Public Economics Commons^™

Does Starting School Before Labor Day Affect High School Retention And Graduation: Evidence From Virginia's Kings Dominion Law, Timothy M. Komarek, Jay K. Walker

Economics Faculty Publications

Several states have required K-12 public schools to start after Labor Day in an effort to aid the tourism and hospitality industry. However, little is known about how these policies impact educational outcomes. We examine the impact of Virginia's post-Labor Day school start law on high school retention and graduation rates. We use a difference-in-differences model to exploit exogenous variation in school division start dates. Our results show small differences of up to three weeks have little effect on high school dropout and graduation rates. Our findings inform the debate on post-Labor Day school start laws and compulsory attendance age …

In Classical And Keynesian Times: The Twentieth Century Economy Revisited, Lewis Karstensson

Economics Faculty Publications

A descriptive analysis of the performance of the United States economy with respect to production, employment, and average price level over the twentieth century by presidential administration.

Working Capital Requirement And The Unemployment Volatility Puzzle, Tsu-Ting Tim Lin

Economics Faculty Publications

Shimer (2005) argues that a search and matching model of the labor market in which wage is determined by Nash bargaining cannot generate the observed volatility in unemployment and vacancy in response to reasonable labor productivity shocks. This paper examines how incorporating monopolistically competitive firms with a working capital requirement (in which firms borrow funds to pay their wage bills) improves the ability of the search models to match the empirical fluctuations in unemployment and vacancy without resorting to an alternative wage setting mechanism. The monetary authority follows an interest rate rule in the model. A positive labor productivity shock …

Common-Value Procurement Auctions With Renegotiation, Rimvydas Baltaduonis, Lucas Rentschler

Economics Faculty Publications

This note contains the equilibrium bid functions for two types of common-value procurement auctions: 1) a procurement auction in which bids represent an enforceable contract; 2) a procurement auction in which, upon learning the true cost of supplying the good, the winning bidder can renegotiate the contract with the buyer, and each bidder must submit a bond with their bid, which is returned at the end of the auction unless they are the low bidder and renegotiate the contract.

El Mal De Chagas Y Su Potencial De Eliminación, Eileen Stillwaggon

Economics Faculty Publications

La Asamblea Mundial de la Salud ha elegido algunas enfermedades como blancos para la eliminación. Hay mucha esperanza y una alta probabilidad de que varias enfermedades, recientemente llamadas desatendidas, sean eliminadas en las próximas décadas. Vamos a presenciar el fin de la transmisión de la dracunculiasis, la filariosis linfática, la poliomielitis, y en las Américas por lo menos, la oncocercosis. Ya se ven éxitos significativos como la cuasi erradicación de la dracunculiasis y paso importantes en contra de otras aflicciones. [Original Spanish version]

The World Health Assembly has chosen some diseases as targets for elimination. There is much …

An Experimental Study Of Complex-Offer Auctions From Wholesale Energy Markets, Rimvydas Baltaduonis

Economics Faculty Publications

A Payment Cost Minimization auction has been proposed as an alternative to the Offer Cost Minimization auction for use in wholesale electric power markets with an intention to lower procurement cost of electricity. Efficiency concerns have been raised for this proposal while assuming that the true production costs would be revealed to the auctioneer in a competitive market. Using an experimental approach, the study compares the performance of these two complex-offer auctions, controlling for the level of unilateral market power. The analysis finds that neither auction results in allocations that correspond to the true cost revelation. Two auctions perform similarly …

Real-Time Forecasting, Dean D. Croushore

Economics Faculty Publications

This chapter will discuss real-time forecasting in a macroeconomic policy context. I will begin by talking about the Survey of Professional Forecasters (SPF), a survey of private-sector forecasters. Next, I will discuss research on real-time data analysis and its importance in forecasting. Finally, I will discuss real-time forecasting in the 1990s.

