ANARCHY AND AUTARKY: ENDOGENOUS PREDATION AS A BARRIER TO TRADE*

This article presents a general equilibrium two‐country Ricardian trade model with endogenous transactions costs that arise from individual utility‐maximizing allocation of labor to production and piracy. In the absence of institutions for risk sharing and coordination of defense, autarky obtains over most of the parameter space. When both trade and predation are supported in equilibrium, terms of trade effects can make security immiserizing. In that case, paradoxically, predation creates trade.     

A methodologist's econometric model selection

Conclusion The use of shortcuts to predict time series is discouraged by the findings of this paper. First, if time series data are no longer considered to be the result of random sampling, statistical analyses based on properties of sampling distributions become questionable. Using the shoal of fish analogy, we should be wary of considering our catch of fish caught in one dip of the net as essentially identical to another catch obtained from another dip. Second, transformation of time series data to achieve stationarity prevents the user of VAR-related methods from relying on information that is potentially symptomatic of misspecification, especially in the form of missing variables. Since the incidence of missing variables is enhanced the more “compact” is the model used, the implications of the stationarity assumption are vast. Third, uninformed comparisons of the short-term forecasting performance of VAR and large-scale commercial forecasting models leads to a more positive evaluation of VAR than is otherwise warranted. Overall, using our shoal of fish metaphor one final time, we should focus more attention on the reasons why the shoal is in its present location, the reasons why the fish are the size they appear to have, the reasons why the size of the shoal increases and the reasons why the shoal moves from one location to another. If there are sharks around, we should want to know, rather than ignoring their presence.     

Some notes on inflation and employment: Incomes policy and the perspective of the European Monetary Union

In recent times, a new notion of incomes policy as an instrument aiming both at the control of inflation and at the defense of employment has come to supplant the original conception of incomes policy as the set of conditions which could make the growth of the economy compatible with price stability. The aim of the paper is to emphasize that the theoretical background of the former notion appears profoundly different from—and far less solid than—the one of the latter conception. The second aim is to emphasize that factual experience appears to confirm the role assigned to incomes policy in its original meaning. Wage moderation, important as it may be for the control of inflation, is not sufficient for the defense of employment. The third aim of the paper is to emphasize that the perspective of the European Monetary Union has made the defense of employment even more complex, thus calling for a careful reconsideration of a widely advertised relationship between "Maastricht" and employment. A procedural suggestion addressed to each one of the 15 members of the European Union concludes the paper. This article is published posthumously. His death is a great loss to the economic community.     

The enfranchisement of women and the welfare state

We offer a rationale for the decision to extend the franchise to women within a politico-economic model where men are richer than women, women display a higher preference for public goods, and women's disenfranchisement carries a societal cost. Men and women are matched within households which are the center of the decision process. We derive the optimal tax rate under two alternative regimes: a males-only enfranchisement regime and a universal enfranchisement regime. The latter is associated with a higher tax rate but, as industrialization raises the reward to intellectual labor relative to physical labor, women's relative wage increases, thus decreasing the difference between the tax rates. When the cost of disenfranchisement becomes higher than the cost of the higher tax rate which applies under universal enfranchisement, the male median voter is better off extending the franchise to women. A consequent expansion of the size of government is only to be expected in societies with a relatively high cost of disenfranchisement.We empirically test the implications of the model over the 1870–1930 period. We proxy the gender wage gap with the level of per capita income and the cost of disenfranchisement with the presence of catholicism, which is associated with a more traditional view of women's role and thus a lower cost. The gender gap in the preferences for public goods is proxied by the availability of divorce, which implies marital instability and a more vulnerable economic position for women. Consistently with the model's predictions, women's suffrage is correlated positively with per capita income and negatively with the presence of catholicism and the availability of divorce, while women's suffrage increases the size of government only in non-catholic countries.     

Asymmetric effects of housing wealth on college enrolment

We investigate the impact of housing wealth, credit availability and financial distress on college enrolment decisions. We find that housing wealth is negatively related to enrolment in public schools and positively related to enrolment in private schools. This evidence suggests that, on average, students substituted away from private schools towards public institutions during the recent financial crisis.     

