Economics Commons^™

Empowering The Public Health Service, Louis Graham

Louis F Graham

The Adequacy Of Economic Resources In Retirement, Michael Hurd, Susann Rohwedder

Susann Rohwedder

The most common metric for assessing the adequacy of economic preparation for retirement is the income replacement rate, the ratio of income after retirement to income before retirement. However both economic theory and common sense say that someone is adequately prepared if she is able to maintain her level of economic well-being, which is not the same as maintaining her level of income or some fixed proportion of income. Economic well-being is typically measured by consumption, which is the measure we use. We define and estimate measures of economic preparation for retirement based on a complete inventory of economic resources, …

Individuals’ Responses To Social Security Reform, Adeline Delavande, Susann Rohwedder

Susann Rohwedder

The Social Security trust fund is predicted to be depleted by 2041. While there are several viable reform proposals to restore long-term solvency of the Social Security system, one important element that is critical to the success of any reform remains unknown: how will individuals respond to, for example, a cut of their Social Security benefits. Will they work longer or save more or both, and to what extent will their response make up for the cut in benefits? In this paper we use data from the HRS Internet Survey where we asked respondents directly what they would do if …

Mumbai And Malgudi: Cooperate On Sezs To Bring Prosperity To All., Shyam Sunder

Shyam Sunder

No abstract provided.

Energy Tax Incentives And The Alternative Minimum Tax, Curtis Carlson, Gilbert E. Metcalf

Gilbert E. Metcalf

We take a first look at limitations on the use of energy-related tax credits contained in the General Business Credit (GBC) due to limitations within the regular corporate income tax as well as the AMT. Between 2000 and 2005, firms were unable to use all energy-related tax credits due to GBC limitations in the regular tax. The AMT has a smaller but still pronounced impact on the ability of firms to use these credits. Finally we provide some illustrative calculations to demonstrate how the AMT can lead to very different levelized costs of producing electricity from a wind power project.

Do Borrowers Know Their Mortgage Terms?, Brian K. Bucks, Karen M. Pence

Karen M. Pence

We assess whether borrowers know their mortgage terms by comparing the distributions of these variables in the household-reported Survey of Consumer Finances (SCF) to the distributions in lender-reported data. We also examine the characteristics of SCF respondents who report not knowing these contract terms. Although most borrowers seem to know basic mortgage terms, borrowers with adjustable-rate mortgages appear likely to underestimate or to not know how much their interest rates could change. Borrowers who could experience large payment changes if interest rates rose are more likely to report not knowing these contract terms. Difficulties with gathering and processing information appear …

Framing The Choice Between Cash And Courthouse: Experiences With The 9/11 Victim Compensation Fund, Gillian K. Hadfield

Gillian K Hadfield

In this paper I report the results of a quantitative and qualitative empirical study of how those who were injured or lost a family member in the September 11, 2001 terrorist attacks evaluated the tradeoff between a cash payment--available through the Victim Compensation Fund--and the pursuit of litigation. Responses make it clear that potential plaintiffs saw much more at stake than monetary compensation and that the choice to forego litigation required the sacrifice of important non-monetary, civic, values: obtaining and publicizing information about what happened, prompting public findings of accountability for those responsible, and participating in the process of ensuring …

Applying Regret Theory To Investment Choices: Currency Hedging Decisions☆, Sébastien Michenaud, Bruno Solnik

Sébastien Michenaud

Foreign Exchange Intervention And Central Bank Independence: The Latin American Experience, Mauricio Nunes, Sergio Da Silva

Sergio Da Silva

Employing data from 13 Latin American countries, we find that greater central bank independence is associated with lesser intervention in the foreign exchange market, and also with leaning-against-the-wind intervention. We also find that the structural reforms that occurred in Latin America mostly in the 1990s helped to reduce the need for foreign exchange intervention.

