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In this article, Maryland's non-legal-tender paper money emissions between 1765 and 1775 are reconstructed to determine quantities outstanding and redemption dates, providing a substantial correction to the literature. Over 80 per cent of this paper money's current market value was expected real asset present value and under 20 per cent was liquidity premium. It was primarily a real barter asset and not a fiat currency. The liquidity premium was positively related to the amount of paper money per capita in circulation. This paper money traded below face value due to time-discounting, rather than depreciation. Past scholars have simply confused depreciation with time-discounting. [ABSTRACT FROM AUTHOR]

A stochastic framework for coordination of macroeconomic policies is introduced in this paper. It is suggested that: (i) measures of policy accountability should allow for the climate of uncertainty that surrounds policy decisions, and (ii) most models of aggregate economic activity impose arbitrary specifications of uncertainty that do not appear to be empirically justifiable. Ambiguities in interpreting the Humphrey-Hawkins reports of policy authorities are sketched in section II; a proposal for maximizing the ex ante prospects of policy objectives is illustrated in section III; finally, nonstationary allocations of uncertainty are discussed in sections IV and V. This paper provides a brief survey of ongoing work by members of the Federal Reserve Board staff on the role of uncertainty in policy forecasts. It suggests that policy discussion could be improved by more explicit consideration of the allocation of uncertainty. [ABSTRACT FROM AUTHOR]

The article comments on three papers within the issue: "Long-Term Effects of Government Deficits on the U.S. Output Potential," by George von Furstenburg, "Capital Formation and the Recent Productivity Slowdown," by Peter Clark, and "U.S. Productivity Growth Recession: History and Prospects for the Future," by Michael McCarthy. The author discusses each article and criticizes their shortcomings. He looks at von Furstenburg's use of the Phelps-Shell model of dynamic economic growth and notes the usefulness of neoclassical growth theory. The author feels that his discussion on the effects of government deficits on output growth or productivity represent a fruitful economic analysis innovation.

The article sheds light on commercial banking in the United States during the sixties. The article makes the conclusion that if the trends emerging in the late 1950s and in 1960 are not reversed by major changes in economic conditions or tax and regulatory policy, then the commercial banks will be unable to play as important a role in financing the 1960s as they have done in previous years. The article's conclusion is based on the expectation that in all years, except those of recession, bank deposits will continue to expand at a slower rate than the growth of the gross national product.

The Federal Reserve sets targets for interest rates which it enforces through direct market intervention. These targets are changed periodically. In this paper, we develop a term structure model in which the short rate is subject to a control which keeps it close to a target which changes from time to time. The probability of target changes is not constant in the model, but changes as a function of observables. The model performs well at explaining the shifts in the yield curve that accompany target changes. [ABSTRACT FROM AUTHOR]

The article focuses on the important issues related to ethanol industry in the U.S. These issues includes the implications of alternative incentive schemes for renewable fuels production, impact on the country's agriculture of producing 10-60 gallons of ethanol in 2010-2030 respectively and a comparison between two organizational methods for production and energy crop harvesting. The five main objectives of the incentive scheme includes the consumer cost of fuel, food prices, safety net improvement for the renewable fuel industry , national security and emission control management. The primary purpose of the issues are to examine the significance of bioenergy technology for the improvement of the agriculture economics in the country.

Modern macroeconomic theories are customarily classified as either neoclassical or Keynesian. Neoclassical theories are those that assume that most markets are in equilibrium most of the time; in particular, they generally assume that the labor market is always in equilibrium. Keynesian theories are those that assume that many markets are in disequilibrium much of the time; in addition to the labor market, they generally assume that financial markets and markets for capital goods are often in disequilibrium, in this paper, we will be interested in the extent to which a theory assumes that markets are in equilibrium, rather than in the intellectual tradition of the theory, so we will classify theories as "equilibrium theories" or "disequilibrium theories." We will be interested in dynamic theories, which describe the development of prices, stocks, and flows of goods and services over time, rather than in static theories, which describe the impact of events such as a one-time change in tastes, technology, or government policy. One of the purposes of this paper is to develop an aggregate model of the development over time of an economy that includes money and that is in continual equilibrium in the sense described above. Such a model would help in the analysis of the properties of a competitive monetary economy, and would be a logical starting point for the analysis of such phenomena as unemployment and changes in the rate of inflation. Since most Keynesian models of the economy do not pretend to be equilibrium models, let us turn to the neoclassical models of economic growth. [ABSTRACT FROM AUTHOR]