我国粮食流通中利益损失的原因分析与均衡策略

加入WTO,我国的粮食流通领域必须遵照多边协议的要求,按既定的进程对外开放。然而历次的改革表明。由于国家的粮食流通政策变动频繁,流通与生产、消费等环节难以形成稳定的经济联系,以致流通中的利益分配不合理,并在很大程度上加大了粮食市场的供求矛盾。粮食流通业的弱质性决定了粮食流通利益损失的必然性。我们应采取相应措施,减少粮食流通利益损失,实现利益均衡。     

Skew Selection: Nature Favors a Trickle-Down Distribution of Resources in Ants

Synopsis: According to skew selection, ant queens are neither ruthlessly selfish nor blindly altruistic; they are shrewd investors. The goal of shrewd investors is not to win the game, but to continue play over evolutionary time. Skew selection describes a set of investment strategies employed by players such as ant queens to keep the game going. First, ant queens acquire excess resources—more than they need for immediate survival and reproduction. Second, queens invest a portion of their excess resources in personal capital to maintain dominant status. Third, queens also invest a portion of excess resources in low-quality offspring to gain group capital. Fourth, when investing in group capital, resources are distributed in a trickle-down fashion to maintain the largest number of diminishing-quality offspring possible. The trickle-down redistribution allows the shrewd queen to increase group size (safety in numbers) and, at the same time, maintain individual status (safety in position). According to skew selection, queens invest in low-quality offspring (sterile workers) to buffer hereself and her high-quality offspring from agents of death such as war, predation or disease. This revised version was published online in July 2006 with corrections to the Cover Date.     

Resource Utilization and Economies of Size in Secondary Schools

This paper identifies the determinants of costs per pupil in English secondary schools. A distinction is made between the short run and the long run in order to estimate the separate effects on costs per pupil of short‐run variations in school output and school size. A school’s capacity utilization rate is used to indicate short‐run deviations in output from pupil capacity, and pupil capacity is used as an indicator of school size to capture scale effects on costs per pupil. The statistical analysis uses both published and unpublished data for secondary schools in England. Two separate analyses are undertaken, one for grant‐maintained schools alone and the other for all schools. A separate analysis is undertaken for grant‐maintained schools since cost data are available only for schools in this sector. Staff hours per pupil is used as a proxy for costs per pupil for schools as a whole. The main finding is that costs per pupil and staff hours per pupil are both highly significantly negatively related to both school size and the capacity utilization rate of schools. A range of other variables are also estimated to have a significant effect on costs per pupil in secondary schools. The main finding is that there is scope for reducing the costs of schooling in the secondary schools sector in England.     

Intra-school competition and student achievement

Within the economics of education literature, numerous studies have investigated the relationship between educational market competition and educational achievement. Educational market competition has been defined as either the availability of vouchers within a community or the number of schools or school districts within the relevant market structure. While these studies have shown that increases in inter-district competition result in increased student achievement, no studies, to our knowledge, have yet investigated the effect of intra-school competition on student achievement. Within this study, a measure of intra-school competition is developed and the findings indicate that increased intra-school competition leads to increased student achievement.     

Can Small Class Policy Close the Gap? An Empirical Analysis of Class Size Effects in Japan

Can smaller classes lead to better educational outcomes and greater equality in achievement? We estimate the causal effects of class size on achievement tests by using discontinuous changes in class size under the Japanese public compulsory education system. We employ a value‐added model that uses achievement tests conducted at two different times during the same school year. Our results show that a reduction in class size has significantly positive effects on Japanese language test scores in the sixth grade, especially at schools in wealthy areas. However, we find no evidence that a universal small class policy closes the achievement gap among schools.     

Joint determination of food consumption and production in rural Sierra Leone: Estimates of a household-firm model

This paper investigates the determination of food consumption for rural households in Sierra Leone that produce the foods which they consume. A household—firm model is estimated with seven commodities: including five foods, non-foods and labor, as compared to three commodities in past studies. Such food disaggregation permits tracing of the effects of socioeconomic variables on household nutrient availability. Household specialization in production is such that censored data is a problem. A Tobit approach is used to correct for this. For most crops the own price effects on consumption remain negative when a price change is allowed to shift the budget constraint by effecting the profits from home production. Elasticities of calorie availability with respect to toal expenditure are found to be sizeable, varying little by expenditure group. The price elasticities of calorie availability are generally positive, however an important exception occurs for price of the staple food, rice. This exception has several important policy implications which are explored.     

