FN Thomson Reuters Web of Science™ VR 1.0 PT J AU Schuh, S Triest, RK AF Schuh, S Triest, RK TI The evolution of regional manufacturing employment: Gross job flows within and between firms and industries SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article AB The shift of manufacturing activity from the Northeast to the Sunbelt is familiar and well documented. Less well documented, and more controversial, is the question of what factors caused this shift. Anecdotes from the early twentieth century indicate that New England mill owners moved jobs to southern states in order to reduce labor costs, but there has been little research quantifying the importance of this type of phenomenon in the general geographic redistribution of manufacturing activity. In this article, the authors examine the mechanisms underlying the regional shift of manufacturing employment toward the Sunbelt. In particular, they examine the roles of job creation and job destruction, and the extent to which the shifts in employment occurred mainly within firms and within industries. Their results suggest that interregional job flows within companies are an important contributor to the shifting geographic distribution of manufacturing employment. The authors also find that most of the differences in employment growth between regions appear to be caused by employment shifts within industries, not by differences in industry mix. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Schuh, S (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 8 TC 1 Z9 1 U1 0 U2 0 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PY 2002 IS 3 BP 35 EP + PG 20 WC Economics SC Business & Economics GA 619QL UT WOS:000179487600003 ER PT J AU Olivei, GP AF Olivei, GP TI Japan's approach to monetary policy SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article C1 Fed Bank, Boston, MA USA. RP Olivei, GP (reprint author), Fed Bank, Boston, MA USA. NR 4 TC 1 Z9 1 U1 0 U2 0 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PY 2002 IS 2 BP 39 EP 43 PG 5 WC Economics SC Business & Economics GA 573HW UT WOS:000176824500009 ER PT J AU Bradbury, K Katz, J AF Bradbury, K Katz, J TI Women's labor market involvement and family income mobility when marriages end SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 47th annual Conference of the Federal-Reserve-Bank-of-Boston CY JUN, 2002 CL BOSTON, MASSACHUSETTS SP Fed Reserve Bank Boston ID MARITAL DISSOLUTION; ECONOMIC CONSEQUENCES; DIVORCE; DISRUPTION; GENDER; TRENDS; PARTICIPATION; COSTS; PAY AB The last 30 years have seen a dramatic change in women's social and economic status in the United States, particularly in their labor market activity. When women were less involved and less successful in the labor market, many of them gained access to market income only or primarily through marriage or cohabitation with a working man. As a result, women and children were especially vulnerable to the death of a partner, separation, or divorce. In this article, the authors examine three decades of data on the relationship between women's labor market activity and the income mobility of families that lose a spouse through death, divorce, or separation. The authors find that wives' labor market activity acts as partial insurance for women and their families against the negative economic consequences of marital dissolution. However, the authors also find that while women who lose their husbands increase their earnings significantly, the number of upwardly mobile families is quite small, and a majority of families actually move down by the end of each decade. In addition, families that lose a wife to death, divorce, or separation do less well in successive decades, as the wives make increasingly larger contributions to family income. These findings imply that U.S. social and economic policies currently leave considerable gaps in "insurance" for families in the event of marital dissolution. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Bradbury, K (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 38 TC 8 Z9 8 U1 1 U2 3 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PY 2002 IS 4 BP 41 EP + PG 35 WC Economics SC Business & Economics GA 661PZ UT WOS:000181900100003 ER PT J AU Olivei, GP AF Olivei, GP TI Norway's approach to monetary policy SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article C1 Fed Reserve Bank Boston, Boston, MA USA. RP Olivei, GP (reprint author), Fed Reserve Bank Boston, Boston, MA USA. NR 5 TC 0 Z9 0 U1 0 U2 0 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PY 2002 IS 2 BP 45 EP 49 PG 5 WC Economics SC Business & Economics GA 573HW UT WOS:000176824500010 ER PT J AU Little, JS Triest, RK AF Little, JS Triest, RK TI The impact of demographic change on US labor markets SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article ID MOBILITY EXPERIMENT; SCHOOL AB According to U.S. Census Bureau projections, the United States will face dramatic demographic changes over the next one hundred years. The population is expected to grow more slowly but age more rapidly, with the share of the population over 65 climbing to a succession of new record highs. Additionally, the United States will once again become a nation of immigrants. Well over half of the increase in the U.S. population will be caused by the inflow of new immigrants and their children. And because the source of the immigrant inflow has shifted from Europe to Latin America and Asia, this new wave will change the voice and face of America forever. In this article (originally prepared for Seismic Shifts: The Economic Impact of Demographic Change, a June 2001 conference sponsored by the Federal Reserve Bank of Boston) the authors discuss the implications for U.S. labor markets of three projected demographic developments: population aging, the slow growth of the workforce, and increased immigration. In so doing, they emphasize the outlook for aggregate U.S. welfare, labor quality, and productivity growth. The authors examine the economic adjustments that might be triggered by these demographic trends, and they explore some policy implications, specifically regarding social insurance programs and immigration. Measures to extend the normal work life as lifetimes lengthen also warrant consideration. The authors' findings suggest that, with the help of such measures, the U.S. economy will likely accommodate the real demands posed by these demographic changes without serious strain-although certain groups may bear a disproportionate share of the adjustment costs. Given the importance of productivity gains to increasing our standard of living as the population ages and the relative size of our workforce shrinks, steps to raise U.S. educational attainment head the authors' list of policy recommendations. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Little, JS (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 43 TC 1 Z9 2 U1 0 U2 7 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PY 2002 IS 1 BP 47 EP + PG 23 WC Economics SC Business & Economics GA 572AF UT WOS:000176750800003 ER PT J AU Little, JS AF Little, JS TI Sweden's approach to monetary policy SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article C1 Fed Reserve Bank Boston, Boston, MA USA. RP Little, JS (reprint author), Fed Reserve Bank Boston, Boston, MA USA. NR 17 TC 0 Z9 0 U1 0 U2 0 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PY 2002 IS 2 BP 51 EP 55 PG 5 WC Economics SC Business & Economics GA 573HW UT WOS:000176824500011 ER PT J AU Olivei, GP AF Olivei, GP TI Switzerland's approach to monetary policy SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article C1 Fed Bank, Boston, MA USA. RP Olivei, GP (reprint author), Fed Bank, Boston, MA USA. NR 3 TC 2 Z9 2 U1 0 U2 1 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PY 2002 IS 2 BP 57 EP 60 PG 4 WC Economics SC Business & Economics GA 573HW UT WOS:000176824500012 ER PT J AU Tootell, GMB AF Tootell, GMB TI The Bank of England's monetary policy SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article C1 Fed Reserve Bank Boston, Boston, MA USA. RP Tootell, GMB (reprint author), Fed Reserve Bank Boston, Boston, MA USA. NR 0 TC 2 Z9 2 U1 0 U2 0 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PY 2002 IS 2 BP 61 EP 64 PG 4 WC Economics SC Business & Economics GA 573HW UT WOS:000176824500013 ER PT B AU Drabenstott, M Sheaff, KH AF Drabenstott, M Sheaff, KH GP FRBKC TI The new power of regions: A policy focus for rural America. A conference summery SO NEW POWER OF REGIONS: A POLICY FOCUS FOR RURAL AMERICA LA English DT Proceedings Paper CT Conference on the New Power of Region - A Policy Focus for Rural America CY MAY 09-10, 2002 CL Kansas City, MO SP Ctr Study Rural Amer C1 Fed Reserve Bank Kansas City, Ctr Study Rural Amer, Kansas City, KS USA. NR 1 TC 2 Z9 2 U1 0 U2 0 PU FEDERAL RESERVE BANK KANSAS CITY PI KANSAS CITY PA 925 GRAND AVE, KANSAS CITY, MO 64198 USA PY 2002 BP 1 EP 6 PG 6 WC Planning & Development SC Public Administration GA BBS78 UT WOS:000227632700001 ER PT B AU Goldberg, LS AF Goldberg, LS BE Edwards, S Frankel, JA TI When is US bank lending to emerging markets volatile? SO PREVENTING CURRENCY CRISES IN EMERGING MARKETS SE NATIONAL BUREAU OF ECONOMIC RESEARCH CONFERENCE REPORT LA English DT Proceedings Paper CT Conference of the National-Bureau-of-Economic-Research CY JAN, 2001 CL ISLAMORADA, FL SP Natl Bur Econ Res C1 Fed Reserve Bank New York, New York, NY 10045 USA. NR 10 TC 9 Z9 9 U1 0 U2 0 PU UNIV CHICAGO PRESS PI CHICAGO PA 1427 E 60 ST, CHICAGO, IL 60637 USA BN 0-226-18494-3 J9 NBER CONF R PY 2002 BP 171 EP 195 PG 25 WC Business, Finance; Economics SC Business & Economics GA BX69G UT WOS:000186142700005 ER PT B AU Evanoff, DD Wall, LD AF Evanoff, DD Wall, LD BE Kaufman, GG TI Subordinated debt and prompt corrective regulatory action SO PROMPT CORRECTIVE ACTION IN BANKING: 10 YEARS LATER SE RESEARCH IN FINANCIAL SERVICES: PRIVATE AND PUBLIC POLICY LA English DT Proceedings Paper CT 77th Annual Meeting of the Western-Economic-Association-International CY JUN 29-JUL 03, 2002 CL Seattle, WA SP Western Econ Assoc Int ID BANK AB Several recent studies have recommended greater reliance on subordinated debt as a tool to discipline bank risk taking. Some of these proposals recommend using subordinated debt yield spreads as additional triggers for supervisory discipline under prompt corrective action (PCA); action that is currently prompted by capital adequacy measures. This paper provides a theoretical model describing how use of a second market-measure of batik risk, in addition to the supervisors own internalized information, could improve bank discipline. We then empirically evaluate the implications of the model. The evidence suggests that subordinated debt spreads dominate the current capital measures used to trigger PCA and consideration should be given to using spreads to complement supervisory discipline. The evidence also suggests that spreads over corporate bonds may be preferred to using spreads over U.S. Treasuries. C1 Fed Reserve Bank Chicago, Res Dept, Chicago, IL USA. NR 16 TC 5 Z9 5 U1 0 U2 1 PU JAI-ELSEVIER SCI BV PI AMSTERDAM PA RADARWEG 29, PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS BN 0-7623-0987-3 J9 RES FIN SERV PY 2002 VL 14 BP 3 EP 29 PG 27 WC Business, Finance SC Business & Economics GA BW26T UT WOS:000181391900001 ER PT B AU Gilbert, RA Meyer, AP Vaughan, MD AF Gilbert, RA Meyer, AP Vaughan, MD BE Kaufman, GG TI Can feedback from the jumbo-CD market improve off-site surveillance of community banks? SO PROMPT CORRECTIVE ACTION IN BANKING: 10 YEARS LATER SE RESEARCH IN FINANCIAL SERVICES: PRIVATE AND PUBLIC POLICY LA English DT Proceedings Paper CT 77th Annual Meeting of the Western-Economic-Association-International CY JUN 29-JUL 03, 2002 CL Seattle, WA SP Western Econ Assoc Int ID DEPOSIT INSURANCE; DISCIPLINE; RISK; FAILURES AB We examine the value of feedback from the jumbo-certificate-of-deposit (CD) market in the off-site surveillance of community banks. Using accounting data, we construct proxies for default premiums on jumbo CDs and produce rank orderings of community, banks - defined as institutions holding less than $500 million in assets (constant 1999 dollars) - based on these proxies. Next, we use an econometric surveillance model to generate rank orderings based on the probability of encountering financial distress. Finally, we compare these rank orderings as tools for flagging emerging problems. Our comparisons include eight out-of-sample test windows during the 1990s. We find that feedback from the jumbo-CD market would have added little value in community-bank surveillance during our sample period. Taken together, our findings validate current surveillance practices. We conclude by arguing that the robust economic environment of the 1990s probably plays a large role in our results. C1 Fed Reserve Bank St Louis, Res Dept, St Louis, MO USA. NR 46 TC 1 Z9 1 U1 0 U2 0 PU JAI-ELSEVIER SCI BV PI AMSTERDAM PA RADARWEG 29, PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS BN 0-7623-0987-3 J9 RES FIN SERV PY 2002 VL 14 BP 31 EP 62 PG 32 WC Business, Finance SC Business & Economics GA BW26T UT WOS:000181391900002 ER PT B AU Eisenbeis, RA Wall, LD AF Eisenbeis, RA Wall, LD BE Kaufman, GG TI The major supervisory initiatives post-FDICIA: Are they based on the goals of PCA? Should they be? SO PROMPT CORRECTIVE ACTION IN BANKING: 10 YEARS LATER SE RESEARCH IN FINANCIAL SERVICES: PRIVATE AND PUBLIC POLICY LA English DT Proceedings Paper CT 77th Annual Meeting of the Western-Economic-Association-International CY JUN 29-JUL 03, 2002 CL Seattle, WA SP Western Econ Assoc Int ID IMPROVEMENT ACT; RISK AB The prompt corrective action provisions in FDICIA 1991 provide the supervisors with an unambiguous goal: "to resolve the problems of insured depository institutions at the least possible long-term cost to the deposit insurance fund." Yet performance of the regulators in achieving this goal has been lacking in that substantial losses continue to be imposed on the insurance funds when banks fail. Is PCA misguided, or are there incentive defects in the law and how the requirements are being administered? This paper analyzes these issues in the context of recent proposals to reform the deposit insurance system. C1 Fed Reserve Bank Atlanta, Atlanta, GA USA. NR 45 TC 2 Z9 2 U1 0 U2 0 PU JAI-ELSEVIER SCI BV PI AMSTERDAM PA RADARWEG 29, PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS BN 0-7623-0987-3 J9 RES FIN SERV PY 2002 VL 14 BP 109 EP 142 PG 34 WC Business, Finance SC Business & Economics GA BW26T UT WOS:000181391900006 ER PT B AU Rosenblum, H AF Rosenblum, H BE Kaufman, GG TI Comment SO PROMPT CORRECTIVE ACTION IN BANKING: 10 YEARS LATER SE RESEARCH IN FINANCIAL SERVICES: PRIVATE AND PUBLIC POLICY LA English DT Proceedings Paper CT 77th Annual Meeting of the Western-Economic-Association-International CY JUN 29-JUL 03, 2002 CL Seattle, WA SP Western Econ Assoc Int C1 Fed Reserve Bank Dallas, Dallas, TX USA. NR 1 TC 0 Z9 0 U1 0 U2 0 PU JAI-ELSEVIER SCI BV PI AMSTERDAM PA RADARWEG 29, PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS BN 0-7623-0987-3 J9 RES FIN SERV PY 2002 VL 14 BP 227 EP 233 PG 7 WC Business, Finance SC Business & Economics GA BW26T UT WOS:000181391900009 ER PT B AU Gruben, WC Koo, J Moore, RR AF Gruben, WC Koo, J Moore, RR BE Kaufman, GG TI When does financial liberalization make banks risky? An empirical examination of Argentina, Canada and Mexico SO PROMPT CORRECTIVE ACTION IN BANKING: 10 YEARS LATER SE RESEARCH IN FINANCIAL SERVICES: PRIVATE AND PUBLIC POLICY LA English DT Proceedings Paper CT 77th Annual Meeting of the Western-Economic-Association-International CY JUN 29-JUL 03, 2002 CL Seattle, WA SP Western Econ Assoc Int ID MARKET AB In the literature on systemic banking crises, two common themes are: (1) lack of market discipline encourages risky lending; and (2) financial liberalization or privatization leads to risky lending. However, there is evidence to suggest that neither financial liberalization nor weak market discipline always precedes risky lending. We test for depositor discipline and, separately for post-liberalization or post-privatization risky, lending in Argentina, Canada, and Mexico. In the countries without market discipline, lending risk increases significantly in the wake of liberalization. Where depositors discipline banks, banks neither behave riskily nor does their risk increase in the wake of privatization. C1 Fed Reserve Bank Dallas, Dallas, TX USA. NR 32 TC 0 Z9 0 U1 0 U2 1 PU JAI-ELSEVIER SCI BV PI AMSTERDAM PA RADARWEG 29, PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS BN 0-7623-0987-3 J9 RES FIN SERV PY 2002 VL 14 BP 293 EP 312 PG 20 WC Business, Finance SC Business & Economics GA BW26T UT WOS:000181391900013 ER PT B AU Hunter, WC AF Hunter, WC BE Kaufman, GG TI Comment SO PROMPT CORRECTIVE ACTION IN BANKING: 10 YEARS LATER SE RESEARCH IN FINANCIAL SERVICES: PRIVATE AND PUBLIC POLICY LA English DT Proceedings Paper CT 77th Annual Meeting of the Western-Economic-Association-International CY JUN 29-JUL 03, 2002 CL Seattle, WA SP Western Econ Assoc Int C1 Fed Reserve Bank Chicago, Chicago, IL USA. NR 0 TC 0 Z9 0 U1 0 U2 0 PU JAI-ELSEVIER SCI BV PI AMSTERDAM PA RADARWEG 29, PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS BN 0-7623-0987-3 J9 RES FIN SERV PY 2002 VL 14 BP 313 EP 319 PG 7 WC Business, Finance SC Business & Economics GA BW26T UT WOS:000181391900014 ER PT B AU Greenspan, A AF Greenspan, A GP FRBKC TI Opening remarks SO RETHINKING STABILIZATION POLICY LA English DT Proceedings Paper CT Symposium on Rethinking Stabilization Policy CY AUG 29-31, 2002 CL Jackson Hole, WY SP Fed Reserve Bank Kansas City C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 0 TC 12 Z9 13 U1 0 U2 1 PU FEDERAL RESERVE BANK KANSAS CITY PI KANSAS CITY PA 925 GRAND AVE, KANSAS CITY, MO 64198 USA PY 2002 BP 1 EP 10 PG 10 WC Economics SC Business & Economics GA BBS18 UT WOS:000227541000002 ER PT J AU Kehoe, TJ Prescott, EC AF Kehoe, TJ Prescott, EC TI Introduction - Great depressions of the 20th century SO REVIEW OF ECONOMIC DYNAMICS LA English DT Editorial Material DE depression; growth accounting; total factor productivity; dynamic general equilibrium AB The papers in this issue study nine depressions-both from the interwar period in Europe and North America and from more recent times in Japan and Latin America-using a common framework. All of the papers rely on growth accounting to decompose changes in output into the portions due to changes in factor inputs and the portion due to the changes in efficiency with which these factors are used. All of the papers employ simple applied dynamic general equilibrium models. Collectively, these papers indicate that government policies that affect productivity and hours per working-age person are the crucial determinants of the great depressions of the 20th century. (C) 2002 Elsevier Science. C1 Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. Fed Reserve Bank Minneapolis, Dept Res, Minneapolis, MN 55480 USA. RP Kehoe, TJ (reprint author), Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. NR 16 TC 64 Z9 65 U1 2 U2 5 PU ACADEMIC PRESS INC ELSEVIER SCIENCE PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 1094-2025 J9 REV ECON DYNAM JI Rev. Econ. Dyn. PD JAN PY 2002 VL 5 IS 1 BP 1 EP 18 DI 10.1006/redy.2001.0151 PG 18 WC Economics SC Business & Economics GA 512AZ UT WOS:000173300100001 ER PT J AU Cole, HL Ohanian, LE AF Cole, HL Ohanian, LE TI The Great UK Depression: A puzzle and possible resolution SO REVIEW OF ECONOMIC DYNAMICS LA English DT Article DE unemployment benefits; sectoral shocks; workweek restriction ID INTERWAR BRITAIN; INDIVISIBLE LABOR; UNEMPLOYMENT; EXPLANATION AB The United Kingdom was depressed for 20 years between the two world wars. The decrease in output was entirely due to lower hours per worker and lower employment. Our main finding is that generous unemployment benefits, in conjunction with large negative sectoral shocks, are the most plausible candidate explanation for this depression. We also find that the conventional Keynesian monetary story for this period is unconvincing. (C) 2002 Elsevicr Science. C1 Fed Reserve Bank Minneapolis, Res Dept, Minneapolis, MN 55480 USA. Univ Calif Los Angeles, Dept Econ, Los Angeles, CA 90095 USA. RP Cole, HL (reprint author), Fed Reserve Bank Minneapolis, Res Dept, Minneapolis, MN 55480 USA. NR 32 TC 16 Z9 16 U1 0 U2 2 PU ACADEMIC PRESS INC ELSEVIER SCIENCE PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 1094-2025 J9 REV ECON DYNAM JI Rev. Econ. Dyn. PD JAN PY 2002 VL 5 IS 1 BP 19 EP 44 DI 10.1006/redy.2001.0140 PG 26 WC Economics SC Business & Economics GA 512AZ UT WOS:000173300100002 ER PT J AU Amaral, PS MacGee, JC AF Amaral, PS MacGee, JC TI The Great Depression in Canada and the United States: A neoclassical perspective SO REVIEW OF ECONOMIC DYNAMICS LA English DT Article DE Great Depression; Canada; productivity; terms of trade; deflation ID LESSONS AB Canada suffered a major depression from 1929 to 1939. In terms of output it was similar to the Great Depression in the United States. However, total factor productivity (TFP) in Canada did not recover relative to trend, while in the United States TFP had recovered by 1937. We find that the neoclassical growth model, with TFP treated as exogenous, can account for over half of the decline in output relative to trend in Canada. In contrast, we find that conventional explanations for the Great Depression-monetary shocks, terms of trade shocks, and labor market and competition policies-do not work for Canada. (C) 2002 Elsevier Science. C1 Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. Fed Reserve Bank Minneapolis, Res Dept, Minneapolis, MN 55480 USA. RP Amaral, PS (reprint author), Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. RI Amaral, Pedro/C-3693-2009; nipe, cef/A-4218-2010 NR 41 TC 7 Z9 7 U1 0 U2 5 PU ACADEMIC PRESS INC ELSEVIER SCIENCE PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 1094-2025 J9 REV ECON DYNAM JI Rev. Econ. Dyn. PD JAN PY 2002 VL 5 IS 1 BP 45 EP 72 DI 10.1006/redy.2001.0141 PG 28 WC Economics SC Business & Economics GA 512AZ UT WOS:000173300100003 ER PT J AU Fisher, JDM Hornstein, A AF Fisher, JDM Hornstein, A TI The role of real wages, productivity, and fiscal policy in Germany's Great Depression 1928-1937 SO REVIEW OF ECONOMIC DYNAMICS LA English DT Article DE Great Depression; Germany; growth model; real wages; productivity; fiscal policy AB We study the behavior of output, employment, consumption, and investment in Germany during the Great Depression of 1928-1937. In this time period, real wages were countercyclical, and productivity and fiscal policy were procyclical. We use the neoclassical growth model to investigate how much these factors contribute to the depression. We find that real wages, which were significantly above their market clearing levels, were the most important factor for the economic decline in the depression. Changes in productivity and fiscal policy were also important for the decline and recovery. Even though our analysis is limited to a small number of factors, the model accounts surprisingly well for the depression in Germany. (C) 2002 Elsevier Science. C1 Fed Reserve Bank Chicago, Chicago, IL 60604 USA. Fed Reserve Bank Richmond, Richmond, VA 23261 USA. RP Fisher, JDM (reprint author), Fed Reserve Bank Chicago, 230 S LaSalle St, Chicago, IL 60604 USA. NR 19 TC 9 Z9 9 U1 0 U2 2 PU ACADEMIC PRESS INC ELSEVIER SCIENCE PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 1094-2025 J9 REV ECON DYNAM JI Rev. Econ. Dyn. PD JAN PY 2002 VL 5 IS 1 BP 100 EP 127 DI 10.1006/redy.2001.0142 PG 28 WC Economics SC Business & Economics GA 512AZ UT WOS:000173300100005 ER PT J AU Kydland, FE Zarazaga, CEJM AF Kydland, FE Zarazaga, CEJM TI Argentina's lost decade SO REVIEW OF ECONOMIC DYNAMICS LA English DT Article DE Argentina; depression; growth model ID AGGREGATE FLUCTUATIONS AB Argentina suffered a depression in the 1980s that was as severe as the Great Depression experienced in the United States and Germany in the interwar period. Our paper examines this depression from the perspective of growth theory, taking total factor productivity as exogenous. The predictions of the growth model conform rather well with the observations during the "lost decade" years. (C) 2002 Elsevier Science. C1 Carnegie Mellon Univ, Dept Econ, Pittsburgh, PA 15213 USA. Fed Reserve Bank Dallas, Dept Res, Dallas, TX 75201 USA. RP Kydland, FE (reprint author), Carnegie Mellon Univ, Dept Econ, Pittsburgh, PA 15213 USA. NR 13 TC 23 Z9 25 U1 2 U2 6 PU ACADEMIC PRESS INC ELSEVIER SCIENCE PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 1094-2025 J9 REV ECON DYNAM JI Rev. Econ. Dyn. PD JAN PY 2002 VL 5 IS 1 BP 152 EP 165 DI 10.1006/redy.2001.0145 PG 14 WC Economics SC Business & Economics GA 512AZ UT WOS:000173300100007 ER PT J AU Bergoeing, R Kehoe, PJ Kehoe, TJ Soto, R AF Bergoeing, R Kehoe, PJ Kehoe, TJ Soto, R TI A decade lost and found: Mexico and Chile in the 1980s SO REVIEW OF ECONOMIC DYNAMICS LA English DT Article DE Chile; Mexico; growth accounting; total factor productivity; depression ID ADJUSTMENTS AB Chile and Mexico experienced severe economic crises in the early 1980s. This paper analyzes four possible explanations for why Chile recovered much faster than Mexico did. Comparing data from the two countries allows us to rule out a monetarist explanation, an explanation based on falls in real wages and real exchange rates, and a debt overhang explanation. Using growth accounting, a calibrated growth model, and economic theory, we conclude that the crucial difference between the two countries was the earlier policy reforms in Chile that generated faster productivity growth. The most crucial of these reforms were in banking and bankruptcy procedures. (C) 2002 Elsevier Science. C1 Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. Fed Reserve Bank Minneapolis, Res Dept, Minneapolis, MN 55480 USA. Univ Chile, Ctr Econ Aplicada, Santiago, Chile. Natl Bur Econ Res, Cambridge, MA 02138 USA. Pontificia Univ Catolica Chile, Inst Econ, Santiago, Chile. Banco Cent Chile, Gerencia Invest Econ, Santiago, Chile. RP Kehoe, TJ (reprint author), Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. NR 26 TC 63 Z9 66 U1 0 U2 8 PU ACADEMIC PRESS INC ELSEVIER SCIENCE PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 1094-2025 J9 REV ECON DYNAM JI Rev. Econ. Dyn. PD JAN PY 2002 VL 5 IS 1 BP 166 EP 205 DI 10.1006/redy.2001.0150 PG 40 WC Economics SC Business & Economics GA 512AZ UT WOS:000173300100008 ER PT J AU Hayashi, F Prescott, EC AF Hayashi, F Prescott, EC TI The 1990s in Japan: A lost decade SO REVIEW OF ECONOMIC DYNAMICS LA English DT Article DE growth model; TFP; Japan; workweek ID INDIVISIBLE LABOR; MONETARY-POLICY AB This paper examines the Japanese economy in the 1990s, a decade of economic stagnation. We find that the problem is not a breakdown of the financial system, as corporations large and small were able to find financing for investments. There is no evidence of profitable investment opportunities not being exploited due to lack of access to capital markets. The problem then and today is a low productivity, growth rate. Growth theory, treating TFP as exogenous, accounts well for the Japanese lost decade of growth. We think that research effort should be focused on what policy changes will allow productivity to again grow rapidly. (C) 2002 Elsevier Science. C1 Univ Tokyo, Tokyo, Japan. Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. Fed Reserve Bank Minneapolis, Res Dept, Minneapolis, MN 55480 USA. RP Hayashi, F (reprint author), Univ Tokyo, Tokyo, Japan. NR 14 TC 209 Z9 210 U1 3 U2 27 PU ACADEMIC PRESS INC ELSEVIER SCIENCE PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 1094-2025 J9 REV ECON DYNAM JI Rev. Econ. Dyn. PD JAN PY 2002 VL 5 IS 1 BP 206 EP 235 DI 10.1006/redy.2001.0149 PG 30 WC Economics SC Business & Economics GA 512AZ UT WOS:000173300100009 ER PT B AU Hendricks, D AF Hendricks, D BE Figlewski, S Levich, RM TI Payment and settlement risks in international financial markets SO RISK MANAGEMENT: THE STATE OF THE ART SE NEW YORK UNIVERSITY SALOMON CENTER SERIES ON FINANCIAL MARKETS AND INSTITUTIONS LA English DT Proceedings Paper CT Conference on Risk Management CY JAN 13-14, 2000 CL NYU STERN SCH BUSINESS, NEW YORK, NY SP NYU Salomon Ctr HO NYU STERN SCH BUSINESS C1 Fed Reserve Bank New York, New York, NY 10045 USA. NR 0 TC 0 Z9 0 U1 0 U2 0 PU KLUWER ACADEMIC PUBLISHERS PI NORWELL PA 101 PHILIP DRIVE, ASSINIPPI PARK, NORWELL, MA 02061 USA BN 0-7923-7427-4 J9 NYU SA CTR SER F M I PY 2002 VL 8 BP 123 EP 127 PG 5 WC Business, Finance; Management SC Business & Economics GA BU08Y UT WOS:000174997800010 ER PT B AU Hendricks, D AF Hendricks, D BE Figlewski, S Levich, RM TI Capital adequacy in financial institutions: Basel proposals SO RISK MANAGEMENT: THE STATE OF THE ART SE NEW YORK UNIVERSITY SALOMON CENTER SERIES ON FINANCIAL MARKETS AND INSTITUTIONS LA English DT Meeting Abstract CT Conference on Risk Management CY JAN 13-14, 2000 CL NYU STERN SCH BUSINESS, NEW YORK, NY SP NYU Salomon Ctr HO NYU STERN SCH BUSINESS C1 Fed Reserve Bank New York, New York, NY 10045 USA. NR 1 TC 0 Z9 0 U1 0 U2 1 PU KLUWER ACADEMIC PUBLISHERS PI NORWELL PA 101 PHILIP DRIVE, ASSINIPPI PARK, NORWELL, MA 02061 USA BN 0-7923-7427-4 J9 NYU SA CTR SER F M I PY 2002 VL 8 BP 201 EP 205 PG 5 WC Business, Finance; Management SC Business & Economics GA BU08Y UT WOS:000174997800016 ER PT J AU Lengwiler, Y Orphanides, A AF Lengwiler, Y Orphanides, A TI Optimal discretion SO SCANDINAVIAN JOURNAL OF ECONOMICS LA English DT Article DE rules; discretion; credibility; dynamic inconsistency; inflation targeting ID MONETARY-POLICY; INFLATION; INFORMATION; CREDIBILITY; REPUTATION; COMMITMENT; MODEL AB We investigate the desirability of adopting a rule in favor of discretionary monetary policy in a model exhibiting Kydland and Prescott's dynamic inconsistency problem but no fundamental incompatibility between the policymaker's price stability and full employment objectives. We show that if discretion provides a policy flexibility benefit, then a rule is optimal only when inflation exceeds an endogenously determined threshold. This gives rise to a discretionary policy zone for inflation with the central bank taking more drastic action towards stabilizing inflation when inflation veers outside the zone. Imperfect credibility narrows the scope for discretion and enhances the benefits of adopting a rule. C1 Univ Basel, CH-4003 Basel, Switzerland. Fed Reserve Board, Washington, DC 20551 USA. RP Lengwiler, Y (reprint author), Univ Basel, CH-4003 Basel, Switzerland. NR 30 TC 3 Z9 3 U1 2 U2 3 PU BLACKWELL PUBL LTD PI OXFORD PA 108 COWLEY RD, OXFORD OX4 1JF, OXON, ENGLAND SN 0347-0520 J9 SCAND J ECON JI Scand. J. Econ. PY 2002 VL 104 IS 2 BP 261 EP 276 DI 10.1111/1467-9442.00285 PG 16 WC Economics SC Business & Economics GA 576ZY UT WOS:000177038100006 ER PT J AU Hobijn, B Jovanovic, B AF Hobijn, B Jovanovic, B TI The information-technology revolution and the stock market: Evidence SO AMERICAN ECONOMIC REVIEW LA English DT Article ID BEHAVIOR; PRICES AB Why did the stock market decline so much in the early 1970's and remain low until the early 1980's? We argue that it was because information technology arrived on the scene and the stock-market incumbents of the day were not ready to implement it. Instead, new firms would bring in the new technology after the mid-1980's. Investors foresaw this in the early 1970's and stock prices fell right away. In our model, new capital destroys old capital, but with a lag. The prospect of this causes the value of the old capital to fall right away. C1 Fed Reserve Bank New York, Domest Res, New York, NY 10045 USA. Univ Chicago, Dept Econ, Chicago, IL 60637 USA. NYU, New York, NY USA. RP Hobijn, B (reprint author), Fed Reserve Bank New York, Domest Res, 33 Liberty St, New York, NY 10045 USA. NR 27 TC 72 Z9 72 U1 1 U2 8 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD DEC PY 2001 VL 91 IS 5 BP 1203 EP 1220 DI 10.1257/aer.91.5.1203 PG 18 WC Economics SC Business & Economics GA 502ZN UT WOS:000172772800002 ER PT J AU Bryan, MF Cecchetti, SG O'Sullivan, R AF Bryan, MF Cecchetti, SG O'Sullivan, R TI Asset prices in the measurement of inflation SO ECONOMIST-NETHERLANDS LA English DT Article DE asset prices; inflation measurement; excluded goods bias; dynamic factor index AB The debate over including asset prices in the construction of an inflation statistic has attracted renewed attention in recent years. Virtually all of this (and earlier) work on incorporating asset prices into an aggregate price statistic has been motivated by a presumed, but unidentified transmission mechanism through which asset prices arc leading indicators of inflation at the retail level. In this paper, we take an alternative, longer-term perspective on the issue and argue that the exclusion of asset prices introduces an 'excluded goods bias' in the computation of the inflation statistic that is of interest to the monetary authority. We implement this idea using a relatively modern statistical technique, a dynamic factor index. This statistical algorithm allows us to see through the excessively 'noisy' asset price data that have frustrated earlier researchers who have attempted to integrate these prices into an aggregate measure. We rind that the failure to include asset prices in the aggregate price statistic has introduced a downward bias in the US Consumer Price Index on the order of magnitude of roughly 1/4 percentage point annually. Of the three broad assets categories considered here - equities, bonds, and houses - we find that the failure to include housing prices resulted in the largest potential measurement error. This conclusion is also supported by a cursory took at some cross-country evidence. C1 Fed Reserve Bank Cleveland, Cleveland, OH 44114 USA. Ohio State Univ, Columbus, OH 43210 USA. NBER, Cambridge, MA 02138 USA. RP Bryan, MF (reprint author), Fed Reserve Bank Cleveland, Cleveland, OH 44114 USA. NR 21 TC 6 Z9 6 U1 1 U2 4 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA VAN GODEWIJCKSTRAAT 30, 3311 GZ DORDRECHT, NETHERLANDS SN 0013-063X J9 ECONOMIST-NETHERLAND JI Economist-Netherlands PD DEC PY 2001 VL 149 IS 4 BP 405 EP 431 DI 10.1023/A:1014650017264 PG 27 WC Economics SC Business & Economics GA 522CW UT WOS:000173879000002 ER PT J AU Berger, AN Klapper, LF Udell, GF AF Berger, AN Klapper, LF Udell, GF TI The ability of banks to lend to informationally opaque small businesses SO JOURNAL OF BANKING & FINANCE LA English DT Article; Proceedings Paper CT 13th Annual Australasian Finance and Banking Conference CY DEC 18-20, 2000 CL SYDNEY, AUSTRALIA DE banks; mergers; foreign ownership; financial distress; multiple lenders ID CREDIT CRUNCH; UNITED-STATES; FINANCIAL INTERMEDIATION; CAPITAL CRUNCH; DEBT; AVAILABILITY; PERFORMANCE; GERMANY; COUNTRY; SHOCKS AB We test hypotheses about the effects of bank size, foreign ownership, and distress on lending to informationally opaque small firms using a rich new data set on Argentinean banks, firms, and loans. We also test hypotheses about borrowing from a single bank versus multiple banks. Our results suggest that large and foreign-owned institutions may have difficulty extending relationship loans to opaque small firms. Bank distress appears to have no greater effect on small borrowers than on large borrowers, although even small firms may react to bank distress by borrowing from multiple banks, raising borrowing costs and destroying some relationship benefits. (C) 2001 Published by Elsevier Science B.V. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. Wharton Financial Inst Ctr, Philadelphia, PA 19104 USA. World Bank, Washington, DC 20433 USA. Indiana Univ, Kelley Sch Business, Bloomington, IN 47405 USA. RP Berger, AN (reprint author), Fed Reserve Syst, Board Governors, Mail Stop 153,20th & C St NW, Washington, DC 20551 USA. EM aberger@frb.gov; lklapper@worldbank.org; gudell@indiana.edu NR 85 TC 174 Z9 177 U1 5 U2 25 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 EI 1872-6372 J9 J BANK FINANC JI J. Bank Financ. PD DEC PY 2001 VL 25 IS 12 BP 2127 EP 2167 DI 10.1016/S0378-4266(01)00189-3 PG 41 WC Business, Finance; Economics SC Business & Economics GA 498CR UT WOS:000172492700002 ER PT J AU Hughes, JP Mester, LJ Moon, CG AF Hughes, JP Mester, LJ Moon, CG TI Are scale economies in banking elusive or illusive? Evidence obtained by incorporating capital structure and risk-taking into models of bank production SO JOURNAL OF BANKING & FINANCE LA English DT Article; Proceedings Paper CT 13th Annual Australasian Finance and Banking Conference CY DEC 18-20, 2000 CL SYDNEY, AUSTRALIA DE banking; production; risk; scale economies ID DEPOSIT INSURANCE; EFFICIENCY; COST; DEBT AB This paper explores how to incorporate banks' capital structure and risk-taking into models of production. In doing so, the paper bridges the gulf between (1) the banking literature that studies moral hazard effects of bank regulation without considering the underlying microeconomics of production and (2) the literature that uses dual profit and cost functions to study the microeconomics of bank production without explicitly considering how banks' production decisions influence their riskiness. Various production models that differ in how they account for capital structure and in the objectives they impute to bank managers - cost minimization versus value maximization - are estimated using U.S. data on highest-level bank holding companies. Modeling the bank's objective as value maximization conveniently incorporates both market-priced risk and expected cash flow into managers' ranking and choice of production plans. Estimated scale economies are found to depend critically on how banks' capital structure and risk-taking are modeled. In particular, when equity capital, in addition to debt, is included in the production model and cost is computed from the value-maximizing expansion path rather than the cost-minimizing path, banks are found to have large scale economies that increase with size. Moreover, better diversification is associated with larger scale economies while increased risk-taking and inefficient risk-taking are associated with smaller scale economics. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Rutgers State Univ, Dept Econ, New Brunswick, NJ 08901 USA. Fed Reserve Bank Philadelphia, Dept Res, Philadelphia, PA 19106 USA. Univ Penn, Wharton Sch, Dept Finance, Philadelphia, PA 19104 USA. Hanyang Univ, Coll Business & Econ, Dept Econ, Seongdong Gu, Seoul 133791, South Korea. RP Hughes, JP (reprint author), Rutgers State Univ, Dept Econ, New Brunswick, NJ 08901 USA. EM jphughes@rci.rutgers.edu RI Moon, Choon-Geol/C-1768-2017 OI Moon, Choon-Geol/0000-0002-2933-9150 NR 35 TC 88 Z9 90 U1 1 U2 12 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 EI 1872-6372 J9 J BANK FINANC JI J. Bank Financ. PD DEC PY 2001 VL 25 IS 12 BP 2169 EP 2208 DI 10.1016/S0378-4266(01)00190-X PG 40 WC Business, Finance; Economics SC Business & Economics GA 498CR UT WOS:000172492700003 ER PT J AU Estrella, A AF Estrella, A TI Mixing and matching: Prospective financial sector mergers and market valuation SO JOURNAL OF BANKING & FINANCE LA English DT Article; Proceedings Paper CT 13th Annual Australasian Finance and Banking Conference CY DEC 18-20, 2000 CL SYDNEY, AUSTRALIA DE diversification; option pricing; arbitrage pricing theory ID EFFICIENCY; COST; DIVERSIFICATION; INSTITUTIONS; INDUSTRY; OPTIONS; FOCUS; RISKS; BANKS AB Which types of mergers are likely to be most productive for banks and other financial firms in the US? From a management perspective, mixing disparate firms may be difficult, but may offer significant gains from diversification. The opposite applies to matching similar firms. This paper considers life insurance, property and casualty insurance, securities, and commercial firms as potential matches for banks. It examines a measure of diversification gains from potential consolidation, based on option pricing, and a model of the "building blocks" of the industries, based on arbitrage pricing theory. The results identify potential diversification gains from virtually all combinations involving banking and insurance, which arise because common factors are combined in different ways and because insurance is already well diversified. Published by Elsevier Science B.V. C1 Fed Reserve Bank New York, New York, NY 10045 USA. RP Estrella, A (reprint author), Fed Reserve Bank New York, 33 Liberty St, New York, NY 10045 USA. EM arturo.estrella@ny.frb.org NR 39 TC 22 Z9 23 U1 1 U2 6 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 EI 1872-6372 J9 J BANK FINANC JI J. Bank Financ. PD DEC PY 2001 VL 25 IS 12 BP 2367 EP 2392 DI 10.1016/S0378-4266(01)00195-9 PG 26 WC Business, Finance; Economics SC Business & Economics GA 498CR UT WOS:000172492700009 ER PT J AU Edison, H Reinhart, CM AF Edison, H Reinhart, CM TI Stopping hot money SO JOURNAL OF DEVELOPMENT ECONOMICS LA English DT Article; Proceedings Paper CT 12th International Seminar on Economics (IASE) CY DEC, 1999 CL BUENOS AIRES, ARGENTINA DE capital controls; financial crises; contagion; co-movement ID CAPITAL CONTROLS; LATIN-AMERICA; FLOWS AB While high interest rates and foreign exchange sales are the most common way of dealing with a speculative attack in the foreign exchange market, several countries resorted to capital controls during recent periods of currency market turbulence. The purpose of this study is to use daily financial data to examine three of these capital controls episodes-Brazil 1999, Malaysia 1998, and Thailand 1997. We aim to assess the extent to which the capital controls were effective in delivering the outcomes that motivated their inception in the first place. We conclude that in two of the three cases (Brazil and Thailand), the controls did not deliver much of what was intended-although, one does not observe the counterfactual. By contrast, in the case of Malaysia, the controls did align closely with the priors of what controls are intended to achieve: greater interest rate and exchange rate stability and more policy autonomy. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Univ Maryland, College Pk, MD 20742 USA. NBER, College Pk, MD 20742 USA. Board Governors Fed Reserve, Washington, DC USA. RP Reinhart, CM (reprint author), Univ Maryland, College Pk, MD 20742 USA. RI Reinhart, Carmen/B-6997-2008; Edison, Hali/A-7550-2009 NR 14 TC 26 Z9 31 U1 2 U2 12 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3878 J9 J DEV ECON JI J. Dev. Econ. PD DEC PY 2001 VL 66 IS 2 BP 533 EP 553 DI 10.1016/S0304-3878(01)00173-0 PG 21 WC Economics SC Business & Economics GA 489LM UT WOS:000171992900008 ER PT J AU Dennis, R AF Dennis, R TI Neap challenges for monetary policy: A symposium sponsored by the Federal Reserve Bank of Kansas City. SO JOURNAL OF ECONOMIC LITERATURE LA English DT Book Review C1 Fed Reserve Bank, San Francisco, CA USA. RP Dennis, R (reprint author), Fed Reserve Bank, San Francisco, CA USA. NR 1 TC 0 Z9 0 U1 0 U2 0 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0022-0515 J9 J ECON LIT JI J. Econ. Lit. PD DEC PY 2001 VL 39 IS 4 BP 1239 EP 1240 PG 2 WC Economics SC Business & Economics GA 502MD UT WOS:000172746600016 ER PT J AU Kodrzycki, YK AF Kodrzycki, YK TI The Boston renaissance: Race, space, and economic change in an American metropolis. SO JOURNAL OF ECONOMIC LITERATURE LA English DT Book Review C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Kodrzycki, YK (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 1 TC 0 Z9 0 U1 0 U2 0 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0022-0515 J9 J ECON LIT JI J. Econ. Lit. PD DEC PY 2001 VL 39 IS 4 BP 1284 EP 1286 PG 3 WC Economics SC Business & Economics GA 502MD UT WOS:000172746600047 ER PT J AU Kroszner, RS Strahan, PE AF Kroszner, RS Strahan, PE TI Bankers on boards: monitoring, conflicts of interest, and lender liability SO JOURNAL OF FINANCIAL ECONOMICS LA English DT Article DE banking and commerce; boards of directors; conflicts of interest; lender liability ID GLASS-STEAGALL ACT; CORPORATE-OWNERSHIP; UNITED-STATES; DIRECTORS; INVESTMENT; DEBT; DETERMINANTS; ORGANIZATION; SECURITIES; BANKRUPTCY AB We investigate the trade-off between the benefits from bank monitoring when a banker is represented on a firm's board and the costs from two sources: conflicts Of interests between lenders and shareholders, and U.S. legal doctrines that generate lender liability for bankers on boards of firms in financial distress. Consistent with high costs of active involvement, bankers are on boards of large, stable firms with high proportions of collateralizable assets and low reliance on short-term financing. While permitting banks to own equity could mitigate conflicts, the protection of shareholder versus creditor rights could continue to reduce the role of U.S. banks in corporate governance. (C) 2001 Published by Elsevier Science S.A. C1 Univ Chicago, Grad Sch Business, Chicago, IL 60637 USA. Fed Reserve Bank New York, Res & Market Anal Grp, New York, NY 10045 USA. RP Strahan, PE (reprint author), Boston Coll, Carroll Sch Management, Chestnut Hill, MA 02467 USA. NR 70 TC 88 Z9 89 U1 3 U2 17 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0304-405X J9 J FINANC ECON JI J. Financ. Econ. PD DEC PY 2001 VL 62 IS 3 BP 415 EP 452 DI 10.1016/S0304-405X(01)00082-4 PG 38 WC Business, Finance; Economics SC Business & Economics GA 494RN UT WOS:000172299800001 ER PT J AU Neely, CJ Weller, PA AF Neely, CJ Weller, PA TI Technical analysis and central bank intervention SO JOURNAL OF INTERNATIONAL MONEY AND FINANCE LA English DT Article DE technical analysis; trading rule; genetic programming; exchange rate; central bank; intervention ID FOREIGN-EXCHANGE MARKET; TRADING-RULE PROFITS AB This paper extends genetic programming techniques to show that US foreign exchange intervention information improves technical trading rules' profitability for two of four exchange rates over part of the out-of-sample period. Rules trade contrary to intervention and are unusually profitable on days prior to intervention, indicating that intervention is intended to halt predictable trends. Intervention seems to be more successful in checking such trends in the out-of-sample (1981-98) period than in the in-sample (1975-80) period. Any improvement in performance results from more precise estimation of the relationship between current and past exchange rates, rather than from information about contemporaneous intervention. (C) 2001 Elsevier Science Ltd. All tights reserved. C1 Fed Reserve Bank, Res Dept, St Louis, MO 63166 USA. Univ Iowa, Dept Finance, Henry B Tippie Coll Business Adm, Iowa City, IA 52242 USA. RP Neely, CJ (reprint author), Fed Reserve Bank, Res Dept, POB 442, St Louis, MO 63166 USA. RI Neely, Christopher/D-3636-2012; Neely, Christopher/I-5749-2016 OI Neely, Christopher/0000-0003-2852-9419 NR 17 TC 23 Z9 23 U1 2 U2 4 PU ELSEVIER SCI LTD PI OXFORD PA THE BOULEVARD, LANGFORD LANE, KIDLINGTON, OXFORD OX5 1GB, OXON, ENGLAND SN 0261-5606 J9 J INT MONEY FINANC JI J. Int. Money Finan. PD DEC PY 2001 VL 20 IS 7 BP 949 EP 970 DI 10.1016/S0261-5606(01)00033-X PG 22 WC Business, Finance SC Business & Economics GA 498CP UT WOS:000172492500001 ER PT J AU Duca, JV Van Hoose, DD AF Duca, JV Van Hoose, DD TI The rise of goods-market competition and the fall of nominal wage contracting: Endogenous wage contracting in a multisector economy SO JOURNAL OF MACROECONOMICS LA English DT Article ID MACROECONOMIC APPROACH; MONETARY-POLICY; STICKY PRICES; INDEXATION; INFLATION; RIGIDITY; MONEY; UNION AB This paper shows how heterogeneity in wage setting and a link between nominal wage flexibility and goods-market competition arise in a multisector economy that is affected by aggregate and sector-specific shocks. Aggregate volatility increases the variance of real contract wages, whereas sectoral volatility increases the relative variance of real Walrasian wages. Given this tradeoff the prevalence of nominal wage contracting reflects both the relative volatility of aggregate versus sectoral disturbances and the overall degree of goods-market market competition. We find that these variables help explain the decline in unionization (a proxy for contracting) in the United States. C1 Fed Reserve Bank, Dallas, TX 75201 USA. Univ Alabama, Tuscaloosa, AL 35487 USA. RP Duca, JV (reprint author), Fed Reserve Bank, Dallas, TX 75201 USA. NR 37 TC 8 Z9 8 U1 0 U2 6 PU LOUISIANA STATE UNIV PR PI BATON ROUGE PA BATON ROUGE, LA 70893 USA SN 0164-0704 J9 J MACROECON JI J. Macroecon. PD WIN PY 2001 VL 23 IS 1 BP 1 EP 29 DI 10.1016/S0164-0704(01)00152-5 PG 29 WC Economics SC Business & Economics GA 398ZP UT WOS:000166786600001 ER PT J AU Chatterjee, S Carlino, GA AF Chatterjee, S Carlino, GA TI Aggregate metropolitan employment growth and the deconcentration of metropolitan employment SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE employment density; urban evolution; metropolitan growth ID CITIES; PRODUCTIVITY AB In this paper we document that the disparity in employment densities across US metropolitan areas has lessened substantially over the postwar period. To account for this deconcentration of metropolitan employment, we develop a system-of-cities model in which an increase in aggregate metropolitan employment clauses congestion costs to increase faster for the more dense metro areas. A calibrated version of the model reveals that the (roughly) two-and-a-half-fold increase in postwar aggregate metropolitan employment implies, by itself, more deconcentration than actually observed. Thus, rising aggregate metropolitan employment is a powerful force favoring deconcentration, although some benefit of greater employment density appears to have partially offset the effects of rising congestion costs for the more dense metro areas. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank Philadelphia, Dept Res, Philadelphia, PA 19106 USA. RP Chatterjee, S (reprint author), Fed Reserve Bank Philadelphia, Dept Res, 10 Independence Mall, Philadelphia, PA 19106 USA. NR 20 TC 14 Z9 15 U1 1 U2 4 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD DEC PY 2001 VL 48 IS 3 BP 549 EP 583 DI 10.1016/S0304-3932(01)00085-X PG 35 WC Business, Finance; Economics SC Business & Economics GA 491AQ UT WOS:000172086200003 ER PT J AU Bomfim, AN AF Bomfim, AN TI Measurement error in general equilibrium: the aggregate effects of noisy economic indicators SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE cyclical volatility; signal extraction; bounded rationality; production externalities ID MODELS; OUTPUT; INDEX; TIME AB I analyze the business cycle implications of noisy economic indicators in the context of a dynamic general equilibrium model. Two main results emerge. First, measurement error in preliminary data releases can have a quantitatively important effect on economic fluctuations. For instance, under efficient signal-extraction, the introduction of accurate economic indicators would make aggregate output 10-30 percent more volatile than suggested by the post-war experience of the U.S. economy. Second, the sign - but not the magnitude - of the measurement error effect depends crucially on the signal processing capabilities of agents. In particular, if agents take the noisy data at face value, significant improvement in the quality of key economic indicators would lead to considerably less cyclical volatility. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Board, Div Monetary Affairs Monetary & Financial Market, Washington, DC 20551 USA. RP Bomfim, AN (reprint author), Fed Reserve Board, Div Monetary Affairs Monetary & Financial Market, Mail Stop 74, Washington, DC 20551 USA. NR 29 TC 8 Z9 8 U1 0 U2 5 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD DEC PY 2001 VL 48 IS 3 BP 585 EP 603 DI 10.1016/S0304-3932(01)00083-6 PG 19 WC Business, Finance; Economics SC Business & Economics GA 491AQ UT WOS:000172086200004 ER PT J AU Rupert, P Schindler, M Wright, R AF Rupert, P Schindler, M Wright, R TI Generalized search-theoretic models of monetary exchange SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE money; search; bargaining; prices ID RANDOM-MATCHING MODEL; TRANSACTION POLICY; MONEY; PRICES; UNEMPLOYMENT; GOVERNMENT AB Virtually all simple search models of money assume agents with money cannot produce, and so everyone has either 0 or 1 units of money in steady state. We alternatively assume agents can always produce, and simply restrict money inventories to 0 or 1. This seems better for many issues; for example, in the standard model it is difficult to interpret increases in the money supply, because increasing the fraction of agents holding money decreases the economy's productive capacity. Our model avoids these problems and thus delivers more natural, and simpler, implications in many contexts. We compare results on existence, multiplicity, and welfare across models. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Univ Penn, Dept Econ, Philadelphia, PA 19104 USA. Fed Reserve Bank Cleveland, Dept Res, Cleveland, OH 44101 USA. RP Wright, R (reprint author), Univ Penn, Dept Econ, 3718 Locust Walk, Philadelphia, PA 19104 USA. NR 25 TC 16 Z9 16 U1 0 U2 1 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD DEC PY 2001 VL 48 IS 3 BP 605 EP 622 DI 10.1016/S0304-3932(01)00088-5 PG 18 WC Business, Finance; Economics SC Business & Economics GA 491AQ UT WOS:000172086200005 ER PT J AU Burnside, C Eichenbaum, M Rebelo, S AF Burnside, C Eichenbaum, M Rebelo, S TI Prospective deficits and the Asian currency crisis SO JOURNAL OF POLITICAL ECONOMY LA English DT Article ID OF-PAYMENTS CRISES; PRICE-LEVEL; MODEL; BALANCE; ECONOMY AB This paper argues that a principal cause of the 1997 Asian currency crisis was large prospective deficits associated with implicit bailout guarantees to failing banking systems. The expectation that these future deficits would be at least partially financed by seigniorage revenues or an inflation tax on outstanding nominal debt led to a collapse of the fixed exchange rate regimes in Asia. We articulate this view using a simple model whose key feature is that a speculative attack is inevitable once the present value of future government deficits rises. We present empirical evidence in support of the key assumptions underlying our interpretation of the crisis. C1 World Bank, Washington, DC 20433 USA. Northwestern Univ, Evanston, IL 60208 USA. Natl Bur Econ Res, Cambridge, MA 02138 USA. Fed Reserve Bank Chicago, Chicago, IL USA. RP Burnside, C (reprint author), World Bank, 1818 H St NW, Washington, DC 20433 USA. RI nipe, cef/A-4218-2010 NR 42 TC 84 Z9 84 U1 2 U2 11 PU UNIV CHICAGO PRESS PI CHICAGO PA 1427 E 60TH ST, CHICAGO, IL 60637-2954 USA SN 0022-3808 J9 J POLIT ECON JI J. Polit. Econ. PD DEC PY 2001 VL 109 IS 6 BP 1155 EP 1197 DI 10.1086/323271 PG 43 WC Economics SC Business & Economics GA 493CX UT WOS:000172205400001 ER PT J AU Lettau, M Ludvigson, S AF Lettau, M Ludvigson, S TI Resurrecting the (C)CAPM: A cross-sectional test when risk premia are time-varying SO JOURNAL OF POLITICAL ECONOMY LA English DT Article ID ASSET PRICING-MODELS; EXPECTED STOCK RETURNS; CAPITAL-MARKET EQUILIBRIUM; FINITE-SAMPLE PROPERTIES; BOOK-TO-MARKET; STOCHASTIC CONSUMPTION; GENERALIZED-METHOD; EMPIRICAL TESTS; DIVIDEND YIELDS; COMMON-STOCKS AB This paper explores the ability of conditional versions of the CAPM and the consumption CAPM-jointly the (C) CAPM-to explain the cross section of average stock returns. Central to our approach is the use of the log consumption-wealth ratio as a conditioning variable. We demonstrate that such conditional models perform far better than unconditional specifications and about as well as the Fama-French three-factor model on portfolios sorted by size and book-to-market characteristics. The conditional consumption CAPM can account for the difference in returns between low-book-to-market and high-book-to-market portfolios and exhibits little evidence of residual size or book-to-market effects. C1 NYU, New York, NY 10003 USA. Fed Reserve Bank New York, New York, NY 10045 USA. Ctr Econ Policy Res, London SW1Y 6LA, England. RP Lettau, M (reprint author), NYU, New York, NY 10003 USA. NR 78 TC 330 Z9 334 U1 10 U2 53 PU UNIV CHICAGO PRESS PI CHICAGO PA 1427 E 60TH ST, CHICAGO, IL 60637-2954 USA SN 0022-3808 J9 J POLIT ECON JI J. Polit. Econ. PD DEC PY 2001 VL 109 IS 6 BP 1238 EP 1287 DI 10.1086/323282 PG 50 WC Economics SC Business & Economics GA 493CX UT WOS:000172205400003 ER PT J AU Nosal, E AF Nosal, E TI The taking of land: market value compensation should be paid SO JOURNAL OF PUBLIC ECONOMICS LA English DT Article ID TAKINGS AB In most jurisdictions in the world, governments are allowed to expropriate private property. But a government's expropriation decision may be personally motivated and not in society's best interest. I propose a very simple tax and compensation scheme that implements the socially optimal allocation when the government behaves in such a manner. An implication of my tax and compensation policy is that an individual who has his property expropriated will receive its full market value as compensation. (C) 2001 Elsevier Science BY All rights reserved. C1 Fed Reserve Bank Cleveland, Dept Res, Cleveland, OH 44101 USA. Univ Waterloo, Dept Econ, Waterloo, ON N2L 3G1, Canada. RP Nosal, E (reprint author), Fed Reserve Bank Cleveland, Dept Res, POB 6387, Cleveland, OH 44101 USA. NR 10 TC 16 Z9 16 U1 2 U2 8 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0047-2727 J9 J PUBLIC ECON JI J. Public Econ. PD DEC PY 2001 VL 82 IS 3 BP 431 EP 443 DI 10.1016/S0047-2727(00)00146-8 PG 13 WC Economics SC Business & Economics GA 492UG UT WOS:000172185500007 ER PT J AU Johnson, R AF Johnson, R TI Why the "average age of retirement" is a misleading measure of labor supply SO MONTHLY LABOR REVIEW LA English DT Editorial Material C1 Fed Reserve Bank, Div Res, Kansas City, KS USA. RP Johnson, R (reprint author), Fed Reserve Bank, Div Res, Kansas City, KS USA. NR 6 TC 1 Z9 1 U1 0 U2 0 PU US GOVERNMENT PRINTING OFFICE PI WASHINGTON PA SUPERINTENDENT DOCUMENTS,, WASHINGTON, DC 20402-9325 USA SN 0098-1818 J9 MON LABOR REV JI Mon. Labor Rev. PD DEC PY 2001 VL 124 IS 12 BP 38 EP 40 PG 3 WC Industrial Relations & Labor SC Business & Economics GA 517HU UT WOS:000173605700005 ER PT J AU Holmes, TJ AF Holmes, TJ TI Bar codes lead to frequent deliveries and superstores SO RAND JOURNAL OF ECONOMICS LA English DT Article ID INVENTORY AB This article explores the consequences of new information technologies, such as bar codes and computer tracking of inventories, for the optimal organization of retail. The first result is that there is a complementarity between the new information technology and frequent deliveries. This is consistent with the recent move in the retail sector toward higher-frequency delivery schedules. The second result is that adoption of the new technology tends to increase store size. This is consistent with recent increases in store size and the success of the superstore model of retail organization. C1 Univ Minnesota, Minneapolis, MN 55455 USA. Fed Reserve Bank Minneapolis, Minneapolis, MN 55480 USA. RP Holmes, TJ (reprint author), Univ Minnesota, Minneapolis, MN 55455 USA. NR 23 TC 25 Z9 25 U1 2 U2 4 PU RAND PI LAWRENCE PA 810 EAST 10TH ST, LAWRENCE, KS 66044 USA SN 0741-6261 J9 RAND J ECON JI Rand J. Econ. PD WIN PY 2001 VL 32 IS 4 BP 708 EP 725 DI 10.2307/2696389 PG 18 WC Economics SC Business & Economics GA 518LY UT WOS:000173670900007 ER PT J AU Spiotto, AH AF Spiotto, AH TI Electronic bill payment and presentment: A primer SO BUSINESS LAWYER LA English DT Article C1 Fed Reserve Bank Chicago, Emerging Payments Studies Dept, Chicago, IL USA. RP Spiotto, AH (reprint author), Fed Reserve Bank Chicago, Emerging Payments Studies Dept, Chicago, IL USA. NR 47 TC 1 Z9 1 U1 0 U2 0 PU AMER BAR ASSOC PI CHICAGO PA 750 N LAKE SHORE DR, ATTN:ORDER FULFILLMENT, CHICAGO, IL 60611 USA SN 0007-6899 J9 BUS LAWYER JI Bus. Lawyer PD NOV PY 2001 VL 57 IS 1 BP 447 EP 473 PG 27 WC Law SC Government & Law GA 503AT UT WOS:000172775500014 ER PT J AU Clark, TE McCracken, MW AF Clark, TE McCracken, MW TI Tests of equal forecast accuracy and encompassing for nested models SO JOURNAL OF ECONOMETRICS LA English DT Article DE causality; forecast accuracy; forecast encompassing ID EXCHANGE-RATES; PREDICTIVE ABILITY; UNIT-ROOT; PARAMETER; SELECTION; SAMPLE; REAL; FUNDAMENTALS; INFERENCE; ERRORS AB We examine the asymptotic and finite-sample properties of tests for equal forecast accuracy and encompassing applied to 1-step ahead forecasts from nested linear models. We first derive the asymptotic distributions of two standard tests and one new test of encompassing and provide tables of asymptotically valid critical values. Monte Carlo methods are then used to evaluate the size and power of tests of equal forecast accuracy and encompassing. The simulations indicate that post-sample tests cats be reasonably well sized. Of the post-sample tests considered, the encompassing test proposed in this paper is the most powerful. We conclude with an empirical application regarding the predictive content of unemployment for inflation. (C) 2001 Elsevier Science S.A. All rights reserved. C1 Fed Reserve Bank, Econ Res Dept, Kansas City, MO 64198 USA. Louisiana State Univ, Dept Econ, Baton Rouge, LA 70803 USA. RP Clark, TE (reprint author), Fed Reserve Bank, Econ Res Dept, 925 Grand Blvd, Kansas City, MO 64198 USA. RI mccracken, michael/I-5748-2016 OI mccracken, michael/0000-0002-7004-1233 NR 39 TC 319 Z9 322 U1 6 U2 27 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0304-4076 J9 J ECONOMETRICS JI J. Econom. PD NOV PY 2001 VL 105 IS 1 BP 85 EP 110 DI 10.1016/S0304-4076(01)00071-9 PG 26 WC Economics; Mathematics, Interdisciplinary Applications; Social Sciences, Mathematical Methods SC Business & Economics; Mathematics; Mathematical Methods In Social Sciences GA 477AT UT WOS:000171261500005 ER PT J AU Croushore, D Stark, T AF Croushore, D Stark, T TI A real-time data set for macroeconomists SO JOURNAL OF ECONOMETRICS LA English DT Article DE real-time data; forecasting; data revisions ID MODELS; FORECASTS; POLICY; ERRORS AB This paper describes a real-time data set for macroeconomists that can be used for a variety of purposes, including forecast evaluation. The data set consists of quarterly vintages, or snapshots, of the major macroeconomic data available at quarterly intervals in real time. The paper explains the construction of the data set, examines the properties of several of the variables in the data set across vintages, and provides an example showing how data revisions can affect forecasts. (C) 2001 Elsevier Science S.A. All rights reserved. C1 Fed Reserve Bank, Res Dept, Philadelphia, PA 19106 USA. RP Croushore, D (reprint author), Fed Reserve Bank, Res Dept, Philadelphia, PA 19106 USA. NR 45 TC 200 Z9 200 U1 0 U2 4 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0304-4076 J9 J ECONOMETRICS JI J. Econom. PD NOV PY 2001 VL 105 IS 1 BP 111 EP 130 DI 10.1016/S0304-4076(01)00072-0 PG 20 WC Economics; Mathematics, Interdisciplinary Applications; Social Sciences, Mathematical Methods SC Business & Economics; Mathematics; Mathematical Methods In Social Sciences GA 477AT UT WOS:000171261500006 ER PT J AU Campbell, JY Ludvigson, S AF Campbell, JY Ludvigson, S TI Elasticities of substitution in real business cycle models with home production SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Article ID HOUSEHOLD PRODUCTION; CONSUMPTION; GROWTH; INCOME; TIME AB This paper constructs a simple model of home production that demonstrates the connection between the intertemporal elasticity of substitution in market consumption (IES) and the static elasticity of substitution between home and market consumption (SES). Understanding this connection is important because there is a large body of empirical evidence suggesting that the IES is small, but little evidence on the size of the SES. We use our framework to shed light on the properties of a home production model with a low IES. We find that such a model must have three fundamental properties in order to match key aspects of aggregate U.S. data. First, the steady-state growth rate of technology must be the same across sectors. Second, shocks to technology must be sufficiently positively correlated across sectors. Third, capital must be used more intensively in the market sector than in the home sector. A home production model with these three properties can be surprisingly successful at reconciling the RBC paradigm with evidence for a low IES. C1 Harvard Univ, Cambridge, MA 02138 USA. Fed Reserve Bank New York, New York, NY 10045 USA. RP Campbell, JY (reprint author), Harvard Univ, Cambridge, MA 02138 USA. NR 23 TC 13 Z9 14 U1 0 U2 3 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD NOV PY 2001 VL 33 IS 4 BP 847 EP 875 DI 10.2307/2673926 PG 29 WC Business, Finance; Economics SC Business & Economics GA 485FY UT WOS:000171743900001 ER PT J AU Einarsson, T Marquis, MH AF Einarsson, T Marquis, MH TI Bank intermediation over the business cycle SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Article ID MONETARY-POLICY; FINANCIAL INTERMEDIATION; FLUCTUATIONS; LIQUIDITY; MONEY; RATES; MODEL; TIME AB A model is developed in which banks engage in valued asset transformation by converting illiquid assets (working capital loans) into highly liquid demand deposit accounts that households use for transactions purposes. Consumption-smoothing behavior induces countercyclicality in the degree to which firms rely on bank borrowings to finance their working capital expenses, which is consistent with U.S. data. The importance of financial markets that provide alternative sources of short-term funds to firms is also illustrated. Absent these markets, nominal interest rates become nearly perfectly positively correlated with output, which is counterfactual, and monetary shocks induce (perhaps, artificially) large aggregate employment responses. C1 Univ Iceland, IS-101 Reykjavik, Iceland. Univ Florida, Gainesville, FL 32611 USA. Fed Reserve Bank San Francisco, San Francisco, CA USA. RP Einarsson, T (reprint author), Univ Iceland, IS-101 Reykjavik, Iceland. NR 16 TC 8 Z9 11 U1 1 U2 4 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD NOV PY 2001 VL 33 IS 4 BP 876 EP 899 DI 10.2307/2673927 PG 24 WC Business, Finance; Economics SC Business & Economics GA 485FY UT WOS:000171743900002 ER PT J AU DeYoung, R Flannery, MJ Lang, WW Sorescu, SM AF DeYoung, R Flannery, MJ Lang, WW Sorescu, SM TI The information content of bank exam ratings and subordinated debt prices SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Article ID BOND AB Do supervisory examinations of large commercial banking firms produce useful information not already reflected in market prices? To investigate this question, we apply a new research methodology to data on bank exam ratings and the subordinated debt risk spreads of their parent holding companies. We find that government exams do produce new, value-relevant information; that debenture prices do not immediately reflect this information; and that the market prices the likely regulatory actions implied by this information. These results have implications for market versus regulatory discipline at large banking firms, and for proposals to make subordinated debt mandatory for these firms. C1 Fed Reserve Bank Chicago, Chicago, IL 60604 USA. Univ Florida, Gainesville, FL 32611 USA. Univ Houston, Houston, TX USA. RP DeYoung, R (reprint author), Fed Reserve Bank Chicago, Chicago, IL 60604 USA. NR 21 TC 48 Z9 49 U1 0 U2 4 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD NOV PY 2001 VL 33 IS 4 BP 900 EP 925 DI 10.2307/2673928 PG 26 WC Business, Finance; Economics SC Business & Economics GA 485FY UT WOS:000171743900003 ER PT J AU Bennett, P Peach, R Peristiani, S AF Bennett, P Peach, R Peristiani, S TI Structural change in the mortgage market and the propensity to refinance SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Article ID CONSTRAINTS AB We hypothesize that the intrinsic benefit required to trigger a refinancing has become smaller, due to a combination of technological, regulatory, and structural changes that have made mortgage origination more competitive and more efficient and have raised financial awareness of homeowners. To test this hypothesis, we estimate an empirical hazard model of loan survival for two subperiods, using a database that allows us to carefully control for homeowners' credit ratings, equity, loan size, and measurable transaction costs. Our findings strongly confirm that credit ratings and home equity have significant effects on the refinancing probability. In addition, we provide evidence that homeowners postpone refinancing in the face of increased interest rate volatility, consistent with option value theory. Finally, our results support the hypothesis that structural change in the mortgage market has increased homeowners' propensity to refinance. C1 Fed Reserve Bank New York, Res Dept, New York, NY 10045 USA. RP Bennett, P (reprint author), Fed Reserve Bank New York, Res Dept, New York, NY 10045 USA. NR 12 TC 23 Z9 24 U1 0 U2 8 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD NOV PY 2001 VL 33 IS 4 BP 955 EP 975 DI 10.2307/2673930 PG 21 WC Business, Finance; Economics SC Business & Economics GA 485FY UT WOS:000171743900005 ER PT J AU Kouparitsas, MA AF Kouparitsas, MA TI Should trade barriers be phased-out slowly? A case study of North America SO JOURNAL OF POLICY MODELING LA English DT Article DE CGE; NAFTA; CFTA ID GENERAL EQUILIBRIUM; POLICY; MODELS AB A dynamic computable general is developed to analyze the effects of different phase-in rates of the Canada-US and North American Free Trade Agreements on their member countries, as well as the impact on the rest of their trading partners. The model is based on intertemporal optimization behavior of households and firm with fully specified countries/regions in which all prices and quantities are endogenously determined. I show that the size and the distribution of the welfare gains from these trade agreements are quite sensitive to the speed of trade liberalization. In particular, I find as a general rule that smaller member countries are better off under a more rapid phase-out of trade barriers, while larger member countries/regions are better off under a slower phase-out. (C) 2001 Society for Policy Modeling. Published by Elsevier Science Inc. C1 Fed Reserve Bank Chicago, Chicago, IL 60690 USA. RP Kouparitsas, MA (reprint author), Fed Reserve Bank Chicago, POB 834, Chicago, IL 60690 USA. NR 27 TC 3 Z9 3 U1 0 U2 2 PU ELSEVIER SCIENCE INC PI NEW YORK PA 360 PARK AVE SOUTH, NEW YORK, NY 10010-1710 USA SN 0161-8938 J9 J POLICY MODEL JI J. Policy Model. PD NOV PY 2001 VL 23 IS 8 BP 875 EP 900 DI 10.1016/S0161-8938(01)00092-8 PG 26 WC Economics SC Business & Economics GA 520RR UT WOS:000173795400003 ER PT J AU Carlino, GA DeFina, RH Sill, K AF Carlino, GA DeFina, RH Sill, K TI Sectoral shocks and metropolitan employment growth SO JOURNAL OF URBAN ECONOMICS LA English DT Article DE metropolitan employment growth; time series models; aggregate and sectoral shocks ID CYCLICAL UNEMPLOYMENT; FLUCTUATIONS; SHIFTS AB In this paper, we study the sources of industry employment growth in each of five metropolitan statistical areas (MSAs). The objective is to understand the relative importance of aggregate disturbances versus local sectoral shocks in generating observed employment fluctuations at the MSA level. The empirical evidence presented in this paper derives from structural vector autoregressions (SVARs), estimated for each of the five MSAs. Estimations use monthly employment data covering nine one-digit industrial categories for the period 1951:1-1999:8, as well as two variables that capture the influences of aggregate (i.e., national) shocks on MSAs. We find that within-MSA industry shocks explain considerably more of the forecast error variance in industry employment growth than do aggregate shocks. Sectoral shocks account for between 87 and 94% of the 36-month-ahead forecast error variance. Among individual local sectors, shocks to MSA-specific government, manufacturing, and service sector employment growth are the predominate sources of variability. (C) 2001 Academic Press. C1 Fed Reserve Bank Philadelphia, Philadelphia, PA 19106 USA. Villanova Univ, Dept Econ, Villanova, PA 19085 USA. RP Carlino, GA (reprint author), Fed Reserve Bank Philadelphia, 10 Independence Mall, Philadelphia, PA 19106 USA. EM jerry.carlino@phil.frb.org NR 17 TC 14 Z9 14 U1 1 U2 2 PU ACADEMIC PRESS INC ELSEVIER SCIENCE PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 0094-1190 J9 J URBAN ECON JI J. Urban Econ. PD NOV PY 2001 VL 50 IS 3 BP 396 EP 417 DI 10.1006/juec.2001.2225 PG 22 WC Economics; Urban Studies SC Business & Economics; Urban Studies GA 488QY UT WOS:000171948200002 ER PT J AU Bollerslev, T Wright, JH AF Bollerslev, T Wright, JH TI High-frequency data, frequency domain inference, and volatility forecasting SO REVIEW OF ECONOMICS AND STATISTICS LA English DT Article ID AUTOREGRESSIVE CONDITIONAL HETEROSKEDASTICITY; FOREIGN-EXCHANGE MARKET; EMPIRICAL-EVIDENCE; VARIANCE; MODELS AB Although it is clear that the volatility of asset returns is serially correlated, there is no general agreement as to the most appropriate parametric model for characterizing this temporal dependence, In this paper. we propose a simple way of modeling financial market volatility using high-frequency data. The method avoids using a tight parametric model by instead simply fitting a long autoregression to log-squared, squared, or absolute high-frequency returns. This can either be estimated by the usual time domain method, or alternatively the autoregressive coefficients can be backed out from the smoothed periodograrn estimate of the spectrum of log-squared, squared, or absolute returns. We show how this approach can be used to construct volatility forecasts, which compare favorably with some leading alternatives in an out-of-sample forecasting exercise. C1 Duke Univ, Durham, NC 27706 USA. Natl Bur Econ Res, Cambridge, MA 02138 USA. Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Bollerslev, T (reprint author), Duke Univ, Durham, NC 27706 USA. NR 42 TC 38 Z9 38 U1 0 U2 4 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 0034-6535 J9 REV ECON STAT JI Rev. Econ. Stat. PD NOV PY 2001 VL 83 IS 4 BP 596 EP 602 DI 10.1162/003465301753237687 PG 7 WC Economics; Social Sciences, Mathematical Methods SC Business & Economics; Mathematical Methods In Social Sciences GA 492CB UT WOS:000172148800004 ER PT J AU Evanoff, DD Wall, LD AF Evanoff, DD Wall, LD TI Reforming bank capital regulation: Using subordinated debt to enhance market and supervisory discipline SO CONTEMPORARY ECONOMIC POLICY LA English DT Article AB In 1988 the Basel Capital Accord introduced minimum risk-weighted capital requirements for internationally active banks. In recent years there has been a growing realization that there are significant problems with the capital guidelines. As financial firms have become more sophisticated and complex they have effectively arbitraged the requirements and have become so good at it that the regulations have essentially ceased being a safety and soundness issue for supervisors and have become more of a compliance issue. Indeed, the Basel Committee is now evaluating reforms to the capital accord and is considering various means to improve the risk-capital relationship and to increase the role of market discipline. The authors argue that many of the problems that currently exist can be addressed, and some additional benefits not previously possible under the current capital guidelines can be realized, by increasing the role of subordinated debt in the bank capital structure. The authors discuss the potential benefits and offer a capital reform proposal that would improve both market and supervisory oversight. This should lead to more prudent risk management behavior by the larger, more complex banking organizations, resulting in a safer industry with less potential for systemic problems. C1 Fed Reserve Bank Chicago, Dept Res, Chicago, IL 60604 USA. Fed Reserve Bank Atlanta, Dept Res, Atlanta, GA 30309 USA. RP Evanoff, DD (reprint author), Fed Reserve Bank Chicago, Dept Res, 230 S LaSalle, Chicago, IL 60604 USA. NR 30 TC 10 Z9 10 U1 0 U2 6 PU WESTERN ECONOMIC ASSOC INT PI HUNTINGTON BEACH PA 7400 CENTER AVE SUITE 109, HUNTINGTON BEACH, CA 92647-3039 USA SN 1074-3529 J9 CONTEMP ECON POLICY JI Contemp. Econ. Policy PD OCT PY 2001 VL 19 IS 4 BP 444 EP 453 DI 10.1093/cep/19.4.444 PG 10 WC Economics; Public Administration SC Business & Economics; Public Administration GA 488KE UT WOS:000171933700007 ER PT J AU Kuttner, KN Posen, AS AF Kuttner, KN Posen, AS TI Beyond bipolar: A three-dimensional assessment of monetary frameworks SO INTERNATIONAL JOURNAL OF FINANCE & ECONOMICS LA English DT Article DE exchange rates; inflation targeting; central bank independence ID INDEPENDENCE; CREDIBILITY AB A great deal of attention has been focused recently on the impact of exchange rate regimes, just as previous empirical research examined central bank autonomy and announced targets for domestic monetary policy. To date, however, these three elements of monetary frameworks have been assessed in isolation from one another, and all have been viewed in terms of a unidimensional spectrum of fixity versus flexibility. Using a newly constructed dataset, this paper jointly analyses and compares all three elements' effects on inflation and exchange rate behaviour. The results show that each of the three elements has independent and distinct effects on nominal outcomes. Key findings include: (1) although hard pegs do tend to reduce inflation and attenuate exchange rate fluctuations within some range, they are clearly characterized by large devaluations (2) central bank autonomy is associated with a more stable exchange rate and lower inflation; and (3) explicit inflation targeting reduces both inflation and its persistence, consistent with the view that inflation targeting increases flexibility through transparency. These results raise the possibility that a combination of central bank autonomy, inflation targeting, and a free float might offer the same benefits as any intermediate exchange rate regime on its own, without the proclivity to occasional large depreciations. Copyright (C) 2001 Institute for International Economics and Federal Reserve Bank of New York. C1 Inst Int Econ, Washington, DC 20036 USA. Fed Reserve Bank New York, New York, NY 10045 USA. RP Posen, AS (reprint author), Inst Int Econ, 1750 Massachusetts Ave,NW, Washington, DC 20036 USA. NR 40 TC 20 Z9 20 U1 0 U2 3 PU JOHN WILEY & SONS LTD PI W SUSSEX PA BAFFINS LANE CHICHESTER, W SUSSEX PO19 1UD, ENGLAND SN 1076-9307 J9 INT J FINANC ECON JI Int. J. Financ. Econ. PD OCT PY 2001 VL 6 IS 4 BP 369 EP 387 DI 10.1002/ijfe.167 PG 19 WC Business, Finance SC Business & Economics GA 498PD UT WOS:000172519100007 ER PT J AU Dedola, L Leduc, S AF Dedola, L Leduc, S TI Why is the business-cycle behaviour of fundamentals alike across exchange-rate regimes? SO INTERNATIONAL JOURNAL OF FINANCE & ECONOMICS LA English DT Article DE exchange rate volatility and fundamentals; fixed and floating currency regimes; local currency pricing ID MONETARY-POLICY RULES; INTERNATIONAL EVIDENCE; RATE DYNAMICS; REAL; PRICES; MODEL; MACROECONOMICS; CONSUMPTION; MARKETS; GOODS AB Since the adoption of flexible exchange rates, real exchange rates have been much more volatile than they were under Bretton Woods. However, the volatilities of most other macroeconomic variables have remained approximately unchanged. This poses a puzzle for standard international business cycle models. This paper develops a two-country, two-sector model with nominal rigidities featuring deviations from the law of one price due to firms setting prices in buyers' currencies. By partially insulating goods markets across countries and thus mitigating the international expend itu re-switching effect, this pricing behaviour is found to considerably dampen the responses of quantities to shocks hitting the economics therefore helping to account for the puzzle. Copyright (C) 2001 John Wiley & Sons, Ltd. C1 Bank Italy, Res Dept, I-00184 Rome, Italy. Fed Reserve Bank Philadelphia, Philadelphia, PA USA. RP Dedola, L (reprint author), Bank Italy, Res Dept, Via Nazl 91, I-00184 Rome, Italy. NR 35 TC 7 Z9 7 U1 3 U2 6 PU JOHN WILEY & SONS LTD PI W SUSSEX PA BAFFINS LANE CHICHESTER, W SUSSEX PO19 1UD, ENGLAND SN 1076-9307 J9 INT J FINANC ECON JI Int. J. Financ. Econ. PD OCT PY 2001 VL 6 IS 4 BP 401 EP 419 DI 10.1002/ijfe.169 PG 19 WC Business, Finance SC Business & Economics GA 498PD UT WOS:000172519100009 ER PT J AU Neely, CJ Roy, A Whiteman, CH AF Neely, CJ Roy, A Whiteman, CH TI Risk aversion versus intertemporal substitution: A case study of identification failure in the intertemporal consumption capital asset pricing model SO JOURNAL OF BUSINESS & ECONOMIC STATISTICS LA English DT Article DE consumption-based asset pricing; elasticity of substitution; maximum likelihood estimation; time series analysis; two-stage least squares ID EFFICIENT ESTIMATION; TEMPORAL BEHAVIOR; INSTRUMENTS; RETURNS; PRICES AB Is the risk-aversion parameter in the intertemporal consumption capital asset pricing model "small" as stated by Hansen and Singleton or is its reciprocal-the intertemporal elasticity of substitution-small, as stated by Hall? We attribute the disparate estimates of this fundamental parameter not to failures of instrument admissibility as do Hall and Hansen and Singleton but rather to failures of instrument relevance, That is, the disparate estimates reflect near nonidentification due to the unpredictability of asset returns and consumption growth. Imposing natural identifying restrictions from the risk-aversion perspective and the intertemporal substitution perspective yields low and stable estimates in each case. C1 Fed Reserve Bank, St Louis, MO 63102 USA. Univ London London Sch Econ & Polit Sci, Financial Markets Grp, London WC2A 2AE, England. Credit Suisse First Boston, London, England. Univ Iowa, Dept Econ, Iowa City, IA 52242 USA. RP Neely, CJ (reprint author), Fed Reserve Bank, St Louis, MO 63102 USA. RI Neely, Christopher/I-5749-2016 OI Neely, Christopher/0000-0003-2852-9419 NR 14 TC 27 Z9 27 U1 0 U2 4 PU AMER STATISTICAL ASSOC PI ALEXANDRIA PA 1429 DUKE ST, ALEXANDRIA, VA 22314 USA SN 0735-0015 J9 J BUS ECON STAT JI J. Bus. Econ. Stat. PD OCT PY 2001 VL 19 IS 4 BP 395 EP 403 DI 10.1198/07350010152596646 PG 9 WC Economics; Social Sciences, Mathematical Methods; Statistics & Probability SC Business & Economics; Mathematical Methods In Social Sciences; Mathematics GA 475BV UT WOS:000171142500002 ER PT J AU Nelson, CR Piger, J Zivot, E AF Nelson, CR Piger, J Zivot, E TI Markov regime switching and unit-root tests SO JOURNAL OF BUSINESS & ECONOMIC STATISTICS LA English DT Article DE business-cycle asymmetry; deterministic trend; heteroscedasticity; stochastic trend ID NONSTATIONARY TIME-SERIES; BUSINESS FLUCTUATIONS; PLUCKING MODEL; TRENDS; HETEROSKEDASTICITY; COINTEGRATION; HYPOTHESIS; PERMANENT; OUTLIERS; BREAK AB We investigate the power and size performance of unit-root tests when the data undergo Markov regime switching. All tests, including those robust to a single break in trend growth rate, have low power against a process with a Markov-switching trend. Under the null hypothesis, we find that previously documented size distortions in Dickey-Fuller-type tests caused by a single break in trend growth rate or variance do not generalize to most parameterizations of Markov switching in trend or variance. However, Markov switching in variance can lead to overrejection in tests allowing for a single break in the level of trend. C1 Univ Washington, Dept Econ, Seattle, WA 98195 USA. Fed Reserve Board, Washington, DC 20551 USA. Univ Washington, Dept Econ, Seattle, WA 98195 USA. RP Nelson, CR (reprint author), Univ Washington, Dept Econ, Seattle, WA 98195 USA. RI Piger, Jeremy/I-7643-2012 OI Piger, Jeremy/0000-0001-6592-9986 NR 33 TC 47 Z9 47 U1 0 U2 3 PU AMER STATISTICAL ASSOC PI ALEXANDRIA PA 1429 DUKE ST, ALEXANDRIA, VA 22314 USA SN 0735-0015 J9 J BUS ECON STAT JI J. Bus. Econ. Stat. PD OCT PY 2001 VL 19 IS 4 BP 404 EP 415 DI 10.1198/07350010152596655 PG 12 WC Economics; Social Sciences, Mathematical Methods; Statistics & Probability SC Business & Economics; Mathematical Methods In Social Sciences; Mathematics GA 475BV UT WOS:000171142500003 ER PT J AU Cecchetti, SG Rich, RW AF Cecchetti, SG Rich, RW TI Structural estimates of the US sacrifice ratio SO JOURNAL OF BUSINESS & ECONOMIC STATISTICS LA English DT Article DE disinflation; identification; structural shocks; vector autoregression ID DISINFLATION; PARAMETER; MODELS; TESTS AB This article investigates the statistical properties of the U.S. sacrifice ratio-the cumulative output loss arising from a permanent reduction in inflation. We derive estimates of the sacrifice ratio from three structural vector autoregression models and then conduct a series of simulation exercises to analyze their sampling distribution. We obtain point estimates of the sacrifice ratio that are consistent with results reported in earlier studies. However, the estimates are very imprecise, which we suggest reflects the poor quality of instruments used in estimation. We conclude that the estimates provide a very unreliable guide for assessing the output cost of disinflation policy. C1 Ohio State Univ, Dept Econ, Columbus, OH 43210 USA. Fed Reserve Bank New York, Domest Res Funct, New York, NY 10045 USA. RP Cecchetti, SG (reprint author), Ohio State Univ, Dept Econ, Columbus, OH 43210 USA. EM cecchetti.1@osu.edu; robert.rich@ny.frb.org NR 26 TC 19 Z9 20 U1 2 U2 6 PU AMER STATISTICAL ASSOC PI ALEXANDRIA PA 732 N WASHINGTON ST, ALEXANDRIA, VA 22314-1943 USA SN 0735-0015 J9 J BUS ECON STAT JI J. Bus. Econ. Stat. PD OCT PY 2001 VL 19 IS 4 BP 416 EP 427 DI 10.1198/07350010152596664 PG 12 WC Economics; Social Sciences, Mathematical Methods; Statistics & Probability SC Business & Economics; Mathematical Methods In Social Sciences; Mathematics GA 475BV UT WOS:000171142500004 ER PT J AU Evanoff, DD Wall, LD AF Evanoff, DD Wall, LD TI Sub-debt yield spreads as bank risk measures SO JOURNAL OF FINANCIAL SERVICES RESEARCH LA English DT Article; Proceedings Paper CT Conference on Incorporating Market Information into Financial Supervision CY NOV09, 2000 CL WASHINGTON, D.C. DE bank regulation; bank capital; subordinated debt ID MARKET; PERFORMANCE AB Several recent studies have recommended greater reliance on subordinated debt as a tool to discipline bank risk taking. Some of these proposals recommend using sub-debt yield spreads as triggers for supervisory discipline under prompt corrective action (PCA). Currently such action is prompted by capital adequacy measures. This paper provides the first empirical analysis of the relative accuracy or various capital ratios and sub-debt spreads in predicting bank condition: measured as subsequent CAMEL or BOPEC ratings. The results suggest that some of the capital ratios, including the summary measure used to trigger PCA, have almost no predictive power. Sub-debt yield spreads performed slightly better than the best capital measure, the Tier-1 leverage ratio, albeit the difference is not significant. The performance of sub-debt yields satisfies an important pre-requisite for using sub-debt as a PCA trigger. However, the prediction errors are relatively high and further work to refine the measures would be desirable. C1 Fed Reserve Bank Chicago, Res Dept, Chicago, IL 60604 USA. Fed Reserve Bank Atlanta, Res Dept, Atlanta, GA 30309 USA. RP Evanoff, DD (reprint author), Fed Reserve Bank Chicago, Res Dept, 230 S LaSalle St, Chicago, IL 60604 USA. NR 35 TC 38 Z9 40 U1 2 U2 5 PU SPRINGER PI NEW YORK PA 233 SPRING ST, NEW YORK, NY 10013 USA SN 0920-8550 EI 1573-0735 J9 J FINANC SERV RES JI J. Financ. Serv. Res. PD OCT-DEC PY 2001 VL 20 IS 2-3 BP 121 EP 145 DI 10.1023/A:1012408023269 PG 25 WC Business, Finance SC Business & Economics GA 501FY UT WOS:000172675700003 ER PT J AU Hancock, D Kwast, ML AF Hancock, D Kwast, ML TI Using subordinated debt to monitor bank holding companies: Is it feasible? SO JOURNAL OF FINANCIAL SERVICES RESEARCH LA English DT Article; Proceedings Paper CT Conference on Incorporationg Market Information into Financial Supervision CY NOV 09, 2000 CL WASHINGTON, D.C. DE subordinated debt; banks; market discipline; systematic risk factors ID BOND PRICE DATA; MARKET AB Although accurate bond prices, are difficult to conic by. many have advocated that bank supervisors use subordinated debt spreads in the surveillance of large banking organizations. Our findings indicate that subordinated debt spreads are most consistent across data sources for the most liquid bonds, (i.e.. those of relatively large issuance size, relatively young age, issued by relatively large firms) traded in a relatively robust overall bond market. We also find a high degree of concordance in rankings of firms by their minimum spreads across bonds with especially strong agreement about which large firms are in the tails of the spread distribution at each point in time. Our time-series results further support and provide additional guidance for the use of subordinated debt spreads in supervisory monitoring, support the need for careful judgment when interpreting such spreads, highlight difficulties with currently available data sources, and motivate the need for further research. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Hancock, D (reprint author), Fed Reserve Syst, Board Governors, Mail Stop 153, Washington, DC 20551 USA. NR 27 TC 33 Z9 35 U1 0 U2 2 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA VAN GODEWIJCKSTRAAT 30, 3311 GZ DORDRECHT, NETHERLANDS SN 0920-8550 J9 J FINANC SERV RES JI J. Financ. Serv. Res. PD OCT-DEC PY 2001 VL 20 IS 2-3 BP 147 EP 187 DI 10.1023/A:1012460007340 PG 41 WC Business, Finance SC Business & Economics GA 501FY UT WOS:000172675700004 ER PT J AU Morgan, DP Stiroh, KJ AF Morgan, DP Stiroh, KJ TI Market discipline of banks: The asset test SO JOURNAL OF FINANCIAL SERVICES RESEARCH LA English DT Article; Proceedings Paper CT Conference on Incorporationg Market Information into Financial Supervision CY NOV 09, 2000 CL WASHINGTON, D.C. AB As the banking, business grows more complex, government supervisors of banks seem increasingly willing to share the role of policing bank risk with private investors, especially bondholders. Using spreads on nearly 500 bank bond issues between 1993 and 1998, this paper investigates the relationship between the spreads on those bonds and the full portfolio of assets held by the issuing bank. Our results show that bond spreads reflect the overall mix of banks' assets at the time of issuance, even after controlling for the standard measures of risk and performance used in earlier studies, Banks contemplating a shift into riskier activities like trading, for example, can expect to pay higher spreads as a result. Credit card and commercial and industrial lending also carry a penalty in terms of higher spreads. Overall, these results suggest that investors do price the ex ante credit and other risks implicit in banks' asset portfolios, Their vigilance should help to deter excessive or inefficient risk taking by banks. C1 Fed Reserve Bank New York, Banking Studies Funct, New York, NY 10045 USA. RP Morgan, DP (reprint author), Fed Reserve Bank New York, Banking Studies Funct, 33 Liberty St, New York, NY 10045 USA. NR 17 TC 60 Z9 60 U1 0 U2 10 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA VAN GODEWIJCKSTRAAT 30, 3311 GZ DORDRECHT, NETHERLANDS SN 0920-8550 J9 J FINANC SERV RES JI J. Financ. Serv. Res. PD OCT-DEC PY 2001 VL 20 IS 2-3 BP 195 EP 208 DI 10.1023/A:1012464108248 PG 14 WC Business, Finance SC Business & Economics GA 501FY UT WOS:000172675700006 ER PT J AU Engel, C Rogers, JH AF Engel, C Rogers, JH TI Deviations from purchasing power parity: causes and welfare costs SO JOURNAL OF INTERNATIONAL ECONOMICS LA English DT Article; Proceedings Paper CT Meeting of the Lessons from Intranational Economcs for International Economics CY JUN 10-12, 1999 CL GERZENSEE, SWITZERLAND DE purchasing power parity; fixed exchange rates; law of one price ID REAL EXCHANGE-RATES; NATIONAL BORDERS MATTER; TRADE; PRICES; MARKET; GOODS AB We explore deviations from short-run purchasing power parity (PPP) across European cities, attempting to move beyond a 'first-generation' of papers that document very large border effects. We document two very distinct types of border effects embedded in relative prices. The first is a 'real barriers effect', caused by various barriers to market integration. The second is a sticky-consumer-price cum volatile exchange-rate effect. Both are shown to be important empirically, the second type especially so. We argue that the two effects are very different from each other. For the first type of effect, it is clear that border effects imply deadweight welfare losses. We argue that while the second type of border effect could be eliminated with fixed exchange rates, welfare is not necessarily increased. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Univ Wisconsin, Dept Econ, Madison, WI 53706 USA. NBER, Cambridge, MA 02138 USA. Fed Reserve Syst, Board Governors, Int Finance Div, Washington, DC 20551 USA. RP Engel, C (reprint author), Univ Wisconsin, Dept Econ, WI 53706-1393, Madison, WI 53706 USA. NR 28 TC 45 Z9 46 U1 2 U2 7 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0022-1996 J9 J INT ECON JI J. Int. Econ. PD OCT PY 2001 VL 55 IS 1 BP 29 EP 57 DI 10.1016/S0022-1996(01)00094-0 PG 29 WC Economics SC Business & Economics GA 474GE UT WOS:000171097300003 ER PT J AU Clark, TE van Wincoop, E AF Clark, TE van Wincoop, E TI Borders and business cycles SO JOURNAL OF INTERNATIONAL ECONOMICS LA English DT Article; Proceedings Paper CT Meeting of the Lessons from Intranational Economcs for International Economics CY JUN 10-12, 1999 CL GERZENSEE, SWITZERLAND DE comovement; intranational; international; EMU; trade ID US; FLUCTUATIONS; REGIONS; EMU AB We document that business cycles of U.S. Census regions are substantially more synchronized than those of European countries. Data from regions within European countries confirm a European border effect - within-country correlations are substantially larger than cross-country correlations. These results continue to hold after controlling for exogenous factors such as distance and size. We consider the role of four factors that have received attention in the debate about EMU: sectoral specialization, the level of trade, monetary policy and fiscal policy. We find that the lower level of trade between European countries explains most of the observed border effect. (C) 2001 Elsevier Science BY All rights reserved. C1 Fed Reserve Bank New York, Int Res Funct, New York, NY 10045 USA. Fed Reserve Bank Kansas City, Kansas City, MO 64198 USA. RP van Wincoop, E (reprint author), Fed Reserve Bank New York, Int Res Funct, 33 Liberty St, New York, NY 10045 USA. NR 39 TC 123 Z9 126 U1 2 U2 5 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0022-1996 J9 J INT ECON JI J. Int. Econ. PD OCT PY 2001 VL 55 IS 1 BP 59 EP 85 DI 10.1016/S0022-1996(01)00095-2 PG 27 WC Economics SC Business & Economics GA 474GE UT WOS:000171097300004 ER PT J AU Kalemli-Ozcan, S Sorensen, BE Yosha, O AF Kalemli-Ozcan, S Sorensen, BE Yosha, O TI Economic integration, industrial specialization, and the asymmetry of macroeconomic fluctuations SO JOURNAL OF INTERNATIONAL ECONOMICS LA English DT Article; Proceedings Paper CT Meeting of the Lessons from Intranational Economcs for International Economics CY JUN 10-12, 1999 CL GERZENSEE, SWITZERLAND DE capital market integration; monetary union; risk sharing; welfare gains ID UNITED-STATES; BUSINESS CYCLES; RISK; GROWTH; MARKETS; DIVERSIFICATION; INTERDEPENDENCE; COUNTRIES; REGIONS; TRADE AB We show empirically that regions with a more specialized production structure exhibit output fluctuations that are less correlated with those of other regions (less 'symmetric' fluctuations). Combined with the causal relation running from capital market integration to regional specialization found in an earlier study, this finding supports the idea that higher capital market integration leads to less symmetric fluctuations. This mechanism counterbalances the effect of lower trade-barriers on the symmetry of fluctuations quantified by Frankel and Rose (1998). Deriving a simple closed form expression for the gains from risk sharing for CRRA utility is an independent contribution of the present article. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank Kansas City, Econ Res Dept, Kansas City, MO 64198 USA. Univ Houston, Dept Econ, Houston, TX 77204 USA. Tel Aviv Univ, Berglas Sch Econ, IL-69978 Tel Aviv, Israel. RP Sorensen, BE (reprint author), Fed Reserve Bank Kansas City, Econ Res Dept, 925 Grand Blvd, Kansas City, MO 64198 USA. NR 49 TC 92 Z9 92 U1 3 U2 10 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0022-1996 J9 J INT ECON JI J. Int. Econ. PD OCT PY 2001 VL 55 IS 1 BP 107 EP 137 DI 10.1016/S0022-1996(01)00097-6 PG 31 WC Economics SC Business & Economics GA 474GE UT WOS:000171097300006 ER PT J AU Santore, R Viard, AD AF Santore, R Viard, AD TI Legal fee restrictions, moral hazard, and attorney rents SO JOURNAL OF LAW & ECONOMICS LA English DT Article ID CONTINGENT FEES AB When attorney effort is unobservable and certain other simplifying assumptions (such as risk neutrality) hold, it is efficient for an attorney to purchase the rights to a client's legal claim. However, the American Bar Association Model Rules of Professional Conduct prohibit this arrangement. We show that this ethical restriction, which is formally equivalent to requiring a minimum fixed fee of zero, can create economic rents for attorneys, even though they continue to compete along the contingent-fee dimension. The contingent fee is not bid down to the zero-profit level, because such a fee does not induce sufficient attorney effort. We thereby provide a political economy explanation for these restrictions. C1 Univ Tennessee, Knoxville, TN 37996 USA. Fed Reserve Bank Dallas, Dallas, TX USA. RP Santore, R (reprint author), Univ Tennessee, Knoxville, TN 37996 USA. NR 19 TC 22 Z9 22 U1 0 U2 2 PU UNIV CHICAGO PRESS PI CHICAGO PA 1427 E 60TH ST, CHICAGO, IL 60637-2954 USA SN 0022-2186 J9 J LAW ECON JI J. Law Econ. PD OCT PY 2001 VL 44 IS 2 BP 549 EP 572 DI 10.1086/322814 PN 1 PG 24 WC Economics; Law SC Business & Economics; Government & Law GA 487XA UT WOS:000171903300009 ER PT J AU Bekaert, G Hodrick, RJ Marshall, DA AF Bekaert, G Hodrick, RJ Marshall, DA TI Peso problem explanations for term structure anomalies SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE term structure; regime switching; expectations hypothesis ID INTEREST-RATES; RISK PREMIUMS; INFORMATION; REGIME; INFLATION; MODELS AB We investigate whether term structure anomalies in U.S. data may be due to a generalized peso problem, in which a high-interest-rate regime occurred less frequently in the U.S. sample than was rationally anticipated. We formalize this idea by estimating a regime-switching model of short-term interest rates with data from seven countries. Under the small-sample distributions generated by the model, the expectations hypothesis is rejected. When we allow moderate time variation in term premiums, the term-premium dynamics interact with peso-problem effects to generate small-sample distributions more consistent with the data. Nonetheless, our model cannot fully account for U,S. term structure anomalies. (C) 2001 Published by Elsevier Science B.V. C1 Fed Reserve Bank, Dept Res, Chicago, IL 60604 USA. Columbia Univ, New York, NY 10027 USA. Natl Bur Econ Res, Cambridge, MA 02138 USA. RP Marshall, DA (reprint author), Fed Reserve Bank, Dept Res, 230 S LaSalle St, Chicago, IL 60604 USA. NR 37 TC 62 Z9 63 U1 1 U2 4 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD OCT PY 2001 VL 48 IS 2 BP 241 EP 270 DI 10.1016/S0304-3932(01)00075-7 PG 30 WC Business, Finance; Economics SC Business & Economics GA 475LX UT WOS:000171166600001 ER PT J AU Gomme, P Kydland, FE Rupert, P AF Gomme, P Kydland, FE Rupert, P TI Home production meets time to build SO JOURNAL OF POLITICAL ECONOMY LA English DT Article ID BUSINESS-CYCLE; AGGREGATE FLUCTUATIONS; HOUSEHOLD PRODUCTION; COMOVEMENT AB An innovation in this paper is to introduce a time-to-build technology for the production of market capital into a model with home production. Our main finding is that the two anomalies that have plagued all household production models-the positive correlation between business and household investment, and household investment's leading business investment over the business cycle-are resolved when time to build is added. C1 Fed Reserve Bank Cleveland, Cleveland, OH 44114 USA. Carnegie Mellon Univ, Pittsburgh, PA 15213 USA. RP Gomme, P (reprint author), Fed Reserve Bank Cleveland, Cleveland, OH 44114 USA. NR 14 TC 33 Z9 33 U1 3 U2 10 PU UNIV CHICAGO PRESS PI CHICAGO PA 1427 E 60TH ST, CHICAGO, IL 60637-2954 USA SN 0022-3808 J9 J POLIT ECON JI J. Polit. Econ. PD OCT PY 2001 VL 109 IS 5 BP 1115 EP 1131 DI 10.1086/322829 PG 17 WC Economics SC Business & Economics GA 472NV UT WOS:000170991100007 ER PT J AU Carlstrom, CT Fuerst, TS AF Carlstrom, CT Fuerst, TS TI Real indeterminacy in monetary models with nominal interest rate distortions SO REVIEW OF ECONOMIC DYNAMICS LA English DT Article DE money and interest rates; monetary policy and central banking ID PRICE-LEVEL DETERMINACY; IN-ADVANCE ECONOMY; MONEY; POLICY; LIQUIDITY; UTILITY; RULES AB This paper demonstrates that in a standard flexible-price monetary model there exists real indeterminacy whenever the nominal interest rate moves too closely with either current or forecasted inflation. However, an aggressive response to lagged inflation will ensure determinacy. These conclusions are robust to a wide range of calibrations, and a monetary environment that allows for endogenous velocity. The results are affected by the inclusion of investment spending in the transactions constraint. Journal of Economic Literature Classification Numbers: E4, E5. (C) 2001 Academic Press. C1 Bowling Green State Univ, Dept Econ, Bowling Green, OH 43403 USA. Fed Reserve Bank Cleveland, Cleveland, OH 44101 USA. RP Fuerst, TS (reprint author), Bowling Green State Univ, Dept Econ, Bowling Green, OH 43403 USA. NR 20 TC 15 Z9 15 U1 1 U2 2 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 1094-2025 J9 REV ECON DYNAM JI Rev. Econ. Dyn. PD OCT PY 2001 VL 4 IS 4 BP 767 EP 789 DI 10.1006/redy.2001.0137 PG 23 WC Economics SC Business & Economics GA 490PU UT WOS:000172060900002 ER PT J AU Lacker, JM AF Lacker, JM TI Collateralized debt as the optimal contract SO REVIEW OF ECONOMIC DYNAMICS LA English DT Article DE debt; financial contracts; optimal contracts; collateral; asymmetric information; borrowing constraints AB In a multiple-good risk-sharing environment with ex post private information, conditions are found under which collateralized debt is the optimal contract. The necessary and sufficient condition is that the borrower values the collateral good more highly than does the lender; otherwise the optimal contract does not resemble debt. Limited collateral can give rise to an endogenous borrowing constraint, driving a further wedge between the intertemporal marginal rates of substitution of the borrower and the lender. Journal of Economic Literature Classification Numbers: D82, G10. (C) 2001 Academic Press. C1 Fed Res Bank Richmond, Richmond, VA 23261 USA. RP Lacker, JM (reprint author), Fed Res Bank Richmond, POB 27622, Richmond, VA 23261 USA. NR 6 TC 13 Z9 13 U1 0 U2 1 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 1094-2025 J9 REV ECON DYNAM JI Rev. Econ. Dyn. PD OCT PY 2001 VL 4 IS 4 BP 842 EP 859 DI 10.1006/redy.2001.0138 PG 18 WC Economics SC Business & Economics GA 490PU UT WOS:000172060900005 ER PT J AU Bernheim, BD Skinner, J Weinberg, S AF Bernheim, BD Skinner, J Weinberg, S TI What accounts for the variation in retirement wealth among US households? SO AMERICAN ECONOMIC REVIEW LA English DT Article ID LIFE-CYCLE; LIQUIDITY CONSTRAINTS; CONSUMPTION GROWTH; SAVINGS; INCOME; INSURANCE; MOTIVES AB Even among households with similar socioeconomic characteristics,sm,ling and wealth vary, considerably. Life-cycle models attribute this variation to differences ill time preference rates, risk tolerance, exposure to uncertainty, relative tastes for work and leisure at advanced ages, and income replacement rates. These factors have testable implications concerning the relation between accumulated wealth and the shape of the consumption profile. Using the Panel Study of Income Dynamics and the Consumer Expenditure Sun,ey, we find little support for these implications. The data are instead consistent with "rule of thumb," "mental accounting, " or hyperbolic discounting theories of wealth accumulation. C1 Stanford Univ, Dept Econ, Stanford, CA 94305 USA. Natl Bur Econ Res, Cambridge, MA 02138 USA. Dartmouth Coll, Dept Econ, Hanover, NH 03755 USA. Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Bernheim, BD (reprint author), Stanford Univ, Dept Econ, Stanford, CA 94305 USA. NR 46 TC 112 Z9 112 U1 2 U2 23 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD SEP PY 2001 VL 91 IS 4 BP 832 EP 857 DI 10.1257/aer.91.4.832 PG 26 WC Economics SC Business & Economics GA 474KD UT WOS:000171104900005 ER PT J AU Orphanides, A AF Orphanides, A TI Monetary policy rules based on real-time data SO AMERICAN ECONOMIC REVIEW LA English DT Article ID FORECASTS AB This paper examines the magnitude of informational problems associated with the implementation and interpretation of simple monetary policy rules. Using Taylor's ride as an example, I demonstrate that real-time policy recommendations differ considerably from those obtained with ex post revised data. Further, estimated policy reaction functions based on ex post revised data provide misleading descriptions of historical policy and obscure the behavior suggested by information available to the Federal Reserve in real time. These results indicate that reliance on the information actually available to policy makers in real time is essential for the analysis of monetary policy rules. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Orphanides, A (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 30 TC 329 Z9 334 U1 1 U2 16 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD SEP PY 2001 VL 91 IS 4 BP 964 EP 985 DI 10.1257/aer.91.4.964 PG 22 WC Economics SC Business & Economics GA 474KD UT WOS:000171104900011 ER PT J AU Bils, M Klenow, PJ AF Bils, M Klenow, PJ TI Quantifying quality growth SO AMERICAN ECONOMIC REVIEW LA English DT Article ID COMPETITION; GOODS AB Using U.S. Consumer Expenditure Surveys, we estimate "quality Engel curves" for 66 durable goods based on the extent richer households pay more for each good. The same data show that the average price paid rises faster from 1980 to 1996 for goods with steeper quality Engel curves, as if households are ascending these clin,es. BLS prices likewise increase more quickly for goods with steeper quality Engel curves,es, suggesting the BLS does not fully net out the impact of quality upgrading. We estimate that annual quality growth averages 3.7 percent for our goods, with 2.2 percent showing up as higher inflation. C1 Univ Rochester, Dept Econ, Rochester, NY 14627 USA. Fed Reserve Bank Minneapolis, Res Dept, Minneapolis, MN 55480 USA. RP Bils, M (reprint author), Univ Rochester, Dept Econ, Harkness Hall, Rochester, NY 14627 USA. NR 25 TC 51 Z9 53 U1 0 U2 7 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD SEP PY 2001 VL 91 IS 4 BP 1006 EP 1030 DI 10.1257/aer.91.4.1006 PG 25 WC Economics SC Business & Economics GA 474KD UT WOS:000171104900013 ER PT J AU Sommer, JH AF Sommer, JH TI The birth of the American business corporation: Of banks, corporate governance, and social responsibility SO BUFFALO LAW REVIEW LA English DT Review ID LAW C1 Fed Reserve Bank New York, New York, NY 10045 USA. RP Sommer, JH (reprint author), Fed Reserve Bank New York, New York, NY 10045 USA. NR 149 TC 2 Z9 2 U1 1 U2 2 PU UNIV BUFFALO STATE UNIV NEW YORK PI BUFFALO PA SCHOOL LAW, 605 JOHN LORD O BRIAN HALL, NORTH CAMPUS, BUFFALO, NY 14260 USA SN 0023-9356 J9 BUFFALO LAW REV JI Buffalo Law Rev. PD FAL PY 2001 VL 49 IS 3 BP 1011 EP 1097 PG 87 WC Law SC Government & Law GA 504PG UT WOS:000172864600001 ER PT J AU Allen, B Yannelis, NC AF Allen, B Yannelis, NC TI Differential information economies: Introduction SO ECONOMIC THEORY LA English DT Editorial Material ID INCENTIVE COMPATIBILITY; MARKET GAMES; CORE; EFFICIENCY; SPACES C1 Univ Illinois, Dept Econ, Champaign, IL 61820 USA. Fed Reserve Bank Minneapolis, Minneapolis, MN 55480 USA. Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. RP Yannelis, NC (reprint author), Univ Illinois, Dept Econ, Champaign, IL 61820 USA. NR 37 TC 24 Z9 24 U1 0 U2 0 PU SPRINGER-VERLAG PI NEW YORK PA 175 FIFTH AVE, NEW YORK, NY 10010 USA SN 0938-2259 J9 ECON THEOR JI Econ. Theory PD SEP PY 2001 VL 18 IS 2 BP 263 EP 273 DI 10.1007/PL00004138 PG 11 WC Economics SC Business & Economics GA 462XZ UT WOS:000170446500001 ER PT J AU Zavodny, M AF Zavodny, M TI The effect of partners' characteristics on teenage pregnancy and its resolution SO FAMILY PLANNING PERSPECTIVES LA English DT Article ID UNITED-STATES; CONTRACEPTIVE USE; ADOLESCENT; CHILDBEARING; ANTECEDENTS; INTERCOURSE; FATHERHOOD; ABORTION; MARRIAGE; FAMILY AB Context: Although the determinants of whether a teenage woman has a nonmarital pregnancy and how such a pregnancy is resolved have been widely investigated, little is known about the effect of her partner's characteristics or the joint influence of the two partners' characteristics on nonmarital teenage pregnancy. Methods: Data from the 1995 National Survey of Family Growth are used to examine whether the characteristics of teenage women and their partners affect the likelihood of a nonmarital pregnancy and how the pregnancy is resolved. The data are corrected for underreporting of abortions. Results: More than 17% of teenage women are estimated to have become pregnant during their first nonmarital teenage sexual relationship. About 44% of these pregnancies result in a nonmarital birth and about 18% in a marital birth, while 37% end In an abortion. The likelihood of nonmarital pregnancy declines as age at first intercourse rises, but age does not affect how such a pregnancy is resolved. Women who are older than their first partner are more likely to become pregnant than those who are the same age, and their pregnancies are less likely to end in abortion than in a marital birth. Women who are younger than their first partner are no more likely to become pregnant than other women after the effects of other characteristics are taken into account. The male partner's education is negatively associated with the likelihood of nonmarital pregnancy but is positively associated with the likelihood of abortion if a pregnancy occurs. Differences between partners in race or ethnicity do not affect the likelihood of a nonmarital pregnancy but do increase the likelihood that such a pregnancy will end in abortion or a nonmarital birth rather than in a marital birth. Conclusions: The characteristics of teenage women and their partners appear to play a role in nonmarital teenage pregnancy and its outcome. However, the estimated relationships between one partner's characteristics and the probability of a nonmarital pregnancy and its resolution are generally little affected by whether the other partner's characteristics are also taken into account. C1 Fed Reserve Bank, Dept Res, Atlanta, GA USA. RP Zavodny, M (reprint author), Fed Reserve Bank, Dept Res, Atlanta, GA USA. NR 24 TC 33 Z9 33 U1 1 U2 4 PU ALAN GUTTMACHER INST PI NEW YORK PA 120 WALL STREET, NEW YORK, NY 10005 USA SN 0014-7354 J9 FAM PLANN PERSPECT JI Fam. Plann. Perspect. PD SEP-OCT PY 2001 VL 33 IS 5 BP 192 EP + DI 10.2307/2673781 PG 9 WC Demography; Family Studies SC Demography; Family Studies GA 477FK UT WOS:000171272300001 PM 11589539 ER PT J AU Heitfield, E Levy, A AF Heitfield, E Levy, A TI Parametric, semi-parametric and non-parametric models of telecommunications demand - An investigation of residential calling patterns SO INFORMATION ECONOMICS AND POLICY LA English DT Article DE telecommunications; call duration; non-parametric; semi-parametric AB We investigate long distance telephone calling patterns using billing information and demographic data for a large cross-section of residential households. The joint distribution of the number and duration of toll calls is estimated using a non-parametric kernel model, a semi-parametric Cox proportional hazard model, and a fully parametric Poisson-Weibull model. Particular attention is paid to the estimation and analysis of call duration hazard functions. We find that call duration is quite inelastic with respect to price, and that while evening and night/weekend rate calls share vary similar duration characteristics, they differ substantially from peak rate calls. Published by Elsevier Science B.V. C1 Fed Reserve Syst, Board Governors, Div Res & Stat, Washington, DC 20551 USA. Anal Grp Econ, Menlo Pk, CA 94025 USA. RP Heitfield, E (reprint author), Fed Reserve Syst, Board Governors, Div Res & Stat, Washington, DC 20551 USA. NR 12 TC 6 Z9 6 U1 1 U2 5 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0167-6245 J9 INF ECON POLICY JI Inf. Econ. Policy PD SEP PY 2001 VL 13 IS 3 BP 311 EP 329 DI 10.1016/S0167-6245(01)00033-6 PG 19 WC Economics SC Business & Economics GA 473YK UT WOS:000171076800005 ER PT J AU Thornton, DL AF Thornton, DL TI The Federal Reserve's operating procedure, nonborrowed reserves, borrowed reserves and the liquidity effect SO JOURNAL OF BANKING & FINANCE LA English DT Article DE VAR; federal funds rate; borrowed reserves; nonborrowed reserves; liquidity effect ID TERM INTEREST-RATES; MONETARY-POLICY; MONEY; FUNDS; IDENTIFICATION; MARKET; SENSE AB Recently, a number of researchers (Christiano and Eichenbaum, 1992; Christiano et al., 1996a,b, 1997; Evans and Marshall, 1998; Strongin, 1995; Pagan and Robertson, 1995; Brunner, 1994) claim to have found evidence of a statistically significant liquidity effect in a recursive structural VAR using nonborrowed reserves (NBR). It is claimed that innovations to NBR reflect the exogenous policy actions of the Fed. This paper argues that the opposite is true. Specifically, I show that the Fed has an incentive to offset bank-initiated discount window borrowing when it implements the Federal Open Market Committee's policy directive, and that it has done so since the late 1950s. This practice has created a negative contemporaneous covariance between NBR and the funds rate that has been incorrectly attributed to the liquidity effect. By showing that these models capture the endogenous response of the Fed to bank borrowing on NBR, rather than the effect of exogenous policy actions on the funds rate, this paper also resolves the puzzle of the vanishing liquidity effect noted by Pagan and Robertson (1995) and Christiano (1995). (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank St Louis, St Louis, MO 63166 USA. RP Thornton, DL (reprint author), Fed Reserve Bank St Louis, POB 442, St Louis, MO 63166 USA. NR 42 TC 18 Z9 18 U1 0 U2 2 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 J9 J BANK FINANC JI J. Bank Financ. PD SEP PY 2001 VL 25 IS 9 BP 1717 EP 1739 DI 10.1016/S0378-4266(00)00146-1 PG 23 WC Business, Finance; Economics SC Business & Economics GA 465GL UT WOS:000170581200006 ER PT J AU Sarte, PDG AF Sarte, PDG TI Rent-seeking bureaucracies and oversight in a simple growth model SO JOURNAL OF ECONOMIC DYNAMICS & CONTROL LA English DT Article DE rent-seeking; oversight; economic growth ID LONG-RUN GROWTH; ECONOMIC-GROWTH; POLICY; INVESTMENT; CORRUPTION AB Following recent cross-country empirical work, research on public policy and growth has come to examine the impact of inefficient or corrupt bureaucracies. Most of this work has emphasized the interactions of bureaucracies with private markets. By contrast, this paper focuses on the relationship between rent-seeking bureaucracies and their political authority. We show that when oversight is relatively costly, as in many developing economies, the political authority exercises little monitoring of its agencies which reduces the effectiveness of productive government spending. Moreover, when the technology used to provide public services is poor, bureaus better succeed in requesting overly large budgets before triggering any monitoring. Both of these characteristics contribute to reducing the growth rate of already poor economies. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank, Res Dept, Richmond, VA 23261 USA. RP Sarte, PDG (reprint author), Fed Reserve Bank, Res Dept, POB 27622, Richmond, VA 23261 USA. NR 22 TC 3 Z9 3 U1 0 U2 2 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0165-1889 J9 J ECON DYN CONTROL JI J. Econ. Dyn. Control PD SEP PY 2001 VL 25 IS 9 BP 1345 EP 1365 DI 10.1016/S0165-1889(99)00057-3 PG 21 WC Economics SC Business & Economics GA 446ZW UT WOS:000169544900005 ER PT J AU Sarno, L Taylor, MP AF Sarno, L Taylor, MP TI Official intervention in the foreign exchange market: Is it effective and, if so, how does it work? SO JOURNAL OF ECONOMIC LITERATURE LA English DT Review ID CENTRAL BANK INTERVENTION; MONETARY-POLICY; CURRENCY CRISES; RATE DYNAMICS; SPECULATIVE ATTACKS; PAYMENTS CRISES; ASIAN CRISIS; RATE REGIMES; MODEL; BALANCE C1 Univ Warwick, CEPR, Coventry CV4 7AL, W Midlands, England. Fed Reserve Bank, St Louis, MO USA. World Bank, Washington, DC 20433 USA. RP Sarno, L (reprint author), Univ Warwick, CEPR, Coventry CV4 7AL, W Midlands, England. NR 136 TC 207 Z9 215 U1 3 U2 28 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0022-0515 J9 J ECON LIT JI J. Econ. Lit. PD SEP PY 2001 VL 39 IS 3 BP 839 EP 868 DI 10.1257/jel.39.3.839 PG 30 WC Economics SC Business & Economics GA 476CH UT WOS:000171208300004 ER PT J AU Kehoe, TT AF Kehoe, TT TI Numerical methods in economics. SO JOURNAL OF ECONOMIC LITERATURE LA English DT Book Review C1 Univ Minnesota, Minneapolis, MN 55455 USA. Fed Reserve Bank Minneapolis, Minneapolis, MN 55480 USA. RP Kehoe, TT (reprint author), Univ Minnesota, Minneapolis, MN 55455 USA. NR 1 TC 0 Z9 0 U1 0 U2 0 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0022-0515 J9 J ECON LIT JI J. Econ. Lit. PD SEP PY 2001 VL 39 IS 3 BP 907 EP 908 PG 2 WC Economics SC Business & Economics GA 476CH UT WOS:000171208300010 ER PT J AU Brownstone, D Valletta, R AF Brownstone, D Valletta, R TI The bootstrain and multiple imputations: Harnessing increased computing power for improved statistical tests SO JOURNAL OF ECONOMIC PERSPECTIVES LA English DT Article; Proceedings Paper CT Annual Meeting of the Allied-Social-Science-Association CY JAN, 2001 CL NEW ORLEANS, LOUISIANA SP Allied Soc Sci Assoc ID MEASUREMENT ERROR; REGRESSION; JACKKNIFE; EXTENT C1 Univ Calif Irvine, Irvine, CA 92717 USA. Fed Reserve Bank, San Francisco, CA USA. RP Brownstone, D (reprint author), Univ Calif Irvine, Irvine, CA 92717 USA. NR 36 TC 41 Z9 41 U1 0 U2 4 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0895-3309 J9 J ECON PERSPECT JI J. Econ. Perspect. PD FAL PY 2001 VL 15 IS 4 BP 129 EP 141 DI 10.1257/jep.15.4.129 PG 13 WC Economics SC Business & Economics GA 502KF UT WOS:000172742200010 ER PT J AU Ongena, S Smith, DC AF Ongena, S Smith, DC TI The duration of bank relationships SO JOURNAL OF FINANCIAL ECONOMICS LA English DT Article DE bank relationships; hazard models; duration analysis ID LENDING RELATIONSHIPS; CAPITAL STRUCTURE; SHORT-TERM; CHOICE; LOANS; DEBT; INFORMATION; CREDIT; INTERMEDIATION; REPUTATION AB We analyze the duration of bank relationships using a unique panel data set of listed firms and their banks from the bank-dominated Norwegian market. We find that firms are more likely to leave a bank as the relationship matures. Small, profitable, and highly leveraged firms maintain shorter bank relationships, as do firms with multiple bank relationships. These findings are robust to censoring, alternate specifications for the distribution of relationship duration, and other control variables relevant to the Norwegian market. Overall., our results cast doubt on theories suggesting that firms become locked into bank relationships. (C) 2001 Published by Elsevier Science S.A. C1 Tilburg Univ, Dept Finance, NL-5000 LE Tilburg, Netherlands. CentER, NL-5000 LE Tilburg, Netherlands. Fed Reserve Syst, Board Governors, Div Int Finance, Washington, DC 20551 USA. RP Smith, DC (reprint author), Tilburg Univ, Dept Finance, NL-5000 LE Tilburg, Netherlands. NR 40 TC 97 Z9 98 U1 3 U2 13 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0304-405X J9 J FINANC ECON JI J. Financ. Econ. PD SEP PY 2001 VL 61 IS 3 BP 449 EP 475 DI 10.1016/S0304-405X(01)00069-1 PG 27 WC Business, Finance; Economics SC Business & Economics GA 459PG UT WOS:000170259300006 ER PT J AU Chaboud, A LeBaron, B AF Chaboud, A LeBaron, B TI Foreign-exchange trading volume and Federal Reserve intervention SO JOURNAL OF FUTURES MARKETS LA English DT Article ID RATE VOLATILITY; VARIANCE AB We find a large positive correlation between daily trading volume in currency futures markets and foreign-exchange intervention by the Federal Reserve over the period 1979 to 1996. Neither contemporaneous nor predicted volatility can fully account for the increases in trading activity. Whether or not the intervention operation is publicly reported appears to be an important determinant of trading volume. (C) 2001 John Wiley & Sons, Inc. C1 Fed Reserve Syst, Board Governors, Div Int Finance, Washington, DC 20551 USA. Brandeis Univ, Grad Sch Int Econ & Finance, Waltham, MA 02254 USA. RP Chaboud, A (reprint author), Fed Reserve Syst, Board Governors, Div Int Finance, Washington, DC 20551 USA. EM alain.p.chaboud@frb.gov NR 16 TC 12 Z9 12 U1 1 U2 3 PU WILEY-BLACKWELL PI MALDEN PA COMMERCE PLACE, 350 MAIN ST, MALDEN 02148, MA USA SN 0270-7314 J9 J FUTURES MARKETS JI J. Futures Mark. PD SEP PY 2001 VL 21 IS 9 BP 851 EP 860 DI 10.1002/fut.1904 PG 10 WC Business, Finance SC Business & Economics GA 452RC UT WOS:000169871700004 ER PT J AU Lusardi, A Cossa, R Krupka, EL AF Lusardi, A Cossa, R Krupka, EL TI Savings of young parents SO JOURNAL OF HUMAN RESOURCES LA English DT Article; Proceedings Paper CT National Longitudinal Survey 1997 Early Results Conference (NLSY97) CY NOV 18-19, 1999 CL WASHINGTON, D.C. ID RETIREMENT; INSURANCE; PAYMENTS; HEALTH AB In this paper, we examine household savings using data from the National Longitudinal Survey, Cohort 1997. This data set provides detailed information about assets and liabilities of parents vith teenage children. In our empirical work, we have to first deal with several problems in measuring wealth. Although many responding parents report owning assets and liabilities, they often do not report their values. To get around the nonresponse problem, we impute the missing values for assets and liabilities. To study, the patterns of accumulation of young parents, we examine wealth holdings and asset ownership across several demographic groups. C1 Dartmouth Coll, Hanover, NH 03755 USA. Chicago Partners, Chicago, IL USA. Fed Reserve Bank Chicago, Chicago, IL USA. RP Lusardi, A (reprint author), Dartmouth Coll, Hanover, NH 03755 USA. NR 33 TC 7 Z9 7 U1 0 U2 5 PU UNIV WISCONSIN PRESS PI MADISON PA JOURNAL DIVISION, 2537 DANIELS ST, MADISON, WI 53718 USA SN 0022-166X J9 J HUM RESOUR JI J. Hum. Resour. PD FAL PY 2001 VL 36 IS 4 BP 762 EP 794 DI 10.2307/3069641 PG 33 WC Economics; Industrial Relations & Labor SC Business & Economics GA 492HK UT WOS:000172162200007 ER PT J AU Chauvet, M Potter, S AF Chauvet, M Potter, S TI Nonlinear risk SO MACROECONOMIC DYNAMICS LA English DT Article; Proceedings Paper CT Workshop on Multivariate Nonlinear Models in Econometrics CY SEP 17-18, 1999 CL ROTTERDAM, NETHERLANDS DE expected excess return; risk premia; conditional variance; dynamic factor; Markov process ID STOCK RETURNS; BUSINESS-CYCLE; ASSET RETURNS; VOLATILITY; MARKET; MODEL; HETEROSKEDASTICITY; COVARIANCES; VARIANCES; INFLATION AB This paper analyzes the joint time-series properties of the level and volatility of expected excess stock returns. An unobservable dynamic factor is constructed as a nonlinear proxy for the market risk premia with its first moment and conditional volatility driven by a latent Markov variable. The model allows for the possibility that the risk-return relationship may not be constant across the Markov states or over time. We find an overall negative contemporaneous relationship between the conditional expectation and variance of the monthly value-weighted excess return. However, the sign of the correlation is not stable, but instead varies according to the stage of the business cycle. In particular, around the beginning of recessions, volatility rises substantially, reflecting great uncertainty associated with these periods, while expected return falls, anticipating a decline in earnings. Thus, around economic peaks there is a negative relationship between conditional expectation and variance. However, toward the end of a recession expected return is at its highest value as an anticipation of the economic recovery, and volatility is still very high in anticipation of the end of the contraction. That is, the risk-return relation is positive around business-cycle troughs, This time-varying behavior also holds for noncontemporaneous correlations of these two conditional moments. C1 Univ Calif Riverside, Dept Econ, Riverside, CA 92521 USA. Fed Reserve Bank New York, New York, NY 10045 USA. RP Chauvet, M (reprint author), Univ Calif Riverside, Dept Econ, Riverside, CA 92521 USA. NR 36 TC 6 Z9 6 U1 1 U2 2 PU CAMBRIDGE UNIV PRESS PI PORT CHESTER PA 110 MIDLAND AVE, PORT CHESTER, NY 10573-9863 USA SN 1365-1005 J9 MACROECON DYN JI Macroecon. Dyn. PD SEP PY 2001 VL 5 IS 4 BP 621 EP 646 PG 26 WC Economics SC Business & Economics GA 487PG UT WOS:000171884000008 ER PT J AU Biehl, AR AF Biehl, AR TI Durable-goods monopoly with stochastic values SO RAND JOURNAL OF ECONOMICS LA English DT Article ID COASE CONJECTURE; DYNAMICS; DEMAND; ENTRY AB I analyze a durable-goods model that allows consumers' values to vary over time. The optimal mechanism for a monopolist is computed and compared to both the sales and leasing equilibria. I show that sales may implement the optimal strategy, and that the dominance of leasing over sales is not necessarily true. This implication is consistent with the prevalence of simple sales contracts in many markets. C1 Fed Reserve Bank New York, New York, NY 10045 USA. Duke Univ, Durham, NC 27706 USA. RP Biehl, AR (reprint author), Fed Reserve Bank New York, New York, NY 10045 USA. NR 25 TC 12 Z9 12 U1 0 U2 3 PU RAND PI LAWRENCE PA 810 EAST 10TH ST, LAWRENCE, KS 66044 USA SN 0741-6261 J9 RAND J ECON JI Rand J. Econ. PD FAL PY 2001 VL 32 IS 3 BP 565 EP 577 DI 10.2307/2696369 PG 13 WC Economics SC Business & Economics GA 495XA UT WOS:000172364600009 ER PT J AU Veltri, SC Adams, MI Turner, PS AF Veltri, SC Adams, MI Turner, PS TI Payments SO BUSINESS LAWYER LA English DT Article C1 Ohio No Univ, Ada, OH 45810 USA. Fed Reserve Bank New York, New York, NY USA. RP Turner, PS (reprint author), Ohio No Univ, Ada, OH 45810 USA. NR 5 TC 7 Z9 7 U1 0 U2 0 PU AMER BAR ASSOC PI CHICAGO PA 750 N LAKE SHORE DR, ATTN:ORDER FULFILLMENT, CHICAGO, IL 60611 USA SN 0007-6899 J9 BUS LAWYER JI Bus. Lawyer PD AUG PY 2001 VL 56 IS 4 BP 1783 EP 1803 PG 21 WC Law SC Government & Law GA 470YL UT WOS:000170900000013 ER PT J AU Sarno, L AF Sarno, L TI Nonlinear dynamics, spillovers and growth in the G7 economies: An empirical investigation SO ECONOMICA LA English DT Article ID RESEARCH-AND-DEVELOPMENT; TRANSITION AUTOREGRESSIVE MODELS; PANEL-DATA APPROACH; TIME-SERIES; INTERNATIONAL COMPARISONS; POLITICAL INSTABILITY; COINTEGRATION VECTORS; CONVERGENCE; TESTS; COUNTRIES AB This paper proposes an empirical growth model which is consistent with a stochastic steady-state tabour productivity level varying over time and across countries, where the disequilibrium mechanism leading to long-run equilibrium follows a nonlinear equilibrium correction model. Using data for the G7 economics during the postwar period since 1950, the empirical analysis yields a long-run model which implies plausible estimates of the production function parameters. Postwar economic growth in each of the G7 countries appears to be well characterized by a nonlinear equilibrium correction model where the dynamic adjustment towards long-run equilibrium is governed by a logistic function, while also capturing spillover effects in growth dynamics. C1 Univ Oxford, Oxford, England. Ctr Econ Policy Res, London, England. Fed Reserve Bank, St Louis, MO USA. RP Sarno, L (reprint author), Univ Oxford, S Parks Rd, Oxford, England. NR 76 TC 2 Z9 2 U1 1 U2 2 PU BLACKWELL PUBL LTD PI OXFORD PA 108 COWLEY RD, OXFORD OX4 1JF, OXON, ENGLAND SN 0013-0427 J9 ECONOMICA JI Economica PD AUG PY 2001 VL 68 IS 271 BP 401 EP 426 DI 10.1111/1468-0335.00253 PG 26 WC Economics SC Business & Economics GA 469BJ UT WOS:000170792400006 ER PT J AU Veracierto, M AF Veracierto, M TI Employment flows, capital mobility, and policy analysis SO INTERNATIONAL ECONOMIC REVIEW LA English DT Article ID INDIVISIBLE LABOR; EQUILIBRIUM; GROWTH; MARKET AB This article extends Hopenhayn and Rogerson's analysis of firing taxes by introducing a flexible form of capital and considering transitionary dynamics. The article finds that capital is not important for understanding the long run and welfare effects of firing taxes. However, capital is crucial for determining the short run consequences of eliminating this type of policy. C1 Fed Reserve Bank Chicago, Chicago, IL 60604 USA. RP Fed Reserve Bank Chicago, Chicago, IL 60604 USA. NR 16 TC 25 Z9 25 U1 0 U2 3 PU WILEY-BLACKWELL PI HOBOKEN PA 111 RIVER ST, HOBOKEN 07030-5774, NJ USA SN 0020-6598 EI 1468-2354 J9 INT ECON REV JI Int. Econ. Rev. PD AUG PY 2001 VL 42 IS 3 BP 571 EP 595 DI 10.1111/1468-2354.00125 PG 25 WC Economics SC Business & Economics GA 467QL UT WOS:000170715200001 ER PT J AU Holman, JA Rioja, FK AF Holman, JA Rioja, FK TI International transmission of anticipated inflation under alternative exchange-rate regimes SO JOURNAL OF INTERNATIONAL MONEY AND FINANCE LA English DT Article DE inflation; inflation tax; two-country model; exchange-rate regime ID IN-ADVANCE ECONOMY; BUSINESS CYCLES; MODEL; LIQUIDITY; MONETARY; MONEY; COMPETITION; EQUILIBRIUM; VELOCITY; GROWTH AB This paper studies the international transmission of anticipated inflation. A two-country, two-good, two-currency, cash-in-advance model is used to examine analytically and numerically the consequences of changes in a country's inflation rate. Domestic monetary policy influences real activity at home through an inflation-tax channel. These real effects are transmitted to the foreign country via fluctuations in the real exchange rate. Under a flexible nominal exchange rate, inflation is a beggar-thy-neighbor policy. Under a fixed nominal exchange rate, each country suffers a welfare loss when one country inflates. The quantitative results are fairly insensitive to variations in the cash-credit mix used to finance investment expenditures. (C) 2001 Elsevier Science Ltd. All rights reserved. C1 Fed Reserve Bank Kansas City, Econ Res Dept, Kansas City, MO 64198 USA. Georgia State Univ, Sch Policy Studies, Dept Econ, Atlanta, GA 30303 USA. RP Holman, JA (reprint author), Fed Reserve Bank Kansas City, Econ Res Dept, Kansas City, MO 64198 USA. NR 28 TC 3 Z9 4 U1 1 U2 6 PU ELSEVIER SCI LTD PI OXFORD PA THE BOULEVARD, LANGFORD LANE, KIDLINGTON, OXFORD OX5 1GB, OXON, ENGLAND SN 0261-5606 J9 J INT MONEY FINANC JI J. Int. Money Finan. PD AUG PY 2001 VL 20 IS 4 BP 497 EP 519 DI 10.1016/S0261-5606(00)00054-1 PG 23 WC Business, Finance SC Business & Economics GA 463XA UT WOS:000170501500003 ER PT J AU Frame, WS Srinivasan, A Woosley, L AF Frame, WS Srinivasan, A Woosley, L TI The effect of credit scoring on small-business lending SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Article ID BANKS AB This paper examines the effect of credit scoring on small-business lending for a sample of large U.S. banking organizations. We find that credit scoring is associated with an 8.4 percent increase in the portfolio share of small-business loans, or $4 billion per institution. However, we fail to uncover any specific attributes of bank small-business credit-scoring pro.-rams that lead to this increased lending. Overall, we conclude that credit scoring lowers information costs between borrowers and lenders, thereby reducing the value of traditional, local bank lending relationships. C1 Fed Reserve Bank, Dept Res, Atlanta, GA USA. Fed Reserve Bank, Credit & Risk Management Dept, Atlanta, GA USA. RP Frame, WS (reprint author), Fed Reserve Bank, Dept Res, Atlanta, GA USA. NR 25 TC 64 Z9 65 U1 2 U2 17 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD AUG PY 2001 VL 33 IS 3 BP 813 EP 825 DI 10.2307/2673896 PG 13 WC Business, Finance; Economics SC Business & Economics GA 457BN UT WOS:000170117400007 ER PT J AU Hess, GD Orphanides, A AF Hess, GD Orphanides, A TI War and democracy SO JOURNAL OF POLITICAL ECONOMY LA English DT Article ID INTERNATIONAL CONFLICT; DOMESTIC POLITICS; FORCE; CYCLES AB We present a general equilibrium model of conflict to investigate whether the prevalence of democracy is sufficient to foster the perpetual peace hypothesized by Immanuel Kant and whether the world would necessarily become more peaceful as more countries adopt democratic institutions. Our exploration suggests that neither hypothesis is true. The desire of incumbent leaders with unfavorable economic performance to hold on to power generates an incentive to initiate conflict and salvage their position-with some probability. An equilibrium with positive war frequency is sustained even if all nations were to adopt representative democratic institutions and even in the absence of an appropriative motive for war. C1 Oberlin Coll, Oberlin, OH 44074 USA. Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Hess, GD (reprint author), Oberlin Coll, Oberlin, OH 44074 USA. NR 55 TC 38 Z9 38 U1 0 U2 5 PU UNIV CHICAGO PRESS PI CHICAGO PA 1427 E 60TH ST, CHICAGO, IL 60637-2954 USA SN 0022-3808 J9 J POLIT ECON JI J. Polit. Econ. PD AUG PY 2001 VL 109 IS 4 BP 776 EP 810 DI 10.1086/322085 PG 35 WC Economics SC Business & Economics GA 456VZ UT WOS:000170104600003 ER PT J AU Black, SE Lynch, LM AF Black, SE Lynch, LM TI How to compete: The impact of workplace practices and information technology on productivity SO REVIEW OF ECONOMICS AND STATISTICS LA English DT Article ID RESOURCE MANAGEMENT-PRACTICES; APPAREL INDUSTRY; MODULAR PRODUCTION; FIRM PERFORMANCE; PANEL DATA; TURNOVER AB Using data from a unique nationally representative, sample of businesses, we examine the impact of workplace practices, information technology, and human capital investments on productivity. We estimate an augmented Cobb-Douglas production function with both cross section and panel data covering the period of 1987-1993, using both within and GMM estimators. We find that it is not whether an employer adopts a particular work practice but rather how that work practice is actually implemented within the establishment that is associated with higher productivity. Unionized establishments that have adopted human resource practices that promote joint decision making coupled with incentive-based compensation have higher productivity than other similar nonunion plants, whereas unionized businesses that maintain more traditional labor management relations have lower productivity. Finally, plant productivity is higher in businesses with more-educated workers or greater computer usage by nonmanagerial employees. C1 Fed Reserve Bank New York, New York, NY 10045 USA. Tufts Univ, Medford, MA 02155 USA. NBER, Cambridge, MA 02138 USA. RP Black, SE (reprint author), Fed Reserve Bank New York, New York, NY 10045 USA. NR 47 TC 331 Z9 338 U1 10 U2 52 PU MIT PRESS PI CAMBRIDGE PA ONE ROGERS ST, CAMBRIDGE, MA 02142-1209 USA SN 0034-6535 EI 1530-9142 J9 REV ECON STAT JI Rev. Econ. Stat. PD AUG PY 2001 VL 83 IS 3 BP 434 EP 445 DI 10.1162/00346530152480081 PG 12 WC Economics; Social Sciences, Mathematical Methods SC Business & Economics; Mathematical Methods In Social Sciences GA 456JR UT WOS:000170079800004 ER PT J AU Carlino, G Sill, K AF Carlino, G Sill, K TI Regional income fluctuations: Common trends and common cycles SO REVIEW OF ECONOMICS AND STATISTICS LA English DT Article ID TIME-SERIES; COINTEGRATION VECTORS; MONETARY-POLICY; BUSINESS-CYCLE; COMPONENTS; DYNAMICS; SYSTEMS; SHOCKS; MONEY AB This paper investigates trend and cycle dynamics in per capita income for the major U.S. regions during the 1956-1995 period. Cointegration and serial correlation common features information are used in jointly decomposing the series into trend and cycle components. We find considerable differences in the volatility of regional cycles. Controlling for differences in volatility, we find a great deal of comovement in the cyclical response for all regions but the Far West. Possible sources underlying differences in regional cycles are explored, such as the share of a region's income accounted forby manufacturing, defense spending as a proportion of a region's income, oil price shocks, and the stance of monetary policy. Somewhat surprisingly, we find that the share of manufacturing in a region seems to account for little of the variation in regional cycles relative to national cycles, hut manufacturing share differentially affects trend growth for four of the seven regions studied. C1 Fed Reserve Bank Philadelphia, Philadelphia, PA 19106 USA. RP Carlino, G (reprint author), Fed Reserve Bank Philadelphia, Philadelphia, PA 19106 USA. NR 36 TC 53 Z9 54 U1 1 U2 5 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 0034-6535 J9 REV ECON STAT JI Rev. Econ. Stat. PD AUG PY 2001 VL 83 IS 3 BP 446 EP 456 DI 10.1162/00346530152480090 PG 11 WC Economics; Social Sciences, Mathematical Methods SC Business & Economics; Mathematical Methods In Social Sciences GA 456JR UT WOS:000170079800005 ER PT J AU Campa, JM Goldberg, LS AF Campa, JM Goldberg, LS TI Employment versus wage adjustment and the US dollar SO REVIEW OF ECONOMICS AND STATISTICS LA English DT Article ID EXCHANGE-RATES; INVESTMENT AB Using two decades of annual data, we explore the links between real exchange rates and employment, wages, and overtime activity in U.S. manufacturing industries. Especially in industries with lower price-over-cost markups, exchange rates have statistically significant effects on industry wages, with the magnitude of these effects rising as industries increase their export orientation and declining as imported input use becomes more important. Exchange rate implications for jobs and hours worked are smaller and less precisely measured. We find a much higher response of overtime wages and overtime hours to transitory exchange rates movements. C1 NBER, Cambridge, MA 02138 USA. Fed Reserve Bank New York, New York, NY 10045 USA. NR 23 TC 46 Z9 49 U1 0 U2 5 PU MIT PRESS PI CAMBRIDGE PA 55 HAYWARD STREET, CAMBRIDGE, MA 02142 USA SN 0034-6535 J9 REV ECON STAT JI Rev. Econ. Stat. PD AUG PY 2001 VL 83 IS 3 BP 477 EP 489 DI 10.1162/00346530152480126 PG 13 WC Economics; Social Sciences, Mathematical Methods SC Business & Economics; Mathematical Methods In Social Sciences GA 456JR UT WOS:000170079800008 ER PT J AU DeYoung, R Spong, K Sullivan, RJ AF DeYoung, R Spong, K Sullivan, RJ TI Who's minding the store? Motivating and monitoring hired managers at small, closely held commercial banks SO JOURNAL OF BANKING & FINANCE LA English DT Article DE commercial banks; corporate governance; principal-agent problems; profit efficiency; small businesses ID RISK-TAKING BEHAVIOR; OWNERSHIP STRUCTURE; CORPORATE-CONTROL; PROFIT FUNCTION; FIRM PERFORMANCE; AGENCY PROBLEMS; EFFICIENCY; ECONOMIES; INDUSTRY; MARKET AB Small, closely held corporations must rely disproportionately on managerial share-holdings to mitigate the agency costs associated with hired managers, because market discipline and motivated outside monitors are typically absent for such firms. We study a random sample of 266 small, closely held US commercial banks with a broad range of ownership and management arrangements. Our results suggest that hiring an outside manager can improve profitability, but these gains depend on aligning hired managers with owners via managerial shareholdings. We find that over-utilizing this control mechanism results in entrenchment, while under-utilization is costly in terms of foregone profits. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank Chicago, Econ Res Dept, Chicago, IL 60604 USA. Fed Reserve Bank Kansas City, Kansas City, MO 64198 USA. RP DeYoung, R (reprint author), Fed Reserve Bank Chicago, Econ Res Dept, 11th Floor, Chicago, IL 60604 USA. NR 46 TC 19 Z9 19 U1 0 U2 5 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 J9 J BANK FINANC JI J. Bank Financ. PD JUL PY 2001 VL 25 IS 7 BP 1209 EP 1243 DI 10.1016/S0378-4266(00)00127-8 PG 35 WC Business, Finance; Economics SC Business & Economics GA 444QH UT WOS:000169410700001 ER PT J AU Bartolini, L Bertola, G Prati, A AF Bartolini, L Bertola, G Prati, A TI Banks' reserve management, transaction costs, and the timing of Federal Reserve intervention SO JOURNAL OF BANKING & FINANCE LA English DT Article DE reserve requirements; interest-rate smoothing; value of waiting ID FUNDS RATE; BEHAVIOR; MARKET AB We use daily data on bank reserves and overnight interest rates to document a striking pattern in the high-frequency behavior of the US market for federal funds: depository institutions tend to hold more reserves during the last few days of each "reserve maintenance period", when the opportunity cost of holding reserves is typically highest. We then propose and analyze a model of the federal funds market where uncertain liquidity flows and transaction costs induce banks to delay trading and to bid up interest rates at the end of each maintenance period. In this context, the central bank's interest-rate-smoothing policy causes a high supply of liquid funds to be associated with high interest rates around reserve-settlement days. (C) 2001 Elsevier Science B.V. All rights reserved. C1 European Univ Inst, Dept Econ, I-50016 San Domenico Fiesole, FI, Italy. Fed Reserve Bank New York, New York, NY 10045 USA. Univ Turin, Turin, Italy. CEPR, London, England. Int Monetary Fund, Washington, DC 20431 USA. RP Bertola, G (reprint author), European Univ Inst, Dept Econ, I-50016 San Domenico Fiesole, FI, Italy. NR 16 TC 21 Z9 21 U1 0 U2 2 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 J9 J BANK FINANC JI J. Bank Financ. PD JUL PY 2001 VL 25 IS 7 BP 1287 EP 1317 DI 10.1016/S0378-4266(00)00130-8 PG 31 WC Business, Finance; Economics SC Business & Economics GA 444QH UT WOS:000169410700004 ER PT J AU Robertson, JC Tallman, EW AF Robertson, JC Tallman, EW TI Improving federal-funds rate forecasts in VAR models used for policy analysis SO JOURNAL OF BUSINESS & ECONOMIC STATISTICS LA English DT Article DE futures market; impulse responses; overfitting; shrinkage estimator ID PREDICTIVE ABILITY; MONETARY-POLICY; TESTS AB Federal-funds rate-forecast errors from vector autoregressive (VAR) models used for monetary policy analysis and fitted by ordinary least squares (OLS) are large relative to those from the futures market. Using three different structural VAR models, we show that forecasts based on a shrinkage estimator dominate the OLS-based forecasts-even after restricting the lag length and/or imposing exact unit-root restrictions-and are broadly comparable to the futures-market forecasts. Our results refute the perception that VAR models forecast the funds rate poorly in general and suggest that using stochastic prior restrictions can provide an effective way of improving forecast accuracy without sacrificing structural interpretation. C1 Fed Reserve Bank Atlanta, Dept Res, Atlanta, GA 30303 USA. RP Robertson, JC (reprint author), Fed Reserve Bank Atlanta, Dept Res, Atlanta, GA 30303 USA. NR 25 TC 22 Z9 22 U1 1 U2 2 PU AMER STATISTICAL ASSOC PI ALEXANDRIA PA 1429 DUKE ST, ALEXANDRIA, VA 22314 USA SN 0735-0015 J9 J BUS ECON STAT JI J. Bus. Econ. Stat. PD JUL PY 2001 VL 19 IS 3 BP 324 EP 330 DI 10.1198/073500101681019972 PG 7 WC Economics; Social Sciences, Mathematical Methods; Statistics & Probability SC Business & Economics; Mathematical Methods In Social Sciences; Mathematics GA 451DG UT WOS:000169785400010 ER PT J AU Smith, BD AF Smith, BD TI Introduction to monetary and financial arrangements SO JOURNAL OF ECONOMIC THEORY LA English DT Editorial Material ID CENTRAL BANKING; THOUGHTS; PAYMENTS; FUTURE; PANEL; MONEY; INFLATION; REPRESSION; GROWTH AB Recent years have seen major innovations in the nature of monetary, banking, and payment arrangements. These innovations, which are certain to continue into the foreseeable future. will have huge implications for the conduct of monetary policy. for the regulation of banking, and for the design of payment systems. Indeed, central banks now need to think about the conduct of monetary policy in environments where the evolution of banking and payments systems already has implied and will continue to imply a declining demand for their liabilities. Central banks also need to think about the conduct of monetary policy in increasingly global markets and in a context where the number of currencies is shrinking as different nations abandon their own monies in favor of the dollar or the euro. And, at least in the United States, all legal impediments to the issue of currency substitutes by private agents have been repealed. This has occurred at the same time that developments in communications and record-keeping technologies have made it feasible for agents to issue various forms of electronic currency substitutes. What would the widespread issue of private, possibly electronic Currency substitutes imply for price level and interest rate determination or for the conduct of monetary policy in general? In addition, the increasing frequency and severity of financial crises around the globe and the increasing exposure of economies like the U.S. to external events raise issues about the appropriate roles for national central banks and the appropriate roles for international agencies, like the IMF. And recent changes in U.S. banking legislation will force a rethinking of how the supervision and regulation of the banking system should be conducted and of how far the "safety-net" created by deposit insurance provision and lender of last resort services should be extended. These issues will become particularly vexing as the scope of activities conducted by "banks" increases and as the notion of a "bank" becomes more amorphous. The papers in this issue are intended to provide frameworks for advancing research on these and other topics. (C) 2001 Academic Press. C1 Univ Texas, Dept Econ, Austin, TX 78712 USA. Fed Reserve Bank Cleveland, Cleveland, OH 44114 USA. RP Smith, BD (reprint author), Univ Texas, Dept Econ, Austin, TX 78712 USA. NR 55 TC 0 Z9 0 U1 2 U2 12 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 0022-0531 J9 J ECON THEORY JI J. Econ. Theory PD JUL-AUG PY 2001 VL 99 IS 1-2 BP 1 EP 21 DI 10.1006/jeth.2001.2804 PG 21 WC Economics SC Business & Economics GA 463AM UT WOS:000170454700001 ER PT J AU Jafarey, S Rupert, P AF Jafarey, S Rupert, P TI Limited commitment, money, and credit SO JOURNAL OF ECONOMIC THEORY LA English DT Article DE money; credit; private information AB This paper studies limited commitment and adverse selection in an economy in which private liabilities (inside money I can be used as instruments of intertemporal trade. The results suggest that in conjunction with adverse selection, the limited commitment problem may affect the behavior of intrinsically higher quality debtors more severely than loader quality ones. Nonetheless, a credit economy may function better when both problems are present than under limited commitment alone. Adding a fixed amount of money eases frictions associated with the credit market. (C) 2001 Academic Press. C1 Univ Liverpool, Dept Econ & Accounting, Liverpool L69 7ZA, Merseyside, England. Fed Reserve Bank Cleveland, Cleveland, OH 44114 USA. RP Jafarey, S (reprint author), Univ Liverpool, Dept Econ & Accounting, Liverpool L69 7ZA, Merseyside, England. NR 12 TC 3 Z9 3 U1 0 U2 4 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 0022-0531 J9 J ECON THEORY JI J. Econ. Theory PD JUL-AUG PY 2001 VL 99 IS 1-2 BP 22 EP 58 DI 10.1006/jeth.2000.2712 PG 37 WC Economics SC Business & Economics GA 463AM UT WOS:000170454700002 ER PT J AU Azariadis, AE Bullard, J Smith, BD AF Azariadis, AE Bullard, J Smith, BD TI Private and public circulating liabilities SO JOURNAL OF ECONOMIC THEORY LA English DT Article DE flat money; private money; electronic cash; monetary theory; endogenous volatility ID PURE EXCHANGE; MONEY; BANKING AB Legal and technological changes have made private banknote issue, or its electronic equivalent, possible, We construct a model where private liabilities circulate, either by themselves or alongside outside money. We provide results on existence and multiplicity of equilibria and characterize dynamics near steady states, Our results support Friedman in that circulating private liabilities are associated with endogenous volatility. But implementing Friedman's advice (the government should ban private currency substitutes) causes significant inefficiency. The proposal of Hayek (that the government should leave currency creation to "the market") also is often constrained-suboptimal. Both public and private circulating liabilities are required for optimality. (C) 2001 Academic Press. C1 Fed Reserve Bank St Louis, Res Dept, St Louis, MO 63102 USA. Univ Texas, Dept Econ, Austin, TX 78712 USA. Univ Calif Los Angeles, Dept Econ, Los Angeles, CA 90095 USA. RP Bullard, J (reprint author), Fed Reserve Bank St Louis, Res Dept, 411 Locust St, St Louis, MO 63102 USA. RI Bullard, James/L-8120-2016 OI Bullard, James/0000-0002-1142-6803 NR 32 TC 13 Z9 13 U1 0 U2 2 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 0022-0531 J9 J ECON THEORY JI J. Econ. Theory PD JUL-AUG PY 2001 VL 99 IS 1-2 BP 59 EP 116 PG 58 WC Economics SC Business & Economics GA 463AM UT WOS:000170454700003 ER PT J AU Lagunoff, R Schreft, SL AF Lagunoff, R Schreft, SL TI A model of financial fragility SO JOURNAL OF ECONOMIC THEORY LA English DT Article DE financial fragility; financial crisis; contagion; portfolio linkages AB This article presents a dynamic, stochastic game-theoretic model with two essential features. First. agents hold diversified portfolios that link their financial positions to those of other agents, Second, shocks to fundamentals at the initial date cause some portfolio losses. Agents who incur losses reallocate their portfolios, thereby breaking some linkages. In the Pareto-efficient symmetric equilibrium studied, two related types of financial crisis can occur in response. One occurs gradually as losses spread, breaking more links. The other type occurs instantaneously when forward-looking agents preemptively shift to safer portfolios to avoid future losses from contagion. An economy is more fragile the earlier its last remaining link breaks from Such a crisis. (C) 2001 Academic Press. C1 Georgetown Univ, Dept Econ, Washington, DC 20057 USA. Fed Reserve Bank Kansas City, Res Dept, Kansas City, MO 64198 USA. RP Lagunoff, R (reprint author), Georgetown Univ, Dept Econ, Washington, DC 20057 USA. NR 19 TC 30 Z9 31 U1 2 U2 13 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 0022-0531 J9 J ECON THEORY JI J. Econ. Theory PD JUL-AUG PY 2001 VL 99 IS 1-2 BP 220 EP 264 DI 10.1006/jeth.2000.2733 PG 45 WC Economics SC Business & Economics GA 463AM UT WOS:000170454700007 ER PT J AU Neumark, D Wascher, W AF Neumark, D Wascher, W TI Minimum wages and training revisited SO JOURNAL OF LABOR ECONOMICS LA English DT Article ID UNITED-STATES; LABOR-MARKET; JOB; OUTCOMES; GROWTH AB Theory predicts that minimum wages will reduce employer-provided on-the-job training designed to improve workers' skills on the current job, but it is ambiguous regarding training that workers obtain to qualify for a job. We estimate the effects of minimum wages on both types of training received by young workers, exploiting cross-state variation in minimum wage increases. Much of the evidence supports the hypothesis that higher minimum wages reduce formal training to improve skills on the current job. But there is little or no evidence of offsetting increases in training undertaken to qualify for or obtain jobs. C1 Michigan State Univ, E Lansing, MI 48824 USA. Natl Bur Econ Res, Cambridge, MA 02138 USA. Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Neumark, D (reprint author), Michigan State Univ, E Lansing, MI 48824 USA. NR 29 TC 29 Z9 31 U1 0 U2 4 PU UNIV CHICAGO PRESS PI CHICAGO PA 1427 E 60TH ST, CHICAGO, IL 60637-2954 USA SN 0734-306X J9 J LABOR ECON JI J. Labor Econ. PD JUL PY 2001 VL 19 IS 3 BP 563 EP 595 DI 10.1086/322073 PG 33 WC Economics; Industrial Relations & Labor SC Business & Economics GA 463WQ UT WOS:000170500600002 ER PT J AU Cole, HL Kocherlakota, NR AF Cole, HL Kocherlakota, NR TI Efficient allocations with hidden income and hidden storage SO REVIEW OF ECONOMIC STUDIES LA English DT Article ID REPEATED MORAL HAZARD; PRIVATE INFORMATION; RISK; INSURANCE; CONTRACTS; GROWTH; EQUILIBRIUM; MULTIPERIOD; COMMITMENT; MARKETS AB We consider an environment in which individuals receive income shocks that are unobservable to others and can privately store resources. We provide a simple characterization of the unique efficient allocation of consumption in cases in which the rate of return on storage is sufficiently high or, alternatively, in which the worst possible outcome is sufficiently dire. We show that, unlike in environments without unobservable storage, the symmetric efficient allocation of consumption is decentralizable through a competitive asset market in which individuals trade risk-free bonds among themselves. C1 Univ Calif Los Angeles, Los Angeles, CA 90024 USA. Fed Reserve Bank Minneapolis, Minneapolis, MN 55480 USA. RP Cole, HL (reprint author), Univ Calif Los Angeles, Los Angeles, CA 90024 USA. NR 33 TC 57 Z9 57 U1 0 U2 5 PU REVIEW OF ECONOMIC STUDIES LTD PI OXFORD PA C/O BASIL BLACKWELL LTD, 108 COWLEY RD, PO BOX 805, OXFORD OX4 1JF, OXON, ENGLAND SN 0034-6527 J9 REV ECON STUD JI Rev. Econ. Stud. PD JUL PY 2001 VL 68 IS 3 BP 523 EP 542 DI 10.1111/1467-937X.00179 PG 20 WC Economics SC Business & Economics GA 476FQ UT WOS:000171215900003 ER PT J AU Altig, D Auerbach, AJ Kotlikoff, LJ Smetters, KA Walliser, J AF Altig, D Auerbach, AJ Kotlikoff, LJ Smetters, KA Walliser, J TI Simulating fundamental tax reform in the United States SO AMERICAN ECONOMIC REVIEW LA English DT Article ID INTERGENERATIONAL TRANSFERS; ACCUMULATION; INVESTMENT; WEALTH; MODEL AB This paper uses a new, large-scale, dynamic life-cycle simulation model to compare the welfare and macroeconomic effects of transitions to five fundamental alternatives to the U.S, federal income tax, including a proportional consumption tax and a flat tax. The model incorporates intragenerational heterogeneity, and a detailed specification of alternative tax systems. Simulation results project significant long-run increases in output for same reforms. For other reforms, namely those that seek to insulate the poor and initial older generations from adverse welfare changes, long-run output gains are modest. C1 Fed Reserve Bank Cleveland, Cleveland, OH 44101 USA. Univ Calif Berkeley, Dept Econ, Berkeley, CA 94720 USA. Boston Univ, Dept Econ, Boston, MA 02215 USA. Univ Penn, Wharton Sch, Philadelphia, PA 19104 USA. Int Monetary Fund, Washington, DC 20431 USA. RP Altig, D (reprint author), Fed Reserve Bank Cleveland, Cleveland, OH 44101 USA. NR 24 TC 114 Z9 119 U1 3 U2 18 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD JUN PY 2001 VL 91 IS 3 BP 574 EP 595 DI 10.1257/aer.91.3.574 PG 22 WC Economics SC Business & Economics GA 449YD UT WOS:000169714000012 ER PT J AU Ludvigson, SC Michaelides, A AF Ludvigson, SC Michaelides, A TI Does buffer-stock saving explain the smoothness and excess sensitivity of consumption? SO AMERICAN ECONOMIC REVIEW LA English DT Article ID PERMANENT INCOME HYPOTHESIS; LIQUIDITY CONSTRAINTS; LABOR INCOME; AGGREGATION; MODEL; EXPECTATIONS; EARNINGS; GROWTH; CREDIT C1 Fed Reserve Bank New York, New York, NY 10045 USA. Univ Cyprus, CY-1678 Nicosia, Cyprus. RP Ludvigson, SC (reprint author), Fed Reserve Bank New York, 33 Liberty St, New York, NY 10045 USA. RI Michaelides, Alexander/G-7914-2011 NR 46 TC 20 Z9 20 U1 3 U2 8 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 EI 1944-7981 J9 AM ECON REV JI Am. Econ. Rev. PD JUN PY 2001 VL 91 IS 3 BP 631 EP 647 DI 10.1257/aer.91.3.631 PG 17 WC Economics SC Business & Economics GA 449YD UT WOS:000169714000016 ER PT J AU Burnside, C Eichenbaum, M Rebelo, S AF Burnside, C Eichenbaum, M Rebelo, S TI Hedging and financial fragility in fixed exchange rate regimes SO EUROPEAN ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 23rd Annual International Seminar on Macroeconomics (ISOM) CY JUN 16-17, 2000 CL HELSINKI, FINLAND SP European Econ Assoc, Natl Bur Econ Res DE fixed exchange rate regimes; hedging; government guarantees ID CRISES; MODEL AB Currency crises that coincide with banking crises tend to share at least three elements. First, banks have a currency mismatch between their assets and liabilities. Second, banks do not completely hedge the associated exchange rate risk. Third, there are implicit government guarantees to banks and their foreign creditors. This paper argues that the first two features arise from banks' optimal response to government guarantees. We show that guarantees completely eliminate banks' incentives to hedge the risk of a devaluation. Our model also articulates one reason why governments might be tempted to provide guarantees to bank creditors. Guarantees lower the domestic interest rate and lead to a boom in economic activity. But this boom comes at the cost of a more fragile banking system. In the event of a devaluation, banks renege on foreign debts and declare bankruptcy. (C) 2001 Elsevier Science B.V. All rights reserved. C1 World Bank, Washington, DC 20433 USA. Northwestern Univ, Dept Econ, Evanston, IL 60208 USA. NBER, Cambridge, MA 02138 USA. Fed Reserve Bank Chicago, Chicago, IL USA. Northwestern Univ, JL Kellogg Grad Sch Management, Evanston, IL 60208 USA. CEPR, London, England. RP Burnside, C (reprint author), World Bank, 1818 H St NW,MSN MC3-301, Washington, DC 20433 USA. RI nipe, cef/A-4218-2010 NR 44 TC 65 Z9 66 U1 0 U2 6 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0014-2921 J9 EUR ECON REV JI Eur. Econ. Rev. PD JUN PY 2001 VL 45 IS 7 BP 1151 EP 1193 DI 10.1016/S0014-2921(01)00090-3 PG 43 WC Economics SC Business & Economics GA 441LF UT WOS:000169231300002 ER PT J AU Sorensen, BE Wu, L Yosha, O AF Sorensen, BE Wu, L Yosha, O TI Output fluctuations and fiscal policy: US state and local governments 1978-1994 SO EUROPEAN ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 23rd Annual International Seminar on Macroeconomics (ISOM) CY JUN 16-17, 2000 CL HELSINKI, FINLAND SP European Econ Assoc, Natl Bur Econ Res DE budget surplus; balanced budget rules; income smoothing ID UNITED-STATES; DEFICITS AB We study the cyclical properties of U.S, state and local government fiscal policy. The budget surpluses of both are procyclical over short- and medium-term horizons. Procyclical surpluses are the result of strongly procyclical revenue and weakly procyclical expenditure. These results hold whether aggregate (U.S.-wide) fluctuations are controlled for or not. Federal grants to state and local governments are procyclical, but this is due to aggregate output fluctuations: With respect to state-level output fluctuations, federal grants are countercyclical. The budget surpluses of trust funds and utilities are also procyclical, but there is no evidence that this effect is stronger in states where balanced budget rules are tighter. The cyclical patterns of state and local budget surpluses are affected by various political institutions; for example, budget surpluses are less procyclical in conservative states. In an election year that occurs in 'good times', state governments refrain from accumulating a larger surplus. In 'bad times', no such asymmetry between election and non-election years is apparent. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank Kansas City, Kansas City, MO 64198 USA. Nurun Inc, Montreal, PQ, Canada. Tel Aviv Univ, Berglas Sch Econ, IL-69978 Tel Aviv, Israel. RP Yosha, O (reprint author), Fed Reserve Bank Kansas City, Kansas City, MO 64198 USA. EM yosha@post.tau.ac.il NR 44 TC 39 Z9 39 U1 0 U2 5 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0014-2921 J9 EUR ECON REV JI Eur. Econ. Rev. PD JUN PY 2001 VL 45 IS 7 BP 1271 EP 1310 DI 10.1016/S0014-2921(00)00104-5 PG 40 WC Economics SC Business & Economics GA 441LF UT WOS:000169231300005 ER PT J AU Blankenau, W Kose, MA Yi, KM AF Blankenau, W Kose, MA Yi, KM TI Can world real interest rates explain business cycles in a small open economy? SO JOURNAL OF ECONOMIC DYNAMICS & CONTROL LA English DT Article; Proceedings Paper CT 5th International Conference of the Society-for-Computational-Economics CY JUN, 1999 CL BOSTON, MA SP Soc Computational Economics DE world interest rates; business cycles; dynamic stochastic general equilibrium models; small open economy ID MODELS; FLUCTUATIONS; INVESTMENT; TERMS; TRADE AB While the world real interest rate is potentially an important mechanism for transmitting international shocks to small open economies, much of the recent quantitative research that studies this mechanism concludes that it has little effect on output, investment, and net exports. We re-examine the importance of world real interest rate shacks using an approach that reverses the standard real business cycle methodology. We begin with a small open economy business cycle model. But, rather than specifying the stochastic processes for the shocks and then solving and simulating the model to evaluate how well these shocks explain business cycles, we use the model to back out the shocks that are consistent with the model's observable endogenous variables, Then we use variance decompositions to examine the importance of each shock. We apply this methodology to Canada and find that world real interest rate shocks can play an important role in explaining the cyclical variation in a small open economy. In particular, they can explain up to one-third of the fluctuations in output and more than half of the fluctuations in net exports and net foreign assets. (C) 2001 Elsevier Science B.V. ALL rights reserved. C1 Fed Reserve Bank New York, Int Res, New York, NY 10045 USA. Univ Wisconsin, Dept Econ, Whitewater, WI 53190 USA. Brandeis Univ, Grad Sch Int Econ & Finance, Waltham, MA 02454 USA. RP Yi, KM (reprint author), Fed Reserve Bank New York, Int Res, 33 Liberty St, New York, NY 10045 USA. EM blankenw@uwwvax.uww.edu; akose@lemberg.brandeis.edu; kei-mu.yi@ny.frb.org NR 42 TC 32 Z9 34 U1 0 U2 4 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0165-1889 J9 J ECON DYN CONTROL JI J. Econ. Dyn. Control PD JUN-JUL PY 2001 VL 25 IS 6-7 BP 867 EP 889 DI 10.1016/S0165-1889(00)00059-2 PG 23 WC Economics SC Business & Economics GA 423QW UT WOS:000168189100003 ER PT J AU Tetlow, RJ von zur Muehlen, P AF Tetlow, RJ von zur Muehlen, P TI Robust monetary policy with misspecified models: Does model uncertainty always call for attenuated policy? SO JOURNAL OF ECONOMIC DYNAMICS & CONTROL LA English DT Article; Proceedings Paper CT 5th International Conference of the Society-for-Computational-Economics CY JUN, 1999 CL BOSTON, MA SP Soc Computational Economics DE model uncertainty; robust control; monetary policy; Stackelberg games AB This paper explores Knightian model uncertainty as a possible explanation of the considerable difference between estimated interest rate rules and optimal feedback descriptions of monetary policy. We focus on two types of uncertainty: (i) unstructured model uncertainty reflected in additive shock error processes that result from omitted-variable misspecifications, and (ii) structured model uncertainty, where one or more parameters are identified as the source of misspecifiction. For an estimated forward-looking model of the US economy, we find that rules that are robust against uncertainty, the nature of which is unspecifiable, or against one-time parametric shifts, are more aggressive than the optimal linear quadratic rule. However, policies designed to protect the economy against the worst-case consequences of misspecified dynamics are less aggressive and turn out to be good approximations of the estimated rule. A possible drawback of such policies is that the losses incurred from protecting against worst-case scenarios are concentrated among the same business cycle frequencies that normally occupy the attention of policymakers. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Board, Washington, DC 20551 USA. RP von zur Muehlen, P (reprint author), Fed Reserve Board, Mailstop 61, Washington, DC 20551 USA. EM rtetlow@frb.gov; pmuehlen@frb.gov NR 60 TC 41 Z9 43 U1 1 U2 4 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0165-1889 J9 J ECON DYN CONTROL JI J. Econ. Dyn. Control PD JUN-JUL PY 2001 VL 25 IS 6-7 BP 911 EP 949 PG 39 WC Economics SC Business & Economics GA 423QW UT WOS:000168189100005 ER PT J AU Oliner, SD Sichel, DE AF Oliner, SD Sichel, DE TI The production function and productivity - Response from Stephen E. Oliner and Daniel E. Sichel SO JOURNAL OF ECONOMIC PERSPECTIVES LA English DT Editorial Material C1 Fed Reserve Board, Washington, DC USA. RP Oliner, SD (reprint author), Fed Reserve Board, Washington, DC USA. NR 1 TC 0 Z9 0 U1 0 U2 0 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0895-3309 J9 J ECON PERSPECT JI J. Econ. Perspect. PD SUM PY 2001 VL 15 IS 3 BP 259 EP 259 PG 1 WC Economics SC Business & Economics GA 469LD UT WOS:000170816100015 ER PT J AU Lettau, M Ludvigson, S AF Lettau, M Ludvigson, S TI Consumption, aggregate wealth, and expected stock returns SO JOURNAL OF FINANCE LA English DT Article ID DIVIDEND YIELDS; TESTS; COINTEGRATION; PRICES; RISK AB This paper studies the role of fluctuations in the aggregate consumption-wealth ratio for predicting stock returns. Using U.S, quarterly stock market data, we find that these fluctuations in the consumption-wealth ratio are strong predictors of both real stock returns and excess returns over a Treasury bill rate. We also find that this variable is a better forecaster of future returns at short and intermediate horizons than is the dividend yield, the dividend payout ratio, and several other popular forecasting variables. Why should the consumption-wealth ratio forecast asset returns? We show that a wide class of optimal models of consumer behavior imply that the log consumption-aggregate wealth (human capital plus asset holdings) ratio summarizes expected returns on aggregate wealth, or the market portfolio. Although this ratio is not observable, we provide assumptions under which its important predictive components for future asset returns may be expressed in terms of observable variables, namely in terms of consumption, asset holdings and labor income. The framework implies that these variables are cointegrated, and that deviations from this shared trend summarize agents' expectations of future returns on the market portfolio. C1 Fed Reserve Bank New York, Res Dept, New York, NY 10045 USA. RP Lettau, M (reprint author), Fed Reserve Bank New York, Res Dept, New York, NY 10045 USA. NR 44 TC 472 Z9 477 U1 3 U2 43 PU WILEY-BLACKWELL PI HOBOKEN PA 111 RIVER ST, HOBOKEN 07030-5774, NJ USA SN 0022-1082 EI 1540-6261 J9 J FINANC JI J. Financ. PD JUN PY 2001 VL 56 IS 3 BP 815 EP 849 DI 10.1111/0022-1082.00347 PG 35 WC Business, Finance; Economics SC Business & Economics GA 446AM UT WOS:000169490800001 ER PT J AU Hummels, D Ishii, J Yi, KM AF Hummels, D Ishii, J Yi, KM TI The nature and growth of vertical specialization in world trade SO JOURNAL OF INTERNATIONAL ECONOMICS LA English DT Article DE growth of world trade; globalization; vertical specialization ID WAGES AB Dramatic changes are occurring in the nature of international trade. Production processes increasingly involve a sequential, vertical trading chain stretching across many countries, with each country specializing in particular stages of a good's production sequence. We document a key aspect of these vertical linkages - the use of imported inputs in producing goods that are exported - which we call vertical specialization. Using input-output tables from 10 OECD and four emerging market countries we calculate that vertical specialization accounts for 21% of these countries' exports, and grew almost 30% between 1970 and 1990, We also find that growth in vertical specialization accounts for 30% of the growth in these countries' exports. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank New York, New York, NY 10045 USA. Purdue Univ, Krannert Sch Management, Dept Econ, W Lafayette, IN 47907 USA. Stanford Univ, Dept Econ, Stanford, CA 94305 USA. RP Yi, KM (reprint author), Fed Reserve Bank New York, 33 Liberty St, New York, NY 10045 USA. NR 30 TC 538 Z9 559 U1 13 U2 59 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0022-1996 J9 J INT ECON JI J. Int. Econ. PD JUN PY 2001 VL 54 IS 1 BP 75 EP 96 DI 10.1016/S0022-1996(00)00093-3 PG 22 WC Economics SC Business & Economics GA 439MA UT WOS:000169119600005 ER PT J AU Alvarez, F Veracierto, M AF Alvarez, F Veracierto, M TI Severance payments in an economy with frictions SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE severance payments; search; unemployment insurance ID JOB AB We construct a general equilibrium model to evaluate the quantitative effects of severance payments in the presence of contractual and reallocational frictions. Key elements of the model are establishment level dynamics, imperfect insurance markets, and variable search decisions. In contrast to previous studies that analyzed severance payments in frictionless environments, we find that severance payments can have large positive effects on employment and welfare. This result is a consequence of search being costly and of wage contracts being rigid. Moreover, we find that the firing penalty role of severance payments is much more important than their insurance role. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank Chicago, Dept Res, Chicago, IL 60604 USA. Univ Chicago, Dept Econ, Chicago, IL 60637 USA. Univ Torcuato Di Tella, RA-1428 Buenos Aires, DF, Argentina. Natl Bur Econ Res, Cambridge, MA 02138 USA. RP Veracierto, M (reprint author), Fed Reserve Bank Chicago, Dept Res, S LaSalle St, Chicago, IL 60604 USA. NR 10 TC 39 Z9 39 U1 0 U2 2 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD JUN PY 2001 VL 47 IS 3 BP 477 EP 498 DI 10.1016/S0304-3932(01)00058-7 PG 22 WC Business, Finance; Economics SC Business & Economics GA 449XC UT WOS:000169711600002 ER PT J AU Khan, A Ravikumar, B AF Khan, A Ravikumar, B TI Growth and risk-sharing with private information SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE growth; long-term contracts; risk-sharing ID ASYMMETRIC INFORMATION; BUSINESS CYCLES; INSURANCE; UNCERTAINTY AB We examine the impact of incomplete risk-sharing on growth and welfare. The source of market incompleteness in our economy is private information: a household's idiosyncratic productivity shock is not observable by others. Risk-sharing between households occurs through long-term contracts with intermediaries. We find that incomplete risk-sharing tends to reduce the rate of growth relative to the complete risk-sharing benchmark. Numerical examples indicate that the welfare cost and the growth effect of private information are small. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank Philadelphia, Dept Res, Philadelphia, PA 19106 USA. Penn State Univ, Dept Econ, University Pk, PA 16802 USA. RP Khan, A (reprint author), Fed Reserve Bank Philadelphia, Dept Res, 10 Independence Mall, Philadelphia, PA 19106 USA. RI Ravikumar, B./K-6862-2016 OI Ravikumar, B./0000-0001-6991-4677 NR 27 TC 16 Z9 16 U1 0 U2 3 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD JUN PY 2001 VL 47 IS 3 BP 499 EP 521 DI 10.1016/S0304-3932(01)00053-8 PG 23 WC Business, Finance; Economics SC Business & Economics GA 449XC UT WOS:000169711600003 ER PT J AU Kuttner, KN AF Kuttner, KN TI Monetary policy surprises and interest rates: Evidence from the Fed funds futures market SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE monetary policy; fed funds futures; term structure of interest rates ID TERM STRUCTURE AB This paper estimates the impact of monetary policy actions on bill, note, and bond yields, using data from the futures market for Federal funds to separate changes in the target funds rate into anticipated and unanticipated components. Interest rates' response to anticipated target rate changes is small, while their response to unanticipated changes is large and highly significant. These responses are generally consistent with the expectations hypothesis of the term structure. Surprise target rate changes have little effect on expectations of future actions, however, which helps to explain the lack of empirical support for the expectations hypothesis at the short end of the yield curve. (C) 2001 Published by Elsevier Science B.V. C1 Fed Reserve Bank New York, Dept Res, New York, NY 10045 USA. RP Kuttner, KN (reprint author), Fed Reserve Bank New York, Dept Res, 33 Liberty St, New York, NY 10045 USA. NR 17 TC 275 Z9 278 U1 2 U2 26 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD JUN PY 2001 VL 47 IS 3 BP 523 EP 544 DI 10.1016/S0304-3932(01)00055-1 PG 22 WC Business, Finance; Economics SC Business & Economics GA 449XC UT WOS:000169711600004 ER PT J AU Engen, EM Gruber, J AF Engen, EM Gruber, J TI Unemployment insurance and precautionary saving SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE precautionary saving; unemployment insurance; income uncertainty ID LIQUIDITY CONSTRAINTS; SOCIAL-SECURITY; EARNINGS UNCERTAINTY; CONSUMPTION; INCOME; MODEL; ERROR; RISK AB Models of precautionary saving imply that households will hold more assets when faced with greater income uncertainty. However, previous empirical studies of income uncertainty have produced somewhat mixed support for the precautionary saving hypothesis. In this paper, we note that differences in the state-contingent income stream available to workers through the unemployment insurance (UI) program provides an excellent source of variation for testing the presence of a precautionary savings motive. Simulations of a stochastic life cycle model suggest that a UI system similar to the type currently in place in the U.S. can lead to a significant reduction in the assets accumulated by a median worker. Moreover, there is considerable variation in the UI benefit schedules for workers living in different states in the U.S., which provides an exogenous source of variation for empirically testing the precautionary saving hypothesis. We carry out this test using data on expected UI benefit replacement rates and financial assets held by households in the Survey of Income and Program Participation. Our empirical results are consistent with the predictions of the model and suggest that reducing the UI benefit replacement rate by 50 percent would increase gross financial asset holdings by 14 percent, or $241, for the average worker. We also find empirical evidence that this "crowd out" effect of UI on household saving is stronger for those facing higher unemployment risk and weaker for older workers, both of which are implications from our precautionary saving model. (C) 2001 Elsevier Science B.V. All rights reserved. C1 MIT, Dept Econ, Cambridge, MA 02142 USA. Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Gruber, J (reprint author), MIT, Dept Econ, 50 Mem Dr,E52-355, Cambridge, MA 02142 USA. NR 72 TC 60 Z9 60 U1 2 U2 11 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD JUN PY 2001 VL 47 IS 3 BP 545 EP 579 DI 10.1016/S0304-3932(01)00051-4 PG 35 WC Business, Finance; Economics SC Business & Economics GA 449XC UT WOS:000169711600005 ER PT J AU Kozicki, S Tinsley, PA AF Kozicki, S Tinsley, PA TI Shifting endpoints in the term structure of interest rates SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE expectations hypothesis; changepoints; breakpoints; learning ID GENERAL EQUILIBRIUM-MODEL; INFLATION UNCERTAINTY; RATIONAL-EXPECTATIONS; ALTERNATIVE MODELS; ASSET PRICES; CHANGE-POINT; COINTEGRATION; TIME; REAL; INFORMATION AB This paper links the term structure to perceptions of monetary policy. Long-horizon forecasts of short rates required by no-arbitrage term structure models are heavily influenced by the endpoints, or limiting conditional forecasts, of the short rate process. Common assumptions that the short rate is mean-reverting or contains a unit root are shown to generate unrealistic yield predictions. Failures occur because these assumptions inadequately account for historical shifts in market perceptions of the policy target for inflation. This paper links endpoint shifts to agent learning about shifts in long-term policy goals. Shifting endpoints in short rate processes significantly improve yield predictions. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank Kansas City, Kansas City, MO 64198 USA. Univ Cambridge, Fac Econ & Polit, Cambridge CB3 9DD, England. RP Kozicki, S (reprint author), Fed Reserve Bank Kansas City, 925 Grand Blvd, Kansas City, MO 64198 USA. NR 66 TC 97 Z9 97 U1 8 U2 12 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD JUN PY 2001 VL 47 IS 3 BP 613 EP 652 DI 10.1016/S0304-3932(01)00054-X PG 40 WC Business, Finance; Economics SC Business & Economics GA 449XC UT WOS:000169711600008 ER PT J AU Wheelock, DC Wilson, PW AF Wheelock, DC Wilson, PW TI New evidence on returns to scale and product mix among US commercial banks SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE returns to scale; economies of scope; nonparametric; local linear smoother; kernel regression ID COMPETITIVE VIABILITY; EFFICIENCY; ECONOMIES; COST; INEFFICIENCY; SCOPE AB This paper presents new estimates of scale and product mix economies for U.S. commercial banks. We compare estimates derived from fitting a translog function to bank costs with estimates derived from nonparametric methods. We refine measures of scale and product mix economies introduced by Berger et al. (J. Monet. Econ. 20 (1987) 501) to accommodate nonparametric estimation, and estimate confidence intervals to assess the statistical significance of returns to scale. Broadly, we find evidence that potential economies have increased since 1985, with scale economies not exhausted until banks have $30-$500 million of assets. We generally fail to reject constant returns for larger banks. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Res Bank St Louis, Dept Res, St Louis, MO 63166 USA. Univ Texas, Dept Econ, Austin, TX 78712 USA. RP Wheelock, DC (reprint author), Fed Res Bank St Louis, Dept Res, POB 442, St Louis, MO 63166 USA. RI Wheelock, David/I-5757-2016 OI Wheelock, David/0000-0002-2702-8164 NR 29 TC 39 Z9 40 U1 0 U2 2 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD JUN PY 2001 VL 47 IS 3 BP 653 EP 674 DI 10.1016/S0304-3932(01)00059-9 PG 22 WC Business, Finance; Economics SC Business & Economics GA 449XC UT WOS:000169711600009 ER PT J AU Ginther, DK Zavodny, M AF Ginther, DK Zavodny, M TI Is the male marriage premium due to selection? The effect of shotgun weddings on the return to marriage SO JOURNAL OF POPULATION ECONOMICS LA English DT Article DE male marriage premium; shotgun marriages ID YOUNG MEN; EARNINGS AB in standard cross-sectional wage regressions, married men appear to earn 10 to 20% more than comparable never married men. One proposed explanation for this male marriage premium is that men may be selected into marriage on the basis of characteristics valued by employers as well as by spouses or because they earn high wages. This paper examines the selection hypothesis by focusing on shotgun weddings, which may make marital status uncorrelated with earnings ability. We compare the estimated marriage premium between white men whose first marriages are soon followed by a birth and other married white men in the United States. The return to marriage differs little for married men with a premarital conception and other married men, and the results suggest that at most 10% of the: estimated marriage premium is due to selection. C1 Fed Reserve Bank Atlanta, Res Dept, Atlanta, GA 30303 USA. RP Ginther, DK (reprint author), Fed Reserve Bank Atlanta, Res Dept, Atlanta, GA 30303 USA. RI Ginther, Donna/F-7317-2016 OI Ginther, Donna/0000-0002-0881-7969 NR 18 TC 39 Z9 40 U1 1 U2 12 PU SPRINGER-VERLAG PI NEW YORK PA 175 FIFTH AVE, NEW YORK, NY 10010 USA SN 0933-1433 J9 J POPUL ECON JI J. Popul. Econ. PD JUN PY 2001 VL 14 IS 2 BP 313 EP 328 DI 10.1007/s001480000058 PG 16 WC Demography; Economics SC Demography; Business & Economics GA 455EM UT WOS:000170014600005 ER PT J AU Bernheim, BD Garrett, DM Maki, DM AF Bernheim, BD Garrett, DM Maki, DM TI Education and saving: The long-term effects of high school financial curriculum mandates SO JOURNAL OF PUBLIC ECONOMICS LA English DT Article DE saving; education ID INCENTIVES; PROGRAMS AB Over the last 40 years, a majority of stares have adopted consumer education policies, and a sizable minority have mandated that high school students receive instruction on topics related to household financial decision-making. In this paper, we attempt to determine whether these mandates have had any effect on subsequent decisions. We exploit the variation in requirements both across states and over time to identify the effects of interest. The evidence indicates that mandates have raised both exposure to financial curricula and subsequent asset accumulation once exposed students reached adulthood. The estimated effects are gradual, probably due to implementation lags. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Stanford Univ, Natl Bur Econ Res, Stanford, CA 94305 USA. Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Bernheim, BD (reprint author), Stanford Univ, Natl Bur Econ Res, Stanford, CA 94305 USA. NR 43 TC 98 Z9 100 U1 3 U2 11 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0047-2727 J9 J PUBLIC ECON JI J. Public Econ. PD JUN PY 2001 VL 80 IS 3 BP 435 EP 465 DI 10.1016/S0047-2727(00)00120-1 PG 31 WC Economics SC Business & Economics GA 430HA UT WOS:000168567400005 ER PT J AU Khan, A AF Khan, A TI Financial development and economic growth SO MACROECONOMIC DYNAMICS LA English DT Article DE financial development; external finance ID DEBT CONTRACTS; ENVIRONMENT; MARKETS; BANKS AB We develop a theory of financial development based on the costs associated with the provision of external finance. These costs arise through informational asymmetries between borrowers and lenders that are costly to resolve. When borrowing is limited, producers with access to financial intermediary loans obtain higher returns to investment than other producers. This creates incentives for others to undertake the technology adoption necessary to access investment loans. Over time, as increasing numbers of producers gain access to external finance, borrowers' net worth rises relative to debt. This reduces the costs of financial intermediation and raises the overall return on investment. The theory is consistent with recent evidence that financial development reduces the costs associated with the provision of external finance and increases the rate of economic growth. Furthermore, the theory predicts that financial development will raise the return. on loans and reduce the spread between borrowing and lending rates. C1 Fed Reserve Bank Philadelphia, Dept Res, Philadelphia, PA 19106 USA. RP Khan, A (reprint author), Fed Reserve Bank Philadelphia, Dept Res, 10 Independence Mall, Philadelphia, PA 19106 USA. NR 28 TC 22 Z9 22 U1 5 U2 10 PU CAMBRIDGE UNIV PRESS PI PORT CHESTER PA 110 MIDLAND AVE, PORT CHESTER, NY 10573-9863 USA SN 1365-1005 J9 MACROECON DYN JI Macroecon. Dyn. PD JUN PY 2001 VL 5 IS 3 BP 413 EP 433 PG 21 WC Economics SC Business & Economics GA 444HY UT WOS:000169395100004 ER PT J AU Neumark, D Wascher, W AF Neumark, D Wascher, W TI Using the EITC to help poor families: New evidence and a comparison with the minimum wage SO NATIONAL TAX JOURNAL LA English DT Article AB This paper evaluates the effects of the earned income tax credit (EITC) on poor families' earnings. Exploiting state-level variation in EITCs, we find that the EITC helps families rise above poverty-level earnings, primarily by inducing labor market entry in families that initially do not have an adult worker. Evidence based on the federal EITC is less supportive of a positive impact of the EITC. Finally, based on the slate-level EITC results, our findings suggest that for the range of policy changes typical of recent history in the U.S., the EITC is move beneficial for poor families than is the minimum wage. C1 Michigan State Univ, Dept Econ, E Lansing, MI 48824 USA. NBER, Cambridge, MA 02138 USA. Publ Policy Inst Calif, San Francisco, CA 94111 USA. Fed Reserve Syst, Board Governors, Div Res & Stat, Washington, DC 20551 USA. RP Neumark, D (reprint author), Michigan State Univ, Dept Econ, E Lansing, MI 48824 USA. NR 15 TC 39 Z9 39 U1 2 U2 8 PU NATL TAX ASSOC PI WASHINGTON PA 725 15TH ST, N W #600, WASHINGTON, DC 20005-2109 USA SN 0028-0283 J9 NATL TAX J JI Natl. Tax J. PD JUN PY 2001 VL 54 IS 2 BP 281 EP 317 PG 37 WC Business, Finance; Economics SC Business & Economics GA 450CH UT WOS:000169723600005 ER PT J AU Ohanian, LE AF Ohanian, LE TI Why did productivity fall so much during the great depression? SO AMERICAN ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 113th Annual Meeting of the American-Economic-Association CY JAN 05-07, 2001 CL NEW ORLEANS, LOUISIANA SP Amer Econ Assoc C1 Univ Calif Los Angeles, Dept Econ, Los Angeles, CA 90024 USA. Fed Reserve Bank Minneapolis, Res Dept, Minneapolis, MN 55410 USA. RP Ohanian, LE (reprint author), Univ Calif Los Angeles, Dept Econ, 405 Hilgard Ave, Los Angeles, CA 90024 USA. NR 9 TC 25 Z9 26 U1 0 U2 3 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD MAY PY 2001 VL 91 IS 2 BP 34 EP 38 DI 10.1257/aer.91.2.34 PG 5 WC Economics SC Business & Economics GA 439JW UT WOS:000169114600008 ER PT J AU Alvarez, F Lucas, RE Weber, WE AF Alvarez, F Lucas, RE Weber, WE TI Interest rates and inflation SO AMERICAN ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 113th Annual Meeting of the American-Economic-Association CY JAN 05-07, 2001 CL NEW ORLEANS, LOUISIANA SP Amer Econ Assoc ID MONETARY C1 Univ Chicago, Dept Econ, Chicago, IL 60637 USA. NBER, Cambridge, MA 02138 USA. Fed Reserve Bank Minneapolis, Dept Res, Minneapolis, MN 55480 USA. RP Alvarez, F (reprint author), Univ Chicago, Dept Econ, 1126 E 59th St, Chicago, IL 60637 USA. NR 6 TC 59 Z9 60 U1 2 U2 10 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD MAY PY 2001 VL 91 IS 2 BP 219 EP 225 DI 10.1257/aer.91.2.219 PG 7 WC Economics SC Business & Economics GA 439JW UT WOS:000169114600042 ER PT J AU Meyer, LH Swanson, ET Wieland, VW AF Meyer, LH Swanson, ET Wieland, VW TI NAIRU uncertainty and nonlinear policy rules SO AMERICAN ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 113th Annual Meeting of the American-Economics-Association CY JAN 05-07, 2001 CL NEW ORLEANS, LA SP Amer Econ Assoc C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. Univ Frankfurt, D-60325 Frankfurt, Germany. RP Meyer, LH (reprint author), Fed Reserve Syst, Board Governors, 20th & Constitut Ave,NW, Washington, DC 20551 USA. NR 12 TC 16 Z9 16 U1 0 U2 2 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD MAY PY 2001 VL 91 IS 2 BP 226 EP 231 DI 10.1257/aer.91.2.226 PG 6 WC Economics SC Business & Economics GA 439JW UT WOS:000169114600043 ER PT J AU Bils, M Klenow, PJ AF Bils, M Klenow, PJ TI The acceleration in variety growth SO AMERICAN ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 113th Annual Meeting of the American-Economics-Association CY JAN 05-07, 2001 CL NEW ORLEANS, LA SP Amer Econ Assoc C1 Univ Rochester, Dept Econ, Rochester, NY 14627 USA. Fed Reserve Bank Minneapolis, Dept Res, Minneapolis, MN 55480 USA. RP Bils, M (reprint author), Univ Rochester, Dept Econ, Harkness Hall, Rochester, NY 14627 USA. NR 13 TC 32 Z9 32 U1 1 U2 8 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD MAY PY 2001 VL 91 IS 2 BP 274 EP 280 DI 10.1257/aer.91.2.274 PG 7 WC Economics SC Business & Economics GA 439JW UT WOS:000169114600052 ER PT J AU Kose, MA Yi, KM AF Kose, MA Yi, KM TI International trade and business cycles: Is vertical specialization the missing link? SO AMERICAN ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 113th Annual Meeting of the American-Economic-Association CY JAN 05-07, 2001 CL NEW ORLEANS, LOUISIANA SP Amer Econ Assoc C1 Brandeis Univ, Grad Sch Int Econ & Finance, Waltham, MA 02454 USA. Fed Reserve Bank New York, New York, NY 10045 USA. RP Kose, MA (reprint author), Brandeis Univ, Grad Sch Int Econ & Finance, MS-021, Waltham, MA 02454 USA. NR 13 TC 48 Z9 48 U1 0 U2 6 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD MAY PY 2001 VL 91 IS 2 BP 371 EP 375 DI 10.1257/aer.91.2.371 PG 5 WC Economics SC Business & Economics GA 439JW UT WOS:000169114600070 ER PT J AU Rose, AK van Wincoop, E AF Rose, AK van Wincoop, E TI National money as a barrier to international trade: The real case for currency union SO AMERICAN ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 113th Annual Meeting of the American-Economic-Association CY JAN 05-07, 2001 CL NEW ORLEANS, LOUISIANA SP Amer Econ Assoc C1 Univ Calif Berkeley, Haas Sch Business, Berkeley, CA 94720 USA. Fed Reserve Bank New York, New York, NY 10045 USA. NBER, Cambridge, MA 02138 USA. RP Rose, AK (reprint author), Univ Calif Berkeley, Haas Sch Business, Berkeley, CA 94720 USA. RI Rose, Andrew/I-1578-2014 OI Rose, Andrew/0000-0003-1100-1212 NR 6 TC 212 Z9 216 U1 2 U2 16 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD MAY PY 2001 VL 91 IS 2 BP 386 EP 390 DI 10.1257/aer.91.2.386 PG 5 WC Economics SC Business & Economics GA 439JW UT WOS:000169114600073 ER PT J AU Allayannis, G Ihrig, J Weston, JP AF Allayannis, G Ihrig, J Weston, JP TI Exchange-rate hedging: Financial versus operational strategies SO AMERICAN ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 113th Annual Meeting of the American-Economic-Association CY JAN 05-07, 2001 CL NEW ORLEANS, LOUISIANA SP Amer Econ Assoc ID EXPOSURE C1 Rice Univ, Jesse H Jones Grad Sch Management, Houston, TX 77251 USA. Univ Virginia, Darden Grad Sch Business Adm, Charlottesville, VA 22906 USA. Fed Reserve Board, Div Int Finance, Washington, DC 20551 USA. RP Allayannis, G (reprint author), Univ Virginia, Darden Grad Sch Business Adm, POB 6550, Charlottesville, VA 22906 USA. NR 8 TC 63 Z9 64 U1 1 U2 13 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD MAY PY 2001 VL 91 IS 2 BP 391 EP 395 DI 10.1257/aer.91.2.391 PG 5 WC Economics SC Business & Economics GA 439JW UT WOS:000169114600074 ER PT J AU Goldberg, L Tracy, J AF Goldberg, L Tracy, J TI Gender differences in the labor-market effects of the dollar SO AMERICAN ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 113th Annual Meeting of the American-Economics-Association CY JAN 05-07, 2001 CL NEW ORLEANS, LA SP Amer Econ Assoc ID EMPLOYMENT C1 Fed Reserve Bank New York, Res Dept, New York, NY 10045 USA. RP Goldberg, L (reprint author), Fed Reserve Bank New York, Res Dept, 33 Liberty St, New York, NY 10045 USA. EM Linda.Goldberg@ny.frb.org; Joseph.Traey@ny.frb.org NR 6 TC 1 Z9 1 U1 0 U2 8 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD MAY PY 2001 VL 91 IS 2 BP 400 EP 405 DI 10.1257/aer.91.2.400 PG 6 WC Economics SC Business & Economics GA 439JW UT WOS:000169114600076 ER PT J AU Kehoe, TJ Levine, DK AF Kehoe, TJ Levine, DK TI Liquidity constrained markets versus debt constrained markets SO ECONOMETRICA LA English DT Article DE collateral; contract enforcement; debt constraint; incomplete markets; liquidity constraint; participation constraint ID EQUILIBRIUM; CONSUMPTION; EFFICIENCY; COMMITMENT; EXISTENCE; DEFAULT; PRICES; GROWTH; RISK AB This paper compares two different models in a common environment. The first model has liquidity constraints in that consumers save a single asset that they cannot sell short. The second model has debt constraints in that consumers cannot borrow so much that they would want to default, but is otherwise a standard complete markets model. Both models share the features that individuals are unable to completely insure against idiosyncratic shocks and that interest rates are lower than subjective discount rates. In a stochastic environment, the two models have quite different dynamic properties, with the debt constrained model exhibiting simple stochastic steady states, while the liquidity constrained model has greater persistence of shocks. C1 Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. Fed Reserve Bank Minneapolis, Dept Res, Minneapolis, MN 55480 USA. Univ Calif Los Angeles, Dept Econ, Los Angeles, CA 90095 USA. RP Kehoe, TJ (reprint author), Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. NR 31 TC 62 Z9 62 U1 1 U2 9 PU BLACKWELL PUBL LTD PI OXFORD PA 108 COWLEY RD, OXFORD OX4 1JF, OXON, ENGLAND SN 0012-9682 J9 ECONOMETRICA JI Econometrica PD MAY PY 2001 VL 69 IS 3 BP 575 EP 598 DI 10.1111/1468-0262.00206 PG 24 WC Economics; Mathematics, Interdisciplinary Applications; Social Sciences, Mathematical Methods; Statistics & Probability SC Business & Economics; Mathematics; Mathematical Methods In Social Sciences GA 428AG UT WOS:000168438500002 ER PT J AU Nosal, E AF Nosal, E TI Optimal at-will labour contracts SO ECONOMICA LA English DT Article ID INVOLUNTARY UNEMPLOYMENT; ASYMMETRIC INFORMATION; EMPLOYMENT CONTRACTS; INCOMPLETE CONTRACTS; IMPLICIT CONTRACTS; UNDEREMPLOYMENT; RENEGOTIATION AB An at-will employment rule allows parties to sever their employment relationship for 'a good reason, a bad reason or no reason at all' [Schawb, S. (1993) Life-cycle justice: accommodating just cause and employment at will. Michigan Lan Review, 92, 8-62]. A specific performance employment rule allows any party to force the other party to perform as specified in the contract. Although the theory of labour contracting generally assumes enforcement by specific performance, in practice, the vast majority of non-union employment relationships are mediated by an at-will rule. When employment contracts are enforced by an at-will rule, I show that the 'standard' counter-intuitive predictions generated by standard labour contracting models disappear. C1 Fed Reserve Bank, Cleveland, OH USA. Univ Waterloo, Waterloo, ON N2L 3G1, Canada. RP Nosal, E (reprint author), Fed Reserve Bank, Cleveland, OH USA. NR 23 TC 0 Z9 0 U1 0 U2 5 PU BLACKWELL PUBL LTD PI OXFORD PA 108 COWLEY RD, OXFORD OX4 1JF, OXON, ENGLAND SN 0013-0427 J9 ECONOMICA JI Economica PD MAY PY 2001 VL 68 IS 270 BP 187 EP 201 DI 10.1111/1468-0335.00241 PG 15 WC Economics SC Business & Economics GA 442CZ UT WOS:000169268800003 ER PT J AU Faust, J Svensson, LEO AF Faust, J Svensson, LEO TI Transparency and credibility: Monetary policy with unobservable goals SO INTERNATIONAL ECONOMIC REVIEW LA English DT Article ID INFORMATION; DISCRETION; INFLATION; CONTRACTS AB We define and study transparency, credibility, and reputation in a model where the central bank's characteristics are unobservable to the private sector and inferred from the policy outcome. Increased transparency makes the bank's reputation and credibility mere sensitive to its actions. This moderates the bank's policy and induces the bank to follow a policy closer to the socially optimal one. Full transparency of the central bank's intentions is generally socially beneficial but frequently worse for the bank. Somewhat paradoxically, direct observability of idiosyncratic central bank goals removes the moderating influence on the bank and leads to the worst equilibrium. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. Univ Stockholm, Inst Int Econ Studies, Stockholm, Sweden. RP Faust, J (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. EM faustj@frb.gov NR 33 TC 119 Z9 122 U1 0 U2 7 PU WILEY-BLACKWELL PI MALDEN PA COMMERCE PLACE, 350 MAIN ST, MALDEN 02148, MA USA SN 0020-6598 J9 INT ECON REV JI Int. Econ. Rev. PD MAY PY 2001 VL 42 IS 2 BP 369 EP 397 DI 10.1111/1468-2354.00114 PG 29 WC Economics SC Business & Economics GA 425LH UT WOS:000168291700004 ER PT J AU Ericsson, NR Irons, JS Tryon, RW AF Ericsson, NR Irons, JS Tryon, RW TI Output and inflation in the long run SO JOURNAL OF APPLIED ECONOMETRICS LA English DT Article ID CROSS-COUNTRY EVIDENCE; ECONOMIC-GROWTH; MODEL; REGRESSIONS; BANKS; WAGE AB Cross-country regressions explaining output growth often obtain a negative effect from inflation. However, that result is not robust, due to the selection of countries in sample, temporal aggregation, and omission of consequential variables in levels. This paper demonstrates some implications of these mis-specifications, both analytically and empirically. In particular, for most G-7 countries, annual time series of inflation and the log-level of output are cointegrated, thus rejecting the existence of a long-run relation between output growth and inflation. Typically, output and inflation are positively related in these cointegrating relationships: a price markup model helps to interpret this surprising feature. Copyright (C) 2001 John Wiley & Sons, Ltd. C1 Fed Reserve Board, Div Int Finance, Washington, DC 20551 USA. Amherst Coll, Dept Econ, Amherst, MA 01002 USA. RP Ericsson, NR (reprint author), Fed Reserve Board, Div Int Finance, Stop 22,2000 C St NW, Washington, DC 20551 USA. NR 39 TC 31 Z9 31 U1 0 U2 3 PU JOHN WILEY & SONS LTD PI W SUSSEX PA BAFFINS LANE CHICHESTER, W SUSSEX PO19 1UD, ENGLAND SN 0883-7252 J9 J APPL ECONOM JI J. Appl. Econom. PD MAY-JUN PY 2001 VL 16 IS 3 BP 241 EP 253 DI 10.1002/jae.614 PG 13 WC Economics; Social Sciences, Mathematical Methods SC Business & Economics; Mathematical Methods In Social Sciences GA 448PG UT WOS:000169635300004 ER PT J AU Cole, HL Kocherlakota, N AF Cole, HL Kocherlakota, N TI Dynamic games with hidden actions and hidden states SO JOURNAL OF ECONOMIC THEORY LA English DT Article ID MORAL HAZARD; IMPERFECT AB We consider a class of dynamic games in which each player's actions are unobservable to the other players and each player's actions can influence a state variable that is unobservable to the other players. We develop an algorithm that solves for the subset of sequential equilibria in which equilibrium strategies depend on private information only through the privately observed state. (C) 2001 Academic Press. C1 Fed Reserve Bank Minneapolis, Minneapolis, MN 55480 USA. Univ Calif Los Angeles, Los Angeles, CA 90024 USA. Univ Minnesota, Minneapolis, MN 55455 USA. RP Cole, HL (reprint author), Fed Reserve Bank Minneapolis, Minneapolis, MN 55480 USA. NR 9 TC 19 Z9 19 U1 0 U2 1 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 0022-0531 J9 J ECON THEORY JI J. Econ. Theory PD MAY PY 2001 VL 98 IS 1 BP 114 EP 126 DI 10.1006/jeth.2000.2695 PG 13 WC Economics SC Business & Economics GA 438CN UT WOS:000169036300005 ER PT J AU Sniderman, MS AF Sniderman, MS TI Global monetary integration - A conference sponsored by the Federal Reserve Bank of Cleveland June 1-3, 2000 - Opening remarks SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Editorial Material C1 Fed Reserve Bank Cleveland, Cleveland, OH 44114 USA. RP Sniderman, MS (reprint author), Fed Reserve Bank Cleveland, Cleveland, OH 44114 USA. NR 0 TC 0 Z9 0 U1 0 U2 0 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD MAY PY 2001 VL 33 IS 2 BP 301 EP 302 PN 2 PG 2 WC Business, Finance; Economics SC Business & Economics GA 427BK UT WOS:000168384800001 ER PT J AU Del Negro, M Hernandez-Delgado, A Humpage, O Huybens, E AF Del Negro, M Hernandez-Delgado, A Humpage, O Huybens, E TI Introduction: Context, issues, and contributions SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Editorial Material C1 Inst Technol Autonomo Mexico, Div Social Sci, Mexico City, DF, Mexico. Fed Reserve Bank Cleveland, Cleveland, OH 44114 USA. World Bank, Washington, DC 20433 USA. RP Del Negro, M (reprint author), Fed Reserve Bank, Atlanta, GA 30303 USA. NR 13 TC 0 Z9 0 U1 0 U2 3 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD MAY PY 2001 VL 33 IS 2 BP 303 EP 311 PN 2 PG 9 WC Business, Finance; Economics SC Business & Economics GA 427BK UT WOS:000168384800002 ER PT J AU Kashyap, AK AF Kashyap, AK TI Comment on capital markets and the exchange rate SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Editorial Material C1 Univ Chicago, Chicago, IL 60637 USA. Fed Reserve Bank, Chicago, IL USA. Natl Bur Econ Res, Cambridge, MA 02138 USA. RP Kashyap, AK (reprint author), Univ Chicago, Chicago, IL 60637 USA. NR 4 TC 0 Z9 0 U1 0 U2 0 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD MAY PY 2001 VL 33 IS 2 BP 335 EP 338 DI 10.2307/2673903 PN 2 PG 4 WC Business, Finance; Economics SC Business & Economics GA 427BK UT WOS:000168384800004 ER PT J AU Faust, J AF Faust, J TI Comment on how much bang for the buck? SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Editorial Material ID ECONOMIC-GROWTH; FINANCE C1 Fed Reserve Syst, Board Governors, Int Finance Div, Washington, DC 20551 USA. RP Faust, J (reprint author), Fed Reserve Syst, Board Governors, Int Finance Div, Washington, DC 20551 USA. NR 9 TC 0 Z9 0 U1 0 U2 0 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD MAY PY 2001 VL 33 IS 2 BP 364 EP 369 DI 10.2307/2673905 PN 2 PG 6 WC Business, Finance; Economics SC Business & Economics GA 427BK UT WOS:000168384800006 ER PT J AU Del Negro, M Obiols-Homs, F AF Del Negro, M Obiols-Homs, F TI Has monetary policy been so bad that it is better to get rid of it? The case of Mexico SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Article; Proceedings Paper CT Conference on Global Monetary Integration CY JUN 01-03, 2000 CL CLEVELAND, OH SP Fed Reserve Bank Cleveland ID DEATH FORETOLD; EXCHANGE-RATES; CRISIS; PAYMENTS; BALANCE AB Motivated by the dollarization debate in Mexico, we estimate an identified vector autoregression for the Mexican economy, using monthly data from 1976 to 1997, taking into account the changes in the monetary policy regime which occurred during this period. We find that (i) exogenous shocks to monetary policy have had no impact on output and prices; (ii) most of the shocks originated in the foreign sector; (iii) disturbances originating in the U.S. economy have been a more important source of fluctuations for Mexico than shocks to oil prices. We also study the endogenous response of domestic monetary policy by means of a counterfactual experiment. The results indicate that the response of monetary policy to foreign shocks played an important part in the 1994 crisis. C1 Fed Reserve Bank Atlanta, Atlanta, GA 30303 USA. Inst Tecnol Autonomo Mexico, Ctr Invest Econ, Mexico City, DF, Mexico. RP Del Negro, M (reprint author), Fed Reserve Bank Atlanta, Atlanta, GA 30303 USA. EM Marco.DelNegro@atl.frb.org; obiols@itam.mx RI Obiols, Francesc/H-3344-2015 OI Obiols, Francesc/0000-0003-2316-0288 NR 35 TC 10 Z9 11 U1 0 U2 7 PU WILEY-BLACKWELL PI HOBOKEN PA 111 RIVER ST, HOBOKEN 07030-5774, NJ USA SN 0022-2879 EI 1538-4616 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD MAY PY 2001 VL 33 IS 2 BP 404 EP 433 DI 10.2307/2673908 PN 2 PG 30 WC Business, Finance; Economics SC Business & Economics GA 427BK UT WOS:000168384800009 ER PT J AU Zarazaga, CEJM AF Zarazaga, CEJM TI Comment on stabilization policy and the costs of dollarization SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Editorial Material ID MONETARY-POLICY C1 Fed Reserve Bank, Ctr Latin Amer Economies, Dallas, TX 75201 USA. RP Zarazaga, CEJM (reprint author), Fed Reserve Bank, Ctr Latin Amer Economies, Dallas, TX 75201 USA. NR 10 TC 0 Z9 0 U1 0 U2 0 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD MAY PY 2001 VL 33 IS 2 BP 510 EP 517 DI 10.2307/2673913 PN 2 PG 8 WC Business, Finance; Economics SC Business & Economics GA 427BK UT WOS:000168384800014 ER PT J AU Espinosa-Vega, MA AF Espinosa-Vega, MA TI Comment on optimal exchange rate policy SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Editorial Material C1 Fed Reserve Bank, Atlanta, GA 30303 USA. RP Espinosa-Vega, MA (reprint author), Fed Reserve Bank, Atlanta, GA 30303 USA. NR 4 TC 0 Z9 0 U1 0 U2 0 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD MAY PY 2001 VL 33 IS 2 BP 542 EP 547 DI 10.2307/2673915 PN 2 PG 6 WC Business, Finance; Economics SC Business & Economics GA 427BK UT WOS:000168384800016 ER PT J AU Kehoe, TJ AF Kehoe, TJ TI Comment on dollarization and the integration of international capital markets SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Editorial Material C1 Univ Minnesota, Minneapolis, MN 55455 USA. Fed Reserve Bank Minneapolis, Minneapolis, MN USA. RP Kehoe, TJ (reprint author), Univ Minnesota, Minneapolis, MN 55455 USA. NR 4 TC 1 Z9 1 U1 0 U2 1 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD MAY PY 2001 VL 33 IS 2 BP 590 EP 596 DI 10.2307/2673917 PN 2 PG 7 WC Business, Finance; Economics SC Business & Economics GA 427BK UT WOS:000168384800018 ER PT J AU Bradbury, KL Mayer, CJ Case, KE AF Bradbury, KL Mayer, CJ Case, KE TI Property tax limits, local fiscal behavior, and property values: evidence frolic Massachusetts under Proposition 2(1)/(2) SO JOURNAL OF PUBLIC ECONOMICS LA English DT Article DE proposition 2(1)/(2); tax limitations; capitalization; educational spending ID PUBLIC-SECTOR; CAPITALIZATION; EQUILIBRIUM; EFFICIENCY; LIMITATION; SYSTEM; WAGES AB This paper examines the impact of a specific property tax limit, Proposition 2 1/2 in Massachusetts, on the fiscal behavior of cities and towns in Massachusetts and the capitalization of that behavior into property values. Proposition 2 1/2 places a cap on the effective property tax rate at 2.5% and limits nominal annual growth in property tax revenues to 2.5%, unless residents pass a referendum allowing a greater increase. The study analyzes the 1990-1994 period, a time when Massachusetts municipalities faced significant fiscal stress because of a 30% cut in real state aid and a demographically driven Increase in school enrollments. The findings include the following: (1) Proposition 2 1/2 significantly constrained local spending in some communities, with most of its impact on school spending; (2) constrained communities realized gains in property values to the degree that they were able to increase school spending despite the limitation; and (3) changes in non-school spending had little impact on property values. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Univ Penn, Wharton Sch, Philadelphia, PA 19104 USA. Fed Reserve Bank Boston, Boston, MA 02210 USA. Wellesley Coll, Boston, MA USA. RP Mayer, CJ (reprint author), Univ Penn, Wharton Sch, 314 Lauder Fischer Hall,256 S 37th St, Philadelphia, PA 19104 USA. NR 35 TC 42 Z9 42 U1 6 U2 14 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0047-2727 J9 J PUBLIC ECON JI J. Public Econ. PD MAY PY 2001 VL 80 IS 2 BP 287 EP 311 DI 10.1016/S0047-2727(00)00081-5 PG 25 WC Economics SC Business & Economics GA 428JF UT WOS:000168458000006 ER PT J AU Grosskopf, S Hayes, KJ Taylor, LL Weber, WL AF Grosskopf, S Hayes, KJ Taylor, LL Weber, WL TI On the determinants of school district efficiency: Competition and monitoring SO JOURNAL OF URBAN ECONOMICS LA English DT Article ID PUBLIC-SCHOOLS; TIEBOUT HYPOTHESIS; GOVERNMENT; INEFFICIENCY; PERFORMANCE; ACHIEVEMENT; EDUCATION; QUALITY; REFORM; IMPACT AB A number of researchers have asserted that inefficiency in the U.S. school system arises from a lack of incentives For public schools to behave efficiently. This paper uses a Shephard input distance function to model educational production, and a switching-regressions estimation to explore the relationship between school district efficiency and two existing incentive mechanisms-competition and voter monitoring. We find evidence that ease uf monitoring enhances both technical and allocative efficiency of urban school districts, and that increased competition reduces allocative inefficiency in communities above a competitive threshold. We find no evidence that competition is related to technical inefficiency. (C) 2001 Academic Press. C1 Oregon State Univ, Dept Econ, Corvallis, OR 97331 USA. So Methodist Univ, Dedman Coll, Off Dean, Dallas, TX 75275 USA. Fed Reserve Bank, Dallas, TX 75265 USA. SE Missouri State Univ, Dept Econ, Cape Girardeau, MO 63701 USA. RP Grosskopf, S (reprint author), Oregon State Univ, Dept Econ, Corvallis, OR 97331 USA. RI GROSSKOPF , Shawnax/H-4031-2013 NR 46 TC 27 Z9 28 U1 2 U2 6 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 0094-1190 J9 J URBAN ECON JI J. Urban Econ. PD MAY PY 2001 VL 49 IS 3 BP 453 EP 478 DI 10.1006/juec.2000.2201 PG 26 WC Economics; Urban Studies SC Business & Economics; Urban Studies GA 427TQ UT WOS:000168421900002 ER PT J AU Carrington, WJ Fallick, BC AF Carrington, WJ Fallick, BC TI Do some workers have minimum wage careers? SO MONTHLY LABOR REVIEW LA English DT Article ID JOB AB Most workers who begin their careers in minimum-wage jobs eventually gain more experience and move on to higher paying jobs; however, some workers spend substantial portions of their early careers consistently working in minimum wage jobs. C1 Welch Consulting & Unicon Res Corp, Bethesda, MD USA. Fed Reserve Board, Washington, DC USA. RP Carrington, WJ (reprint author), Welch Consulting & Unicon Res Corp, Bethesda, MD USA. NR 16 TC 15 Z9 15 U1 0 U2 1 PU US GOVERNMENT PRINTING OFFICE PI WASHINGTON PA SUPERINTENDENT DOCUMENTS,, WASHINGTON, DC 20402-9325 USA SN 0098-1818 J9 MON LABOR REV JI Mon. Labor Rev. PD MAY PY 2001 VL 124 IS 5 BP 17 EP 27 PG 11 WC Industrial Relations & Labor SC Business & Economics GA 446NZ UT WOS:000169520500002 ER PT J AU Corsetti, G Pesenti, P AF Corsetti, G Pesenti, P TI Welfare and macroeconomic interdependence SO QUARTERLY JOURNAL OF ECONOMICS LA English DT Article ID EXCHANGE-RATE DYNAMICS; MONOPOLISTIC COMPETITION; MODEL AB We develop a baseline model of monetary and fiscal transmission in interdependent economies. The welfare effects of expansionary policies are related to monopolistic supply in production and monopoly power of a country in trade. An unanticipated exchange rate depreciation can be beggar-thyself rather than beggar-thy-neighbor, as gains in domestic output are offset by deteriorating terms of trade. Smaller and more open economies are more prone to suffer from inflationary shocks. Larger economies benefit from moderate demand-led expansions, but may be worse off if policy-makers attempt to close the output gap. Fiscal shocks are generally beggar-thy-neighbor in the long run; in the short nm they raise domestic demand at given terms of trade, thus reducing the welfare benefits from monetary expansions. Analytical tractability makes our model uniquely suitable as a starting point to approach the recent "new open-economy macroeconomic" literature. C1 Univ Rome 3, Rome, Italy. Yale Univ, New Haven, CT 06520 USA. Ctr Econ Policy Res, London SW1Y 6LA, England. Fed Reserve Bank New York, New York, NY 10045 USA. Natl Bur Econ Res, Cambridge, MA 02138 USA. RP Corsetti, G (reprint author), Univ Rome 3, Rome, Italy. OI Corsetti, Giancarlo/0000-0001-8965-9853 NR 32 TC 192 Z9 197 U1 4 U2 15 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 0033-5533 J9 Q J ECON JI Q. J. Econ. PD MAY PY 2001 VL 116 IS 2 BP 421 EP 445 DI 10.1162/00335530151144069 PG 25 WC Economics SC Business & Economics GA 429LA UT WOS:000168517400002 ER PT J AU Rudebusch, GD AF Rudebusch, GD TI Is the fed too timid? Monetary policy in an uncertain world SO REVIEW OF ECONOMICS AND STATISTICS LA English DT Article ID STABILITY; OUTPUT AB Estimates of the Taylor rule using historical data from the past decade or two suggest that monetary policy in the U.S. can be characterized as having reacted in a moderate fashion to output and inflation gaps. In contrast, the parameters of optimal Taylor rules derived using empirical models of the economy often recommend much more vigorous policy responses. This paper attempts to match the historical policy rule with an optimal policy rule by incorporating uncertainty into the derivation of the optimal rule and by examining plausible variations in the policymaker's model and preferences. C1 Fed Reserve Bank San Francisco, San Francisco, CA 94105 USA. RP Rudebusch, GD (reprint author), Fed Reserve Bank San Francisco, San Francisco, CA 94105 USA. NR 54 TC 102 Z9 104 U1 2 U2 5 PU MIT PRESS PI CAMBRIDGE PA 55 HAYWARD STREET, CAMBRIDGE, MA 02142 USA SN 0034-6535 J9 REV ECON STAT JI Rev. Econ. Stat. PD MAY PY 2001 VL 83 IS 2 BP 203 EP 217 DI 10.1162/00346530151143752 PG 15 WC Economics; Social Sciences, Mathematical Methods SC Business & Economics; Mathematical Methods In Social Sciences GA 429KQ UT WOS:000168516400001 ER PT J AU Laubach, T AF Laubach, T TI Measuring the NAIRU: Evidence from seven economies SO REVIEW OF ECONOMICS AND STATISTICS LA English DT Article ID UNEMPLOYMENT; POLICY; ERROR; MODEL AB Several specifications of state-space models are used to obtain estimates of the NAIRU for the G7 except Japan. plus Australia, over the past 28 years. A Phillips curve-type regression is shown to deliver estimates that do not mimic low-frequency movements in unemployment rates, even when a drift is included in the specification of the NAIRU. Standard errors around the estimates are extremely large. Using information about the behavior of unemployment, in addition to inflation, alleviates both these shortcomings. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Laubach, T (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 20 TC 46 Z9 47 U1 0 U2 5 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 0034-6535 J9 REV ECON STAT JI Rev. Econ. Stat. PD MAY PY 2001 VL 83 IS 2 BP 218 EP 231 DI 10.1162/00346530151143761 PG 14 WC Economics; Social Sciences, Mathematical Methods SC Business & Economics; Mathematical Methods In Social Sciences GA 429KQ UT WOS:000168516400002 ER PT J AU Ludvigson, S Paxson, CH AF Ludvigson, S Paxson, CH TI Approximation bias in linearized Euler equations SO REVIEW OF ECONOMICS AND STATISTICS LA English DT Article ID LIQUIDITY CONSTRAINTS; TIME-SERIES; CONSUMPTION; INCOME; EARNINGS; MODEL AB A wide range of empirical applications rely on linear approximations to dynamic Euler equations. Among the most notable of these is the large and growing literature on precautionary saving that examines how consumption growth and saving behavior are affected by uncertainty and prudence. Linear approximations to Euler equations imply a linear relationship between expected consumption growth and uncertainty in consumption growth, with a slope coefficient that is a function of the coefficient of relative prudence. This literature has produced puzzling results: estimates of the coefficient of relative prudence land the coefficient of relative risk aversion) from linear regressions of consumption growth on uncertainty in consumption growth imply estimates of prudence and risk aversion that are unrealistically low. Using numerical solutions to a fairly standard intertemporal optimization problem, our results show that the actual relationship between expected consumption growth and uncertainty in consumption growth differs substantially from the relationship implied by a linear approximation. We also present Monte Carlo evidence that shows that the instrumental-variables methods that are commonly used to estimate the parameters correct some, but not all, of the approximation bias. C1 Fed Reserve Bank New York, New York, NY 10045 USA. Princeton Univ, Princeton, NJ 08544 USA. RP Ludvigson, S (reprint author), Fed Reserve Bank New York, New York, NY 10045 USA. NR 35 TC 28 Z9 28 U1 4 U2 6 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 0034-6535 J9 REV ECON STAT JI Rev. Econ. Stat. PD MAY PY 2001 VL 83 IS 2 BP 242 EP 256 DI 10.1162/00346530151143789 PG 15 WC Economics; Social Sciences, Mathematical Methods SC Business & Economics; Mathematical Methods In Social Sciences GA 429KQ UT WOS:000168516400004 ER PT J AU Jensen, JB McGuckin, RH Stiroh, KJ AF Jensen, JB McGuckin, RH Stiroh, KJ TI The impact of vintage and survival on productivity: Evidence from cohorts of US manufacturing plants SO REVIEW OF ECONOMICS AND STATISTICS LA English DT Article ID DYNAMICS; INDUSTRY AB This paper examines the evolution of productivity in U.S. manufacturing plants from 1963 to 1992. We define a vintage effect as the change in productivity of recent cohorts of new plants relative to earlier cohorts of new plants, and a survival effect as the change in productivity of a particular cohort of surviving plants as it ages. Both factors contribute to industry productivity growth, but play offsetting roles in determining a cohort's relative position in the productivity distribution. Recent cohorts enter with higher productivity than earlier entrants did, whereas surviving cohorts show productivity increases as they age. These two effects roughly offset each other, however, so there is a rough convergence in productivity across cohorts in 1992 and 1987. C1 US Bur Census, Washington, DC 20233 USA. Fed Reserve Bank New York, New York, NY 10045 USA. RP Jensen, JB (reprint author), US Bur Census, Washington, DC 20233 USA. NR 18 TC 30 Z9 30 U1 2 U2 4 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 0034-6535 J9 REV ECON STAT JI Rev. Econ. Stat. PD MAY PY 2001 VL 83 IS 2 BP 323 EP 332 DI 10.1162/00346530151143851 PG 10 WC Economics; Social Sciences, Mathematical Methods SC Business & Economics; Mathematical Methods In Social Sciences GA 429KQ UT WOS:000168516400011 ER PT J AU Kasa, K AF Kasa, K TI A robust Hansen-Sargent prediction formula SO ECONOMICS LETTERS LA English DT Article DE robust control; model uncertainty ID EXPECTATIONS AB This paper derives a formula for the optimal forecast of a discounted sum of future values of a random variable, where optimal is defined in terms of the minimized H-infinity-norm of the forecast error. This problem reflects a preference for robustness in the presence of (unstructured) model uncertainty. The paper shows that revisions of a robust forecast are more sensitive to new information, and discusses the relevance of this result to previous findings of excess sensitivity of consumption and asset prices to new information. (C) 2001 Elsevier Science B.V, All rights reserved. C1 Fed Reserve Bank San Francisco, Dept Res, San Francisco, CA 94120 USA. RP Kasa, K (reprint author), Fed Reserve Bank San Francisco, Dept Res, POB 7702, San Francisco, CA 94120 USA. NR 9 TC 4 Z9 5 U1 0 U2 2 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0165-1765 J9 ECON LETT JI Econ. Lett. PD APR PY 2001 VL 71 IS 1 BP 43 EP 48 DI 10.1016/S0165-1765(00)00411-0 PG 6 WC Economics SC Business & Economics GA 422BT UT WOS:000168098600006 ER PT J AU Surette, BJ AF Surette, BJ TI Transfer from two-year to four-year college: an analysis of gender differences SO ECONOMICS OF EDUCATION REVIEW LA English DT Article DE two-year college; transfer; community college; return to college; human capital ID LABOR-MARKET RETURNS; COMMUNITY-COLLEGES; EDUCATION AB Nearly one-third of all students who attend a two-year college transfer to a four-year college by the time they turn 25. This paper demonstrates that women are less likely than men to transfer, and that women who do transfer are less likely to earn a bachelor's degree. Given the large wage returns to each year of college, and the large sheepskin value of a bachelor's degree, the lower propensity by women to transfer may reduce their subsequent earnings. This paper tests several plausible explanations for the transfer rate difference. Most notably, marital status, the presence of children, and gender differences in occupational preferences do not fully explain women's lower transfer rates. Despite controlling for these and other factors, women remain less likely than men to transfer from a two-year to a four-year college. (C) 2001 Elsevier Science Ltd. All rights reserved. C1 Fed Res Board, Washington, DC 20551 USA. RP Surette, BJ (reprint author), Fed Res Board, 20th & C St NW,Mail Stop 153, Washington, DC 20551 USA. NR 18 TC 17 Z9 17 U1 0 U2 5 PU PERGAMON-ELSEVIER SCIENCE LTD PI OXFORD PA THE BOULEVARD, LANGFORD LANE, KIDLINGTON, OXFORD OX5 1GB, ENGLAND SN 0272-7757 J9 ECON EDUC REV JI Econ. Educ. Rev. PD APR PY 2001 VL 20 IS 2 BP 151 EP 163 DI 10.1016/S0272-7757(00)00013-3 PG 13 WC Economics; Education & Educational Research SC Business & Economics; Education & Educational Research GA 406EH UT WOS:000167201600004 ER PT J AU Cetorelli, N Gambera, M AF Cetorelli, N Gambera, M TI Banking market structure, financial dependence and growth: International evidence from industry data SO JOURNAL OF FINANCE LA English DT Article ID ECONOMIC-GROWTH; INTERMEDIATION; COMPETITION; CREDIT AB This paper explores the empirical relevance of banking market structure on growth. There is substantial evidence of a positive relationship between the level of development of the banking sector of an economy and its long-run output growth. Little is known, however, about the role played by the market structure of the banking sector on the dynamics of capital accumulation. This paper provides evidence that bank concentration promotes the growth of those industrial sectors that are more in need of external finance by facilitating credit access to younger firms. However, we also find evidence of a general depressing effect on growth associated with a concentrated banking industry, which impacts all sectors and all firms indiscriminately. C1 Fed Reserve Bank Chicago, Chicago, IL 60604 USA. RP Cetorelli, N (reprint author), Fed Reserve Bank Chicago, Chicago, IL 60604 USA. NR 42 TC 170 Z9 174 U1 7 U2 34 PU BLACKWELL PUBLISHERS PI MALDEN PA 350 MAIN STREET, STE 6, MALDEN, MA 02148 USA SN 0022-1082 J9 J FINANC JI J. Financ. PD APR PY 2001 VL 56 IS 2 BP 617 EP 648 DI 10.1111/0022-1082.00339 PG 32 WC Business, Finance SC Business & Economics GA 413HT UT WOS:000167607500007 ER PT J AU Fenn, GW Liang, N AF Fenn, GW Liang, N TI Corporate payout policy and managerial stock incentives SO JOURNAL OF FINANCIAL ECONOMICS LA English DT Article DE dividends; share repurchases; executive stock options; stock incentives ID FREE CASH FLOW; INVESTMENT OPPORTUNITY SET; MARKET SHARE REPURCHASES; EMPIRICAL-ANALYSIS; DIVIDEND ANNOUNCEMENTS; COMPENSATION POLICIES; CAPITAL STRUCTURE; EQUITY OWNERSHIP; TENDER OFFERS; PLANS AB We examine how corporate payout policy is affected by managerial stock incentives using data on more than 1,100 nonfinancial firms during 1993-97. We find that management stock ownership is associated with higher payouts by firms with potentially the greatest agency problems - those with low management stock ownership and few investment opportunities or high free cash flow. We also find that management stock options are related to the composition of payouts. We find a strong negative relationship between dividends and management stock options, as predicted by Lambert ct al (1989), acid a positive relationship between repurchases and management stock options. Our results suggest that the growth in stock options may help to explain the rise in repurchases at the expense of dividends. (C) 2001 Published by Elsevier Science S.A. C1 Bates White & Ballentine, Cambridge, MA 02139 USA. Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Fenn, GW (reprint author), Bates White & Ballentine, Tow Canal Pk, Cambridge, MA 02139 USA. NR 43 TC 153 Z9 155 U1 9 U2 39 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0304-405X J9 J FINANC ECON JI J. Financ. Econ. PD APR PY 2001 VL 60 IS 1 BP 45 EP 72 DI 10.1016/S0304-405X(01)00039-3 PG 28 WC Business, Finance; Economics SC Business & Economics GA 422VC UT WOS:000168139100002 ER PT J AU Berlin, M Mester, LJ AF Berlin, M Mester, LJ TI Lender liability and large investors SO JOURNAL OF FINANCIAL INTERMEDIATION LA English DT Article DE controlling investor; lender liability; equitable subordination ID DEBT; BANKRUPTCY; SENIORITY; DESIGN; MANAGEMENT; CONTRACTS; OWNERSHIP; SYSTEMS; EQUITY; FIRM AB We explore the optimal financial contract for a large investor with potential control over a firm's investment decisions. An optimal menu of claims resembles a U.S. version of lender liability doctrine - quitable subordination. This doctrine permits the court to subordinate a controlling investor`s claim in bankruptcy, but only under well-specified conditions. It allows a firm to strike an efficient balance between: (i) inducing the large investor to monitor, and (ii) limiting the influence costs that arise when claimants can challenge existing contracts. We provide a partial rationale for a financial system in which powerful creditors do not hold blended debt and equity claims. (C) 2001 Academic Press. C1 Fed Reserve Bank Philadelphia, Philadelphia, PA USA. Univ Penn, Wharton Sch, Philadelphia, PA 19104 USA. RP Berlin, M (reprint author), Fed Reserve Bank Philadelphia, Philadelphia, PA USA. NR 47 TC 3 Z9 3 U1 1 U2 3 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 1042-9573 J9 J FINANC INTERMED JI J. Financ. Intermed. PD APR PY 2001 VL 10 IS 2 BP 108 EP 137 DI 10.1006/jfin.2001.0312 PG 30 WC Business, Finance SC Business & Economics GA 442BN UT WOS:000169265500001 ER PT J AU Mester, LL Saunders, A AF Mester, LL Saunders, A TI Introduction: Special issue on the banking and finance workshop SO JOURNAL OF FINANCIAL SERVICES RESEARCH LA English DT Editorial Material C1 Univ Penn, Wharton Sch, Philadelphia, PA 19104 USA. Fed Reserve Bank Philadelphia, Philadelphia, PA USA. RP Mester, LL (reprint author), 10 Independence Mall, Philadelphia, PA 19106 USA. NR 0 TC 0 Z9 0 U1 0 U2 0 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0920-8550 J9 J FINANC SERV RES JI J. Financ. Serv. Res. PD APR-JUN PY 2001 VL 19 IS 2-3 BP 93 EP 97 DI 10.1023/A:1011126514094 PG 5 WC Business, Finance SC Business & Economics GA 467VW UT WOS:000170725300001 ER PT J AU Ackert, LF Hunter, WC AF Ackert, LF Hunter, WC TI An empirical examination of the price-dividend relation with dividend management SO JOURNAL OF FINANCIAL SERVICES RESEARCH LA English DT Article; Proceedings Paper CT Meeting of the Banking and Finance Workshop CY MAY 19-20, 2000 CL UNIV MIGUEL HERNANDEZ, ALICANTE, SPAIN HO UNIV MIGUEL HERNANDEZ DE stock price determination; volatility; dividend payout; present value model ID EFFICIENT CAPITAL-MARKETS; VARIANCE BOUNDS TESTS; STOCK-PRICES; ASSET PRICES; INTRINSIC BUBBLES; MEAN REVERSION; VOLATILITY; SHAREHOLDERS; BEHAVIOR; CRASH AB Some recent empirical evidence suggests that stock prices are not properly modeled as the present discounted value of expected dividends. In this paper, we estimate a present value model of stock price that is capable of explaining the observed long-term trends in stock prices. The model recognizes that firm managers control cash dividend payments. The model estimates indicate that stock price movements may be explained by managerial behavior. C1 Kennesaw State Univ, Michael J Coles Coll Business, Dept Econ & Finances, Kennesaw, GA 30144 USA. Fed Reserve Bank Atlanta, Res Dept, Atlanta, GA USA. Fed Reserve Bank Chicago, Res Dept, Chicago, IL USA. RP Ackert, LF (reprint author), Kennesaw State Univ, Michael J Coles Coll Business, Dept Econ & Finances, Kennesaw, GA 30144 USA. NR 49 TC 0 Z9 0 U1 0 U2 6 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0920-8550 J9 J FINANC SERV RES JI J. Financ. Serv. Res. PD APR-JUN PY 2001 VL 19 IS 2-3 BP 115 EP 129 DI 10.1023/A:1011190800890 PG 15 WC Business, Finance SC Business & Economics GA 467VW UT WOS:000170725300003 ER PT J AU Berger, AN Deyoung, R AF Berger, AN Deyoung, R TI The effects of geographic expansion on bank efficiency SO JOURNAL OF FINANCIAL SERVICES RESEARCH LA English DT Article; Proceedings Paper CT Meeting of the Banking and Finance Workshop CY MAY 19-20, 2000 CL UNIV MIGUEL HERNANDEZ, ALICANTE, SPAIN HO UNIV MIGUEL HERNANDEZ DE banks; efficiency; mergers; financial institutions ID FINANCIAL INSTITUTIONS; COMMERCIAL-BANKS; COST EFFICIENCY; BRANCHES; RISK AB We assess the effects of geographic expansion on bank efficiency, using cost and profit efficiencies estimated for over 7000 U.S. banks from 1993 to 1998. We find both positive and negative links between geographic scope and bank efficiency. Parent organizations exercise some control over the efficiency of their affiliates, although this control tends to dissipate with the distance to the affiliate. However, on average, distance-related efficiency effects tend to be modest, and our results suggest that some efficient organizations can export efficient practices to their affiliates and overwhelm any effects of distance. The results imply there may be no particular optimal geographic scope for banking organizations-some may operate efficiently within a single region, while others may operate efficiently on a nationwide or international basis. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. Wharton Financial Inst Ctr, Philadelphia, PA USA. Fed Reserve Bank Chicago, Chicago, IL USA. RP Berger, AN (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 30 TC 74 Z9 75 U1 2 U2 17 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0920-8550 J9 J FINANC SERV RES JI J. Financ. Serv. Res. PD APR-JUN PY 2001 VL 19 IS 2-3 BP 163 EP 184 DI 10.1023/A:1011159405433 PG 22 WC Business, Finance SC Business & Economics GA 467VW UT WOS:000170725300006 ER PT J AU Peek, J Rosengren, ES AF Peek, J Rosengren, ES TI Determinants of the Japan premium: actions speak louder than words SO JOURNAL OF INTERNATIONAL ECONOMICS LA English DT Article; Proceedings Paper CT NBER Japan Project Conference CY OCT 29-30, 1998 CL TOKYO, JAPAN SP NBER DE Japan premium; Eurodollar; Euroyen; LIBOR AB Since August 1995, Japanese banks have had to pay a premium on Eurodollar and Euroyen interbank loans relative to their U.S. and U.K. competitors. This so-called "Japan premium" provides a market indicator of investor anxiety about the ability of Japanese banks to repay loans. We examine the determinants of the Japan premium and find that government announcements not associated with concrete actions had little impact. On the other hand, announcements of concrete actions by the Japanese government, such as injections of funds into the banking system, tended to have an effect on the size of the Japan premium. (C) 2001 Elsevier Science BN. All rights reserved. C1 Fed Reserve Bank Boston, Res Dept T8, Boston, MA 02106 USA. RP Rosengren, ES (reprint author), Fed Reserve Bank Boston, Res Dept T8, 600 Atlantic Ave, Boston, MA 02106 USA. NR 10 TC 31 Z9 31 U1 0 U2 3 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0022-1996 J9 J INT ECON JI J. Int. Econ. PD APR PY 2001 VL 53 IS 2 BP 283 EP 305 DI 10.1016/S0022-1996(00)00076-3 PG 23 WC Economics SC Business & Economics GA 385AP UT WOS:000165979700004 ER PT J AU Tiile, C AF Tiile, C TI The role of consumption substitutability in the international transmission of monetary shocks SO JOURNAL OF INTERNATIONAL ECONOMICS LA English DT Article DE Marshall-Lerner-Robinson condition; beggar-thy-neighbor ID DYNAMICS; SUBSTITUTION; DEVALUATION; TRADE AB This paper develops a general framework to analyze the impact of monetary shocks in an open economy, focusing on the role of the degree of substitutability between goods produced in different countries. We extend the contributions by Obstfeld and Rogoff [Obstfeld, M., Rogoff, K., 1995. Exchange rate dynamics redux. Journal of Political Economy 103, 624-659] and Corsetti and Pesenti [Corsetti, G., Pesenti, P., 1997. Welfare and Macroeconomic Interdependence, NBER Working Paper 6307] to show that the welfare impact differs across countries when the degree of substitutability between goods produced in different countries is different from the degree of substitutability between goods produced in the same country. A shock that would be beneficial in a closed economy can have an adverse 'beggar-thyself' effect in the country where it takes place, or an adverse 'beggar-thy-neighbor' effect on its neighbor. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank New York, New York, NY 10045 USA. RP Tiile, C (reprint author), Fed Reserve Bank New York, 33 Liberty St, New York, NY 10045 USA. NR 25 TC 13 Z9 13 U1 0 U2 2 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0022-1996 J9 J INT ECON JI J. Int. Econ. PD APR PY 2001 VL 53 IS 2 BP 421 EP 444 PG 24 WC Economics SC Business & Economics GA 385AP UT WOS:000165979700010 ER PT J AU Ruffin, RJ AF Ruffin, RJ TI Quasi-specific factors: worker comparative advantage in the two-sector production model SO JOURNAL OF INTERNATIONAL ECONOMICS LA English DT Article DE Heckscher-Ohlin; Ricardian; specific factors; wages ID GENERAL EQUILIBRIUM-MODEL; WAGE INEQUALITY; UNEMPLOYMENT; SKILL; DISTORTIONS; TECHNOLOGY; MARKETS; TRADE AB This paper integrates the Heckscher-Ohlin, specific factors, and the Ricardian models of production with applications to international trade and labor economics. The model economy exhibits both Heckscher-Ohlin and specific factors properties, but never at the same time. In international trade, the wage skill premium across countries can move in different directions and has natural limits within countries. In labor economics, we show that the earning of economic rents is not inconsistent with competitive markets in general equilibrium and that process and skill-based innovations have contrasting effects on wage inequality. (C) 2001 EIsevier Science BN. All rights reserved. C1 Univ Houston, Dept Econ, Houston, TX 77004 USA. Fed Reserve Bank Dallas, Dallas, TX USA. RP Ruffin, RJ (reprint author), Univ Houston, Dept Econ, Houston, TX 77004 USA. NR 27 TC 5 Z9 5 U1 0 U2 2 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0022-1996 J9 J INT ECON JI J. Int. Econ. PD APR PY 2001 VL 53 IS 2 BP 445 EP 461 DI 10.1016/S0022-1996(00)00072-6 PG 17 WC Economics SC Business & Economics GA 385AP UT WOS:000165979700011 ER PT J AU Carlstrom, CT Fuerst, TS AF Carlstrom, CT Fuerst, TS TI Timing and real indeterminacy in monetary models SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE real indeterminacy; monetary models ID MONEY AB An increasingly common approach to the theoretical analysis of monetary policy is to ensure that a proposed policy does not introduce real indeterminacy and thus sunspot fluctuations into the model economy, Policy is typically conducted in terms of directives for the nominal interest rate. This paper uses a discrete-time money-in-the-utility function model to demonstrate how seemingly minor modifications in the trading environment result in dramatic differences in the policy restrictions needed to ensure real determinacy. These differences arise because of the differing pricing equations for the nominal interest rate, (C) 2001 Elsevier Science B.V. All rights reserved. C1 Bowling Green State Univ, Dept Econ, Bowling Green, OH 43403 USA. Fed Reserve Bank Cleveland, Dept Res, Cleveland, OH 44101 USA. RP Fuerst, TS (reprint author), Bowling Green State Univ, Dept Econ, Bowling Green, OH 43403 USA. NR 13 TC 71 Z9 71 U1 0 U2 3 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD APR PY 2001 VL 47 IS 2 BP 285 EP 298 DI 10.1016/S0304-3932(01)00048-4 PG 14 WC Business, Finance; Economics SC Business & Economics GA 433UX UT WOS:000168780100003 ER PT J AU Kahn, CM Roberds, W AF Kahn, CM Roberds, W TI Real-time gross settlement and the costs of immediacy SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE payments; money; real-time gross settlement ID SYSTEMS AB Using a neoclassical monetary model, we investigate the welfare cost of a payment system that operates as a real-time gross settlement (RTGS) system. We illustrate how the cost of such systems ultimately derives from the credit constraints imposed by RTGS. The effects of these constraints can be undone if the central bank makes intraday credit freely available. If intraday credit is only available on a collateralized basis, however, RTGS will always impose a liquidity cost. (C) 2001 Published by Elsevier Science B.V. C1 Fed Reserve Bank Atlanta, Dept Res, Atlanta, GA 30303 USA. Univ Illinois, Dept Finance, Urbana, IL 61801 USA. RP Roberds, W (reprint author), Fed Reserve Bank Atlanta, Dept Res, 104 Marietta St NW, Atlanta, GA 30303 USA. NR 26 TC 16 Z9 16 U1 1 U2 3 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD APR PY 2001 VL 47 IS 2 BP 299 EP 319 DI 10.1016/S0304-3932(01)00047-2 PG 21 WC Business, Finance; Economics SC Business & Economics GA 433UX UT WOS:000168780100004 ER PT J AU Humphreys, BR Maccini, LJ Schuh, S AF Humphreys, BR Maccini, LJ Schuh, S TI Input and output inventories SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE inventories; stage-of-fabrication; gross production; value added ID PRODUCTION SMOOTHING MODEL; VARIANCE BOUNDS TEST; RATIONAL-EXPECTATIONS; JOINT PRODUCTION; FINISHED GOODS; BEHAVIOR; FLUCTUATIONS; INVESTMENT; PRICES; LEVEL AB This paper presents a new stage-of-fabrication inventory model with delivery, usage, and stocks of input materials that distinguishes between gross production and value added. It extends the linear-quadratic model of output inventories by adding the joint determination of input inventories. Empirically, input inventories are more important than output inventories. Maximum likelihood estimation of the decision rules yields correctly signed and significant parameter estimates using data for nondurable and durable goods industries, but the overidentifying restrictions of the model are rejected. The value added specification dominates because adjustment costs on materials usage are critical to fitting the data. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank Boston, Dept Res, Boston, MA 02106 USA. Univ Maryland Baltimore Cty, Dept Econ, Baltimore, MD 21250 USA. Johns Hopkins Univ, Dept Econ, Baltimore, MD 21218 USA. RP Schuh, S (reprint author), Fed Reserve Bank Boston, Dept Res, POB 2076, Boston, MA 02106 USA. OI Humphreys, Brad/0000-0003-0099-7237 NR 43 TC 39 Z9 39 U1 1 U2 7 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD APR PY 2001 VL 47 IS 2 BP 347 EP 375 DI 10.1016/S0304-3932(01)00046-0 PG 29 WC Business, Finance; Economics SC Business & Economics GA 433UX UT WOS:000168780100006 ER PT J AU Holmes, TJ Schmitz, JA AF Holmes, TJ Schmitz, JA TI A gain from trade: From unproductive to productive entrepreneurship SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE entrepreneurship; gains from trade; resistance to technology; political economy of growth ID GROWTH; INDUSTRY; INEFFICIENCY; DEREGULATION; COMPETITION AB There is a large and growing theoretical literature studying the allocation of individuals and their effort amongst productive and unproductive entrepreneurial activities. Trade and competition between regions have been recognized as potentially powerful forces limiting unproductive entrepreneurial activities. In this paper we extend the technology-ladder model of Grossman and Helpman to study this issue and demonstrate conditions under which lowering of tariffs leads to a shift from unproductive to productive entrepreneurial activities. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank Minneapolis, Dept Res, Minneapolis, MN 55480 USA. Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. RP Schmitz, JA (reprint author), Fed Reserve Bank Minneapolis, Dept Res, 90 Hennepin Ave, Minneapolis, MN 55480 USA. NR 21 TC 38 Z9 39 U1 0 U2 3 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD APR PY 2001 VL 47 IS 2 BP 417 EP 446 DI 10.1016/S0304-3932(01)00044-7 PG 30 WC Business, Finance; Economics SC Business & Economics GA 433UX UT WOS:000168780100008 ER PT J AU Hess, GD Orphanides, A AF Hess, GD Orphanides, A TI Economic conditions, elections, and the magnitude of foreign conflicts SO JOURNAL OF PUBLIC ECONOMICS LA English DT Article DE war; elections; recessions; rational voters ID DOMESTIC POLITICS; FORCE; WAR; MODEL AB This paper investigates the relationship between the business cycle, the election cycle, and the timing and magnitude of foreign conflict. We propose a theoretical model which suggests that in the presence of a reelection motive, the frequency of war will be greater following recessions than otherwise. However, if partially benevolent leaders can influence the size of conflicts, then the consequences may be limited to conflicts of relatively small magnitude. We test the predictions of the theory using data for the United States for the Cold War period, and obtain results consistent with the theory when leaders are partially benevolent. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Oberlin Coll, Dept Econ, Oberlin, OH 44140 USA. Board Governors Fed Reserve Syst, Washington, DC USA. RP Hess, GD (reprint author), Oberlin Coll, Dept Econ, 207 Rice Hall, Oberlin, OH 44140 USA. NR 27 TC 18 Z9 18 U1 0 U2 1 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0047-2727 J9 J PUBLIC ECON JI J. Public Econ. PD APR PY 2001 VL 80 IS 1 BP 121 EP 140 DI 10.1016/S0047-2727(99)00067-5 PG 20 WC Economics SC Business & Economics GA 407GW UT WOS:000167264700006 ER PT J AU Arifovic, J Bullard, J AF Arifovic, J Bullard, J TI Introduction to the special issue: New approaches to learning in macroeconomic models SO MACROECONOMIC DYNAMICS LA English DT Editorial Material C1 Simon Fraser Univ, Dept Econ, Burnaby, BC V5A 1S6, Canada. Fed Reserve Bank, St Louis, MO USA. RP Arifovic, J (reprint author), Simon Fraser Univ, Dept Econ, Burnaby, BC V5A 1S6, Canada. RI Bullard, James/L-8120-2016 OI Bullard, James/0000-0002-1142-6803 NR 0 TC 2 Z9 2 U1 0 U2 1 PU CAMBRIDGE UNIV PRESS PI PORT CHESTER PA 110 MIDLAND AVE, PORT CHESTER, NY 10573-9863 USA SN 1365-1005 J9 MACROECON DYN JI Macroecon. Dyn. PD APR PY 2001 VL 5 IS 2 BP 143 EP 147 DI 10.1017/S1365100501019010 PG 5 WC Economics SC Business & Economics GA 440FQ UT WOS:000169165600001 ER PT J AU Bullard, J Duffy, J AF Bullard, J Duffy, J TI Learning and excess volatility SO MACROECONOMIC DYNAMICS LA English DT Article DE learning; least-squares learning; learning equilibria; excess volatility; capital markets ID STOCK-PRICES; EXPECTATIONS EQUILIBRIA; VARIANCE DECOMPOSITION; FINANCIAL-MARKETS; PREDICTABILITY; ECONOMIES; BEHAVIOR; RETURNS; MODEL; RISK AB We introduce adaptive learning behavior into a general-equilibrium life-cycle economy with capital accumulation. Agents form forecasts of the rate of return to capital assets using least-squares autoregressions on past data. We show that, in contrast to the perfect-foresight dynamics, the dynamical system under learning possesses equilibria that are characterized by persistent excess volatility in returns to capital. We explore a quantitative case for these learning equilibria. We use an evolutionary search algorithm to calibrate a version of the system under learning and show that this system can generate data that matches some features of the time-series data for U.S, stock returns and per-capita consumption. We argue that this finding provides support for the hypothesis that the observed excess volatility of asset returns can be explained by changes in investor expectations against a background of relatively small changes in fundamental factors. C1 Univ Pittsburgh, Dept Econ, Pittsburgh, PA 15260 USA. Fed Reserve Bank, St Louis, MO USA. RP Duffy, J (reprint author), Univ Pittsburgh, Dept Econ, Pittsburgh, PA 15260 USA. RI Duffy, John/F-6968-2015; Bullard, James/L-8120-2016 OI Duffy, John/0000-0002-7660-2281; Bullard, James/0000-0002-1142-6803 NR 33 TC 21 Z9 21 U1 1 U2 6 PU CAMBRIDGE UNIV PRESS PI PORT CHESTER PA 110 MIDLAND AVE, PORT CHESTER, NY 10573-9863 USA SN 1365-1005 J9 MACROECON DYN JI Macroecon. Dyn. PD APR PY 2001 VL 5 IS 2 BP 272 EP 302 DI 10.1017/S1365100501019071 PG 31 WC Economics SC Business & Economics GA 440FQ UT WOS:000169165600007 ER PT J AU Haughwout, AF Inman, RP AF Haughwout, AF Inman, RP TI Fiscal policies in open cities with firms and households SO REGIONAL SCIENCE AND URBAN ECONOMICS LA English DT Article; Proceedings Paper CT Conference on Fiscal Competition and Federalism in Europe CY JUN 02-03, 1999 CL ZENTRUM EUROPA WIRTSCHAFTSFPRSCHUNG, MANNHEIM, GERMANY HO ZENTRUM EUROPA WIRTSCHAFTSFPRSCHUNG DE fiscal policy; cities; federalism ID RESIDENTIAL PROPERTY-TAX; EQUILIBRIUM; TAXATION; GROWTH; COMPETITION; MOBILITY; STATES; LIFE AB This paper provides an equilibrium numerical model of an open city economy with mobile firms and resident workers. Given household preferences and firm technologies and an exogenous configuration of city tax rates and national grants and fiscal mandates, the model calculates equilibrium values for aggregate city economic activity, factor prices, and finally, local tax bases, revenues, and public goods provision. The model is calibrated to the Philadelphia economy for Fiscal Year 1998. We then explore the economic and fiscal consequences of raising city tax rates and the city's ability to finance rising local welfare payments. We find the city to be incapable of bearing significant increases in local (C) 2001 Federal Reserve Bank of New York. Published by Elsevier Science B.V. C1 Fed Reserve Bank New York, New York, NY 10045 USA. RP Haughwout, AF (reprint author), Fed Reserve Bank New York, 33 Liberty St, New York, NY 10045 USA. NR 32 TC 16 Z9 16 U1 2 U2 8 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0166-0462 J9 REG SCI URBAN ECON JI Reg. Sci. Urban Econ. PD APR PY 2001 VL 31 IS 2-3 BP 147 EP 180 DI 10.1016/S0166-0462(00)00059-4 PG 34 WC Economics; Environmental Studies; Urban Studies SC Business & Economics; Environmental Sciences & Ecology; Urban Studies GA 414UX UT WOS:000167685500003 ER PT J AU Boldrin, M Christiano, LJ Fisher, JDM AF Boldrin, M Christiano, LJ Fisher, JDM TI Habit persistence, asset returns, and the business cycle SO AMERICAN ECONOMIC REVIEW LA English DT Article ID EQUITY PREMIUM; INTEREST-RATES; CONSUMPTION; PRICES; INCOME; MODELS; FLUCTUATIONS; COMOVEMENT; PUZZLE; MONEY AB Two modifications are introduced into the standard real-business-cycle model: habit preferences and a two-sector technology with limited intersectoral factor mobility. The model is consistent with the observed mean risk-free rate, equity premium, and Sharpe ratio on equity. In addition, its business-cycle implications represent a substantial improvement over the standard model. It accounts for persistence in output, comovement of employment across different sectors over the business cycle, the evidence of "excess sensitivity" of consumption growth to output growth, and the "inverted leading-indicator property of interest rates," that interest rates are negatively correlated with future output. C1 Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. Northwestern Univ, Dept Econ, Evanston, IL 60208 USA. Fed Reserve Bank Chicago, Econ Res Dept, Chicago, IL 60604 USA. RP Boldrin, M (reprint author), Univ Minnesota, Dept Econ, 1035 Heller Hall,271 19th Ave S, Minneapolis, MN 55455 USA. NR 56 TC 258 Z9 263 U1 7 U2 20 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD MAR PY 2001 VL 91 IS 1 BP 149 EP 166 DI 10.1257/aer.91.1.149 PG 18 WC Economics SC Business & Economics GA 416RF UT WOS:000167793400007 ER PT J AU Lopez, JA AF Lopez, JA TI Evaluating the predictive accuracy of volatility models SO JOURNAL OF FORECASTING LA English DT Article DE volatility; ARCH; probability forecasts; scoring rules; exchange rates ID ARCH MODELS; CONDITIONAL HETEROSCEDASTICITY; INTERVAL FORECASTS; VARIANCE; ABILITY AB Standard statistical loss functions, such as mean-squared error, are commonly used for evaluating financial volatility forecasts. In this paper, an alternative evaluation framework, based on probability scoring rules that can be more closely tailored to a forecast user's decision problem, is proposed. According to the decision at hand, the user specifies the economic events to be forecast, the scoring rule with which to evaluate these probability forecasts, and the subsets of the forecasts of particular interest. The volatility forecasts from a model are then transformed into probability forecasts of the relevant events and evaluated using the selected scoring rule and calibration tests. An empirical example using exchange rate data illustrates the framework and confirms that the choice of loss function directly affects the forecast evaluation results. Copyright (C) 2001 John Wiley & Sons, Ltd. C1 Fed Reserve Bank San Francisco, Econ Res Dept, San Francisco, CA 94105 USA. RP Lopez, JA (reprint author), Fed Reserve Bank San Francisco, Econ Res Dept, 101 Market St, San Francisco, CA 94105 USA. NR 42 TC 58 Z9 64 U1 0 U2 6 PU JOHN WILEY & SONS LTD PI W SUSSEX PA BAFFINS LANE CHICHESTER, W SUSSEX PO19 1UD, ENGLAND SN 0277-6693 J9 J FORECASTING JI J. Forecast. PD MAR PY 2001 VL 20 IS 2 BP 87 EP 109 DI 10.1002/1099-131X(200103)20:2<87::AID-FOR782>3.0.CO;2-7 PG 23 WC Economics; Management SC Business & Economics GA 418WB UT WOS:000167916200001 ER PT J AU Bassett, WF Lumsdaine, RL AF Bassett, WF Lumsdaine, RL TI Probability limits - Are subjective assessments adequately accurate? SO JOURNAL OF HUMAN RESOURCES LA English DT Article ID EXPECTATIONS; INTENTIONS; RETIREMENT; BEHAVIOR; HEALTH AB The Health and Retirement Study asks respondents their subjective probabilities about 12 future events. An individual's responses contain a common component that is unrelated to the true probability of the event in question. Use oft he entire set of an individual's responses to control for this unobserved individual herogeneity can improve the information content in responses regarding intergenerational transfer and labor force participation plans. Although there is little overall gain from renormalization, in samples where the respondent may not fully hal e understood the question adjusting the responses for heterogeneity leads to an improved ability to predict outcomes in later waves. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. Brown Univ, Providence, RI 02912 USA. Natl Bur Econ Res, Cambridge, MA 02138 USA. RP Bassett, WF (reprint author), Fed Reserve Syst, Board Governors, 20th & C St NW, Washington, DC 20551 USA. EM wbassett@frb.gov NR 23 TC 11 Z9 11 U1 0 U2 3 PU UNIV WISCONSIN PRESS PI MADISON PA JOURNAL DIVISION, 1930 MONROE ST, 3RD FL, MADISON, WI 53711 USA SN 0022-166X J9 J HUM RESOUR JI J. Hum. Resour. PD SPR PY 2001 VL 36 IS 2 BP 327 EP 363 DI 10.2307/3069662 PG 37 WC Economics; Industrial Relations & Labor SC Business & Economics GA 427TP UT WOS:000168421800006 ER PT J AU Viard, AD AF Viard, AD TI Some results on the comparative statics of optimal categorical transfer payments SO PUBLIC FINANCE REVIEW LA English DT Article ID INCOME-TAX; INFORMATION; TAXATION AB To alleviate equity-efficiency trade-offs, tax transfer systems pay categorical transfers to groups defined by characteristics correlated with earnings ability. The author examines the comparative statics of categorical transfer payments in a linear income tax model through analysis of first-order conditions and numerical calculations. The analysis sharpens previous results on the size of categorical transfers, the resulting reduction in the income tax rate, and the associated welfare gain. Notably, the author finds that categorical transfers should vary more across groups when earnings ability is more equal within each group, when labor supply is more elastic, and when less revenue is required for public goods. C1 Fed Reserve Bank Dallas, Dallas, TX 75201 USA. RP Viard, AD (reprint author), Fed Reserve Bank Dallas, Dallas, TX 75201 USA. NR 28 TC 3 Z9 3 U1 0 U2 2 PU SAGE PUBLICATIONS INC PI THOUSAND OAKS PA 2455 TELLER RD, THOUSAND OAKS, CA 91320 USA SN 0048-5853 J9 PUBLIC FINANC REV JI Public Financ. Rev. PD MAR PY 2001 VL 29 IS 2 BP 148 EP 180 PG 33 WC Business, Finance SC Business & Economics GA 464XP UT WOS:000170558900004 ER PT J AU Choi, JP Stefanadis, C AF Choi, JP Stefanadis, C TI Tying, investment, and the dynamic leverage theory SO RAND JOURNAL OF ECONOMICS LA English DT Article ID COMMODITY; MONOPOLY AB The idea that an incumbent supplier may tie two complementary products to fend off potential entrants is popular among practitioners yet is not fully understood in formal economic theory. This article makes sense of the argument by formally deriving a dynamic version of the old leverage doctrine. We show that when an incumbent monopolist faces the threat of entry in all complementary components, tying may make the prospects of successful entry less certain, discouraging rivals from investing and innovating. Tie-in sales may reduce consumer and total economic welfare. C1 Michigan State Univ, E Lansing, MI 48824 USA. Fed Reserve Bank, New York, NY USA. RP Choi, JP (reprint author), Michigan State Univ, E Lansing, MI 48824 USA. NR 22 TC 81 Z9 82 U1 1 U2 4 PU RAND PI LAWRENCE PA 810 EAST 10TH ST, LAWRENCE, KS 66044 USA SN 0741-6261 J9 RAND J ECON JI Rand J. Econ. PD SPR PY 2001 VL 32 IS 1 BP 52 EP 71 DI 10.2307/2696397 PG 20 WC Economics SC Business & Economics GA 419YP UT WOS:000167977400003 ER PT J AU Prager, RA AF Prager, RA TI The effects of ATM surcharges on small banking organizations SO REVIEW OF INDUSTRIAL ORGANIZATION LA English DT Article DE automated teller machine; banks; surcharge AB Effective April 1, 1996, the Cirrus and Plus national ATM networks modified their operating rules to allow ATM owners to impose surcharges on other banks' customers who use their ATMs. Since 1996, surcharging has become widespread and has attracted a great deal of opposition. Among other things, surcharge opponents argue that the imposition of surcharges will cause customers to shift their deposits away from small banks that own few ATMs, toward large banks that own extensive networks of ATMs. This article provides empirical evidence regarding the effects of surcharging on small banks' deposit market shares and profitability. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Prager, RA (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 9 TC 9 Z9 9 U1 0 U2 1 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0889-938X J9 REV IND ORGAN JI Rev. Ind. Organ. PD MAR PY 2001 VL 18 IS 2 BP 161 EP 173 DI 10.1023/A:1007805725579 PG 13 WC Economics; Management SC Business & Economics GA 386GR UT WOS:000166053000002 ER PT J AU Allen, F Santomero, AM AF Allen, F Santomero, AM TI What do financial intermediaries do? SO JOURNAL OF BANKING & FINANCE LA English DT Article DE intermediation; risk management; delegated monitoring; banks; participation costs ID CAPITAL STRUCTURE; MARKETS AB This paper presents evidence that the traditional banking business of accepting deposits and making loans has declined significantly in the US in recent years. There has been a switch from directly held assets to pension-funds and mutual funds. However, banks have maintained their position relative to GDP by innovating and switching from their traditional business to fee-producing activities, A comparison of investor portfolios across countries shows that households in the US and UK bear considerably more risk from their investments than counterparts in Japan, France and Germany. It is argued that in these latter countries intermediaries can manage risk by holding liquid reserves and intertemporally smoothing. However, in the US and UK competition from financial markets prevents this and risk management must be accomplished using derivatives and other similar techniques. The decline in the traditional banking business and the financial innovation undertaken by banks in the US is interpreted as a response to the competition from markets' and the decline of intertemporal smoothing. (C) 2001 Elsevier Science B.V. All rights reserved. JEL classification. G2; G1; E5; L2. C1 Univ Penn, Wharton Sch, Philadelphia, PA 19104 USA. Fed Reserve Bank, Philadelphia, PA 19106 USA. RP Allen, F (reprint author), Univ Penn, Wharton Sch, Room 2336,Steinberg Hall Dietrich Hall, Philadelphia, PA 19104 USA. NR 27 TC 92 Z9 97 U1 2 U2 14 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 J9 J BANK FINANC JI J. Bank Financ. PD FEB PY 2001 VL 25 IS 2 BP 271 EP 294 DI 10.1016/S0378-4266(99)00129-6 PG 24 WC Business, Finance; Economics SC Business & Economics GA 395WQ UT WOS:000166604600001 ER PT J AU Kamin, SB AF Kamin, SB TI Real exchange rates and inflation in exchange-rate-based stabilizations: an empirical examination SO JOURNAL OF DEVELOPMENT ECONOMICS LA English DT Article DE inflation; real exchange rate; stabilization AB Numerous explanations have been advanced for why real exchange rates typically appreciate after the nominal exchange rate is stabilized, but few of them have been directly tested. This paper uses an error-correction model of Mexican inflation to decompose the real appreciation of the peso during 1988-1994 into that part attributable to the peso's initial undervaluation, that part explained by growing domestic demand, and that part attributable to backward-looking inflation. The results indicate that the effects of backward-looking inflation were highly transitory, but that both the expansion of domestic demand and the initial undervaluation of the peso were important in boosting domestic prices and, hence, appreciating the real exchange rate. (C) 2001 Published by Elsevier Science B.V. JEL classification: E31; F41. C1 Fed Reserve Board, Int Finance Div, Washington, DC 20551 USA. RP Kamin, SB (reprint author), Fed Reserve Board, Int Finance Div, Washington, DC 20551 USA. NR 16 TC 5 Z9 5 U1 0 U2 1 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3878 J9 J DEV ECON JI J. Dev. Econ. PD FEB PY 2001 VL 64 IS 1 BP 237 EP 253 DI 10.1016/S0304-3878(00)00131-0 PG 17 WC Economics SC Business & Economics GA 385UK UT WOS:000166022000010 ER PT J AU Campbell, JY Lettau, M Malkiel, BG Xu, YX AF Campbell, JY Lettau, M Malkiel, BG Xu, YX TI Have individual stocks become more volatile? An empirical exploration of idiosyncratic risk SO JOURNAL OF FINANCE LA English DT Article ID MARKET VOLATILITY; CYCLICAL UNEMPLOYMENT; INDUSTRIAL-STRUCTURE; SECTORAL SHIFTS; CAPITAL-MARKETS; RETURNS; VARIANCE; TIME; ESTIMATORS; BEHAVIOR AB This paper uses a disaggregated approach to study the volatility of common stocks at the market, industry, and firm levels. Over the period from 1962 to 1997 there has been a noticeable increase in firm-level volatility relative to market volatility. Accordingly, correlations among individual stocks and the explanatory power of the market model for a typical stock have declined, whereas the number of stocks needed to achieve a given level of diversification has increased. All the volatility measures move together countercyclically and help to predict GDP growth. Market volatility tends to lead the other volatility series. Factors that may be responsible for these findings are suggested. C1 Harvard Univ, Dept Econ, Cambridge, MA 02138 USA. NBER, Cambridge, MA 02138 USA. Fed Reserve Bank New York, New York, NY 10045 USA. Princeton Univ, Princeton, NJ 08544 USA. Univ Texas, Dallas, TX 75230 USA. RP Campbell, JY (reprint author), Harvard Univ, Dept Econ, Cambridge, MA 02138 USA. NR 63 TC 524 Z9 535 U1 5 U2 54 PU WILEY-BLACKWELL PI HOBOKEN PA 111 RIVER ST, HOBOKEN 07030-5774, NJ USA SN 0022-1082 EI 1540-6261 J9 J FINANC JI J. Financ. PD FEB PY 2001 VL 56 IS 1 BP 1 EP 43 DI 10.1111/0022-1082.00318 PG 43 WC Business, Finance; Economics SC Business & Economics GA 402NW UT WOS:000166995900001 ER PT J AU Bartolini, L AF Bartolini, L TI Political economy in macroeconomics SO JOURNAL OF INTERNATIONAL ECONOMICS LA English DT Book Review C1 Fed Reserve Bank New York, New York, NY 10045 USA. RP Bartolini, L (reprint author), Fed Reserve Bank New York, 33 Liberty St, New York, NY 10045 USA. NR 4 TC 0 Z9 0 U1 0 U2 0 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0022-1996 J9 J INT ECON JI J. Int. Econ. PD FEB PY 2001 VL 53 IS 1 BP 231 EP 234 DI 10.1016/S0022-1996(00)00097-0 PG 4 WC Economics SC Business & Economics GA 383GE UT WOS:000165874100012 ER PT J AU Bomfim, AN AF Bomfim, AN TI Heterogeneous forecasts and aggregate dynamics SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE expectations; business cycles; strategic complementarity; propagation; bounded rationality ID BOUNDED RATIONALITY; BUSINESS-CYCLE; EQUILIBRIUM; MODELS AB Motivated by issues raised in both the finance and economics literatures, I construct a dynamic general equilibrium model where agents use differing degrees of sophistication when forecasting future economic conditions. All agents solve standard dynamic optimization problems and face strategic complementarity in production, but some solve their inference problems based on simple forecasting rules of thumb. Assuming a hierarchical information structure similar to the one in Townsend's (J. Political Econom. 91 (1983) 546-588) model of informationally dispersed markets, I show that even a minority of rule-of-thumb forecasters can have a significant effect on the aggregate properties of the economy. For instance, as agents try to forecast each others' behavior they effectively strengthen the internal propagation mechanism of the economy. The quantitative results are obtained by calibrating the model and running 3 battery of sensitivity tests on key parameters. The analysis highlights the role of strategic complementarity in the heterogeneous expectations literature and precisely quantifies many qualitative claims about the aggregate implications of expectational heterogeneity. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Board, Div Monetary Affairs, Monetary & Financial Market, Washington, DC 20551 USA. RP Bomfim, AN (reprint author), Fed Reserve Board, Div Monetary Affairs, Monetary & Financial Market, Mail Stop 74, Washington, DC 20551 USA. NR 28 TC 7 Z9 8 U1 1 U2 7 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD FEB PY 2001 VL 47 IS 1 BP 145 EP 161 DI 10.1016/S0304-3932(00)00046-5 PG 17 WC Business, Finance; Economics SC Business & Economics GA 393DL UT WOS:000166453900008 ER PT J AU Schmitz, JA AF Schmitz, JA TI Government production of investment goods and aggregate labor productivity SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE government production; public enterprises; aggregate productivity ID GROWTH AB In this paper, I estimate the impact on aggregate labor productivity of having government, rather than private industry, produce investment goods. This policy was pursued to varying degrees by Egypt, India, and Turkey, among others. The policy has a large impact because there is both a direct effect (it lowers productivity in the investment sector) and a secondary effect (it lowers the economy-wide capital stock. per worker), I estimate that this policy alone reduced Egypt's aggregate productivity by 30% and accounted for 20% of Egypt's aggregate labor productivity gap with the United States during the 1960s. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank Minneapolis, Res Dept, Minneapolis, MN 55480 USA. RP Schmitz, JA (reprint author), Fed Reserve Bank Minneapolis, Res Dept, 90 Hennepin Ave, Minneapolis, MN 55480 USA. NR 22 TC 11 Z9 12 U1 0 U2 1 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD FEB PY 2001 VL 47 IS 1 BP 163 EP 187 DI 10.1016/S0304-3932(00)00050-7 PG 25 WC Business, Finance; Economics SC Business & Economics GA 393DL UT WOS:000166453900009 ER PT J AU Engel, C Rogers, JH AF Engel, C Rogers, JH TI Violating the law of one price: Should we make a federal case out of it? SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Article ID NATIONAL BORDERS MATTER; TRADE AB We use new disaggregated data on consumer prices to determine why there is variability in prices of similar goods across U.S. cities. We address questions similar to those that have arisen in the international context: is this variability purely a result of market segmentation or do sticky nominal prices play a role? We also examine how the degree of tradability of a good influences price variability. Surprisingly, we find that variability is larger for traded goods. We attribute this finding to greater price stickiness for nontraded goods. Distance between cities accounts for a significant amount of the variation in prices between pairs of cities. But we also find that nominal price stickiness plays an even more significant role. C1 Univ Wisconsin, Madison, WI 53706 USA. Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Engel, C (reprint author), Univ Wisconsin, Madison, WI 53706 USA. NR 7 TC 39 Z9 40 U1 0 U2 1 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD FEB PY 2001 VL 33 IS 1 BP 1 EP 15 DI 10.2307/2673869 PG 15 WC Business, Finance; Economics SC Business & Economics GA 396AK UT WOS:000166614000001 ER PT J AU Ennis, HM AF Ennis, HM TI On random matching, monetary equilibria, and sun spots SO MACROECONOMIC DYNAMICS LA English DT Article DE random matching; monetary equilibria; multiplicity; comparative statics; sunspot equilibrium ID MONEY; SEARCH; SUNSPOTS; PRICES; MODEL AB We study comparative statics results for the steady-state monetary equilibria of a simple random matching model of money with endogenous prices and no extrinsic uncertainty. Some of the results appear counterintuitive (both when take-it-or-leave-it offer or when Nash-Rubinstein bargaining is used in the model). Consistency of the equilibrium expectations causes the partial equilibrium intuitions to be reversed. We then proceed to apply the new insights to the analysis of sunspot equilibria in these type of models of bilateral trade with money. C1 Fed Reserve Bank Richmond, Res Dept, Richmond, VA 23261 USA. RP Ennis, HM (reprint author), Fed Reserve Bank Richmond, Res Dept, POB 27622, Richmond, VA 23261 USA. NR 14 TC 7 Z9 7 U1 0 U2 3 PU CAMBRIDGE UNIV PRESS PI PORT CHESTER PA 110 MIDLAND AVE, PORT CHESTER, NY 10573-9863 USA SN 1365-1005 J9 MACROECON DYN JI Macroecon. Dyn. PD FEB PY 2001 VL 5 IS 1 BP 132 EP 142 DI 10.1017/S1365100501018065 PG 11 WC Economics SC Business & Economics GA 431AX UT WOS:000168610700006 ER PT J AU Aaronson, D AF Aaronson, D TI Price pass-through and the minimum wage SO REVIEW OF ECONOMICS AND STATISTICS LA English DT Article ID IMPERFECT COMPETITION; CIGARETTE INDUSTRY; SALES TAXES; TAXATION; OLIGOPOLY; BEHAVIOR; MARKET; STATE AB This paper tests a textbook consequence of competitive markets: that an industry-wide increase in the price of labor is passed on to consumers through an increase in prices. Using several data sources on restaurant prices, I explore the price impact of minimum-wage hikes in Canada and the United States. Particular attention is paid to the timing of the-se price responses to gauge the "stickiness" of minimum-wage cost shocks. I find that restaurant prices generally rise with changes in the wage bill and that this response is concentrated in the quarter surrounding the month during which the legislation is enacted. C1 Fed Reserve Bank Chicago, Chicago, IL 60604 USA. RP Aaronson, D (reprint author), Fed Reserve Bank Chicago, Chicago, IL 60604 USA. NR 29 TC 30 Z9 30 U1 0 U2 2 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 0034-6535 J9 REV ECON STAT JI Rev. Econ. Stat. PD FEB PY 2001 VL 83 IS 1 BP 158 EP 169 DI 10.1162/003465301750160126 PG 12 WC Economics; Social Sciences, Mathematical Methods SC Business & Economics; Mathematical Methods In Social Sciences GA 403RT UT WOS:000167056800014 ER PT J AU Stavins, J AF Stavins, J TI Price discrimination in the airline market: The effect of market concentration SO REVIEW OF ECONOMICS AND STATISTICS LA English DT Article ID ADVANCE-PURCHASE DISCOUNTS; COMPETITION; INDUSTRY; ENTRY AB We test the hypothesis that price discrimination increases with competition in the airline market. Using a large cross section of tickets offered by Several carriers on various routes, we approximate price discrimination with marginal implicit prices of ticket restrictions that carriers typically use to price discriminate: Saturday-night stayover requirements and advanced-purchase discounts. We find that the restrictions are associated with lower airfares, but that the discounts are smaller on routes with higher market concentration. The results suggest that price dispersion attributed to ticket restrictions increases as markets become more competitive. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Stavins, J (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 14 TC 75 Z9 75 U1 3 U2 13 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 0034-6535 J9 REV ECON STAT JI Rev. Econ. Stat. PD FEB PY 2001 VL 83 IS 1 BP 200 EP 202 DI 10.1162/rest.2001.83.1.200 PG 3 WC Economics; Social Sciences, Mathematical Methods SC Business & Economics; Mathematical Methods In Social Sciences GA 403RT UT WOS:000167056800019 ER PT J AU Kuttner, KN Posen, AS AF Kuttner, KN Posen, AS TI The Great Recession: Lessons for macroeconomic policy from Japan SO BROOKINGS PAPERS ON ECONOMIC ACTIVITY LA English DT Article; Proceedings Paper CT 72nd Conference of the Brookings Panel on Economic Activity CY SEP 06-07, 2001 CL WASHINGTON, D.C. ID HOUSEHOLD SAVING RATE; MONETARY-POLICY; INTEREST-RATES; DEPRESSION; SHOCKS; TRANSMISSION; PERFORMANCE; INVESTMENT; CYCLES; CRISIS C1 Fed Reserve Bank New York, New York, NY 10045 USA. RP Kuttner, KN (reprint author), Fed Reserve Bank New York, New York, NY 10045 USA. NR 149 TC 22 Z9 23 U1 0 U2 11 PU BROOKINGS INST PI WASHINGTON PA 1775 MASSACHUSETTS AVE NW, WASHINGTON, DC 20036 USA SN 0007-2303 EI 1533-4465 J9 BROOKINGS PAP ECO AC JI Brook. Pap. Econ. Act. PY 2001 IS 2 BP 93 EP 185 PG 93 WC Economics SC Business & Economics GA 519FD UT WOS:000173713500003 ER PT J AU Jordan, JL AF Jordan, JL TI Hayekian economic infrastructure as a foundation for sustained prosperity SO CONTEMPORARY ECONOMIC POLICY LA English DT Article; Proceedings Paper CT 75th Annual Conference of the Western-Economic-Association-International CY JUN 29-JUL 03, 2000 CL VANCOUVER, CANADA SP Western Econ Assoc Int AB Rather than debate whether technical advances have created a "new economy," economists should focus on the more interesting and useful question: How do we create the sort of environment in which innovation and the productive use of new technology thrive thereby creating economic prosperity? Such an environment is the product of government laying the appropriate infrastructure, manifested in the culture of the institutions it supports. This article discusses the features governments must incorporate into their institutions in order to build an economic infrastructure that promotes prosperity. (JEL E52, E58, E65). C1 Fed Reserve Bank Cleveland, Cleveland, OH 44114 USA. RP Jordan, JL (reprint author), Fed Reserve Bank Cleveland, 1455 E 6th St, Cleveland, OH 44114 USA. NR 2 TC 0 Z9 0 U1 0 U2 1 PU WESTERN ECONOMIC ASSOC INT PI HUNTINGTON BEACH PA 7400 CENTER AVE SUITE 109, HUNTINGTON BEACH, CA 92647-3039 USA SN 1074-3529 J9 CONTEMP ECON POLICY JI Contemp. Econ. Policy PD JAN PY 2001 VL 19 IS 1 BP 20 EP 26 PG 7 WC Economics; Public Administration SC Business & Economics; Public Administration GA 394QJ UT WOS:000166534500003 ER PT J AU Cochrane, JH AF Cochrane, JH TI Long-term debt and optimal policy in the fiscal theory of the price level SO ECONOMETRICA LA English DT Article DE fiscal theory of the price level; government debt; price level; inflation ID MONETARY; EXPECTATIONS; MONEY; MODEL AB The fiscal theory says that the price level is determined by the ratio of nominal debt to the present value of real primary surpluses. I analyze long-term debt and optimal policy in the fiscal theory. I find that the maturity structure of the debt matters. For example, it determines whether news of future deficits implies current inflation or future inflation. When long-term debt is present, the government can trade current inflation for future inflation by debt operations: this tradeoff is not present if the government rolls over short-term debt. The maturity structure of outstanding debt acts as a "budget constraint" determining which periods' price levels the government can affect by debt variation alone. In addition, debt policy-the expected pattern of future state-contingent debt sales, repurchases and redemptions-matters crucially for the effects of a debt operation. I solve for optimal debt policies to minimize the variance of inflation. I find cases in which long-term debt helps to stabilize inflation. I also find that the optimal policy produces lime series that are similar to U.S. surplus and debt time series. To understand the data, I must assume that debt policy offsets the inflationary impact of cyclical surplus shocks, rather than causing price level disturbances by policy-induced shocks. Shifting the objective from price level variance to inflation variance, the optimal policy produces much less volatile inflation at the cost of a unit root in the price level; this is consistent with the stabilization of U.S. inflation after the gold standard was abandoned. C1 Univ Chicago, Grad Sch Business, Chicago, IL 60637 USA. Fed Res Bank Chicago, Chicago, IL USA. NBER, Cambridge, MA 02138 USA. RP Cochrane, JH (reprint author), Univ Chicago, Grad Sch Business, 1101 E 58th St, Chicago, IL 60637 USA. EM john.cochrane@gsb.uchicago.edu NR 23 TC 60 Z9 68 U1 0 U2 15 PU WILEY-BLACKWELL PI MALDEN PA COMMERCE PLACE, 350 MAIN ST, MALDEN 02148, MA USA SN 0012-9682 J9 ECONOMETRICA JI Econometrica PD JAN PY 2001 VL 69 IS 1 BP 69 EP 116 DI 10.1111/1468-0262.00179 PG 48 WC Economics; Mathematics, Interdisciplinary Applications; Social Sciences, Mathematical Methods; Statistics & Probability SC Business & Economics; Mathematics; Mathematical Methods In Social Sciences GA 392BR UT WOS:000166391200003 ER PT B AU Greenspan, A AF Greenspan, A GP FRBKC TI Opening remarks SO ECONOMIC POLICY FOR THE INFORMATION ECONOMY LA English DT Proceedings Paper CT Symposium on Economic Policy for the Information Economy CY AUG 30-SEP 01, 2001 CL Jackson Hole, WY SP Fed Reserve Bank Kansas City C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 0 TC 0 Z9 0 U1 0 U2 0 PU FEDERAL RESERVE BANK KANSAS CITY PI KANSAS CITY PA 925 GRAND AVE, KANSAS CITY, MO 64198 USA PY 2001 BP 1 EP 10 PG 10 WC Economics SC Business & Economics GA BBS17 UT WOS:000227537000002 ER PT B AU Hakkio, CS AF Hakkio, CS GP FRBKC TI Economic policy for the information economy - A summary of the bank's 2001 economic symposium SO ECONOMIC POLICY FOR THE INFORMATION ECONOMY LA English DT Proceedings Paper CT Symposium on Economic Policy for the Information Economy CY AUG 30-SEP 01, 2001 CL Jackson Hole, WY SP Fed Reserve Bank Kansas City C1 Fed Reserve Bank Kansas City, Kansas City, KS USA. NR 1 TC 0 Z9 0 U1 0 U2 0 PU FEDERAL RESERVE BANK KANSAS CITY PI KANSAS CITY PA 925 GRAND AVE, KANSAS CITY, MO 64198 USA PY 2001 BP XXI EP XLI PG 21 WC Economics SC Business & Economics GA BBS17 UT WOS:000227537000001 ER PT B AU Ferguson, RW AF Ferguson, RW GP FRBKC TI Commentary: Technology, information production, and market efficiency SO ECONOMIC POLICY FOR THE INFORMATION ECONOMY LA English DT Proceedings Paper CT Symposium on Economic Policy for the Information Economy CY AUG 30-SEP 01, 2001 CL Jackson Hole, WY SP Fed Reserve Bank Kansas City C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 0 TC 0 Z9 0 U1 0 U2 0 PU FEDERAL RESERVE BANK KANSAS CITY PI KANSAS CITY PA 925 GRAND AVE, KANSAS CITY, MO 64198 USA PY 2001 BP 161 EP 171 PG 11 WC Economics SC Business & Economics GA BBS17 UT WOS:000227537000009 ER PT B AU Glick, R Moreno, R Spiegel, MM AF Glick, R Moreno, R Spiegel, MM BE Glick, R Moreno, R Spiegel, MM TI Financial crises in emerging markets: An introductory overview SO FINANCIAL CRISES IN EMERGING MARKETS LA English DT Proceedings Paper CT Conference on Financial Crises in Emerging Markets CY SEP 23-24, 1999 CL SAN FRANCISCO, CA SP Ctr Pacific Basin Monetary, Econ Studies Fed Reserve Bank San Francisco ID DEATH FORETOLD; MODEL C1 Fed Reserve Bank San Francisco, San Francisco, CA USA. NR 37 TC 0 Z9 0 U1 4 U2 4 PU CAMBRIDGE UNIV PRESS PI CAMBRIDGE PA THE PITT BUILDING, TRUMPINGTON ST, CAMBRIDGE CB2 1RP, CAMBS, ENGLAND BN 0-521-80020-X PY 2001 BP 1 EP 32 DI 10.1017/CBO9780511572159.002 PG 32 WC Business, Finance; Economics SC Business & Economics GA BV58X UT WOS:000179455500001 ER PT B AU Glick, R Hutchison, MM AF Glick, R Hutchison, MM BE Glick, R Moreno, R Spiegel, MM TI Banking and currency crises: How common are twins? SO FINANCIAL CRISES IN EMERGING MARKETS LA English DT Proceedings Paper CT Conference on Financial Crises in Emerging Markets CY SEP 23-24, 1999 CL SAN FRANCISCO, CA SP Ctr Pacific Basin Monetary, Econ Studies Fed Reserve Bank San Francisco ID PAYMENTS CRISES; BALANCE; MODEL C1 Fed Reserve Bank San Francisco, San Francisco, CA USA. NR 36 TC 19 Z9 19 U1 5 U2 5 PU CAMBRIDGE UNIV PRESS PI CAMBRIDGE PA THE PITT BUILDING, TRUMPINGTON ST, CAMBRIDGE CB2 1RP, CAMBS, ENGLAND BN 0-521-80020-X PY 2001 BP 35 EP 69 DI 10.1017/CBO9780511572159.003 PG 35 WC Business, Finance; Economics SC Business & Economics GA BV58X UT WOS:000179455500002 ER PT B AU Pesenti, P AF Pesenti, P BE Glick, R Moreno, R Spiegel, MM TI Discussion - Multiple equilibria, contagion, and the emerging market crises SO FINANCIAL CRISES IN EMERGING MARKETS LA English DT Proceedings Paper CT Conference on Financial Crises in Emerging Markets CY SEP 23-24, 1999 CL SAN FRANCISCO, CA SP Ctr Pacific Basin Monetary, Econ Studies Fed Reserve Bank San Francisco C1 Fed Reserve Bank New York, New York, NY 10045 USA. NR 4 TC 0 Z9 0 U1 0 U2 0 PU CAMBRIDGE UNIV PRESS PI CAMBRIDGE PA THE PITT BUILDING, TRUMPINGTON ST, CAMBRIDGE CB2 1RP, CAMBS, ENGLAND BN 0-521-80020-X PY 2001 BP 99 EP 105 DI 10.1017/CBO9780511572159.006 PG 7 WC Business, Finance; Economics SC Business & Economics GA BV58X UT WOS:000179455500005 ER PT B AU Kasa, K AF Kasa, K BE Glick, R Moreno, R Spiegel, MM TI Discussion - How are shocks propagated international firm-level evidence from the Russian and East Asian crises SO FINANCIAL CRISES IN EMERGING MARKETS LA English DT Proceedings Paper CT Conference on Financial Crises in Emerging Markets CY SEP 23-24, 1999 CL SAN FRANCISCO, CA SP Ctr Pacific Basin Monetary, Econ Studies Fed Reserve Bank San Francisco C1 Fed Reserve Bank San Francisco, San Francisco, CA USA. NR 3 TC 0 Z9 0 U1 0 U2 0 PU CAMBRIDGE UNIV PRESS PI CAMBRIDGE PA THE PITT BUILDING, TRUMPINGTON ST, CAMBRIDGE CB2 1RP, CAMBS, ENGLAND BN 0-521-80020-X PY 2001 BP 160 EP 164 DI 10.1017/CBO9780511572159.008 PG 5 WC Business, Finance; Economics SC Business & Economics GA BV58X UT WOS:000179455500007 ER PT B AU Spiegel, MM AF Spiegel, MM BE Glick, R Moreno, R Spiegel, MM TI Discussion - Uncertainty and the disappearance of international credit SO FINANCIAL CRISES IN EMERGING MARKETS LA English DT Proceedings Paper CT Conference on Financial Crises in Emerging Markets CY SEP 23-24, 1999 CL SAN FRANCISCO, CA SP Ctr Pacific Basin Monetary, Econ Studies Fed Reserve Bank San Francisco C1 Fed Reserve Bank San Francisco, San Francisco, CA USA. NR 0 TC 0 Z9 0 U1 0 U2 1 PU CAMBRIDGE UNIV PRESS PI CAMBRIDGE PA THE PITT BUILDING, TRUMPINGTON ST, CAMBRIDGE CB2 1RP, CAMBS, ENGLAND BN 0-521-80020-X PY 2001 BP 191 EP 195 DI 10.1017/CBO9780511572159.010 PG 5 WC Business, Finance; Economics SC Business & Economics GA BV58X UT WOS:000179455500009 ER PT B AU Chang, R AF Chang, R BE Glick, R Moreno, R Spiegel, MM TI Discussion - International capital inflows, domestic financial intermediation, and financial crises under imperfect information SO FINANCIAL CRISES IN EMERGING MARKETS LA English DT Proceedings Paper CT Conference on Financial Crises in Emerging Markets CY SEP 23-24, 1999 CL SAN FRANCISCO, CA SP Ctr Pacific Basin Monetary, Econ Studies Fed Reserve Bank San Francisco ID MODEL C1 Fed Reserve Bank Atlanta, Atlanta, GA USA. NR 9 TC 0 Z9 0 U1 0 U2 1 PU CAMBRIDGE UNIV PRESS PI CAMBRIDGE PA THE PITT BUILDING, TRUMPINGTON ST, CAMBRIDGE CB2 1RP, CAMBS, ENGLAND BN 0-521-80020-X PY 2001 BP 238 EP 242 DI 10.1017/CBO9780511572159.012 PG 5 WC Business, Finance; Economics SC Business & Economics GA BV58X UT WOS:000179455500011 ER PT J AU Humphrey, TM AF Humphrey, TM TI Quantity theory and needs-of-trade measurements and indicators for monetary policymakers in the 1920s SO HISTORY OF POLITICAL ECONOMY LA English DT Article C1 Fed Reserve Bank Richmond, Richmond, VA 23261 USA. RP Humphrey, TM (reprint author), Fed Reserve Bank Richmond, POB 27622, Richmond, VA 23261 USA. NR 39 TC 1 Z9 1 U1 0 U2 0 PU DUKE UNIV PRESS PI DURHAM PA 905 W MAIN ST, STE 18-B, DURHAM, NC 27701 USA SN 0018-2702 J9 HIST POLIT ECON JI Hist. Polit. Econ. PY 2001 VL 33 SU S BP 162 EP 189 DI 10.1215/00182702-33-Suppl_1-162 PG 28 WC Economics; History Of Social Sciences SC Business & Economics; Social Sciences - Other Topics GA 550MZ UT WOS:000175508000008 ER PT J AU Huck, P AF Huck, P TI Home mortgage lending by applicant race: Do HMDA figures provide a distorted picture? SO HOUSING POLICY DEBATE LA English DT Article DE data; minorities; mortgages AB The Home Mortgage Disclosure Act of 1975 (HMDA) was designed to further fair access to mortgage credit and requires lenders to report such information as location, loan amount, income, and race and sex for each application. However, race is missing in a significant proportion of applications taken by mail or phone. Given the widespread use of HMDA data by lenders, community groups, researchers, and regulators and the importance of mortgage lending as a public policy issue, the strengths and shortcomings of these data must be clearly understood. The main findings are that reported approval rates by race are significantly overstated for refinance and home improvement loans, while home purchase loans are little affected. A review of trends in how race is reported and in the technology of mortgage lending indicates that missing data on race will become a bigger and bigger problem in the near future. C1 Fed Reserve Bank Chicago, Chicago, IL USA. RP Huck, P (reprint author), Fed Reserve Bank Chicago, Chicago, IL USA. NR 17 TC 10 Z9 10 U1 0 U2 0 PU FANNIE MAE FOUNDATION PI WASHINGTON PA 4000 WISCONSIN AVE, NW, NORTH TOWER, STE ONE, WASHINGTON, DC 20016-2804 USA SN 1051-1482 J9 HOUS POLICY DEBATE JI Hous. Policy Debate PY 2001 VL 12 IS 4 BP 719 EP 736 PG 18 WC Planning & Development; Urban Studies SC Public Administration; Urban Studies GA 514KT UT WOS:000173438900006 ER PT B AU Durkin, TA Staten, ME AF Durkin, TA Staten, ME BE Durkin, TA Staten, ME TI The impact of public policy on consumer credit SO IMPACT OF PUBLIC POLICY ON CONSUMER CREDIT LA English DT Proceedings Paper CT Research Conference on Impact of Public Policy on Consumer Credit CY NOV, 1999 CL WASHINGTON, D.C. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 4 TC 0 Z9 0 U1 0 U2 0 PU KLUWER ACADEMIC PUBLISHERS PI NORWELL PA 101 PHILIP DRIVE, ASSINIPPI PARK, NORWELL, MA 02061 USA BN 0-7923-7418-5 PY 2001 BP 1 EP 22 PG 22 WC Economics; Public Administration SC Business & Economics; Public Administration GA BV57V UT WOS:000179401600001 ER PT B AU Maki, DM AF Maki, DM BE Durkin, TA Staten, ME TI The growth of consumer credit and the household debt service burden SO IMPACT OF PUBLIC POLICY ON CONSUMER CREDIT LA English DT Proceedings Paper CT Research Conference on Impact of Public Policy on Consumer Credit CY NOV, 1999 CL WASHINGTON, D.C. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 25 TC 0 Z9 0 U1 0 U2 2 PU KLUWER ACADEMIC PUBLISHERS PI NORWELL PA 101 PHILIP DRIVE, ASSINIPPI PARK, NORWELL, MA 02061 USA BN 0-7923-7418-5 PY 2001 BP 43 EP 68 PG 26 WC Economics; Public Administration SC Business & Economics; Public Administration GA BV57V UT WOS:000179401600003 ER PT B AU Luckett, CA AF Luckett, CA BE Durkin, TA Staten, ME TI Personal bankruptcies SO IMPACT OF PUBLIC POLICY ON CONSUMER CREDIT LA English DT Proceedings Paper CT Research Conference on Impact of Public Policy on Consumer Credit CY NOV, 1999 CL WASHINGTON, D.C. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 16 TC 0 Z9 0 U1 0 U2 0 PU KLUWER ACADEMIC PUBLISHERS PI NORWELL PA 101 PHILIP DRIVE, ASSINIPPI PARK, NORWELL, MA 02061 USA BN 0-7923-7418-5 PY 2001 BP 69 EP 108 PG 40 WC Economics; Public Administration SC Business & Economics; Public Administration GA BV57V UT WOS:000179401600004 ER PT B AU Durkin, TA Elliehausen, G AF Durkin, TA Elliehausen, G BE Durkin, TA Staten, ME TI Disclosure as a consumer protection SO IMPACT OF PUBLIC POLICY ON CONSUMER CREDIT LA English DT Proceedings Paper CT Research Conference on Impact of Public Policy on Consumer Credit CY NOV, 1999 CL WASHINGTON, D.C. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 37 TC 0 Z9 0 U1 0 U2 0 PU KLUWER ACADEMIC PUBLISHERS PI NORWELL PA 101 PHILIP DRIVE, ASSINIPPI PARK, NORWELL, MA 02061 USA BN 0-7923-7418-5 PY 2001 BP 109 EP 148 PG 40 WC Economics; Public Administration SC Business & Economics; Public Administration GA BV57V UT WOS:000179401600005 ER PT B AU Bostic, RW AF Bostic, RW BE Durkin, TA Staten, ME TI Trends in equal access to credit products SO IMPACT OF PUBLIC POLICY ON CONSUMER CREDIT LA English DT Proceedings Paper CT Research Conference on Impact of Public Policy on Consumer Credit CY NOV, 1999 CL WASHINGTON, D.C. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 31 TC 0 Z9 0 U1 0 U2 0 PU KLUWER ACADEMIC PUBLISHERS PI NORWELL PA 101 PHILIP DRIVE, ASSINIPPI PARK, NORWELL, MA 02061 USA BN 0-7923-7418-5 PY 2001 BP 171 EP 208 PG 38 WC Economics; Public Administration SC Business & Economics; Public Administration GA BV57V UT WOS:000179401600007 ER PT B AU Johnson, KW AF Johnson, KW BE Durkin, TA Staten, ME TI Consumer loan securitization SO IMPACT OF PUBLIC POLICY ON CONSUMER CREDIT LA English DT Proceedings Paper CT Research Conference on Impact of Public Policy on Consumer Credit CY NOV, 1999 CL WASHINGTON, D.C. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 31 TC 0 Z9 0 U1 0 U2 0 PU KLUWER ACADEMIC PUBLISHERS PI NORWELL PA 101 PHILIP DRIVE, ASSINIPPI PARK, NORWELL, MA 02061 USA BN 0-7923-7418-5 PY 2001 BP 287 EP 313 PG 27 WC Economics; Public Administration SC Business & Economics; Public Administration GA BV57V UT WOS:000179401600010 ER PT J AU Bansak, C Raphael, S AF Bansak, C Raphael, S TI Immigration reform and the earnings of Latino workers: Do employer sanctions cause discrimination SO INDUSTRIAL & LABOR RELATIONS REVIEW LA English DT Article ID CONTROL ACT; LABOR-MARKET; WAGES; TRENDS AB Using the Current Population Surveys, the authors investigate whether sanctions against employers for hiring undocumented workers, a provision of the 1986 Immigration Reform and Control Act (IRCA), adversely affected the hourly earnings of Latino workers in the southwestern United States. The analysis exploits the fact that agricultural employers were exempt from the sanctions and from employee-verification requirements for the first two years following IRCA's passage. The authors find substantial pre-post IRCA declines in the wages of Latino nonagricultural workers relative to Latinos in agriculture. They do not observe similar shifts in the relative wages among non-Latino white workers. When using non-Latino black and white non-agricultural workers as alternative control groups, they find that Latino wages declined relative to black wages but not relative to white wages. Finally, they find that the pre-post IRCA inter-sectoral and inter-ethnic relative wage declines for Latino non-agricultural workers do not reflect longer-term trends. C1 Fed Reserve Syst, Washington, DC 20551 USA. Univ Calif Berkeley, Goldman Sch Publ Policy, Berkeley, CA 94720 USA. RP Bansak, C (reprint author), Fed Reserve Syst, Washington, DC 20551 USA. NR 28 TC 23 Z9 23 U1 2 U2 6 PU INDUSTRIAL LABOR RELAT REV PI ITHACA PA CORNELL UNIV, ITHACA, NY 14851-0952 USA SN 0019-7939 J9 IND LABOR RELAT REV JI Ind. Labor Relat. Rev. PD JAN PY 2001 VL 54 IS 2 BP 275 EP 295 DI 10.2307/2696011 PG 21 WC Industrial Relations & Labor SC Business & Economics GA 393PL UT WOS:000166478800005 ER PT J AU Marquez, J AF Marquez, J TI Methodology and tacit knowledge: Two experiments in econometrics SO INTERNATIONAL JOURNAL OF FORECASTING LA English DT Book Review C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Marquez, J (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 2 TC 0 Z9 0 U1 0 U2 0 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0169-2070 J9 INT J FORECASTING JI Int. J. Forecast. PD JAN-MAR PY 2001 VL 17 IS 1 BP 130 EP 133 DI 10.1016/S0169-2070(00)00071-6 PG 4 WC Economics; Management SC Business & Economics GA 400QT UT WOS:000166883700011 ER PT J AU Drabenstott, M AF Drabenstott, M TI New policies for a new rural america SO INTERNATIONAL REGIONAL SCIENCE REVIEW LA English DT Article AB The U.S. rural economy is undergoing huge changes as the twenty-first century begins. The most compelling feature of these several changes is unevenness: some rural areas are booming while many others struggle. Looking forward, rural America faces five major challenges. Closing the digital divide will help rural America top e-business opportunities. Urging on rural entrepreneurs will help fuel new economic activity on Main Street. Leveraging a new product-oriented agriculture will boost growth in some farming communities, but probably not all. Sustaining the rural environment will provide a strong economic foundation for many scenic rural areas. And boosting rural human capital will be essential for most rural growth strategies. Public policy will play an important supporting role as rural America meets these challenges. But rural policies in the twenty-first century will have to go far beyond a historical focus on agriculture. The period ahead will likely see a rich debate on the goals and mechanisms of a new generation of rural policy. C1 Fed Reserve Bank, Ctr Study Rural Amer, Kansas City, MO USA. RP Drabenstott, M (reprint author), Fed Reserve Bank, Ctr Study Rural Amer, Kansas City, MO USA. NR 1 TC 16 Z9 17 U1 1 U2 3 PU SAGE PUBLICATIONS INC PI THOUSAND OAKS PA 2455 TELLER RD, THOUSAND OAKS, CA 91320 USA SN 0160-0176 J9 INT REGIONAL SCI REV JI Int. Reg. Sci. Rev. PD JAN PY 2001 VL 24 IS 1 BP 3 EP 15 DI 10.1177/016001701761012962 PG 13 WC Environmental Studies; Planning & Development; Urban Studies SC Environmental Sciences & Ecology; Public Administration; Urban Studies GA 385AC UT WOS:000165978600001 ER PT J AU Greenspan, A AF Greenspan, A TI The economy of rural America SO INTERNATIONAL REGIONAL SCIENCE REVIEW LA English DT Article C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Greenspan, A (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 0 TC 0 Z9 0 U1 0 U2 0 PU SAGE PUBLICATIONS INC PI THOUSAND OAKS PA 2455 TELLER RD, THOUSAND OAKS, CA 91320 USA SN 0160-0176 J9 INT REGIONAL SCI REV JI Int. Reg. Sci. Rev. PD JAN PY 2001 VL 24 IS 1 BP 16 EP 20 DI 10.1177/016001701761012999 PG 5 WC Environmental Studies; Planning & Development; Urban Studies SC Environmental Sciences & Ecology; Public Administration; Urban Studies GA 385AC UT WOS:000165978600002 ER PT J AU Carey, M Hrycay, M AF Carey, M Hrycay, M TI Parameterizing credit risk models with rating data SO JOURNAL OF BANKING & FINANCE LA English DT Article DE credit risk; value at risk; credit ratings; debt default; capital regulation ID DEBT AB Estimates of average default probabilities for borrowers assigned to each of a financial institution's internal credit risk rating grades are crucial inputs to portfolio credit risk models. Such models are increasingly used in setting financial institution capital structure, in internal control and compensation systems, in asset-backed security design, and are being considered for use in setting regulatory capital requirements for banks. This paper empirically examines properties of the major methods currently used to estimate average default probabilities by grade. Evidence of potential problems of bias, instability, and gaming is presented. With care, and perhaps judicious application of multiple methods, satisfactory estimates may be possible. In passing, evidence is presented about other properties of internal and rating-agency ratings. (C) 2001 Elsevier Science B.V. All rights reserved. JEL classification. G11; G20, G31: G33. C1 Fed Reserve Board, Washington, DC 20551 USA. Advertising Com, Baltimore, MD 21230 USA. RP Carey, M (reprint author), Fed Reserve Board, Mail Stop 153, Washington, DC 20551 USA. NR 22 TC 36 Z9 37 U1 2 U2 9 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 J9 J BANK FINANC JI J. Bank Financ. PD JAN PY 2001 VL 25 IS 1 BP 197 EP 270 DI 10.1016/S0378-4266(00)00124-2 PG 74 WC Business, Finance; Economics SC Business & Economics GA 392JB UT WOS:000166407000010 ER PT J AU Lettau, M Gong, G Semmler, W AF Lettau, M Gong, G Semmler, W TI Statistical estimation and moment evaluation of a stochastic growth model with asset market restrictions SO JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION LA English DT Article; Proceedings Paper CT 3rd International Conference on Computing in Economics and Finance CY JUN 30-JUL 02, 1997 CL STANFORD UNIV, STANFORD, CALIFORNIA HO STANFORD UNIV DE stochastic growth model; sharpe-ratio; maximum likelihood ID CONTINUOUS-VARIABLES; EQUITY PREMIUM; BUSINESS-CYCLE; OPTIMIZATION; PUZZLE; TIME AB This paper estimates the parameters of a stochastic growth model with asset market and contrasts the model's moments with moments of the actual data. We solve the model through log-linearization along the line of Campbell (1994) [Journal of Monetary Economics 33(3), 463] and estimate the model without and with asset pricing restrictions. As asset pricing restrictions we employ the riskfree interest rate and the Sharpe-ratio. To estimate the parameters we employ, as in Semmler and Gong (1996a) [Journal of Economics Behavior and Organization 30, 301], a ML estimation. The estimation is conducted through the simulated annealing. We introduce a diagnostic procedure which is closely related to Watson (1993) [Journal of Political Economy 101(6), 1011] and Diebold et al. (1995) [Technical Working Paper No. 174, National Burea of Economic Research] to test whether the second moments of the actual macroeconomic time series data are matched by the model's time series. Several models are explored. The overall results are that sensible parameter estimates may be obtained when the actual and computed riskfree rate is included in the moments to be matched. The attempt, however, to include the Sharpe-ratio as restriction in the estimation does not produce sensible estimates. The paper thus shows, by employing statistical estimation techniques, that the baseline real business cycle (RBC) model is not likely to give correct predictions on asset market pricing when parameters are estimated from actual time series data. (C) 2001 Elsevier Science B.V. All rights reserved. JEL classification: C13; C15; C61; E32; G1; G12. C1 New Sch Social Res, Dept Econ, New York, NY 10003 USA. Fed Reserve Bank New York, Res Dept, New York, NY 10045 USA. Univ Bielefeld, Dept Econ, D-33615 Bielefeld, Germany. RP Semmler, W (reprint author), New Sch Univ, Dept Econ, 65 5th Ave, New York, NY 10003 USA. NR 35 TC 5 Z9 5 U1 3 U2 6 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0167-2681 J9 J ECON BEHAV ORGAN JI J. Econ. Behav. Organ. PD JAN PY 2001 VL 44 IS 1 BP 85 EP 103 DI 10.1016/S0167-2681(00)00149-9 PG 19 WC Economics SC Business & Economics GA 381GL UT WOS:000165753900005 ER PT J AU Kozicki, S Tinsley, PA AF Kozicki, S Tinsley, PA TI Term structure views of monetary policy under alternative models of agent expectations SO JOURNAL OF ECONOMIC DYNAMICS & CONTROL LA English DT Article DE changepoints; expectations hypothesis; nonstationary inflation; shifting endpoint ID NOMINAL INTEREST-RATES; TIME-SERIES; INFLATION; FUNDS AB Term structure models and many descriptions of the transmission of monetary policy rest on the empirical relevance of the expectations hypothesis. Small differences in,the perceived policy reaction function in VAR models of agent expectations strongly influence the relevance in the transmission mechanism of the expected short rate component of bond yields. Mean-reverting or difference-stationary characterizations of interest rates require large and volatile term premiums to match the observable term structure. However, short rate descriptions that capture shifting perceptions of long-horizon inflation evident in survey data support a more substantial term structure role for short rate expectations. (C) 2001 Elsevier Science B.V. All rights reserved. JEL classification: E4. C1 Fed Reserve Bank, Kansas City, MO 64198 USA. Univ Cambridge, Fac Econ & Polit, Cambridge CB3 9DD, England. RP Kozicki, S (reprint author), Fed Reserve Bank, 925 Grand Blvd, Kansas City, MO 64198 USA. NR 39 TC 26 Z9 26 U1 3 U2 5 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0165-1889 J9 J ECON DYN CONTROL JI J. Econ. Dyn. Control PD JAN PY 2001 VL 25 IS 1-2 BP 149 EP 184 DI 10.1016/S0165-1889(99)00072-X PG 36 WC Economics SC Business & Economics GA 362LU UT WOS:000089780100005 ER PT J AU Tetlow, RJ von zur Muehlen, P AF Tetlow, RJ von zur Muehlen, P TI Simplicity versus optimality: The choice of monetary policy rules when agents must learn SO JOURNAL OF ECONOMIC DYNAMICS & CONTROL LA English DT Article DE monetary policy; learning ID RATIONAL-EXPECTATIONS; PHILLIPS-CURVE; MODEL AB The normal assumption of full information is dropped and the choice of monetary policy rules is instead examined when private agents must learn the rule. A small, forward-looking model is estimated and stochastic simulations conducted with agents using discounted least squares to learn of a change of preferences or a switch to a more complex rule. We find that the costs of learning a new rule may be substantial, depending on preferences and the rule that is initially in place. Policymakers with strong preferences for inflation control incur substantial costs when they change the rule in use, but are nearly always willing to bear the costs. Policymakers with weak preferences for inflation control may actually benefit from agents' prior belief that a strong rule is in place. (C) 2001 Elsevier Science B.V. All rights reserved. JEL classification: C5; C6; E5. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP von zur Muehlen, P (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. EM pmuehlen@frb.gov NR 43 TC 9 Z9 9 U1 0 U2 1 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0165-1889 J9 J ECON DYN CONTROL JI J. Econ. Dyn. Control PD JAN PY 2001 VL 25 IS 1-2 BP 245 EP 279 DI 10.1016/S0165-1889(99)00075-5 PG 35 WC Economics SC Business & Economics GA 362LU UT WOS:000089780100008 ER PT J AU David, A AF David, A TI Pricing the strategic value of putable securities in liquidity crises SO JOURNAL OF FINANCIAL ECONOMICS LA English DT Article DE credit risk protection; poison puts; liquidity trigger; bankruptcy costs; multilateral negotiations ID OPTIMAL CAPITAL STRUCTURE; BOND COVENANTS; PERFECT EQUILIBRIUM; BANKRUPTCY COSTS; CORPORATE-DEBT; FIRM; RISK; REORGANIZATION; VALUATION; POISON AB Putable security holders have a de facto first claim on the firm's liquid assets and can threaten to force solvent issuers to bear financial distress costs. Their threatening power implies that the puts have a strategic value larger than their intrinsic value. Strategic value depends on the issuer's size, potential distress costs, and the distribution of put ownership relative to the firm's liquidity position. The analysis of Kmart's put-induced crisis in 1995, and a calibration to observed secondary market yield reductions on poison put bonds, shows that strategic value is an important determinant of payouts received by bondholders. (C) 2001 Elsevier Science S.A. All rights reserved. JEL classification: G13; G33. C1 Fed Reserve Syst, Board Governors, Capital Markets Sect, Washington, DC 20551 USA. RP David, A (reprint author), Fed Reserve Syst, Board Governors, Capital Markets Sect, Washington, DC 20551 USA. NR 40 TC 8 Z9 8 U1 2 U2 12 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0304-405X J9 J FINANC ECON JI J. Financ. Econ. PD JAN PY 2001 VL 59 IS 1 BP 63 EP 99 DI 10.1016/S0304-405X(00)00082-9 PG 37 WC Business, Finance; Economics SC Business & Economics GA 391TU UT WOS:000166372300003 ER PT J AU DeYoung, R Roland, KP AF DeYoung, R Roland, KP TI Product mix and earnings volatility at commercial banks: Evidence from a degree of total leverage model SO JOURNAL OF FINANCIAL INTERMEDIATION LA English DT Article DE commercial banks; degree of total leverage; earnings volatility; fee-based actitivities; product mix ID RISK; RETURNS; IMPACT AB We construct a degree-of-total-leverage framework to test whether and how shifts in product mix affect earnings volatility at 472 U.S. commercial banks between 1988 and 1995. Our framework, which accounts for cost and revenue synergies net captured in most previous studies, conceptually links earnings volatility to revenue volatility, expense fixity, and product mix. We find that replacing traditional lending activities with fee-based activities-an ongoing trend that may be strengthened by recent financial modernization-is associated with both higher revenue volatility and higher total leverage, which in this framework implies higher earnings volatility. Journal of Economic Literature Classification Numbers: G21, G32, D24. (C) 2001 Academic Press. C1 Fed Reserve Bank, Econ Res Dept, Chicago, IL 60604 USA. Valdosta State Univ, Coll Business Adm, Dept Accounting & Finance, Valdosta, GA 31698 USA. RP DeYoung, R (reprint author), Fed Reserve Bank, Econ Res Dept, 230 S LaSalle St, Chicago, IL 60604 USA. NR 34 TC 129 Z9 132 U1 7 U2 19 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 1042-9573 J9 J FINANC INTERMED JI J. Financ. Intermed. PD JAN PY 2001 VL 10 IS 1 BP 54 EP 84 DI 10.1006/jfin.2000.0305 PG 31 WC Business, Finance SC Business & Economics GA 402MT UT WOS:000166992800003 ER PT J AU Espinosa-Vega, MA Russell, S AF Espinosa-Vega, MA Russell, S TI Are there optimal multiple-reserve requirements? SO JOURNAL OF FINANCIAL INTERMEDIATION LA English DT Article AB A number of developing countries have adopted deficit finance regimes involving multiple-(currency and bond) reserve requirements. A key characteristic of these regimes is that the real interest rates on reservable bonds are higher than the real return rates on currency, so that the nominal interest rates on the bonds are positive. We seek an efficiency-based explanation for the existence of multiple-reserve regimes and for this key characteristic. We find that there are economies in which some of the efficient allocations can be supported only by multiple-reserve requirements, and that positive nominal bond rates may be needed to support some of these allocations. We also find that there are economies in which allocations supported by multiple-reserve regimes with negative nominal bond rates Pareto dominate single-reserve allocations, even when the latter are efficient relative to other single-reserve allocations. Journal of Economic Literature Classification Numbers: E42, E58, H62. (C) 2001 Academic Press. C1 Fed Reserve Bank, Dept Res, Atlanta, GA 30306 USA. IUPUI, Dept Econ, Indianapolis, IN 46202 USA. RP Espinosa-Vega, MA (reprint author), Fed Reserve Bank, Dept Res, 104 Marietta St, Atlanta, GA 30306 USA. NR 9 TC 0 Z9 0 U1 0 U2 2 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 1042-9573 J9 J FINANC INTERMED JI J. Financ. Intermed. PD JAN PY 2001 VL 10 IS 1 BP 85 EP 104 DI 10.1006/jfin.2000.0303 PG 20 WC Business, Finance SC Business & Economics GA 402MT UT WOS:000166992800004 ER PT J AU Locke, PR Sarkar, A AF Locke, PR Sarkar, A TI Liquidity supply and volatility: Futures market evidence SO JOURNAL OF FUTURES MARKETS LA English DT Article ID BEHAVIOR AB This article examines the provision of liquidity in futures markets as price volatility changes. We find that customer trading costs do not increase with volatility. However, for three of the four contracts studied, the nature of liquidity supply changes with volatility. Specifically, For relatively inactive contracts, customers as a group trade more with each other and less with market makers, on higher volatility days. By contrast, for the most active contract, trading between customers and market makers increases with volatility. We also find that market makers' income per contract decreases with volatility for one of the least active contracts in our sample, but is not significantly affected by volatility for the other contracts. These results are consistent with the idea that, for high-cost, inactive contracts, market makers react to temporary increases in volatility by raising their bid-ask spreads significantly, and customers provide increased liquidity through standing limit orders. An implication of our results is that electronic systems, where market maker participation is not required, are able to supply adequate liquidity during volatile periods. (C) 2001 John Wiley & Sons, Inc. C1 Fed Reserve Bank New York, New York, NY 10045 USA. George Washington Univ, Dept Finance, Washington, DC USA. RP Sarkar, A (reprint author), Fed Reserve Bank New York, 33 Liberty St, New York, NY 10045 USA. NR 10 TC 7 Z9 7 U1 1 U2 7 PU JOHN WILEY & SONS INC PI NEW YORK PA 605 THIRD AVE, NEW YORK, NY 10158-0012 USA SN 0270-7314 J9 J FUTURES MARKETS JI J. Futures Mark. PD JAN PY 2001 VL 21 IS 1 BP 1 EP 17 PG 17 WC Business, Finance SC Business & Economics GA 377KN UT WOS:000165512900001 ER PT J AU Gokhale, J Kotlikoff, LJ Sefton, J Weale, M AF Gokhale, J Kotlikoff, LJ Sefton, J Weale, M TI Simulating the transmission of wealth inequality via bequests SO JOURNAL OF PUBLIC ECONOMICS LA English DT Article; Proceedings Paper CT Conference on Bequests and Wealth Taxation CY MAY 15-17, 1998 CL UNIV LIEGE, LIEGE, BELGIUM SP Int Seminar Public Econom, Pierre Pestieau HO UNIV LIEGE ID NATIONAL DISTRIBUTION; LIFE-CYCLE; INHERITANCE; MOBILITY; EARNINGS; INCOME; MODEL; CONSUMPTION; TRANSFERS; ALTRUISM AB This paper develops, calibrates, and simulates a dynamic 88-period OLG model to study the intergenerational transmission of U.S. wealth inequality via bequests. The model features marriage, realistic fertility patterns, random death, assortative mating based on skills, heterogeneous skill endowments, heterogeneous rates of return, skill inheritability, progressive income taxation, and resource annuitization via social security. All bequests arise from imperfect annuitization. Nonetheless, the model generates a realistic ratio of aggregate wealth to aggregate labor income, a realistic bequest flow relative to the stock of wealth, and a realistic wealth distribution at retirement. Skill differences, assortative mating, social security, and the time preference are the primary determinants of wealth inequality. Bequests do propagate wealth inequality, but only in the presence of social security, which disproportionately disinherits the lifetime poor. Intergenerational wealth immobility, also considered here, is primarily determined by the inheritance of skills from one's parents and the magnification of the impact of this inheritance by marital sorting. (C) 2001 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank Cleveland, Cleveland, OH 44101 USA. Boston Univ, Boston, MA 02215 USA. Natl Bur Econ Res, Boston, MA 02215 USA. Natl Inst Econ & Social Res, London SW1P 3HE, England. RP Gokhale, J (reprint author), Fed Reserve Bank Cleveland, 1455 E 6th St, Cleveland, OH 44101 USA. NR 45 TC 29 Z9 29 U1 0 U2 6 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0047-2727 J9 J PUBLIC ECON JI J. Public Econ. PD JAN PY 2001 VL 79 IS 1 BP 93 EP 128 DI 10.1016/S0047-2727(00)00097-9 PG 36 WC Economics SC Business & Economics GA 377WV UT WOS:000165550000006 ER PT J AU Mattey, J Wallace, N AF Mattey, J Wallace, N TI Housing-price cycles and prepayment rates of US mortgage pools SO JOURNAL OF REAL ESTATE FINANCE AND ECONOMICS LA English DT Article DE mortgage-backed security; prepayment; default; option models; hazard models ID BACKED SECURITIES; TERM STRUCTURE; VALUATION; TERMINATIONS; MODEL AB Empirical mortgage prepayment models generally have trouble explaining differences in mortgage-prepayment speeds among pools with similar interest rates on the underlying mortgages. In this article, we model some of the sources of termination heterogeneity across mortgage pools, particularly the role of regional variations in housing prices in generating atypical prepayment speeds. Using a sample of Freddie Mac mortgage pools from 1991 to 1998, we compare two classes of empirical models: a rational option-pricing model using a backward-solving pricing algorithm and an empirical hazard model. In both empirical estimation strategies, we find evidence that differences in house-price dynamics across regions are an important source of between-pool heterogeneity. This finding is then shown to be robust to alternative ways of parameterizing pool heterogeneity in mortgage termination models. C1 Fed Reserve Bank San Francisco, San Francisco, CA 94105 USA. Univ Calif Berkeley, Haas Sch Business, Berkeley, CA 94720 USA. RP Mattey, J (reprint author), Fed Reserve Bank San Francisco, San Francisco, CA 94105 USA. NR 25 TC 11 Z9 11 U1 0 U2 3 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0895-5638 J9 J REAL ESTATE FINANC JI J. Real Estate Financ. Econ. PY 2001 VL 23 IS 2 BP 161 EP 184 DI 10.1023/A:1011106416095 PG 24 WC Business, Finance; Economics; Urban Studies SC Business & Economics; Urban Studies GA 451EW UT WOS:000169789000003 ER PT J AU Heuson, A Passmore, W Sparks, R AF Heuson, A Passmore, W Sparks, R TI Credit scoring and mortgage securitization: Implications for mortgage rates and credit availability SO JOURNAL OF REAL ESTATE FINANCE AND ECONOMICS LA English DT Article DE mortgage securitization; credit scoring; mortgage rate determination; credit availability ID MARKET; INFORMATION AB This article develops a model of the interactions between borrowers, originators, and a securitizer in primary and secondary mortgage markets. In the secondary market, the securitizer adds liquidity and plays a strategic game with mortgage originators. The securitizer sets the price at which it will purchase mortgages and the credit-score standard that qualifies a mortgage for purchase. We investigate two potential links between securitization and mortgage rates. First, we analyze whether a portion of the liquidity premium gets passed on to borrowers in the form of a lower mortgage rate. Somewhat surprisingly, we find very plausible conditions under which securitization fails to lower the mortgage rate. Second, and consistent with recent empirical results, we derive an inverse correlation between the volume of securitization and mortgage rates. However, the causation is reversed from the standard rendering. In our model, a decline in the mortgage rate causes increased securitization rather than the other way around. C1 Univ Miami, Dept Finance, Coral Gables, FL 33134 USA. Fed Reserve Board, Washington, DC 20551 USA. Mills Coll, Dept Econ, Oakland, CA 94613 USA. RP Heuson, A (reprint author), Univ Miami, Dept Finance, Box 248094, Coral Gables, FL 33134 USA. NR 20 TC 17 Z9 17 U1 1 U2 8 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0895-5638 J9 J REAL ESTATE FINANC JI J. Real Estate Financ. Econ. PY 2001 VL 23 IS 3 BP 337 EP 363 DI 10.1023/A:1017952120081 PG 27 WC Business, Finance; Economics; Urban Studies SC Business & Economics; Urban Studies GA 472CU UT WOS:000170966300006 ER PT J AU Bostic, RW Surette, BJ AF Bostic, RW Surette, BJ TI Have the doors opened wider ? Trends in homeownership rates by race and income SO JOURNAL OF REAL ESTATE FINANCE AND ECONOMICS LA English DT Article DE homeownership; race; income; Community Reinvestment Act; credit scoring ID HMDA DATA; WEALTH AB Homeownership among U.S. families increased notably in recent years, from 63 percent in 1989 to 66.2 percent in 1998. This article examines this trend and the factors contributing to it. We find that (1) homeownership rose for all racial, ethnic, and income groups; (2) the differences in homeownership between minority and nonminority families and between middle-income and lower-income families declined significantly; and (3) changes in family-related characteristics explain homeownership trends among only the top two income quintiles. Among the lower two income quintiles, family-related characteristics explain almost none of the increase in homeownership. This pattern suggests that the favorable economic climate of the last decade, changes in mortgage and housing markets, and changes in the regulations governing those markets account for the increase in homeownership among lower-income families. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. Freddie Mac, Mclean, VA 22102 USA. RP Bostic, RW (reprint author), Fed Reserve Syst, Board Governors, Mail Stop 153,20th & C St NW, Washington, DC 20551 USA. NR 18 TC 28 Z9 28 U1 0 U2 3 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0895-5638 J9 J REAL ESTATE FINANC JI J. Real Estate Financ. Econ. PY 2001 VL 23 IS 3 BP 411 EP 434 DI 10.1023/A:1017960321898 PG 24 WC Business, Finance; Economics; Urban Studies SC Business & Economics; Urban Studies GA 472CU UT WOS:000170966300010 ER PT J AU Aaronson, D AF Aaronson, D TI Neighborhood dynamics SO JOURNAL OF URBAN ECONOMICS LA English DT Article ID EDUCATION; MODELS AB The evolution of neighborhood characteristics is an important bur understudied component of research on the consequences of community income and racial sorting. This paper reports descriptive findings on census tract dynamics in the U.S. between 1970 and 1990. The empirical vector autoregression techniques allow a more complete description of important systematic facts about neighborhood race. income, and housing dynamics. A number of insights about neighborhood evolution emerge, including estimates of the persistence and feedback effects of ti oct composition, the level of heterogeneity in the evolution of neighborhoods, and the impact of nearby neighbor hoods and labor market conditions on a tract's growth. C1 Fed Reserve Bank, Res Dept, Chicago, IL 60604 USA. RP Aaronson, D (reprint author), Fed Reserve Bank, Res Dept, 230 S LaSalle St, Chicago, IL 60604 USA. NR 30 TC 20 Z9 20 U1 1 U2 4 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 0094-1190 J9 J URBAN ECON JI J. Urban Econ. PD JAN PY 2001 VL 49 IS 1 BP 1 EP 31 DI 10.1006/juec.2000.2181 PG 31 WC Economics; Urban Studies SC Business & Economics; Urban Studies GA 389BA UT WOS:000166217300001 ER PT J AU Krainer, J AF Krainer, J TI A theory of liquidity in residential real estate markets SO JOURNAL OF URBAN ECONOMICS LA English DT Article ID HOUSING-MARKET; PRICES; SEARCH; HOMES; MODEL; TIME AB A "hot" real estate market is one where prices ore rising, average selling times are short and the volume of transactions is higher than the non. "Cold" markets have the opposite characteristics: prices are falling, liquidity is poor, and volume is low. This paper provides a theory to match these observed correlations. I show that liquidity can be good while prices are high because the opportunity cost of failing to complete a transaction is high for both buyers and sellers. I also show how state-varying liquidity depends on the absence of smoothly functioning rental markets. C1 Fed Reserve Bank, Res Dept, San Francisco, CA 94105 USA. RP Krainer, J (reprint author), Fed Reserve Bank, Res Dept, 101 Market St, San Francisco, CA 94105 USA. NR 11 TC 67 Z9 68 U1 3 U2 10 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 0094-1190 J9 J URBAN ECON JI J. Urban Econ. PD JAN PY 2001 VL 49 IS 1 BP 32 EP 53 DI 10.1006/juec.2000.2180 PG 22 WC Economics; Urban Studies SC Business & Economics; Urban Studies GA 389BA UT WOS:000166217300002 ER PT J AU Chauvet, M Potter, S AF Chauvet, M Potter, S TI Recent changes in the US business cycle SO MANCHESTER SCHOOL LA English DT Article; Proceedings Paper CT Conference on Growth and Business Cycles in Theory and Practice CY JUL, 2000 CL UNIV MANCHESTER, MANCHESTER, ENGLAND SP Ctr Growth & Business Cycles Res HO UNIV MANCHESTER AB The US business cycle expansion that started in March 1991 is the longest on record. In this paper we use statistical techniques to examine whether this expansion is a one-time unique event or whether its length is a result of a change in the stability of the US economy. Bayesian methods are used to estimate a common factor model that allows for structural breaks in the dynamics of a wide range of macroeconomic variables. We find strong evidence that a reduction in volatility is common to the series examined. Further, the reduction in volatility implies that future expansions will be considerably longer than the historical record. C1 Univ Calif Riverside, Riverside, CA 92521 USA. Fed Reserve Bank New York, New York, NY 10045 USA. RP Chauvet, M (reprint author), Univ Calif Riverside, Riverside, CA 92521 USA. NR 15 TC 31 Z9 31 U1 0 U2 3 PU BLACKWELL PUBL LTD PI OXFORD PA 108 COWLEY RD, OXFORD OX4 1JF, OXON, ENGLAND SN 1463-6786 J9 MANCH SCH JI Manch. Sch. PY 2001 VL 69 IS 5 SI SI BP 481 EP 508 DI 10.1111/1467-9957.00266 PG 28 WC Economics SC Business & Economics GA 495ND UT WOS:000172346500002 ER PT B AU Henderson, DW Kim, F AF Henderson, DW Kim, F BE Leijonhufvud, A TI The choice of a monetary policy reaction function in a simple opt1imizing model SO MONETARY THEORY AND POLICY EXPERIENCE SE International Economic Association Series LA English DT Proceedings Paper CT Conference of the International-Economic-Association CY SEP 04-07, 1997 CL UNIV TRENTO, TRENT, ITALY SP Int Econ Assoc HO UNIV TRENTO ID TARGETING NOMINAL INCOME; BUSINESS-CYCLE; MONOPOLISTIC COMPETITION; OPTIMIZING MODEL; MACRO MODEL; CONTRACTS; MONEY; DEMAND C1 Fed Reserve Board, Washington, DC USA. NR 41 TC 2 Z9 2 U1 1 U2 1 PU PALGRAVE PI BASINGSTOKE PA HOUNDMILLS, BASINGSTOKE RG21 6XS, ENGLAND BN 0-333-96089-0 J9 INT ECON ASSOC SERIE PY 2001 BP 122 EP 178 PG 57 WC Business, Finance SC Business & Economics GA BU49S UT WOS:000176149300006 ER PT S AU Drazen, A Alesina, A Walsh, CE AF Drazen, A Alesina, A Walsh, CE BE Bernanke, BS Rogoff, K TI The political business cycle after 25 years SO NBER MACROECONOMICS ANNUAL 2000 SE NBER MACROECONOMICS ANNUAL LA English DT Article; Proceedings Paper CT Annual Macroeconomics Conference CY APR 07-08, 2000 CL CAMBRIDGE, MASSACHUSETTS SP Natl Bur Econ Res ID MONETARY-POLICY; MACROECONOMIC POLICY; CONGRESSIONAL ELECTIONS; ECONOMIC CONDITIONS; FLUCTUATIONS; DETERMINANTS; PRESIDENT; BEHAVIOR; EVENTS; RULES AB Research on the political business cycle since the mid-1970s is surveyed and assessed. We argue that models based on monetary surprises as the driving force are unconvincing explanations of either opportunistic or partisan cycles. Research should concentrate on fiscal policy as the driving force, with monetary effects being the result of accommodation of fiscal impulses. We present a model political business-cycle model (which we term the AFPM model) that combines active fiscal policy and passive monetary policy and that addresses a number of objections to earlier models. C1 Univ Maryland, College Pk, MD 20742 USA. Hebrew Univ Jerusalem, Jerusalem, Israel. NBER, Cambridge, MA 02138 USA. CEPR, London, England. Harvard Univ, Cambridge, MA 02138 USA. Univ Calif Santa Cruz, Santa Cruz, CA 95064 USA. Fed Reserve Bank, San Francisco, CA USA. RP Drazen, A (reprint author), Univ Maryland, College Pk, MD 20742 USA. NR 70 TC 37 Z9 38 U1 3 U2 9 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 0889-3365 BN 0-262-02503-5 J9 NBER MACROECON ANN PY 2001 VL 15 BP 75 EP + PG 64 WC Economics SC Business & Economics GA BX24D UT WOS:000184718900002 ER PT S AU Morris, S Shin, HS Atkeson, A Rey, H AF Morris, S Shin, HS Atkeson, A Rey, H BE Bernanke, BS Rogoff, K TI Rethinking multiple equilibria in macroeconomic modeling SO NBER MACROECONOMICS ANNUAL 2000 SE NBER MACROECONOMICS ANNUAL LA English DT Article; Proceedings Paper CT Annual Macroeconomics Conference CY APR 07-08, 2000 CL CAMBRIDGE, MASSACHUSETTS SP Natl Bur Econ Res ID BANKING PANICS; SELECTION; GAMES; RUNS AB Are beliefs as indeterminate as suggested by models with multiple equilibria? Multiplicity of equilibria arises largely as the unintended consequence of two modeling assumptions-the fundamentals are assumed to be common knowledge, and economic agents know others' actions in equilibrium. Both are questionable. When others' actions are not known with certainty (as when actions rely on noisy signals), self-fulfilling beliefs lead to a unique outcome determined by the fundamentals and the knowledge that others are rational. This paper illustrates this approach in the context of a model of bank runs and other similar applications. Such an approach places comparative statics and policy analyses on a firmer footing. It also suggests that public information has a disproportionately larger influence on the outcome than private information. C1 Yale Univ, New Haven, CT 06520 USA. Univ Oxford, Oxford OX1 2JD, England. Univ Minnesota, Minneapolis, MN 55455 USA. Univ London London Sch Econ & Polit Sci, London WC2A 2AE, England. CEPR, London, England. Fed Reserve Bank Minneapolis, Minneapolis, MN 55480 USA. RP Morris, S (reprint author), Yale Univ, New Haven, CT 06520 USA. NR 20 TC 25 Z9 25 U1 7 U2 10 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 0889-3365 BN 0-262-02503-5 J9 NBER MACROECON ANN PY 2001 VL 15 BP 139 EP + PG 45 WC Economics SC Business & Economics GA BX24D UT WOS:000184718900003 ER PT S AU Cole, HL Ohanian, LE Bordo, M Erceg, C Evans, C Gertler, M AF Cole, HL Ohanian, LE Bordo, M Erceg, C Evans, C Gertler, M BE Bernanke, BS Rogoff, K TI Re-examining the contributions of money and banking shocks to the US great depression SO NBER MACROECONOMICS ANNUAL 2000 SE NBER Macroeconomics Annual LA English DT Article; Proceedings Paper CT Annual Macroeconomics Conference CY APR 07-08, 2000 CL CAMBRIDGE, MA SP Natl Bur Econ Res ID MANUFACTURING-INDUSTRIES; ECONOMIC-RECOVERY; EXCHANGE-RATES; BUSINESS-CYCLE; REAL WAGES; CREDIT; EXPLANATION; EMPLOYMENT; 1930S AB This paper quantitatively evaluates the hypothesis that deflation can account for much of the Great Depression (1929-1933). We examine two popular explanations of the Depression: (1) the high-wage story, according to which deflation, combined with imperfectly flexible wages, raised real wages and reduced employment and output; (2) the bank-failure story, according to which deflationary money shocks contributed to bank failures and to a reduction in the efficiency of financial intermediation, which in turn reduced lending and output. We evaluate these stories using general-equilibrium business-cycle models, and find that wage shocks and banking shocks account for a small fraction of the Great Depression. We also find that some other predictions of the theories are at variance with the data. C1 Fed Reserve Bank Minneapolis, Minneapolis, MN USA. Univ Calif Los Angeles, Los Angeles, CA 90024 USA. Fed Reserve Bank Chicago, Chicago, IL USA. NYU, New York, NY USA. NBER, Cambridge, MA 02138 USA. Rutgers State Univ, Board Governors Fed Reserve Syst, Piscataway, NJ 08855 USA. RP Cole, HL (reprint author), Fed Reserve Bank Minneapolis, Minneapolis, MN USA. NR 54 TC 7 Z9 7 U1 1 U2 8 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 0889-3365 BN 0-262-02503-5 J9 NBER MACROECON ANNU PY 2001 VL 15 BP 183 EP + PG 79 WC Economics SC Business & Economics GA BX24D UT WOS:000184718900004 ER PT J AU Browne, LE AF Browne, LE TI Does Japan offer any lessons for the United States? SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article ID NEW-ENGLAND AB In the late 1990s, some observers began to make comparisons between the rapid rise in stock prices then taking place in the United States and the escalation in asset values in Japan in the late 1980s. Did Japan's experience, which was followed by more than a decade of stagnation, contain any cautionary lessons for the United States? With the recent slowing in the pace of U.S. economic activity, the question has been asked more earnestly; and while the prevailing view remains that the United States is not Japan, the denials have been less forceful. This article compares Japan's experience during the 1980s with U.S. prosperity in the 1990s, trying to discern the extent of similarities and differences. It then provides an overview of how Japanese policymakers responded once economic conditions began to deteriorate. On balance, the author notes, the conclusions are reassuring. Although similarities exist between Japan's economic performance in the 1980s and U.S. experience in the late 1990s, land values, as well as stock prices, rose very rapidly in Japan. Bank lending backed by land also rose very rapidly. This is a critical difference, she stresses, as the subsequent decline in Japanese land values crippled the Japanese banking system and economic activity generally. C1 Fed Reserve Bank Boston, Boston, MA 02106 USA. RP Browne, LE (reprint author), Fed Reserve Bank Boston, Boston, MA 02106 USA. NR 36 TC 0 Z9 0 U1 1 U2 2 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PY 2001 IS 3 BP 3 EP + PG 17 WC Economics SC Business & Economics GA 545CZ UT WOS:000175199800001 ER PT J AU Browne, LE AF Browne, LE TI The evolution of monetary policy and Federal Reserve Systems over the past thirty years: An overview SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article AB Over the past thirty years, the activities of the Federal Reserve System have undergone major change. Public interest and confidence in monetary policy have grown immensely. Low inflation has emerged, if not as the primary objective of monetary policy, at least as a more central focus than it was thirty years ago. The Federal Reserve System has also undergone changes. Reserve Banks now charge for many of their financial services, rather than providing them free to banks that are System members. Placed in competition with commercial banks in providing financial services, Reserve Banks have striven to be more efficient, more responsive, and more innovative. At the same time, Reserve Banks have played increasingly active and increasingly visible roles in their communities and their Districts, providing economic expertise and civic leadership. Frank Morris, President of the Federal Reserve Bank of Boston from 1968 to 1988, was a key contributor to all these developments. His influence was felt most strongly in the conduct of monetary policy, in the evolution of the payments system, and in shaping the role that Reserve Banks play in their regions. Accordingly, this conference in his honor focused on these three areas and on the developments that have occurred since 1968 and the prospects and challenges ahead. Three sessions addressed issues in monetary policy, and one each tackled payments and the role of the regional Reserve Banks. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Browne, LE (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 0 TC 0 Z9 0 U1 1 U2 2 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD JAN-FEB PY 2001 BP 3 EP + PG 9 WC Economics SC Business & Economics GA 545CT UT WOS:000175199200001 ER PT J AU Fortune, P AF Fortune, P TI Margin lending and stock market volatility SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article ID REQUIREMENTS; RETURNS AB The author is Senior Economist and Advisor to the Director of Research at the Federal Reserve Bank of Boston. He is grateful to Richard Kopcke and Lynn Browne for constructive insights. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Fortune, P (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 34 TC 7 Z9 7 U1 1 U2 13 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PY 2001 IS 4 BP 3 EP + PG 24 WC Economics SC Business & Economics GA 545DA UT WOS:000175199900001 ER PT J AU Kopcke, RW Brauman, RS AF Kopcke, RW Brauman, RS TI Ne performance of traditional macroeconomic models of businesses' investment spending SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article ID INFORMATION AB The rate of capital formation by businesses has long been among the most closely watched elements of the national accounts. During the last decade, this component of investment attracted considerable interest as capital spending helped support our uncommonly high rate of economic growth. Not only did this spending lift the growth of aggregate demand, it also increased our capacity for supplying goods and services, which in turn could allow output to continue growing rapidly in the future. This article analyzes the performance of conventional models of investment spending by comparing their abilities to describe this spending from 1960 to 1990 as well as their abilities to forecast spending during the 1990s. The authors find that recent shifts in the composition of the stock of capital goods and in the relative prices of capital goods have undermined the performance of these models of aggregate spending. In many ways, aggregate capital spending seems to depend more heavily than it has in the past on industries' unique circumstances and changing technologies. The authors suggest that errors of the models, the changing composition of capital, and new methods of measuring the stocks of capital warrant considering more disaggregated descriptions of investment spending. C1 Fed Reserve Bank Boston, Boston, MA 02106 USA. RP Kopcke, RW (reprint author), Fed Reserve Bank Boston, Boston, MA 02106 USA. NR 54 TC 4 Z9 4 U1 0 U2 3 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PY 2001 IS 2 BP 3 EP + PG 38 WC Economics SC Business & Economics GA 545CY UT WOS:000175199700001 ER PT J AU Kodrzycki, YK AF Kodrzycki, YK TI Migration of recent college graduates: Evidence from the National Longitudinal Survey of Youth SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article ID INTERNAL MIGRATION; UNITED-STATES AB In the context of today's tight labor markets, as well as projections of continued demand for workers with high skills, various states are considering how to retain and attract college graduates. Such efforts involve identifying an area's relative strengths and weaknesses and taking actions as needed, either to capitalize on the strengths or to mitigate the weaknesses. Perhaps surprisingly, however, little systematic evidence exists on the factors influencing location decisions of recent graduates. This study is a first step in providing such evidence, making use of the National Longitudinal Survey of Youth from 1979 to 1996 to examine cross-state migration in the five-year period after completion of schooling. The author first presents information on geographic mobility of young adults by educational attainment and region of the country. Next, she briefly outlines previous explanations for migration in the general population and investigates their applicability both to young college graduates and-for comparison-to other young adults without four years of college. Her study shows that the person's past history of migration is very important. In addition, the majority of moves are made to states with stronger economies or more attractive characteristics, as measured by such factors as higher employment growth, lower unemployment, higher pay, lower housing costs, or better amenities. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Kodrzycki, YK (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 14 TC 39 Z9 39 U1 2 U2 15 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD JAN-FEB PY 2001 BP 13 EP + PG 24 WC Economics SC Business & Economics GA 545CT UT WOS:000175199200002 ER PT J AU Stavins, J AF Stavins, J TI Effect of consumer characteristics on the use of payment instruments SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article ID TECHNOLOGICAL-CHANGE; ECONOMIES; SCALE AB Predictions about a cashless and checkless society have been made for many years, but retail payments transactions made with electronic payment instruments still constitute only a small fraction of all payments made in the United States. This is the case despite differences in cost and despite marketing and educational campaigns conducted by the Federal Reserve and other institutions. One of the reasons the cost differences have little effect is that the differences in cost among payment instruments typically are not evident to consumers, who are charged the same amount regardless of how they pay. This article explores the possibility that consumer characteristics may affect the adoption of electronic payment instruments. Using data from the 1998 Survey of Consumer Finances, the author estimates the effect of several demographic characteristics on the probability of using electronic payments. She finds strong effects of demographic characteristics and of location on consumers' choices. She suggests that the importance of location may indicate demand-related network effects, although further analysis of the supply side would be needed to test that hypothesis. C1 Fed Reserve Bank Boston, Boston, MA 02106 USA. RP Stavins, J (reprint author), Fed Reserve Bank Boston, Boston, MA 02106 USA. NR 22 TC 19 Z9 19 U1 1 U2 11 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PY 2001 IS 3 BP 19 EP + PG 15 WC Economics SC Business & Economics GA 545CZ UT WOS:000175199800002 ER PT J AU Tannenwald, R AF Tannenwald, R TI Are state and local revenue systems becoming obsolete? SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article ID ECONOMIC-DEVELOPMENT; PUBLIC-SERVICES; COMMERCE; COMPETITION; INCENTIVES; TAXATION AB Assistant Vice President and Economist, Federal Reserve Bank of Boston. The author thanks Amanda Lydon and Willie Kwan for their valuable research assistance. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Tannenwald, R (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 55 TC 7 Z9 7 U1 0 U2 5 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PY 2001 IS 4 BP 27 EP + PG 18 WC Economics SC Business & Economics GA 545DA UT WOS:000175199900002 ER PT J AU Cooper, RN Little, JS AF Cooper, RN Little, JS TI US monetary policy in an integrating world: 1960 to 2000 SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article ID FOREIGN-EXCHANGE INTERVENTION; MATTER AB This article examines the impact of global developments on the practice of U.S. monetary policy, broadly defined to include regulatory and lender-of-last-resort functions as well as open market, discount, and intervention activity, over the past forty years. It is part of a paper presented at the forty-fifth economic conference of the Federal Reserve Bank of Boston. The authors briefly review a few familiar facts establishing the increased openness of the U.S. economy, and go on to explore episodes when external events beyond those included in the domestic outlook vents like significant exchange rate shifts-appear to have influenced monetary policy decisions. They find that the view that U.S. monetary policy is mostly or even entirely domestically oriented is largely incorrect, in at least three different respects. Greater engagement with the rest of the world in both trade and financial transactions has led the U.S. economy to be more directly affected by overseas developments than it was three or four decades ago. Moreover, a perusal of FOMC records reveals extensive references to international developments in discussions of the future direction of monetary policy. And third, external competitive pressures have facilitated substantial changes in the structure of the U.S. financial system. This interplay between financial innovation and regulatory change has in turn affected how monetary policy works. C1 Harvard Univ, Cambridge, MA 02138 USA. Fed Reserve Bank Boston, Boston, MA USA. RP Cooper, RN (reprint author), Harvard Univ, Cambridge, MA 02138 USA. NR 35 TC 2 Z9 2 U1 0 U2 0 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PY 2001 IS 3 BP 33 EP + PG 25 WC Economics SC Business & Economics GA 545CZ UT WOS:000175199800003 ER PT J AU Schuh, S AF Schuh, S TI An evaluation of recent macroeconomic forecast errors SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article ID PRICE FORECASTS; UNITED-STATES; RATIONALITY; UNCERTAINTY; PANEL; BIAS AB Despite a significant decline in the pace of economic growth in the second half of 2000, macroeconomic forecasters underpredicted real GDP growth and overpredicted the unemployment rate by a significant amount, for the fifth consecutive year. On average, real GDP forecasts were about 2 percentage points below the actual data for the 1996-2000 period, and unemployment rate forecasts about 0.5 percentage point above. On a more positive note, forecasters ended their chronic overprediction of inflation during much of this period. Nevertheless, surprisingly large and persistent errors in recent forecasts of GDP, inflation, and unemployment have perplexed macroeconomists and policymakers for quite some time, and they merit closer examination. This article evaluates forecast errors in an attempt to understand why recent forecasts have gone awry. The investigation centers on errors in forecasts of real GDP growth, inflation, the unemployment rate, and nominal and real short-term interest rates since 1969. The focus is on one-year-ahead forecasts because well-known lags in the effects of monetary policy require the Federal Reserve to forecast economic activity well ahead when setting its current interest rate target. In addition to studying average forecast errors, the author looks briefly at the time series properties of the work of some individual forecasters. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Schuh, S (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 24 TC 13 Z9 13 U1 0 U2 8 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD JAN-FEB PY 2001 BP 35 EP + PG 23 WC Economics SC Business & Economics GA 545CT UT WOS:000175199200003 ER PT J AU Tootell, GMB Kopcke, RW Triest, RK AF Tootell, GMB Kopcke, RW Triest, RK TI Investment and employment by manufacturing plants SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article ID INVENTORIES AB The preceding article analyzed the determinants of investment at the macroeconomic level. In general, analysis of investment at this degree of aggregation implies that all firms in the economy react similarly to the same macro-level variables. Yet, examining macro data may obscure a great deal of variation in the forces that affect different firms, thus making quantification of the impact of these forces difficult. Since different types of firms face an array of different constraints, the authors analyze employment and investment at manufacturing plants at a finer level of distinction than was used in the previous study. The article examines some simple investment and employment equations at a more disaggregated level and compares them to an aggregate equation. Using micro data allows the incorporation of regional and industry-level data that appear to be quite important in the employment and investment decisions of these plants. Sorting the manufacturing data into four different groups allows the exploration of other important issues that cannot be examined using macro data. The findings are somewhat mixed. For many variables, examining broad aggregates does not affect the estimation of the relationship. However, regional effects do explain much of the difference in performance of firms, as regional income and relative wages determine investment and employment across regions. Also, different types of firms tend to react differently to several variables, perhaps the most interesting of which is bank lending. C1 Fed Reserve Bank Boston, Boston, MA 02106 USA. RP Tootell, GMB (reprint author), Fed Reserve Bank Boston, Boston, MA 02106 USA. NR 9 TC 1 Z9 1 U1 0 U2 0 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PY 2001 IS 2 BP 41 EP + PG 19 WC Economics SC Business & Economics GA 545CY UT WOS:000175199700002 ER PT B AU Crystal, JS Dages, BG Goldberg, LS AF Crystal, JS Dages, BG Goldberg, LS BE Litan, RE Masson, P Pomerleano, M TI Does foreign ownership contribute to sounder banks? The Latin American experience SO OPEN DOORS: FOREIGN PARTICIPATION IN FINANCIAL SYSTEMS IN DEVELOPING COUNTRIES LA English DT Proceedings Paper CT Conference on Open Doors - Foreign Participation in Financial Systems in Developing Countries CY APR 19-21, 2001 CL NEW YORK, NY SP World Bank Grp, Int Monetary Fund, Brookings Inst ID SECTOR C1 Fed Reserve Bank New York, New York, NY 10045 USA. NR 15 TC 8 Z9 9 U1 0 U2 1 PU BROOKINGS INST PI WASHINGTON PA 1775 MASSACHUSETTS AVE NW, WASHINGTON, DC 20036 USA BN 0-8157-0245-0 PY 2001 BP 217 EP 266 PG 50 WC Economics; International Relations SC Business & Economics; International Relations GA BW64H UT WOS:000182680600008 ER PT J AU Wall, HJ AF Wall, HJ TI Voting with your feet in the United Kingdom: Using cross-migration rates to estimate relative living standards SO PAPERS IN REGIONAL SCIENCE LA English DT Article DE interregional migration; standard of living; quality of life ID QUALITY-OF-LIFE; NORTH-SOUTH DIVIDE; REGIONAL MIGRATION; UNEMPLOYMENT; EQUILIBRIUM; POLICY; WAGES; LABOR; UK; MARKETS AB This article reexamines and extends the literature on the use of migration rates to estimate compensating differentials as measures of regional quality of life. I estimate an interregional migration regression for the UK and use the results to measure regional quality of life and standard of living. The results suggest a North-South divide within England, and that Scotland and Wales have relatively high levels of bath, The results also lead to a rejection of regional standard-of-living equivalence (long-run regional equilibrium) in the UK. JEL classification: J61, R23. C1 Fed Reserve Bank, Div Res, St Louis, MO 63166 USA. RP Wall, HJ (reprint author), Fed Reserve Bank, Div Res, POB 442, St Louis, MO 63166 USA. NR 39 TC 13 Z9 14 U1 1 U2 5 PU SPRINGER-VERLAG PI NEW YORK PA 175 FIFTH AVE, NEW YORK, NY 10010 USA SN 1056-8190 J9 PAP REG SCI JI Pap. Reg. Sci. PD JAN PY 2001 VL 80 IS 1 BP 1 EP 23 DI 10.1007/PL00011487 PG 23 WC Economics; Environmental Studies; Geography SC Business & Economics; Environmental Sciences & Ecology; Geography GA 397GW UT WOS:000166685800001 ER PT J AU Kahn, JA Lim, JS AF Kahn, JA Lim, JS TI Finite horizons, political economy, and growth SO REVIEW OF ECONOMIC DYNAMICS LA English DT Article DE growth; political instability; political economy; education; Markov equilibrium ID TIME-CONSISTENCY; EDUCATION; DEFICIT; POLICY AB This paper analyzes the political economy of growth when agents and the government have finite horizons and equilibrium growth is inefficient. A "representative" government (i.e., one whose preferences reflect those of its constituents) endowed merely with the ability to tax and transfer can improve somewhat on the market allocation, but cannot achieve first-best growth. Efficiency requires in addition the ability to bind future governments. We argue that this ability is related to political stability, and we provide empirical evidence that stability and growth-related policies (namely education) are meaningfully related. (C) 2001 Academic Press. C1 Fed Reserve Bank New York, Res Dept, New York, NY 10045 USA. Kwangwoon Univ, Dept Int Trade, Nowon Ku, Seoul 139701, South Korea. RP Kahn, JA (reprint author), Fed Reserve Bank New York, Res Dept, 33 Liberty St, New York, NY 10045 USA. NR 24 TC 2 Z9 2 U1 0 U2 1 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 1094-2025 J9 REV ECON DYNAM JI Rev. Econ. Dyn. PD JAN PY 2001 VL 4 IS 1 BP 1 EP 25 DI 10.1006/redy.2000.0111 PG 25 WC Economics SC Business & Economics GA 469TC UT WOS:000170830100001 ER PT J AU Klenow, P AF Klenow, P TI Comment on "It's not factor accumulation: Stylized facts and growth models," by William Easterly and Ross Levine SO WORLD BANK ECONOMIC REVIEW LA English DT Editorial Material C1 Fed Reserve Bank, Minneapolis, MN USA. RP Klenow, P (reprint author), Fed Reserve Bank, Minneapolis, MN USA. NR 8 TC 3 Z9 6 U1 0 U2 1 PU OXFORD UNIV PRESS PI OXFORD PA GREAT CLARENDON ST, OXFORD OX2 6DP, ENGLAND SN 0258-6770 J9 WORLD BANK ECON REV JI World Bank Econ. Rev. PY 2001 VL 15 IS 2 BP 221 EP 224 DI 10.1093/wber/15.2.221 PG 4 WC Business, Finance; Economics; Planning & Development SC Business & Economics; Public Administration GA 486AB UT WOS:000171794800002 ER PT J AU Bacchetta, P van Wincoop, E AF Bacchetta, P van Wincoop, E TI Does exchange-rate stability increase trade and welfare? SO AMERICAN ECONOMIC REVIEW LA English DT Article ID INTERNATIONAL-TRADE; RATE VOLATILITY; UNCERTAINTY; PRICES; RISK; CONSUMPTION; DYNAMICS; MARKETS; GOODS; LEVEL AB This paper develops a simple general-equilibrium framework to study the effect of the exchange-rate system on trade and welfare. An important feature of the model is deviations from purchasing-power parity, caused by rigid price setting in buyers' currency, In a benchmark model with separable preferences and only monetary shocks, trade is unaffected by the exchange-rate system, consistent with most evidence. In general, both trade and welfare can be higher under either exchange-rate system, depending on preferences and on the monetary-policy rules followed under each system. There is no one-to-one relationship between the levels of trade and welfare across exchange-rate systems. C1 Study Ctr Gerzensee, CH-3115 Gerzensee, Switzerland. Univ Lausanne, CH-1015 Lausanne, Switzerland. Fed Reserve Bank New York, Int Res, New York, NY 10045 USA. RP Bacchetta, P (reprint author), Study Ctr Gerzensee, CH-3115 Gerzensee, Switzerland. NR 50 TC 87 Z9 89 U1 2 U2 16 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD DEC PY 2000 VL 90 IS 5 BP 1093 EP 1109 DI 10.1257/aer.90.5.1093 PG 17 WC Economics SC Business & Economics GA 383YJ UT WOS:000165912000001 ER PT J AU Bils, M Klenow, PJ AF Bils, M Klenow, PJ TI Does schooling cause growth? SO AMERICAN ECONOMIC REVIEW LA English DT Article ID INTERNATIONAL COMPARISONS; ECONOMIC-GROWTH; RETURNS; COUNTRIES; EDUCATION; TECHNOLOGY; INVESTMENT; EFFICIENCY; EARNINGS; QUALITY AB A number of economists find that growth and schooling are highly correlated across countries. A model is examined in which the ability to build on the human capital of one's elders plays an important role in linking growth to schooling. The model is calibrated to quantify the strength of the effect of schooling on growth by using evidence from the labor literature on Mincerian returns to education. The upshot is that the impact of schooling on growth explains less than one-third of the empirical cross-country relationship. The ability of reverse causality to explain this empirical relationship is also investigated. C1 Univ Rochester, Dept Econ, Rochester, NY 14627 USA. Fed Reserve Bank Minneapolis, Res Dept, Minneapolis, MN 55480 USA. RP Bils, M (reprint author), Univ Rochester, Dept Econ, Harkness Hall, Rochester, NY 14627 USA. NR 57 TC 353 Z9 373 U1 11 U2 44 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD DEC PY 2000 VL 90 IS 5 BP 1160 EP 1183 DI 10.1257/aer.90.5.1160 PG 24 WC Economics SC Business & Economics GA 383YJ UT WOS:000165912000005 ER PT J AU Campbell, JR Fisher, JDM AF Campbell, JR Fisher, JDM TI Aggregate employment fluctuations with microeconomic asymmetries SO AMERICAN ECONOMIC REVIEW LA English DT Article ID ADJUSTMENT COSTS; LABOR DEMAND; JOB CREATION; DESTRUCTION AB We provide a simple explanation for the observation from the U.S. manufacturing sector that the job destruction rate fluctuates more than the job creation rate. In our model, proportional plant-level costs df creating and destroying jobs cause shrinking plants to be more sensitive to aggregate shocks than growing plants. We describe circumstances in which this microeconomic asymmetry is preserved in the aggregate and show that it can account for much of the observed asymmetries in gross job flows. This is so even though we abstract from job matching frictions, incomplete contracts, and aggregate congestion effects. C1 Univ Chicago, Dept Econ, Chicago, IL 60637 USA. Natl Bur Econ Res, Chicago, IL 60604 USA. Fed Reserve Bank Chicago, Econ Res Dept, Chicago, IL 60604 USA. RP Campbell, JR (reprint author), Univ Chicago, Dept Econ, 1126 E 59th St, Chicago, IL 60637 USA. NR 31 TC 24 Z9 24 U1 2 U2 5 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD DEC PY 2000 VL 90 IS 5 BP 1323 EP 1345 DI 10.1257/aer.90.5.1323 PG 23 WC Economics SC Business & Economics GA 383YJ UT WOS:000165912000012 ER PT J AU Neumark, D Wascher, W AF Neumark, D Wascher, W TI Minimum wages and employment: A case study of the fast-food industry in New Jersey and Pennsylvania: Comment SO AMERICAN ECONOMIC REVIEW LA English DT Letter C1 Michigan State Univ, Dept Econ, E Lansing, MI 48824 USA. Natl Bur Econ Res, Cambridge, MA 02138 USA. Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Neumark, D (reprint author), Michigan State Univ, Dept Econ, E Lansing, MI 48824 USA. NR 15 TC 116 Z9 117 U1 4 U2 35 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD DEC PY 2000 VL 90 IS 5 BP 1362 EP 1396 DI 10.1257/aer.90.5.1362 PG 35 WC Economics SC Business & Economics GA 383YJ UT WOS:000165912000014 ER PT J AU Bordo, MD Erceg, CJ Evans, CL AF Bordo, MD Erceg, CJ Evans, CL TI Money, sticky wages, and the great depression SO AMERICAN ECONOMIC REVIEW LA English DT Article ID NOMINAL INTEREST-RATES; RATIONAL-EXPECTATIONS; UNITED-STATES; UNEMPLOYMENT; EMPLOYMENT; DEFLATION; CONTRACTS; PRICES; OUTPUT; 1930S C1 Rutgers State Univ, Dept Econ, New Brunswick, NJ 08901 USA. Natl Bur Econ Res, Cambridge, MA 02138 USA. Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. Fed Reserve Bank, Chicago, IL 60690 USA. RP Bordo, MD (reprint author), Rutgers State Univ, Dept Econ, New Brunswick, NJ 08901 USA. NR 55 TC 44 Z9 44 U1 0 U2 9 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD DEC PY 2000 VL 90 IS 5 BP 1447 EP 1463 DI 10.1257/aer.90.5.1447 PG 17 WC Economics SC Business & Economics GA 383YJ UT WOS:000165912000018 ER PT J AU McConnell, MM Perez-Quiros, G AF McConnell, MM Perez-Quiros, G TI Output fluctuations in the United States: What has changed since the early 1980's? SO AMERICAN ECONOMIC REVIEW LA English DT Article ID BUSINESS-CYCLE; PARAMETER INSTABILITY; LEADING INDICATORS; STRUCTURAL-CHANGE; TIME-SERIES; STABILIZATION; ECONOMY; TESTS; MODEL; VOLATILITY C1 Fed Reserve Bank New York, Domest Res Dept, New York, NY 10045 USA. European Cent Bank, OG Res, D-60311 Frankfurt, Germany. RP McConnell, MM (reprint author), Fed Reserve Bank New York, Domest Res Dept, 33 Liberty St, New York, NY 10045 USA. NR 36 TC 554 Z9 559 U1 2 U2 15 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD DEC PY 2000 VL 90 IS 5 BP 1464 EP 1476 DI 10.1257/aer.90.5.1464 PG 13 WC Economics SC Business & Economics GA 383YJ UT WOS:000165912000019 ER PT J AU Dekle, R Henderson, D Thomas, S AF Dekle, R Henderson, D Thomas, S TI The stock market, fundamentals, cash flow, and private investment: evidence from Japan SO JAPAN AND THE WORLD ECONOMY LA English DT Article DE Japanese investment; Japanese postwar growth AB Using Japanese postwar annual aggregate data, we examine the responsiveness of investment to three variables - asset Q (stock market), fundamentals Q (discounted future "profits"), and cash flow. We find considerable support for cash Row, but only moderate and very weak support for fundamentals Q and asset Q, respectively. Earlier work that has estimated investment equations on Japanese data spanning the entire period from the 1960s to the 1990s may therefore be plagued with specification error When estimating the investment equations, we are careful to split the Japanese post-war period into two samples. (C) 2000 Published by Elsevier Science B.V. C1 Univ So Calif, Coll Letters Arts & Sci, Dept Econ, Los Angeles, CA 90089 USA. Fed Reserve Board, Div Int Finance, Washington, DC 20431 USA. RP Dekle, R (reprint author), Univ So Calif, Coll Letters Arts & Sci, Dept Econ, Los Angeles, CA 90089 USA. EM econ@usc.edu NR 14 TC 2 Z9 2 U1 0 U2 1 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0922-1425 J9 JPN WORLD ECON JI Jpn. World Econ. PD DEC PY 2000 VL 12 IS 4 BP 295 EP 310 DI 10.1016/S0922-1425(00)00054-2 PG 16 WC Economics SC Business & Economics GA 383JR UT WOS:000165879800001 ER PT J AU Lee, J Hogarth, JM AF Lee, J Hogarth, JM TI Relationships among information search activities when shopping for a credit card SO JOURNAL OF CONSUMER AFFAIRS LA English DT Article ID CONSUMER INFORMATION; EXTERNAL SEARCH; BEHAVIOR; PRODUCT; MODEL; AUTOMOBILES; FRAMEWORK; ECONOMICS; PATTERNS; SEEKING AB Using data from the 1997 University of Michigan Survey of Consumers, researchers investigated consumers' information search and the potential interdependency among search activities, using credit cards as a case study. The authors find that consumers have diverse patterns of information search that cannot be captured by a global measure or a few single measures of search and that strong interdependencies among some search activities exist. C1 Univ Georgia, Dept Consumer Econ & Housing, Athens, GA 30602 USA. Fed Reserve Board, Washington, DC USA. RP Lee, J (reprint author), Univ Georgia, Dept Consumer Econ & Housing, Athens, GA 30602 USA. NR 51 TC 14 Z9 14 U1 0 U2 2 PU UNIV WISCONSIN PRESS PI MADISON PA JOURNAL DIVISION, 2537 DANIELS ST, MADISON, WI 53718 USA SN 0022-0078 J9 J CONSUM AFF JI J. Consum. Aff. PD WIN PY 2000 VL 34 IS 2 BP 330 EP 360 PG 31 WC Business; Economics SC Business & Economics GA 370RN UT WOS:000165136200009 ER PT J AU Gerdes, GR AF Gerdes, GR TI Interactive economics instruction with Java and CGI SO JOURNAL OF ECONOMIC EDUCATION LA English DT Article C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Gerdes, GR (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 0 TC 0 Z9 0 U1 0 U2 2 PU HELDREF PUBLICATIONS PI WASHINGTON PA 1319 EIGHTEENTH ST NW, WASHINGTON, DC 20036-1802 USA SN 0022-0485 J9 J ECON EDUC JI J. Econ. Educ. PD WIN PY 2000 VL 31 IS 1 BP 12 EP 12 PG 1 WC Economics; Education & Educational Research SC Business & Economics; Education & Educational Research GA 264WA UT WOS:000084204900005 ER PT J AU Benhabib, J Spiegel, MM AF Benhabib, J Spiegel, MM TI The role of financial development in growth and investment SO JOURNAL OF ECONOMIC GROWTH LA English DT Article DE growth; investment; human capital; financial development ID PANEL-DATA APPROACH; INCOME-DISTRIBUTION; ECONOMIC-GROWTH; REGRESSIONS AB This article decomposes the well-documented relationship between financial development and growth. We examine whether financial development affects growth solely through its contribution to growth in "primitives'' or factor accumulation rates or whether it also has a positive impact on total factor productivity growth. Our results suggest that indicators of financial development are correlated with both total factor productivity growth and investment. However, the indicators that are correlated with total factor productivity growth differ from those that encourage investment. In addition, many of the results are sensitive to the inclusion of country fixed effects, which may indicate that the financial development indicators are proxying for broader country characteristics. C1 NYU, New York, NY 10003 USA. Fed Reserve Bank San Francisco, San Francisco, CA 94105 USA. RP Benhabib, J (reprint author), NYU, New York, NY 10003 USA. NR 40 TC 81 Z9 82 U1 0 U2 9 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 1381-4338 J9 J ECON GROWTH JI J. Econ. Growth PD DEC PY 2000 VL 5 IS 4 BP 341 EP 360 DI 10.1023/A:1026599402490 PG 20 WC Economics SC Business & Economics GA 389VD UT WOS:000166258600002 ER PT J AU Hetzel, R AF Hetzel, R TI Monetary policy and the great inflation in the United States: The federal reserve and the failure of macroeconomic policy, 1965-79. SO JOURNAL OF ECONOMIC LITERATURE LA English DT Book Review C1 Fed Reserve Bank, Richmond, VA 23219 USA. RP Hetzel, R (reprint author), Fed Reserve Bank, Richmond, VA 23219 USA. NR 1 TC 0 Z9 0 U1 0 U2 0 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0022-0515 J9 J ECON LIT JI J. Econ. Lit. PD DEC PY 2000 VL 38 IS 4 BP 947 EP 948 PG 2 WC Economics SC Business & Economics GA 383FB UT WOS:000165871500013 ER PT J AU Strahan, PE AF Strahan, PE TI The bank merger wave: The economic causes and social consequences of financial consolidation. SO JOURNAL OF ECONOMIC LITERATURE LA English DT Book Review C1 Fed Reserve Bank New York, New York, NY 10045 USA. RP Strahan, PE (reprint author), Fed Reserve Bank New York, New York, NY 10045 USA. NR 1 TC 1 Z9 1 U1 0 U2 0 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0022-0515 J9 J ECON LIT JI J. Econ. Lit. PD DEC PY 2000 VL 38 IS 4 BP 956 EP 957 PG 2 WC Economics SC Business & Economics GA 383FB UT WOS:000165871500019 ER PT J AU Hancock, D AF Hancock, D TI Performance of financial institutions: Efficiency, innovation, regulation. SO JOURNAL OF ECONOMIC LITERATURE LA English DT Book Review C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Hancock, D (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 1 TC 0 Z9 0 U1 0 U2 1 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0022-0515 J9 J ECON LIT JI J. Econ. Lit. PD DEC PY 2000 VL 38 IS 4 BP 957 EP 958 PG 2 WC Economics SC Business & Economics GA 383FB UT WOS:000165871500020 ER PT J AU Wheelock, DC AF Wheelock, DC TI Charting twentieth-century monetary policy: Herbert Hoover and Benjamin Strong, 1917-1927. SO JOURNAL OF ECONOMIC LITERATURE LA English DT Book Review C1 Fed Reserve Bank, St Louis, MO 63102 USA. RP Wheelock, DC (reprint author), Fed Reserve Bank, St Louis, MO 63102 USA. RI Wheelock, David/I-5757-2016 OI Wheelock, David/0000-0002-2702-8164 NR 1 TC 0 Z9 0 U1 0 U2 0 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0022-0515 J9 J ECON LIT JI J. Econ. Lit. PD DEC PY 2000 VL 38 IS 4 BP 978 EP 979 PG 2 WC Economics SC Business & Economics GA 383FB UT WOS:000165871500034 ER PT J AU Allen, B AF Allen, B TI The future of microeconomic theory SO JOURNAL OF ECONOMIC PERSPECTIVES LA English DT Article ID BUSINESS FIRMS; COMMUNICATION; EQUILIBRIA C1 Univ Minnesota, Minneapolis, MN 55455 USA. Fed Reserve Bank Minneapolis, Minneapolis, MN 55480 USA. RP Allen, B (reprint author), Univ Minnesota, Minneapolis, MN 55455 USA. NR 21 TC 11 Z9 11 U1 0 U2 7 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0895-3309 J9 J ECON PERSPECT JI J. Econ. Perspect. PD WIN PY 2000 VL 14 IS 1 BP 143 EP 150 DI 10.1257/jep.14.1.143 PG 8 WC Economics SC Business & Economics GA 292QW UT WOS:000085807400011 ER PT J AU Campbell, JY Cochrane, JH AF Campbell, JY Cochrane, JH TI Explaining the poor performance of consumption-based asset pricing models SO JOURNAL OF FINANCE LA English DT Article ID EXPECTED RETURNS; STOCHASTIC CONSUMPTION; TEMPORAL BEHAVIOR; EMPIRICAL TESTS; RISK-AVERSION; CROSS-SECTION; STOCK-MARKET; PRICES; CAPM AB We show that the external habit-formation model economy of Campbell and Cochrane (1999) can explain why the Capital Asset Pricing Model (CAPM) and its extensions are better approximate asset pricing models than is the standard consumption-based model. The model economy produces time-varying expected returns, tracked by the dividend-price ratio. Portfolio-based models capture some of this variation in state variables, which a state-independent function of consumption cannot capture. Therefore, though the consumption-based model and CAPM are both perfect conditional asset pricing models, the portfolio-based models are better approximate unconditional asset pricing models. C1 Harvard Univ, Cambridge, MA 02138 USA. NBER, Cambridge, MA 02138 USA. Univ Chicago, Fed Reserve Board, Chicago, IL 60637 USA. RP Campbell, JY (reprint author), Harvard Univ, Cambridge, MA 02138 USA. NR 25 TC 74 Z9 76 U1 1 U2 9 PU BLACKWELL PUBLISHERS PI MALDEN PA 350 MAIN STREET, STE 6, MALDEN, MA 02148 USA SN 0022-1082 J9 J FINANC JI J. Financ. PD DEC PY 2000 VL 55 IS 6 BP 2863 EP 2878 DI 10.1111/0022-1082.00310 PG 16 WC Business, Finance SC Business & Economics GA 378CR UT WOS:000165567900015 ER PT J AU Neely, CJ Weller, P AF Neely, CJ Weller, P TI Predictability in international asset returns: A reexamination SO JOURNAL OF FINANCIAL AND QUANTITATIVE ANALYSIS LA English DT Article ID RATIONAL-EXPECTATIONS MODELS; STOCK RETURNS; TEMPORARY COMPONENTS; STRUCTURAL-CHANGE; TERM STRUCTURE; TESTS; SAMPLE; MARKETS; PRICES; RATES AB This paper argues that inferring long-horizon asset return predictability from the properties of vector autoregressive (VAR) models on relatively short spans of data is potentially unreliable. We illustrate the problems that can arise by reexamining the findings of Bekaert and Hodrick (1992), who detected evidence of in-sample predictability in international equity and foreign exchange markets using VAR methodology for a variety of countries from 1981-1989. The VAR predictions are significantly biased in most out-of-sample forecasts and are conclusively outperformed by a simple benchmark model at horizons of up to six months. This remains true even after corrections for small sample bias and the introduction of Bayesian parameter restrictions. A Monte Carlo analysis indicates that the data are unlikely to have been generated by a stable VAR. This conclusion is supported by an examination of structural break statistics. We show that implied long-horizon statistics calculated from the VAR parameter estimates are very unreliable. C1 Fed Reserve Bank, Dept Res, St Louis, MO 63011 USA. Univ Iowa, Coll Business Adm, Dept Finance, Iowa City, IA 52240 USA. RP Neely, CJ (reprint author), Fed Reserve Bank, Dept Res, St Louis, MO 63011 USA. RI Neely, Christopher/D-3636-2012; Neely, Christopher/I-5749-2016 OI Neely, Christopher/0000-0003-2852-9419 NR 29 TC 13 Z9 15 U1 3 U2 11 PU UNIV WASHINGTON SCH BUSINESS & ADMINISTRATION PI SEATTLE PA C/O OFFICE MANAGER, 115 LEWIS HALL, BOX 353200, SEATTLE, WA 98195-3200 USA SN 0022-1090 J9 J FINANC QUANT ANAL JI J. Financ. Quant. Anal. PD DEC PY 2000 VL 35 IS 4 BP 601 EP 620 DI 10.2307/2676257 PG 20 WC Business, Finance; Economics SC Business & Economics GA 383EZ UT WOS:000165871300005 ER PT J AU Benston, GJ Eisenbeis, RA Kaufman, GG AF Benston, GJ Eisenbeis, RA Kaufman, GG TI Untitled - Introduction SO JOURNAL OF FINANCIAL SERVICES RESEARCH LA English DT Editorial Material C1 Emory Univ, Atlanta, GA 30322 USA. Fed Reserve Bank, Atlanta, GA USA. Loyola Univ, Chicago, IL 60611 USA. RP Benston, GJ (reprint author), Emory Univ, Atlanta, GA 30322 USA. NR 0 TC 0 Z9 0 U1 0 U2 0 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0920-8550 J9 J FINANC SERV RES JI J. Financ. Serv. Res. PD DEC PY 2000 VL 18 IS 2-3 BP 93 EP 93 DI 10.1023/A:1026545500073 PG 1 WC Business, Finance SC Business & Economics GA 389ZC UT WOS:000166267700001 ER PT J AU Eisenbeis, RA AF Eisenbeis, RA TI History of the Journal of Financial Services Research SO JOURNAL OF FINANCIAL SERVICES RESEARCH LA English DT Article; Proceedings Paper CT Conference held in honor of Anna J Schwartz CY APR 14-15, 2000 CL AMER ENTERPRISE INST, WASHINGTON, D.C. SP Journal Financial Serv Res, AEI HO AMER ENTERPRISE INST C1 Fed Reserve Bank, Atlanta, GA 30303 USA. RP Eisenbeis, RA (reprint author), Fed Reserve Bank, Atlanta, GA 30303 USA. NR 16 TC 0 Z9 0 U1 0 U2 1 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0920-8550 J9 J FINANC SERV RES JI J. Financ. Serv. Res. PD DEC PY 2000 VL 18 IS 2-3 BP 103 EP 107 DI 10.1023/A:1026574300981 PG 5 WC Business, Finance SC Business & Economics GA 389ZC UT WOS:000166267700003 ER PT J AU Greenspan, A AF Greenspan, A TI Technology and financial services SO JOURNAL OF FINANCIAL SERVICES RESEARCH LA English DT Article; Proceedings Paper CT Conference held in honor of Anna J Schwartz CY APR 14-15, 2000 CL AMER ENTERPRISE INST, WASHINGTON, D.C. SP Journal Financial Serv Res, AEI HO AMER ENTERPRISE INST C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Greenspan, A (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 0 TC 0 Z9 0 U1 0 U2 1 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0920-8550 J9 J FINANC SERV RES JI J. Financ. Serv. Res. PD DEC PY 2000 VL 18 IS 2-3 BP 109 EP 113 DI 10.1023/A:1026526417820 PG 5 WC Business, Finance SC Business & Economics GA 389ZC UT WOS:000166267700004 ER PT J AU Jordan, JL Carlson, JB AF Jordan, JL Carlson, JB TI Money, monetary policy, and central banking SO JOURNAL OF FINANCIAL SERVICES RESEARCH LA English DT Article; Proceedings Paper CT Conference held in honor of Anna J Schwartz CY APR 14-15, 2000 CL AMER ENTERPRISE INST, WASHINGTON, D.C. SP Journal Financial Serv Res, AEI HO AMER ENTERPRISE INST DE central bank; currency board; dollarization; interest rates; inflation; money; monetary policy; monetary stability; quality of money AB Anna Schwartz's insights and careful analysis of the forces shaping institutions have contributed greatly to our understanding of money, central banks, and monetary policy. We discuss these contributions in the context of three issues. The first concerns governments' role in money. First, we focus on Anna's contribution to our understanding of the quality of money. In this context, we consider how the acceleration of globalization and developments in information technology has, as an external development, forced improvements in institutions and social arrangements. The second issue concerns the potential for currency boards to serve as an intermediate institution in the evolution toward and, perhaps now, away from so many central banks and sovereign monetary authorities. Finally, we turn our attention to current issues in the implementation of monetary policy. C1 Fed Reserve Bank Cleveland, Cleveland, OH 44114 USA. RP Jordan, JL (reprint author), Fed Reserve Bank Cleveland, Cleveland, OH 44114 USA. NR 15 TC 2 Z9 2 U1 0 U2 1 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0920-8550 J9 J FINANC SERV RES JI J. Financ. Serv. Res. PD DEC PY 2000 VL 18 IS 2-3 BP 241 EP 253 DI 10.1023/A:1026551107342 PG 13 WC Business, Finance SC Business & Economics GA 389ZC UT WOS:000166267700015 ER PT J AU Poole, W Rasche, RH AF Poole, W Rasche, RH TI Perfecting the market's knowledge of monetary policy SO JOURNAL OF FINANCIAL SERVICES RESEARCH LA English DT Article; Proceedings Paper CT Conference held in honor of Anna J Schwartz CY APR 14-15, 2000 CL AMER ENTERPRISE INST, WASHINGTON, D.C. SP Journal Financial Serv Res, AEI HO AMER ENTERPRISE INST AB The rational expectations revolution made clear that a complete macro model requires a specification of the government's economic policy. We argue that monetary policy should be conducted in such a way that the market can predict policy actions. An implication of market success in predicting policy actions is that interest rates move ahead of the policy actions, and such a timing relationship may appear to some as the central bank following the market instead of leading it. Another implication of the market predicting policy actions is that nominal interest rate changes provide no useful information to the central bank about the strength of aggregate demand or inflationary expectations. Finally, failure of the market to predict policy actions reflects a problem that needs to be addressed. We explore the theoretical implications of a monetary policy that is completely specified and perfectly understood by the market. We construct a bare-bones model to illustrate the key concepts. Finally, we conduct an empirical investigation of these issues, especially in the context of monetary policy since 1988, when the establishment of the federal funds future market made available well-defined market information on expectations about Fed policy actions. We find that when the intended funds rate is changed, interest rates over the maturity spectrum respond to "news" measured by changes in the one-month-ahead funds futures yield but do not respond to the anticipated component of the change in the intended funds rate. C1 Fed Reserve Bank, St Louis, MO 63102 USA. RP Poole, W (reprint author), Fed Reserve Bank, St Louis, MO 63102 USA. NR 12 TC 41 Z9 41 U1 0 U2 3 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0920-8550 J9 J FINANC SERV RES JI J. Financ. Serv. Res. PD DEC PY 2000 VL 18 IS 2-3 BP 255 EP 298 DI 10.1023/A:1026555225089 PG 44 WC Business, Finance SC Business & Economics GA 389ZC UT WOS:000166267700016 ER PT J AU Freund, C AF Freund, C TI Multilateralism and the endogenous formation of preferential trade agreements SO JOURNAL OF INTERNATIONAL ECONOMICS LA English DT Article DE trade; regionalism; imperfect competition ID CUSTOMS UNIONS; REGIONALISM; WORLD AB This paper examines the interaction between preferential trade agreements (PTAs) and multilateral tariff reduction in a model of imperfect competition. A growing literature finds that the formation of PTAs alters the incentives for and the sustainability of multilateral tariff reduction. We show that the causation is not one-sided: multilateral tariff reduction also affects the formation of PTAs. Specifically, tariff reduction enhances the incentives to form a PTA and increases the likelihood that it is self-enforcing. Thus, each round of multilateral tariff reduction should lead to a new wave of PTAs. This may help to explain the current trend towards regionalism. (C) 2000 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Board, Div Int Finance, Washington, DC 20551 USA. RP Freund, C (reprint author), Fed Reserve Board, Div Int Finance, Washington, DC 20551 USA. NR 18 TC 50 Z9 51 U1 0 U2 5 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0022-1996 J9 J INT ECON JI J. Int. Econ. PD DEC PY 2000 VL 52 IS 2 BP 359 EP 376 DI 10.1016/S0022-1996(99)00051-3 PG 18 WC Economics SC Business & Economics GA 373XD UT WOS:000165314600008 ER PT J AU Marquez, J AF Marquez, J TI Is the US trade deficit sustainable? SO JOURNAL OF INTERNATIONAL ECONOMICS LA English DT Book Review C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Marquez, J (reprint author), Fed Reserve Syst, Board Governors, 20th & C NW, Washington, DC 20551 USA. NR 1 TC 0 Z9 0 U1 0 U2 0 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0022-1996 J9 J INT ECON JI J. Int. Econ. PD DEC PY 2000 VL 52 IS 2 BP 405 EP 407 DI 10.1016/S0022-1996(00)00051-9 PG 3 WC Economics SC Business & Economics GA 373XD UT WOS:000165314600011 ER PT J AU Rupert, P Rogerson, R Wright, R AF Rupert, P Rogerson, R Wright, R TI Homework in labor economics: Household production and intertemporal substitution SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE intertemporal substitution; home production ID LIFE-CYCLE; MODELS; ELASTICITIES; ALLOCATION; TIME AB We argue that estimates of intertemporal substitution elasticities obtained from standard life cycle models are subject to a downward bias because they neglect changes in work done at home over the life cycle. We extend the standard life cycle model to include home production and estimate it using data from three time use surveys. We find that the downward bias is large. (C) 2000 Published by Elsevier Science B.V. All rights reserved. JEL classification: D1; J2. C1 Fed Reserve Bank Cleveland, Cleveland, OH 44101 USA. Univ Penn, Dept Econ, Philadelphia, PA 19106 USA. RP Rogerson, R (reprint author), Fed Reserve Bank Cleveland, Cleveland, OH 44101 USA. NR 22 TC 30 Z9 30 U1 0 U2 1 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD DEC PY 2000 VL 46 IS 3 BP 557 EP 579 DI 10.1016/S0304-3932(00)00038-6 PG 23 WC Business, Finance; Economics SC Business & Economics GA 374HF UT WOS:000165339200001 ER PT J AU Velde, FR Weber, WE AF Velde, FR Weber, WE TI A model of bimetallism SO JOURNAL OF POLITICAL ECONOMY LA English DT Article ID GOLD STANDARD; CRIME AB Bimetallism has been the subject of considerable debate: Was it a viable monetary system? Was it desirable? In our model, the amounts of each metal are split between coined metal, satisfying a cash-in-advance constraint, and uncoined metal, yielding utility. The ratio of the monies in the cash-in-advance constraint is endogenous. Bimetallism is feasible: we find a continuum of steady states indexed by the constant exchange rate of the monies. Bimetallism is not desirable: among steady states, welfare under monometallism is higher than under any bimetallic equilibrium. Long-nm trends in gold and silver production placed limits on the maintenance of bimetallism at any given ratio, but its sudden collapse in 1873 remains a puzzle. C1 Fed Reserve Bank, Chicago, IL 60604 USA. Fed Reserve Bank Minneapolis, Minneapolis, MN 55480 USA. Univ Minnesota, Minneapolis, MN 55455 USA. RP Velde, FR (reprint author), Fed Reserve Bank, Chicago, IL 60604 USA. NR 41 TC 16 Z9 16 U1 1 U2 11 PU UNIV CHICAGO PRESS PI CHICAGO PA 5720 SOUTH WOODLAWN AVE, CHICAGO, IL 60637-1603 USA SN 0022-3808 J9 J POLIT ECON JI J. Polit. Econ. PD DEC PY 2000 VL 108 IS 6 BP 1210 EP 1234 DI 10.1086/317687 PG 25 WC Economics SC Business & Economics GA 383FT UT WOS:000165873000005 ER PT J AU McGranahan, LM AF McGranahan, LM TI Charity and the bequest motive: Evidence from seventeenth-century wills SO JOURNAL OF POLITICAL ECONOMY LA English DT Article ID IMPURE ALTRUISM; FAMILY; MODEL AB This paper researches motivations for charitable bequests by looking at gifts to the poor in wills written in Suffolk, England, in the 1620s and 1630s. The findings that wealthier and more religious individuals and those with fewer children give more to the poor support an altruistic model of testator utility. However, the result that individuals who give to more people outside of their immediate families are more likely to give to the poor contradicts the simple altruism model. This result is consistent with a model that suggests that charitable giving is partially driven by the approbation granted to charitable behavior. C1 Fed Reserve Bank Chicago, Chicago, IL 60604 USA. Univ Warwick, Coventry CV4 7AL, W Midlands, England. RP McGranahan, LM (reprint author), Fed Reserve Bank Chicago, Chicago, IL 60604 USA. NR 34 TC 6 Z9 6 U1 1 U2 8 PU UNIV CHICAGO PRESS PI CHICAGO PA 5720 SOUTH WOODLAWN AVE, CHICAGO, IL 60637-1603 USA SN 0022-3808 J9 J POLIT ECON JI J. Polit. Econ. PD DEC PY 2000 VL 108 IS 6 BP 1270 EP 1291 DI 10.1086/317685 PG 22 WC Economics SC Business & Economics GA 383FT UT WOS:000165873000007 ER PT J AU Orphanides, A Wieland, V AF Orphanides, A Wieland, V TI Efficient monetary policy design near price stability SO JOURNAL OF THE JAPANESE AND INTERNATIONAL ECONOMIES LA English DT Article; Proceedings Paper CT Conference on Monetary Policy in a Low Inflation Environment CY DEC 16-17, 1999 CL TOKYO, JAPAN SP Tokyo Ctr Econ Res, Natl Bur Econ Res, Ctr Econ Policy Res DE price stability; zero bound; optimal policy; liquidity trap ID GREAT-DEPRESSION; TRANSMISSION; CREDIT; MODEL AB Using dynamic programming methods, we study the design of optimal monetary policy in a simple, calibrated open-economy model and evaluate the effect of the liquidity trap generated by the zero bound on nominal interest rates. We show that the optimal policy near price stability is asymmetric. As inflation declines, policy turns expansionary sooner and more aggressively than would be optimal in the absence of the zero bound. This introduces an upward bias in the average level of inflation. We also discuss operational issues associated with the interpretation and implementation of policy at the zero bound in relation to the recent situation in Japan. (C) 2000 Academic Press Journal of Economic Literature Classification Numbers: E31, E52, E58, E61. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Orphanides, A (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 66 TC 59 Z9 59 U1 0 U2 4 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 0889-1583 J9 J JPN INT ECON JI J. Jpn. Inst. Econ. PD DEC PY 2000 VL 14 IS 4 BP 327 EP 365 DI 10.1006/jjie.2000.0452 PG 39 WC Economics; International Relations SC Business & Economics; International Relations GA 393ZE UT WOS:000166498900006 ER PT J AU Barrow, L McGranahan, L AF Barrow, L McGranahan, L TI The effects of the earned income credit on the seasonality of household expenditures SO NATIONAL TAX JOURNAL LA English DT Article; Proceedings Paper CT Joint Center for Proverty Research Conferene on the Earned Income Tax Credit: Early Evidence CY OCT 07-08, 1999 CL EVANSTON, ILLINOIS ID CONSUMPTION AB Using data from the Consumer Expenditure Survey, we investigate whether the Earned Income Credit (EIC) leads to changes in seasonal expenditure patterns of low-income workers. We find that EIC eligible households spend approximately 3 percent move total during February, the modal month of EIC refunds, and 9 percent more on durable goods than non-eligible households. The increased spending on durable goods indicates that the EIC facilitates the purchasing of big-ticket items by low-income-families. These estimates, when converted to dollars, also suggest that EIC recipients smooth expenditure somewhat since the average increase in expenditure is less than the average EIC refund. C1 Fed Reserve Bank, Chicago, IL 60604 USA. Univ Warwick, Coventry CV4 7AL, W Midlands, England. RP Barrow, L (reprint author), Fed Reserve Bank, Chicago, IL 60604 USA. NR 12 TC 33 Z9 33 U1 2 U2 5 PU NATL TAX ASSN PI COLUMBUS PA 5310 EAST MAIN ST, COLUMBUS, OH 43213 USA SN 0028-0283 J9 NATL TAX J JI Natl. Tax J. PD DEC PY 2000 VL 53 IS 4 BP 1211 EP 1243 PN 2 PG 33 WC Business, Finance; Economics SC Business & Economics GA 393WN UT WOS:000166492800010 ER PT J AU Dupont, D AF Dupont, D TI Market making, prices, and quantity limits SO REVIEW OF FINANCIAL STUDIES LA English DT Article ID BID-ASK SPREAD; TRADE SIZE; INFORMATION; SPECIALIST; ANNOUNCEMENTS; LIQUIDITY; EARNINGS; RETURNS AB This article develops a model of spread and depth setting under asymmetric information where the equilibrium depth is proportionally more sensitive than the spread to changes in the degree of information asymmetry. The analysis uses a one-period model in which a risk-neutral, monopolistic market maker faces a price-sensitive liquidity trader and a better informed trader who is alternatively risk neutral and risk averse. The equilibrium depth can take values ranging from 0 to infinity, depending on the information asymmetry, the asset volatility, and the strength of the liquidity demand. while the spread remains positive and finite. C1 Eurandom TUE, Fed Reserve Syst, Board Governors, NL-5600 MB Eindhoven, Netherlands. RP Dupont, D (reprint author), Eurandom TUE, Fed Reserve Syst, Board Governors, POB 513, NL-5600 MB Eindhoven, Netherlands. NR 15 TC 12 Z9 12 U1 1 U2 8 PU OXFORD UNIV PRESS INC PI CARY PA JOURNALS DEPT, 2001 EVANS RD, CARY, NC 27513 USA SN 0893-9454 J9 REV FINANC STUD JI Rev. Financ. Stud. PD WIN PY 2000 VL 13 IS 4 BP 1129 EP 1151 DI 10.1093/rfs/13.4.1129 PG 23 WC Business, Finance; Economics SC Business & Economics GA 368BQ UT WOS:000090098100009 ER PT J AU Kay, SJ AF Kay, SJ TI Do options exist? The reform of pension and health care systems in Latin America. SO COMPARATIVE POLITICAL STUDIES LA English DT Book Review C1 Fed Reserve Bank Atlanta, Atlanta, GA USA. RP Kay, SJ (reprint author), Fed Reserve Bank Atlanta, Atlanta, GA USA. NR 1 TC 0 Z9 0 U1 0 U2 0 PU SAGE PUBLICATIONS INC PI THOUSAND OAKS PA 2455 TELLER RD, THOUSAND OAKS, CA 91320 USA SN 0010-4140 J9 COMP POLIT STUD JI Comp. Polit. Stud. PD NOV PY 2000 VL 33 IS 9 BP 1231 EP 1234 PG 4 WC Political Science SC Government & Law GA 361QV UT WOS:000089735200006 ER PT J AU Stiroh, KJ AF Stiroh, KJ TI How did bank holding companies prosper in the 1990s? SO JOURNAL OF BANKING & FINANCE LA English DT Article DE bank holding companies; productivity; efficiency ID COMMERCIAL-BANKS; COST EFFICIENCY; ECONOMIES; SCALE; SCOPE AB This paper examines the improved performance of US bank holding companies (BHCs) from 1991 to 1997. Analysis of cost and profit functions using several alternative output specifications suggests that the gains were primarily due to productivity growth and changes in scale economies. Various econometric methodologies yield productivity growth of about 0.4% per year and the optimal size seems to have increased in the 1990s era of deregulation, technological change, and financial innovation. Estimates of both productivity growth and economies of scale are robust across traditional and non-traditional output specifications. Despite the overall success, however, substantial cost and profit inefficiency existed for BHCs of all sizes in the 1990s. These efficiency estimates are particularly sensitive to the output specification and failure to account for non-traditional activities like off-balance sheet (OBS) items leads profit efficiency, but not cost efficiency, to be understated for the largest BHCs. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: G21; D21. C1 Fed Reserve Bank New York, New York, NY 10045 USA. RP Stiroh, KJ (reprint author), Fed Reserve Bank New York, 33 Liberty St, New York, NY 10045 USA. NR 29 TC 57 Z9 58 U1 1 U2 4 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 J9 J BANK FINANC JI J. Bank Financ. PD NOV PY 2000 VL 24 IS 11 BP 1703 EP 1745 DI 10.1016/S0378-4266(99)00101-6 PG 43 WC Business, Finance; Economics SC Business & Economics GA 365HE UT WOS:000089945200001 ER PT J AU Hasan, I Hunter, WC Mathis, RE AF Hasan, I Hunter, WC Mathis, RE TI Promotional expenditures, market competition, and thrift behavior SO JOURNAL OF BUSINESS RESEARCH LA English DT Article ID PERFORMANCE AB This article investigates the impact of promotional expenditures or advertising on the performance and asset and liability characteristics of firms in the U.S. savings and loan industry over the period 1985 to 1989. The results of a simultaneous equation analysis on a sample of 2,534 thrifts in the Southeast region indicate that promotional expenditures had a strong positive impact on the profitability of their non-interest business activities. The promotional expenditures of thrifts were found to be positively related to their investment in nontraditional assets and their reliance on purchased funds. The findings indicate that promotional expenditures have increased due to the increased competition in the local markets as a result of the introduction of interstate banking during the period. (C) 2000 Elsevier Science Inc. All rights reserved. C1 New Jersey Inst Technol, SOM, Newark, NJ 07102 USA. NYU, New York, NY USA. Fed Reserve Bank, Chicago, IL USA. RP Hasan, I (reprint author), New Jersey Inst Technol, SOM, Newark, NJ 07102 USA. NR 21 TC 1 Z9 1 U1 0 U2 2 PU ELSEVIER SCIENCE INC PI NEW YORK PA 655 AVENUE OF THE AMERICAS, NEW YORK, NY 10010 USA SN 0148-2963 J9 J BUS RES JI J. Bus. Res. PD NOV PY 2000 VL 50 IS 2 BP 177 EP 184 DI 10.1016/S0148-2963(99)00030-2 PG 8 WC Business SC Business & Economics GA 361ND UT WOS:000089728400006 ER PT J AU Bomfim, AN Rudebusch, GD AF Bomfim, AN Rudebusch, GD TI Opportunistic and deliberate disinflation under imperfect credibility SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Article AB One strategy for disinflation prescribes a deliberate path toward low inflation. A contrasting opportunistic approach eschews deliberate action and instead waits for unforeseen shocks to reduce inflation. This paper compares the ability of these two approaches to achieve disinflation-and at, what cost. We analyze these issues using the Federal Reserve's FRB/US model, which allows alternative assumptions to be made about expectations held by agents in the economy; hence, the credibility of the central bank can be considered in assessing the cost of deliberate and opportunistic disinflations. C1 Fed Reserve Bank, San Francisco, CA USA. EM glenn.rudebusch@sf.frb.org NR 34 TC 28 Z9 28 U1 0 U2 1 PU WILEY-BLACKWELL PI MALDEN PA COMMERCE PLACE, 350 MAIN ST, MALDEN 02148, MA USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD NOV PY 2000 VL 32 IS 4 BP 707 EP 721 DI 10.2307/2601179 PN 1 PG 15 WC Business, Finance; Economics SC Business & Economics GA 372TN UT WOS:000165250300001 ER PT J AU Haubrich, JG Ritter, JA AF Haubrich, JG Ritter, JA TI Dynamic commitment and incomplete policy rules SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Article ID MONETARY-POLICY; POSITIVE THEORY; UNCERTAINTY; CREDIBILITY; CONTRACTS AB Considering the dynamics of commitment highlights some neglected features of time inconsistency problems. We modify the standard rules-versus-discretion question in three ways: (1)A government that does not commit today retains the option to do so tomorrow, (2) the government's commitment capability is restricted to a class of simple rules, and (3) the government's ability to make irrevocable commitments is restricted. Three results stand out. First, the option to wait makes the incumbent regime (rules or discretion) relatively more attractive. Second, the option to wait means that increased uncertainty makes the incumbent regime more attractive. Third, because the commitment decision takes place in "real time," policy choice displays hysteresis. C1 Fed Reserve Bank Cleveland, Dept Res, Cleveland, OH 44114 USA. Fed Reserve Bank, Div Res, St Louis, MO USA. RP Haubrich, JG (reprint author), Fed Reserve Bank Cleveland, Dept Res, Cleveland, OH 44114 USA. NR 25 TC 4 Z9 4 U1 0 U2 4 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD NOV PY 2000 VL 32 IS 4 BP 766 EP 784 DI 10.2307/2601182 PN 1 PG 19 WC Business, Finance; Economics SC Business & Economics GA 372TN UT WOS:000165250300004 ER PT J AU Duca, JV AF Duca, JV TI Financial technology shocks and the case of the missing M2 SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Article ID MONEY DEMAND; BOND FUNDS; INCOME AB M2 growth was unusually weak in the early 1990s when its velocity soared. Although MZ growth subsequently recovered, its velocity plateaued at a high level, giving rise to a case of missing money. These swings in M2 growth have accompanied opposite swings in bond mutual fund inflows. M2 growth is better tracked and the "missing M2" problem is resolved when money models are modified to account for shifts in bond mutual fund costs. This approach avoids the capital gains and portfolio substitution problems posed by adding bond or equity funds to M2, while capturing the substitution effects relevant to money demand. C1 Fed Reserve Bank, Dallas, TX USA. RP Duca, JV (reprint author), Fed Reserve Bank, Dallas, TX USA. NR 39 TC 11 Z9 12 U1 2 U2 11 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD NOV PY 2000 VL 32 IS 4 BP 820 EP 839 DI 10.2307/2601185 PN 1 PG 20 WC Business, Finance; Economics SC Business & Economics GA 372TN UT WOS:000165250300007 ER PT J AU Fuhrer, JC Sniderman, MS AF Fuhrer, JC Sniderman, MS TI Monetary policy in a low-inflation environment - Conference summary SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Editorial Material C1 Fed Reserve Bank, Boston, MA USA. Fed Reserve Bank, Cleveland, OH USA. RP Fuhrer, JC (reprint author), Fed Reserve Bank, Boston, MA USA. RI Fuhrer, Jeff/F-8852-2013 NR 11 TC 2 Z9 2 U1 0 U2 3 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD NOV PY 2000 VL 32 IS 4 BP 845 EP 869 PN 2 PG 25 WC Business, Finance; Economics SC Business & Economics GA 372TP UT WOS:000165250400001 ER PT J AU Christiano, LJ AF Christiano, LJ TI Comment on theoretical analysis regarding a zero lower bound on nominal interest rates SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Editorial Material ID MODEL C1 Northwestern Univ, Evanston, IL 60208 USA. Fed Reserve Bank Cleveland, Cleveland, OH 44114 USA. Fed Reserve Bank, Chicago, IL USA. RP Christiano, LJ (reprint author), Northwestern Univ, Evanston, IL 60208 USA. NR 18 TC 4 Z9 4 U1 5 U2 5 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD NOV PY 2000 VL 32 IS 4 BP 905 EP 930 DI 10.2307/2601149 PN 2 PG 26 WC Business, Finance; Economics SC Business & Economics GA 372TP UT WOS:000165250400003 ER PT J AU Zavodny, M AF Zavodny, M TI The effect of the minimum wage on employment and hours SO LABOUR ECONOMICS LA English DT Article DE minimum wage; hours; teens ID FAST-FOOD INDUSTRY; CALIFORNIA; YOUTH AB This study examines the effect of minimum wage increases on teen hours of work and employment using both state- and individual-level panel data in the US. The state-level results indicate that minimum wage increases may lower employment rates but do not adversely affect hours among either working teens or all teens. The individual-level results do not indicate that minimum wage increases have a significant negative effect on hours worked by low-wage teens who are likely to be affected by a minimum wage increase. The results suggest that low-wage teens are less likely to remain employed, relative to high-wage teens, when the minimum wage is raised. However, this adverse effect disappears when these low-wage teens are compared to other low-wage teens during periods when the minimum wage did not increase. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: J38. C1 Fed Reserve Bank Atlanta, Res Dept, Atlanta, GA 30303 USA. RP Zavodny, M (reprint author), Fed Reserve Bank Atlanta, Res Dept, 104 Marietta St, Atlanta, GA 30303 USA. NR 22 TC 46 Z9 46 U1 0 U2 13 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0927-5371 J9 LABOUR ECON JI Labour Econ. PD NOV PY 2000 VL 7 IS 6 BP 729 EP 750 DI 10.1016/S0927-5371(00)00021-X PG 22 WC Economics SC Business & Economics GA 372AB UT WOS:000165210500003 ER PT J AU Rosengren, ES Jordan, JS AF Rosengren, ES Jordan, JS TI Building an infrastructure for financial stability: An overview SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article AB Numerous conferences organized in the aftermath of the financial crisis of 1997-98 offered analyses of what went wrong in the crisis countries and prompted a number of reform proposals directed toward reducing the risk of future crises. However, now that the crisis has abated, reform appears to be much lower on most political agendas and is rarely the topic of media reports or academic inquiries. The Federal Reserve Bank of Boston's June 2000 conference "Building an Infrastructure for Financial Stability" attempted to address this deficiency. As conference participants presented their analyses of the reform process in various countries, a common theme became apparent: Those recommending reform need to do a better job of recognizing political, economic, and social constraints facing individual countries. These constraints tend to be the true impediments to successfully implementing reform. Conference participants also made several general recommendations. First, countries should focus much more attention on improving the enforcement of existing laws, accounting requirements, investor protections, and bank supervisory practices. Second, where reform is needed, one must do a better job of molding the reform so that it fits the societal norms of the recipient country. And finally, specific reforms are likely to work differently in a country that bases its legal system on civil law than in one that bases its legal system on common law. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Rosengren, ES (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 0 TC 0 Z9 0 U1 0 U2 2 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD NOV-DEC PY 2000 BP 3 EP + PG 15 WC Economics SC Business & Economics GA 545CN UT WOS:000175198800001 ER PT J AU Simons, K AF Simons, K TI The use of value at risk by institutional investors SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article AB In recent years, risk management has been of growing interest to institutional investors, including pension funds, insurance companies, endowments, and foundations, as well as the asset management firms that manage funds on their behalf. Traditionally, institutional investors, and particularly pension funds, have emphasized measuring and rewarding investment performance by their portfolio managers. In the past decade, however, many U.S. pension funds have significantly increased the complexity of their portfolios by broadening the menu of acceptable investments. At the same time, well-publicized losses among pension funds, hedge funds, and municipalities have underlined the importance of risk management and measuring performance on a risk-adjusted basis. One approach to risk management, known as Value at Risk (or VaR), has gained increasing acceptance in the last five years. VaR originated on derivatives trading desks and then spread to other trading operations. It is a measure of risk based on a probability of loss and a specific time horizon in which this loss can be expected to occur. VaR has become an accepted standard in the banking industry and it forms the basis of bank capital requirements for market risk. VaR adoption has been slower in the investment management industry, but as demand grows and consensus about the standards emerges, its use can be expected to accelerate. The author discusses the issues surrounding measures of risk-adjusted performance, and she describes the major difficulties institutional investors may encounter when implementing VaR analysis. She concludes with a discussion of possible policy implications of widespread VaR adoption. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Simons, K (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 6 TC 5 Z9 7 U1 0 U2 3 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD NOV-DEC PY 2000 BP 21 EP + PG 12 WC Economics SC Business & Economics GA 545CN UT WOS:000175198800002 ER PT J AU Kopcke, RW AF Kopcke, RW TI Has the stock market become too narrow? SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article AB The price of equity has soared during the past five years, stoking concerns that stocks' prices might have risen too far, too fast. These concerns became more pressing as the values of equities rose much more rapidly than earnings during 1998 and early 1999, lifting stocks' prices to record highs relative to their earnings. Although many indexes of stocks' prices continued to rise sharply in 1998 and 1999, fewer stocks contributed to this performance. The market became more narrow as the running count of stocks whose prices were rising fell behind that for stocks whose prices were dropping. This article reviews the valuation of the equities constituting the S&P 500 index between 1968 and 1999. Although the ranks of the winners thinned and the gap separating the performance of the winners from laggers increased, the value of most equities remained high by historical standards. Analysts generally expected most companies' earnings to grow comparatively rapidly in subsequent years. The author suggests that this optimism might be the market's principal weakness. For companies' earnings to support the current valuation of equity, the economy must grow unusually rapidly for the next decade and beyond. The evidence does not yet confirm that growth has increased sufficiently or will last long enough to pay the expected dividends. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Kopcke, RW (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 1 TC 1 Z9 1 U1 0 U2 1 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD NOV-DEC PY 2000 BP 31 EP + PG 14 WC Economics SC Business & Economics GA 545CN UT WOS:000175198800003 ER PT J AU Freund, C AF Freund, C TI Different paths to free trade: The gains from regionalism SO QUARTERLY JOURNAL OF ECONOMICS LA English DT Article ID MARKET PIONEER ADVANTAGES; GOODS INDUSTRIES; SUNK COSTS; HYSTERESIS; AGREEMENTS; EXPORT; BLOCS; MODEL; ENTRY; SIZE AB We compare free trade reached through expanding regional trading blocs to free trade accomplished by multilateral negotiation. With sunk costs, the outcomes are different. Trade in an imperfectly competitive good flows disproportionately more between the original members of a regional agreement even after free trade is reached. They secure a higher welfare level from regionalism than from free trade achieved multilaterally; nonmembers, however, reach a lower welfare level. A surprising result is that world welfare during free trade is greater when it is achieved by the regional path. We conclude with some empirical evidence from the European Union that is consistent with the model. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Freund, C (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 30 TC 41 Z9 41 U1 2 U2 11 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 0033-5533 J9 Q J ECON JI Q. J. Econ. PD NOV PY 2000 VL 115 IS 4 BP 1317 EP 1341 DI 10.1162/003355300555088 PG 25 WC Economics SC Business & Economics GA 374RW UT WOS:000165359000007 ER PT J AU Altunbas, Y Liu, MH Molyneux, P Seth, R AF Altunbas, Y Liu, MH Molyneux, P Seth, R TI Efficiency and risk in Japanese banking SO JOURNAL OF BANKING & FINANCE LA English DT Article DE Japanese banks; cost functions; economies of scale; inefficiencies; technical change ID COMMERCIAL-BANKS; SCALE EFFICIENCY; TECHNICAL CHANGE; ECONOMIES; COST; SCOPE; INEFFICIENCY; FRONTIERS; INDUSTRY; MODEL AB This paper investigates the impact of risk and quality factors on banks' cost by using the stochastic cost frontier methodology to evaluate scale and X-inefficiencies, as well as technical change for a sample of Japanese commercial banks between 1993 and 1996, Loan-loss provisions are included in the cost frontier model to control for output quality, with a financial capital and a liquidity ratio included to control risk. Following the approach suggested in Mester (1996) we show that if risk and quality factors are not taken into account optimal bank size tends to be overstated. That is, optimal bank size is considerably smaller when risk and quality factors are taken into account when modelling the cost characteristics of Japanese banks. We also find that the level of financial capital has the biggest influence on the scale efficiency estimates. X-inefficiency estimates, in contrast, appear less sensitive to risk and quality factors. Our results also suggest that scale inefficiencies dominate X-inefficiencies. These are important findings because they contrast with the results of previous studies on Japanese banking. In particular, the results indicate an alternative policy prescription, namely, that the largest banks should shrink to benefit from scale advantages. It also seems that financial capital has the largest influence on optimal bank size. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: G21; D21; G23. C1 Univ Wales, Sch Accounting Banking & Econ, Bangor LL57 2DG, Gwynedd, Wales. S Bank Univ, Sch Business, London SE1 0AA, England. Fed Reserve Bank New York, New York, NY 10045 USA. Nanyang Technol Univ, Nanyang Business Sch, Singapore 639798, Singapore. RP Molyneux, P (reprint author), Univ Wales, Sch Accounting Banking & Econ, Bangor LL57 2DG, Gwynedd, Wales. EM p.molyneux@bangor.ac.uk NR 44 TC 104 Z9 107 U1 4 U2 18 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 J9 J BANK FINANC JI J. Bank Financ. PD OCT PY 2000 VL 24 IS 10 BP 1605 EP 1628 DI 10.1016/S0378-4266(99)00095-3 PG 24 WC Business, Finance; Economics SC Business & Economics GA 358EB UT WOS:000089543300003 ER PT J AU Park, S AF Park, S TI Effects of the affiliation of banking and commerce on the firm's investment and the bank's risk SO JOURNAL OF BANKING & FINANCE LA English DT Article DE Glass-Steagall Act; universal banking; investment efficiency; bank risk ID FINANCIAL INTERMEDIATION; UNIVERSAL BANKING; BEHAVIOR; MARKET; POLICY AB This paper examines how the affiliation of banking and commerce affects the firm's investment efficiency and the bank's risk exposure. The bank's holding of a borrowing firm's equity reduces the agency conflict between the firm and the bank, but increases the monitoring need of uninformed debtholders. Thus, the firm's investment efficiency is maximized when the bank's equity share is between zero and its debt share. The bank's risk exposure can increase in two ways. With a large equity share, the bank has more incentives to allow the firm to undertake risky projects. The firm, when it has control over the bank, may force the bank to finance its risky projects. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: G21; G28. C1 Fed Reserve Bank New York, New York, NY 10045 USA. RP Park, S (reprint author), Fed Reserve Bank New York, 33 Liberty St, New York, NY 10045 USA. NR 13 TC 4 Z9 4 U1 2 U2 4 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 J9 J BANK FINANC JI J. Bank Financ. PD OCT PY 2000 VL 24 IS 10 BP 1629 EP 1650 DI 10.1016/S0378-4266(99)00099-0 PG 22 WC Business, Finance; Economics SC Business & Economics GA 358EB UT WOS:000089543300004 ER PT J AU Gorton, G Schmid, FA AF Gorton, G Schmid, FA TI Universal banking and the performance of German firms SO JOURNAL OF FINANCIAL ECONOMICS LA English DT Article DE corporate control; corporate finance; ownership structure; universal banking ID LOCALLY WEIGHTED REGRESSION; CORPORATE-CONTROL; OWNERSHIP STRUCTURE; EMPIRICAL-ANALYSIS; LARGE SHAREHOLDERS; BRITISH-COMPANIES; MARKET; LIQUIDITY; MODELS; COSTS AB We empirically investigate the influence of German universal banks on the performance of German firms. We take into account banks' control rights from equity ownership, banks' proxy-voting rights, and the concentration of control rights from equity ownership (which includes complex forms such as pyramids, cross-shareholdings, and stocks with multiple votes). We also account for voting restrictions and the German codetermination system (under which employees of large firms have control rights that are unrelated to equity ownership). We find that firm performance improves to the extent that equity control rights are concentrated. Moreover, bank control rights from equity ownership significantly improve firm performance beyond what nonbank blockholders can achieve. (C) 2000 Elsevier Science S.A. All rights reserved. C1 Univ Penn, Wharton Sch, Dept Finance, Philadelphia, PA 19104 USA. Natl Bur Econ Res, Cambridge, MA 02138 USA. Fed Reserve Bank, St Louis, MO 63102 USA. RP Gorton, G (reprint author), Univ Penn, Wharton Sch, Dept Finance, 3620 Locust Walk,2300 Steinberg Hall Dietrich Hal, Philadelphia, PA 19104 USA. NR 64 TC 101 Z9 104 U1 4 U2 16 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0304-405X J9 J FINANC ECON JI J. Financ. Econ. PD OCT-NOV PY 2000 VL 58 IS 1-2 BP 29 EP 80 DI 10.1016/S0304-405X(00)00066-0 PG 52 WC Business, Finance; Economics SC Business & Economics GA 357YH UT WOS:000089529400003 ER PT J AU Berger, AN Cummins, JD Weiss, MA Zi, HM AF Berger, AN Cummins, JD Weiss, MA Zi, HM TI Conglomeration versus strategic focus: Evidence from the insurance industry SO JOURNAL OF FINANCIAL INTERMEDIATION LA English DT Article DE insurance; conglomeration; focus; mergers; scope economies ID COMPOSITE COST FUNCTION; PRODUCT MIX ECONOMIES; UNITED-STATES BANKS; LIFE-INSURANCE; UNIVERSAL BANKING; SCOPE ECONOMIES; EFFICIENCY; SCALE; DIVERSIFICATION; RETURNS AB We provide evidence on the validity of the conglomeration hypothesis versus the strategic focus hypothesis for financial institutions using data on U.S. insurance companies. We distinguish between the hypotheses using profit scope economies, which measure the relative efficiency of joint versus specialized production, taking both costs and revenues into account. The results suggest that the conglomeration hypothesis dominates for some types of financial service providers and the strategic focus hypothesis dominates for other types. This may explain the empirical puzzle of why joint producers and specialists both appear to be competitively viable in the long run. Journal of Economic Literature Classification Numbers: G22, G28, G34, L23, L89. (C) 2000 Academic Press. C1 Univ Penn, Wharton Sch, Philadelphia, PA 19104 USA. Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. Wharton Financial Inst Ctr, Philadelphia, PA 19104 USA. Temple Univ, Philadelphia, PA 19122 USA. Sejong Univ, Seoul, South Korea. RP Cummins, JD (reprint author), Univ Penn, Wharton Sch, 3641 Locust Walk, Philadelphia, PA 19104 USA. NR 44 TC 65 Z9 65 U1 3 U2 8 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 1042-9573 J9 J FINANC INTERMED JI J. Financ. Intermed. PD OCT PY 2000 VL 9 IS 4 BP 323 EP 362 DI 10.1006/jfin.2000.0295 PG 40 WC Business, Finance SC Business & Economics GA 365MN UT WOS:000089955200002 ER PT J AU Hughes, JP Lang, W Mester, LJ Moon, CG AF Hughes, JP Lang, W Mester, LJ Moon, CG TI Recovering risky technologies using the almost ideal demand system: An application to US banking SO JOURNAL OF FINANCIAL SERVICES RESEARCH LA English DT Article DE banking; production; risk; efficiency; agency problems ID DEPOSIT INSURANCE; DEREGULATION; CHOICE; DEBT AB We present and estimate a model that shifts the focus of modeling production from the traditional assumptions of profit maximization and cost minimization to a more general assumption of managerial utility maximization that can incorporate risk incentives into the analysis of production and recover value-maximizing technologies. We implement the model using the almost ideal demand system. In addition, we use the model to measure efficiency in a more general way that can incorporate a concern for the market value of firms' assets and equity and identify value-maximizing firms. This shift in focus bridges the ap between the risk incentives literature in banking that ignores the microeconomics of production and the production literature that ignores the relationship between production decisions and risk. Our estimation of the model for a sample of U.S. commercial banks illustrates that results obtained from our generalized model can differ significantly from those obtained from the standard profit-maximization model, which ignores risk. C1 Rutgers State Univ, Piscataway, NJ 08855 USA. Fed Reserve Bank, Philadelphia, PA USA. Univ Penn, Wharton Sch, Philadelphia, PA 19104 USA. Hanyang Univ, Coll Business & Econ, Seoul, South Korea. RP Hughes, JP (reprint author), Rutgers State Univ, Piscataway, NJ 08855 USA. RI Moon, Choon-Geol/C-1768-2017 OI Moon, Choon-Geol/0000-0002-2933-9150 NR 27 TC 22 Z9 22 U1 0 U2 3 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0920-8550 J9 J FINANC SERV RES JI J. Financ. Serv. Res. PD OCT PY 2000 VL 18 IS 1 BP 5 EP 27 DI 10.1023/A:1026554922476 PG 23 WC Business, Finance SC Business & Economics GA 387FM UT WOS:000166112200001 ER PT J AU Bonser-Neal, C Roley, VV Sellon, GH AF Bonser-Neal, C Roley, VV Sellon, GH TI The effect of monetary policy actions on exchange rates under interest-rate targeting SO JOURNAL OF INTERNATIONAL MONEY AND FINANCE LA English DT Article DE exchange rates; interest-rate targeting; overshooting; monetary policy; policy shocks ID RATIONAL-EXPECTATIONS; TERM STRUCTURE; RATE DYNAMICS; TRANSMISSION; INTERVENTION; ADJUSTMENT; PRICES; MODEL AB We specify a theoretical model of the exchange-rate response to U.S. monetary policy actions that is capable of explaining a wide range of recent empirical results. We show that the response pattern of spot and expected future exchange rates depends on the predictability of Federal Reserve actions, the persistence of shocks to the economy, and the reaction of foreign central banks to the US monetary policy shock. We also show that the movements of spot and expected future exchange rates in anticipation of a monetary policy change can outweigh the immediate responses at the time of the change. (C) 2000 Elsevier Science Ltd. All rights reserved. C1 Univ Washington, Dept Finance, Seattle, WA 98195 USA. Indiana Univ, Kelley Sch Business, Indianapolis, IN 46202 USA. Fed Reserve Bank Kansas City, Econ Res Dept, Kansas City, MO 64198 USA. RP Roley, VV (reprint author), Univ Washington, Dept Finance, Box 353200, Seattle, WA 98195 USA. NR 30 TC 2 Z9 3 U1 1 U2 4 PU ELSEVIER SCI LTD PI OXFORD PA THE BOULEVARD, LANGFORD LANE, KIDLINGTON, OXFORD OX5 1GB, OXON, ENGLAND SN 0261-5606 J9 J INT MONEY FINANC JI J. Int. Money Finan. PD OCT PY 2000 VL 19 IS 5 BP 601 EP 631 DI 10.1016/S0261-5606(00)00026-7 PG 31 WC Business, Finance SC Business & Economics GA 352PR UT WOS:000089227500001 ER PT J AU Erceg, CJ Henderson, DW Levin, AT AF Erceg, CJ Henderson, DW Levin, AT TI Optimal monetary policy with staggered wage and price contracts SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE monetary policy; inflation targeting; nominal wage and price rigidity; staggered contracts ID RATIONAL-EXPECTATIONS; MODEL AB We formulate an optimizing-agent model in which both labor and product markets exhibit monopolistic competition and staggered nominal contracts. The unconditional expectation of average household utility can be expressed in terms of the unconditional variances of the output Sap, price inflation, and wage inflation. Monetary policy cannot achieve the Pareto-optimal equilibrium that would occur under completely flexible wages and prices: that is, the model exhibits a tradeoff in stabilizing the output gap, price inflation, and wage inflation. We characterize the optimal policy rule for reasonable calibrations of the model. We also find that strict price inflation targeting generates relatively large welfare losses, whereas several other simple policy rules perform nearly as well as the optimal rule. (C) 2000 Published by Elsevier Science B.V. All rights reserved. JEL classification: E31; E32; E52. C1 Fed Reserve Board, Washington, DC 20551 USA. RP Henderson, DW (reprint author), Fed Reserve Board, Mail Stop 24,20th & C St NW, Washington, DC 20551 USA. EM dale.henderson@frb.gov NR 43 TC 474 Z9 479 U1 3 U2 24 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 EI 1873-1295 J9 J MONETARY ECON JI J. Monetary Econ. PD OCT PY 2000 VL 46 IS 2 BP 281 EP 313 DI 10.1016/S0304-3932(00)00028-3 PG 33 WC Business, Finance; Economics SC Business & Economics GA 352NW UT WOS:000089225600001 ER PT J AU Carlson, JB Hoffman, DL Keen, BD Rasche, RH AF Carlson, JB Hoffman, DL Keen, BD Rasche, RH TI Results of a study of the stability of cointegrating relations comprised of broad monetary aggregates SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE money demand; VECM ID UNITED-STATES; MONEY; VECTORS; INCOME; DEMAND; M2 AB We find strong evidence of a stable 'money demand' relationship for MZM and M2M through the 1990s, Though the M2 relation breaks down somewhere around 1990, evidence has been accumulating that the disturbance is well characterized as a permanent upward shift in M2 velocity, which began around 1990 and was largely over by 1994. Taken together, our results support the hypothesis that households permanently reallocated a portion of their wealth from time deposits to mutual funds. Although this reallocation may have been induced by depository restructuring, we argue that the substitution could be explained by appropriately measured opportunity cost. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: E41. C1 Arizona State Univ, Dept Econ, Tempe, AZ 85284 USA. Fed Reserve Bank Cleveland, Cleveland, OH 44101 USA. Univ Virginia, Dept Econ, Charlottesville, VA 22903 USA. Fed Reserve Bank, St Louis, MO 63166 USA. RP Hoffman, DL (reprint author), Arizona State Univ, Dept Econ, Tempe, AZ 85284 USA. NR 29 TC 24 Z9 24 U1 0 U2 1 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD OCT PY 2000 VL 46 IS 2 BP 345 EP 383 DI 10.1016/S0304-3932(00)00029-5 PG 39 WC Business, Finance; Economics SC Business & Economics GA 352NW UT WOS:000089225600003 ER PT J AU Viard, AD AF Viard, AD TI Dynamic asset pricing effects and incidence of realization-based capital gains taxes SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE capital gains taxation; asset pricing; tax incidence; lock-in effect ID TRANSACTION COSTS; TAXATION; RETURNS; EQUILIBRIUM; INVESTMENT; SECURITIES; MODEL AB Many analyses of capital gains taxation assume that realization-based taxes are economically similar to accrual-based taxes. In equilibrium, however, the distinctive implications of realization taxes for asset trading through the lock-in effect are associated with distinctive dynamic asset pricing effects. Asset prices are increased by the current realization tax, to partly offset the sale disincentive that the tax would otherwise impose. The resulting division of the tax burden between buyers and sellers of assets is similar to traditional public finance models of excise-tax incidence in product markets. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification. G11: G17; H22. C1 Fed Reserve Bank, Res Dept, Dallas, TX 75265 USA. RP Viard, AD (reprint author), Fed Reserve Bank, Res Dept, Dallas, TX 75265 USA. NR 34 TC 10 Z9 11 U1 2 U2 7 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD OCT PY 2000 VL 46 IS 2 BP 465 EP 488 DI 10.1016/S0304-3932(00)00034-9 PG 24 WC Business, Finance; Economics SC Business & Economics GA 352NW UT WOS:000089225600008 ER PT J AU Gilchrist, S Williams, JC AF Gilchrist, S Williams, JC TI Putty-clay and investment: A business cycle analysis SO JOURNAL OF POLITICAL ECONOMY LA English DT Article ID RATIONAL-EXPECTATIONS; CAPACITY UTILIZATION; MACHINE REPLACEMENT; MODELS; FLUCTUATIONS; OUTPUT; TIME AB This paper develops a general equilibrium model with putty-clay technology, investment irreversibility, and variable capacity utilization. Low short-run capital-labor substitutability induces the putty-clay effect of a tight link between changes in capacity and movements in employment and output. Permanent shocks to technology or factor prices generate a hump-shaped response of hours, persistence in output growth, and positive comovement in the forecastable components of output and hours. Capacity constraints result in asymmetric responses to large shocks with recessions deeper than expansions. Estimation of a two-sector model supports a significant role for putty-clay capital in explaining business cycle and medium-run dynamics. C1 Boston Univ, Boston, MA 02215 USA. Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Gilchrist, S (reprint author), Boston Univ, Boston, MA 02215 USA. RI Williams, John/A-8226-2009 NR 33 TC 50 Z9 50 U1 1 U2 9 PU UNIV CHICAGO PRESS PI CHICAGO PA 5720 SOUTH WOODLAWN AVE, CHICAGO, IL 60637-1603 USA SN 0022-3808 J9 J POLIT ECON JI J. Polit. Econ. PD OCT PY 2000 VL 108 IS 5 BP 928 EP 960 DI 10.1086/317673 PG 33 WC Economics SC Business & Economics GA 364UD UT WOS:000089910600004 ER PT J AU Rogers, DL Rogers, JH AF Rogers, DL Rogers, JH TI Political competition and state government size: Do tighter elections produce looser budgets? SO PUBLIC CHOICE LA English DT Article ID LEVIATHAN; GROWTH; DEBT; VOTE AB We test implications of political competition theory concerning government size, using data from U.S. states. We find that greater political competition in the race for governor acts as a check against bigger government. Evidence on the effectiveness of legal limits on expenditures and/or revenues growth is mixed. The Democratic Party is associated with bigger government, but only when party representation in both the governor's house and the legislature is strong. The flypaper effect of grants is found to be strong. Our results have implications for models of fiscal illusion. C1 Urban Inst, Income & Benefits Policy Ctr, Washington, DC 20037 USA. Fed Reserve Syst, Board Governors, Int Finance Div, Washington, DC 20551 USA. RP Rogers, DL (reprint author), Urban Inst, Income & Benefits Policy Ctr, 2100 M St NW, Washington, DC 20037 USA. NR 25 TC 23 Z9 24 U1 1 U2 5 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0048-5829 J9 PUBLIC CHOICE JI Public Choice PD OCT PY 2000 VL 105 IS 1-2 BP 1 EP 21 DI 10.1023/A:1005122127801 PG 21 WC Economics; Political Science SC Business & Economics; Government & Law GA 351FU UT WOS:000089147800001 ER PT J AU Perica, V AF Perica, V TI The Catholic Church and the making of the Croatian nation, 1970-84 SO EAST EUROPEAN POLITICS AND SOCIETIES LA English DT Article C1 Lib Congress, Fed Res Div, Washington, DC 20540 USA. RP Perica, V (reprint author), Lib Congress, Fed Res Div, Washington, DC 20540 USA. NR 58 TC 1 Z9 1 U1 0 U2 0 PU UNIV CALIF PRESS PI BERKELEY PA C/O JOURNALS DIVISION, 2000 CENTER ST, STE 303, BERKELEY, CA 94704-1223 USA SN 0888-3254 J9 E EUR POLIT SOC JI East Eur. Polit. Soc. PD FAL PY 2000 VL 14 IS 3 BP 532 EP 564 DI 10.1177/0888325400014003002 PG 33 WC Area Studies; Political Science SC Area Studies; Government & Law GA 391BQ UT WOS:000166334600002 ER PT J AU Krusell, P Ohanian, LE Rios-Rull, JV Violante, GL AF Krusell, P Ohanian, LE Rios-Rull, JV Violante, GL TI Capital-skill complementarity and inequality: A macroeconomic analysis SO ECONOMETRICA LA English DT Article DE capital-skill complementarity; wage inequality; technological change ID MAXIMUM-LIKELIHOOD METHODS; WAGE INEQUALITY AB The supply and price of skilled labor relative to unskilled labor have changed dramatically over the postwar period. The relative quantity of skilled labor has increased substantially, and the skill premium, which is the wage of skilled labor relative to that of unskilled labor, has grown significantly since 1980. Many studies have found that accounting for the increase in the skill premium on the basis of observable variables is difficult and have concluded implicitly that latent skill-biased technological change must be the main factor responsible. This paper examines that view systematically We develop a framework that provides a simple, explicit economic mechanism for understanding skill-biased technological change in terms of observable variables, and we use the framework to evaluate the fraction of variation in the skill premium that can be accounted for by changes in observed factor quantities. We find that with capital-skill complementarity, changes in observed inputs alone can account for most of the variations in the skill premium over the last 30 years. C1 Univ Rochester, Dept Econ, Rochester, NY 14627 USA. Univ Calif Los Angeles, Dept Econ, Los Angeles, CA 90024 USA. Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. Fed Reserve Bank Minneapolis, Dept Res, Minneapolis, MN 55480 USA. Univ Penn, Dept Econ, Philadelphia, PA 19096 USA. UCL, Dept Econ, London WC1E 6BT, England. RP Univ Rochester, Dept Econ, Rochester, NY 14627 USA. RI Violante, Giovanni/F-1872-2017 NR 28 TC 351 Z9 354 U1 5 U2 33 PU WILEY-BLACKWELL PI HOBOKEN PA 111 RIVER ST, HOBOKEN 07030-5774, NJ USA SN 0012-9682 EI 1468-0262 J9 ECONOMETRICA JI Econometrica PD SEP PY 2000 VL 68 IS 5 BP 1029 EP 1053 DI 10.1111/1468-0262.00150 PG 25 WC Economics; Mathematics, Interdisciplinary Applications; Social Sciences, Mathematical Methods; Statistics & Probability SC Business & Economics; Mathematics; Mathematical Methods In Social Sciences GA 349AK UT WOS:000089021500001 ER PT J AU Stock, JH Wright, JH AF Stock, JH Wright, JH TI GMM with weak identification SO ECONOMETRICA LA English DT Article DE instrumental variables; empirical processes; Euler equation estimation; asset pricing ID INSTRUMENTAL VARIABLES REGRESSION; ASSET PRICING-MODELS; STRUCTURAL PARAMETERS; SAMPLE DISTRIBUTION; GENERALIZED-METHOD; TEMPORAL BEHAVIOR; RISK-AVERSION; TESTS; SUBSTITUTION; CONSUMPTION AB This paper develops asymptotic distribution theory for GMM estimators and test statistics when some or all of the parameters are weakly identified. General results are obtained and are specialized to two important cases: linear instrumental variables regression and Euler equations estimation of the CCAPM. Numerical results for the CCAPM demonstrate that weak-identification asymptotics explains the breakdown of conventional GMM procedures documented in previous Monte Carlo studies. Confidence sets immune to weak identification are proposed. We use these results to inform an empirical investigation of various CCAPM specifications; the substantive conclusions reached differ from those obtained using conventional methods. C1 Harvard Univ, Kennedy Sch Govt, Cambridge, MA 02138 USA. Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Stock, JH (reprint author), Harvard Univ, Kennedy Sch Govt, 79 JFK St, Cambridge, MA 02138 USA. NR 48 TC 218 Z9 221 U1 3 U2 7 PU BLACKWELL PUBL LTD PI OXFORD PA 108 COWLEY RD, OXFORD OX4 1JF, OXON, ENGLAND SN 0012-9682 J9 ECONOMETRICA JI Econometrica PD SEP PY 2000 VL 68 IS 5 BP 1055 EP 1096 DI 10.1111/1468-0262.00151 PG 42 WC Economics; Mathematics, Interdisciplinary Applications; Social Sciences, Mathematical Methods; Statistics & Probability SC Business & Economics; Mathematics; Mathematical Methods In Social Sciences GA 349AK UT WOS:000089021500002 ER PT J AU Chari, VV Kehoe, PJ McGrattan, ER AF Chari, VV Kehoe, PJ McGrattan, ER TI Sticky price models of the business cycle: Can the contract multiplier solve the persistence problem? SO ECONOMETRICA LA English DT Article DE staggered price-setting; endogenous price stickiness; monetary business cycles ID RATIONAL EXPECTATIONS; INTEREST-RATES; MONEY; NEUTRALITY; DYNAMICS; DEMAND; OUTPUT AB We construct a quantitative equilibrium model with firms setting prices in a staggered fashion and use it to ask whether monetary shocks can generate business cycle fluctuations. These fluctuations include persistent movements in output along with the other defining features of business cycles, like volatile investment and smooth consumption. We assume that prices are exogenously sticky for a short time. Persistent output fluctuations require endogenous price stickiness in the sense that firms choose not to change prices much when they can do so. We find that for a wide range of parameter values, the amount of endogenous stickiness is small. Thus, we find that in a standard quantitative model, staggered price-setting, alone, does not generate business cycle fluctuations. C1 Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. Fed Reserve Bank Minneapolis, Dept Res, Minneapolis, MN 55480 USA. Univ Penn, Dept Econ, Philadelphia, PA 19104 USA. Natl Bur Econ Res, Cambridge, MA 02138 USA. RP Chari, VV (reprint author), Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. NR 33 TC 212 Z9 214 U1 4 U2 14 PU BLACKWELL PUBL LTD PI OXFORD PA 108 COWLEY RD, OXFORD OX4 1JF, OXON, ENGLAND SN 0012-9682 J9 ECONOMETRICA JI Econometrica PD SEP PY 2000 VL 68 IS 5 BP 1151 EP 1179 DI 10.1111/1468-0262.00154 PG 29 WC Economics; Mathematics, Interdisciplinary Applications; Social Sciences, Mathematical Methods; Statistics & Probability SC Business & Economics; Mathematics; Mathematical Methods In Social Sciences GA 349AK UT WOS:000089021500005 ER PT J AU Guzman, MG AF Guzman, MG TI Bank structure, capital accumulation and growth: a simple macroeconomic model SO ECONOMIC THEORY LA English DT Article DE bank structure; credit rationing; capital accumulation and growth ID STOCK-MARKET DEVELOPMENT; FINANCIAL INTERMEDIATION; ENDOGENOUS GROWTH; DEBT CONTRACTS; COMPETITION; IMPERFECTIONS AB This paper analyzes the equilibrium growth paths of two economies that are identical in all respects, except for the organization of their financial systems: in particular, one has a competitive banking system and the other has a monopolistic banking system. In addition, the sources of inefficiencies, as a result of monopoly banking, and their relationship to the existence of credit rationing are explored. Monopoly in banking tends to depress the equilibrium law of motion for the capital stock for either of two reasons. When credit rationing exists, monopoly banks ration credit more heavily than competitive banks. When credit is not rationed, the existence of monopoly banking leads to excessive monitoring of credit financed investment. Both of these have adverse consequences for capital accumulation. In addition, monopoly banking is more likely to lead to credit rationing than is competitive banking. Finally, the scope for development trap phenomena to arise is considered under both a competitive and a monopolistic banking system. C1 Fed Reserve Bank, Dept Res, Dallas, TX 75201 USA. RP Guzman, MG (reprint author), Fed Reserve Bank, Dept Res, 2200 N Pearl St, Dallas, TX 75201 USA. NR 42 TC 29 Z9 29 U1 6 U2 10 PU SPRINGER-VERLAG PI NEW YORK PA 175 FIFTH AVE, NEW YORK, NY 10010 USA SN 0938-2259 J9 ECON THEOR JI Econ. Theory PD SEP PY 2000 VL 16 IS 2 BP 421 EP 455 DI 10.1007/PL00004091 PG 35 WC Economics SC Business & Economics GA 350HE UT WOS:000089094300012 ER PT J AU Bollerslev, T Wright, JH AF Bollerslev, T Wright, JH TI Semiparametric estimation of long-memory volatility dependencies: The role of high-frequency data SO JOURNAL OF ECONOMETRICS LA English DT Article DE long memory; log-periodogram regressions; stochastic volatility; temporal aggregation; high-frequency data; exchange rates ID OPTIMAL SPECTRAL BANDWIDTH; FOREIGN-EXCHANGE MARKET; RANGE DEPENDENCE; CONDITIONAL HETEROSKEDASTICITY; TIME-SERIES; RETURNS; AGGREGATION; REGRESSION; DYNAMICS; PRICES AB Recent empirical studies have argued that the temporal dependencies in financial market volatility are best characterized by long memory, or fractionally integrated, time series models. Meanwhile. little is known about the properties of the semiparametric inference procedures underlying much of this empirical evidence. The simulations reported in the present paper demonstrate that, in contrast to log-periodogram regression estimates for the degree of fractional integration in the mean (where the span of the data is crucially important), the quality of the inference concerning long-memory dependencies in the conditional variance is intimately related to the sampling frequency of the data. Some new estimators that succinctly aggregate the information in higher frequency returns are also proposed. The theoretical findings are illustrated through the analysis of a ten-year time series consisting of more than half-a-million intradaily observations on the Japanese Yen-U.S. Dollar exchange rate. (C) 2000 Published by Elsevier Science S.A. All rights reserved. C1 Fed Reserve Syst, Board Governors, Int Finance Div, Washington, DC 20551 USA. Duke Univ, Dept Econ, Durham, NC 27708 USA. NBER, Cambridge, MA 02138 USA. RP Wright, JH (reprint author), Fed Reserve Syst, Board Governors, Int Finance Div, Washington, DC 20551 USA. NR 54 TC 35 Z9 38 U1 0 U2 4 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0304-4076 J9 J ECONOMETRICS JI J. Econom. PD SEP PY 2000 VL 98 IS 1 BP 81 EP 106 DI 10.1016/S0304-4076(99)00079-2 PG 26 WC Economics; Mathematics, Interdisciplinary Applications; Social Sciences, Mathematical Methods SC Business & Economics; Mathematics; Mathematical Methods In Social Sciences GA 345MF UT WOS:000088819200004 ER PT J AU Potter, SM AF Potter, SM TI Nonlinear impulse response functions SO JOURNAL OF ECONOMIC DYNAMICS & CONTROL LA English DT Article DE nonlinear; impulse response function; persistence; generalized impulse response function AB The standard linear technique of impulse response function analysis is extended to the nonlinear case by defining a generalized impulse response function. Measures of persistence and asymmetry in response are constructed for a wide class of time series. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification. C22; C51; C52; E32. C1 Fed Reserve Bank New York, Domest Res Funct, New York, NY 10045 USA. RP Potter, SM (reprint author), Fed Reserve Bank New York, Domest Res Funct, 33 Liberty St, New York, NY 10045 USA. NR 12 TC 53 Z9 53 U1 0 U2 3 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0165-1889 J9 J ECON DYN CONTROL JI J. Econ. Dyn. Control PD SEP PY 2000 VL 24 IS 10 BP 1425 EP 1446 DI 10.1016/S0165-1889(99)00013-5 PG 22 WC Economics SC Business & Economics GA 342PY UT WOS:000088655400003 ER PT J AU Wheelock, DC AF Wheelock, DC TI A history of banking in antebellum America: Financial markets and economic development in an era of nation-building. SO JOURNAL OF ECONOMIC HISTORY LA English DT Book Review C1 Fed Reserve Bank, St Louis, MO 63102 USA. RP Wheelock, DC (reprint author), Fed Reserve Bank, St Louis, MO 63102 USA. RI Wheelock, David/I-5757-2016 OI Wheelock, David/0000-0002-2702-8164 NR 1 TC 0 Z9 0 U1 0 U2 0 PU CAMBRIDGE UNIV PRESS PI NEW YORK PA 40 WEST 20TH STREET, NEW YORK, NY 10011-4211 USA SN 0022-0507 J9 J ECON HIST JI J. Econ. Hist. PD SEP PY 2000 VL 60 IS 3 BP 910 EP 912 PG 3 WC Economics; History; History Of Social Sciences SC Business & Economics; History; Social Sciences - Other Topics GA 356PH UT WOS:000089451300046 ER PT J AU Sheiner, L AF Sheiner, L TI Generational accounting around the world. SO JOURNAL OF ECONOMIC LITERATURE LA English DT Book Review C1 Fed Reserve Board, Washington, DC USA. RP Sheiner, L (reprint author), Fed Reserve Board, Washington, DC USA. NR 1 TC 0 Z9 0 U1 0 U2 2 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0022-0515 J9 J ECON LIT JI J. Econ. Lit. PD SEP PY 2000 VL 38 IS 3 BP 646 EP 647 PG 2 WC Economics SC Business & Economics GA 354LZ UT WOS:000089333100015 ER PT J AU Oliner, SD Sichel, DE AF Oliner, SD Sichel, DE TI The resurgence of growth in the late 1990s: Is information technology the story? SO JOURNAL OF ECONOMIC PERSPECTIVES LA English DT Article C1 Fed Reserve Board, Div Res & Stat, Washington, DC USA. RP Oliner, SD (reprint author), Fed Reserve Board, Div Res & Stat, Washington, DC USA. NR 27 TC 376 Z9 380 U1 1 U2 9 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0895-3309 J9 J ECON PERSPECT JI J. Econ. Perspect. PD FAL PY 2000 VL 14 IS 4 BP 3 EP 22 DI 10.1257/jep.14.4.3 PG 20 WC Economics SC Business & Economics GA 379JV UT WOS:000165639700001 ER PT J AU Chari, VV AF Chari, VV TI Limits of markets and limits of governments: An introduction to a symposium on political economy SO JOURNAL OF ECONOMIC THEORY LA English DT Editorial Material ID INFORMATION; DEBT AB This introduces the Journal of Economic Theory symposium on political economy. Journal of Economic Literature Classification Number: P16. (C) 2000 Academic Press. C1 Univ Minnesota, Minneapolis, MN 55455 USA. Fed Reserve Bank, Minneapolis, MN USA. RP Chari, VV (reprint author), Univ Minnesota, Minneapolis, MN 55455 USA. NR 14 TC 2 Z9 2 U1 0 U2 2 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 0022-0531 J9 J ECON THEORY JI J. Econ. Theory PD SEP PY 2000 VL 94 IS 1 BP 1 EP 6 DI 10.1006/jeth.2000.2725 PG 6 WC Economics SC Business & Economics GA 363EY UT WOS:000089823200001 ER PT J AU Brewer, E Jackson, WE AF Brewer, E Jackson, WE TI Requiem for a market maker: The case of Drexel Burnham Lambert and junk bonds SO JOURNAL OF FINANCIAL SERVICES RESEARCH LA English DT Article DE market maker; bankruptcy; market efficiency; junk bonds; intermediation ID BANK STOCK-PRICES; INVESTMENT DECISIONS; DEBT CRISIS; EVENT; FIRMS; INSTITUTIONS; HYPOTHESIS; CONTAGION; IMPACT; VALUES AB This article adds to both the financial intermediation and market microstructure literature by examining the market reactions surrounding the withdrawal of a major financial intermediary and market maker from a specific securities market. We examine the exit of Drexel Burnham Lambert (Drexel) from the junk bond market in 1990. At the time Drexel exited the market by declaring bankruptcy, it was the dominant market maker and underwriter of junk bonds. We examine the impact of Drexel's failure on direct and indirect holders of junk bonds by investigating the effect of Drexel's collapse on junk bond returns, and on the stock returns of a group of firms that, on average, held significant amounts of junk bonds. We find that the collapse of Drexel had a significant impact on junk bond prices in general, and a greater impact on the prices of lower-quality junk bonds in particular. We interpret this result to imply that the value of the liquidity services supplied by Drexel was higher for lower-quality junk bonds. Additionally, we find that junk bonds underwritten by Drexel, as opposed to other investment banks, experienced a significant decline in price over the months leading up to Drexel's failure announcement. This suggests that the monitoring services provided by Drexel for the bonds it underwrote would not be replaced easily by other financial intermediaries operating in the junk bond market. Our results also indicate that the stock returns of life insurance companies with relatively high junk bond exposure tended to be affected more negatively by Drexel's financial distress than the stock returns of life insurance companies with relatively low junk bond exposure. C1 Fed Reserve Bank Chicago, Res Dept, Chicago, IL 60604 USA. Univ N Carolina, Kenan Flagler Business Sch, Chapel Hill, NC USA. RP Brewer, E (reprint author), Fed Reserve Bank Chicago, Res Dept, Chicago, IL 60604 USA. NR 56 TC 2 Z9 2 U1 4 U2 7 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0920-8550 J9 J FINANC SERV RES JI J. Financ. Serv. Res. PD SEP PY 2000 VL 17 IS 3 BP 209 EP 235 DI 10.1023/A:1008118702558 PG 27 WC Business, Finance SC Business & Economics GA 367EY UT WOS:000090049800001 ER PT J AU Gunther, JW Hooks, LM Robinson, KJ AF Gunther, JW Hooks, LM Robinson, KJ TI Adverse selection and competing deposit insurance systems in pre-depression texas SO JOURNAL OF FINANCIAL SERVICES RESEARCH LA English DT Article ID MARKET-INFORMATION; BANK FAILURES; PROBIT MODELS; MORAL HAZARD AB In 1910, Texas instituted a unique deposit insurance program for its state chartered banks by providing a choice between two separate plans: the depositors guaranty fund, similar to insurance schemes in several other states, and the depositors bond security system, which required the procurement of a privately issued guarantee of indemnity. While, under most deposit insurance schemes, the incentive to monitor the financial condition of individual banks simply devolves from depositors to regulators, the bond security system established in Texas distinguished itself by attempting to reintroduce market discipline through the indemnity requirement. Using a probit model with heteroscedasticity, we find evidence that the choice of insurance coverage led to risk-sorting among the banks, with relatively conservative and financially secure institutions opting for the comparatively rigorous bond security system. In addition, the bank failure record indicates the risk differentials between banks in the two plans persisted over time and even possibly grew, suggesting the bond security system at least partially avoided the moral hazard incentives associated with the fixed-rate depositors guaranty plan. These findings support the general view that market discipline is effective in banking. C1 Fed Reserve Bank Dallas, Dallas, TX 75201 USA. Washington & Lee Univ, Lexington, VA 24450 USA. RP Gunther, JW (reprint author), Fed Reserve Bank Dallas, Dallas, TX 75201 USA. NR 51 TC 3 Z9 3 U1 2 U2 5 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0920-8550 J9 J FINANC SERV RES JI J. Financ. Serv. Res. PD SEP PY 2000 VL 17 IS 3 BP 237 EP 258 DI 10.1023/A:1008150719396 PG 22 WC Business, Finance SC Business & Economics GA 367EY UT WOS:000090049800002 ER PT J AU Ginther, D Haveman, R Wolfe, B AF Ginther, D Haveman, R Wolfe, B TI Neighborhood attributes as determinants of children's outcomes - How robust are the relationships? SO JOURNAL OF HUMAN RESOURCES LA English DT Article ID PANEL AB Estimates of neighborhood effects on children's outcomes vary widely among the studies that seek to identify their existence and magnitude, reflecting substantial variation in data and model specification. Here, we re view that literature, and ask if the disparity in estimates of neighborhood effects may reflect the differences among studies in the specification of family characteristics, and hence omitted variables bias. We report a systematic set of robustness results for three youth outcomes thigh school graduation, the number of years of completed schooling, and teen nonmarital childbearing) using data on about 2,600 children from the Panel Study of Income Dynamics. We observe these children over a period of at least 21 years and have included an extensive set of neighborhood variables for these individuals measured over the entire school-age period. We measure the relationship of these neighborhood variables to the three outcomes, moving from basic models containing no individual and family characteristic variables to models containing an extensive set of individual and family statistical controls. We conclude that the reliability of estimates of these impacts may be an artifact of the degree to which family background is characterized in model specification. Confidence that reported neighborhood effects reveal true relationships requires statistical controls for the full range of family and individual background that may also influence children's attainments; not all variables with coefficients showing asterisks have significant effects. C1 Washington Univ, St Louis, MO 63130 USA. Fed Reserve Bank, Atlanta, GA USA. Univ Wisconsin, Madison, WI USA. RP Ginther, D (reprint author), Washington Univ, St Louis, MO 63130 USA. RI Brower, Susan/C-7090-2009; Ginther, Donna/F-7317-2016 OI Ginther, Donna/0000-0002-0881-7969 NR 41 TC 97 Z9 97 U1 0 U2 10 PU UNIV WISCONSIN PRESS PI MADISON PA JOURNAL DIVISION, 2537 DANIELS ST, MADISON, WI 53718 USA SN 0022-166X J9 J HUM RESOUR JI J. Hum. Resour. PD FAL PY 2000 VL 35 IS 4 BP 603 EP 642 DI 10.2307/146365 PG 40 WC Economics; Industrial Relations & Labor SC Business & Economics GA 375UQ UT WOS:000165420000001 ER PT J AU McQuerry, E AF McQuerry, E TI Changing financial landscapes and their policy implications SO JOURNAL OF INTERAMERICAN STUDIES AND WORLD AFFAIRS LA English DT Review C1 Fed Reserve Bank Atlanta, Latin Amer Res Grp, Atlanta, GA 30303 USA. RP McQuerry, E (reprint author), Fed Reserve Bank Atlanta, Latin Amer Res Grp, Atlanta, GA 30303 USA. NR 9 TC 0 Z9 0 U1 0 U2 0 PU UNIV MIAMI PI CORAL GABLES PA J INTERAMER STUD WORLD AFF PO BOX 248134, CORAL GABLES, FL 33124 USA SN 0022-1937 J9 J INTERAM STUD WORLD JI J. Interam. Stud. World Aff. PD FAL PY 2000 VL 42 IS 3 BP 171 EP 184 DI 10.2307/166442 PG 14 WC Area Studies; International Relations; Political Science SC Area Studies; International Relations; Government & Law GA 374PV UT WOS:000165354300007 ER PT J AU Spiegel, MM AF Spiegel, MM TI Bank charter value and the viability of the Japanese convoy system SO JOURNAL OF THE JAPANESE AND INTERNATIONAL ECONOMIES LA English DT Article DE convoy system; Japan; banking AB This paper compares the performance of a convoy banking system, similar to that whch prevailed in Japan, to a fixed-premium deposit insurance regime. While neither