Teaching the coase theorem: Are we getting it right?

The authors examine current textbook representations of Coase's analysis of negative externalities [Coase, 1960]. Standard treatments identify Coase's ideas with Stigler's Coase Theorem: a zero transaction cost world in which efficient solutions emerge automatically, regardless of legal rules and the initial allocation of rights. Yet Coase's seminal paper breaks from this mode of analysis. The authors use this intellectual history to distinguish two approaches to negative externalities: blackboard (Pigou, Stigler, Samuelson) and Coasean. They survey 45 microeconomics textbooks and find that 80 percent misrepresent Coase's arguments. They argue that a Coasean approach increases students' critical thinking skills by challenging them to move beyond simple laissez faire or interventionist solutions.     

The Complex Course of Ideological Change

Abstract . Ideologies are somewhat coherent, rather comprehensive belief systems about social relations, each such system having cognitive, moral, programmatic, and solidary aspects. Such belief systems have played a critical role in determining the nature of the economic order and the size of government, among other things, but scholars have yet to formulate a convincing account of how and why ideological change occurs. In this article, the author discusses some important aspects of ideology and ideological change, indicates how certain notable thinkers have tried to account for such change, and suggests how we might think more productively about some open questions that invite further research.     

Welfare effects on the United States of a significant multilateral tariff reduction

This paper summarizes an estimate of the impact of a 50 percent multilateral tariff reduction on U.S. trade, employment, capital utilization, and economic welfare. In addition to calculating conventional measures of consumer surplus and revenue effects, the paper quantifies the economic adjustment costs faced by labor and capital-owners who are displaced by trade liberalization. Account is taken of both direct and indirect effects through utilization of the 367- sector U.S. input-output table. Some of the more interesting and important welfare dislocation estimates are highlighted on an industry-by-industry basis. In the aggregate, the calculated gains from trade liberalization dwarf the measured adjustment costs by a ratio of almost 20 to 1.     

Retailing in the 21st century: reflections and prologue to research

Retailing in the 21st century will no doubt be very different from retailing in the 20th century, just as retailing in the 20th century was very different from retailing in the 19th century. To understand and explain current retailing phenomena and retailing-related phenomena, and accurately predict such phenomena, it is necessary to have a coherent and consistent definition of retailing as well as comprehensive retailing theories based on this definition. This introduction to the special issue argues for such a definition and related comprehensive theories.     

Arbitrage pricing with information

The Arbitrage Pricing Theory is extended to a setting where investors possess information about future asset returns. A no-arbitrage pricing restriction is obtained with arbitrage conditioned on an investor's information. The pricing restriction contains unconditional factor loadings and either conditional or unconditional expected returns. Thus, tests of the theory can be based solely on time-series estimates of unconditional moments. Additional tests based on conditional expected returns are also appropriate.