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What are the effects of labor market policies when the economy is sliding into a deep recession? We show that public announcements asking firms not to cut wages under H. Hoover during 1929–33 postponed entering the zero lower bound episode and reduced its duration. We develop and estimate a medium scale New Keynesian model to measure the effect of Hoover policies during the Great Depression and we find evidence that without such polices the U.S. economy would have ended up in a liquidity trap 3 years before it actually did, suffering an even deeper recession with a larger deflation. [ABSTRACT FROM AUTHOR]

This article asks what distribution behavior of private foundations in the United States reveals about their motivations and strategy. Do private foundations intentionally distribute additional money to grantees to help them manage through business cycles and maintain services during economic downturns? Such behavior would be consistent with revealed publicness with respect to distributions. Do they retrench during difficult economic times to protect their endowments? Or do they simply distribute money independent from the larger economy? The current study considers these conflicting expectations, and empirically tests whether private foundation distributions vary with endowment returns and the larger economy as suggested by competing theories. Using administrative data filed with the Internal Revenue Service, fixed effects regression models indicate that private foundations change distributions in a manner consistent with retrenchment or independently from the larger economy, depending on the sample used. The results do not support the notion that private foundations act with prosocial-countercyclical motivations about distributions—in which more money is distributed during economic downturns—despite their receiving significant public subsidies. [ABSTRACT FROM AUTHOR]

Since the financial crisis of 2008, subprime lending in the United States has flourished in auto loan markets. This article charts, for the first time, some of the contours of this underresearched part of the subprime landscape. In so doing, it makes two contributions. First, it widens and resituates debates about subprime lending by building on a suite of feminist political economic scholarship to argue that the sites, practices, and agents of social reproduction provide an essential—and largely neglected—perspective on the endurance and deepening of subprime markets. Second, the article leverages the intrinsically geographical, place-bound nature of social reproduction to provide a more holistic treatment of the financialization of everyday life. The article uses (auto)mobility as a novel vantage point from which to connect hitherto disparate social science literatures on financialization, transportation planning, welfare, and urban form. Drawing on secondary data and qualitative fieldwork in Los Angeles, the research explores the proliferation of subprime auto lending and the gendered, raced, and classed inequalities in mobility that mediate everyday life—the daily commute, the school run, the grocery shopping trip—and the demand for subprime debt. [ABSTRACT FROM AUTHOR]

The authors respond to the comments on their article about macromedical regulation in the U.S. amid the COVID-19 pandemic health care crisis. Topics include the responsibilities and opportunities encountered by both banks and hospitals in the face of a surge in demand, a skeptical view on U.S. health policy and failures in national economic policy, and the authors' argument on secondary and tertiary problems in pandemic response addressed in the article.

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Biden Administration's highest priorities well into the second half of 2021 will be domestic matters such as dealing effectively with the coronavirus pandemic and repairing the economic devastation caused for businesses and workers by the pandemic.1 Still, the Administration cannot safely ignore certain trade issues for American workers and businesses (including those who have been hit hard by both the recession and the China tariffs) even in these initial months of the Administration. A full "time out" on trade would be risky since U.S. adversaries such as China are energetically seeking to dominate the field, currently without effective pushback by the United States. Others, although important, are not as critical for the health of the nation. This paper divides the trade issues between the highest priorities (Part I) and those that probably can be safely addressed later (Part II). Part III is a short conclusion. I note that even the trade issues I consider to be lower priorities, including currency concerns with Vietnam and possible free trade agreements with Kenya are not being ignored by the Biden Administration's U.S. Trade Representative (USTR) Katherine Tai and her colleagues. In all instances changing the tone of U.S. trade diplomacy may be almost as important as the substantive results. The Biden Administration's USTR Katherine Tai,2 and the rest of the administration's trade bureaucracy, recognize that effective trade policies for the United States require the support not only of members of Congress but also the public. Finally, considering trade policy as well as other Administration endeavors, it is important for the Biden Administration to encourage its allies and adversaries alike to understand that the United States is prepared to deal multilaterally as well as unilaterally when it makes sense to do so, and remains committed to the rule of law in trade matters as well as otherwise. [ABSTRACT FROM AUTHOR]

