states, but full deregulation appears unlikely in the foreseeable future.
FEDERAL BUDGET DEFICITS, MONEY, AND EXCHANGE RATES
Authors: DERAVI KEIVAN , GREGOROWICZ PHILIP , HEGJI CHARLES E. 
Published: January 2010

The dollar's strength during the 1980s appears to many—particularly as reported in the financial press—to have been directly linked to the decade's large budget deficits and the subsequent increase in the stock of federal debt outstanding. The popular argument is that the budget deficit and the growth of federal government credit market demand caused U.S. interest rates to rise over that period, inducing large capital inflows from abroad to finance the deficit. According to the argument, the capital inflows caused the dollar to appreciate. Despite the argument's popularity, the empirical literature does not strongly support it. Evidence on the relationship between the federal deficit and the dollar is at best mixed.This article reconsiders the effects of federal budget deficits on the exchange rate. The analysis involves estimating a vector autoregressive (VAR) model of exchange rates that includes monetary, fiscal, and price level variables. Within the VAR framework, impulse analysis traces the dynamic response of exchange rates to various budget deficit measures.The analysis finds that deficits do not directly Granger cause exchange rates, but it also finds evidence of an indirect effect working through the money supply and price level. Moreover, the analysis reveals some evidence that foreign exchange markets are forward looking and react to expected budget deficits. The innovations accounting and impulse analysis also suggest a forward‐looking dynamic relationship between deficits and exchange rates, but the relationship is sensitive to the ordering of the variables.
THE FUTURE OF THE U.S. DEFENSE INDUSTRY
Authors: WEIDENBAUM MURRAY 
Published: January 2010

Defense contractors in the United States face a painful choice between downsizing or investing in new high‐risk commercial ventures. Past experience reveals numerous failed efforts to penetrate commercial markets and few, if any, successes.The capabilities required to succeed in civilian business are fundamentally different from those needed to design and produce weapon systems. Defense firms and defense divisions of diversified corporations lack adequate knowledge of commercial products, production methods, advertising and distribution, financial approaches, and customer demand.Given the outlook for a sustained decline in U.S. military spending, the author advises companies catering to military markets to cut their costs by reducing excess capacity. Smaller but more competitive positions can be achieved through restructuring, mergers, sales of assets, and, if necessary, closing down unneeded facilities. Firms that ignore the pleas for “conversion” and do not dissipate their assets in civilian markets alien to them stand the best chance of surviving during a period of reduced military demand.
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.
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 classesBoth 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.