The principle objective of our paper [5] was to present the theoretical concept of the Monetary Full Employment Interest Rate (MFEIR). We argued (and still believe) that this concept should be acceptable for use as an objective indicator of monetary policy by economists who believe that the Keynesian monetary mechanism is a valid description of reality. The presentation of estimates of the MFEIR was a secondary objective. As we stated, "[o]ur empirical results are presented more as an example of how this variable might be measured and used rather than as a definitive set of estimates of the monetary full employment interest rate during the 1952-1966 period." [5, p. 638]. [ABSTRACT FROM AUTHOR]

In asking the question, "what can Europe do for itself?" in recovering and rebuilding after World War II, the article presents a conference paper that addresses information from the "General Report of the Committee of European Economic Cooperation." The author summarizes the European position into one: increase production. The author considers whether the goals outlined are attainable and what that will mean, discussing food, coal, electrical power, oil refinement, and steel production.

Abstract: A large number of models have been developed in the literature to analyze and forecast changes in output dynamics. The objective of this paper was to compare the predictive ability of univariate and bivariate models, in terms of forecasting US gross national product (GNP) growth at different forecasting horizons, with the bivariate models containing information on a measure of economic uncertainty. Based on point and density forecast accuracy measures, as well as on equal predictive ability (EPA) and superior predictive ability (SPA) tests, we evaluate the relative forecasting performance of different model specifications over the quarterly period of 1919:Q2 until 2014:Q4. We find that the economic policy uncertainty (EPU) index should improve the accuracy of US GNP growth forecasts in bivariate models. We also find that the EPU exhibits similar forecasting ability to the term spread and outperforms other uncertainty measures such as the volatility index and geopolitical risk in predicting US recessions. While the Markov switching time‐varying parameter vector autoregressive model yields the lowest values for the root mean squared error in most cases, we observe relatively low values for the log predictive density score, when using the Bayesian vector regression model with stochastic volatility. More importantly, our results highlight the importance of uncertainty in forecasting US GNP growth rates. [ABSTRACT FROM AUTHOR]

This paper documents the effects of changes in US monetary policy on asset prices in 51 countries to evaluate the validity of the event-study approach. We find that the event-study estimates contain a significant bias. However, this bias is fairly small and the ordinary least squares approach tends to outperform in an expected squared error sense the heteroscedasticity-based estimator for both small and large sample sizes. Hence in general the event-study methodology should be preferred. Moreover, we show that US monetary policy has been an important determinant of global financial markets. [ABSTRACT FROM AUTHOR]

This paper demonstrates how the labour and product markets interact in determining as outcome a generalized reduced-form price Phillips curve. For the labour market we consider a wage Phillips curve and for the product market a price Phillips curve. We estimate separately the wage and price Phillips curves for the USA, using ordinary least squares, non-parametric estimation and three-stage least squares techniques. The finding is that wages are always more flexible than prices with respect to their respective demand pressure and that price inflation responds somewhat more to a medium-run cost pressure than does wage inflation. The implications for macroeconomic stability are demonstrated. We also show—as a link between product and labour markets—that employment is related to output as Okun's law states. In comparing linear and non-linear estimates of the wage and price Phillips curves we find furthermore that for some relationships non-linearities are important while not for others. Although overall the non-linear estimates tend to confirm our linear estimates, non-linearities in some relationships of the Phillips curve are important as well. [ABSTRACT FROM AUTHOR]