This paper examines if internal migrants at the turn of the twentieth century have influenced the long-term economic development of the counties where they settled over 100 years ago. Using Census microdata from 1880 and 1910, the distance travelled by American-born migrants between birthplace and county of residence is examined to assess its relevance for the economic development of US counties today. The settlement patterns of domestic migrants across the 48 continental states are then linked to current county-level development. Factors influencing both migration at the time and the level of development of the county today are controlled for. The results of the analysis underline the economic importance of internal migration. Counties that attracted American-born migrants more than 100 years ago are significantly richer today. Moreover, distance is crucial for the impact of internal migration on long-term economic development; the larger the distance travelled by domestic migrants, the greater the long-term economic impact on the receiving territories. [ABSTRACT FROM AUTHOR]

As the labor market continues its slow return to health following the Great Recession, economic policymakers have been concerned that unemployed workers do not have the skills required for the jobs that employers would like to fill. In this article, the author reviews available evidence and finds little empirical basis for the view that skill mismatch has impeded U.S. economic recovery. She then considers why the widespread perception of serious skill mismatch is so much at odds with what the data suggest. The article concludes with a brief discussion of implications for policy. [ABSTRACT FROM PUBLISHER]

Competition with China has become the main lens through which the United States looks at the world. How will this affect US strategy in Europe? First, Washington's increased focus on China leaves fewer US resources available to influence security developments in and around Europe. This compels US policy makers to seek ways to preserve a favorable regional balance in Europe that require less of the United States. Second, Sino-American competition is leading Washington to view its transatlantic relationships in terms of how they affect its position relative to China. As the Euro-Atlantic area becomes less central to US grand strategy, global--and particularly China-focused--considerations will play an increasingly important role in the context of the transatlantic relationship. [ABSTRACT FROM AUTHOR]

Potential US adversaries have integrated nuclear weapons into their concepts for fighting and winning a future regional conflict. To this end, they have organized, trained, and equipped nuclear-capable forces for theater war fighting. The United States, and its allies, must prepare for adversaries who integrate conventional and nuclear arms to shape the regional battlespace, counter theater defenses, and combat coalition forces. The challenge posed by this conventional-nuclear integration (CNI) cuts across strategic, operational, and tactical levels of warfare. While CNI is not a new phenomenon, its growth and evolution in recent years is placing increasing pressure on US regional deterrence and defense strategies. To effectively deter this threat requires an integrated, but not mirror-imaged, approach. The goal of US CNI is to convince potential adversaries that integrating conventional and nuclear-capable forces grants insufficient advantages within a future regional conflict to overcome either the latter's potential vulnerabilities or the risks attendant with attempting to leverage nuclear escalation. Potential adversaries are likely to retain some of these platforms and their associated nuclear weapons as a hedge against uncertainty. However, it is important for the Department of Defense to bolster US and allied deterrence postures in Europe and the Asia-Pacific by taking steps--prior to any regional crisis--to influence their cost-benefit calculus in contemplating the deployment or employment of nuclear weapons in theater. This article proposes a three-part framework using the Department of Defense's Deterrence Operations - Joint Operating Concept (deny benefits, impose costs, and encourage restraint) to plan and posture for accomplishing this goal. [ABSTRACT FROM AUTHOR]

The COVID-19 pandemic highlights the importance of the Federal Reserve as a leading actor in global economic governance. As a creature of U.S. domestic law with an international presence and operational independence, the Fed wields authority without a well-defined international legal status, international legal standards to guide its conduct, or accountability to those around the world affected by its decisions. This Essay explores three conceptual approaches that could be used to develop norms, standards, and principles to address this gap. [ABSTRACT FROM AUTHOR]

