An Illuminating Exchange The Construction of Social Reality

A BSTRACT . In his The Construction of Social Reality , Searle presents an account of rights, responsibilities, obligations, duties, and similar entities in terms of the formula X counts as Y in context C , where " X " refers in the simplest case to some physical object or event and " Y " to the result of imposing upon X some deontic power or function. Smith attempts to show the limitations of this formula, focusing especially on the examples of contested property rights (where C is not uniquely defined), and of money in bank accounts and other phenomena (where no physical X -term is available). Searle responds to these criticisms, above all by pointing to the fact that some of the problems Smith raises are to be addressed not by an ontological analysis of social reality but rather through legal or political means.     

The financing decisions of REITs: The case of warrant extensions

In this paper, we examine the warrant price and stock price reactions to the announcement of warrant life extensions by REITs. As predicted by option pricing theory, warrant prices increase in response to these extensions. The stocks of REITs making the extension announcements experience average abnormal returns that are not significantly different from zero. Thus, total firm value appears to increase, with the gains accruing primarily to the warrantholders.     

Labour-market reforms in transition economies

Several lessons can be drawn from the natural experiments ofcentral and eastern European countries with labour-market policies.Two of them are particularly relevant also for OECD countries.First, it is not wise to reduce the duration of unemploymentbenefits when the length of unemployment spells are on the rise,unless (I) unemployment is still low and there is the administrativecapacity to implement active labour-market policies on a widescale or (ii) there are income support schemes of the last resortin place and an administration capable of cost-effectively enforcingwork-tests for those falling off unemployment benefit compensationrolls. The second and perhaps more positive lesson in the lightof the above is that it is possible to transform institutionand create an efficient policy delivery mechanism within a shorttime span.     

Hispanic Ethnicity,English‐Skill Investments,and Earnings

Analyzing synthetic cohorts in the 1980 and 1990 Public Use Microdata Samples, we find that Mexican‐Americans and other Hispanics acquired English fluency at a faster pace than Puerto Ricans and Cuban‐Americans during the 1980s. Additional results indicate that English‐skill investments differently influenced the earnings distributions of these ethnic groups.     

Inter-industry technology flows in the US food-processing industries

The study examines the origins of technology important to improving productivity in the food-processing industries. Technology flows were measured both by patents in patent classes closely identified with six food industries, and by a sample of significant food-processing innovations. These data are consistent with the hypothesis that interindustry technology flows are the most significant determinant of productivity improvements in the food industries. These findings solve the enigma that the food-processing industries have enjoyed rapid improvements in productivity despite making very modest investments in research and development.     

Programme Evaluation with Unobserved Heterogeneity and Selective Implementation: The Mexican PROGRESA Impact on Child Nutrition

This paper considers the impact of Programa de Educación, Salud y Alimentación ( PROGRESA ), a large Mexican rural anti-poverty programme that had an evaluation sample in which overall treatment was randomly assigned to some communities but not others, on child nutrition. When we examine the impact of PROGRESA based on the presumption of randomized allocations, we find that PROGRESA had no or even a negative impact on child nutrition. However, not all children designated to receive nutritional supplements actually did so. Our preferred estimates – child fixed-effects estimates that control for unobserved heterogeneity that is correlated with access to the supplement – indicate a significantly positive and fairly substantial programme effect of the nutritional supplements on children 12–36 months. They imply an increase of about a sixth in mean growth per year for these children and a lower probability of stunting. Effects are somewhat larger for children from poorer communities but whose mothers are functionally literate. The long-term consequences of these improvements are non-trivial; its impact working through adult height alone could result in a 2.9% increase in lifetime earnings.     

The distributional impact of unification and the 1992–93 recession on West German households

The 1992–93 recession in the western states of Germany has been attributed, in substantial measure, to the macroeconomic consequences of policies to finance unification. Studies of the costs of unification have not attempted to measure the burden of the recession. We estimate a dynamic, panel model of household incomes using data from the German Socio-Economic Panel (GSOEP) and use it to forecast what these incomes would have been in 1992–94 without a recession. Using a ratio of actual to forecast incomes, we compare the relative burden of the recession across households. Our findings suggest that western households below the median income bore the brunt of the combined impact of unification and the recession of 1992–93.
JEL classification: P3, D3, E3.     

Output-inflation tradeoffs in 34 countries

This article examines the responsiveness of real output to the variability of inflation and aggregate demand. In the manner of Lucas (1973), estimates of the output-inflation tradeoff are computed for a large sample of countries. This measure is then correlated with the variances of the inflation rate and the growth rate in nominal income. Because differences in inflation variance (and hence the tradeoff) are viewed as the outcomes of differences in demand variance, correlations between these two variables are also reported. Cross-time and cross-country results provide a good measure of support for Lucas and the notion that attempts to exploit the tradeoff weaken it.