This paper examines the economic experience of past energy booms and that of current unconventional shale gas and oil development. We focus on key economic characteristics of gas and oil production such as its employment potential, its geography, and its boom-bust nature. This background is used to discuss important economic policy issues arising with unconventional oil and gas development such as taxation, governmental use of those revenues, preemption, and equity in the distribution of costs and benefits. The paper concludes with economic policy recommendations for states and communities affected by such development including not viewing oil and gas development as an effective long-run economic development strategy, leveraging short-run financial gains from the development into permanent advantages, and strengthening the capacity for local governments to understand and manage this activity. [ABSTRACT FROM AUTHOR]

This paper is concerned with macroeconomic policy interaction in a two-country flexible exchange rate model with no exchange market intervention. The three key ingredients are (1) a short-run non-vertical Phillips curve in each country; (2) positive transmission of economic expansion through the terms of trade; and (3) zero or constant capital movements, so that the flexible exchange rate keeps the trade balance unchanged. [ABSTRACT FROM AUTHOR]

Forecasting the economic policy uncertainty in Europe is of paramount importance given the ongoing sovereign debt crisis. This paper evaluates monthly economic policy uncertainty index forecasts and examines whether ultra‐high frequency information from asset market volatilities and global economic uncertainty can improve the forecasts relatively to the no‐change forecast. The results show that the global economic policy uncertainty provides the highest predictive gains, followed by the European and US stock market realized volatilities. In addition, the European stock market implied volatility index is shown to be an important predictor of the economic policy uncertainty. [ABSTRACT FROM AUTHOR]

This paper examines the effects which agricultural economists had on developments in economics and on economic policies during the years 1910-1960. These developments are viewed against the backdrop of what was happening in the economy at large and particularly with respect to farmers, and of major books and articles in economics published in the period. Some ideas of agricultural economists and the influence they had are discussed. Agricultural issues and agricultural economists, in the broad sense, had a profound influence on the development of general economics and on economic policies during this period. [ABSTRACT FROM AUTHOR]

The article discusses economic policies of agencies of the Federal government of the United States. The use by the federal government of semi-autonomous corporations and agencies to accomplish certain quasi-commercial tasks has always been controversial. Many of the quasi-commercial and revenue-producing operations of government should be put in the hands of semi-independent, self-financing agencies and kept completely out of the unified Federal budget. This would reduce the size of the budget and, since the expenditures thus made extra-budgetary would very probably exceed the revenues similarly affected, it would also make for a budget surplus. Administratively, there seem to be some major drawbacks to the extra-budgetary idea in general and to the security issuing process in particular. Unfortunate effects on the government securities market may occur when issues are allowed to reach the market from several sources. When the extra-budgetary paper is sold to about the same group of investors as the regular Treasury issues, a certain element of competition could arise. Real financial independence for an agency of the Federal government seems unlikely.

The decade of the seventies has seen a dramatic surge in the acceptance and adoption of long range planning systems by U.S. firms. This paper examines the planning experiences of 86 "Fortune" 1000 companies, many of them with formal planning systems ten years of age or more. Data collected in this study suggests that planning systems move through different phases in a development cycle. The ability to cope with planning problems, the satisfaction of planning participants, and the extent to which companies formulate explicit policies to recognize managerial contributions to long range planning activities are associated with the age of a company's formal planning system and its phase of planning system development. Mature system companies do a better job in coping with planning problems, are more satisfied with their planning systems, and are more likely to recognize managerial contributions to long range planning. [ABSTRACT FROM AUTHOR]

