Economic Inquiry

Articles from Vol. 29, No. 1, January

Advertising, Concentration and Profitability in Manufacturing
ADVERTISING, CONCENTRATION AND PROFITABILITY IN MANUFACTURING I. INTRODUCTION Economists have devoted much effort to empirically testing the hypothesized relationships between industrial concentration, profits and advertising. Twenty years...
A Guide to the Pitfalls of Identifying Price Discrimination
A GUIDE TO THE PITFALLS OR IDENTIFYING PRICE DISCRIMINATION I. INTRODUCTION Many economists explain pricing anomalies by invoking "monopoly power." To paraphrase H. L. Mencken, such answers are all too frequently simple, neat, and wrong. By...
A Note on Risk Aversion and Preferences
A NOTE ON RISK AVERSION AND PREFERENCES I. INTRODUCTION The theory of choice under uncertainty as presented, for instance, by Debreu [1959! is "formally identical with the theory of [choice under! certainty." (1) Yet the terminology used in...
Bashing and Coercion in Monetary Policy
BASHING AND COERCION IN MONETARY POLICY I. INTRODUCTION "We've got excess plant capacity...I don't think that growth is excessive" ..." I have not been overly concerned with inflation." (President Bush in a February 14, 1989 interview with...
Campaign Spending in Congressional Elections
CAMPAIGN SPENDING IN CONGRESSIONAL ELECTIONS I. INTRODUCTION Empirical studies of the effects of campaign spending on the outcome of Congressional elections have found that campaign spending by incumbents is not as effective as that of their...
Committee Assignments, Constituent Preferences, and Campaign Contributions
COMMITTEE ASSIGNMENTS, CONSTITUENT PREFERENCES, AND CAMPAIGN CONSTRIBUTIONS The familiar economic model of regulation as developed by Stigler [1971!, Peltzman [1976! and Becker [1983!, posits an essentially frictionless market process for regulatory...
Competition and the Cigarette TV Advertising Ban
COMPETITION AND THE CIGARETTE TV ADVERTISING BAN I. INTRODUCTION Whether advertising increases or decreases competition has been debated for decades. On one hand, Kaldor [1949-50!, Bain [1956!, and others argue that advertising reduces competition...
Decentralized Income Redistribution Reconsidered
DECENTRALIZED INCOME REDISTRIBUTION RECONSIDERED I. INTRODUCTION Which is the appropriate level of government to undertake income redistribution? This issue is receiving renewed attention from economists examining how migration and labor supply...
Determinants of Voluntary Overtime Decisions
DETERMINANTS OF VOLUNTARY OVERTIME DECISIONS I. INTRODUCTION Since the passage of the Fair Labor Standards Act in 1938, the minimum legal overtime pay premium has remained time and one-half for persons working more than forty hours per week....
Extending the Equation of Exchange: Dual Equations, for Output and Input
EXTENDING THE EQUATION OF EXCHANGE: DUAL EQUATIONS, FOR OUTPUT AND INPUT I. INTRODUCTION As a framework to organize thinking about inflation, deflation, and recession or depression, an equation of exchange is often useful: either Irving Fisher's...
Firm Participation in Steel Industry Lobbying
FIRM PARTICIPATION IN STEEL INDUSTRY LOBBYING I. INTRODUCTION What are the causes of recent protectionist pressure exerted by U.S. import-competing firms? Studies by Coughlin, Terza and Khalifah [1989!, Feigenbaum and Willett [1985! and Takacs...
Firm Specific Training, Layoffs, and Unreliable Workers
FIRM SPECIFIC TRAINING, LAYOFFS, AND UNRELIABLE WORKERS 1. INTRODUCTION Early work in implicit contract theory argues that a long-term relationship between a worker and a firm evolves due to the risk-sharing nature of the implicit contract between...
In Search of Giffen Behavior
IN SEARCH OF GIFFEN BEHAVIOR I. INTRODUCTION The existence of Giffen behavior has intrigued students of traditional consumer theory for many years. Stigler [1947 1948! and Hicks [1956! dealt with the Giffen good by dismissing it as a theoretical...
Interest Rates, Expected Future Deficits and Tax Proposals
INTEREST RATES, EXPECTED FUTURE DEFICITS AND TAX PROPOSALS I. INTRODUCTION In several recent publications Paul Evans [1985 1987 1988a 1988b! presents evidence suggesting a negative wealth effect in response to federal deficits. Evans [1987!...
Measuring the Nominal Value of Financial Services in the National Income Accounts
MEASURING THE NOMINAL VALUE OF FINANCIAL SERVICES IN THE NATIONAL INCOME ACCOUNTS I. INTRODUCTION The treatment of financial services in national income accounting has been a sometimes controversial subject for over thirty years. For economies...
Policy Inference Using VAR Models
POLICY INFERENCE USING VAR MODELS I. INTRODUCTION Macroeconomics has a long tradition of examining the response of macroeconomic variables to shocks in alternative policy measures. Much recent work in this area has been based on the empirical...
Premium Bundling
PREMIUM BUNDLING I. INTRODUCTION The practice of firms offering goods for sale as a bundle or package has long represented an intriguing economic question. One explanation theorizes that bundling offers firms a way to price discriminate among...
Profit and Expenditure Functions in Public Finance: A Correction
PROFIT AND EXPENDITURE FUNCTIONS IN PUBLIC FINANCE: A CORRECTION Greenberg and Denzau's 1988 paper in this journal uses duality to demonstrate lucidly many important theorems about deadweight losses from taxes and subsidies. However, an error in...
Short-Run Pricing Strategies to Increase Corporate Average Fuel Economy
SHORT-RUN PRICING STRATEGIES TO INCREASE CORPORATE AVERAGE FUEL ECONOMY I. INTRODUCTION In 1974 the average fuel efficiency of new automobiles sold in the United States reached a low of 14.2 miles per gallon (MPG). Close on the heels of the...