What is the best way to impede a central bank?

Recent work has found several ways of restricting central bank behavior to achieve much of the gain of commitment over discretion. This paper compares three such impediments: A quadratic penalty on interest rate changes, a fixed penalty on any rate change, and forced infrequency of rate change. All three achieve significant improvement over discretion, and often come close to interest rate rule commitment. The fixed penalty is frequently the best performing restriction, although the quadratic penalty does best in certain alternative parameterizations. Combinations are found to provide no improvement over the individual impediments alone.     

Why Do Some Schools Group by Ability?

A bstract .   This article explores the reasons that schools choose to group their students by ability. A mathematical model suggests that high diversity of achievement and a large number of students in a school will cause a school to be more likely to group. Less legitimately, some schools may choose to use ability grouping to segregate students by race or class within a school.
The data used in this study come from the 1992 NAEP 8^th grade Mathematics Assessment. Cross-tabulations suggest that ability grouping is correlated with diversity of student achievement, the number of students, racial diversity, and low levels of poverty. The mean achievement of students and school spending levels do not have much correlation with the schools' tracking decisions. Logit regressions indicate that the number of students in a school and its racial diversity are most important, and that other factors (most notably the diversity of achievement) are not. These results lend credence to those who suggest that grouping is not necessarily done for academic reasons, but rather is a subtle way to segregate by race or class.     

An Empirical Analysis of the Housing Decisions of Older Homeowners

This paper examines the effects of finanacial, demographic and housing variables on older homeowners' propensity to make a variety of housing changes. Pooled cross-sectional data from the Panel Study of Income Dynamics is used in a multinomial logit framework. The results indicate that demographic factors are much more important than financial factors in explaining housing changes by older homeowners.     

Reemployment Differences Among Dislocated and Other Workers

Abstract Dislocated workers are often assumed to have a more difficult time becoming reemployed than their non-dislocated counterparts, especially into jobs in growth sectors of the economy. Evidence presented here suggests that it is not dislocation per se that makes reemployment difficult, but that factors associated with dislocation such as education, experience, and industry-specific skills in declining industries play the most important roles. The findings are relevant to the matter of workers' retraining programs.