Housing prices,stock prices and the US economy

This paper studies the relationship between housing prices, stock prices, interest rates and aggregate output in the US using monthly data from 1993 to 2014. Evidence from causality tests and a variance decomposition procedure suggest that stock prices have a much larger effect on aggregate output in the US economy than do either housing prices or interest rates. Instead, the wealth effect created by changes in stock prices has a relatively large impact on US aggregate output. Separate estimations and variance decompositions for the sample periods 1993–2001, 2002–2008 and 2009–2014 show that the impact of housing prices relative to stock prices has been waning over time.     

Inconsistency in inventory loss measurements under the LCM rule

This paper demonstratess that the propensity for student to rely on memorized measuremrnt shortcuts in the application of the LCM rule is attributable to a lack of clear measurement objectives for inventory losses in the professional standards. Any one of three possible definitions of loss might be applicable to a valuation case and there is no criterion for the selection of which loss concept is applicable until after the valuations have been made. Without an intelligble conceptual guide, students are left with only memorized rules in solving LCM problems.     

Housing and the Weather

Monthly readings on housing construction and sales that are at odds with expectations are often attributed to unusual weather conditions. This paper examines the empirical relationship between weather abnormalities and housing activity. The conclusion is that unseasonable weather patterns have, at most, a slight impact on total housing starts, home sales, and the pace of construction activity. Even this weak effect is found only during the winter months. Sampling error accounts for much more of the month-to-month changes in measured housing activity than does the weather, and there is a general tendency to exaggerate the influence of unusual weather on the monthly national housing data.     

How financial intermediation challenges national sovereignty in emerging markets

This study explores the impact of changes occurring in financial markets on national sovereignty. Sovereignty involves both the authority to rule and the capacity to exercise this rule. Changes now occurring in financial markets and their most important institution, banks, present challenges to sovereignty. Domestic challenges include consolidation, conglomeration, automation, reduction of government banking, disintermediation, and the development of risk transfer markets and mechanisms. International challenges include freeing capital inflows and outflows, foreign control of financial service institutions, regional and supranational economic integration, and the abandonment of national currencies. These often create a web of obligations that may compromise national sovereignty. While sovereignty may not be viewed as absolute in terms of national priorities, and may be in a constant state of negotiation, it is a measure of national strength. Its infringement may produce resentments and dissatisfactions among international agents and within national political structure and render a toll on national growth and development.     

Freight transportation costs and the thickening of the US–Mexico border

Border regulatory requirements and administrative practices changed subsequent to the September 11, 2001 (9/11), terrorist attacks in the United States. Research in this study examines the manners in which transportation cost data for merchandise imports from Mexico behaved before and after 2001. Evidence is obtained that confirms results earlier tabulated for imports from Canada. Empirical results further indicate that, beyond freight cost changes, growth in the value of imports from Mexico was disrupted by events associated with the aftermath of 9/11.     

Penalties and the deterrence of unlawful collusion

This paper investigates the size of penalties required to deter cartel formation. Allowing the penalty to be increasing in duration within the infinitely repeated game framework, penalties do not need to be as severe as previous research would suggest.     

The control of politicians within a constitutional framework: the case of state-level recall provisions

As previously recognized, the structure of representative democracy is endogenous and the choice of constitutional provisions selected by such organizations is important. The present paper focuses on constitutional choices that work to control the behaviour of elected officials by examining the constitutional ease of recalling elected officials across the 50 states. After developing a numerical measure of the ‘ease’ with which registered voters can recall officials, ordinary logistic, ordered logistic and tobit models are employed to examine the factors of such an endogenous choice across states. The results are quite consistent with the theoretical models developed previously by public choice and constitutional scholars.     

International Trade and Gender Wage Discrimination: Evidence from East Asia

The paper explores how competition from international trade affects gender wage discrimination in two open economies. According to neoclassical theory, if discrimination is costly, then increased industry competitiveness from international trade lessens the incentive for employers to discriminate against women. This effect should be stronger in concentrated sectors, where employers can use excess profits to cover the costs of discrimination. Alternatively, increased international trade may reduce women's bargaining power to achieve wage gains. Results for Taiwan and Korea indicate that, in contrast to neoclassical theory, competition from foreign trade in concentrated industries is positively associated with wage discrimination against women.     

Intergenerational Earnings Mobility Revisited: Estimates Based on Lifetime Earnings*

Using Norwegian intergenerational data, which include a substantial part of the life‐cycle earnings for children and almost the entire life‐cycle earnings for their fathers, we present new estimates of intergenerational mobility. Extending the length of fathers’ earnings window from 5 to 25 years increases estimated elasticities. Increasing the age at which fathers’ earnings are observed has the opposite effect. Biases in the estimated elasticities are related to both transitory earnings variation and life‐cycle measurement error; the former appear to be more important than the latter. Estimation bias stemming from persistence in transitory innovations plays only a minor role. Our findings indicate that intergenerational earnings mobility in Norway might have been strongly overstated in many earlier studies with shorter earnings histories. Some of our new estimates are twice as large as earlier estimates.