Why Money Growth Determines Inflation in the Long Run: Answering the Woodford Critique

Woodford argues that it is not appropriate to regard inflation in the steady state of New Keynesian models as determined by steady‐state money growth. Woodford instead argues that the intercept term in the monetary authority's interest rate policy rule determines steady‐state inflation. In this paper, I offer an alternative interpretation of steady‐state behavior, according to which it is appropriate to regard steady‐state inflation as determined by steady‐state money growth. The argument relies on traditional interpretations of the central bank's power in the long run and appeals to model properties that are common to textbook and New Keynesian analysis. According to this argument, the only way the central bank can control interest rates in the long run is via affecting inflation, and its only means available for determining inflation is by determining the money growth rate.     

Limiting Auditors' Liability: The Potential Consequences

The recent revival of interest in the issue of limiting auditors' liability raises questions about the potential effect of such a limitation on auditors' performance. This paper considers the consequences of limited liability from the perspectives of contracting theory and economic arguments. We examine the potential effect of a reduction in auditors' liability on the standard of care or quality of service they provide, emphasising the "calculus of negligence" concept used by Australian courts. We consider the potential impact of reduced liability on the auditor's decision to shirk responsibilities (the moral hazard problem) and on the value placed on audit services. The analysis shows that placing a statutory cap on auditors' liability has the potential to reduce the effectiveness of bonding mechanisms; provide an avenue for divergent behaviour; lower the level of care provided by auditors; and decrease the value of audit services.     

OCCUPATIONAL EARNINGS BEHAVIOR AND THE INEQUALITY OF EARNINGS BY SEX AND RACE IN THE UNITED STATES*

This paper examines differences in earnings by occupations, and within occupations by sex and by race, on the basis of the 1/100 Public Use Samples of the 1960 and 1970 U.S. Population Censuses. It employs interval analysis to establish 32 categories of occupations with similar characteristics. Little relation was found between mean earnings of occupational groups and the degree of earnings inequality within them. When the figures are examined by sex, it was found that men, on average, earned over twice as much as women in both years, but women's earnings were more unequally distributed (as measured by the Gini coefficient). Women are concentrated in the traditional “female” occupations, which tend to be those at the bottom of the earnings scale, and men have a monopoly of the higher paid occupations. But mean earnings for men exceeded those for women in all occupational groups except one, even in the primarily female occupations. Standardizing first for occupational distribution and then for earnings by occupation, it was found that earnings differences between males and females within occupation had a greater impact on the overall male-female earnings ratio than did differences in occupational distribution by sex. In contrast, when the figures are examined by race, the change in occupational distribution (primarily the movement of blacks out of farming and of blacks and Spanish speakers out of personal services) was the major factor. There was also a considerable degree of earnings inequality within demographic groups. The degree of inequality was in the main reduced when the demographic groups were subdivided into occupations, but it was still substantial. Additional factors like time worked, schooling, and experience must be taken into consideration in understanding this phenomenon.     

具缺货期不同决策支配权的两级供应链合作机制研究

从考虑市场需求固定且卖方和买方对缺货期的不同决策支配权情况,研究了两级供应链的合作机制,建立了其不完全信息的动态博弈模型,并得出其精炼贝叶斯纳什均衡,从理论上证明了卖方和买方分别占支配地位和从属地位时买方卖方应相互合作。     

Immigration and Economic Welfare: Resource and Environmental Aspects*

The relation between immigration and the economic welfare of residents b analyzed for resource-rich economies (such as Australia) both under competitive conditions and when various distortions are present Immigration provides efficiency gains for residents under distortion–free competition for standard ‘gains from trade’ reasons. Such reasons, however, tend to be ignored by immigration and ‘optimal population’ theorists who raise the issue of restricting immigration without explicitly referring to the distortions. In situations where distortions and externalities are present, we argue that it is generally preferable to devise policies which specifically target the distortions than to restrict immigration.     

Seven Fallacies Concerning Milton Friedman's “The Role of Monetary Policy”

This paper analyzes Milton Friedman's (1968a) article “The Role of Monetary Policy,” via a discussion of seven fallacies concerning the article. These fallacies are as follows: (i) “The Role of Monetary Policy” was Friedman's first public statement of the natural rate hypothesis. (ii) The Friedman–Phelps Phillips curve was already present in Samuelson and Solow's (1960) analysis. (iii) Friedman's specification of the Phillips curve was based on perfect competition and no nominal rigidities. (iv) Friedman's (1968a) account of monetary policy in the Great Depression contradicted the Monetary History’s version. (v) Friedman (1968a) stated that a monetary expansion will keep the unemployment rate and the real interest rate below their natural rates for two decades. (vi) The zero lower bound on nominal interest rates invalidates the natural rate hypothesis. (vii) Friedman's (1968a) treatment of an interest-rate peg was refuted by the rational expectations revolution. The discussion lays out the reasons why each of these seven items is a fallacy and infers key aspects of the framework underlying Friedman's (1968a) analysis.     

Probabilities of Small Claims Judgment Satisfaction and Factors Influencing Success

A claim adjudicated in small claims court is substantively not resolved until the judgement rendered has been received by the winning plaintiff. Using data from the Boone County, Missouri, Small Claims Court, this study found that one-half of the winning claims were collected in full. Differences in collection success were more closely related to the judgment amount and characteristics of the defendant than to characteristics of the plaintiff.