A reappraisal of the evidence on PPP: a systematic investigation into MA roots in panel unit root tests and their implications

Panel unit root tests of real exchange rates—as opposed to univariate tests—usually reject non-stationarity. These tests, however, could be biased if the real exchange rate contained MA roots. Indeed, two independent arguments claim that the real exchange rate, being a sum of a stationary and a non-stationary component, is possibly an ARIMA (1, 1, 1) process. Monte Carlo simulations show how systematic changes in the parameters of the components, of the test equation and of the correlation matrix affect the size of first and second-generation panel unit root tests. Two components of the real exchange rate—the real exchange rate of a single good and a weighted sum of relative prices—are constructed from the data for a panel of countries. Computation of the relevant parameters reveals that panel unit root tests of the real exchange rate are severely oversized, usually much more so than simple augmented Dickey-Fuller tests. Thus, the evidence for purchasing power parity from first and second-generation panel unit root tests may be merely due to extreme size biases.     

FOOD TRADE AND BIODIVERSITY EFFECTS

Pests create biodiversity effects that increase food production risks and decrease productivity when agricultural production is specialized. Pesticides contain these effects, but damage the environment and human health. When opening to trade, governments are tempted to restrict pesticide use because, with more food being imported, less pesticide is needed for domestic consumption. However, pesticide restrictions hinder the competitiveness of their agricultural sector on international markets. We show that restrictions on pesticides are more stringent under free trade than under autarky, which reduces the gains from trade, and that trade increases food price volatility.     

The Effects of the Defense Sector on the Productivity of Civilian Industry in the United States and the USSR

In this paper we estimate production functions in order to measure the effects of the defense sector on productivity in the civilian branches of U.S. and Soviet industry. The size of the defense sector is measured by a flow variable, annual expenditures, and a stock variable, the stock of military capital. For the United States, we use annual data from 1948 to 1985, and for the Soviet Union we use annual data from 1965 to 1987. The results of the estimation procedure provide strong support for the hypothesis that increases in the flow of defense expenditures provide a short-term spur to civilian industrial productivity in both countries during the period under investigation. The supply-side crowding-out hypothesis is also supported, and as expected, support is weaker in short-term estimates than in long-term estimates. J. Comp. Econom., December 1993, 17(4), pp. 768-785. Marquette University, Milwaukee, Wisconsin 53233.     

CASELOAD IMPACTS OF WELFARE REFORM

A welfare reform demonstration program designed to reduce Aid to Families with Dependent Children (AFDC) recidivism through increased employment and training services resulted in significantly higher short-term caseload growth. Demonstration sites attracted proportionally more households onto assistance early in the demonstration than did comparison sites. These entrants tended to have more extensive previous employment histories. This result suggests that the demonstration attracted individuals who previously qualified for AFDC but did not apply for benefits and/or individuals who reduced their employment to qualify for AFDC. Exits from AFDC also were delayed under the demonstration, suggesting that the more intensive services provided through the demonstration required more time to complete. Finally, certain groups—nonwhites and those with language problems, for example—apparently avoided the demonstration by not migrating into demonstration sites or by migrating out of demonstration sites. These results have important implications for the likely costs of state welfare reform efforts under the Family Support Act of 1988 .     

Welfare distribution of collective in-kind transfers in education: an application to the extended schools programme

In this study, we employ the distributional characteristics approach to analyse the welfare distribution of the Extended Schools Programme, a social programme that fights inequality in Northern Ireland’s public schools. Our main result is that increasing funding to schools as their size increases penalizes the most deprived students. This is because the school size, although related to the educational supply, does not reflect the distribution of deprivation within schools. Thus, although in the Northern Irish context the largest welfare gains are possible if funds are redistributed among middle-size schools, our general result indicates an excessive support of small-size schools at the expenses of large-size schools.     

