Is China''''s Entry into the WTO Good for the United States

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Does consumption buy happiness? Evidence from the United States

We examine the association between various components of consumption expenditure and happiness in the Health and Retirement Study (HRS), a nationally representative sample of older Americans. We find that only one component of consumption is positively related to happiness—leisure consumption. In contrast, consumption of durables, charity, personal care, food, health care, vehicles, and housing are not significantly associated with happiness. Second, we find that leisure consumption is associated with higher levels of happiness partially through its effect on social connectedness, as indexed by measures of loneliness and embeddedness in social networks. On one hand, these results counter the conventional wisdom that “material goods can’t buy happiness.” One the other hand, they underscore the importance of social goods and social connectedness in the production of happiness.     

Does defence expenditure affect private consumption? Evidence from the United States

This paper empirically discusses the relationship between government defence expenditure and private consumption for the United States. The estimations show a substitution or complementary effect of the military sector on private categories of consumer choices, although sensitivity analysis for different utility functions and sub-samples indicates a time-decrease on substitutability. Our findings are in line with previous results highlighting a weak substitution of defence expenditure on aggregate consumption.     

Is productivity diverging in the EU? Evidence from 11 Member States

An argument that received a lot of attention in the political and economic discussion surrounding the recent crisis in the EU is that diverging trends in productivity across member countries will undermine the viability of the common currency. This article examines the issue of convergence in multifactor productivity using sector-level data from 11 EU Member States. A state-space model is developed, and formal Bayesian model comparisons are performed to infer whether productivity is diverging, both at the aggregate level and at a sector-by-sector basis. The data point toward diverging productivity at the aggregate level, but suggest the opposite for many individual sectors.     

Privatizing Social Security in the United States—Comparing the Options

This paper uses a new version of the Auerbach–Kotlikoff model to consider alternative ways to privatize the U.S. Social Security System. The new model incorporates intra- and intergenerational heterogeneity and is closely calibrated to U.S. fiscal institutions. Three privatization issues are considered: financing the transition, participation rules, and progressivity. As shown, Social Security's privatization can substantially raise long-run living standards. But these gains come at the cost of welfare losses to transition generations and take a long time to materialize. The long-run poor have much to gain from privatization even absent an explicit redistribution mechanism. Finally, privatizations that give initial workers the option of remaining in the current system have particularly low transition costs and particularly favorable macroeconomic consequences. Journal of Economic Literature Classification Numbers: D9, E6.     

Transition programs for internationally educated nurses: what can the United States learn from the United Kingdom, Australia, and Canada?

It is critical to conduct competency assessments of internationally educated nurses (IENs) to ensure public safety, as well as uphold accountability to nursing as a regulated profession. Transition programs are needed because of the required proficiency of the working language, as well as differences in nursing education, national health care systems, nursing practice and culture, etc. Transition programs in the United States are grossly under-developed because of lack of recognition of their importance, lack of funding and standardization, and decentralized regulation in nursing. United States can learn from the United Kingdom, Australia, and Canada regarding how to best transition IENs. Its current hit-and-miss approach is inadequate and inconsistent with the emerging global trend to systematically deal with the transitional challenges of IENs at the national level.     

Idiosyncratic Risk in the United States and Sweden: Is There a Role for Government Insurance?

We examine the effects of government redistribution schemes in an economy where agents are subject to uninsurable, individual specific productivity risk. In particular, we consider the trade-off between positive insurance effects and negative distortions on labor supply and saving. We parameterize the model by estimating productivity processes on Swedish and U.S. data. The estimation results show that agents in the United States are subject to more idiosyncratic risk than agents in Sweden. Although distortions are significant, the welfare benefits of government redistribution and insurance systems can be substantial. Journal of Economic Literature Classification Numbers: E20, H21.     

Inventory investment in the United States, 1920–1941

An inventory investment function for the inter-war period in the United States is estimated using recently published quarterly data. The estimates obtained are consistent with plausible lag structures. An increase (decrease) in sales causes unplanned inventory decumulation (accumulation) in that quarter but by the end of a year more than half of the adjustment of inventories to a new equilibrium is complete.     