There are several different facets to the argument for the extension of FRS reserve requirements to nonmember banks, including issues of regulatory equity between member and nonmember banks, ability of the commercial banking system to withstand financial shocks, etc. However, the heart of the argument is that the Federal Reserve authorities need to be able to set reserve requirements on nonmember bank deposits in order to better control the money stock. The purpose of this paper is to present some evidence which is germane to the question of whether or not FRS reserve requirements on nonmember bank deposits are needed for greater precision in money stock control. Specifically, evidence is presented on the impact of nonmember banks upon the precision of Federal Reserve control over the money stock during the 1960's and early 1970's. Section I contains a discussion of the nonmember bank data problem (a problem which severely limited the scope of this study and which makes its findings less trustworthy than they might otherwise have been) and Section II presents the logic of the empirical inquiry. Section III contains the findings of the study, none of which supports the contention that the absence of FRS reserve requirements on the deposits of nonmember banks has been a source of instability for Federal Reserve control of the money stock. [ABSTRACT FROM AUTHOR]

The ultimate objective of selective credit policies is to influence the composition of real investment, and not merely to influence financial markets. Although various forms of selective credit policies have been in use in the U.S.A. for many decades, there has been relatively little systematic investigation of the extent to which this ultimate objective can be realized. In this paper, we attempt to examine the theoretical and empirical justification for using selective credit policies; specify the structural conditions under which such policies might be expected to achieve their real objective; and look at the empirical evidence to determine whether or not these conditions are satisfied in one specific area where selective credit policies have been proposed. [ABSTRACT FROM AUTHOR]

ABSTRACT: In this paper, we examine the convergence hypothesis using a long memory framework that allows for structural breaks and does not rely on a benchmark country using both univariate and multivariate estimates of the long memory parameter d. Using per capita GDP gaps, we confirm the findings of non‐stationarity and long memory behavior that have been found previously in the literature using univariate tests. However, the support for these findings is much weaker when using a multivariate framework, in which case we find more evidence of stationary behavior. Based on these results, we also investigate club formation, something that would suggest the presence of conditional convergence. We describe a club formation methodology using the sequential testing criteria that we have employed in our analysis as the basis for forming clusters or clubs of countries with similar convergence characteristics. [ABSTRACT FROM AUTHOR]

Using data across U.S. states over a recent decade, this paper uniquely uses three qualitatively different measures of entrepreneurship to examine the knowledge flows from patents, paying attention to the dynamic nature of such influences. We find that there are significant variations in the effects of knowledge flows across entrepreneurship types and, in general, these effects are not immediate. The greatest positive effect of knowledge spillovers is on startup entrepreneurship and the resulting magnitude grows somewhat over time. The spillovers are modest on overall entrepreneurship, while entrepreneurs who were previously employed see more immediate benefits. These findings are generally robust. ( JEL L26, O33, O51, M21) [ABSTRACT FROM AUTHOR]

Because of several policy distortions, including import-substitution industrialization, widespread government intervention, and both domestic and international competitive barriers, there has been a general presumption that Latin America has been much less productive than the leading economies in the last decades. In this paper we show, however, that until the late 1970s Latin American countries had high productivity levels relative to the United States. It is only after the late 1970s that we observe a fast decrease of relative total factor productivity (TFP) in Latin America. We also show that the inclusion of human capital in the production function makes a crucial difference in the TFP calculations for Latin America. [ABSTRACT FROM AUTHOR]

Among the policy responses to the global financial crisis, the international provision of US dollars via central bank swap lines stands out. This paper studies the build-up of stresses on banks' balance sheets that led to this coordinated policy response. We reconstruct the worldwide consolidated balance sheets of the major national banking systems to investigate the structure of their global operations across offices worldwide, shedding light on how their international asset positions were funded across currencies and counterparties. The analysis shows how the growth in European banks' US dollar assets produced structural US dollar funding needs, setting the stage for the global dollar shortage when interbank and swap markets became impaired. We demonstrate that such vulnerabilities are best measured along the contours of banks' consolidated balance sheets, rather than along national borders. [ABSTRACT FROM AUTHOR]

