Economic Inquiry

Articles from Vol. 38, No. 2, April

A Cross-Country Panel Analysis of Currency Substitution and Trade
ERIC PENTECOST [*] Attention that has been directed toward the effect of trade on foreigner's holdings of domestic currency comes exclusively from time-series evidence. Here we extend a model of currency substitution that incorporates a trade motive...
Does a Helping Hand Put Others at Risk?: Affirmative Action, Police Departments, and Crime
Will increasing the number of minority and women police officers make law enforcement more effective by drawing on abilities that have gone untapped and creating better contact with communities and victims? Or will standards have to be lowered too...
Does Multinational Activity Displace Trade?
KIMBERLY A. CLAUSING [*] Using two-panel data sets on the operations of U.S. multinational firms abroad and the operations of foreign multinational firms in the United States, this article examines the empirical relationship between international...
Factor Demands, Effective Discount Rates, and Liquidity Constraints in the Retail Trade Firm
EUNKYUNG KWON [*] This is a firm-level empirical study of the impact of credit market frictions on firm factor demands. It extends previous work in two ways: it studies the impact of liquidity constraints on both fixed investment and employment...
Financial Development, Investment, and Economic Growth
ZHENHUI XU [*] In this article, I use a multivari ate vector-autoregressive (VAR) approach to examine the effects of permanent financial development on domestic investment and output in 41 countries between 1960 and 1993. The VAR approach permits...
Firm Outsourcing Decisions: Evidence from U.S. Foreign Trade Zones
DEBORAH L. SWENSON [*] This article examines the operations of firms located in U. S. foreign trade subzones to study the responsiveness of outsourcing to international cost changes. I find that firms reduce their reliance on foreign inputs when...
Precaution and Liquidity in the Demand for Housing
We exploit cross-sectional mortgage data to investigate the importance of liquidity constraints and a precautionary motive in the demand for housing. Households that are not liquidity constrained consume housing services essentially as the life cycle...
Pretrial Negotiation, Litigation, and Procedural Rules
R. PRESTON MCAFEE [*] We model the civil dispute resolution process as a two-stage game with the parties bargaining to reach a settlement in the first stage and then playing a litigation expenditure game at trial in the second stage. We find that...
Some Evidence on the Continuity of the Growth Process among the G7 Countries
DAVID H. PAPELL [*] The stability of the growth process, whether growth rates are rising, falling, or constant, is one of the central questions of economic growth theory. We use recently developed techniques for identifying structural change in...
Team Effects on Compensation: An Application to Salary Determination in the National Hockey League
LEO H. KAHANE [*] Studies of salary determination largely model pay as a function of the attributes of the individual and the workplace (i.e., employer size, job characteristics, and so forth). This article empirically investigates an additional...
The Economics of Organized Crime and Optimal Law Enforcement
NUNO GAROUPA [*] This article extends the optimal law enforcement literature to organized crime. I model the criminal organization as a vertical structure where the principal extracts some rents from the agents through extortion. As long as extortion...
The Publishing Patterns of Recent Economics Ph.D. Recipients
VICTOR STANGO [*] We present publication data for recent graduates of 50 economics Ph.D. programs. The data show that publishing output is highly concentrated among graduates of the top programs; the top three programs, for example, generate more...
Which Countries Protect Intellectual Property? the Case of Software Piracy
DAVID G. STEEL [*] Using data on software piracy, we examine how protection of intellectual property varies across countries. Consistent with other studies, we find that intellectual property receives greater protection in developed economies; high-income...