Regional Income Inequality in the United States: 1969–2017

Abstract:

This article contains an analysis of the nation’s 100 lowest and 100 highest per capita income counties in the United States from 1969 to 2017. The low-income counties are very different from the high-income counties. Compared to the high-income counties, the low-income counties are generally small, mainly rural, and geographically concentrated. The people of the low-income counties are also more likely to be from minority groups than the people of either the nation or the high-income counties. Despite major institutional and technological change, both groups of counties exhibit considerable stability over the last half century. A reasonable assertion from the analysis is that the nature of regional income inequality is not likely to change substantially over the next half-century.     

Will Sub-Prime be a Twin Crisis for the United States?

We identify incentives generated by the Bretton Woods II system that may have contributed to the sub-prime liquidity crisis now working its way through the international monetary system. We then evaluate the persistent conjecture that the liquidity crisis is or will become a balance of payments crisis for the United States. Given that it happens, the additional costs associated with a sudden stop of net capital flows to the United States could be quite substantial. But we observe that emerging market governments have continued to acquire US assets even as yields have fallen, and the incentives for continuing to do so remain strong. Moreover, the Bretton Woods II system, which has clearly been the most resilient of the forces driving current markets, continues to generate low real interest rates in industrial countries and growth in emerging markets that will help limit the damage from the liquidity crisis.     

“Cleansing the air at the expense of waterways?” Empirical evidence from the toxic releases of coal-fired power plants in the United States

Environmental policies in the United States have primarily taken the form of media-specific regulations that emphasize end-of-pipe pollution control. This can lead to the shifting of pollution across environmental media, thereby having the potential to solve one environmental problem by creating a new problem. This study uses data from 228 coal-fired power plants that report to the Toxics Release Inventory to conduct an empirical examination of the extent to which media-specific regulation has caused power plants to shift their toxic air releases to waterways, land, or transfers for offsite recycling facilities. Controlling for plant-level fixed effects, scale of production, and environmental inspections and enforcement under air regulation, this study finds that adopting tougher air pollution regulation that designates counties as being in nonattainment status with the National Ambient Air Quality Standards significantly increased toxic releases to waterways and land.     

Is Beta-t-EGARCH(1,1) superior to GARCH(1,1)?

Statistical performance, in-sample point forecast precision and out-of-sample density forecast precision of GARCH(1,1) and Beta-t-EGARCH(1,1) models are compared. We study the volatility of nine global industry indices for period from April 2006 to July 2010. Competing models are estimated for periods before, during and after the United States (US) financial crisis of 2008. The results provide evidence of the superior out-of-sample predictive performance of Beta-t-EGARCH compared to GARCH after the US financial crisis.     

Intraindustry Specialization and the Proposed Korea–United States Free Trade Agreement

Changes in intraindustry specialization indicators over the 2000–2007 period are used to assess factor adjustment pressures that may arise in Korea from the proposed Korea–United States Free Trade Agreement (KORUS FTA). There is considerable scope for intraindustry specialization between Korea and the United States. Results show few industries in Korea are candidates for adjustment problems. The 14 industries that may face adjustment pressures account for 13% of all Korean imports from the United States. Long tariff phase-out periods, tariff-rate quotas and import safeguards will be used to ease factor adjustment pressures in import-sensitive industries.     

Why the money multiplier has remained persistently so low in the post-crisis United States?

The money multiplier collapsed in the USA in the wake of the Lehman crisis, and since then it remained at particularly low levels. The main reason for this collapse is to be found in the significant increase in banks’ excess reserves and the modest increase in deposits. The weak growth of deposits resulted from a contained growth of loans. Most scholars attribute the latter to the low propensity of banks to grant credit. Using quarterly data for the period 1991–2017 we estimate a demand for loans by firms and households. We show that the modest increase in deposits and the persistence of low levels of the US money multiplier has been due to the weak demand for loans by the private sector.     