Sustainable Budgeting, Brian K. Strow, Claudia W. Strow

Economics Faculty Publications

At the forefront of current discussion and social conscience is the importance of ecological sustainability. An also important but often overlooked issue is the importance of sustainable budgeting practices for our various levels of government. Governments often provide social services such as food, clothing, shelter, education, public safety, or health care. If the money to pay for the social services comes from additional government debt, social services to future citizens become imperiled. In this paper, the authors set forth a theoretical framework for sustainable government decision making with special emphasis on sustainable governmental budgeting. The authors outline the intricacies of …

Philadelphia Fed Forecasting Surveys: Their Value For Research, Dean D. Croushore

Economics Faculty Publications

The Federal Reserve Bank of Philadelphia has conducted both the Survey of Professional Forecasters and the Livingston Survey for 20 years. Both surveys of private-sector forecasters provide researchers, central bankers, news media, and the public with detailed forecasts of major macroeconomic variables. The surveys have proved helpful for people who are planning for the future, and they have also provided useful input into the decisions of policymakers at the Federal Reserve and elsewhere. In this article, Dean Croushore provides an overview of the surveys and discusses the ways in which researchers have used the surveys.

Monopoly, Regulation, And Innovation, Matt Bogard

Economics Faculty Publications

Recently the Justice department has started investigations into alleged anti-trust violations by Monsanto. This has helped fuel a lot of already hyped discontent with one of the world’s leaders in innovative solutions for sustainable agriculture. This article discusses how the regulatory environment could possibly have contributed to more concentration and power in the biotech industry. Increasing regulation would likely have the opposite effect of creating a level playing field in the agriculture industry. From AgWeb, March 27,2010 http://www.agweb.com/blog/Economic_Sense_190/Monopoly_Regulation__and_Innovation_10771/

Kentucky's Debt Relief Attempt, Stephen E. Lile

Economics Faculty Publications

No abstract provided.

Efficiency In Deregulated Electricity Markets: Offer Cost Minimization Vs. Payment Cost Minimization Auction, Rimvydas Baltaduonis

Economics Faculty Publications

A payment cost minimization (PCM) auction has been proposed to solve the problem of inflated wholesale electricity prices. In the electricity industry, where even small changes in $/MW are worth tens of millions of dollars, it is highly important that policy makers have a good understanding of the tradeoffs and impacts of new institutional rules. In this paper we examine efficiency performance of the proposed PCM auction in contrast with the offer cost minimization (OCM) auction currently used by most independent system operators (ISOs) in the United States. For most of the analysis we concentrate on production efficiency, which is …

Consumer Confidence Surveys: Can They Help Us Forecast Consumer Spending In Real Time?, Dean D. Croushore

Economics Faculty Publications

In 1993, the Philadelphia Fed undertook a project to develop a real-time data set for macroeconomists, who can use these data in many ways — for example, when analyzing indexes of consumer confidence. existing research indicates that consumer-confidence measures, though highly correlated with future spending, do not improve forecasts of future spending. but these studies used revised data that were not available to forecasters at the time they made their forecasts. In this article, Dean Croushore uses the real-time data set to investigate an important question: Does using data available to forecasters at the time — that is, real-time data …

U.S. Coins: Forecasting Change, Dean D. Croushore

Economics Faculty Publications

Although the government annually produces about 70 new coins for every man, woman, and child, the economy’s need for coins can vary from year to year. So how do the U.S. Mint, which makes the coins, and the Federal Reserve, which distributes them, decide how many coins the economy needs? Dean Croushore highlights some facts about coins and describes how demand for change is forecast.

How Useful Are Forecasts Of Corporate Profits, Dean D. Croushore

Economics Faculty Publications

If forecasters predict higher earnings for corporations, the stock market will rise. Stock prices will drop with a forecast of lower earnings. But are such forecasts on the money? Dean Croushore uses data from the Survey of Professional Forecasters to check the accuracy of forecasts of corporate profits. The results show that, despite the volatility of corporate profits, the forecasts are rational.

