Explaining The <Emphasis Type="Italic">Hump</Emphasis> In Life Cycle Consumption profiles

Summary  This paper documents life cycle (or age) profiles of (log) household income, durable and non-durable consumption for Dutch households after explicitly controlling for time (or business cycle) effects and birth cohort effects. We find that both measures of consumption as well as income is clearly hump shaped over the life cycle. Hence, real consumption per household seems to track income over the life cycle. This empirical regularity is hard to reconcile with basic specifications of the life cycle model. We further document life cycle profiles of demographic and labor supply variables. We argue that part, but not all, of the hump in consumption may be explained by household composition variables. Durable consumption per adult equivalent stays approximately flat until age 60 after which it drops dramatically. This phenomenon may be partly explained by a decrease in work related durable expenditures after retirement. Non-durable consumption per equivalent adult increases steadily until age 55 and stays approximately flat after that.      

Whites,Blacks, and <Emphasis Type="Italic">Brown</Emphasis> in the Labor Market in Brazil: A Study About Inequalities

This paper examines inequalities between white and black and brown populations in Brazil within occupations that require university degree. The main result confirms that once reached the university degree, blacks/brown usually obtain smaller but comparable income to that of whites. Although some racial discrimination in labor market may exist, such result corroborates other studies that identify schooling differentials as the main reason for the high income inequality found in Brazil.     

The Great Growth Debate: A Statistical Look at Mankiw,Romer, and Weil, <Emphasis Type="Italic">versus</Emphasis> Islam

This paper takes a purely statistical look at two of the most important empirical growth papers authored by Mankiw et al. [1992] and Islam [1995]. MRW claim that the Solow model is justified only when human capital is added to the regression, while Islam claims that cross-country heterogeneity is the actual culprit. In a statistical sense, the author of this study finds that Islam was correct in the fact that mean heterogeneity does exist in MRWs data. However, after statistical adequacy is achieved, human capital continues to maintain its role as a significant determinant of growth even though the estimates are not robust for one of the two cross-country samples investigated. On the other hand, though Islams models were not without statistical problems, they continue to maintain their traditional form and his estimates are robust to respecification. This paper also exemplifies the need for objective statistical testing methods in applied work.     

Probability and the synthetic <Emphasis Type="Italic">a Priori</Emphasis>: A reply to block

Conclusion Contrary to Block, the synthetic a priori has little to do with our dispute. My critique of the Austrians is not that their methods are “unscientific,” but that their most distinctive positions are false or overstated. Yet Block’s latest reply does inadvertently make Austrian economics more reasonable. If synthetic a priori claims vary in degree of probability, they can no longer be treated as scientifically superior to empirical claims. Furthermore, while empirically testing absolutely certain synthetic a priori claims is pointless, empirically testing uncertain synthetic a priori claims is not. As is often the case with Austrians, Block is better at criticizing neoclassicals than he is at producing a sound alternative. He is right that most economists do not practice the logical positivism that they preach. He is also correct to maintain that logical positivism is mistaken. However, both of these problems can be resolved if neoclassical economists themselves adopt the Bayesian model of belief formation that they routinely apply to everyone else.     

Tax evasion as a<Emphasis Type="Italic">de facto</Emphasis> vote of disapproval of PAC contributions

In this study, it is hypothesized that higher (rising) real PAC election campaign contributions may lead the public to increasingly distrust and resent politicians because of the perceived political influence that these contributions exercise. It is further hypothesized that to express that distrust and resentment, the public may make greater efforts to evade income taxation so as to deny tax revenues to the Treasury and “influence-peddling” politicians. Instrumenatal Variable (IV) estimates in first differences that allow for income tax rates, IRS audit rates, IRS penalty assessments on detected unreported income, and the public's dissatisfaction with government per se, find strong, albeit only preliminary, empirical evidence that tax evasion is an increasing function of real PAC election campaign contributions. The author is indebted to Jim Alm, Mike McKee, Joel Slemrod, and Thomas Stratmann and to the University of Miami Economics Seminar faculty and the University of Nevada, Las Vegas Economics Seminar faculty for ideas and helpful comments.