Economic Inquiry

Articles from Vol. 35, No. 2, April

A Simple Principal-Agent Experiment for the Classroom
Interest in the use of classroom experiments has increased dramatically in the past decade.(1) As we were surveying available demonstrations for a booklet, Ortmann and Colander [1995], we found that there were a number of classroom experiments readily...
Black-White Wealth Inequality: Is Inheritance the Reason?
I. INTRODUCTION On average, black Americans have less wealth than white Americans. Previous studies of wealth reveal that blacks hold on average between 10% and 25% of the wealth held by whites as reported in Terrell [1971], Smith [1975], Sobol...
Central Banking as a Political Principal-Agent Problem
I. INTRODUCTION Conventional wisdom holds that during election periods political leaders have incentives to misuse policy instruments to enhance their chances of reelection. Rogoff and Sibert [1988] construct a rational political economy model of...
Deregulating Religion: The Economics of Church and State
I. INTRODUCTION Enshrined in scripture, scholarship, and the media - the standard stories of religion recount creeping "secularization" punctuated by infrequent bursts of spirituality. Societies drift from faith to disbelief; pivotal figures receive...
Governing a Groundwater Commons: A Strategic and Laboratory Analysis of Western Water Law
I. INTRODUCTION Between the poles of rent maximization and complete rent dissipation, wide latitude exists for institutions to manage or allocate common pool resources (CPRs) with reasonable economic performance. Two topics addressed in previous...
Government Consumption and Growth
I. INTRODUCTION Interest in formulating and testing growth models has surged in recent years. Following the seminal articles of Romer [1986] and Lucas [1988], the theoretical growth literature has primarily sought to endogenize the trend growth...
Hysteresis in Unemployment: Evidence from 48 U.S. States
I. INTRODUCTION One central idea in macroeconomics is the equilibrium unemployment rate hypothesis.(1) In many macroeconomic models which allow for some degree of price stickiness, fluctuations in demand and supply may lead to deviations of the...
Job Mobility and Gender-Based Wage Growth Differentials
I. INTRODUCTION Evidence presented by Goldin [1989], O'Neill [1985] and others shows that the gender wage gap is narrowing. Much of the narrowing has been attributed to changes in female employment behavior such as the increased consistency of labor...
Minimum Wages and Tipped Servers
I. INTRODUCTION Economists have long searched for the presence of monopsony in labor markets. Their consensus has been that the labor market for low-wage workers is competitive.(1) However, some economists have recently asserted that these labor...
Money Demand and Quantity Constraints: Evidence from the Soviet Interview Project
I. INTRODUCTION There are more than 500 studies of money demand that use time-series or pooled data but less than twenty studies that use cross-section data. Time-series studies use a limited number of aggregate variables, such as income and wealth....
Public Munificence for Private Benefit: Liturgies in Classical Athens
I. INTRODUCTION Throughout the democratic period in Athens from the first quarter of the fifth century to the last quarter of the fourth, the numerous liturgies or public services performed by the wealthiest citizens represented an important source...
Rational Bubbles in the Stock Market: Accounting for the U.S. Stock-Price Volatility
I. INTRODUCTION Many economists believe that stock prices are too volatile to be attributed to market fundamentals. In his seminal paper, Shiller [1981] reports that over the past century U.S. stock prices are five to thirteen times more volatile...
Reexamining the Added Worker Effect
I. INTRODUCTION The added worker effect refers to a wife entering the labor force when her employed husband becomes unemployed. This labor supply response is a transitory method of intertemporally smoothing family income and consumption, and is...
Stigma Effects of Nonemployment
I. INTRODUCTION It is well known that longer durations of past nonemployment are associated with longer durations of future nonemployment.(1) Two explanations have been offered in the literature to interpret this phenomenon: heterogeneity and the...
The Development and Decline of Medieval Voting Institutions: A Comparison of England and France
Voting institutions developed throughout medieval Europe, but they varied significantly in their power, form, and durability. This paper attempts to explain why both feudal councils and representative voting institutions were more developed, more powerful,...
The Impact of Unionization on Motor Carrier Costs
I. INTRODUCTION The increasingly competitive markets fostered by the Motor Carrier Act of 1980 have forced motor carriers to focus on cost saving strategies intended to reduce operating miles, fuel consumption, and capital and labor expenses. There...
The Supply of Children's Time to Disabled Elderly Parents
I. INTRODUCTION In recent years, economists have become increasingly interested in intergenerational transfers of both time and money.(1) Such transfers may be motivated by altruism or exchange. Models of altruism assume that a person's utility...
Unobservable Individual Effects, Marriage and the Earnings of Young Men
I. INTRODUCTION Married men earn more than unmarried men. This fact is unassailable and is robust across data sets and over time. Two common explanations of the married-male wage premium are (i) the division of labor in a married household which...

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