This paper examines the price response of wireless carriers to the introduction of number portability in the U. S. I find that wireless prices decreased in response to number portability, but not uniformly across plans. Average prices for the plans with the fewest minutes decreased by only $0.19/month (0.97%), but average prices for medium and high-volume plans decreased by $3.64/month (4.84%) and $10.29/month (6.81%), respectively. The results suggest that higher-volume users in the wireless market benefited more from the policy-induced reduction in switching costs. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between political action committee (PAC) contributions from four sectors of the health care industry and committee membership in the House of Representatives over three election cycles, 1998-2002. The hypothesis tested is that members of the House who serve on committees with oversight responsibility for the health care industry are more likely to receive contributions from health care industry PACs than members of the House who do not serve on these committees. We find mixed support for the hypothesis. ( JEL D72, HI0, I10) [ABSTRACT FROM AUTHOR]

This paper studies how changes in the federal funds rate by the US Federal Reserve affect the eurozone economy. In our analysis, the international transmission mechanism works through movements in the exchange rate, commodity prices, short-term interest rates and the trade balance. We find that an increase in the federal funds rate causes the euro to immediately depreciate, while commodity, and in particular oil, prices decline sharply, reflecting a decline in demand. Lower commodity prices stimulate household consumption in the short run, and the higher aggregate demand induces an expansion of eurozone economic activity. Our results show that the effects of changes in the federal funds rate on commodity prices are greater than previously found in the literature. Our analysis also assesses the likely effects on the eurozone economy of the European Central Bank's (ECB's) own responses to macroeconomic developments. We find that the expansionary effect of lower commodity prices and a depreciated euro on the eurozone economy is partially offset by the ECB increasing short-term nominal interest rates to curb inflationary pressures in an expanding economy. This result highlights the importance of commodity prices and the euro–dollar exchange rate as inputs into European monetary policy-making, as seen, for example, in the Eurosystem staff macroeconomic projections used by the Governing Council to assess the risks to price stability. [ABSTRACT FROM AUTHOR]

The paper analyses the transmission of US monetary policy shocks to global equity markets and the macroeconomic determinants of the underlying transmission process. We show that there is a substantial cross-country heterogeneity in reactions across 50 equity markets worldwide, with returns falling on average around 2.7% in response to a 100 basis point tightening of US monetary policy, but ranging from a zero response in some to a reaction of 5% or more in other markets. As to the determinants of the strength of transmission to individual countries, we test the relevance of their macroeconomic policies and the role of real and financial integration. We find that in particular the degree of global integration of countries – and not a country's bilateral integration with the United States – is a key determinant for the transmission process. [ABSTRACT FROM AUTHOR]

This paper proposes a new measure of potential output for the USA. The key idea is that potential output is constructed as the level of output which would correspond to a forecast of no inflation change over the policy horizon. The resultant output gap has a clear interpretation as a measure to gauge future inflationary pressures. It also exhibits better predictability for future inflation changes in comparison with previous output gap measures. Simulation results further demonstrate its usefulness as a feedback variable in the Taylor monetary policy rule for interest rates. [ABSTRACT FROM AUTHOR]

This paper considers the productivity impact on the US economy of the period of war mobilization and demobilization lasting from 1941 to 1948. Optimists have pointed to learning by doing in military production and spin-offs from military R & D as the basis for asserting a substantial positive effect of military conflict on potential output. Productivity data for the private non-farm economy are not consistent with this view, as they show slower total factor productivity (TFP) growth between 1941 and 1948 than before or after. The paper argues for adopting a less rosy perspective on the supply side effects of the war. [ABSTRACT FROM AUTHOR]

This paper offers an alternative explanation for the great inflation of the 1970s by measuring a novel source of monetary policy time inconsistency. In the presence of asymmetric preferences, the monetary authorities generate a systematic inflation bias through the private-sector expectations of a larger policy response in recessions than in booms. The estimated Fed's implicit target for inflation has declined from the pre- to the post-Volcker regime. The average inflation bias was about 1% before 1979, but this has disappeared over the last two decades, because the preferences on output stabilization were large and asymmetric only in the former period. [ABSTRACT FROM AUTHOR]

