Banking lessons from the past: The 1938 regulatory Agreement interpreted

We show that the interagency 1938 Uniform Agreement on Bank Supervisory Procedures set the precedent for dynamically varying supervisory standards to conform to national macroeconomic policies and political agendas. Our evidence indicates that the conferences leading to the Agreement were motivated and dominated by the Federal Reserve. Contrary to the goals of the other banking agencies, the Fed sought greater leniency in bank examination in order to stimulate bank credit creation. This precedent for softening examination standards was paralleled in 1991–1992 when the administration and regulatory agencies attempted to offset a proclaimed credit crunch by subordinating bank examinations to the perceived need for more bank credit. The implied risk of trading off bank safety for short-lived economic policies merits more open national debate.Our earlier work on this topic was partially supported by the National Center on Financial Studies, University of California, Berkeley.     

Is Part-Time Employment after Childbirth a Stepping-Stone into Full-Time Work? A Cohort Study for East and West Germany

Does part-time work support first-time mothers’ employment by providing a stepping-stone into full-time work in Germany? Using data from the German Socio-Economic Panel from 1984–2012, this study compares three different age cohorts of first-time East and West German mothers to investigate whether there has been any convergence between East and West Germany in the way women use part-time employment. Results show that mothers in West Germany in all cohorts tended to remain in part-time employment for longer periods than those in East Germany. Part-time employment more often provided a stepping-stone into full-time employment in East Germany than in West Germany. East German women who gave birth after reunification were less likely than older cohorts to experience a transition from part-time to full-time work. Thus, part-time employment not followed by subsequent full-time work has become more common in the East.     

The marketing of bank risk-management services

This article analyzes the need to reform the structure of bank risk-management services (RMS), including the sale of derivatives. It reviews the contribution derivatives make to corporate financial management and discusses threatened restrictions on bank RMS following large losses reported by corporate clients. The two major weaknesses in RMS are characterized by incentive incompatibility and asymmetric information. Steps are proposed for aligning bank RMS incentives with client objectives. This requires reskilling bank management of RMS consistent with the holistic demands of globalization on corporate operations and strategies. Additional steps are proposed for equalizing buyer-seller information on the risks of opaque derivatives. These steps involve assistance to clients in setting policies leading to position limits and loss tolerances and instituting monitoring and disclosure. © 1995 John Wiley & Sons, Inc.     

Real Estate Settlement Pricing: A Theoretical Framework

This paper examines the pricing of real estate settlement services. Prices charged by real estate brokers, title insurers, private mortgage companies and other settlement service providers have been a public policy issue for a decade. The Real Estate Settlement Procedures Act of 1974 did little to alleviate public concerns or change pricing practices.
The paper provides both a conceptual framework and some observations on how prices for settlement services are determined. It concludes that the demand has little to do with the services themselves, but rather depends on the demand for housing. This creates an environment for unnecessary services to be performed and for prices to be far in excess of cost.     

Effective Property Tax Rates and Capital Formation Issues: Manvel, Acton and Darby

Using comparatively new data sources, this study estimates that effective property tax rates on taxable capital declined nearly 50% in the U.S. during the decade of the 1970s, a phenomenon generally overlooked or understated in previous studies. Recognition of this halving of property tax rates permits at least a partial explanation for a number of otherwise unexplained macroeconomic occurrences during the 1970s, particularly the smaller-than-anticipated interactive effects of inflation and the income tax on interest rates, on the one hand, and on capital allocation, on the other. The clear implication is that greater attention must be paid to trends in effective property tax rates in understanding and predicting important economic behavior.     

Trends in Substandard Housing 1940–1980

"A decent home and a suitable living environment for every American family" has remained an elusive goal since it was first stated by Congress in the Housing Act of 1949. This owes in large part to the difficulty of translating the goal into practical definitions of housing objectives, and of developing reasonably precise estimates of U.S. housing quality, especially as these estimates may be changing over time. This paper discusses the difficulties involved in measuring housing (in)adequacy, reviews previous definitions of U.S. housing quality, and delineates a measure of housing inadequacy. Then, based upon this current measure, the numbers of inadequate housing units are calculated for 1973–1978 (years for which complete Annual Housing Survey data are available), melded with the traditional measure of "substandard" housing for the years 1940–1970, and predicted for 1979–1980 (years for which only core AHS data were currently available).
The study's principal findings are twofold:
First, The U.S. housing stock has shown a fairly steady improvement in average quality during the last forty years, a trend that appears to be continuing.
Second, while the search for better measures of housing quality must continue, HUD's current definition of physically inadequate housing represents the state of the art and, with proper calibration, provides a reasonably consistent basis for measuring U.S. housing quality over time.     

Digging into Construction Data

Construction is a large, diverse, and—lately—fast-growing sector of the U.S. economy, comprising several distinct categories of activity. Construction accounts for roughly five percent of non-farm payroll employment and 12 percent of self-employment. The value of construction put in place totals eight percent of GDP; construction supplies and equipment are important components of manufacturing output. The current outlook for the industry is for a pause in the fast-growing residential market, but we can expect an acceleration in private and public nonresidential construction. Data on different aspects of construction are available from a variety of federal and private sources. There are limitations and pitfalls that data users should bear in mind.JEL Classification L700     

Matthew Yglesias: One Billion Americans: The Case for Thinking Bigger

Business Economics -