The Physical Basis Of Voluntary Trade, Karl Widerquist

Karl Widerquist

The article discusses the conditions under which can we say that people enter the economic system voluntarily. “The Need for an Exit Option” briefly explains the philosophical argument that voluntary interaction requires an exit option—a reasonable alternative to participation in the projects of others. “The Treatment of Effective Forced Labor in Economic and Political Theory” considers the treatment of effectively forced interaction in economic and political theory. “Human Need” discusses theories of human need to determine the capabilities a person requires to have an acceptable exit option. “Capability in Cash, Kind, or Raw Resources” considers what form access to that …

Differences In Impact Factor Across Fields And Over Time, Benjamin M. Althouse, Jevin D. West, Ted C. Bergstrom, Carl T. Bergstrom

Ted C Bergstrom

The impact factor of an academic journal for any year is the number of times the average article published in that journal in the previous two years are cited in that year. From 1994-2005, the average impact factor of journals listed by the ISI has been increasing by an average of 2.6 percent per year. This paper documents this growth and explores its causes.

La Riqueza De La Nación, Rodrigo Garcia-Verdu

Rodrigo Garcia-Verdu

No abstract provided.

Behavioral Public Finance, Edward J. Mccaffery

Edward J McCaffery

These are slides from a presentation to the Gruter Institute for Law and Behavioral Research, Squaw Valley Conference, May, 2008 (at which event Michael Jensen got me to agree to post these slides as a pdf on SSRN . . . ). The task is to give an overview of what I hope to be an emerging field of behavioral public finance. Behavioral finance, as per Barberis and Thaler 2003 (and others), consists of two parts: (1) individual level heuristics and biases, which can lead to sub-optimal (inconsistent) judgment and decision-making, and (2) institutional arbitrage mechanisms. In private finance and …

Comments On Liebman And Zeckhauser, Simple Humans, Complex Insurance, Subtle Subsidies, Edward J. Mccaffery

Edward J McCaffery

These are brief comments on an excellent paper by Jeffrey Liebman and Richard Zeckhauser, prepared for a conference sponsored by the Urban Institute and Brookings on tax and health care policy. Liebman and Zeckhauser summarize the complexities involved in making optimal health insurance decisions, and offer generally cautionary notes about conflating these with tax law (a theme of the conference). Most importantly, Liebman and Zeckhauser suggest a positive role for employers in health care and insurance decisions, as better setters or framers of choice sets—witness 401(k) plans. In this Commentary, I applaud Leibman and Zeckhauser’s general work and particular observation, …

Political Altruism Of Transboundary Water Sharing, Anik Bhaduri, Edward Barbier

Edward B Barbier

In the paper, using a political altruism model, we make an attempt to explain why an upstream country might agree to a treaty that recognizes and enforces the water claims of a downstream country. In a natural extension of the standard economic model, it is possible to explain the above phenomena, by allowing for altruism between countries. The altruistic concerns of the countries are dependent on the other country’s willingness to have a good political relationship. If both the countries maintain favorable political relations with one another, then the upstream country will care about the impacts of its water diversion …

Explosive And Periodically Collapsing Bubbles In Emerging Stockmarkets, Sergio Da Silva, Mauricio Nunes

Sergio Da Silva

We detected bubbles in 22 emerging stockmarkets using both standard and threshold cointegration. Eighteen stockmarkets experienced explosive bubbles (and some of them periodically collapsing bubbles as well). The remaining four markets experienced periodically collapsing bubbles only.

Innovation And Entrepreneurship In Latinamerican, Phd(C) José Luis Massón-Guerra

José Luis Massón Guerra, PhD

No abstract provided.

Laboratory Experiments In Economics: Coming Of Age, Shyam Sunder

Shyam Sunder

No abstract provided.

The Development And Testing Of A Purchasing Power Parity Method For Comparing Construction Costs Internationally, Rick Best

Rick Best

Over the past fifty to sixty years there have been numerous attempts to compare the performance of the construction industries of different countries. In almost all cases the cost of construction has been an important, sometimes the single parameter Cost performance has sometimes been equated to productivity, and productivity measurement and comparison is attempted by governments and their agencies on a regular basis.