Low Inflation: The Surprise Of The 1990s, Dean D. Croushore

Economics Faculty Publications

For most of the 1990s, forecasters have been predicting an upturn in inflation. Yet, over that same period, the United States has experienced stable or declining inflation. Why have forecasts been at odds with reality? And why does it matter? In this article, Dean Croushore considers some answers to these questions and explains why inflation is the economic surprise of the decade.

The Livingston Survey: Still Useful After All These Years, Dean D. Croushore

Economics Faculty Publications

The decisions of households, firms, and government agencies depend on forecasts of the overall economy. Large firms and the federal government often have the resources to hire their own economists to provide forecasts. But households, small firms, and local governments often depend on surveys of forecasters to get their information. In this article, Dean Croushore spotlights the Livingston Survey, which, even after 50 years, still provides useful forecasts of the economy.

Inflation Forecasts: How Good Are They?, Dean D. Croushore

Economics Faculty Publications

Forecasts of inflation affect decision-making in many segments of the economy. But in the early 1980s, economists found that forecasts in surveys taken over the past 20 years systematically underpredicted inflation. As a result, many economists stopped paying attention to forecasts. However, they may have abandoned them too quickly. In this article, Dean Croushore takes a closer look at survey forecasts and, after considering some relevant factors, concludes that inflation forecasts may not be as bad as you think.

Introducing: The Survey Of Professional Forecasters, Dean D. Croushore

Economics Faculty Publications

Forecasts play a crucial role in the economy. Businesses won't hire workers as readily if they think the economy may go into a recession soon. Long-term interest rates will rise if people in the financial markets expect inflation to increase. And firms are less likely to borrow money for new investment spending today if they think interest rates will soon decline.

Forecasts are important for many decisions, but not many people have the knowledge and experience to forecast economic variables well. It makes sense, therefore, for people to rely on the forecasts of experts. One easy way to get these …

What Are The Costs Of Disinflation?, Dean D. Croushore

Economics Faculty Publications

The Federal Reserve can use monetary policy to reduce the inflation rate, a process known as disinflation. Are the benefits of disinflation worth the costs? Proponents of disinflation argue that the long-run benefits of price stability, including lower interest rates, increased economic efficiency, and perhaps faster economic growth, greatly exceed the short-run costs. Opponents, of course, claim the opposite, usually arguing that the short-run costs in terms of higher unemployment and lost output would be immense.

How Big Is Your Share Of Government Debt?, Dean D. Croushore

Economics Faculty Publications

In evaluating the government's financial position, taxpayers need to account not only for its debt, but also for its ownership of tangible assets. Each taxpayer has a share of the government's net worth that is positive; however, the share was larger 10 years ago. While the real net debt tripled, this huge rise in government indebtedness generated no similar gain in government assets. Taxpayers will be paying interest on this debt with little hope of higher future returns from government assets to help pay it off. It is recommended that the government adopt a capital-budgeting system. This system would change …

The Effect Of Government Deficits On Consumption And Interest Rates: A Two Equation Approach, Dean D. Croushore

Economics Faculty Publications

Single-equation estimation of the consumption function often is used in testing the Ricardian equivalence theorem. This approach may be misleading, as effects on interest rates usually are ignored. This paper proposes simultaneous estimation of consumption and investment equations, with the interest rate serving to equilibrate the market. Five existing studies are replicated and subjected to sensitivity tests. The results show that the interest rate is important in the consumption function. The Ricardian equivalence theorem is tested, but the results are mixed.

Government Financial Policy And Capital, Dean D. Croushore

Economics Faculty Publications

Economists have long been concerned about the best way to finance government deficits. Finding the proper fiscal policy and monetary policy mix is a crucial decision. When government debt grows too fast, interest rates rise and capital is crowded out. If the money growth rate is excessive, inflation occurs.

The study of this issue at the theoretical level requires a model which incorporates the following features: (1) modeling money and bonds as endogenous financial assets, whose rates of return are determined in general equilibrium, (2) examination of the utility maxi mization decisions of individuals, so that welfare analysis of alternative …