The liberal international economic and political order which the United States created from the ashes of World War II and has since led is in trouble. To United States President Donald Trump, the order which provided the framework under which sovereign states agreed to follow a rules-based system of economic and political cooperation and shared multilateral governance, has not only allowed other nations (in particular, China) to take advantage of US 'magnanimity', but also weakened the United States economically, while asymmetric alliances compromised its military advantages. Given the sustained assault this cosmopolitan order is facing, many fear that it may not survive if Trump is re-elected in November 2020. Indeed, if the United States response to the COVID-19 pandemic is any guide, an 'America First' agenda, especially a hard-line approach to China, will shape US policy if Trump wins a second term. [ABSTRACT FROM AUTHOR]

The main objective of this article is to explore the background of the World Trade Organization's (WTO) Dispute Settlement Body (DSB) crisis using Marxist, neo-Marxist or, at least, Marxist-influenced theories of political economy and international relations. Its purpose is twofold. First, to propose an interpretation of the actual WTO crisis that will address alternative interpretations' gaps. Second, to advance theoretical inputs founded on Marxist or Marxist-influenced writing in political economy, inputs which could be useful elsewhere in critical studies in international law. At the root of the crisis lies the functioning of neoliberalism (understood as the regime of accumulation promoted by US-dominant classes) and the institutions it uses to regulate itself, to deal with contradictions that hurt its capacity to produce profit, and to allow capital accumulation. One of the most important of these institutions, at the international level, is the WTO. We argue that neoliberalism's incapacity to continuously provide, since the Asian crisis in 1997, a satisfying rate of profit to US capitalists (and to Western capitalists in general, even if our argument focuses on the former) lured it into a crisis. Since the WTO's main function is to prevent neoliberalism from being hurt by contradictions that would limit its capacity to provide profits allowing capital accumulation, it was inevitable that one day or another, the struggle faced by the latter would also drag the former down in an institutional crisis. [ABSTRACT FROM AUTHOR]

This paper analyzes how bounded rationality affects monetary and fiscal policy via an empirically relevant enrichment of the New Keynesian model. It models agents' partial myopia toward distant atypical events using a new microfounded "cognitive discounting" parameter. Compared to the rational model, (i) there is no forward guidance puzzle; (ii) the Taylor principle changes: with passive monetary policy but enough myopia equilibria are determinate and economies stable; (iii) the zero lower bound is much less costly; (iv) price-level targeting is not optimal; (v) fiscal stimulus is effective; (vi) the model is " neo-Fisherian" in the long run, Keynesian in the short run. (JEL E12, E31, E43, E52, E62, E70) [ABSTRACT FROM AUTHOR]

Although much has been written about the quantity of jobs created by entrepreneurs, scholars have yet to examine the quality of these jobs. In this article, the authors begin to address this important issue by examining nearly 5,000 businesses that began operations in 2004. They investigate the extent to which nascent employers provide what many think of as quality jobs-those offering health care coverage and a retirement plan. The authors find that because of small scale, constrained resources, and protection from institutional pressures, start-up companies do not provide their employees with either of these proxies for job quality, and their likelihood of offering health or retirement benefits increases only marginally over their first six years of operation. The finding that entrepreneurs' impressive record of job creation is not matched by a similarly impressive outcome with respect to job quality challenges policymakers to ensure that entrepreneurs are encouraged to create quality employment opportunities in the course of creating new businesses. [ABSTRACT FROM AUTHOR]