Fundamental to these exercises has been the necessity to bring construction costs in different national currencies to a common base. This is imperative as amounts in different currencies cannot be directly compared.

Money market exchange rates do …

Distinguishing Owner Compensation From Profit In Closely Held Companies: In Search Of A Responsibility Premium, Michael Sack Elmaleh

Michael Sack Elmaleh

The application of the income method of valuation requires that owner compensation be distinguished from free cash flow. The “proper” parsing of compensation and free cash flow can be the largest point of contention in contested valuation disputes. The preferred method of parsing is the substitution method which says that the proper allocation should be based on the wage that would have to be paid to a non owner employee. In this article I argue that owner employees carry additional responsibilities that are not normally borne by non owner employees. These additional responsibilities require that a premium be paid the …

Ilr Impact Brief - Industry Clusters Affect Job Mobility And Earnings Growth, Matthew Freedman

Matthew Freedman

Industry clusters are associated with greater job hopping and faster growth in workers’ earning power relative to the experience of workers at less spatially concentrated companies. Workers in these clusters tend to accept lower starting salaries than peers at more isolated firms in anticipation of rapid gains that accompany movement from job to job within the cluster and the accumulation of industry-specific knowledge. Higher earnings observed among workers in clustered firms may also reflect choices made by workers with certain characteristics to seek employment in an area with a high concentration of similar firms and by companies with certain characteristics …

The Exchange Rate And Fiscal Consolidation Episodes In Emerging Market Economies, John Thornton, Amine Mati

John Thornton

An analysis of fiscal consolidations in emerging market economies during 1970–2004 suggests that exchange rate depreciation raises the probability of a fiscal consolidation being successful, including when controlling for debt, growth, the composition of the consolidation, and degree of democracy.

Is Mercosur An Optimum Currency Area? An Assessment Using Generalized Purchasing Power Parity, J. Anchieta Neves, Leandro Stocco, Sergio Da Silva

Sergio Da Silva

We consider the cointegration approach of generalized purchasing power parity to show that a necessary condition for Mercosur to be an optimum currency area is met. Yet there are still large cross-country differences as to cast doubt on the success of either monetary union or official dollarization. The PPP puzzle is also found to occur in Mercosur.

Externalities And Pay As You Drive Auto Insurance, Aaron S. Edlin

Aaron Edlin

Externalities from Auto Accidents and Auto Driving justify mandates of Pay-As-You-Drive Auto Insurance.

Corruption, Trade And The Political Economy Of Resource-Based Development: A Comparison Of Africa And Asia, Edward Barbier

Edward B Barbier

No abstract provided.

Natural Resource Scarcity, Ecological Scarcity And Sustainable Development 20 Years On: What Have We Learned That Is Relevant To Developing Countries?, Edward Barbier

Edward B Barbier

No abstract provided.

Aussiemac: Postscript, Christopher Joye, Joshua S. Gans

Joshua S Gans

The purpose of this postscript is to review the many responses to our AussieMac proposal since we first published the original paper on the 26th of March, 2008. As we shall see, our study triggered a significant amount of industry comment, media attention and, more recently, government inquiry—indeed, much more than we initially anticipated.

The Italian Chamber Of Lords Sits On Listed Company Boards. An Empirical Analysis Of Italian Listed Company Boards From 1998 To 2006 - Presentation (Powerpoint Format), Paolo Santella, Carlo Drago, Andrea Polo

Paolo Santella

No abstract provided.

El Efecto Teflón Y La Exuberancia Irracional, Alfredo Bateman

Alfredo Bateman

No abstract provided.

Saga Of African Underdevelopment: A Viable Approach For Africa's Sustainable Development In The 21st Century, Tetteh A. Kofi, Asayehgn Desta

Asayehgn Desta