A critique of the microfoundations of macroeconomic policy models

The contemporary economic debate is focused mainly on the causes and cures of stagflation. There are three major macroeconomic parties to this debate: Incentivists (supply siders), Keynesians, and Monetarists. Each of these schools prepares policy forecasts promoting the merits of its particular remedies for countering stagflation. Though the models driving these forecasts are different in terms of the determinants they emphasize and the economic casuality they invoke, all are predicated on the same set of microeconomic assumptions: those organized under the neoclassical theory of the firm. The fact that the Incentivist, Keynesian, and Monetarist models all share the same microfoundation pretty much eliminates the firm and its properties from the arena of argument. From the standpoint to be developed in this article, this omission is unfortunate, as contemporary enterprises bear increasingly little resemblance to their neoclassical predecessors. The disparities are particularly important in two respects. First, increases in organizational size and complexity mark modern firms as increasingly susceptible to certain inefficiencies that ultimately affect aggregate economic performance adversely. But the mainstream macroeconomic models do not comprehend microeconomic stimuli to stagflation and therefore cannot presume to control them. The result is perhaps a consistent understatement of the reparative task the Incentivists, Keynesians, and Monetarists are promoting for themselves. Second, modern firms entail a potential for autonomous activities that is a priori denied neoclassical enterprises. Increases in autonomy imply some unresponsiveness to exogenous controls of the type the mainstream schools propose to employ as means of restoring economic integrity. To this extent, their policy models may be uniformly overstating the effect their instruments can enjoy in the present economic context. When the likelihood of underestimating the magnitude of the stagflationary problem is coupled with the probable overestimation of interventionist capabilities, the policy forecasts of the Incentivist, Keynesian, and Monetarist schools may be suspected of a degree of optimism entirely unwarranted by current microeconomic realities.     

Population,food, and knowledge: a simple unified growth theory

This paper provides a unified growth theory, i.e. a model that explains the very long-run economic and demographic development path of industrialized economies, stretching from the pre-industrial era to the present-day and beyond. Making strict use of Malthus’ (An essay on the principle of population. London, printed for J. Johnson, 1798) so-called preventive check hypothesis—that fertility rates vary inversely with the price of food—the current study offers a new and straightforward explanation for the demographic transition and the break with the Malthusian era. Employing a two-sector framework with agriculture and industry, we demonstrate how fertility responds differently to productivity and income growth, depending on whether it emerges in agriculture or industry. Agricultural productivity and income growth makes food goods, and therefore children, relatively less expensive. Industrial productivity and income growth, on the other hand, makes food goods, and therefore children, relatively more expensive. The present framework lends support to existing unified growth theories and is well in tune with historical evidence about structural transformation.      

关于规范高校捐资助学管理的若干思考

社会捐资助学,古今中外早已有之。但是,与西文发达国家相比,当前中国还没有形成有民族特色的社会捐资助学文化,社会捐资助学力度相对较小,有必要加强相关的宣传和管理工作,将民间潜在的积极性转化为现实的捐资助学力量,在全社会营造产生慈善家的环境氛围和机制,形成诸多慈善家资助学校、学生,学校更好地培养学生,学生刻苦学习,努力完成学业,学成后感恩社会,回报母校的良性循环。在此基础上,更多地资助名校、名师,培育名徒,推动国家核心竞争力的发展。     

Measuring heterogeneity in the returns to education using an education reform

In this paper, we explore the impact of a mandatory education reform as well as pre-reform availability of schools above the mandatory level, on educational attainment and returns to education in Norway. We contribute to the existing literature by focusing on the heterogeneity of the impact of reforms. Our results indicate that increased compulsory education from seven to nine years increased the general level of education beyond the compulsory education. We also find that the effect of family background on educational attainment was weaker after the reform. The average treatment effect on returns to education is surprisingly high for education of intermediate duration. This means that increasing the general level of education potentially generates high returns in the form of wages. We also find that the effect of treatment on the treated on the returns to education is 1-4 percentage points higher than the average treatment effect.