The United States is the only large federal country that does not have an explicit way to reduce the economic disparities among more and less developed regions. In Germany, for example, federal revenues are distributed by a formula that takes into account the relative level of wealth of each state (the so-called Finanzausgleich, or fiscal equalization). Similar mechanisms are found in Australia, Canada, India, and other large federal countries. The United States, on the other hand, has no such explicit redistribution. Each state is generally considered equal and sovereign, and the federal government does not distribute revenues to equalize the states' spending capacity. While the overall impact of the federal tax and transfer system may be to shift revenues from richer to poorer states, this is not openly acknowledged, and that impact is generally condemned in existing literature as unfair to the states that send mor e revenues to Washington, D.C., than they get back in federal transfer payments. Nor is it politically likely that the U.S. will adopt a formal fiscal equalization mechanism, because--unlike Germany or Canada--it decisively settled the problem of secession in the Civil War and therefore does not fear a potential break-up along regional lines. This Article proceeds from the normative position that the increasing gap between the richer and poorer areas of the United States is a problem that requires federal intervent ion, and that the federal tax system can play a role in that intervention. There is increasing evidence of a yawning economic gap between the heartland and the coasts of the U.S., which translates into higher permanent unemployment and minimum wage employment, opioid abuse, imprisonment, and premature death. This gap contributed to the political division of the country revealed in the 2016 presidential election and needs to be addressed if we want to prevent ever further polarization. The Article first assesses past and current attempts to enact tax provisions to help disadvantaged regions in the United States. On the federal level the prime example is Internal Revenue Code ("IRC") section 936, which provided tax breaks for investments in Puerto Rico. This section was widely criticized and was ultimat ely repealed in 1996 with a ten-year phase-out. The Article will argue that, in fact, the evidence shows that section 936 was quite successful in creating and maintaining jobs in the territory, and that its repeal led directly to Puerto Rico's current economic problems, which began when section 936 was finally abolished in 2006. A contrary example was IRC section 199, the domestic manufacturing deduction, which was intended to stimulate manufacturing in low-growth areas like the Rust Belt, but was captured by coastal industries like software a nd entertainment, and was ultimately repealed in 2017 because it was widely conceded to be ineffective and mostly failed in reaching its initial goal. Its replacement, the Foreign Derived Intangible Income ("FDII") provision in the Tax Cuts and Jobs Act of 2017, IRC section 250, is geared toward aiding exports by intangible intensive industries and is therefore more likely to help the richer areas where these industries are located. On the state and local level, there exists a proliferation of tax incentives, but inmany cases they do not result in successful development. Rather, they tend to confer windfalls on multinationals who would have invested in the U.S. anyway and to favor investment in already rich cities, such as the twenty finalists and the ultimate winner on Amazon's list of candidates for its second headquarters. The Article then takes a comparative perspective by surveying several more or less successful taxmeasures taken to encourage development of less developed regions, including in China and Israel. Finally, the Article develops a proposal for using federal taxes to influence multinationals to invest in poorer locations. It builds on an existing list of approved targets, namely the so-called "opportunity zones" created by the 2017 tax reform. Opportunity zones are limited to census tracts that have at least a 20-percent poverty rate or are below 80 percent of the state or city median income. An investor in an opportunity zone gets a tax break, although it is limited to gains that she has already made from other investments. The opportunity zone provisions have been widely criticized as only helping investors and not being limited to people and areas in need. We would limit our proposal to opportunity zones in the target area, i.e., ruralAmerica, and excludemajormetropolitan zones in that area. We propose that the federal government should declare that a corporation that invests in an opportunity zone in the target area would pay no federal tax on profits from that zone. To define profits from the opportunity zone and segre gate them from other profits, we suggest using a formula like the one the states use: total corporate profit x [(wages paid to employees in the opportunity zone/total wages) + (number of employees in the opportunity zone/total employees)]/2. This type of formula should work to incentivize corporations to move jobs to the preferred areas. With well paid jobs come good schools, better infrastructure, and the general economy dynamismthe richer areas of the United States already have in abundance. [ABSTRACT FROM AUTHOR]

