The Sensitivity of Capital Use to Price in Higher Education

We test whether U.S. colleges and universities adjust their physical capital intensity to differences in factor prices by regressing the square feet of space per student on construction prices across institutions. The results indicate that physical space at selective liberal arts colleges and private comprehensive universities is unresponsive to relative factor prices but do reflect differences in institutional wealth. At public comprehensive universities and two-year colleges the evidence suggests that students enjoy more space per student where building costs are lower.     

From teleology to evolution

This paper focuses on the uneasy alliance of rational choice and evolutionary explanations in modern economics. While direct evolutionary explanations rule out "purposeful" rational choice by assuming "zero-intelligence" and pure rational choice explanations leave no room for "selective" adaptation, the indirect evolutionary approach integrates both perspectives. Subsequently we go stepwise "from teleology to evolution" and thereby study the model spectrum ranging from pure rational choice over indirect to direct evolutionary approaches. We believe that knowledge of this spectrum can help us to choose more adequate models of economic behavior that incorporate both teleological and evolutionary elements.JEL Classification: C72, B52, B59We gratefully acknowledge the very helpful constructive comments, corrections and the encouragement of our referee. Of course, the conventional disclaimer applies.Correspondence to: S. Berninghaus     

Some Thoughts on Monetary Targeting vs. Inflation Targeting

We offer some empirical evidence on the likely scale of control and indicator problems surrounding alternative monetary targets and a direct inflation target. The links between monetary policy actions and inflation are estimated in dynamic linear models using the Kalman filter. We compare alternative intermediate-target and final-target monetary strategies using German data from the end of the Bretton Woods system until 1997. The estimation results show that broad money dominates narrow money as an intermediate target, while control problems involved in targeting broad money are larger than for direct inflation targets.     

The Gender Gap in Economics Degrees: An Investigation of the Role Model and Quantitative Requirements Hypotheses

Using a panel of 159 institutions over 10 years, we investigate the role model effect of women faculty and quantitative requirements on the female proportion of undergraduate economics majors. We find no evidence that female faculty attract female students. Calculus, however, does matter. A one semester calculus requirement is associated with more female majors at institutions offering business degrees and liberal arts colleges. A second semester calculus requirement deters women from majoring in economics at Ph.D.–granting universities, but is associated with more female majors at liberal arts colleges. Econometrics requirements are unrelated to the gender gap in economics majors.     

Diversification as a commodity policy

The disparities between the economies of developing countries and those of industrialised nations are still widening. How can the economic process in the developing countries be accelerated as soon as possible? The following article examines this decisive question.     

Optimal Mechanisms for Heterogeneous Multi-Cell Aquifers

Standard economic models of groundwater management impose restrictive assumptions regarding perfect transmissivity (i.e., the aquifer behaves as a bathtub), no external effects of groundwater stocks, observability of individual extraction rates, and/or homogeneous agents. In this article, we derive regulatory mechanisms for inducing the socially optimal extraction path in Markov perfect equilibrium for aquifers in which these assumptions do not hold. In spite of the complexity of the underlying system, we identify an interesting case in which a simple linear mechanism achieves the social optimum. To illustrate potential problems that can arise by erroneously imposing simplifying assumptions, we conduct a simulation based on data from the Indian state of Andhra Pradesh.     

Fifteen Years of Research on Graduate Education in Economics: What Have we Learned?

In this article, the authors summarize their 15 years of research on graduate education in economics in the United States. They examine all stages of the process, from the undergraduate origins of eventual economics PhDs to their attrition and time-to-degree outcomes. For PhD completers, the authors examine job market outcomes, research accomplishments, and career paths over the first five and 10 years of their careers.     

Horizontal price agreements in Australian antitrust: Combatting anti-competitive corporate conspiracies of complicity and connivance

When the Trade Practices Act came into operation in 1974, Australian executives, for whom price-fixing had previously been commonplace, faced the prospect of having to abandon their usual methods of doing business. However, with no criminal penalties and a maximum monetary penalty of 250,000 (changed to250,000 (changed to 10m only in 1993), and with little social antagonism towards cartels, there were no significant incentives for firms to act independently. Yet while relatively few major price-fixing cases have been instituted, and no defendant has paid a major monetary penalty, there nevertheless has been a change in business attitudes towards price-fixing. It is not easy to provide a systematic characterization of either the products, firms, markets or justifications which have featured in these cases. To avoid being found guilty in the absence of smoking gun evidence, the courts have established that firms need only show that their behavior was consistent with ordinary commercial conduct.We are grateful to Rod Williams for his helpful comments on an earlier draft of this paper.     

Barriers in services trade: The state of negotiations and prospects

Trade in services constitutes one of the still unresolved problems in the Uruguay Round. What progress has been made so far in this field? Which are the remaining points at issue? What are the prospects for agreement on a comprehensive solution?