Economic ramifications of China–United States trade war for the Russian Federation

ABSTRACT

The purpose of the article was to assess the impact of escalating China-United States trade war on the economic development of such countries as the Russian Federation, Poland, Turkey, Taiwan, Thailand, and South Africa. A cognitive map was developed to describe the general model of economic development of the countries under study, impacted by the trade war, which allowed for substantiation of a qualitative nature of the trade war ramifications in core economic sectors in the countries under consideration. The research results and recommendations are of scientific and practical importance, since they serve as the basis for elaborating further strategies to stem the risks of the escalating trade war to the countries engaged in international trade.     

Investment-Specific Technical Change in the United States (1947–2000): Measurement and Macroeconomic Consequences

By extrapolating Gordon's measures of the quality bias in the official price indexes, we construct quality-adjusted price indexes for 24 types of equipment and software (E&S) from 1947 to 2000 and use them to measure technical change at the aggregate and at the industry level. Technological improvement in E&S accounts for an important fraction of postwar GDP growth and plays a key role in the productivity resurgence of the 1990s. Driving this finding is 4% annual growth in the quality of E&S in the postwar period and more than 6% annual growth in the 1990s. The acceleration in the 1990s occurred in every industry, consistent with the idea that information technology represents a general-purpose technology. Furthermore, we measure for the aggregate economy and different sectors the “technological gap”: how much more productive new machines are compared to the average machine. We show that the technological gap explains the dynamics of investment in new technologies and the returns to human capital, consistent with the Nelson–Phelps conjecture. Since the technological gap continues to increase—it more than doubled in the past 20 years—our evidence supports the view that at least some of the recent increase in productivity growth is sustainable. Journal of Economic Literature Classification Numbers: D24, O47.     

Bubbles and house price dispersion in the United States during 1975–2017

We investigate the rapid growth in the dispersion of housing prices across metropolitan statistical areas (MSAs) in the United States during 1975–2017. We first examine several explanations for this pattern, and find that it is difficult to fully explain it. Our econometric analyses show that the log of price-to-rent ratios follows a random walk process. We then set up a parsimonious asset-pricing island model. We find that the dispersion of fundamental housing prices grow too slow relative to that in data. Incorporating rational bubble solutions, our calibrated model can match the rapid growth in the dispersion of housing prices.     

Whose policy uncertainty affects commodity trade between Australia and the United States?

Recent studies are assessing the impact of news-based policy uncertainty measure on trade flows between countries. In this paper we add to this new literature by investigating the symmetric and asymmetric effects of Australian policy uncertainty index and the U.S. index on trade flows of 63 two-digit industries that trade between the two countries. When we estimated a symmetric and linear model for each industry, we found short-run effects of both uncertainty measures on 30% of the industries' trade flows. However, this number increased to 70% when an asymmetric and nonlinear model was estimated. The long-run effects of both policy uncertainty followed similar pattern. Less than 10% of trade was affected by the estimates of the linear models. However, estimates of the nonlinear models predicted that 41.20% (26.53%) of the U.S. exports to Australia was affected by the U.S. uncertainty (Australian uncertainty). As for the Australian exports to the United States, 6.72% (5.5%) of its exports were affected by the changes in the U.S. policy uncertainty (Australian uncertainty). In almost all industries, increased uncertainty was found to hurt the trade and decreased uncertainty was found to boost it at different rate or asymmetrically. In sum, the U.S. and Australian policy uncertainty measure affects U.S. exports to Australia much more than they affect Australian exports to the United States.     

Going out of the Great Recession? Contrast between the United States and Europe: Proposed work from economic history, 1960–2014

In recent work, the authors have proposed to the United States a model that explains the trend behavior of the rate of profit from share surplus, capital productivity, and the coefficient of financialization. The main results of the explanatory model allow the authors to affirm that with the change of control of Keynesianism to neoliberalism since 1980, there has been a substantial fall in the profit rate to half the values achieved in the years of Keynesian regulation (1945–1973). This significant fall in the level of benefits is due to a substantial fall in capital productivity. The authors are currently working on adapting the explanatory model for the U.S. economy to the main countries of the European Union (Germany, France, Italy, United Kingdom, and Spain). The results show that the pattern of behavior of the variables described in the reference country—the world capitalist economic system, the United States—is repeated more or less precisely in the main countries of the European Union; Germany, France, Italy, United Kingdom, and Spain.