This article analyzes the ideas and policies of Albert Gallatin, the treasury secretary under presidents Thomas Jefferson and James Madison between 1801 and 1813. In particular, it highlights the importance ascribed to revenue instead of debt in Gallatin's policy choices and analyzes the idea of the "community of interests" that Gallatin employed to galvanize the Jeffersonian vision for the new republic. It argues that Gallatin saw individual interests as the basis of the union and that his economic policies sought to strengthen the "community of interests" through internal improvements, free trade, westward expansion, and the establishment of branches of the First Bank of the United States. The article also points to the tragic results of Gallatin's efforts, which led to increased alienation among, and oppression of, Indigenous peoples and African slaves. [ABSTRACT FROM AUTHOR]

This article explores a dilemma at the centre of the monetary order: how to counter inflation eroding the value of money and simultaneously allow bank‐created credit to meet the needs of an expanding economy. Building on recent scholarship on the history of money, the article analyses the Bank Charter Act of 1844 and the financial crisis of 1847 to reveal a response to this dilemma which continues to shape the modern context. That response relies on ex ante restrictive measures in a bid to limit the discretion of the monetary authorities and cultivate financially prudent behaviour. Yet the history of the mid‐nineteenth century exposes the challenges faced by those who enforce such rules, challenges which tie the mid‐nineteenth century to the post 2008 reforms in both the US and the Eurozone, and reveal the ongoing force of the dilemma: that simultaneous desire for both expansive credit and sound money. [ABSTRACT FROM AUTHOR]

The liquefied natural gas (LNG) industry began as a means of making use of natural gas resources in socially remote regions and of natural gas associated with oil production. Natural gas was transformed from a waste product into LNG that could be moved thousands of miles to market, redefining "waste" as a valuable raw material. As the newest large-scale LNG exporter, the United States entered the LNG industry based on another redefinition of nature: the extraction of natural gas previously economically and technologically inaccessible in shale formations. Hydraulic fracturing and new drilling technologies have created reserves of natural gas that are driving down prices with excess production and provoking a search for new markets via LNG exports. Liquefied natural gas is reshaping economies, communities, industries, and ecosystems in the United States and in other parts of the world. This article analyzes the role of the LNG industry with a particular focus on the economic and geopolitical consequences for the United States. The United States is returning to its historical role of energy exporter. Some view the return to this role as an economic and geopolitical boon that will enhance the U.S. economy and the nation's global standing. A contrasting interpretation sees the United States sliding into the extractive periphery, serving the energy demands of a growing China, much like the United States once did for Europe and especially Great Britain. This view condemns what it views as the exploitation of U.S. natural resources to meet China's energy needs while leaving large areas of the United States with depleted resources, damaged ecosystems, and disrupted communities. [ABSTRACT FROM AUTHOR]

Based on analysis of a multi-wave national sample panel of Republican identifiers, we show the increasing coherence among rank and file Republicans around evaluations of Donald Trump. Differences between Republicans who preferred Trump for the GOP nomination and those who preferred another candidate (but, unlike the Never Trump group who said they could not support him in the general election if he won the nomination) are muted by the general election and 2018 waves. While "Never-Trumpers" in the nomination wave maintain their affective distance from Trump in the general election and 2018 waves, their evaluations become less negative. Our analysis suggests that Republicans' favorability toward Trump increasingly aligned with their attitudes toward the Republican Party and their support for Trump's effort to build a southern-border wall. [ABSTRACT FROM AUTHOR]

While a number of studies in recent years explore the particularistic tendencies of presidents – targeting various benefits to districts and states that will help their and their party's electoral prospects – little work has explored how members of Congress react to such behavior. We take some initial steps in this regard by examining how members have responded to President Donald Trump's trade initiatives. We analyze congressional newsletter mentions of tariffs or trade as a means of exploring congressional reaction. We find a positive relationship between tariff/trade mentions and partisanship, as Republican members and members from states that Trump won in 2016 are more likely to refer to tariffs/trade in their newsletters. This represents, we argue, a different kind of credit claiming. These basic empirical patterns set the stage for more systematic analysis in the future. [ABSTRACT FROM AUTHOR]

