Social and Behavioral Sciences Commons^™

Economists' Publication Patterns, James E. Hartley, James Monks, Michael D. Robinson

Economics Faculty Publications

The results presented in this paper give a comprehensive picture of the extent of publishing by economists. While it is obvious that the traditional emphasis on refereed journal articles captures only a part of economists' research output, to date it has been difficult to determine how large a part of that output was not being measured. This note provides the necessary perspective and presents information on the relative productivity of faculty at different institutional types and with different years of experience.

A Little Adam Smith Is A Dangerous Thing, Jonathan B. Wight

Economics Faculty Publications

Adam Smith was trying to counter medieval church theology, which held that any self-interested behavior was sinful and detrimental. Smith countered that self-interest could yield valuable outcomes for society as people pursued specialization and market trade. Much later these quotes would be used to justify the greedy and grasping personae of homo economicus, illustrating how a little Adam Smith can prove to be a dangerous thing. For example, Max Lerner in 1937 would say that Adam Smith "sanctified predatory impulses" and "gave a new dignity to greed." By the 1980s the movie Wall Street has the financial tycoon Gordon …

Does Free Trade Cause Hunger? Hidden Implications Of The Ftaa, Jonathan B. Wight

Economics Faculty Publications

Voluntary free trade has the potential, slowly and gradually over time, to create "general opulence" because it allows workers to acquire greater competency and specialization: in a word, workers become more productive. The creation of a Free Trade Area of the Americas (FTAA) would expand market areas and thereby potentially contribute to raising future living standards of workers. This paper seeks to analyze the theoretical basis for trade, provide an economic overview of FTAA countries, and analyze the winners and losers from trade.

A Funny Thing Happened On The Way To The Data Bank: A Real-Time Data Set For Macroeconomists, Dean D. Croushore, Tom Stark

Economics Faculty Publications

Economic policies are set and forecasts are made based on data that policymakers and forecasters have available to them. But such data are often revised — at times significantly. As a result, when policies and forecasts are viewed from the perspective of today's data, they may not seem sensible. Recognizing this problem, the Research Department at the Philadelphia Fed created a real-time data set so that economists today have the same data that were available to policymakers and forecasters in the past. In this article, Dean Croushore and Tom Stark tell how the data set was constructed, show how large …

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.

Will The Real Adam Smith Please Stand Up?: Teaching Social Economics In The Principles Course, Jonathan B. Wight

Economics Faculty Publications

Part of the difficulty of introducing social economics into the principles course is the perception that social economics is anathema to mainstream economics. As noted by Warren Samuels, however, "neoclassical economics is already a form of social economics" despite its "pretensions of methodological individualism and value-neutrality". Heilbroner also makes the case that the " ... the preponderance of great economists were aware of economics as explanation systems of particular socio-economic formations." Like it or not, economists err in omitting from their models what McCloskey calls "S" variables--variables representing the "social embeddedness" of values which direct human choices.

Layoffs, Top Executive Pay, And Firm Performance, Kevin F. Hallock

Economics Faculty Publications

This paper examines the connection between layoffs, executive pay, and stock prices. Firms that announce layoffs in the previous year pay their CEOs more, and give their CEOs larger percentage raises than firms which do not have at least one layoff announcement in the previous year. However, the likelihood of announcing a layoff varies dramatically along with other dimensions, for example firm size, which are also correlated with CEO pay. Once firm-specific fixed effects are controlled for, the CEO pay premium for laying off workers disappears. In addition, there is a small negative share price reaction to layoff announcements.

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.

Economic Crisis And Reform In Bulgaria, 1989-92, Jonathan B. Wight, M. Louise Fox

Economics Faculty Publications

Bulgaria's economy began a deep and prolonged collapse in 1989, exactly one hundred years after the noted Bulgarian novelist Ivan Vazov published his stirring novel opposing the tyranny of the Ottomans and warning of the mistaken road of socialism. The 1989 collapse was partially a reflection of the external political upheavals among Bulgaria's trading partners in Eastern Europe, which were rejecting socialist principles. But it was also a reflection of the weaknesses imbedded in the economy after 30 years of central planning. Political instability within Bulgaria, market reforms, and attempts at privatization contributed further to economic uncertainty resulting in a …

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.

Evaluating Mccallum's Rule For Monetary Policy, Dean D. Croushore, Tom Stark

Economics Faculty Publications

Some economists have proposed that the Federal Reserve follow a rigid rule for conducting monetary policy. A policy rule is a formula that tells the Fed how to set monetary policy. For example, in 1959 Milton Friedman argued that the Fed should increase the money supply a constant 4 percent each year to eliminate inflation and avoid destabilizing the economy. More recently, other economists have identified an additional benefit: a rule can eliminate the inflationary bias that could occur when discretionary monetary policy is used. Under a discretionary policy, decisions are made on a case-by-case basis.

But economists don't agree …

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 …

The Efficiency Of Producing Alcohol For Energy In Brazil: Comment, Jonathan B. Wight

Economics Faculty Publications

In a 1982 issue of this journal, Michael Barzelay and Scott R. Pearson examined the social costs and benefits of producing ethanol motor fuel in Brazil. They conclude that ethanol fuel was economically infeasible in 1981 and will remain so unless petroleum prices rise dramatically in the future. We seek first to call attention to some problems in their data and second to suggest that their analysis include broader considerations. Quite different conclusions could result.