AGRICULTURAL POLICY AT THE CROSSROADS—AGAIN

American agriculture is suffering from severe structural adjustments and from its worst financial depression since landmark price and income policies were legislated more than half a century ago. As much as one-third of the $220 billion in agricultural debt is now delinquent, nonaccrual, or subject to renegotiation. Land values have fallen precipitously in the past few years. Farm foreclosures are near 1930 Depression levels. The congressional debate over programs that could determine the course of U.S. agriculture for the remainder of the century began in the summer of 1985.     

CURRENCY SUBSTITUTION, U.S. MONEY DEMAND, AND INTERNATIONAL INTERDEPENDENCE

A number of writers have argued in recent years that massive international currency substitution has been a major cause of exchange rate volatility and monetary instability in the United States and other major countries. Such analysis is frequently coupled with recommendations for a return to pegged exchange rates. This paper critically examines the evidence presented for this currency substitution view. It argues that the weight of latest research suggests that direct international currency substitution has not been of major quantitative importance for the U.S. However, empirical evidence supports traditional views that international capital mobility can generate substantial short-run monetary interdependence even under flexible exchange rates. Thus, even though international currency substitution is of little importance to U.S. monetary conditions, a broader range of international considerations may be of considerable importance for the U.S. economy.     

The Impact of the Employment of the Wife on the Achievement of Home Ownership

A logistic regression analysis is used to assess the impact of the wife's income, wage rate, and hours worked on changing from rental tenure to home ownership among a subsample of husband-wife house-holds from the Panel Study of Income Dynamics. Age of the wife, education of the wife, family size, and residence in the Northeast are significant predictors of change in tenure status between 1979 and 1983; of the wife's employment variables tested, only the number of hours worked (a proxy for labor force commitment) is a significant predictor of the probability of changing from rental tenure to home ownership.     

In or out? explaining state shares of the tobacco Master Settlement Agreement

In 1998, 46 states were involved in a Master Settlement Agreement (MSA) with the tobacco industry. The other four states settled on their own. Our goal is to answer a counter factual question: how would these four states have fared had they been included in the MSA? We use data from Viscusi (2002 Viscusi WK (2002) Smoke‐Filled Rooms Chicago University of Chicago Press  [Google Scholar]) to explain settlement shares for states participating in the 1998 tobacco MSA, and to predict settlement shares for the four nonparticipating states. We find that two nonparticipating states (Minnesota and Mississippi) may have fared substantially worse had they been included in the MSA.     

DETERMINING WHETHER DUMPED OR SUBSIDIZED IMPORTS INJURE DOMESTIC INDUSTRIES: INTERNATIONAL TRADE COMMISSION APPROACH

This paper examines the "traditional approach" that the US. International Trade Commission (ITC) has used during recent years to decide whether dumped or subsidized imports cause material injury to a domestic industry. ITC decisions are perceived as not explaining clearly why the conclusions reached follow from the facts presented. Using a survey of recent ITC decisions, the authors attempt to discover the assumptions and methods of analysis lying behind traditional analysis so that readers may more fully understand ITC opinions. The authors argue that the major components of the traditional approach are special applications of ordinary demand-supply analysis.     

AN EXPERIMENT WITH ULTIMATUM BARGAINING IN A CHANGING ENVIRONMENT*

We present experimental results on the ultimatum bargaining game which support an evolutionary explanation of subjects’ behaviour in the game. In these experiments subjects interacted with each other and also with virtual players, i.e. computer programs with pre‐specified strategies. Some of these virtual players were designed to play the equitable allocation, while others exhibited behaviour closer to the subgame‐perfect equilibrium, in which the proposer's share is much larger than that of the responder. We have observed significant differences in the behaviour of real subjects depending on the type of “mutants” (virtual players) that were present in their environment.     

Endogenous Borrowing Constraints With Incomplete Markets

This article develops ways to endogenize the borrowing constraints used in a class of computable incomplete markets models. We allow the constraints to depend on an investor's characteristics such as time preference, risk aversion, and income streams. The proposed constraint can be interpreted as a borrowing limit within which an investor has no incentive to default. Using a numerical algorithm, we find that for an array of structural parameters, the endogenous borrowing constraints can be much less stringent than the ad hoc borrowing constraints adopted by the existing studies.     

Leaving Welfare: Independence or Continued Vulnerability?

Data from two semi‐structured interviews gathered approximately six months apart from seven women who were receiving cash welfare benefits at the time of the first interview and were not receiving benefits at the second interview were used to analyze the experiences of leaving welfare. Emergent themes about the post‐welfare experience are: (1) the low wages and lack of advancement opportunities in jobs, (2) confusion related to program administration, (3) the continued reliance on income support programs and kin, and (4) the banking of cash benefits under the five‐year time limit as a new safety net.