The Trump administration has reversed a 70-year consensus and transformed both the substance of trade policy and the postwar role the US has played in its global management. It has also reconfigured the role of the president in the domestic trade policy process. Armed with the power and influence the US amassed during its long run as leader of the post-war liberal world economy, the Trump administration has used trade as its principle coercive weapon in foreign policy. It has achieved some success, albeit at high diplomatic cost and by putting at risk America's long-standing structural advantages in the world economy. Given that domestic discontent with the liberal world economy has increased significantly, it is likely that the core aspects of Trump's trade revolution will endure, even if subsequent administrations soften Trump's provocative execution of it. [ABSTRACT FROM AUTHOR]

The protection of fair use in the arts has become an inflexible binary. Either artist Shepard Fairey has permission to use the Associated Press photograph of Barack Obama to create the Hope Poster, or he has stolen the image in violation of copyright. This legal framework is rigid, inaccurate, and creatively unsafe. Yet it is the interpretation, not the doctrine itself that needs shifting. The copyright statute already includes an overlooked "value" test that can more accurately reflect collaboration and sampling in the digital age. And yet instead, some scholars have responded to digital copying by suggesting we throw out the copyright of art altogether. This suggestion is dangerous. It ignores both the economic contingency of artistic labor and the constitutional mandate to incentivize creativity. The fair use test for art does not need wholesale abandonment but rather careful attention. This analysis requires us to address two errors: to refocus on the artist's, not the judge's, point of view, and to look clearly at a bias in the case law that has created unequal treatment of visual and verbal creativity. Then, an "added value" analysis--that is, adapting the game-theory tool of asking what happens if one actor is subtracted out--can support the legal test of "transformative use " while also framing the relative contributions of the various makers. This analysis of shared value helps everyone: It relieves judges of their awkward tour of duty as art critics. It makes artists feel safe in the moment of creativity, before value is known. It accomplishes the same outcome of so many cases--"The parties ultimately settled--without the costs of litigation or the losses to society. Newer technologies such as blockchain make shared ownership possible. Such systems offer robust economic complements to copyright that protect speech without impeding innovation. [ABSTRACT FROM AUTHOR]

I investigate how the level of inequality affects American public opinion on foreign aid. As the level of inequality increases across the United States, the majority of the public will be more likely to demand the government implement policies that should ameliorate severe inequality in society. Assuming that government resources are limited, a greater level of inequality in American society may weaken public support for foreign aid because the public may prioritize providing social safety nets and welfare programs in domestic milieu over granting foreign aid to developing countries. In addition, as inequality widens, the public may perceive economic globalization as one of the main causes of inequality; thus, their overall support for globalization will decline. As a result, American support for global engagement will be negatively affected, and public support for foreign aid may decrease. An empirical test using public opinion data in 50 U.S. states since the 1980s confirms my theory: widening inequality both across states and within a given state does weaken public support for U.S. foreign aid. [ABSTRACT FROM AUTHOR]

This article presents an historical analysis of the antitrust laws. Its central contention is that the history of antitrust can only be understood in light of U.S. economic history and the succession of dominant economic policy regimes that punctuated that history. The antitrust laws and a subset of other related policies have historically focused on the negative consequences resulting from the rise, expansion, and dominance of big business. Antitrust specifically uses competition as its tool to address these problems. The article traces the evolution of the emergence, growth, and expansion of big business over six economic eras: the Gilded Age, the Progressive Era, the New Deal, the post–World War II Era, the 1970s, and the era of neoliberalism. It considers three policy regimes: laissez-faire during the Gilded Age and the Progressive Era, the New Deal, policy regime from the Depression through the early 1970s, and the neoliberal policy regime that dominates today and includes the Chicago School of antitrust. The principal conclusion of the article is that the activist antitrust associated with the New Deal that existed from the late 1930s to the 1960s resulted in far stronger economic performance than have the policies of the Chicago School that have dominated antitrust policy since the 1980s. [ABSTRACT FROM AUTHOR]