This paper reviews the history of the federal regulatory oversight of plant agricultural biotechnology in the USA, focusing on the scientific and political forces moulding the continually evolving regulatory structure in place today. Unlike most other jurisdictions, the USA decided to adapt pre-existing legislation to encompass products of biotechnology. In so doing, it established an overarching committee (Office of Science and Technology Policy) to study and distribute various regulatory responsibilities amongst relevant agencies: the Food and Drug Administration, Environmental Protection Agency and US Department of Agriculture. This paper reviews the history and procedures of each agency in the execution of its regulatory duties and investigates the advantages and disadvantages of the US regulatory strategy. [ABSTRACT FROM AUTHOR]

The paper first reviews Europe's experience with regional integration, stressing the political economy forces that governed the direction and speed of the process. It argues that the geographic spread of economic integration in Europe is driven by a domino effect by which each successive integration increases the pressure on non-participants to join the integration effort. On the depth of integration, the paper argues that the path of European integration – from completion of the customs union, to the Single Market programme, to the Maastricht Treaty and monetary union – was dictated by a political economy dynamo set in motion by the unique institutional features established by the 1957 Treaty of Rome. Consequently, the lessons for other regions must be considered with great care. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to shed light on the controversial issue of regional development incentives. Although extensive research has been conducted, a review of the literature gives an inconclusive answer to whether economic incentives are effective. Why do researchers arrive at different conclusions, even after analysing the same programmes? Among the problems that we find, for example, is the fact that for some researchers ‘effective’ means the significant location of new firms in targeted areas, while for others the creation of jobs regardless of whether new firms are arriving in a significant fashion. Furthermore, as we elaborate, the selection of an econometric model will have a significant impact on expected results. Different models, with different limitations, will lead researchers to evaluate the same incentive programme but arrive at different conclusions regarding its effectiveness. The contribution of the paper is to inform policymakers about the potential opportunities and pitfalls when designing incentive strategies. This is particularly relevant, given that both the US and Europe have been promoting incentives as a tool for regional economic development. [ABSTRACT FROM AUTHOR]

Prior to his Nobel Prize-winning work in economic development and human capital, T.W. Schultz focused his attention most centrally on the economics of U.S. agriculture. His research on this subject, published mostly between 1932 and 1951, laid the foundation for his later work. However, the lasting value of Schultz's earlier work may appear to have been called into question even by the author himself. In the three books of collected writings he published toward the end of his life (Schultz, 1990, 1993a, 1993b), very few early writings are reprinted or even cited. Nonetheless, among agricultural economists, Schultz's earlier work has been as influential as his later work became among economists generally. In the American Economic Association's (1969) compilation, Schultz was referenced in the index more than any other economist, and all twenty-two references to his works refer to studies of U.S. agriculture (and only two of them to his work on human capital). In this paper, I review Schultz's contributions under two headings: the economics of farming and agricultural policy. [ABSTRACT FROM AUTHOR]

In this paper we model and explain US macroeconomic outcomes subject to the discipline that monetary policy is set optimally. Exploiting the restrictions that come from optimal policymaking, we estimate the parameters in the Federal Reserve's policy objective function together with the parameters in its optimization constraints. For the period following Volcker's appointment as chairman, we estimate the implicit inflation target to be around 1.4% and show that policymakers assigned a significant weight to interest rate smoothing. We show that the estimated optimal policy provides a good description of US data for the 1980s and 1990s. Copyright © 2005 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

While the research community is often very concerned with the distributional effect of public policy decisions, the geographic distribution of the affected populations is often overlooked. This paper argues that seemingly geographically neutral policies have spatial consequences and that the choice of how to measure them is important. We suggest that maps provide a powerful tool for communicating these ideas to policy makers and that geographical information systems supplemented by spatial statistics yield information that assist policy debates. We develop metrics to illustrate how geographic information provides insights into the spatial consequences of Medicaid expenditure changes in Ohio. [ABSTRACT FROM AUTHOR]

