Micro
Data, Heterogeneity and the Evaluation of Public Policy
A Roundabout Approach to Macroeconomics: Some Autobiographical
Reflections
The Relation Between Student Attitudes Toward Graphs and
Performance in Economics
Personal Financial Planning: Origins, Developments, and a Plan for Future Direction
A
Non-Singular Peaked Laffer Curve: Debunking the Traditional Laffer Curve
The Monthly Effect in Stock Returns and Conditional
Heteroscedasticity
Prison Labor Effects on the Unskilled Labor Market
Workers, Remittances, Remittance Decay and Financial
Deepening in Developing Countries
Book
Review: CEOs on the Hot Seat: Failure
and Redemption in Organizations
Micro
Data, Heterogeneity and the Evaluation of Public Policy,
Part I
by James J. Heckman
This paper summarizes the contributions of microeconometrics to economic
knowledge. Four main themes are developed. (1) Microeconometricians developed
new tools to respond to econometric problems raised by the analysis of
the new sources of micro data produced after the Second World War. (2)Microeconometrics
improved on aggregate time series methods by building models that linked
economic models for individuals to data on individual behaviour. (3) An
important empirical regularity detected by the field is the diversity
and heterogeneity of behaviour. This heterogeneity has profound consequences
for economic theory and for econometric practice. (4) Microeconometrics
has contributed substantially to the scientific evaluation of public policy.More…
A
Roundabout Approach to Macroeconomics: Some Autobiographical Reflections
Roger W. Garrison
“Roundaboutness” is a concept featured in Austrian capital
theory. Homely stories about the bare-handed catching of fish are a prelude
to a discussion of the economy’s capital structure. The outputs
of some stages of production become inputs to others. Production takes
time. The capital structure, broadly conceived, has an temporal profile—one
that can be modified in response to changes in intertemporal consumption
preferences and resource constraints. This was the central message of
Eugen von Böhm-Bawerk (1959).
Alfred Marshall, who theorized in terms of the short period and the long
period, taught us that most problems in economics stem from the ever-critical
time element. I think Marshall was right on time. But I also believe that
a healthy understanding of some of those problems—particularly the
ones in macroeconomics—is not best facilitated by his simple short-period/long-period
distinction. More…
The
Relation Between Student Attitudes Toward Graphs and Performance in Economics
By Elchanan Cohn, Sharon Cohn, Donald C. Balch, and James Bradley,
Jr.
This study examines student attitudes about graphs used in the macro-
and microeconomic sections of the one-semester principles of economics
course at a large southeastern state university. In addition, we investigate
the relation between attitudes about graphs and student performance in
the course, controlling for a variety of factors, such as SAT scores,
college GPA, and a number of other student characteristics (e.g., sex,
race, college major, and term standing). Employing a probit regression
model, we also study the factors that predict student attitudes toward
graphs. Our sample includes data collected from 663 students during the
period 2000-2001. More…
Personal
Financial Planning: Origins, Developments, and a Plan for Future Direction
By Lewis Altfest
Personal
financial planning (PFP) is a fairly new and growing discipline. Its origins
are in the underacknowledged contribution by Modigliani, and by Becker
and Markowitz. PFP deserves academic recognition and additional academic
research in the area. It would be extremely useful if a separate personal
financial planning theory were articulated. The author presents building
blocks for that theory. Furthermore, PFP coursework and textbooks should
be elevated in academic content to place them on par with the corporate
finance and investments areas. With proper support, PFP is likely to achieve
the greater prominence it deserves alongside other well- recognized academic
financial areas and other professional disciplines. More…
A
Non-Singular Peaked Laffer Curve: Debunking the Traditional Laffer Curve
By Uriel Spiegel and Joseph Templeman
This paper
has two purposes: first, to demonstrate a utility function of consumption
and leisure that leads to a backward-bending supply of labor. The second
purpose is to show that in spite of the fact that a Laffer curve of any
individual in a society may have one-peak point where tax revenue is at
its maximum, the aggregate (macro) Laffer curve is very likely to have
multi (or at least dual) peaks. This is caused by the high degree of inequality
in wage distribution in most western countries.
More…
The
Monthly Effect in Stock Returns and Conditional Heteroscedasticity
By Menahem Rosenberg
This paper
analyzes the end-of-month (or monthly) effect in stock returns using a
conditional GARCH variance model. Many researchers who have studied seasonal
anomalies in stock returns have tried to explain these phenomena by looking
at the stock market in isolation. In this paper, we relate the end-of-month
effect to macroeconomic variables. Furthermore, we improve the efficiency
of our statistical tests by including heteroscedasticity in the model.
As a result, we present evidence that there is indeed an end-of-month
effect distinct from the Mondays in the end-of-month effect documented
by previous researchers. We show a link between this end-of-month effect
and the economic business cycle, and present evidence that the end-of-month
anomaly exists only during business cycle expansions; this anomaly disappears
during business cycle contractions.
More…
Prison
Labor Effects on the Unskilled Labor Market
By Frederick W. Derrick, Charles E. Scott, and Thomas Hutson
This paper provides the first analytical estimates of the impact of
prison labor on the market for non-prison, unskilled labor. Estimates
of the impact of prison labor on employment and wages of non-prison employees
are derived using a supply and demand model similar that used in the immigration
literature, and generally accepted estimates of the aggregate demand and
supply elasticities. Our results suggest minimal impact, given the current
level of prison employment, and even with a significant expansion to twenty
five percent of all prisoners.
More…
Workers,
Remittances, Remittance Decay and Financial Deepening in Developing Countries
By C. Kenrick Hunte
Using a model and crosscountry, panel-data for eighteen developing
countries, this paper confirms the remittance decay hypothesis, in which
remittances decrease as household income increases. A one percent increase
in household income results in a 0.8 percent decrease in remittances.
Migrant workers respond to negative shocks to household income by increasing
remittance flows, after accounting for the marginal propensity to remit
times the difference between the threshold income level and household
income. The paper demonstrates that remittances have a positive impact
on financial deepening and policymakers should consider adding incentives
for enhancing remittance flows, as remittances influence saving behavior.
More…
Why
Smart Executives Fail—and What You Can Learn from Their Mistakes,
by Sydney Finkelstein, New York: Penguin, 2003
By Kathleen Park
CEOs on the Hot Seat: Failure and Redemption in Organizations
- The chief executive is famous and the company stock has been historically
high-flying, with the latest product or service marvel soon to unfold.
Then, seemingly paradoxically, the promised marvel does not materialize,
quarterly earnings plunge, and soon billions of dollars in shareholder
wealth have been destroyed. In recent years, such disasters have plagued
CEOs and companies ranging from AMP to World- Com. Sydney Finkelstein
aims to answer the question of what went wrong. In his book Why Smart
Executives Fail, the Tuck School of Business at Dartmouth College professor
presents a compelling portrait of pervasively dystopian functioning in
the executive suite. More…