Economic Inquiry

Articles from Vol. 48, No. 4, October

Across Time and Regimes: 212 Years of the US-UK Real Exchange Rate
I. INTRODUCTION This paper examines the behavior of the real exchange rate under different nominal exchange rate regimes using monthly data on the US-UK exchange rate over the period 1794-2005. The 212-yr series encompasses five floating and four...
Does Offshoring Pay? Firm-Level Evidence from Japan
I. INTRODUCTION The rise in offshoring--as reflected by the rising importance of imported intermediate inputs in domestic production--has been an important factor behind the growth in world trade (Yeats 1998; Yi 2003). East Asia is not an exception...
Economic Growth and the Separation of Church and State: The French Case
I. INTRODUCTION Historically, the decision to establish or forsake a state religion was seldom democratic. It resulted from the political leaders' willingness to consolidate their hold on power and did not reflect the people's attitudes toward a...
Economic Inquiry 2009 Editor's Report
The 2009 volume of Economic Inquiry consists of 54 papers in a wide variety and diverse set of fields, including microeconomics, macroeconomics, and empirical studies. Since my last report, the regular co-editors are the same. Among the specialized...
Educational Benefits and Military Service: An Analysis of Enlistment, Reenlistment, and Veterans' Benefit Usage 1991-2005
I. INTRODUCTION Educational benefits for military veterans have become a prime recruiting tool in the All-Volunteer military force (AVF). The primary education benefit for most of the AVF era has been the Montgomery GI Bill (MGIB). This version...
Financial Contagion on the International Trade Network
I. INTRODUCTION Does integration into the international trade network make a country more vulnerable to financial crises? A priori, the answer to this question is not obvious. On the one hand, if a country has many distinct trading partners, then...
Financial Frictions and the Choice of Exchange Rate Regimes
I. INTRODUCTION This article provides a quantitative assessment of the role of financial frictions for the choice of exchange rate regimes in a two-country model. The standard new open economy model neglects the role that financial frictions can...
Monetary Policy Regime Shifts: New Evidence from Time-Varying Interest Rate Rules
I. INTRODUCTION Interest rate policies are complex decisions. They rely on a multitude of indicators and models and are by nature associated to events not always captured by relatively simple econometric tools. Nonetheless, there is now a widespread...
Political Business Cycles in the New Keynesian Model
"I know there's the myth of the autonomous Fed ..." Nixon barked a quick laugh. --Richard Nixon, talking to Arthur Burns on October 23, 1969, just after Burns's nomination to the Fed had been announced. (1) "I'd like to see another lowering of...
Real Costs of Nominal Grade Inflation? New Evidence from Student Course Evaluations
I. INTRODUCTION A substantial rise over time in grade point averages (GPAs) at colleges in the United States has been documented, debated, lamented, and theorized about, but empirical evidence on effects of grade inflation has been sparse and theoretical...
Seigniorage, Legal Tender, and the Demand Notes of 1861
I. INTRODUCTION Shortly after the onset of hostilities at Fort Sumter, the Lincoln administration asked Congress to authorize the first large-scale issue of federal paper currency. Officially labeled as United States Notes, they were popularly known...
Skilled-Unskilled Wage Inequality and Urban Unemployment
I. INTRODUCTION An extensive body of literature has looked at possible effects of trade liberalization on the labor market in the North. The effects on the labor market in the South have not drawn as much attention. Conventional wisdom, associated...
Structural Estimation of the Output Gap: A Bayesian DSGE Approach
I. INTRODUCTION Macroeconomic analysis often takes account of the output gap, defined as a deviation of actual output from its trend or potential level. This is because the output gap is considered to be an important indicator of overall macroeconomic...
Taxing Leisure Complements
I. INTRODUCTION Income taxation distorts labor effort downward. Accordingly, it tends to be optimal on second-best grounds to set other policy instruments so as to introduce additional distortions if (though only if) doing so helps to mitigate the...
The Effect of Direct Democracy on Income Redistribution: Evidence for Switzerland
I. INTRODUCTION In recent political economy analyses, the impact of constitutional differences on income redistribution has been discussed intensively. Most prominently, Persson and Tabellini (2000) compare majoritarian systems with systems of proportional...
The Impact of Gender on Voluntary and Involuntary Executive Departure
I. INTRODUCTION The employment of women in U.S. corporations has increased dramatically since the early 1990s, particularly in the highest ranking positions. Bertrand and Hallock (2001) document that, between 1992 and 1997, women almost tripled...
The Theory of Interstellar Trade
I. INTRODUCTION Many critics of conventional economics have argued, with considerable justification, that the assumptions underlying neoclassical theory bear little resemblance to the world we know. These critics have, however, been too quick to...
Welfare Impact of a Ban on Child Labor
I. INTRODUCTION The issue of child labor has recently been the subject of a surge in formal economic analysis. According to the International Labor Organization (2006), there has been a significant decrease in child labor and an even steeper decline...
Why China Industrialized after England
I. INTRODUCTION Although industrialization first occurred in England, it is thought that China, not England, may have been the world leader in technology at the time. Yet, China did not industrialize until 150 yr after England and nearly a century...
Workforce Composition and Firm Productivity: Evidence from Taiwan
I. INTRODUCTION Over the past decade, the availability of employee-employer-matched data has created a new wave of research investigating the performance of firms across sections and over time by thoroughly accounting for the economic characteristics...