This article shows how the network structure of economic expertise can influence the diffusion of ideas in economic policymaking. Applying social network analysis, we analyse the networks of economic policy advice in the United States and Germany around the Council of Economic Advisors and the Sachverständigenrat. With the help of co-publication and institutional affiliation data, we argue that the more fragmented structure of academic expertise in Germany hindered the diffusion of new ideas and fostered continuity in the austerity paradigm. In contrast, the more connected structure of economic expertise in the United States facilitated the diffusion of ideas and changes in dominant ideas about economic intervention. [ABSTRACT FROM AUTHOR]

This paper presents two competing views on China's growth experience over the past three decades. For the sake of illustrative ease and brevity I label these two opposing views as the Beijing Consensus and the Washington Consensus. The Beijing Consensus interprets China's economic growth as a function of innovations in the state sector, including close financial controls, state ownership of firms, and political controls in favor of economic growth. The Washington Consensus views China's experience much the same as growth experiences elsewhere•that is, as a result of financial liberalization, private entrepreneurship, and political opening. Contrary to the established views among China scholars, this paper argues that the Washington Consensus view fits with the Chinese growth experience better. [ABSTRACT FROM PUBLISHER]

We use two different nonparametric methods to determine whether there were multiple regimes in U.S. monetary policy over the period 1955-2003. We model monetary policy using two different versions of Taylor's rule for the nominal interest-rate target. By contrast with parametric tests for regime changes, the nonparametric methods we use allow the data to determine the dimensions on which to split the sample for purposes of estimating the coefficients of the Taylor rule. We find evidence for a few structural breaks and consistent agreement between our two nonparametric methods on the dating of those breaks. [ABSTRACT FROM AUTHOR]

We quantify the welfare differential between precommitment and discretionary monetary policy in three estimated models of the U.S. economy by calculating the permanent deviation of inflation from target that in welfare terms is equivalent to moving from discretion to precommitment. Using a range of reasonable central bank preference parameters, this "inflation equivalent" ranges from 0.05 to 3.6 percentage points, with a mid-point of either 0.15 or 1-1.5 percentage points, depending on the model. In addition to the degree of forward-looking behavior, we show that the existence of transmission lags and/or information lags is crucial for determining the welfare gain from precommitment. [ABSTRACT FROM AUTHOR]

This paper investigates regime switching in the response of U.S. output to a monetary policy action. We find substantial, statistically significant, time variation in this response that corresponds to "high response" and "low response" regimes. We then investigate whether the timing of the regime shifts are consistent with three particular manifestations of asymmetry by modeling the transition probabilities governing the switching process as functions of state variables. We find strong evidence that policy actions taken during recessions have larger effects than those taken during expansions. We find less evidence of asymmetry related to the direction or size of the policy action. [ABSTRACT FROM AUTHOR]

The return to "sound" fiscal policy after the high budget deficits of the 1980s and early 1990s has been hailed by many as the Clinton administration's most important achievement. We evaluate post-war, U.S. fiscal policy using a generalized tax-smoothing model that allows for stochastic interest rates and growth rates. We show that contrary to conventional wisdom, the evolution of the U.S. debt--GDP ratio during the 1980s was remarkably consistent with the tax-smoothing paradigm. In fact, a more substantial departure occurred during the late 1990s, when the debt--GDP ratio fell more rapidly than predicted by optimal tax smoothing. [ABSTRACT FROM AUTHOR]

The article presents commentary on the report "Government Asset and Liability Management in an Era of Vanishing Public Debt," by Henning Bohn, included within the issue. An overview of the report's conceptual basis is given and a review is provided of its three primary explorations into the potential treasury surplus, rent-seeking, and balance sheet analysis monetary policies adoptable by the United States. Comments on the clarity and methodology of the paper are included, along with discussion regarding the viability of its conclusion goals of a state-contingent Social Security tax-benefit policy.