Economic
Theory and the Interpretation of GATT/WTO
Recent
Developments in and Future Prospects for Public Economics
Who's
Afraid of Their Economics Classes? Why are Students Apprehensive About
Introductory Economics Courses? An Empirical Investigation
Matched-Long
Term Maturity Stock and Bond Returns in International Markets
Factors Underlying Trends in Economics Majors: A Cause for Concern?
An Active Learning Tool for the Principles of Economics: The Allocation Exercise
Using Greek Mythology to Teach Game Theory
The Policy Assignment Principle With Wage Indexation
Transitivity Is Not Necessary To Show That Indifference Curves Cannot Intersect, A Note.
Economic
Theory and the Interpretation of GATT/WTO
By Kyle Bagwell and Robert W. Staiger
Over the past 50 years, a remarkable degree of trade liberalization has
been achieved through GATT/WTO negotiations. In this paper, we describe
work that provides a theoretical interpretation of this institution. We
emphasize two key features of GATT/WTO: reciprocity and enforcement. We
also identify important areas for future research. The work described
here contributes to the fields of International Trade and Applied Game
Theory. More…
Recent
Developments in and Future Prospects for Public Economics
By James M. Poterba
This paper describes several of the most important research advances in
public economics during the later three decades. These include an improved
theoretical understanding of the incentive problem in tax design, an expanded
base of knowledge on how taxes and social insurance programs affect household
and firm behavior, and a heightened recognition of the political economy
of tax and expenditure policy design. The paper closes with several suggestions
for promising directions for future research in the field of public economics.
More…
Who's
Afraid of Their Economics Classes? Why are Students Apprehensive About
Introductory Economics Courses? An Empirical Investigation.
By Mary Ellen Benedict and John Hoag
This paper investigates why students are apprehensive about their principles
of economics classes. Using data collected on 399 students from a large,
midwestern public university in the 1998 academic year, the authors examine
whether there are demographic differences in levels of apprehension and
what are the reported reasons for apprehension. The study includes a descriptive
analysis and a probit analysis and concludes that: (1) course reputation
is the main reason reported by the students as the reason for being apprehensive;
(2) females end to be more apprehensive than males; (3) increased math
ability reduces apprehension levels for males and females. The authors
suggest that preparatory sessions for those students weak in mathematics
and alternative teaching methodologies may reduce the level of apprehension
in the introductory courses. More…
Matched-Long
Term Maturity Stock and Bond Returns in International Markets
By Nusret Cakici, Mitchell Kellman and Elli Kraizberg
This paper examines the relationship between real stock returns and matched-maturity
long-term bond yields for 16 countries. We find a strong positive correlation
between real stock returns and corresponding matched-maturity long-term
bond returns for every country in the sample. Our findings also indicate
that the volatility for long term real stock returns is closely related
to the volatility of long term real bond yields. Finally, an additional
cross-sectional analysis indicates that the sensitivity of real stock
returns to real bond yields in each country is negatively related to the
average rate of inflation and the coefficient of variation of these inflation
rates. More…
Factors
Underlying Trends in Economics Majors: A Cause for Concern?
By Bruce M. Skoorka and Carol M. Condon
This paper identifies factors that are important in explaining recent
trends in undergraduate economics majors. The decline in economics majors
during the nineteen-nineties has caused concern in the profession because
the declining trend had been attributed to a general decrease in student
interest in the economics majors. This study uses least squares regression
techniques to explain trends in economics Bachelor degrees granted by
20 New Jersey colleges and universities during the 1979-2000 period, with
implications for the national level. The results show that trends in economics
majors are primarily a function of demographic trends, business cycle
conditions, and the desire to attend post-graduate professional school.
Hence, the recent declining trend in the number of economics graduates
may not be a cause for concern. More…
An
Active Learning Tool for the Principles of Economics:
The Allocation Exercise
By Susan Christoffersen
Integrating active learning exercises into pedagogy has long been recommended
for its impact on student motivation, retention, and depth of understanding.
Despite the well-documented literature in this area, many economics classes
are still conducted in the traditional "chalk and talk" mode.
To facilitate change, this paper details an active approach to understanding
the allocation of goods under different economic regimes. This allocation
exercise is described, example of handouts are provided and student responses
to the exercise are summarized. More…
Using
Greek Mythology to Teach Game Theory
By James D. Miller and Debbie Felton
This paper presents eight stories from classical Greek mythology which
illustrate economic theories of truth inducement and separating equilibria.
Since many students already have some familiarity with Greek mythology,
these stories make ideal classroom examples. More…
The
Policy Assignment Principle With Wage Indexation
By Wen-ya Chang and Ching-chong Lai
This paper is the first attempt to examine the role of alternative wage
indexation schemes in coordination between fiscal and exchange rate policies
to achieve given desirable macroeconomic targets under fixed exchange
rates with perfect capital mobility. By introducing an explicit specification
of the supply side similar to Sachs (1980) and Pitchford (1990) into the
Mundell (1963) framework, we show that the crucial factor determining
whether the mixture of fiscal and exchange rate policies will successfully
work to stabilize output and official foreign reserves is the degree of
wage indexation. Furthermore, we also show that such a finding under fixed
exchange rates is robust when the analysis shifts to the system of a managed
floating regime. More…
Transitivity
Is Not Necessary To Show That Indifference Curves Cannot Intersect, A
Note.
By John Scott
Professors in intermediate and advanced microeconomic theory courses often
propose a proof that indifference curves cannot intersect that relies
on the transitivity and monotonicity of preferences. In the interest of
stimulating thought on the topic, we derive an elementary proof that indifference
curves cannot intersect which relies on fewer assumptions that the traditional
proof. We conclude that transitivity is essential in constructing a theory
of rational choice; but transitivity is not essential in showing that
indifference curves cannot intersect. More…