Economic Inquiry

Articles from Vol. 43, No. 3, July

Beliefs about Other-Regarding Preferences in a Sequential Public Goods Game
I. INTRODUCTION Over the years, experimental evidence has soundly rejected the hypothesis that subjects play the selfish, subgame perfect equilibrium in a large class of sequential games, including the ultimatum game (e.g., Forsythe et al., 1994),...
Change-Point Analysis of the Growth Effects of State Banking Deregulation
I. INTRODUCTION Though most researchers agree that a healthy financial sector and robust economic growth go hand in hand, there remains some debate as to whether one is necessarily precedent to the other. One view, often identified with Schumpeter...
Combining Monetary and Social Sanctions to Promote Cooperation
I. INTRODUCTION When externalities are present, private self-interest and overall group welfare may be at odds, with individuals having incentives to take actions that lower overall group payoff. Examples of situations of interest to economists...
Deposit Insurance and External Finance
I. INTRODUCTION Capital markets serve an essential purpose in the growth and development of modern economies. They provide for the efficient channeling of funds from savers to investors. There are two basic methods for financing capital investment:...
Do Dragons Have Better Fate?
I. INTRODUCTION Traditionally, the Chinese believe that the timing of one's birth according to the signs of the Chinese zodiac determines the fate of that individual. Based on this belief, some parents plan the births of their children according...
Do Economics Departments Search Optimally in Faculty Recruiting?
I. INTRODUCTION When an economics department decides to recruit new faculty, it must decide in which fields to conduct the search. Casual observation suggests that the scope of recruiting searches varies widely, with some departments searching primarily...
External Threat and Collective Action
I. INTRODUCTION Individuals with common interests usually attempt to further their welfare by acting collectively. Examples of collective action include the provision of a public good or collective good, the establishment of clubs, and the formation...
Inefficient Standard Adoption: Inertia and Momentum Revisited
I. INTRODUCTION Since the establishment of the theory of network effects, economists have been concerned with the question of whether a market with network effects will tend to settle on the socially optimal standard. It has been postulated that...
IT and Productivity in U.S. Manufacturing: Do Computer Networks Matter?
I. INTRODUCTION How computers affect productivity is a long-standing research question. Many recent studies argue that information technology (IT), particularly computers, is a significant source of U.S. productivity. The specific mechanism remains...
"New" Public Investment And/or Public Capital Maintenance for Growth? the Canadian Experience
I. INTRODUCTION In search of the determinants of long-run growth, a strand of the relevant literature has focused on the growth impact of public productive expenditures. The theoretical work of Barro (1990), Barro and Sala-i-Martin (1992), and others...
On the Information Content of Asymmetric FOMC Policy Statements: Evidence from a Taylor-Rule Perspective
I. INTRODUCTION Since 1983, the Federal Open Market Committee (FOMC) has included in its policy directives a statement indicating conditional expectations about the future. Although the specific language used to communicate expectations has evolved...
On the Nature of Reciprocal Motives
I. INTRODUCTION The most widely applied models in economics and game theory are based on the assumption of "self-regarding preferences," which are characterized by an exclusive concern about one's own material payoff. Models of self-regarding preferences...
Organized Crime or Individual Crime? Endogenous Size of a Criminal Organization and the Optimal Law Enforcement
I. INTRODUCTION Organized criminal activities have been regarded as major economic and social issues since the early 1900s. Although there has been, as pointed out by Fiorentini and Peltzman (1995), enormous research interest in the economics of...
Predicting Inflation: Does the Quantity Theory Help?
I. INTRODUCTION Inflation forecasting has played a key role in recent U.S. monetary policy, and this has led to a renewed search for variables that serve as good indicators of future inflation. One frequently used indicator, based on the Phillips...
Price Competition under Cost Uncertainty: A Laboratory Analysis
I. INTRODUCTION In markets with posted price competition sellers independently choose prices, which are publicly communicated to buyers on a take-it-or-leave-it basis. Such posted pricing is common in retail markets as well as in industries in which...
The Role of Expectations in Adolescent Schooling Choices: Do Youths Respond to Economic Incentives?
I. INTRODUCTION Over the postwar period, the level of education attained by individuals in nations of the Organisation for Economic Co-operation and Development has increased steadily. This is especially true for the United States. (1) In 1950,...
Welfare and Public Policy: The Role of Internationalized Production
I. INTRODUCTION Micro foundations of the "new open macroeconomics" framework (see Lane 2001 for a comprehensive survey) provide a well-grounded welfare criterion to evaluate public policies. Contributions in this line of research suggest that whether...