In this article, the authors choose to test for sustainability of fiscal policy expressed as the stationarity of the debt to gross domestic product (GDP) ratio. Persistent deficits and increases in public debt in most of OECD countries in the last two decades have motivated a large number of empirical studies devoted to sustainability of fiscal policies. This paper departs from previous empirical studies both in the definition of sustainability and in the econometric approach. The authors retain a notion of effective sustainability, which imposes the stationarity of public debt expressed in terms of GDP as a condition for sustainability. This can be viewed as a practical solvency criterion to be opposed to the satisfaction of the intertemporal budget constraint. Concerning the econometric approach, rather than discarding unit root and cointegration tests, the authors reformulate them in order to increase power. The null hypothesis corresponds to a joint restriction on the two equations of the system. This leads to test jointly for a unit root in the process of the variables of interest and for the nullity of the feedback mechanism in an auxiliary equation.

Four essentially independent conceptions of the population problem are visible in current discussions. One is derived from macroeconomics, one from microeconomics, one from the health sciences, and one from ethical concerns about the just relation between man and nature. After describing these conceptions, this paper addresses the population problem principally using the economic definitions. It cites five reasons why discussions of the economic hazards posed by population growth have become markedly less alarmist in the past decade. Failures of highly quantified input-output models to account for human progress are emphasized. The paper presents examples of how technical demography has shed light on the dimensions of and solutions to the population problem and concludes with a brief discussion of contemporary population problems in the U.S. [ABSTRACT FROM AUTHOR]

A conference paper about employee participation (EP) is presented. It reviews both the theoretical and empirical literature about the effectiveness of EP, as well as the legal condition of EP programs in the U.S. It provides information on the four proposals to reform the National Labor Relations Act (NLRA) based on EP literature. It presents several alternative labor policies that could be used to change the NLRA, including the government mandated employee participation committees.

This paper studies the relationship between the real exchange rate and manufacturing profits using Marston's model of pricing-to-market. Looking at US data, we find that a sustained real depreciation of the dollar has a significant and substantial influence on manufacturing profits. During the early 1980s, the appreciation of the dollar reduced profits by at least 25% conditional on the realized time path of sales, costs, and the US markup. The post-plaza depreciation of the dollar boosted profits at least 30%. [ABSTRACT FROM AUTHOR]

The Great Recession sparked wide interest in the economic effects of fiscal policy. That interest is reflected in an ongoing debate over the size of the fiscal multiplier. This survey article addresses three questions: What models do economists use to estimate that multiplier? Why do estimates of it vary widely? How can economists use those estimates to judiciously analyze U.S. economic policy? ( JEL E62, H30, H50) [ABSTRACT FROM AUTHOR]

The article presents information on a paper by David Neumark and colleague that examines the employment affect of a hiring tax credit and compare various papers on the U.S. context to that in Europe and Korea. The paper has proposed for lowering the minimum wage for new small business. It is also stated that the European and Korean papers contribute to an important comparative perspective on the recent global recession. It is suggested that any new economic policies that are developed by a nation should include a rigorous evaluation component.

This article discusses the 2008 global financial crisis, an event that observers say started as a U.S. financial crisis in August 2007. It expects that the global financial crisis will change the economic structures across the world. It is expected also that the crisis will prompt leaders to reexamine the politicies that allowed the build up of the fragilities which then led to the crisis itself. It highlights the high levels of indebtedness of U.S. households as one of the most visible signs of these build up of fragilities. It details how these fragilities ultimately led to the collapse of several financial institutions.

