HOW DID UNCONVENTIONAL MONETARY POLICY AFFECT ECONOMIC FORECASTS?

We study how unconventional monetary policy announcements affected professional forecasters' predictions of bond rates, gross domestic product growth and inflation using data from the monthly survey by the Wall Street Journal. We find that unconventional monetary policy (UMP) announcements moved predicted bond rates in the direction the Fed intended. UMP announcements had differential impacts on forecasters' predictions; they also tended to move growth and inflation predictions in directions opposite those the Fed intended due to Fed information effects. A policy implication of our study is that the Fed should communicate economic projections to the public separately from monetary policy announcements to mitigate Fed information effects. (JEL E52, E58)     

Technology,Trade Sensitivity,and Labor Displacement

This study examines the relationship between international trade, technology, and exposure to job displacement, using data on displaced workers as well as those at risk of job dislocation, for the two-year sample periods 1986-1987 and 1990-1991. Workers employed in manufacturing industries with elevated import penetration or high shares of R&D personnel appear to have increased rates of job loss. However, the risk of job loss is materially reduced when a relatively high proportion of employees report working with computers. The opposing effects on displacement probabilities of R&D employment intensity and computer-use carry over to the nonmanufacturing sector.     

A voluntary brain-drain tax

A major roadblock to the implementation of Bhagwati's proposal to allow developing countries to tax skilled emigrants residing in developed countries (the “brain drain”) is the administrative problems associated with collecting this tax in the absence of developed-country cooperation. This paper provides a partial solution to these problems, involving the tax treatment of emigrants who return to their countries of origin. The tax system is structured so that returning emigrants who previously paid the brain-drain tax face lower tax payments than those who evaded the brain-drain tax. Given the expected value of this tax benefit, emigrants are willing to pay the brain-drain tax. In the basic model, a source country's optimal tax system includes this brain-drain tax and does not distort migration decisions.     

Spatial and temporal patterns of demand for hotel accomodation: Time series analysis in Yorkshire and Humberside,UK

This article is concerned with the identification and interpretation of spatial-temporal patterns of demand for hotel accomodation. Time-series factor analysis is applied to a set of monthly hotel-occupancy series recorded by the Yorkshire and Humberside Tourist Board (YHTB) for 101 hotels in Yorkshire and Humberside, UK, from April 1982 to March 1983. Three major temporal components of expressed demand for hotel accomodation (reference curves) are identified, reflecting differences in occupancy level, the intensity of seasonal fluctuations, and the length of season. The hotels are differentiated, and then grouped, on the basis of their individual parameters on the three reference curves. The spatial-temporal patterns identified form the basis of continuing research which aims to aid the formulation of appropriate marketing and development policies for the hotel industry.     

The same yet different: Worker reports on labour practices and outcomes in a single firm across countries

This paper examines cross-country differences in labour policies and practices and employee performance and attitudes toward work from a sample of nearly 30,000 employees in a large multinational manufacturing firm. The analysis shows: 1) large establishment and country differences in work practices, performance, and attitudes toward work across countries; 2) qualitatively similar responses of workers to work practices across countries; 3) a strong link between the establishment average of employee reports on the quality of labour-management relations and establishment average measures of employee performance 4) a positive relation between average employee performance and average employee-management relations at the country level, but no relation between country level performance in the firm and measures of the extent of national labour regulations or practices.     

Multiple Buyers, Rent‐Defending and the Observed Social Costs of Monopoly

This paper uses analytical and experimental methods to assess the effects of fracturing the interests of agents seeking to maintain the competitive status quo in a rent‐seeking contest for a monopoly franchise. Theoretically, it is shown that while "rent‐defending" can ameliorate the social costs of rent‐seeking, these beneficial effects deteriorate quickly as the interests of those seeking to maintain the status quo become fractured. Experimental results indicate that overbidding is persistent when bidders have different sharing rules. In fact, the observed social costs of rent‐seeking often increase just when rent‐defending has the greatest predicted ameliorative effect.     

Robin L. Einhorn. American Taxation, American Slavery. Chicago, Ill.: University of Chicago Press, 2006. xii + 337 pp. ISBN 0-226-19487-6, $35.00.

Any neoconservative who rushes out to buy this book will bedisappointed. Its misleading title notwithstanding, this monographis not yet another diatribe against federal taxation, but rathera thoughtful examination of how the existence of slavery inthe young republic in the decades following the American Revolutionshaped national policies. If many Americans now trace the republic’spersistent anti-tax tendencies back to the Boston Tea Party,Robin Einhorn instead demonstrates that the origins of modernanti-government     

Risk premia in Australian interest rates

The level of and movements in interest rates and the exchange rate can have a substantial impact on the economic performance of Australia's primary industries. Whether a country and/or exchange risk premium has resulted in higher interest rates and increased volatility in the exchange rate is therefore important to these industries. There is some evidence that a small country risk premium may have emerged during the early 1990s. In line with earlier studies, however, no evidence was found of such a premium during the 1980s. A further finding is that any exchange risk premium may have declined over the last decade or so. Possible links between risk premia and Australia's foreign debt and current account deficits are also examined.     

TERMS OF TRADE AND ECONOMIC GROWTH IN NINETEENTH CENTURY BRITAIN *

International trade and economic growth have been considered intimately linked in nineteenth century Britain. Conventional estimates of Britain's gross national product, however, fail to account for changes in the terms of trade and may be misleading indicators of changes in real income. Revised figures that incorporate terms of trade changes are presented here. One finding is that conventional estimates of GNP overstate growth in real income early in the century when the terms of trade deteriorated.