The Scholarship of Teaching Economics

The authors report on the results of a telephone survey of 1,001 employees of seven large corporations conducted for the Business Roundtable as part of its public policy program. A set of 20 questions keyed to the Voluntary National Content Standards in Economics was embedded in the survey. A measure of economic literacy was constructed from the survey results. Greater economic literacy was associated with more overall education, more college economics coursework, high incomes, and being male. An examination of individual test questions revealed that previous college economics had substantial effects on employees' current economic literacy.     

Who moves? A logit model analysis of inter-provincial migration in Canada

This paper addresses the topic of inter-provincial migration in terms of the basic question: ‘Who moves?’. Panel logit models of the probability that an individual changes his or her province of residence from one year to the next over the 1982–1995 period are estimated using tax-based longitudinal data. It is found that moving is (i) inversely related to the home province's population size, presumably reflecting local economic conditions and labour market scale effects, while language also plays an important role; (ii) more common among residents of smaller cities, towns, and especially rural areas than those in larger cities; (iii) negatively related to age, marriage, and the presence of children for both men and women; (iv) positively related to the provincial unemployment rate, the individuals’ receipt of unemployment insurance (except Entry Men), having no market income (except for Entry Men and Entry Women), and the receipt of social assistance (especially for men); (v) (slightly) positively related to earnings levels (beyond the zero earnings point) for prime aged men, but not for others; and (vi) more or less stable over time, with men's rates declining slightly and women's holding steadier or rising slightly, indicating a divergence in trends along gender lines.     

The Use of Policies for Competition in the Promotion of Structural Change in Transforming Economies

This article takes as its central theme the idea that competition policy is merely one among many policies which can and should be used to promote competition in an economy. After having considered the importance of competition for any healthy economy, the article examines the inextricable links between competition and transition, in particular marketisation and liberalisation, and discusses in detail the scope for the use of various policies for competition in the transformation process. Within this discussion, particular attention is paid to the importance of the legal and institutional framework, the process of privatisation, macroeconomic stability, ease of entry, supply side policies, the role of small and medium-sized enterprises (SMEs), and trade policy in contributing to the development of a market economy. The article concludes by noting the extreme care that must be taken not only in the content of such policies but also in their implementation, something which is easily demonstrated by the experience of developed capitalist economies in the West.     

Tariff evasion in global trade data

ABSTRACT

We find evidence of pervasive tariff evasion in the global data on trade from 1988 to 2015. Using over 35 million observations of data on import and export flows at the HS6 product category level, we find evidence of substantial underreporting of imports relative to export data on average and particularly when tariffs on product categories are high. These effects are stronger in more corrupt destination countries, as measured by the World Bank's Worldwide Governance Indicators [World Bank. 2016. Worldwide Governance Indicators. September 25, 2016]. In addition, evidence of tariff evasion increases significantly in economic downturns. We document these patterns in the global data and explore the welfare effects of this evasion by (1) putting a lower bound on the extent to which there are revenue losses from tariff evasion, and by (2) estimating the effects of corruption as measured by this indicator on global trade in a simple gravity model. We estimate that in total, revenue losses from tariff evasion are currently likely to exceed 400 to 670 million USD globally per year, and find that the effects of corruption on trade flows are ambiguous overall but change from weakly positive (‘grease the wheels’) to largely negative over the years in our sample.     

Junk bonds,life insurer insolvency,and stock market reactions: The case of first executive corporation

The First Executive Corporation was the largest failure in the history of the life insurance industry. The company was one of the most aggressive purchasers of junk bonds through the 1980s and was the first of several large failures in the staid life insurance industry. In this article, we examine the effect of First Executive's failure on the value of companies in the life insurance industry. We find that the price of other life insurance companies' stock is negatively affected by the earnings announcement that preceded First Executive's failure. The magnitude of an individual company's reaction to First Executive's loss varies according to the proportion of the company's assets invested in junk bonds, the proportion of the company's assests invested in real estate, and the financial strength of the company as measured by A.M. Best's rating.     

ON-FARM FACTORS INFLUENCING INVESTMENT IN CROP SOWING MACHINERY*

Farmers in grain industries make important decisions about investment in crop sowing machinery. This paper shows how some on-farm factors affect profit-maximising levels of investment in crop sowing machinery. The paper examines the effect on optimal investment of discontinuities in sowing opportunities, varietal portfolios and soil portfolios.