The past two recessions have proved alarming to state government finances. In 2001, a relatively shallow national recession led to a severe downturn in state revenues that took three years to unwind. In the wake of the recent economic downturn, signs of fiscal stress are readily apparent. In this paper, we investigate whether the revenue patterns surrounding these two recessions are the result of state government revenues having grown more sensitive to economic conditions. We find that the responsiveness of revenues to measures of business cycle conditions has grown since the 1990s. We use data on state government revenues, state-specific information on economic conditions, and measures of state policy to examine fiscal performance and budgeting practice over the economic cycle. Our findings suggest that increasing income cyclicality, in particular of investment income, has made state revenues more responsive to the business cycle since the mid-1990s. We also find that changes in policy making have served to increase revenue cyclicality. [ABSTRACT FROM AUTHOR]

I use weekly Treasury-bill rates with maturities of one to twenty-six weeks to examine the information in forward rates during the 1970's and 1980's. Forward rates contain better information about future changes in spot rates than the information captured by auto regressive and vector-autoregressive models. Forward rates also have considerable predictive power, which increased after October 1979 and remained strong after October 1982. The results show no necessary connection between interest rate predictability and the degree to which the Fed adheres to interest rate targeting. [ABSTRACT FROM AUTHOR]

The article looks at the long-term effects of government deficits on the output potential of the U.S. The author discusses the theory that deficit financing has a negative effect on the growth of private capital using the Phelps-Shell (PS) model. This model deals with alternative steady-states of growing, fully-employed economies. The article also examines whether reasonable fiscal policy inferences can be drawn from the PS model. Five assumptions of the Phelps-Shell model are discussed. The behavior of equilibrium within the PS model is also considered.

Patric Hendershott has attempted to "separate discretionary or exogenous changes in the money stock from automatic or induced changes" [4, p. 4] in order to obtain an unbiased measure of the policy actions of the monetary authorities. According to Hendershott, the exogenous component of the money stock is "neutral" if the impact of business activity on the money stock has been removed. Therefore, if the neutralization procedure is effective, one should find evidence of unidirectional causality running from NMS and MODNMS to business activity, without feedback. A test for unidirectional causality recently proposed by Christopher Sims was employed to determine the causal relationship between GNP and Hendershott's two measures of the exogenous component of the money stock. The empirical findings do not indicate a causal pattern running consistently from either NMS and MODNMS to GNP. In sum, our findings indicate that Hendershott's measures of the exogenous component of the money supply are not truly "exogenous." The difficulties associated with the NMS indicators arise from inherent weaknesses in the procedures employed to extract the exogenous component. As Bowers and Duro [2] have shown, Hendershott's MODNMS may be very closely approximated by removing (via regression analysis) the variation in the money supply attributable to movements in Industrial Production. Suppose, however, that the monetary authorities respond in a timely manner to offset cyclical peaks and troughs. In this case, the exogenous or policy induced component of the money stock would be perfectly and negatively correlated with Industrial Production. If the procedure used by Bowers and Duro is followed to obtain a measure of the Neutralized Money Stock, however, the exogenous component is erroneously taken to be endogenous. Thus, when monetary is exactly contracyclical, the endogenous component is overestimated? Such problems call into question the usefulness of so-called neutralized measu... [ABSTRACT FROM AUTHOR]

Through the application of the Macro Multiplier (MM) approach on an Input–Output matrix for US economy in year 2005, the paper identifies the ‘convenient’ structure of a policy control on final demand, oriented to a particular policy objective. The approach quantifies a set of aggregated scale effects, called MM, and the associated structures of both policy and objective variables. In this way the policy maker can both get a complete picture of the patterns of the objective that can be attained and determine a ‘convenient’ structure of the policy variable that compels the model towards those patterns. [ABSTRACT FROM AUTHOR]

This paper explores the question of how the differential exercise of managerial choice can facilitate organizational adaptation and improve efficiency over periods of regulatory change. We address this question in the context of the US airline industry, with a detailed decomposition of an airline cost function. Our findings suggest that managers employ choice in unconstrained domains to counteract the effects of constrained or pre-determined choices. This is an adaptive mechanism that helps firms adjust to environmental change or maneuver over a rugged landscape. We view this as a type of dynamic managerial capability for achieving dynamic fit under changing conditions. Copyright © 2008 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]