Economic Inquiry

Articles from Vol. 37, No. 1, January

A Direct Test of the Efficient Marriage Market Hypothesis
This paper takes Gary Becker's theory of marriage seriously. In his seminal paper, Becker [1973] proposes an invisible hand theorem for the marriage market. He argues that the competition for spouse leads men and women to be matched in such a way that...
A Fiscal Theory of Government's Role in Money
I. INTRODUCTION "Economic policy has, up to the turn of the century, been motivated primarily by fiscal considerations... . [F]iscal measures have created and destroyed industries ... even where this was not their intent, and have in this manner...
Economic Activity in the Shadow of Conflict
I. INTRODUCTION Production, prices, and welfare are altered when exchange emerges in an autarkic economy. These same variables are likewise affected when appropriation arises in a production and exchange economy. Consider Robinson Crusoe, who allocates...
Growth, Welfare, and the Size of Government
I. INTRODUCTION Given the current state of political debate within the U.S., it would appear that making the claim "a smaller government is a better government" is just a mere statement of a simple fact. President Clinton, the head of the political...
Inflation and Elections: Theory and Evidence for Six OECD Economies
I. INTRODUCTION Political Business Cycle (PBC) models feature the idea that governments stimulate demand prior to elections in order to improve election prospects. While the first generation of PBC models, developed by Nordhaus [1975] and MacRae...
Money and Middlemen in an Economy with Private Information
I. INTRODUCTION Money and middlemen are frequently involved in transactions. Both play an important role in facilitating trade. To understand the medium-of-exchange role of money and middlemen, one needs to be precise about the trading frictions...
Physician Payment and Prenatal Care Access for Heterogeneous Patients
I. INTRODUCTION Following Medicare's shift to the Prospective Payment System (PPS) from cost-based-reimbursement to hospitals in 1983, many payers shifted to prospective fees for physician services. Physician payment for prenatal care for Medicaid...
Raising the Stakes in the Ultimatum Game: Experimental Evidence from Indonesia
I. INTRODUCTION This study investigates behavior in ultimatum games with very high stakes. The ultimatum game, where a Proposer states a proposed allocation of a monetary sum that a Responder accepts or rejects, has generated much interest due to...
Tariff Policy and Entry with Cost-Based Informational Asymmetries
I. INTRODUCTION How does the presence of incomplete information alter the usual effects of trade policy? Recognition that incomplete information characterizes most decision making processes that take place within an international setting has stimulated...
The Impact of Labor Contracts: Evidence from Brazil
I. INTRODUCTION Underlying the Keynesian approach to macroeconomics is the assumption of inefficiencies or, as they are sometimes called, frictions. The precise sort of friction to be introduced into the model, however, is controversial. A traditional...
The Solow Residual for Australia: Technology Shocks or Factor Utilization?
I. INTRODUCTION In macroeconomics a standard way of measuring technology shocks is to use the Solow residual, Solow [1957]. However a growing body of evidence suggests the Solow residual is at best a noisy measure of technology shocks. A number...
Uniform Two-Part Tariffs and below Marginal Cost Prices: Disneyland Revisited
I. INTRODUCTION Since Cournot's [1838] classic analysis of a hard-nosed sole proprietor of a spring pricing water to maximize his profit, the simple theory of monopoly has concluded that a monopolist will produce the level of output at which marginal...