regime is generally preferable over the other, the performance of the convoy system is shown to be more sensitive to changes in bank charter values and the overall health of the banking system under fairly general conditions. The recent breakdown of the convoy system may therefore be partly attributable to adverse movements in these characteristics in Japan. Journal of Economic Literature Classification Numbers: G21, G28. C1 Fed Reserve Bank San Francisco, Dept Res, San Francisco, CA 94120 USA. RP Spiegel, MM (reprint author), Fed Reserve Bank San Francisco, Dept Res, POB 7702, San Francisco, CA 94120 USA. NR 14 TC 0 Z9 0 U1 1 U2 2 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 0889-1583 J9 J JPN INT ECON JI J. Jpn. Inst. Econ. PD SEP PY 2000 VL 14 IS 3 BP 149 EP 168 DI 10.1006/jjie.2000.0447 PG 20 WC Economics; International Relations SC Business & Economics; International Relations GA 362WC UT WOS:000089800400001 ER PT J AU Canova, F De Nicolo, G AF Canova, F De Nicolo, G TI Stock returns, term structure, inflation, and real activity: An international perspective SO MACROECONOMIC DYNAMICS LA English DT Article DE transmission; business cycles; international stock returns; financial markets ID INTEREST-RATES; CAUSAL RELATIONS; GROWTH AB This paper analyzes the empirical interdependecies among asset returns, real activity, and inflation from multicountry and international points of view. We find that innovations in nominal stock returns are not significantly related to inflation or real activity, that the U.S. term structure of interest rates predicts both domestic and foreign inflation rates and domestic future real activity, and that innovations in inflation do not significantly affect real activity. An interpretation of the dynamics and some policy implications of the results are provided. C1 Fed Reserve Board, Int Finance Div, Washington, DC 20551 USA. Univ Pompeu Fabra, Barcelona, Spain. RP De Nicolo, G (reprint author), Fed Reserve Board, Int Finance Div, Mail Stop 19, Washington, DC 20551 USA. RI Canova, Fabio/H-3265-2015 OI Canova, Fabio/0000-0002-8782-4787 NR 29 TC 13 Z9 13 U1 0 U2 5 PU CAMBRIDGE UNIV PRESS PI NEW YORK PA 40 WEST 20TH STREET, NEW YORK, NY 10011-4211 USA SN 1365-1005 J9 MACROECON DYN JI Macroecon. Dyn. PD SEP PY 2000 VL 4 IS 3 BP 343 EP 372 DI 10.1017/S1365100500016047 PG 30 WC Economics SC Business & Economics GA 360YA UT WOS:000089693900004 ER PT J AU Little, JS AF Little, JS TI Recent developments in US energy markets: A background note SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article ID MACROECONOMY; PRICES; OIL AB In its October 1999 World Economic Outlook, the IMF assumed that oil prices would be $18 per barrel in 2000. In reality, oil prices will probably average closer to $30 than to $20 a barrel this year. As oil prices have continued to rise above expectation, analysts have scrambled to find explanations. This note outlines some of the developments that have led to persistently high oil prices over the past two years. It compares the current situation with that prevailing at the time of previous oil shocks, and outlines some of the difficulties entailed in measuring the impact of sharp oil price increases on U.S. inflation and output. C1 Fed Reserve Bank Boston, Boston, MA 02106 USA. RP Little, JS (reprint author), Fed Reserve Bank Boston, Boston, MA 02106 USA. NR 31 TC 0 Z9 0 U1 0 U2 1 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD SEP-OCT PY 2000 BP 3 EP + PG 17 WC Economics SC Business & Economics GA 545CL UT WOS:000175198600001 ER PT J AU Fortune, P AF Fortune, P TI Margin requirements, margin loans, and margin rates: Practice and principles SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article AB The Board of Governors of the Federal Reserve System establishes initial margin requirements under Regulations T, U, and X. Recent margin loan increases, both in aggregate value and relative to market capitalization, have rekindled the debate about using margin requirements as an instrument to affect the prices of common stocks. Proponents of a more active margin requirement policy see the regulations as instruments for affecting the level and volatility of stock prices by influencing investors' demand for common stocks. Others believe that the announcement effects of increased margin requirements would have a stabilizing effect on the stock market and on the economy. This article discusses the historical background, accounting mechanics, regulation, and economic principles of margin lending. The author analyzes the data on the volume of margin loans, and he describes the history and practice of margin requirements as well the accounting framework. He assesses the extent to which initial margin requirements restrict the amount of margin lending, and he reviews the economics of margin loans, focusing on margin loans to the customers of broker-dealers. The author also develops a model of the link between the value of the put option embedded in margin loans and the margin loan rate, which he applies to determine the characteristics that should explain the high margin loan rates that typically prevail. C1 Fed Reserve Bank Boston, Boston, MA 02106 USA. RP Fortune, P (reprint author), Fed Reserve Bank Boston, Boston, MA 02106 USA. NR 10 TC 18 Z9 18 U1 0 U2 2 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD SEP-OCT PY 2000 BP 19 EP + PG 28 WC Economics SC Business & Economics GA 545CL UT WOS:000175198600002 ER PT J AU Peek, J Rosengren, ES AF Peek, J Rosengren, ES TI Implications of the globalization of the banking sector: The Latin American experience SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article AB Not since the Great Depression has so much of the world faced widespread banking problems, with 112 episodes of systemic banking crises in 93 countries since the late 1970s (Caprio and Klingebiel 1999). These crises have imposed significant economic and fiscal costs on the countries involved; Honohan and Klingebiel (2000) find the average direct costs of banking collapses to be equal to 12.8 percent of GDP, with many countries' direct costs substantially exceeding this percentage. Problems in the banking sector extend well beyond the fiscal cost to taxpayers, for a number of reasons. First, many firms do not have significant access to nonbank sources of external finance. Second, most firms have relied on financing from domestic banks, with bank relationships being highly valued and frequently including cross-shareholding or inclusion of bank representatives on the firm's board of directors. Third, most domestic banks in a given country have had similar portfolio exposures, so that banking problems have tended to affect the entire banking sector, rather than being idiosyncratic and affecting only a few individual banks. Thus, a major domestic shock can impair the solvency of a country's entire banking industry, leaving a country with no (or few) healthy major banks. Such a sharp deterioration in the health of a country's banking sector forces the government to make a stark choice. On the one hand, bank regulators can undertake strict enforcement of bank regulations that will result in the widespread closure of insolvent banks. This can ensure the safety and soundness of the banks that do survive, but bank closures can be quite expensive for taxpayers, and the cost of the ensuing credit crunch can be substantial for individual firms and for the overall performance of the macroeconomy. While the early closure of insolvent banks can stop the flow of red ink and contain the cost to the government of recapitalizing the banking system, at least in the short run, the increased macroeconomic costs associated with lost GDP have the potential to more than offset any cost savings, as weakened and failed firms cut production and employment. This path becomes even more problematic for policymakers if it leads to destabilization of the economy and political unrest. The alternative for bank regulators is to follow a policy of forbearance, allowing insolvent banks (and firms) to continue operating. Such a policy may limit the severity of any credit crunch, but it may also increase the ultimate cost to the government of recapitalizing the banking system. This will be particularly true if the moral hazard problem leads insolvent banks to take risky bets in a gamble for resurrection. Bank regulators in many countries in Asia and Latin America have been focused on triage for their banking sector, and many banking reforms have, by necessity, been a pragmatic reaction to evolving domestic economic problems. Some countries have initiated major reforms, such as enhanced disclosure in financial statements, measures to improve transparency; and enhanced regulatory oversight. However, the sequence of measures taken has frequently had a pattern of two steps forward and one step back, as bank regulators have sometimes retreated from their initial supervisory and regulatory reforms in an attempt to satisfy political constraints and placate a populace resentful of squandered funds and the huge potential tax liabilities caused by banking problems. In response to the difficulties associated with reforming domestic bank supervision during a banking crisis, a number of countries have, in effect, imported their bank supervision by encouraging greater penetration of domestic markets by foreign banks. While foreign banks are subject to supervision by the host country, they also are supervised by their home country supervisor, which frequently provides more oversight and requires greater disclosure than traditionally has been the case in many emerging markets. A decision to open up domestic banking markets to foreign competition can provide important potential benefits for the host country, but it is not without significant risks. Among the benefits of opening domestic markets to foreign bank entry are the importation of new management and information technologies to improve banking services, the provision of a new source of funds to recapitalize a troubled banking sector, the provision of an alternative "safe haven" within the country that can reduce the volume of domestic funds that flow offshore during a financial crisis, and the presence of deep-pocket, well-capitalized (foreign) banks that can continue lending following a major adverse shock that substantially weakens the domestic banking sector. Arguments against allowing the entry of foreign banks into domestic markets usually include concerns that the competition from foreign firms will weaken domestic banks, that local regulatory and monetary authorities will have a diminished ability to alter bank behavior, that adverse shocks to foreign banks that are external to the host country may be destabilizing insofar as they adversely affect the banks' behavior in the host country, and that foreign banks will not serve as a stabilizing influence by providing additional credit during a crisis in the host country. C1 Univ Kentucky, Int Banking & Financial Econ, Lexington, KY 40506 USA. Fed Reserve Bank Boston, Boston, MA USA. RP Peek, J (reprint author), Univ Kentucky, Int Banking & Financial Econ, Lexington, KY 40506 USA. NR 15 TC 32 Z9 32 U1 1 U2 17 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD SEP-OCT PY 2000 BP 45 EP + PG 19 WC Economics SC Business & Economics GA 545CL UT WOS:000175198600003 ER PT J AU Bennett, P Peach, R Peristiani, S AF Bennett, P Peach, R Peristiani, S TI Implied mortgage refinancing thresholds SO REAL ESTATE ECONOMICS LA English DT Article ID BACKED SECURITIES; PREPAYMENT; CONSTRAINTS; VALUATION; MODELS AB The optimal prepayment model asserts that rational homeowners will refinance if they can reduce the current value of their liabilities by an amount greater than the refinancing threshold, defined as the cost of carrying the transaction plus the time value of the embedded call option. To compute the notional value of the refinancing threshold, researchers have traditionally relied on discrete- or continuous-time option-pricing models. Using a unique loan level database that links homeowner attributes with property and loan characteristics, this study proposes an alternative approach for estimating the implied value of the refinancing threshold. This empirical method enables us to measure the minimum interest-rate differential needed to justify refinancing conditional on the borrower's creditworthiness, loan-to-value ratio and other observable characteristics. C1 Fed Reserve Bank New York, New York, NY 10045 USA. RP Bennett, P (reprint author), Fed Reserve Bank New York, New York, NY 10045 USA. NR 23 TC 14 Z9 14 U1 1 U2 11 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 1080-8620 J9 REAL ESTATE ECON JI Real Estate Econ. PD FAL PY 2000 VL 28 IS 3 BP 405 EP 434 DI 10.1111/1540-6229.00807 PG 30 WC Business, Finance; Economics; Urban Studies SC Business & Economics; Urban Studies GA 353UD UT WOS:000089293100003 ER PT J AU Avery, RB Bostic, RW Calem, PS Canner, GB AF Avery, RB Bostic, RW Calem, PS Canner, GB TI Credit scoring: Statistical issues and evidence from credit-bureau files SO REAL ESTATE ECONOMICS LA English DT Article AB Although credit Goring offers benefits to lenders and borrowers, its use raises important statistical issues that may affect the ability of scoring systems to accurately quantify an individual's credit risk. The evidence from a national sample of credit-bureau records suggests that concerns about omitted-variable bias may be justified, as local economic factors show significant correlations with credit scores. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Avery, RB (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 11 TC 23 Z9 23 U1 1 U2 6 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 1080-8620 J9 REAL ESTATE ECON JI Real Estate Econ. PD FAL PY 2000 VL 28 IS 3 BP 523 EP 547 DI 10.1111/1540-6229.00811 PG 25 WC Business, Finance; Economics; Urban Studies SC Business & Economics; Urban Studies GA 353UD UT WOS:000089293100007 ER PT J AU Heston, SL Nandi, S AF Heston, SL Nandi, S TI A closed-form GARCH option valuation model SO REVIEW OF FINANCIAL STUDIES LA English DT Article ID STOCHASTIC VOLATILITY; TERM STRUCTURE; INDEX OPTIONS AB This paper develops a closed-form option valuation formula for a spot asset whose variance follows a GARCH (p, q) process that can be correlated with the returns of the spot asset. It provides the first readily computed option formula for a random volatility model that can be estimated and implemented solely on the basis of observables. The single lag version of this model contains Heston's (1993) stochastic volatility model as a continuous-time limit. Empirical analysis on S&P500 index options shows that the out-of-sample valuation errors from the single lag Version of the GARCH model are substantially lower than the ad hoc Black-Scholes model of Dumas, Fleming and Whaley (1998) that uses a separate implied volatility for each option to fit to the smirk/smile in implied volatilties. The GARCH model remains superior even though the parameters of the GARCH model are held constant and volatility is filtered from the history of asset prices while the ad hoc Black-Scholes model is updated every period. The improvement is largely due to the ability of the GARCH model to simultaneously capture the correlation of volatility with spot returns and the path dependence in volatility. C1 Fed Reserve Bank Atlanta, Dept Res, Atlanta, GA 30303 USA. Goldman Sachs & Co, New York, NY 10004 USA. RP Nandi, S (reprint author), Fed Reserve Bank Atlanta, Dept Res, 104 Marietta St NW, Atlanta, GA 30303 USA. NR 41 TC 224 Z9 231 U1 8 U2 29 PU OXFORD UNIV PRESS INC PI CARY PA JOURNALS DEPT, 2001 EVANS RD, CARY, NC 27513 USA SN 0893-9454 J9 REV FINANC STUD JI Rev. Financ. Stud. PD FAL PY 2000 VL 13 IS 3 BP 585 EP 625 DI 10.1093/rfs/13.3.585 PG 41 WC Business, Finance; Economics SC Business & Economics GA 336ZY UT WOS:000088333900004 ER PT J AU Georgellis, Y Wall, HJ AF Georgellis, Y Wall, HJ TI What makes a region entrepreneurial? Evidence from Britain SO ANNALS OF REGIONAL SCIENCE LA English DT Article ID SELF-EMPLOYMENT AB There is a great deal of variation in the levels of entrepreneurship, or rates of self-employment, across the regions of Britain. Over the period 1983-1995, average self-employment in the North, Scotland? and the West Midlands was respectively 25%, 15%,, and 15%, lower than the national average, whereas in the South West, East Anglia, and Wales it was respectively 28%, 23%, and 21%, higher. We develop a theoretical model of regional self-employment, and estimate the roles of labour market conditions, labour force characteristics, industry composition, and region-specific factors such as entrepreneurial human capital. Our results suggest that all of these factors are important, and that regional heterogeneity and regionally correlated disturbances must be accounted for when estimating regional self-employment relationships. C1 Brunel Univ, Dept Econ & Finance, Uxbridge UB8 3PH, Middx, England. Fed Reserve Bank, Div Res, St Louis, MO 63166 USA. RP Georgellis, Y (reprint author), Brunel Univ, Dept Econ & Finance, Uxbridge UB8 3PH, Middx, England. RI Georgellis, Yannis/A-6411-2012; OI Georgellis, Yannis/0000-0002-7866-8014 NR 24 TC 28 Z9 28 U1 0 U2 3 PU SPRINGER-VERLAG PI NEW YORK PA 175 FIFTH AVE, NEW YORK, NY 10010 USA SN 0570-1864 J9 ANN REGIONAL SCI JI Ann. Reg. Sci. PD AUG PY 2000 VL 34 IS 3 BP 385 EP 403 DI 10.1007/s001689900014 PG 19 WC Environmental Studies; Geography SC Environmental Sciences & Ecology; Geography GA 357NX UT WOS:000089508700004 ER PT J AU Veltri, SC Adams, MI Turner, PS AF Veltri, SC Adams, MI Turner, PS TI Payments SO BUSINESS LAWYER LA English DT Article C1 Ohio No Univ, Ada, OH 45810 USA. Fed Reserve Bank New York, New York, NY 10045 USA. RP Veltri, SC (reprint author), Ohio No Univ, Ada, OH 45810 USA. NR 11 TC 1 Z9 1 U1 0 U2 0 PU AMER BAR ASSOC PI CHICAGO PA 750 N LAKE SHORE DR, ATTN:ORDER FULFILLMENT, CHICAGO, IL 60611 USA SN 0007-6899 J9 BUS LAWYER JI Bus. Lawyer PD AUG PY 2000 VL 55 IS 4 BP 1981 EP 2004 PG 24 WC Law SC Government & Law GA 362UP UT WOS:000089796900011 ER PT J AU Wynne, MA Koo, J AF Wynne, MA Koo, J TI Business cycles under monetary union: A comparison of the EU and US SO ECONOMICA LA English DT Article ID CYCLICAL BEHAVIOR; MARKETS; PRICES; TRENDS AB This paper documents business cycle similarities and differences among the 12 Federal Reserve districts in the USA and the 15 countries that make up the EU. The comparison is suggestive of what might be expected to emerge in the way of business cycle synchronization from a monetary union between the member states of the EU. C1 Fed Reserve Bank, Dallas, TX 75201 USA. RP Wynne, MA (reprint author), Fed Reserve Bank, Dallas, TX 75201 USA. NR 40 TC 28 Z9 28 U1 1 U2 7 PU BLACKWELL PUBL LTD PI OXFORD PA 108 COWLEY RD, OXFORD OX4 1JF, OXON, ENGLAND SN 0013-0427 J9 ECONOMICA JI Economica PD AUG PY 2000 VL 67 IS 267 BP 347 EP 374 DI 10.1111/1468-0335.00213 PG 28 WC Economics SC Business & Economics GA 353UX UT WOS:000089294800003 ER PT J AU Bencivenga, VR Smith, BD Starr, RM AF Bencivenga, VR Smith, BD Starr, RM TI Secondary capital markets, long-run growth, and the term structure of asset yields SO INTERNATIONAL ECONOMIC REVIEW LA English DT Article ID FINANCIAL REPRESSION; TRANSACTIONS COSTS; ENDOGENOUS GROWTH; SOUTH-KOREA; RETURNS; POLICY; STOCK AB An endogenous growth model is presented in which production uses a vector of capital inputs. Technologies for creating capital of different types vary by gestation period and productivity. Ownership of gestating capital must be "rolled over" in secondary capital markets in which transactions are costly. We study how reductions in transactions costs affect the equilibrium growth rate, the rate of return on saving, the volume of activity in secondary capital markers, and the term structure of asset yields. We give conditions under which reductions in transactions costs result in higher or lower growth rates. C1 Univ Texas, Austin, TX 78712 USA. Fed Reserve Bank Cleveland, Cleveland, OH 44114 USA. Univ Calif San Diego, San Diego, CA 92103 USA. RP Bencivenga, VR (reprint author), Univ Texas, Austin, TX 78712 USA. NR 33 TC 1 Z9 1 U1 0 U2 1 PU UNIV PENN PI PHILADELPHIA PA DEPT ECON MCNEIL BLDG CR, PHILADELPHIA, PA 19174 USA SN 0020-6598 J9 INT ECON REV JI Int. Econ. Rev. PD AUG PY 2000 VL 41 IS 3 BP 769 EP 800 DI 10.1111/1468-2354.00083 PG 32 WC Economics SC Business & Economics GA 337AD UT WOS:000088334400008 ER PT J AU Elmendorf, DW Kimball, MS AF Elmendorf, DW Kimball, MS TI Taxation of labor income and the demand for risky assets SO INTERNATIONAL ECONOMIC REVIEW LA English DT Article ID PRECAUTIONARY SAVINGS; PORTFOLIO CHOICE; CONSUMPTION; UNCERTAINTY; PERSPECTIVE; DECISIONS; POLICY AB This article analyzes the effect of labor income risk on the joint saving/portfolio-composition problem. Given decreasing absolute prudence, we find that even when labor income risk increases overall saving, it tends to lower investment in a risky asset. Applying the theory to public finance, we argue that realistic increases in marginal tax rates on labor can cause large enough reductions in after-tax labor income risk to cause significant increases in risky investment. C1 Fed Reserve Board, Washington, DC USA. Univ Michigan, Ann Arbor, MI 48109 USA. RP Elmendorf, DW (reprint author), Fed Reserve Board, Washington, DC USA. NR 49 TC 27 Z9 27 U1 1 U2 10 PU UNIV PENN PI PHILADELPHIA PA DEPT ECON MCNEIL BLDG CR, PHILADELPHIA, PA 19174 USA SN 0020-6598 J9 INT ECON REV JI Int. Econ. Rev. PD AUG PY 2000 VL 41 IS 3 BP 801 EP 832 DI 10.1111/1468-2354.00084 PG 32 WC Economics SC Business & Economics GA 337AD UT WOS:000088334400009 ER PT J AU Elliehausen, G Lowrey, BR AF Elliehausen, G Lowrey, BR TI The costs of implementing regulatory changes: The Truth in Savings Act SO JOURNAL OF FINANCIAL SERVICES RESEARCH LA English DT Article DE banking; regulatory costs; Truth in Savings Act ID SCALE AB Although the cost of banking regulation has been a controversial issue for many years, little empirical evidence is available. This study provides new evidence on the effect of the amount of required changes on start-up compliance costs, using data from a survey of the costs of implementing the Truth in Savings Act. The finding, that start-up compliance costs were insensitive to the extent of changes required to implement the regulation, has important implications for regulatory policy. It suggests that a general requirement to alter an infrequent practice may impose nonnegligible costs on all banks, not only those banks that must make substantive changes in their practices. This finding argues against a policy of making frequent minor revisions in regulations. Instead, a policy of delaying revisions until some number have been accumulated and then making infrequent major revisions of regulations may reduce implementation costs by allowing banks to exploit economies of changing practices. C1 Georgetown Univ, McDonough Sch Business, Washington, DC 20057 USA. Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Elliehausen, G (reprint author), Georgetown Univ, McDonough Sch Business, Washington, DC 20057 USA. NR 24 TC 1 Z9 1 U1 0 U2 3 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0920-8550 J9 J FINANC SERV RES JI J. Financ. Serv. Res. PD AUG PY 2000 VL 17 IS 2 BP 165 EP 179 DI 10.1023/A:1008114630858 PG 15 WC Business, Finance SC Business & Economics GA 342HQ UT WOS:000088639500004 ER PT J AU Hooker, MA AF Hooker, MA TI Misspecification versus bubbles in hyperinflation data: Monte Carlo and interwar European evidence SO JOURNAL OF INTERNATIONAL MONEY AND FINANCE LA English DT Article DE hyperinflation; bubbles; Cagan model; specification error; Monte Carlo ID RATIONAL BUBBLES; POLAND HYPERINFLATION; EMPIRICAL-EVIDENCE; MONEY DEMAND; CAGAN MODEL; COINTEGRATION; EXPECTATIONS; INFLATION; FUNDAMENTALS; PRICES AB This paper analyzes some new tests of the Cagan hyperinflation-money demand model which have several advantages relative to those in the literature. They do not confound specification error with rational bubbles, can be implemented with a linear procedure, and are frequently able to detect periodically collapsing bubbles which have challenged existing tests. After a Monte Carlo analysis, the tests are applied to data from hyperinflations in Austria, Germany, Hungary, and Poland. Evidence of misspecification is found for Austria, Germany and Hungary, while the: model without a rational bubble component appears to ft the data for Poland. Published by Elsevier Science Ltd. JEL classification: E31; E41; C15. C1 Fed Reserve Syst, Washington, DC 20551 USA. RP Hooker, MA (reprint author), Fed Reserve Syst, Mail Stop 71,20th & C St NW, Washington, DC 20551 USA. NR 35 TC 5 Z9 5 U1 2 U2 5 PU ELSEVIER SCI LTD PI OXFORD PA THE BOULEVARD, LANGFORD LANE, KIDLINGTON, OXFORD OX5 1GB, OXON, ENGLAND SN 0261-5606 J9 J INT MONEY FINANC JI J. Int. Money Finan. PD AUG PY 2000 VL 19 IS 4 BP 583 EP 600 DI 10.1016/S0261-5606(00)00021-8 PG 18 WC Business, Finance SC Business & Economics GA 342QA UT WOS:000088655600008 ER PT J AU Schreft, SL Smith, BD AF Schreft, SL Smith, BD TI The evolution of cash transactions: Some implications for monetary policy SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE monetary policy; payments; cash; cashless society ID BANKING; GROWTH AB This paper considers the implications for monetary policy of a decreasing demand for outside money. It finds that even perpetual declines in the demand for base money pose no threat to the traditional methods employed for conducting monetary policy. The effects of such reductions in the demand for central bank liabilities, however, do depend on how monetary policy is conducted. Four monetary policy regimes are analyzed. With a policy of nominal-interest-rate targeting, a secular decline in the volume of cash transactions unambiguously leads to accelerating inflation. A policy of maintaining a fixed composition of government liabilities leads to accelerating (decelerating) inflation if agents have sufficiently high (low) levels of risk aversion. Inflation targeting produces falling nominal and real interest rates, while a policy of fixing the rate of money growth can easily lead to indeterminacy and endogenous oscillation in interest rates. It is argued that a policy of fixing the composition of government liabilities has several advantages if it is known that agents are not too risk averse and that the asymptotic demand for base money is small. If this information is not known, then interest-rate or inflation targeting have an advantage because their consequences are not sensitive to such environmental features. (C) 2000 Published by Elsevier Science B.V. All rights reserved. JEL classification: E31; E40; E5. C1 Fed Reserve Bank Kansas City, Dept Res, Kansas City, MO 64198 USA. Univ Texas, Dept Econ, Austin, TX 78712 USA. RP Schreft, SL (reprint author), Fed Reserve Bank Kansas City, Dept Res, Kansas City, MO 64198 USA. NR 18 TC 5 Z9 5 U1 6 U2 11 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD AUG PY 2000 VL 46 IS 1 BP 97 EP 120 DI 10.1016/S0304-3932(00)00021-0 PG 24 WC Business, Finance; Economics SC Business & Economics GA 336MB UT WOS:000088305200004 ER PT J AU Sarte, PDG AF Sarte, PDG TI Informality and rent-seeking bureaucracies in a model of long-run growth SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE informal sector; rent seeking; economic growth ID CORRUPTION AB This paper explores the links among growth, the informal economy, and rent-seeking bureaucracies. The presence of congestion associated with the enforcement of property rights implies that informality can be useful. Whether bureaucratic rent-seeking is detrimental to growth then depends on how good a substitute informality is to production in the formal sector. In order to create profits which can be appropriated, rent-seeking bureaucrats limit entry into the formal economy. As a result, firms operate in the informal sector even when the cost of informality is high, in which case lower growth emerges. However, when the cost of informality is low, a large number of firms choose to operate informally irrespective of entry conditions. In the latter case, growth is unaffected by a rent-seeking bureaucracy as entry restrictions in the formal economy do not bind. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: E13; O10. C1 Fed Reserve Bank Richmond, Dept Res, Richmond, VA 23261 USA. RP Sarte, PDG (reprint author), Fed Reserve Bank Richmond, Dept Res, POB 27622, Richmond, VA 23261 USA. NR 19 TC 30 Z9 30 U1 1 U2 7 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD AUG PY 2000 VL 46 IS 1 BP 173 EP 197 DI 10.1016/S0304-3932(00)00020-9 PG 25 WC Business, Finance; Economics SC Business & Economics GA 336MB UT WOS:000088305200007 ER PT J AU Wieland, V AF Wieland, V TI Monetary policy, parameter uncertainty and optimal learning SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE optimal control with unknown parameters; bayesian learning; monetary policy; structural change; learning by doing; inflation targeting ID MONEY DEMAND; NONCONVEXITIES; INFLATION; MODELS AB Since central banks have limited information concerning the transmission channel of monetary policy, they are faced with the difficult task of simultaneously controlling the policy target and estimating the impact of policy actions. A tradeoff between estimation and control arises because policy actions influence estimation and provide information which may improve future performance. I analyze this tradeoff in a simple model with parameter uncertainty and conduct dynamic simulations of the policymaker's decision problem in the presence of the type of uncertainties that arose in the wake of German reunification. A policy that separates learning from control may induce a persistent upward bias in money growth and inflation, just as observed after unification. In contrast, the optimal learning strategy which exploits the tradeoff between control and estimation significantly improves stabilization performance and reduces the likelihood of inflationary bias. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: E52; E40; D83; C44. C1 Fed Reserve Syst, Board Governors, Div Monetory Affairs, Washington, DC 20551 USA. RP Wieland, V (reprint author), Fed Reserve Syst, Board Governors, Div Monetory Affairs, Mail Stop 70, Washington, DC 20551 USA. NR 44 TC 45 Z9 45 U1 1 U2 6 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD AUG PY 2000 VL 46 IS 1 BP 199 EP 228 DI 10.1016/S0304-3932(00)00023-4 PG 30 WC Business, Finance; Economics SC Business & Economics GA 336MB UT WOS:000088305200008 ER PT J AU Sack, B AF Sack, B TI Does the fed act gradually? A VAR analysis SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE interest-rate smoothing; gradualism; monetary policy rules; parameter uncertainty ID MONETARY-POLICY; TRADE-OFFS AB The tendency for changes in the federal funds rate to be implemented gradually has been considered evidence of an interest-rate smoothing objective for the Federal Reserve. This paper investigates whether gradual funds rate movements can be explained by the dynamic structure of the economy and the uncertainty surrounding that structure, without recourse to including an ad hoc interest-rate smoothing argument in the Fed's objective function. In the absence of parameter uncertainty, the optimal policy involves more aggressive movements in the funds rate than observed. Parameter uncertainty, however, limits the responsiveness of the interest rate. As a result, the optimal policy under parameter uncertainty can account for a considerable portion of the gradualism observed. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: E52; E58. C1 Fed Reserve Syst, Board Governors, Div Monetary Affairs, Washington, DC 20551 USA. RP Sack, B (reprint author), Fed Reserve Syst, Board Governors, Div Monetary Affairs, Washington, DC 20551 USA. EM bsack@frb.gov NR 29 TC 55 Z9 55 U1 0 U2 5 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD AUG PY 2000 VL 46 IS 1 BP 229 EP 256 DI 10.1016/S0304-3932(00)00019-2 PG 28 WC Business, Finance; Economics SC Business & Economics GA 336MB UT WOS:000088305200009 ER PT J AU Pakko, MR AF Pakko, MR TI The cyclical relationship between output and prices: An analysis in the frequency domain SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Article ID BUSINESS CYCLES; BEHAVIOR; MODELS AB Research showing a negative correlation between output and prices has brought into question the conventional wisdom that prices are procyclical. However, this finding has been shown to be sensitive to the sample period considered. This paper examines the relationship in the frequency domain: the covariance of output and prices is decomposed into spectral components to investigate whether differences in the price-output relationship across sample periods reflect changes in the importance of various frequencies embedded within the correlations, or whether they reflect more fundamental changes in the entire spectral relationship. Some implications for model evaluation are also considered. C1 Fed Reserve Bank, St Louis, MO 63102 USA. RP Pakko, MR (reprint author), Fed Reserve Bank, St Louis, MO 63102 USA. NR 33 TC 8 Z9 8 U1 1 U2 2 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD AUG PY 2000 VL 32 IS 3 BP 382 EP 399 DI 10.2307/2601171 PN 1 PG 18 WC Business, Finance; Economics SC Business & Economics GA 339PK UT WOS:000088487000005 ER PT J AU Sniderman, MS AF Sniderman, MS TI What should central banks do? A conference sponsored by the Federal Reserve Bank of Cleveland - October 27-29, 1999 - Opening remarks SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Editorial Material C1 Fed Reserve Bank Cleveland, Cleveland, OH 44101 USA. RP Sniderman, MS (reprint author), Fed Reserve Bank Cleveland, Cleveland, OH 44101 USA. NR 0 TC 0 Z9 0 U1 0 U2 0 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD AUG PY 2000 VL 32 IS 3 BP 443 EP 444 PN 2 PG 2 WC Business, Finance; Economics SC Business & Economics GA 339PP UT WOS:000088487400001 ER PT J AU Haubrich, JG Thomson, JB AF Haubrich, JG Thomson, JB TI What should central banks do? A conference sponsored by the Federal Reserve Bank of Cleveland - October 27-29, 1999 - Introduction SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Editorial Material C1 Fed Reserve Bank Cleveland, Cleveland, OH 44101 USA. RP Haubrich, JG (reprint author), Fed Reserve Bank Cleveland, Cleveland, OH 44101 USA. NR 1 TC 0 Z9 0 U1 0 U2 0 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD AUG PY 2000 VL 32 IS 3 BP 445 EP 449 DI 10.2307/2601189 PN 2 PG 5 WC Business, Finance; Economics SC Business & Economics GA 339PP UT WOS:000088487400002 ER PT J AU Stevens, E AF Stevens, E TI Comments on deposit insurance and lender-of-last-resort functions SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Editorial Material C1 Fed Reserve Bank Cleveland, Cleveland, OH 44101 USA. RP Stevens, E (reprint author), Fed Reserve Bank Cleveland, Cleveland, OH 44101 USA. NR 0 TC 0 Z9 0 U1 1 U2 1 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD AUG PY 2000 VL 32 IS 3 BP 576 EP 579 DI 10.2307/2601195 PN 2 PG 4 WC Business, Finance; Economics SC Business & Economics GA 339PP UT WOS:000088487400008 ER PT J AU Berger, AN Davies, SM Flannery, MJ AF Berger, AN Davies, SM Flannery, MJ TI Comparing market and supervisory assessments of bank performance: Who knows what when? SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Article; Proceedings Paper CT Conference on What Should Central Banks Do CY OCT 27-29, 1999 CL CLEVELAND, OHIO SP Fed Bank Cleveland ID CAMEL RATINGS; STOCK-PRICES; BOND; INFORMATION AB This paper compares the timeliness and accuracy of (confidential) government assessments of bank condition against market evaluations of large U.S. bank holding companies. We find that supervisors and bond rating agencies both acquire some information that would help the other group forecast changes in bank condition. In contrast, supervisory assessments and equity market indicators are not strongly interrelated. Furthermore, supervisory assessments are generally less accurate than either stock or bond market indicators in predicting future changes in performance, except when those assessments derive from a recent on-site inspection visit. To some extent, these findings are consistent with the various parties' differing incentives. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. Fed Reserve Syst, Board Governors, Int Banking Sect, Washington, DC 20551 USA. Univ Florida, Gainesville, FL 32611 USA. RP Berger, AN (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 31 TC 72 Z9 72 U1 2 U2 7 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD AUG PY 2000 VL 32 IS 3 BP 641 EP 667 DI 10.2307/2601200 PN 2 PG 27 WC Business, Finance; Economics SC Business & Economics GA 339PP UT WOS:000088487400013 ER PT J AU Baum-Snow, N Kahn, ME AF Baum-Snow, N Kahn, ME TI The effects of new public projects to expand urban rail transit SO JOURNAL OF PUBLIC ECONOMICS LA English DT Article DE public transit; usage; housing values ID LONG-RUN; IMPACT; TRANSPORTATION; ATLANTA; SYSTEMS; PARKING AB Many US cities invest in large public transit projects in order to reduce private vehicle dependence and to reverse the downward trend in public transit use. Using a unique panel data set for five major cities that upgraded their rail transit systems in the 1980s, we estimate new rail transit's impact on usage and housing values, using distance as a proxy for transit access. New rail transit has a small impact on usage and housing values. This impact is enough to represent tangible benefits of new transit to nearby residents. New transit's benefits are not uniformly distributed. We document which demographic groups are over represented in transit growth areas and the changes in transit usage by different demographic groups. (C) 2000 Elsevier Science S.A. All rights reserved. C1 Columbia Univ, Dept Econ & Int Affairs, New York, NY 10027 USA. Fed Reserve Bank New York, New York, NY 10045 USA. RP Kahn, ME (reprint author), Columbia Univ, Dept Econ & Int Affairs, 420 W 118th St, New York, NY 10027 USA. NR 37 TC 51 Z9 52 U1 1 U2 13 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0047-2727 J9 J PUBLIC ECON JI J. Public Econ. PD AUG PY 2000 VL 77 IS 2 BP 241 EP 263 DI 10.1016/S0047-2727(99)00085-7 PG 23 WC Economics SC Business & Economics GA 327MT UT WOS:000087798200005 ER PT J AU Chari, VV Jones, LE AF Chari, VV Jones, LE TI A reconsideration of the problem of social cost: Free riders and monopolists SO ECONOMIC THEORY LA English DT Article DE public goods; externalities; free-rider problem; complementary monopoly ID PUBLIC-GOODS; INFORMATION; DIFFERENTIATION; COMPETITION AB One version of the Cease Theorem is, If property rights are fully allocated, competition leads to efficient allocations. This version implies that the public goods problem can be solved by allocating property rights fully. We show that this mechanism is not likely to work well in economies with global externalities because the privatized economy is highly susceptible to strategic behavior: The free-rider problem manifests itself as a complementary monopoly problem in an associated private goods economy. Thus, our work relates the validity of the Cease Theorem to the literature on the incentives for strategic behavior in economies with complementarities. C1 Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. Fed Reserve Bank Minneapolis, Dept Res, Minneapolis, MN 55480 USA. RP Chari, VV (reprint author), Univ Minnesota, Dept Econ, 1035 Heller Hall, Minneapolis, MN 55455 USA. NR 35 TC 12 Z9 12 U1 0 U2 7 PU SPRINGER-VERLAG PI NEW YORK PA 175 FIFTH AVE, NEW YORK, NY 10010 USA SN 0938-2259 J9 ECON THEOR JI Econ. Theory PD JUL PY 2000 VL 16 IS 1 BP 1 EP 22 DI 10.1007/s001990050324 PG 22 WC Economics SC Business & Economics GA 339PX UT WOS:000088488100001 ER PT J AU Berger, AN Bonime, SD Covitz, DM Hancock, D AF Berger, AN Bonime, SD Covitz, DM Hancock, D TI Why are bank profits so persistent? The roles of product market competition, informational opacity, and regional/macroeconomic shocks SO JOURNAL OF BANKING & FINANCE LA English DT Article DE bank; persistence; profits; regulation ID PERFORMANCE; INDUSTRY; RUN AB We investigate how banking market competition, informational opacity, and sensitivity to shocks have changed over the last three decades by examining the persistence of firm-level rents. We develop propagation mechanisms with testable implications to isolate the sources of persistence. Our analysis suggests that different processes underlie persistence at the high and low ends of the performance distribution. Our tests suggest that impediments to competition and informational opacity continue to be strong determinants of persistence; that the reduction in geographic regulatory restrictions had little effect on competitiveness; and that persistence remains sensitive to regional/macroeconomic shocks. The findings also suggest reasons for the recent record profitability of the industry. (C) 2000 Published by Elsevier Science B.V. All rights reserved. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Covitz, DM (reprint author), Fed Reserve Board, Mail Stop 153,20th & C Sts NW, Washington, DC 20551 USA. NR 13 TC 64 Z9 65 U1 0 U2 4 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 J9 J BANK FINANC JI J. Bank Financ. PD JUL PY 2000 VL 24 IS 7 BP 1203 EP 1235 DI 10.1016/S0378-4266(99)00124-7 PG 33 WC Business, Finance; Economics SC Business & Economics GA 326UT UT WOS:000087755800005 ER PT J AU Wright, JH AF Wright, JH TI Confidence intervals for univariate impulse responses with a near unit root SO JOURNAL OF BUSINESS & ECONOMIC STATISTICS LA English DT Article DE bootstrap; confidence intervals; impulse response; unit roots ID AUTOREGRESSIVE MODELS; RANDOM-WALK; PARAMETER; REALITY AB This article proposes a method for constructing confidence intervals for the impulse response function of a univariate time series with a near unit root. These confidence intervals control coverage, whereas the existing techniques can all have coverage far below the nominal level. I apply the proposed method to several measures of U.S. aggregate output. C1 Fed Reserve Syst, Board Governors, Int Finance Div, Washington, DC 20551 USA. RP Wright, JH (reprint author), Fed Reserve Syst, Board Governors, Int Finance Div, Washington, DC 20551 USA. NR 19 TC 13 Z9 13 U1 2 U2 6 PU AMER STATISTICAL ASSOC PI ALEXANDRIA PA 1429 DUKE ST, ALEXANDRIA, VA 22314 USA SN 0735-0015 J9 J BUS ECON STAT JI J. Bus. Econ. Stat. PD JUL PY 2000 VL 18 IS 3 BP 368 EP 373 DI 10.2307/1392268 PG 6 WC Economics; Social Sciences, Mathematical Methods; Statistics & Probability SC Business & Economics; Mathematical Methods In Social Sciences; Mathematics GA 424KW UT WOS:000168232300009 ER PT J AU Perraudin, WRM Sorensen, BE AF Perraudin, WRM Sorensen, BE TI The demand for risky assets: Sample selection and household portfolios SO JOURNAL OF ECONOMETRICS LA English DT Article DE discrete-continuous model; consumer finances; monitoring costs; incomplete portfolios; logit model ID CONSUMER DEMAND; DUAL APPROACH; CHOICE; PREFERENCES; CONSTRAINTS; BEHAVIOR; MODEL; SEPARABILITY; CONSUMPTION; AGGREGATION AB We estimate a microeconomic model of household asset demands that allows for the fact that households typically have zero holdings of most assets. The adjustments for non-observed heterogeneity generalize methods developed by Dubin and McFadden (1984. Econometrica 52, 345-362). Simulating our model using a random sample of US households, we examine distributional and demographic effects on macroeconomic demands for money, stocks and bonds. (C) 2000 Elsevier Science S.A. All rights reserved. JEL classification: C35; E41; G11. C1 Fed Reserve Bank, Econ Res Dept, Kansas City, MO 64198 USA. Birkbeck Coll, London, England. Bank England, London, England. RP Sorensen, BE (reprint author), Fed Reserve Bank, Econ Res Dept, 925 Grand Blvd, Kansas City, MO 64198 USA. NR 46 TC 13 Z9 14 U1 1 U2 4 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0304-4076 J9 J ECONOMETRICS JI J. Econom. PD JUL PY 2000 VL 97 IS 1 BP 117 EP 144 DI 10.1016/S0304-4076(99)00069-X PG 28 WC Economics; Mathematics, Interdisciplinary Applications; Social Sciences, Mathematical Methods SC Business & Economics; Mathematics; Mathematical Methods In Social Sciences GA 336QM UT WOS:000088314500005 ER PT J AU Christiano, LJ Fisher, JDM AF Christiano, LJ Fisher, JDM TI Algorithms for solving dynamic models with occasionally binding constraints SO JOURNAL OF ECONOMIC DYNAMICS & CONTROL LA English DT Article DE occasionally binding constraints; parameterized expectations; collocation; Chebyshev interpolation ID STOCHASTIC GROWTH-MODEL; INCOMPLETE MARKETS; INTEREST-RATES; ASSET RETURNS; RISK; UNCERTAINTY; ECONOMIES; PREMIUM; STORAGE; COSTS AB We describe and compare several algorithms for approximating the solution to a model in which inequality constraints occasionally bind. Their performance is evaluated and compared using various parameterizations of the one sector growth model with irreversible investment. We develop parameterized expectation algorithms which, on the basis of speed, accuracy and convenience of implementation, appear to dominate the other algorithms. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: C6; C63; C68. C1 Fed Reserve Bank, Econ Res Dept, Chicago, IL 60613 USA. Northwestern Univ, NBER, Fed Reserve Bank Chicago, Chicago, IL 60611 USA. RP Fisher, JDM (reprint author), Fed Reserve Bank, Econ Res Dept, 230 S LaSalle St, Chicago, IL 60613 USA. NR 61 TC 59 Z9 59 U1 0 U2 2 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0165-1889 J9 J ECON DYN CONTROL JI J. Econ. Dyn. Control PD JUL PY 2000 VL 24 IS 8 BP 1179 EP 1232 DI 10.1016/S0165-1889(99)00016-0 PG 54 WC Economics SC Business & Economics GA 317MZ UT WOS:000087230300002 ER PT J AU Yuan, MW Li, WL AF Yuan, MW Li, WL TI Dynamic employment and hours effects of government spending shocks SO JOURNAL OF ECONOMIC DYNAMICS & CONTROL LA English DT Article DE employment; hours; government spending; job search ID BUSINESS-CYCLE SHOCKS; LABOR-MARKET; EMPIRICAL-ANALYSIS; INDIVISIBLE LABOR; EQUILIBRIUM; UNEMPLOYMENT; PROPAGATION; VACANCIES; SEARCH; RATES AB In this paper, we analyze the dynamic behavior of employment and hours worked per worker in a stochastic general equilibrium model with a matching mechanism between vacancies and unemployed workers. The model is estimated for the WS using the Generalized Methods of Moments (GMM) estimation technique. An increase in govern ment spending raises hours worked per worker, and crowds out private consumption due to a negative wealth effect. On the path converging towards the steady state, private consumption is below its long run average and increases, which implies that the interest rate is above its long run average and declines. The interest rate effect dominates the pure economic rent effect on the capital value of a hired worker to the firm, causing a reduction of job openings and consequently a decrease in employment, These results are contrasted with the predictions of a version of the Burnside, Eichenbaum and Rebelo's labor hoarding model (Burnside et al., Journal of Political Economy 101 (1993) 245-273). (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: E24; E62; E32; J64. C1 Bank Canada, Dept Monetary & Financial Anal, Ottawa, ON K1A 0G9, Canada. Fed Reserve Bank Richmond, Dept Res, Richmond, VA 23261 USA. RP Yuan, MW (reprint author), Bank Canada, Dept Monetary & Financial Anal, Ottawa, ON K1A 0G9, Canada. NR 27 TC 8 Z9 8 U1 1 U2 5 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0165-1889 J9 J ECON DYN CONTROL JI J. Econ. Dyn. Control PD JUL PY 2000 VL 24 IS 8 BP 1233 EP 1263 DI 10.1016/S0165-1889(99)00007-X PG 31 WC Economics SC Business & Economics GA 317MZ UT WOS:000087230300003 ER PT J AU Jordan, JS Peek, J Rosengren, ES AF Jordan, JS Peek, J Rosengren, ES TI The market reaction to the disclosure of supervisory actions: Implications for bank transparency SO JOURNAL OF FINANCIAL INTERMEDIATION LA English DT Article ID COMMERCIAL-BANKS; CONTAGION; DISCIPLINE; RETURNS; CRISIS AB We examine the stock market reaction to announcements of formal supervisory actions. We find that the variation in the quality and timeliness of disclosure by U.S. banks explains much of the variation in the market's reactions, We also find that these announcements can cause spillover effects. However, rather than representing contagion, these spillover effects are consistent with enhanced transparency. Only banks in the same region as the announcing bank, with similar exposures, are affected. Thus, enhanced disclosure can improve the allocation of resources in the banking system. Journal of Economic Literature Classification Numbers: G21, G28. (C) 2000 Academic Press. C1 Fed Reserve Bank Boston, Dept Res, Boston, MA 02106 USA. Univ Kentucky, Gatton Coll Business & Econ, Lexington, KY 40506 USA. RP Jordan, JS (reprint author), Fed Reserve Bank Boston, Dept Res, Boston, MA 02106 USA. NR 21 TC 18 Z9 18 U1 2 U2 8 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 1042-9573 J9 J FINANC INTERMED JI J. Financ. Intermed. PD JUL PY 2000 VL 9 IS 3 BP 298 EP 319 DI 10.1006/jfin.2000.0292 PG 22 WC Business, Finance SC Business & Economics GA 337XK UT WOS:000088388300004 ER PT J AU Zavodny, M AF Zavodny, M TI The effects of official English laws on limited-English-proficient workers SO JOURNAL OF LABOR ECONOMICS LA English DT Article ID LANGUAGE PROFICIENCY; HISPANIC MEN; EARNINGS; WAGES AB Workers with limited English skills may suffer adverse effects when states declare English the official language. If employers believe official English laws allow or require them to adopt workplace English-only rules that lower the demand for limited-English-proficient workers, such laws may harm individuals who do not speak English well, rising data from the 1980 and 1990 censuses, I estimate whether the earnings of limited-English-proficient workers who live in states that adopted official English laws declined relative to other workers. The results suggest a substantial decline in the annual earnings of men with limited English proficiency. C1 Fed Reserve Bank, Atlanta, GA 30303 USA. RP Zavodny, M (reprint author), Fed Reserve Bank, Atlanta, GA 30303 USA. NR 32 TC 10 Z9 10 U1 0 U2 1 PU UNIV CHICAGO PRESS PI CHICAGO PA 5720 SOUTH WOODLAWN AVE, CHICAGO, IL 60637-1603 USA SN 0734-306X J9 J LABOR ECON JI J. Labor Econ. PD JUL PY 2000 VL 18 IS 3 BP 427 EP 452 DI 10.1086/209965 PG 26 WC Economics; Industrial Relations & Labor SC Business & Economics GA 327MW UT WOS:000087798500004 ER PT J AU Olivei, GP AF Olivei, GP TI The role of savings and investment in balancing the current account: Some empirical evidence from the United States SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article ID BUDGET AB Current account deficits ultimately reflect a disparity between a country's national savings and investment. As such, the issue of how current account balance is achieved in practice can be viewed in terms of whether it is savings or investment that adjusts to an external deficit. In this article, the author examines empirically how savings and investment have responded to current account imbalances in the United States over the past 40 years. The main finding is that, on average, investment was largely responsible for rebalancing the current account in the long run. The finding that investment has borne the largest fraction of the external adjustment conforms with the view that, in the long run, the national savings rate constrains a country's rate of investment. Thus, in a situation with outstanding net external debt, low levels of national savings ultimately imply low levels of domestic investment. To the extent that one views net additions of capital as essential for a country's future growth prospects, low savings may signify a reduction in future standards of living. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Olivei, GP (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 10 TC 3 Z9 3 U1 0 U2 2 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD JUL-AUG PY 2000 BP 3 EP + PG 13 WC Economics SC Business & Economics GA 545CJ UT WOS:000175198400001 ER PT J AU Stavins, J AF Stavins, J TI Credit card borrowing, delinquency, and personal bankruptcy SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article AB Credit card delinquencies and personal bankruptcy rates increased during the mid 1990s, despite the strength of the U.S. economy. Even though per capita income rose during that period, household borrowing grew at an even faster pace. The rise in revolving debt-mainly credit card loans-was especially noticeable, and the increase in personal bankruptcy rates was also substantial. This article examines the relationship between consumer credit card borrowing, delinquency rates, and personal bankruptcies. The author looks at developments involving borrowers, the demand side, and lenders, the supply side. Credit card loans have been extended to higher-risk consumers over time. Using data collected in the 1998 Survey of Consumer Finances, the author examines the effect of credit card borrowing on consumer payments delinquency and the relationship between credit card debt and the increase in bankruptcy rates. She also tests whether credit card lenders face an adverse selection problem, whereby banks making worse credit card offers attract more risky customers and have higher delinquency and charge-off rates than others. She finds that banks that charge higher interest rates and some fees have higher delinquency rates, but not higher charge-off rates. Moreover, banks that charge higher interest rates were found to have higher net revenues from credit card lending than other issuers. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Stavins, J (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 12 TC 20 Z9 21 U1 2 U2 10 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD JUL-AUG PY 2000 BP 15 EP + PG 18 WC Economics SC Business & Economics GA 545CJ UT WOS:000175198400002 ER PT J AU Browne, LE AF Browne, LE TI National and regional housing patterns SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article AB Residential investment is one of the most volatile components of GDP. Coming out of a recession, it is not uncommon for residential investment to jump by more than 20 percent in a year. Going into a while residential recession, it may fall by a similar fraction. Thus, investment accounts for just 4 percent of GDP, it can have a disproportionate influence at critical junctures. Moreover, fluctuations in residential investment can have even greater impact at the regional level. This article compares patterns of residential investment, with a particular emphasis on the similarities and differences between the 1980s and the 1990s in individual regions. On balance, the author finds the picture as of 1999 to be fairly reassuring. Although the volume of construction in the Mountain states was high, even relative to that area's rapid population growth, no region seemed to possess the vulnerabilities that characterized New England and Texas in the 1980s. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Browne, LE (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 8 TC 2 Z9 2 U1 1 U2 2 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD JUL-AUG PY 2000 BP 31 EP + PG 28 WC Economics SC Business & Economics GA 545CJ UT WOS:000175198400003 ER PT J AU Palumbo, MG AF Palumbo, MG TI Estimating the effects of earnings uncertainty on families' saving and insurance decisions SO SOUTHERN ECONOMIC JOURNAL LA English DT Article ID FULL INSURANCE; MODELS; MARKET AB This paper investigates whether families save partially to self-insure against uncertain future earnings and estimates the extent to which pooled insurance substitutes for saving as a precaution against earnings risk. An econometric model is estimated using unique household survey data from the nineteenth century to examine families' joint saving and insurance decisions. The historical microdata are of interest because they predate widespread social insurance programs, which may stunt self-insurance through private saving among contemporary families. The econometric results imply that two independent measures of idiosyncratic earnings risk matter for families' saving decisions. Additionally, families whose primary wage earners belong to labor unions significantly save less frequently than others, all else being equal, but this tendency is not apparent among members of private benevolent societies. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Palumbo, MG (reprint author), Fed Reserve Syst, Board Governors, Mail Stop 80, Washington, DC 20551 USA. RI Palumbo, Michael/H-6212-2012 NR 30 TC 4 Z9 4 U1 1 U2 4 PU UNIV NORTH CAROLINA PI CHAPEL HILL PA SOUTHERN ECONOMIC JOURNAL, CHAPEL HILL, NC 27514 USA SN 0038-4038 J9 SOUTHERN ECON J JI South. Econ. J. PD JUL PY 2000 VL 67 IS 1 BP 64 EP 86 DI 10.2307/1061613 PG 23 WC Economics SC Business & Economics GA 334XE UT WOS:000088210600004 ER PT J AU Potter, SM AF Potter, SM TI A nonlinear model of the business cycle SO STUDIES IN NONLINEAR DYNAMICS AND ECONOMETRICS LA English DT Article DE asymmetry; confidence; business cycle; nonlinear impulse response ID TIME-SERIES AB There is now a great deal of empirical evidence that business cycle fluctuations contain asymmetries. I focus on a theoretical model intended to capture the nonlinear behavior of aggregate output following a large negative shock. Nonlinearity introduced by Bayesian updating and an information externality produces an economy in which the response to large negative shocks is an increase in future output. The expansionary effect is produced by the negative shock imparting information about what not to do. C1 Fed Reserve Bank New York, New York, NY 10045 USA. RP Potter, SM (reprint author), Fed Reserve Bank New York, New York, NY 10045 USA. NR 11 TC 0 Z9 0 U1 2 U2 3 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 1081-1826 J9 STUD NONLINEAR DYN E JI Stud. Nonlinear Dyn. Econom. PD JUL PY 2000 VL 4 IS 2 BP 85 EP 93 DI 10.1162/10811820052486004 PG 9 WC Economics; Social Sciences, Mathematical Methods SC Business & Economics; Mathematical Methods In Social Sciences GA 481BT UT WOS:000171499600003 ER PT J AU Fuhrer, JC AF Fuhrer, JC TI Habit formation in consumption and its implications for monetary-policy models SO AMERICAN ECONOMIC REVIEW LA English DT Article ID PERMANENT INCOME; ASSET PRICES AB This paper explores a monetary-policy model with habit formation for consumers, in which consumers' utility depends in part on current consumption relative to past consumption. The empirical tests developed in the paper show that one can reject the hypothesis of no habit formation with tremendous confidence, largely because the habit-formation model captures the gradual hump-shaped response of real spending to various shocks. The paper then embeds the habit-consumption specification in a monetary-policy model and finds that the responses of both spending and inflation to monetary-policy actions are significantly improved by this modification. (JEL D12, E52, E43). C1 Fed Reserve Bank Boston, Res Dept, Boston, MA 02106 USA. RP Fuhrer, JC (reprint author), Fed Reserve Bank Boston, Res Dept, Boston, MA 02106 USA. EM Jeff.Fuhrer@bos.frb.org RI Fuhrer, Jeff/F-8852-2013 NR 40 TC 273 Z9 277 U1 5 U2 19 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD JUN PY 2000 VL 90 IS 3 BP 367 EP 390 DI 10.1257/aer.90.3.367 PG 24 WC Economics SC Business & Economics GA 334GY UT WOS:000088179800004 ER PT J AU Dynan, KE AF Dynan, KE TI Habit formation in consumer preferences: Evidence from panel data SO AMERICAN ECONOMIC REVIEW LA English DT Article ID PERMANENT-INCOME HYPOTHESIS; AGGREGATE CONSUMPTION; LIQUIDITY CONSTRAINTS; DURABILITY; INSTRUMENTS; INFORMATION; GOODS; TESTS; WEAK AB This paper tests for the presence of habit formation using household data. A simple model of habit formation implies a condition relating the strength of habits to the evolution of consumption over time. When the condition is estimated with food consumption data from the Panel Study on Income Dynamics (PSID), the results yield no evidence of habit formation at the annual frequency. This finding is robust to a number of changes in the specification It also holds for several proxies for nondurables and services consumption created by combining PSID variables with weights estimated from Consumer Expenditure Survey data. (JEL D12, D91, E21). C1 Fed Reserve Syst, Washington, DC 20551 USA. RP Dynan, KE (reprint author), Fed Reserve Syst, Washington, DC 20551 USA. EM kdynan@frb.gov NR 41 TC 111 Z9 116 U1 9 U2 23 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD JUN PY 2000 VL 90 IS 3 BP 391 EP 406 DI 10.1257/aer.90.3.391 PG 16 WC Economics SC Business & Economics GA 334GY UT WOS:000088179800005 ER PT J AU Kashyap, AK Stein, JC AF Kashyap, AK Stein, JC TI What do a million observations on banks say about the transmission of monetary policy? SO AMERICAN ECONOMIC REVIEW LA English DT Article ID CREDIT CONDITIONS; EXTERNAL FINANCE; CHANNEL; BEHAVIOR; MARKET; FUNDS AB We study the monetary-transmission mechanism with a data set that includes quarterly observations of every insured U.S. commercial bank from 1976 to 1993. We find that the impact of monetary policy on lending is stronger for banks with less liquid balance sheets-i.e., banks with lower ratios of securities to assets. Moreover, this pattern is largely attributable to the smaller banks, those in the bottom 95 percent of the size distribution. Our results support the existence of a "bank lending channel" of monetary transmission, though they do not allow us to make precise statements about its quantitative importance. (JEL E44, E52, G32). C1 Univ Chicago, Grad Sch Business, Chicago, IL 60637 USA. Fed Reserve Bank Chicago, Chicago, IL USA. Natl Bur Econ Res, Cambridge, MA 02138 USA. MIT, Alfred P Sloan Sch Management, Cambridge, MA 02139 USA. RP Kashyap, AK (reprint author), Univ Chicago, Grad Sch Business, 1101 E 58th St, Chicago, IL 60637 USA. NR 37 TC 387 Z9 395 U1 4 U2 39 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD JUN PY 2000 VL 90 IS 3 BP 407 EP 428 DI 10.1257/aer.90.3.407 PG 22 WC Economics SC Business & Economics GA 334GY UT WOS:000088179800006 ER PT J AU Bils, M Kahn, JA AF Bils, M Kahn, JA TI What inventory behavior tells us about business cycles SO AMERICAN ECONOMIC REVIEW LA English DT Article ID AGGREGATE FLUCTUATIONS; CYCLICAL BEHAVIOR; PRODUCTIVITY; INVESTMENT; MODELS; LABOR; COST AB The countercyclical pattern of inventory-sales ratios is a striking feature of inventory behavior. In a model where inventories are productive for sales, both the markup of price over marginal cost and expected changes in marginal cost are key determinants of that ratio. This paper argues that costly variation in factor utilization gives rise to countercyclical markups in production-to-stock manufacturing industries. The markup turns out to be more important than intertemporal substitution in explaining the behavior of inventory-sales ratios. (JEL E22, E32). C1 Univ Rochester, Dept Econ, Rochester, NY 14627 USA. Natl Bur Econ Res, Cambridge, MA 02138 USA. Fed Reserve Bank New York, Dept Res, New York, NY 10045 USA. RP Bils, M (reprint author), Univ Rochester, Dept Econ, Rochester, NY 14627 USA. NR 38 TC 58 Z9 58 U1 1 U2 13 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD JUN PY 2000 VL 90 IS 3 BP 458 EP 481 DI 10.1257/aer.90.3.458 PG 24 WC Economics SC Business & Economics GA 334GY UT WOS:000088179800008 ER PT J AU Orphanides, A Wieland, V AF Orphanides, A Wieland, V TI Inflation zone targeting SO EUROPEAN ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 22nd Annual International Seminar on Marcoeconomics (ISOM) CY JUN 18-19, 1999 CL INSEAD, FONTAINEBLEAU, FRANCE SP European Econ Assoc, Natl Bur Econ Res HO INSEAD DE inflation targeting; price stability; optimal monetary policy ID MONETARY-POLICY; GROWTH; NAIRU AB We study optimal monetary policy design in a simple model that deviates from the linear-quadratic paradigm and provides a rationale for the practice of inflation zone targeting. We show that the presence of either zone-quadratic preferences or a zone-linear relationship between inflation and economic activity provides strong incentives to deviate from conventional linear policies. We calibrate the model based on parameters for the United States and the euro area and employ a numerical dynamic programming algorithm to derive the optimal policies. With this algorithm, we examine the role of uncertainty, model structure and relative preference towards economic stability in determining the width of the implied targeted inflation zone. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: E31; E52; E58; E61. C1 Fed Reserve Syst, Board Governors, Div Monetary Affairs, Washington, DC 20551 USA. RP Orphanides, A (reprint author), Fed Reserve Syst, Board Governors, Div Monetary Affairs, Washington, DC 20551 USA. NR 67 TC 63 Z9 63 U1 0 U2 4 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0014-2921 J9 EUR ECON REV JI Eur. Econ. Rev. PD JUN PY 2000 VL 44 IS 7 BP 1351 EP 1387 DI 10.1016/S0014-2921(00)00033-7 PG 37 WC Economics SC Business & Economics GA 322XK UT WOS:000087534400007 ER PT J AU Allen, DS Ndikumana, L AF Allen, DS Ndikumana, L TI Financial intermediation and economic growth in Southern Africa SO JOURNAL OF AFRICAN ECONOMIES LA English DT Article ID STOCK-MARKET DEVELOPMENT; PANEL-DATA APPROACH; LONG-RUN GROWTH; SPECIFICATION; INFLATION; TESTS AB Using various indicators of financial development, this paper investigates the role of financial intermediation in stimulating economic growth in Southern Africa. The results lend some support to the hypothesis that financial development is positively correlated with the growth rate of real per capita GDP. This relationship is more evident in regressions that use pooled data (5-year cross-sections) than those using annual data. This finding suggests that the finance-growth nexus is a long-run phenomenon. The data indicate that while Botswana and Mauritius are catching tip with South Africa towards a high-income steady state, the rest of the countries are stagnating to low income levels and low growth rates. C1 Fed Reserve Bank, St Louis, MO USA. Univ Massachusetts, Amherst, MA 01003 USA. RP Allen, DS (reprint author), Fed Reserve Bank, St Louis, MO USA. NR 46 TC 16 Z9 17 U1 2 U2 4 PU OXFORD UNIV PRESS PI OXFORD PA GREAT CLARENDON ST, OXFORD OX2 6DP, ENGLAND SN 0963-8024 J9 J AFR ECON JI J. Afr. Econ. PD JUN PY 2000 VL 9 IS 2 BP 132 EP 160 DI 10.1093/jae/9.2.132 PG 29 WC Economics SC Business & Economics GA 332MU UT WOS:000088078700002 ER PT J AU Bordo, MD Dueker, MJ Wheelock, DC AF Bordo, MD Dueker, MJ Wheelock, DC TI Inflation shocks and financial distress: An historical analysis SO JOURNAL OF ECONOMIC HISTORY LA English DT Meeting Abstract C1 Fed Reserve Bank Kansas City, Kansas City, MO 64198 USA. Rutgers State Univ, Piscataway, NJ 08855 USA. RI Wheelock, David/I-5757-2016 OI Wheelock, David/0000-0002-2702-8164 NR 0 TC 0 Z9 0 U1 0 U2 0 PU CAMBRIDGE UNIV PRESS PI NEW YORK PA 40 WEST 20TH STREET, NEW YORK, NY 10011-4211 USA SN 0022-0507 J9 J ECON HIST JI J. Econ. Hist. PD JUN PY 2000 VL 60 IS 2 BP 534 EP 535 PG 2 WC Economics; History; History Of Social Sciences SC Business & Economics; History; Social Sciences - Other Topics GA 327GK UT WOS:000087785700024 ER PT J AU Wheelock, DC AF Wheelock, DC TI The Bank of the United States and the American economy. SO JOURNAL OF ECONOMIC HISTORY LA English DT Book Review C1 Fed Reserve Bank St Louis, St Louis, MO USA. RP Wheelock, DC (reprint author), Fed Reserve Bank St Louis, St Louis, MO USA. RI Wheelock, David/I-5757-2016 OI Wheelock, David/0000-0002-2702-8164 NR 1 TC 0 Z9 0 U1 0 U2 0 PU CAMBRIDGE UNIV PRESS PI NEW YORK PA 40 WEST 20TH STREET, NEW YORK, NY 10011-4211 USA SN 0022-0507 J9 J ECON HIST JI J. Econ. Hist. PD JUN PY 2000 VL 60 IS 2 BP 574 EP 575 PG 2 WC Economics; History; History Of Social Sciences SC Business & Economics; History; Social Sciences - Other Topics GA 327GK UT WOS:000087785700067 ER PT J AU Elmendorf, DW Sheiner, LM AF Elmendorf, DW Sheiner, LM TI Should America save for its old age? Fiscal policy, population aging, and national saving SO JOURNAL OF ECONOMIC PERSPECTIVES LA English DT Article ID UNITED-STATES C1 US Dept Treasury, Washington, DC 20226 USA. Fed Reserve Board Governors, Washington, DC USA. RP Elmendorf, DW (reprint author), US Dept Treasury, Washington, DC 20226 USA. NR 27 TC 27 Z9 27 U1 0 U2 5 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0895-3309 J9 J ECON PERSPECT JI J. Econ. Perspect. PD SUM PY 2000 VL 14 IS 3 BP 57 EP 74 DI 10.1257/jep.14.3.57 PG 18 WC Economics SC Business & Economics GA 352DZ UT WOS:000089200400004 ER PT J AU Perez-Quiros, G Timmermann, A AF Perez-Quiros, G Timmermann, A TI Firm size and cyclical variations in stock returns SO JOURNAL OF FINANCE LA English DT Article ID MONETARY-POLICY; BUSINESS-CYCLE; ECONOMIC-SIGNIFICANCE; CREDIT CONDITIONS; EXPECTED RETURNS; MARKET RETURNS; INTEREST-RATES; ASSET RETURNS; REAL ACTIVITY; VOLATILITY AB Recent imperfect capital market theories predict the presence of asymmetries in the Variation of small and large firms' risk over the economic cycle. Small firms with little collateral should be more strongly affected by tighter credit market conditions in a recession state than large, better collateralized ones. This paper adopts a flexible econometric model to analyze these implications empirically. Consistent with theory, small firms display the highest degree of asymmetry in their risk across recession and expansion states, which translates into a higher sensitivity of their expected stock returns with respect to variables that measure credit market conditions. C1 Fed Reserve Bank New York, New York, NY 10045 USA. Univ Calif San Diego, La Jolla, CA 92093 USA. RP Perez-Quiros, G (reprint author), Fed Reserve Bank New York, New York, NY 10045 USA. NR 49 TC 155 Z9 155 U1 0 U2 17 PU BLACKWELL PUBLISHERS PI MALDEN PA 350 MAIN STREET, STE 6, MALDEN, MA 02148 USA SN 0022-1082 J9 J FINANC JI J. Financ. PD JUN PY 2000 VL 55 IS 3 BP 1229 EP 1262 DI 10.1111/0022-1082.00246 PG 34 WC Business, Finance SC Business & Economics GA 318WZ UT WOS:000087308800008 ER PT J AU de Cordoba, GF Kehoe, TJ AF de Cordoba, GF Kehoe, TJ TI Capital flows and real exchange rate fluctuations following Spain's entry into the European Community SO JOURNAL OF INTERNATIONAL ECONOMICS LA English DT Article; Proceedings Paper CT Symposium on Globalization Capital Markets Crises and Economic Reform CY DEC 08-09, 1998 CL DUKE UNIV, DURHAM, NORTH CAROLINA SP Duke Univ, N Amer Studies Program, Latin Amer Studies Program, Globalizat & Democrat Govt Initiat, Global Capital Makets Ctr, Off Vice Provost Acad & Int Affairs, Dept Econom HO DUKE UNIV DE Spain; international factor movements; nontraded goods; real exchange rate; adjustment costs ID INVESTMENT; TRADE AB Spain's 1986 entry into the European Community was followed by a dismantling of restrictions on international capital flows. Initial trade deficits and real exchange rate appreciation were followed by trade surpluses and real exchange rate depreciation. This paper analyzes Spain's financial liberalization using a dynamic general equilibrium model with a traded and nontraded good where a capital poor country opens itself to its capital rich neighbors. A carefully calibrated model has trouble accounting for the large changes in relative prices observed given the small changes in quantities, Variants of the model with frictions in factor mobility between sectors fare better. (C) 2000 Elsevier Science B.V. All rights reserved. C1 Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. Univ Salamanca, Dept Econ & Hist Econ, E-37008 Salamanca, Spain. Fed Reserve Bank Minneapolis, Res Dept, Minneapolis, MN 55401 USA. RP Kehoe, TJ (reprint author), Univ Minnesota, Dept Econ, 1169 Management & Econ,271 19th Ave S, Minneapolis, MN 55455 USA. NR 30 TC 27 Z9 27 U1 1 U2 4 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0022-1996 J9 J INT ECON JI J. Int. Econ. PD JUN PY 2000 VL 51 IS 1 BP 49 EP 78 DI 10.1016/S0022-1996(99)00037-9 PG 30 WC Economics SC Business & Economics GA 313LD UT WOS:000087000400004 ER PT J AU Chang, R Velasco, A AF Chang, R Velasco, A TI Banks, debt maturity and financial crises SO JOURNAL OF INTERNATIONAL ECONOMICS LA English DT Article; Proceedings Paper CT Symposium on Globalization Capital Markets Crises and Economic Reform CY DEC 08-09, 1998 CL DUKE UNIV, DURHAM, NORTH CAROLINA SP Duke Univ, N Amer Studies Program, Latin Amer Studies Program, Globalizat & Democrat Govt Initiat, Global Capital Makets Ctr, Off Vice Provost Acad & Int Affairs, Dept Econom HO DUKE UNIV DE bank runs; financial crises; foreign debt ID RUNS; LIQUIDITY AB We develop a model in which the maturity of external debt of banks, their level of international reserves, and the term structure of interest rates are jointly determined. Self-fulfilling runs may occur, and banks take this possibility into account when choosing the structure of their assets and liabilities. If the probability of a run is sufficiently small, banks will deliberately choose an illiquid asset-liability position and expose themselves to a run. In that case, short term debt will be cheaper than long term debt, and the maturity structure of foreign debt will depend on attitudes towards risk. (C) 2000 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank Atlanta, Res Dept, Atlanta, GA 30303 USA. NYU, Dept Econ, New York, NY 10003 USA. RP Chang, R (reprint author), Fed Reserve Bank Atlanta, Res Dept, Atlanta, GA 30303 USA. NR 22 TC 26 Z9 30 U1 5 U2 10 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0022-1996 J9 J INT ECON JI J. Int. Econ. PD JUN PY 2000 VL 51 IS 1 BP 169 EP 194 DI 10.1016/S0022-1996(99)00041-0 PG 26 WC Economics SC Business & Economics GA 313LD UT WOS:000087000400008 ER PT J AU Corsetti, G Pesenti, P Roubini, N Tille, C AF Corsetti, G Pesenti, P Roubini, N Tille, C TI Competitive devaluations: toward a welfare-based approach SO JOURNAL OF INTERNATIONAL ECONOMICS LA English DT Article; Proceedings Paper CT Symposium on Globalization Capital Markets Crises and Economic Reform CY DEC 08-09, 1998 CL DUKE UNIV, DURHAM, NORTH CAROLINA SP Duke Univ, N Amer Studies Program, Latin Amer Studies Program, Globalizat & Democrat Govt Initiat, Global Capital Makets Ctr, Off Vice Provost Acad & Int Affairs, Dept Econom HO DUKE UNIV DE competitive devaluations; exchange rate shocks; contagion; global trade links; law of one price AB This paper revisits the international transmission of exchange rate shocks in a multicountry economy, providing a choice-theoretic framework for the policy analysis of competitive devaluations. As opposed to the traditional view, a devaluation by one country does not necessarily have an adverse beggar-thy-neighbor effect on its trading partners, because they can benefit from an improvement in their terms of trade. Furthermore, a retaliatory devaluation need not be the optimal strategy for the neighbor countries, as the induced terms of trade deterioration can be large enough to offset the gains from defending their export market share. C1 Univ Bologna, I-40126 Bologna, Italy. Yale Univ, New Haven, CT 06520 USA. Fed Reserve Bank New York, New York, NY 10045 USA. NBER, New York, NY 10045 USA. NYU, CEPR, New York, NY 10012 USA. NBER, New York, NY 10012 USA. RP Corsetti, G (reprint author), Univ Bologna, I-40126 Bologna, Italy. OI Corsetti, Giancarlo/0000-0001-8965-9853 NR 30 TC 38 Z9 39 U1 0 U2 2 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0022-1996 J9 J INT ECON JI J. Int. Econ. PD JUN PY 2000 VL 51 IS 1 BP 217 EP 241 DI 10.1016/S0022-1996(99)00043-4 PG 25 WC Economics SC Business & Economics GA 313LD UT WOS:000087000400010 ER PT J AU Antzoulatos, AA AF Antzoulatos, AA TI On the determinants and resilience of bond flows to LDCs, 1990-1995 SO JOURNAL OF INTERNATIONAL MONEY AND FINANCE LA English DT Article DE bonds; international capital flows ID PRIVATE CAPITAL INFLOWS; FOREIGN AB Bond flows to Less Developed Countries (LDCs) proved more resilient than expected to the rising US interest rates during 1994, raising hopes that the current episode of private capital flows to LDCs may not end in a widespread crisis as its predecessors in the 1920s and 1970s did. Global bond issuance, a significant determinant of the flows that recovered quickly from the first interest-rate rise in February 1994, explains this resilience. It can also help the flows withstand future cyclical interest rate rises, as long as the ongoing process of international portfolio diversification continues fueling it. (C) 2000 Elsevier Science Ltd. All rights reserved. C1 Fed Reserve Bank New York, Int Res Dept, New York, NY 10045 USA. RP Antzoulatos, AA (reprint author), Fed Reserve Bank New York, Int Res Dept, 33 Liberty St, New York, NY 10045 USA. NR 19 TC 1 Z9 1 U1 0 U2 1 PU ELSEVIER SCI LTD PI OXFORD PA THE BOULEVARD, LANGFORD LANE, KIDLINGTON, OXFORD OX5 1GB, OXON, ENGLAND SN 0261-5606 J9 J INT MONEY FINANC JI J. Int. Money Finan. PD JUN PY 2000 VL 19 IS 3 BP 399 EP 418 DI 10.1016/S0261-5606(00)00009-7 PG 20 WC Business, Finance SC Business & Economics GA 328AK UT WOS:000087826500005 ER PT J AU Athanasoulis, SG van Wincoop, E AF Athanasoulis, SG van Wincoop, E TI Growth uncertainty and risksharing SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE risksharing; risk; welfare; growth ID ECONOMIC-GROWTH; WELFARE GAINS; TRADE; REGRESSIONS; TERMS AB We propose a new methodology to evaluate the gains from global risksharing that is closely connected to the empirical growth literature. We obtain estimates of diversifiable growth uncertainty at various horizons from regressions of country-specific deviations from world growth on a wide set of variables in the information set. This is used to obtain a measure of the welfare gain from risksharing for a representative country. We find large benefits from risksharing. The gain for a 35-year horizon, corresponding to a welfare equivalent permanent increase in consumption, is 6.6% when based on a set of 49 countries, and 1.5% when based on 21 OECD countries. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: F41; G15. C1 Fed Reserve Bank New York, Int Res Funct, New York, NY 10045 USA. Yale Univ, New Haven, CT 06520 USA. RP van Wincoop, E (reprint author), Fed Reserve Bank New York, Int Res Funct, 33 Liberty St, New York, NY 10045 USA. NR 40 TC 29 Z9 30 U1 0 U2 3 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD JUN PY 2000 VL 45 IS 3 BP 477 EP 505 DI 10.1016/S0304-3932(00)00003-9 PG 29 WC Business, Finance; Economics SC Business & Economics GA 318BU UT WOS:000087264700001 ER PT J AU Dotsey, M Sarte, PD AF Dotsey, M Sarte, PD TI Inflation uncertainty and growth in a cash-in-advance economy SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE economic growth; inflation; uncertainty ID LONG-RUN GROWTH; DEVELOPING-COUNTRIES; POLICY; MODEL; MONEY; REGRESSIONS AB This paper analyzes the effects of inflation variability on economic growth in a model where money is introduced via a cash-in-advance constraint. In this setting, we find that inflation adversely affects long-run growth, even when the cash-in-advance constraint applies only to consumption. At the same time, we find that inflation and growth are positively related in the short run. Furthermore, variability increases average growth through a precautionary savings motive. Since inflation and inflation variability tend to be highly correlated, the presence of uncertainty attenuates the negative long-run relationship between inflation and real growth. It also provides a partial rationale for the apparent lack of robustness in cross-country regressions of growth and inflation, (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: E13; O42. C1 Fed Reserve Bank Richmond, Res Dept, Richmond, VA 23261 USA. RP Dotsey, M (reprint author), Fed Reserve Bank Richmond, Res Dept, POb 27622, Richmond, VA 23261 USA. NR 28 TC 80 Z9 81 U1 1 U2 5 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD JUN PY 2000 VL 45 IS 3 BP 631 EP 655 DI 10.1016/S0304-3932(00)00005-2 PG 25 WC Business, Finance; Economics SC Business & Economics GA 318BU UT WOS:000087264700007 ER PT J AU Park, S Rodrigues, AP AF Park, S Rodrigues, AP TI Is aggregate consumer borrowing consistent with the permanent income hypothesis? SO MANCHESTER SCHOOL LA English DT Article ID TRANSITORY INCOME; CONSUMPTION AB Using US data covering from 1959 to 1994, we examine the consistency of aggregate consumer borrowing with the permanent income/life-cycle hypothesis (PI/LCH) and the predictive power of consumer borrowing, The PI/LCH implies that consumer borrowing should be an increasing function of the gap between permanent and current income, In addition, if consumers accurately estimate permanent income, large borrowing should be associated with rapid income growth in the future, Our empirical results support the PI/LCH; consumer borrowing increases with the estimate of permanent income and decreases with current income, The predictive power of consumer borrowing, however, is marginal; lagged consumer borrowing explains only a small portion of income growth and does not Granger-cause income growth. C1 Fed Reserve Bank New York, New York, NY 10045 USA. RP Park, S (reprint author), Fed Reserve Bank New York, New York, NY 10045 USA. NR 17 TC 3 Z9 3 U1 0 U2 1 PU BLACKWELL PUBL LTD PI OXFORD PA 108 COWLEY RD, OXFORD OX4 1JF, OXON, ENGLAND SN 1463-6786 J9 MANCH SCH JI Manch. Sch. PD JUN PY 2000 VL 68 IS 3 BP 301 EP 320 DI 10.1111/1467-9957.00195 PG 20 WC Economics SC Business & Economics GA 319FT UT WOS:000087331400003 ER PT J AU Passmore, W Sparks, RW AF Passmore, W Sparks, RW TI Automated underwriting and the profitability of mortgage securitization SO REAL ESTATE ECONOMICS LA English DT Article AB This paper develops a game-theoretic model of mortgage securitization, which is then used to examine a potential effect of automated underwriting. The paper's primary supposition is that automated underwriting lowers the costs to competitive mortgage originators and a monopolist securitizer of identifying mortgage applicants who are good credit risks. Faced with lower underwriting costs, originators will screen a larger number of mortgage applicants in the hopes of holding more good risks in their portfolios and passing through more bad risks to the securitizer. This mounting adverse-selection problem causes the securitizer's expected revenues to decline; this effect can outweigh the cost-saving benefit of automated underwriting, causing the securitizer's return on equity to fall. C1 Fed Reserve Board, Washington, DC 20551 USA. Mills Coll, Oakland, CA 94613 USA. RP Passmore, W (reprint author), Fed Reserve Board, Washington, DC 20551 USA. NR 19 TC 6 Z9 6 U1 0 U2 3 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 1080-8620 J9 REAL ESTATE ECON JI Real Estate Econ. PD SUM PY 2000 VL 28 IS 2 BP 285 EP 305 DI 10.1111/1540-6229.00802 PG 21 WC Business, Finance; Economics; Urban Studies SC Business & Economics; Urban Studies GA 329FW UT WOS:000087897300005 ER PT J AU Gorton, G Kahn, J AF Gorton, G Kahn, J TI The design of bank loan contracts SO REVIEW OF FINANCIAL STUDIES LA English DT Article ID DEBT; REORGANIZATION; DEFAULT; MODEL AB The unique characteristics of bank loans emerge endogenously to enhance efficiency in a model of renegotiation between a borrower and a lender in which there is the potential for moral hazard on each side of the relationship. Firm risk is endogenous and renegotiated interest rates on the debt need not be monotone in firm risk. The initial terms of the debt are not set to price default risk but rather are set to efficiently balance bargaining power in later renegotiation. Loan pricing may be nonlinear, involving initial transfers either from the borrower to the bank or from the bank to the borrower. C1 Univ Penn, Wharton Sch, Dept Finance, Philadelphia, PA 19104 USA. NBER, Cambridge, MA 02138 USA. Fed Reserve Bank New York, New York, NY USA. RP Gorton, G (reprint author), Univ Penn, Wharton Sch, Dept Finance, Philadelphia, PA 19104 USA. NR 27 TC 39 Z9 39 U1 5 U2 13 PU OXFORD UNIV PRESS INC PI CARY PA JOURNALS DEPT, 2001 EVANS RD, CARY, NC 27513 USA SN 0893-9454 J9 REV FINANC STUD JI Rev. Financ. Stud. PD SUM PY 2000 VL 13 IS 2 BP 331 EP 364 DI 10.1093/rfs/13.2.331 PG 34 WC Business, Finance; Economics SC Business & Economics GA 307DY UT WOS:000086639000003 ER PT J AU Rhoades, SA AF Rhoades, SA TI Retail commercial banking: An update on a period of extraordinary change SO REVIEW OF INDUSTRIAL ORGANIZATION LA English DT Article DE banking; interstate banking; mergers; multimarket interdependence; switching costs ID MARKET AB The 1990s has been an extraordinary period for the retail commercial banking industry. This industry update discusses some of the important developments and issues they have raised from the standpoint of competition and antitrust policy. A massive merger movement and removal of restrictions on interstate banking have raised questions about barriers to entry, the influence of very large banks on the behavior of other banks in local banking markets, the potential for multimarket interdependence among large banks that meet one another in numerous markets, and the appropriateness of local markets for analyzing competition. Finally, the emergence of electronic banking and the unbundling of the pricing of services have highlighted the possible importance of switching costs for customers in retail banking. C1 Fed Reserve Board, Financial Struct Sect, Washington, DC 20551 USA. RP Rhoades, SA (reprint author), Fed Reserve Board, Financial Struct Sect, Stop 149, Washington, DC 20551 USA. RI French, Shaun/B-1155-2010 NR 16 TC 4 Z9 4 U1 0 U2 1 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0889-938X J9 REV IND ORGAN JI Rev. Ind. Organ. PD JUN PY 2000 VL 16 IS 4 BP 357 EP 366 DI 10.1023/A:1007840809257 PG 10 WC Economics; Management SC Business & Economics GA 305GU UT WOS:000086531700003 ER PT J AU Chang, R Velasco, A AF Chang, R Velasco, A TI Exchange-rate policy for developing countries SO AMERICAN ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 112th Annual Meeting of the American-Economic-Association CY JAN 07-09, 2000 CL BOSTON, MASSACHUSETTS SP Amer Econ Assoc C1 Fed Reserve Bank Atlanta, Res Dept, Atlanta, GA 30303 USA. NYU, Dept Econ, New York, NY 10003 USA. NBER, Cambridge, MA 02138 USA. RP Chang, R (reprint author), Fed Reserve Bank Atlanta, Res Dept, Atlanta, GA 30303 USA. NR 13 TC 26 Z9 28 U1 4 U2 10 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD MAY PY 2000 VL 90 IS 2 BP 71 EP 75 DI 10.1257/aer.90.2.71 PG 5 WC Economics SC Business & Economics GA 322MD UT WOS:000087512600014 ER PT J AU Jorgenson, DW Stiroh, KJ AF Jorgenson, DW Stiroh, KJ TI US economic growth at the industry level SO AMERICAN ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 112th Annual Meeting of the American-Economic-Association CY JAN 07-09, 2000 CL BOSTON, MASSACHUSETTS SP Amer Econ Assoc ID PRODUCTIVITY C1 Harvard Univ, Dept Econ, Cambridge, MA 02138 USA. Fed Reserve Bank New York, New York, NY 10045 USA. RP Jorgenson, DW (reprint author), Harvard Univ, Dept Econ, Cambridge, MA 02138 USA. NR 18 TC 50 Z9 52 U1 1 U2 7 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD MAY PY 2000 VL 90 IS 2 BP 161 EP 167 DI 10.1257/aer.90.2.161 PG 7 WC Economics SC Business & Economics GA 322MD UT WOS:000087512600032 ER PT J AU Bernheim, BD Forni, L Gokhale, J Kotlikoff, LJ AF Bernheim, BD Forni, L Gokhale, J Kotlikoff, LJ TI How much should Americans be saving for retirement? SO AMERICAN ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 112th Annual Meeting of the American-Economic-Association CY JAN 07-09, 2000 CL BOSTON, MASSACHUSETTS SP Amer Econ Assoc C1 Stanford Univ, Dept Econ, Stanford, CA 94305 USA. NBER, I-00184 Rome, Italy. Bank Italy, I-00184 Rome, Italy. Fed Reserve Bank Cleveland, Cleveland, OH 44114 USA. Boston Univ, Dept Econ, Boston, MA 02215 USA. RP Bernheim, BD (reprint author), Stanford Univ, Dept Econ, Stanford, CA 94305 USA. NR 7 TC 12 Z9 12 U1 0 U2 5 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD MAY PY 2000 VL 90 IS 2 BP 288 EP 292 DI 10.1257/aer.90.2.288 PG 5 WC Economics SC Business & Economics GA 322MD UT WOS:000087512600057 ER PT J AU Gokhale, J Page, B Potter, J Sturrock, J AF Gokhale, J Page, B Potter, J Sturrock, J TI Generational accounts for the United States: An update SO AMERICAN ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 112th Annual Meeting of the American-Economic-Association CY JAN 07-09, 2000 CL BOSTON, MASSACHUSETTS SP Amer Econ Assoc C1 Fed Reserve Bank Cleveland, Cleveland, OH 44114 USA. Congress Budget Off, Washington, DC 20515 USA. RP Gokhale, J (reprint author), Fed Reserve Bank Cleveland, 1455 E 6th St, Cleveland, OH 44114 USA. NR 6 TC 3 Z9 3 U1 0 U2 3 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD MAY PY 2000 VL 90 IS 2 BP 293 EP 296 DI 10.1257/aer.90.2.293 PG 4 WC Economics SC Business & Economics GA 322MD UT WOS:000087512600058 ER PT J AU Cutler, DM Sheiner, L AF Cutler, DM Sheiner, L TI Generational aspects of Medicare SO AMERICAN ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 112th Annual Meeting of the American-Economic-Association CY JAN 07-09, 2000 CL BOSTON, MASSACHUSETTS SP Amer Econ Assoc C1 Harvard Univ, Dept Econ, Cambridge, MA 02138 USA. Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Cutler, DM (reprint author), Harvard Univ, Dept Econ, Cambridge, MA 02138 USA. NR 8 TC 7 Z9 7 U1 0 U2 4 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD MAY PY 2000 VL 90 IS 2 BP 303 EP 307 DI 10.1257/aer.90.2.303 PG 5 WC Economics SC Business & Economics GA 322MD UT WOS:000087512600060 ER PT J AU Black, SE Juhn, CH AF Black, SE Juhn, CH TI The rise of female professionals: Are women responding to skill demand? SO AMERICAN ECONOMIC REVIEW LA English DT Article; Proceedings Paper CT 112th Annual Meeting of the American-Economic-Association CY JAN 07-09, 2000 CL BOSTON, MASSACHUSETTS SP Amer Econ Assoc C1 Fed Reserve Bank New York, New York, NY 10045 USA. Univ Houston, Dept Econ, Houston, TX 77204 USA. RP Black, SE (reprint author), Fed Reserve Bank New York, 33 Liberty St, New York, NY 10045 USA. NR 4 TC 17 Z9 17 U1 0 U2 4 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD MAY PY 2000 VL 90 IS 2 BP 450 EP 455 DI 10.1257/aer.90.2.450 PG 6 WC Economics SC Business & Economics GA 322MD UT WOS:000087512600087 ER PT J AU Oakland, WH Testa, WA AF Oakland, WH Testa, WA TI The benefit principle as a preferred approach to taxing business in the Midwest SO ECONOMIC DEVELOPMENT QUARTERLY LA English DT Article ID STATE AB State-local tax policies to encourage growth and development have been roundly criticized as detrimental to social welfare. in response, recent proposals have included delimiting the ability of states and localities to fashion tax policies. Not only are such proposals unworkable, but they fail to harness the creative energy and ideas of development practitioners because they act competitively to foster growth and development. The authors propose an alternative basis on which to fashion state-local taxation of business-that is, the so-called benefit principle-which aligns business tares with costs of government services received by business entities. C1 Tulane Univ, New Orleans, LA 70118 USA. Fed Reserve Bank, Reg Programs, Chicago, IL USA. RP Oakland, WH (reprint author), Tulane Univ, New Orleans, LA 70118 USA. NR 26 TC 3 Z9 3 U1 0 U2 2 PU SAGE PUBLICATIONS INC PI THOUSAND OAKS PA 2455 TELLER RD, THOUSAND OAKS, CA 91320 USA SN 0891-2424 J9 ECON DEV Q JI Econ. Dev. Q. PD MAY PY 2000 VL 14 IS 2 BP 154 EP 164 DI 10.1177/089124240001400203 PG 11 WC Economics; Planning & Development; Urban Studies SC Business & Economics; Public Administration; Urban Studies GA 312LM UT WOS:000086944800003 ER PT J AU Allen, B Deneckere, R Faith, T Kovenock, D AF Allen, B Deneckere, R Faith, T Kovenock, D TI Capacity precommitment as a barrier to entry: A Bertrand-Edgeworth approach SO ECONOMIC THEORY LA English DT Article DE Bertrand-Edgeworth; capacity; entry deterrence; price competition; Stackelberg equilibrium ID EQUILIBRIUM; COMPETITION; DETERRENCE; INVESTMENT; DUOPOLY AB With few exceptions, the literature on the role of capacity as a strategic entry deterrent has assumed Cournot competition in the post-entry game. In contrast, this paper studies a model in which the incumbent and entrant sequentially precommit to capacity levels before competing in price. Interesting deterrence effects arise because firms need time to build, that is, cannot adjust capacity instantaneously in the post-entry game. This approach produces a simple and intuitive set of equilibrium behaviors and generates clear predictions about when these different outcomes are likely to arise. Our model also departs substantially from the existing literature in concluding that sunkness of capacity costs is neither necessary nor sufficient for capacity to have precommitment value. C1 Purdue Univ, Krannert Sch Management, Dept Econ, W Lafayette, IN 47907 USA. Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. Fed Reserve Bank Minneapolis, Minneapolis, MN 55480 USA. Univ Wisconsin, Dept Econ, Madison, WI 53706 USA. Faith Consulting, NL-3039 RK Rotterdam, Netherlands. RP Purdue Univ, Krannert Sch Management, Dept Econ, W Lafayette, IN 47907 USA. EM kovenock@mgmt.purdue.edu NR 23 TC 32 Z9 32 U1 0 U2 8 PU SPRINGER PI NEW YORK PA 233 SPRING ST, NEW YORK, NY 10013 USA SN 0938-2259 EI 1432-0479 J9 ECON THEOR JI Econ. Theory PD MAY PY 2000 VL 15 IS 3 BP 501 EP 530 DI 10.1007/s001990050309 PG 30 WC Economics SC Business & Economics GA 316VM UT WOS:000087188800001 ER PT J AU Pakko, MR AF Pakko, MR TI Do high interest rates stem capital outflows? SO ECONOMICS LETTERS LA English DT Article DE capital flight; default risk; laffer curve; interest rates AB Conventional wisdom posits that high interest rates stem capital flight. But if higher interest rates increase the probability of debt default, they might have anti-orthodox effects. This note develops a framework for evaluating conditions under which this might occur. (C) 2000 Elsevier Science S.A. All rights reserved. JEL classification: F32; F3. C1 Fed Reserve Bank, St Louis, MO 63102 USA. RP Pakko, MR (reprint author), Fed Reserve Bank, 411 Locust St, St Louis, MO 63102 USA. NR 5 TC 6 Z9 6 U1 0 U2 1 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0165-1765 J9 ECON LETT JI Econ. Lett. PD MAY PY 2000 VL 67 IS 2 BP 187 EP 192 DI 10.1016/S0165-1765(99)00260-8 PG 6 WC Economics SC Business & Economics GA 309FB UT WOS:000086756700010 ER PT J AU Chang, R Velasco, A AF Chang, R Velasco, A TI Financial fragility and the exchange rate regime SO JOURNAL OF ECONOMIC THEORY LA English DT Article ID BANKING; LIQUIDITY; CRISES; MONEY AB We study financial fragility, exchange rate crises, and monetary policy in a model of an open economy with Diamond-Dybvig banks. The banking system, the exchange rate regime, and central bank credit policy are seen as parts of a mechanism intended to maximize social welfare; if the mechanism fails, banking crises and speculative attacks on the currency become possible. We compare currency boards, fixed rates, and flexible rates, with and without a lender of last resort. A currency board cannot implement a social optimum; in addition, it allows bank runs to occur. A fixed exchange rate sq stem may implement the social optimum but is more prone to bank runs and exchange rate crises than a currency board. A flexible rate system implements the social optimum and eliminates runs, provided that the exchange rate and credit policies of the central bank are appropriately designed. Journal of Economic Literature Classification Numbers: F3, E5, G2. (C) 2000 Academic Press. C1 Fed Reserve Bank, Atlanta, GA 30303 USA. NYU, New York, NY 10003 USA. Univ Chile, Santiago, Chile. NBER, Cambridge, MA 02138 USA. RP Chang, R (reprint author), Fed Reserve Bank, Atlanta, GA 30303 USA. NR 28 TC 53 Z9 57 U1 7 U2 17 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 0022-0531 J9 J ECON THEORY JI J. Econ. Theory PD MAY PY 2000 VL 92 IS 1 BP 1 EP 34 DI 10.1006/jeth.1999.2621 PG 34 WC Economics SC Business & Economics GA 318AT UT WOS:000087261800001 ER PT J AU Kay, SJ AF Kay, SJ TI Recent changes in Latin American welfare states: is there social dumping? SO JOURNAL OF EUROPEAN SOCIAL POLICY LA English DT Article; Proceedings Paper CT Intenational-Sociological-Association of the World Congress on Sociology CY JUL-AUG -, 1998 CL MONTREAL, CANADA SP Int Sociol Assoc DE Chile; social dumping; social security privatization; social security reform; social spending AB The article evaluates the degree to which the recent wave of pension reform in Latin America can be considered social dumping. While competitive pressures did create incentives for reform, the region's pension systems were already becoming financially unsustainable, consuming greater percentages of GDP throughout the 1980s and 1990s. To the extent that the transition costs of privatization crowd out other-more redistributive-forms of social spending, as occurred in the Chilean case, social dumping may occur. However, it is problematic to speak of a single 'Latin American' trend in social spending in general or in pension reform in particular. The demonstration effect of the Chilean model, International Financial Institution support for privatization, and concerns about economic competitiveness provided incentives for governments to pursue privatization, but policy outcomes were filtered through the prism of domestic politics. Given the dismal financial and distributional picture of the old pay-as-you-go (PAYG) system and its steep transition costs (simply cutting benefits in the old system would be far cheaper), social security privatization is not readily explained as social dumping. C1 Fed Reserve Bank, Atlanta, GA 30303 USA. RP Kay, SJ (reprint author), Fed Reserve Bank, Atlanta, GA 30303 USA. NR 34 TC 5 Z9 5 U1 1 U2 3 PU SAGE PUBLICATIONS LTD PI LONDON PA 6 BONHILL STREET, LONDON EC2A 4PU, ENGLAND SN 0958-9287 J9 J EUR SOC POLICY JI J. Eur. Soc. Policy PD MAY PY 2000 VL 10 IS 2 BP 185 EP 203 PG 19 WC Public Administration; Social Issues SC Public Administration; Social Issues GA 320HW UT WOS:000087396600005 ER PT J AU Thornton, DL AF Thornton, DL TI Lifting the veil of secrecy from monetary policy: Evidence from the Fed's early discount rate policy SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Article AB Traditionally, monetary policy has been conducted under a veil of secrecy. In its landmark Freedom of Information Act case, the Federal Reserve argued that it needed to delay the disclosure of its policy decisions, claiming that immediate disclosure would cause the market to react in a way that was inconsistent with the Fed's intentions. Based on this argument and others, the Fed was permitted to delay the release of FOMC policy decisions. Most economists, however, believe that market forces would work to keep equilibrium outcomes more in line with policymakers' intentions if policymakers would announce their intentions and establish a reputation for behaving in a manner consistent with them. This paper tests the hypothesis that the market responds more closely to the Fed's intentions when the Fed makes its intentions known by investigating the market's reaction to a change in discount rate policy in the early 1960s. We find that the market responded in a manner inconsistent with the Fed's intentions when they were unknown, and responded in a manner consistent with them when the Fed made its intentions known. C1 Fed Reserve Bank, St Louis, MO USA. RP Thornton, DL (reprint author), Fed Reserve Bank, St Louis, MO USA. NR 39 TC 2 Z9 2 U1 0 U2 2 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD MAY PY 2000 VL 32 IS 2 BP 155 EP 167 DI 10.2307/2601236 PG 13 WC Business, Finance; Economics SC Business & Economics GA 308TA UT WOS:000086727900001 ER PT J AU Coughlin, CC Segev, E AF Coughlin, CC Segev, E TI Location determinants of new foreign-owned manufacturing plants SO JOURNAL OF REGIONAL SCIENCE LA English DT Article ID UNITED-STATES; DIRECT-INVESTMENT; EXCHANGE-RATE; AGGLOMERATION; GROWTH; TAXES AB In this paper we examine the county-level pattern of new foreign-owned manufacturing plants in the United States from 1989 through 1994. We construct a model to produce insights into the differences in the location of these plants among Bureau of Economic Analysis regions, as well as between rural and urban counties. Higher levels of economic size, educational attainment, the existing manufacturing base, and transportation infrastructure are found to be associated with larger numbers of new foreign-owned plants. Meanwhile, higher levels of taxes and labor-intensiveness are found to be associated with smaller numbers of new plants. Comparing regions, we find that the main advantages of the Southeast region stem from a relatively high manufacturing base and relatively low taxes. Comparing urban with rural counties, we find that urban counties possess more favorable average values for nearly all the explanatory variables. C1 Fed Reserve Bank St Louis, St Louis, MO 63102 USA. Harvard Univ, John F Kennedy Sch Govt, Cambridge, MA 02138 USA. RP Coughlin, CC (reprint author), Fed Reserve Bank St Louis, 411 Locust St, St Louis, MO 63102 USA. RI Coughlin, Cletus/K-6860-2016 OI Coughlin, Cletus/0000-0002-8304-2796 NR 36 TC 92 Z9 94 U1 1 U2 5 PU BLACKWELL PUBLISHERS PI MALDEN PA 350 MAIN STREET, STE 6, MALDEN, MA 02148 USA SN 0022-4146 J9 J REGIONAL SCI JI J. Reg. Sci. PD MAY PY 2000 VL 40 IS 2 BP 323 EP 351 DI 10.1111/0022-4146.00177 PG 29 WC Economics; Environmental Studies; Planning & Development SC Business & Economics; Environmental Sciences & Ecology; Public Administration GA 406MX UT WOS:000167220700006 ER PT J AU Aaronson, D AF Aaronson, D TI A note on the benefits of homeownership SO JOURNAL OF URBAN ECONOMICS LA English DT Article ID MOBILITY AB This brief note adds to recent work that attempts to identify externalities associated with homeownership. The results suggest that some of the homeownership effect found by Green and White is driven by family characteristics associated with homeownership. especially residential stability. However, as much as home-ownership increases residential stability, ii appears to be correlated with higher school attainment. Attempts to control for endogeneity cannot climinate this finding. (C) 2000 Academic Press. C1 Fed Reserve Bank, Dept Res, Chicago, IL 60604 USA. RP Aaronson, D (reprint author), Fed Reserve Bank, Dept Res, 230 S LaSalle St, Chicago, IL 60604 USA. NR 13 TC 95 Z9 95 U1 2 U2 10 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 0094-1190 J9 J URBAN ECON JI J. Urban Econ. PD MAY PY 2000 VL 47 IS 3 BP 356 EP 369 DI 10.1006/juec.1999.2144 PG 14 WC Economics; Urban Studies SC Business & Economics; Urban Studies GA 311ME UT WOS:000086887400002 ER PT J AU Alter, AB McGranahan, LM AF Alter, AB McGranahan, LM TI Reexamining the filibuster and proposal powers in the Senate SO LEGISLATIVE STUDIES QUARTERLY LA English DT Article; Proceedings Paper CT Annual Meeting of the American-Political-Science-Association CY AUG 28-SEP 02, 1996 CL SAN FRANCISCO, CALIFORNIA SP Amer Polit Sci Assoc ID UNANIMOUS CONSENT AGREEMENTS AB Conventional wisdom views the Senate filibuster as a protection of minority rights. In this paper we challenge this intuition by showing that this common belief always holds true only for specific assumptions about Senate procedures. We show that under an open rule, while the filibuster option may advantage the minority, it is also true that the filibuster option may benefit the proposer at the expense of the minority. Whether the filibuster under an open rule advantages or disadvantages the minority, the majority, or the proposer, is a function of the proposer's preferred policy, the status quo, and the costs faced by potential filibusterers. The use of the filibuster in today's Senate serves the interests of the minority at the expense of the majority. Far from preserving the Senate's role as a deliberative assembly, the filibuster today encourages rampant individualism and obstructionism, endless delays and unfocused discussion, hardly conducive to the thoughtful consideration of measures to solve vexing problems of public policy. C1 Stanford Univ, Dept Polit Sci, Stanford, CA 94305 USA. Fed Reserve Bank Chicago, Chicago, IL 60604 USA. RP Alter, AB (reprint author), Stanford Univ, Dept Polit Sci, Stanford, CA 94305 USA. NR 21 TC 6 Z9 6 U1 0 U2 2 PU COMPARATIVE LEGISLATIVE RES CENTER PI IOWA CITY PA UNIV OF IOWA, W307 SEASHORE HALL, IOWA CITY, IA 52242-1409 USA SN 0362-9805 J9 LEGIS STUD QUART JI Legis. Stud. Q. PD MAY PY 2000 VL 25 IS 2 BP 259 EP 284 DI 10.2307/440371 PG 26 WC Political Science SC Government & Law GA 310KJ UT WOS:000086827000006 ER PT J AU Bradbury, KL AF Bradbury, KL TI Rising tide in the labor market: To what degree do expansions benefit the disadvantaged? SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article ID RACIAL UNEMPLOYMENT GAP; EMPLOYMENT; 1980S AB The current U.S. economic expansion is unusually long and strong. Has it served as a "rising tide" to float all boats in the labor market-benefiting everyone? To what degree are groups that are typically disadvantaged in the labor market-blacks, women, teens, the less educated-participating in the current prosperity? To investigate the effects of economic expansion (or recession) on various labor market groups, this article presents data that describe the patterns of labor force status by race, sex, education, and age (teens) during recent decades. The author finds that while virtually all groups are seeing improvements in labor market outcomes in the current expansion, the gaps between disadvantaged groups and the rest of the economy are shrinking more in some cases than in others. Moreover, even the strong and long expansion of the 1990s has not reduced the gaps to zero. She finds that the analogy with the tide breaks down when one asks whether a strong economy raises all boats to the same level; disadvantaged groups still have above-average unemployment land black men have below-average employment rates) in the best of times. The ongoing problem is that the status of being left out or slower-gaining remains disproportionately concentrated among blacks and teens, where the gaps remain sizable. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Bradbury, KL (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 31 TC 10 Z9 10 U1 0 U2 6 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD MAY-JUN PY 2000 BP 3 EP + PG 32 WC Economics SC Business & Economics GA 350FN UT WOS:000089090400001 ER PT J AU Kodrzycki, YK AF Kodrzycki, YK TI Discouraged and other marginally attached workers: Evidence on their role in the labor market SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article AB The combination of very low unemployment rates and somewhat limited wage and salary pressures has called into question our ability to measure labor market tightness. One issue is the extent to which labor availability is understated, given the existence of people who are not actively looking for work but express interest in working. This note examines the evidence on discouraged and other marginally attached workers. The author concludes that the number of discouraged and other marginally attached workers is extremely low, and their inclusion in an expanded measure of unemployment is unlikely to change the conclusion that the current jobless rate is the lowest in three decades. Marginally attached workers are more concentrated than the unemployed in demographic groups whose employment-population ratios are low. As a group, they are less likely to become employed or remain employed. She finds that the decline in their number in recent years is due in large measure to the success of unemployed workers in finding jobs. Favorable economic conditions serve to limit the number who drop out of the officially measured work force. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Kodrzycki, YK (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 1 TC 5 Z9 5 U1 0 U2 3 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD MAY-JUN PY 2000 BP 35 EP + PG 8 WC Economics SC Business & Economics GA 350FN UT WOS:000089090400002 ER PT J AU Tannenwald, R AF Tannenwald, R TI The neutrality of Massachusetts' taxation of financial institutions SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article AB The provision of financial services has changed dramatically over the past two decades. Technological innovation and deregulation have extended providers' geographic range and broadened the array of products they are capable of delivering. These changes have intensified competition among financial service firms. In recent years Massachusetts, like other states, has passed legislation designed to narrow disparities among the tax burdens of these institutions. At the same time, the Commonwealth has passed tax cuts designed to enhance the competiveness of Massachusetts-based financial institutions. Consequently, the degree to which the Commonwealth has actually leveled the tax playing field for them is unclear. This article attempts to resolve the issue. The author concludes that tax changes enacted in recent years have widened some disparities in tax treatment of Massachusetts-based financial institutions while narrowing others. Tax burdens on most Massachusetts-based financial institutions have been reduced, enhancing their competitive standing vis-g-vis their out-of-state rivals. However, it is not clear that the Commonwealth has narrowed interindustry differences in tax burdens. The author proposes that in the interests of tax neutrality, fairness, and administrative simplicity, the Commonwealth might consider narrowing disparities in tax treatment among financial institutions. He believes that measures designed to reduce differences in tax burdens merit further attention. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Tannenwald, R (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 26 TC 1 Z9 1 U1 0 U2 1 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD MAY-JUN PY 2000 BP 41 EP + PG 17 WC Economics SC Business & Economics GA 350FN UT WOS:000089090400003 ER PT J AU Balke, NS AF Balke, NS TI Credit and economic activity: Credit regimes and nonlinear propagation of shocks SO REVIEW OF ECONOMICS AND STATISTICS LA English DT Article ID MONETARY TRANSMISSION MECHANISM; NUISANCE PARAMETER; BUSINESS CYCLES; POLICY; MONEY AB In this paper, we examine empirically whether credit plays a role as a nonlinear propagator of shocks. This propagation takes the form of a threshold vector autoregression in which a regime change occurs if credit conditions cross a critical threshold. Using nonlinear impulse-response functions, we evaluate the dynamics implied by the threshold model. These suggest that shocks have a larger effect on output in the "tight" credit regime than is normally the case, and that contractionary monetary shocks typically have a larger effect than expansionary shocks. Finally, using a nonlinear version of historical decompositions, we attempt to determine the relative contribution to output growth of shocks and the nonlinear structure. C1 So Methodist Univ, Dallas, TX 75275 USA. Fed Reserve Bank, Dallas, TX USA. RP Balke, NS (reprint author), So Methodist Univ, Dallas, TX 75275 USA. NR 25 TC 59 Z9 60 U1 0 U2 6 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 0034-6535 J9 REV ECON STAT JI Rev. Econ. Stat. PD MAY PY 2000 VL 82 IS 2 BP 344 EP 349 DI 10.1162/rest.2000.82.2.344 PG 6 WC Economics; Social Sciences, Mathematical Methods SC Business & Economics; Mathematical Methods In Social Sciences GA 316DE UT WOS:000087151700015 ER PT J AU Pilloff, SJ Rhoades, SA AF Pilloff, SJ Rhoades, SA TI Do large, diversified banking organizations have competitive advantages? SO REVIEW OF INDUSTRIAL ORGANIZATION LA English DT Article DE banking; antitrust; market share; market structure; competition ID MARKET SHARE; POWER AB The issue of whether large, geographically diversified banking organizations (LDBs) have net competitive advantages, over smaller banks, that benefit retail customers in individual local markets has important implications for antitrust policy and the viability of smaller banks. If LDBs possess net advantages, then large banks may be considered an extra-competitive force in the antitrust analysis of proposed bank mergers and the future viability of small banks might be doubtful. The results of this paper, however, do not support the view that LDBs have net competitive advantages. LDBs generally had difficulty maintaining, much less increasing, their deposit shares from 1990 to 1996 in markets in which they made no acquisitions. The analysis also indicates that market share changes experienced by LDBs vary with a number of LDB and market characteristics. C1 Fed Reserve Board, Financial Struct Sect, Washington, DC 20551 USA. RP Pilloff, SJ (reprint author), Fed Reserve Board, Financial Struct Sect, Washington, DC 20551 USA. NR 21 TC 3 Z9 3 U1 0 U2 1 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0889-938X J9 REV IND ORGAN JI Rev. Ind. Organ. PD MAY PY 2000 VL 16 IS 3 BP 287 EP 302 DI 10.1023/A:1007805424725 PG 16 WC Economics; Management SC Business & Economics GA 288TC UT WOS:000085579700005 ER PT J AU Daly, MC Buchel, F Duncan, GJ AF Daly, MC Buchel, F Duncan, GJ TI Premiums and penalties for surplus and deficit education - Evidence from the United States and Germany SO ECONOMICS OF EDUCATION REVIEW LA English DT Article DE overeducation; undereducation; surplus education; deficit education; wages; cross-country comparisons ID LABOR-MARKET; EARNINGS; OVEREDUCATION; INEQUALITY; JOBS AB An intriguing finding ih the literature on the role of education in the labor market concerns workers who have acquired either more or less education than they say their jobs require. Contrary to predictions from a rigid, structural view of jobs, several authors have found that the labor market rewards workers for having completed more schooling than their jobs require and penalizes workers who have 'too little' schooling. We investigate whether the structural changes in the labor market in the United States over the 1970s and 1980s (see Levy, F., & Murnane, R. (1992). US earnings levels and earnings inequality: a review of recent trends and proposed explanations. Journal of Economic Literature, 30, 1333-1381) affected the rewards and penalties associated with having too much or too little schooling for a job. We then examine whether the same rewards and penalties for surplus and deficit education observed in the United States apply in Germany, a country with a much more structured educational system and labor market. We test explicitly for differences over time in the United States and at a point in time between the United States and Germany. We find, consistent with a universalistic view of labor markets, more similarities across countries than over time. (C) 2000 Elsevier Science Ltd. All rights reserved. C1 Fed Reserve Bank San Francisco, San Francisco, CA 94105 USA. Max Planck Inst Human Dev, D-14195 Berlin, Germany. Northwestern Univ, Inst Policy Res, Evanston, IL 60208 USA. RP Daly, MC (reprint author), Fed Reserve Bank San Francisco, 101 Market St,Mailstop 1130, San Francisco, CA 94105 USA. NR 34 TC 45 Z9 45 U1 0 U2 6 PU PERGAMON-ELSEVIER SCIENCE LTD PI OXFORD PA THE BOULEVARD, LANGFORD LANE, KIDLINGTON, OXFORD OX5 1GB, ENGLAND SN 0272-7757 J9 ECON EDUC REV JI Econ. Educ. Rev. PD APR PY 2000 VL 19 IS 2 BP 169 EP 178 DI 10.1016/S0272-7757(99)00041-2 PG 10 WC Economics; Education & Educational Research SC Business & Economics; Education & Educational Research GA 297LC UT WOS:000086083500005 ER PT J AU Tunis, C AF Tunis, C TI Praise for China insights SO ECONTENT LA English DT Letter C1 Fed Reserve Syst, Board Governors, Res Lib, Washington, DC 20551 USA. RP Tunis, C (reprint author), Fed Reserve Syst, Board Governors, Res Lib, Washington, DC 20551 USA. NR 0 TC 0 Z9 0 U1 0 U2 0 PU ONLINE INC PI WILTON PA 213 DANBURY RD, WILTON, CT 06897-4007 USA SN 1525-2531 J9 ECONTENT PD APR-MAY PY 2000 VL 23 IS 2 BP 8 EP 8 PG 1 WC Information Science & Library Science SC Information Science & Library Science GA 298BD UT WOS:000086118700003 ER PT J AU Gilbert, RA AF Gilbert, RA TI The advent of the Federal Reserve and the efficiency of the payments system: The collection of checks, 1915-1930 SO EXPLORATIONS IN ECONOMIC HISTORY LA English DT Article DE Federal Reserve; payments system; efficiency ID EXPECTATIONS; ADJUSTMENT; REGIME AB This paper investigates whether the services of the Federal Reserve System improved the efficiency of the system in the United States for collecting checks relative to the efficiency of the system used by banks just prior to the formation of the Federal Reserve. There are two types of evidence that the Fed's services improved efficiency. First, the Reserve Banks quickly became major processors of interregional checks, even though banks could have continued to use the prior payments arrangements. The timing of the growth in Reserve Bank collection services was not consistent with the view that banks simply took advantage of a subsidy provided by the Fed. The share of checks collected by the Reserve Banks increased rapidly during the period when the Fed charged banks fees to cover their collection expenses. Second, declines in the ratios of cash to total assets of banks can be attributed to the development of the Fed's check-collection services. (C) 2000 Academic Press. C1 Fed Reserve Bank, St Louis, MO 63102 USA. RP Gilbert, RA (reprint author), Fed Reserve Bank, St Louis, MO 63102 USA. NR 31 TC 6 Z9 6 U1 0 U2 4 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 0014-4983 J9 EXPLOR ECON HIST JI Explor. Econ. Hist. PD APR PY 2000 VL 37 IS 2 BP 121 EP 148 DI 10.1006/exeh.2000.0736 PG 28 WC Economics; History Of Social Sciences SC Business & Economics; Social Sciences - Other Topics GA 310ZN UT WOS:000086859800001 ER PT J AU Wright, JH AF Wright, JH TI Confidence sets for cointegrating coefficients based on stationarity tests SO JOURNAL OF BUSINESS & ECONOMIC STATISTICS LA English DT Article DE cointegration; money demand; regression; robust inference; unit roots ID CONSISTENT COVARIANCE-MATRIX; UNITED-STATES; REGRESSORS; MODELS; HETEROSKEDASTICITY; VECTORS; DEMAND; ROOTS; TIME AB Standard methods for inference in cointegrating systems require: all the variables to have exact unit roots and are not at all robust even to slight violations of this condition. In this article, I consider an alternative approach to inference in a cointegrating system. This involves testing the hypothesis that a cointegrating vector takes on a specified value by testing for the stationarity of the associated residual. Confidence sets for the cointegrating vector can be constructed by exploiting the equivalence between tests and confidence sets. This method has the advantage that it remains Valid even if the regressors have roots that are not exactly equal to unity. C1 Fed Reserve Syst, Board Governors, Int Finance Div, Washington, DC 20551 USA. RP Wright, JH (reprint author), Fed Reserve Syst, Board Governors, Int Finance Div, Washington, DC 20551 USA. NR 23 TC 13 Z9 13 U1 3 U2 3 PU AMER STATISTICAL ASSOC PI ALEXANDRIA PA 1429 DUKE ST, ALEXANDRIA, VA 22314 USA SN 0735-0015 J9 J BUS ECON STAT JI J. Bus. Econ. Stat. PD APR PY 2000 VL 18 IS 2 BP 211 EP 222 DI 10.2307/1392558 PG 12 WC Economics; Social Sciences, Mathematical Methods; Statistics & Probability SC Business & Economics; Mathematical Methods In Social Sciences; Mathematics GA 337NH UT WOS:000088367700009 ER PT J AU Wieland, V AF Wieland, V TI Learning by doing and the value of optimal experimentation SO JOURNAL OF ECONOMIC DYNAMICS & CONTROL LA English DT Article DE Bayesian learning; optimal control with unknown parameters; learning by doing; experimentation; dynamic programming ID MONETARY-POLICY; LONG-RUN; MODELS; NONCONVEXITIES; INFORMATION; PARAMETERS; DEMAND AB Recent research on learning by doing has provided the limit properties of beliefs and actions for a class of learning problems, in which experimentation is an important aspect of optimal decision making. However, under these conditions the optimal policy cannot be derived analytically, because Bayesian learning about unknown parameters introduces a nonlinearity in the dynamic optimization problem. This paper utilizes numerical methods to characterize the optimal policy function for, a learning by doing problem that is general enough for practical economic applications. The optimal policy is found to incorporate a substantial degree of experimentation under a wide range of initial beliefs about the unknown parameters. Dynamic simulations indicate that optimal experimentation dramatically improves the speed of learning and the stream of future payoffs. Furthermore, these simulations reveal that a policy, which separates control and estimation and does not incorporate experimentation, frequently induces a longlasting bias in the control and target variables. While these sequences tend to converge steadily under the optimal policy, they frequently exhibit non-stationary behavior when estimation and control are treated separately. (C) 2000 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Wieland, V (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 38 TC 46 Z9 46 U1 1 U2 6 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0165-1889 J9 J ECON DYN CONTROL JI J. Econ. Dyn. Control PD APR PY 2000 VL 24 IS 4 BP 501 EP 534 DI 10.1016/S0165-1889(99)00015-9 PG 34 WC Economics SC Business & Economics GA 283RH UT WOS:000085288700002 ER PT J AU Fernandes, A Phelan, C AF Fernandes, A Phelan, C TI A recursive formulation for repeated agency with history dependence SO JOURNAL OF ECONOMIC THEORY LA English DT Article DE mechanism design; repeated agency ID REPEATED MORAL HAZARD; PRIVATE INFORMATION; PRINCIPAL; INSURANCE AB We present general recursive methods to handle environments where privately observed variables are linked over time. We show that incentive compatible contracts are implemented recursively with a threat keeping constraint in addition to the usual temporary incentive compatibility and promise keeping conditions. Journal of Economic Literature Classification Numbers: D30, D31, D80, D82. (C) 2000 Academic Press. C1 CEMFI, Madrid 28014, Spain. Fed Reserve Bank Minneapolis, Minneapolis, MN 55480 USA. RP Fernandes, A (reprint author), CEMFI, Casado Alisal 5, Madrid 28014, Spain. RI nipe, cef/A-4218-2010 NR 15 TC 55 Z9 55 U1 0 U2 2 PU ACADEMIC PRESS INC PI SAN DIEGO PA 525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA SN 0022-0531 J9 J ECON THEORY JI J. Econ. Theory PD APR PY 2000 VL 91 IS 2 BP 223 EP 247 DI 10.1006/jeth.1999.2619 PG 25 WC Economics SC Business & Economics GA 308NY UT WOS:000086720800004 ER PT J AU Stevens, GVG AF Stevens, GVG TI Politics, economics and investment: Explaining plant and equipment spending by US direct investors in Argentina, Brazil and Mexico SO JOURNAL OF INTERNATIONAL MONEY AND FINANCE LA English DT Article DE investment; direct investment; political effects; nonlinear estimation AB Few economists or laypeople would deny that political events can have an important, sometimes even overwhelming, impact on economic decisions in general, and investment decisions in particular. The first goal of this paper is to integrate a number of political and non-traditional economic variables into the standard theory of investment based on the maximization of the expected value of the firm. The second goal is to test this generalized investment theory on a particularly fertile field for gauging the interaction of political and economic factors: the plant and equipment spending of foreign manufacturing affiliates of US multinationals in Argentina, Brazil, and Mexico. The results of these tests show that the generalized theory is far superior to the traditional alternatives in explaining the real investment of the sample for the 1958-1989 period. Published by Elsevier Science Ltd. JEL classification: F23; E22; D21; O19. C1 Fed Reserve Board, Div Int Finance, Washington, DC 20551 USA. RP Stevens, GVG (reprint author), Fed Reserve Board, Div Int Finance, Washington, DC 20551 USA. NR 26 TC 5 Z9 5 U1 0 U2 2 PU ELSEVIER SCI LTD PI OXFORD PA THE BOULEVARD, LANGFORD LANE, KIDLINGTON, OXFORD OX5 1GB, OXON, ENGLAND SN 0261-5606 J9 J INT MONEY FINANC JI J. Int. Money Finan. PD APR PY 2000 VL 19 IS 2 BP 153 EP 183 DI 10.1016/S0261-5606(99)00043-1 PG 31 WC Business, Finance SC Business & Economics GA 315EL UT WOS:000087099600001 ER PT J AU Phelan, C Trejos, A AF Phelan, C Trejos, A TI The aggregate effects of sectoral reallocations SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE sectoral shocks; business cycles; matching ID JOB DESTRUCTION; EMPLOYMENT REALLOCATION; CYCLICAL UNEMPLOYMENT; CREATION; SHIFTS; SHOCKS; MODEL AB Can a one-time, permanent change in the fundamentals behind the sectoral composition of the economy prompt an aggregate downturn? Can this downturn be nonnegligible, even if one uses US data to determine the relative size of gross vs. net job flows, and the importance of job creation costs? Can one consider the military build-down of the 1990s as a plausible cause for the 1990-1991 recession? Do sectoral reallocations generate responses that are qualitatively similar to 'productivity shocks'? We use a variant of the Mortensen-Pissarides (1994, Review of Economic Studies 61, 397-415) job creation/destruction model, calibrate it to US labor market data, and run experiments that suggest one can answer yes to all these questions. (C) 2000 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank Minneapolis, Minneapolis, MN 55480 USA. Northwestern Univ, Dept Econ, Evanston, IL 60208 USA. RP Phelan, C (reprint author), Fed Reserve Bank Minneapolis, 90 Hennepin Ave, Minneapolis, MN 55480 USA. EM cphelan@res.mpls.frb.fed.us NR 26 TC 11 Z9 11 U1 0 U2 3 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD APR PY 2000 VL 45 IS 2 BP 249 EP 268 DI 10.1016/S0304-3932(99)00056-2 PG 20 WC Business, Finance; Economics SC Business & Economics GA 299MY UT WOS:000086203400001 ER PT J AU Balke, NS Wynne, MA AF Balke, NS Wynne, MA TI An equilibrium analysis of relative price changes and aggregate inflation SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE relative prices; inflation; cross-section distribution of prices ID BUSINESS-CYCLE; VARIABILITY; RETURNS; SCALE AB Inflation is positively correlated with the variability of relative prices as measured by the standard deviation of the cross-section distribution of prices, and also with the third moment (skewness) of the cross-section distribution of prices. The conventional interpretation of these relationships is that they reflect sluggishness in the adjustment of individual prices in response to shocks. In this paper we question this interpretation. First, we show that similar correlations among the moments exist in alternative measures of underlying technology shocks. Second, when these shocks are fed into a general equilibrium model with multiple sectors and flexible prices, the resulting prices also display a positive correlation between aggregate inflation and skewness of the cross-section distribution. (C) 2000 Elsevier Science B.V. All rights reserved. C1 So Methodist Univ, Dept Econ, Dallas, TX 75275 USA. Fed Reserve Bank Dallas, Dept Res, Dallas, TX 75201 USA. RP Balke, NS (reprint author), So Methodist Univ, Dept Econ, Dallas, TX 75275 USA. NR 22 TC 15 Z9 15 U1 0 U2 0 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD APR PY 2000 VL 45 IS 2 BP 269 EP 292 DI 10.1016/S0304-3932(99)00051-3 PG 24 WC Business, Finance; Economics SC Business & Economics GA 299MY UT WOS:000086203400002 ER PT J AU Tootell, GMB AF Tootell, GMB TI Reserve banks, the discount rate recommendation, and FOMC policy SO SOUTHERN ECONOMIC JOURNAL LA English DT Article AB In the United States, private citizens play little direct role in policymaking. The directors of the boards of the regional Federal Reserve banks are an apparent exception to this rule. These directors recommend changes in the discount rate, although the Board of Governors decides whether to act on the recommendations. These directors would have greater influence if they affected the FOMC votes of their district bank presidents. This paper shows that the FOMC votes of the regional bank presidents are strongly correlated with the discount rate recommendation of their bank's board. Several alternative explanations for the correlation are then examined. C1 Fed Reserve Bank Boston, Res Dept, Boston, MA 02106 USA. RP Tootell, GMB (reprint author), Fed Reserve Bank Boston, Res Dept, 600 Atlantic Ave, Boston, MA 02106 USA. NR 17 TC 3 Z9 3 U1 0 U2 0 PU UNIV NORTH CAROLINA PI CHAPEL HILL PA SOUTHERN ECONOMIC JOURNAL, CHAPEL HILL, NC 27514 USA SN 0038-4038 J9 SOUTHERN ECON J JI South. Econ. J. PD APR PY 2000 VL 66 IS 4 BP 957 EP 975 DI 10.2307/1061538 PG 19 WC Economics SC Business & Economics GA 303YD UT WOS:000086454600008 ER PT J AU Peek, J Rosengren, ES AF Peek, J Rosengren, ES TI Collateral damage: Effects of the Japanese bank crisis on real activity in the United States SO AMERICAN ECONOMIC REVIEW LA English DT Article ID INVESTMENT; MARKET; CRUNCH AB The Japanese banking crisis provides a natural experiment to test whether a loan supply shock can affect real economic activity. Because the shock was external to U.S. cc-edit markets, yet connected through the Japanese bank penetration of U.S. markets, this event allows Its to identify an exogenous loan supply shock and ultimately link that shock to construction activity in U.S. commercial real estate markets. We exploit the variation across geographically distinct commercial real estate markets to establish conclusively that loan supply shocks emanating front Japan had real effects on economic activity in the United States, (JEL E44, F36). C1 Boston Coll, Dept Econ, Chestnut Hill, MA 02467 USA. Fed Reserve Bank Boston, Res Dept T 8, Boston, MA 02106 USA. RP Peek, J (reprint author), Boston Coll, Dept Econ, Chestnut Hill, MA 02467 USA. NR 21 TC 196 Z9 196 U1 2 U2 16 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD MAR PY 2000 VL 90 IS 1 BP 30 EP 45 DI 10.1257/aer.90.1.30 PG 16 WC Economics SC Business & Economics GA 301ZG UT WOS:000086340000003 ER PT J AU McCabe, KA Mukherji, A Runkle, DE AF McCabe, KA Mukherji, A Runkle, DE TI An experimental study of information and mixed-strategy play in the three-person matching-pennies game SO ECONOMIC THEORY LA English DT Article DE Nash equilibrium; Bayesian learning; experimental ID MINIMAX HYPOTHESIS; EQUILIBRIUM; BEHAVIOR AB Recent experiments on mixed-strategy play in experimental games reject the hypothesis that subjects play a mixed strategy even when that strategy is the unique Nash equilibrium prediction. However, in a three-person matching-pennies game played with perfect monitoring and complete payoff information, we cannot reject the hypothesis that subjects play the mixed-strategy Nash equilibrium. Given this support for mixed-strategy play, we then consider two qualitatively different learning theories (sophisticated Bayesian and naive Bayesian) which predict that the amount of information given to subjects will determine whether they can learn to play the predicted mixed strategies. We reject the hypothesis that subjects play the symmetric mixed-strategy Nash equilibrium when they do not have complete payoff information. This finding suggests that players did not use sophisticated Bayesian learning to reach the mixed-strategy Nash equilibrium. C1 Univ Minnesota, Minneapolis, MN 55455 USA. Univ Arizona, Coll Business & Publ Adm, Econ Sci Lab, Tucson, AZ 85721 USA. Univ Arizona, Coll Business & Publ Adm, Dept Econ, Tucson, AZ 85721 USA. Fed Reserve Bank Minneapolis, Res Dept, Minneapolis, MN 55480 USA. RP Mukherji, A (reprint author), Univ Minnesota, Minneapolis, MN 55455 USA. OI McCabe, Kevin/0000-0003-0544-157X NR 31 TC 8 Z9 8 U1 1 U2 5 PU SPRINGER VERLAG PI NEW YORK PA 175 FIFTH AVE, NEW YORK, NY 10010 USA SN 0938-2259 J9 ECON THEOR JI Econ. Theory PD MAR PY 2000 VL 15 IS 2 BP 421 EP 462 DI 10.1007/s001990050020 PG 42 WC Economics SC Business & Economics GA 295JD UT WOS:000085962200009 ER PT J AU van Wincoop, E AF van Wincoop, E TI A method for solving multi-region models SO ECONOMICS LETTERS LA English DT Article DE multi-region; general equilibrium; numerical solution AB The paper develops a two-step method for solving multi-region general equilibrium models. The method has the advantage that the number of regions can be arbitrarily large. (C) 2000 Elsevier Science S.A. All rights reserved. C1 Fed Reserve Bank New York, Int Res, New York, NY 10045 USA. RP van Wincoop, E (reprint author), Fed Reserve Bank New York, Int Res, 33 Liberty St, New York, NY 10045 USA. NR 2 TC 0 Z9 0 U1 0 U2 0 PU ELSEVIER SCIENCE SA PI LAUSANNE PA PO BOX 564, 1001 LAUSANNE, SWITZERLAND SN 0165-1765 J9 ECON LETT JI Econ. Lett. PD MAR PY 2000 VL 66 IS 3 BP 333 EP 336 DI 10.1016/S0165-1765(99)00231-1 PG 4 WC Economics SC Business & Economics GA 284NR UT WOS:000085338900014 ER PT J AU Kauffman, RJ McAndrews, J Wang, YM AF Kauffman, RJ McAndrews, J Wang, YM TI Opening the "black box" of network externalities in network adoption SO INFORMATION SYSTEMS RESEARCH LA English DT Article DE duration models; economic analysis; electronic banking; financial services; hazard function; IT investment; network externalities; network goods; technology adoption ID INFORMATION TECHNOLOGY; INTERORGANIZATIONAL SYSTEMS; DIFFUSION-MODELS; COMPATIBILITY; INNOVATION; MARKETS AB Recent theoretical work suggests that network externalities are a determinant of network adoption. However, few empirical studies have reported the impact of network externalities on the adoption of networks. As a result, little is known about the extent to which network externalities may influence network adoption and diffusion. Using electronic banking as a context: and an econometric technique called hazard modeling, this research examines empirically the impact of network externalities and other influences that combine to determine network membership. The results support the network externalities hypothesis. We find that banks in markets that can generate a larger effective network size and a higher level of externalities tend to adopt early, while the size of a bank's own branch network (a proxy for the opportunity cost of adoption) decreases the probability of early adoption. C1 Univ Minnesota, Carlson Sch Management, Minneapolis, MN 55455 USA. Fed Reserve Bank New York, Dept Res, New York, NY 10045 USA. Calif State Univ Long Beach, Coll Business Adm, Long Beach, CA 90840 USA. RP Kauffman, RJ (reprint author), Univ Minnesota, Carlson Sch Management, Minneapolis, MN 55455 USA. RI KAUFFMAN, Robert/G-2767-2012 NR 55 TC 102 Z9 108 U1 2 U2 32 PU INST OPERATIONS RESEARCH MANAGEMENT SCIENCES PI LINTHICUM HTS PA 901 ELKRIDGE LANDING RD, STE 400, LINTHICUM HTS, MD 21090-2909 USA SN 1047-7047 J9 INFORM SYST RES JI Inf. Syst. Res. PD MAR PY 2000 VL 11 IS 1 BP 61 EP 82 DI 10.1287/isre.11.1.61.11783 PG 22 WC Information Science & Library Science; Management SC Information Science & Library Science; Business & Economics GA 307EV UT WOS:000086641100005 ER PT J AU Brewer, E Minton, BA Moser, JT AF Brewer, E Minton, BA Moser, JT TI Interest-rate derivatives and bank lending SO JOURNAL OF BANKING & FINANCE LA English DT Article DE banking; derivatives; intermediation; swaps; futures ID MODELS; FIRMS; RISK AB We study the relationship between bank participation in derivatives contracting and bank lending for the period 30 June 1985 through the end of 1992. Since 1985 commercial banks have become active participants in the interest-rate derivative products markets as end-users, or intermediaries, or both. Over much of this period significant changes were made in the composition of bank portfolios. We find that banks using interest-rate derivatives experience greater growth in their commercial and industrial (C&I) loan portfolios than banks that do not use these financial instruments. This result is consistent with the model of Diamond (Review of Economic Studies 51, 1984, 393-414) which predicts that intermediaries' use of derivatives enables increased reliance on their comparative advantage as delegated monitors. (C) 2000 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank Chicago, Res Dept, Chicago, IL 60604 USA. Ohio State Univ, Columbus, OH 43210 USA. RP Moser, JT (reprint author), Fed Reserve Bank Chicago, Res Dept, 230 S LaSalle St, Chicago, IL 60604 USA. EM jmoser@frbchi.org NR 24 TC 17 Z9 17 U1 2 U2 5 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 EI 1872-6372 J9 J BANK FINANC JI J. Bank Financ. PD MAR PY 2000 VL 24 IS 3 BP 353 EP 379 DI 10.1016/S0378-4266(99)00041-2 PG 27 WC Business, Finance; Economics SC Business & Economics GA 290KL UT WOS:000085675400001 ER PT J AU Jones, CI Williams, JC AF Jones, CI Williams, JC TI Too much of a good thing? The economics of investment in R&D SO JOURNAL OF ECONOMIC GROWTH LA English DT Article DE endogenous growth; optimal R&D; externalities ID GROWTH AB Research and development is a key determinant of long-run productivity and welfare. A central issue is whether a decentralized economy undertakes too little or too much R&D. We develop an endogenous growth model that incorporates parametrically four important distortions to R&D: the surplus appropriability problem, knowledge spillovers, creative destruction, and duplication externalities. Calibrating the model, we find that the decentralized economy typically underinvests in R&D relative to what is socially optimal. The only exceptions to this conclusion occur when the duplication externality is strong and the equilibrium real interest rate is simultaneously high. C1 Stanford Univ, Dept Econ, Stanford, CA 94305 USA. Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Jones, CI (reprint author), Stanford Univ, Dept Econ, Stanford, CA 94305 USA. RI Williams, John/A-8226-2009 NR 27 TC 152 Z9 154 U1 2 U2 19 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 1381-4338 J9 J ECON GROWTH JI J. Econ. Growth PD MAR PY 2000 VL 5 IS 1 BP 65 EP 85 DI 10.1023/A:1009826304308 PG 21 WC Economics SC Business & Economics GA 315GZ UT WOS:000087106100003 ER PT J AU Moen, JR Tallman, EW AF Moen, JR Tallman, EW TI Clearinghouse membership and deposit contraction during the panic of 1907 SO JOURNAL OF ECONOMIC HISTORY LA English DT Article ID CENTRAL BANKING AB Was clearinghouse membership a key factor mitigating withdrawals from intermediaries during the Panic of 1907? Analyzing balance-sheet information on institutions in New York and Chicago, we find evidence that clearinghouse members had smaller contractions in demand deposits than did nonmembers. New York City trusts, isolated from the clearinghouse, were subject to heightened perceptions of risk, and suffered large-scale withdrawals because they were outside of the clearinghouse and therefore much less prepared to withstand large-scale depositor runs. We suggest that this aspect of the Panic of 1907 helped to forge support for the creation of a U.S. central bank. C1 Univ Mississippi, Dept Econ & Finance, Sch Business Adm, University, MS 38677 USA. Fed Reserve Bank, Dept Res, Atlanta, GA 30303 USA. RP Moen, JR (reprint author), Univ Mississippi, Dept Econ & Finance, Sch Business Adm, 333 Holman, University, MS 38677 USA. NR 21 TC 22 Z9 22 U1 0 U2 0 PU CAMBRIDGE UNIV PRESS PI NEW YORK PA 40 WEST 20TH STREET, NEW YORK, NY 10011-4211 USA SN 0022-0507 J9 J ECON HIST JI J. Econ. Hist. PD MAR PY 2000 VL 60 IS 1 BP 145 EP 163 PG 19 WC Economics; History; History Of Social Sciences SC Business & Economics; History; Social Sciences - Other Topics GA 295DG UT WOS:000085951000006 ER PT J AU Kay, SJ AF Kay, SJ TI Privatizing pensions: Prospects for the Latin American reforms SO JOURNAL OF INTERAMERICAN STUDIES AND WORLD AFFAIRS LA English DT Review C1 Fed Reserve Bank Atlanta, Latin Amer Res Grp, Atlanta, GA 30303 USA. RP Kay, SJ (reprint author), Fed Reserve Bank Atlanta, Latin Amer Res Grp, Atlanta, GA 30303 USA. NR 11 TC 5 Z9 5 U1 0 U2 1 PU UNIV MIAMI PI CORAL GABLES PA J INTERAMER STUD WORLD AFF PO BOX 248134, CORAL GABLES, FL 33124 USA SN 0022-1937 J9 J INTERAM STUD WORLD JI J. Interam. Stud. World Aff. PD SPR PY 2000 VL 42 IS 1 BP 133 EP 143 DI 10.2307/166468 PG 11 WC Area Studies; International Relations; Political Science SC Area Studies; International Relations; Government & Law GA 307VP UT WOS:000086675100006 ER PT J AU Buetow, GW Johnson, RR Runkle, DE AF Buetow, GW Johnson, RR Runkle, DE TI The inconsistency of return-based style analysis - And its implications. SO JOURNAL OF PORTFOLIO MANAGEMENT LA English DT Article AB The authors demonstrate that the usual application of the return-based style analysis relies on commercially available indexes that exhibit extreme multicollinearity. The subsequent results are volatile and have little meaning. As a result, the authors argue that implementing return-based style analysis with commercially available indexes can result in inaccurate and inappropriate investment decision-making. Even with multicollinearity, however, they demonstrate that the results of the analysis can be meaningful as long as the explanatory variables properly capture the investment objective of the portfolio. The authors conclude that the only way to implement return-based analysis is to use portfolio-specific benchmarks that properly capture the investment objectives of the portfolio. C1 BFRC Serv, Charlottesville, VA 22901 USA. Assoc Investment Management & Res, Charlottesville, VA 22903 USA. Fed Reserve Bank Minneapolis, Minneapolis, MN 55480 USA. RP Buetow, GW (reprint author), BFRC Serv, Charlottesville, VA 22901 USA. NR 13 TC 6 Z9 6 U1 1 U2 1 PU INSTITUTIONAL INVESTOR INC PI NEW YORK PA 488 MADISON AVENUE, NEW YORK, NY 10022 USA SN 0095-4918 J9 J PORTFOLIO MANAGE JI J. Portf. Manage. PD SPR PY 2000 VL 26 IS 3 BP 61 EP + DI 10.3905/jpm.2000.319722 PG 18 WC Business, Finance SC Business & Economics GA 313FC UT WOS:000086988800009 ER PT J AU Olivei, GP AF Olivei, GP TI Consumption risk-sharing across G-7 countries SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article ID HOME BIAS AB An intensely debated issue in international economics concerns the extent to which investors exploit the benefits from international trade in financial assets. Such benefits have long been acknowledged in theory but, despite the continuing process of financial integration and globalization, it is unclear whether they are fury exploited in actual practice. This article reexamines some of the evidence concerning the degree to which international financial markets help countries diversify away country-specific risks to achieve a mutually preferable allocation of consumption. By looking at national consumption correlations across G-7 countries, the author investigates whether greater incentives to diversify risks internationally have been accompanied by an effective increase in consumption risk-sharing. He finds that the apparent lack of consumption risk-sharing found in prior studies continued to persist in the 1990s and that the puzzle of low international consumption correlations is probably worse than usually thought. The author then considers alternative explanations for the puzzle and proposals to achieve a better degree of international risk-sharing. C1 Fed Reserve Bank Boston, Boston, MA 02106 USA. RP Olivei, GP (reprint author), Fed Reserve Bank Boston, Boston, MA 02106 USA. NR 18 TC 3 Z9 3 U1 0 U2 2 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD MAR-APR PY 2000 BP 3 EP + PG 13 WC Economics SC Business & Economics GA 319BD UT WOS:000087318400001 ER PT J AU Jordan, JS AF Jordan, JS TI Depositor discipline at failing banks SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article ID MARKET AB Uninsured depositors, whose deposits are not fully protected by federal deposit insurance, have an incentive to monitor banks' activities and impose additional funding costs on risky banks. This pricing is a form of market discipline, since the market penalizes banks for taking on greater risk. For banks that become troubled, market discipline can take a more severe form: Market participants may become unwilling to supply uninsured funds at any reasonable price. This study examines the effectiveness of depositor discipline at banks that failed in New England in the early 1990s. The empirical analysis examines whether failing banks in New England faced depositor discipline as they became troubled in the early 1990s, and whether these banks attempted to shield themselves from this discipline. Failing banks in New England experienced a 70 percent decline in their uninsured deposits in their final two years of operation. The author finds that despite the magnitude of the gay to fill, and despite the presence of close regulatory scrutiny, many failing banks increased their use of insured deposits enough to offset much of the short-fall created by the decline in uninsured deposits, diminishing the effectiveness of market discipline by depositors. C1 Fed Reserve Bank Boston, Boston, MA 02106 USA. RP Jordan, JS (reprint author), Fed Reserve Bank Boston, Boston, MA 02106 USA. NR 12 TC 17 Z9 17 U1 3 U2 5 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD MAR-APR PY 2000 BP 15 EP + PG 16 WC Economics SC Business & Economics GA 319BD UT WOS:000087318400002 ER PT J AU Schuh, S Triest, RK AF Schuh, S Triest, RK TI The role of firms in job creation and destruction in US manufacturing SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article ID FLOWS AB Research in recent years has documented extensively the fact that labor markets are characterized by large and pervasive flows of jobs among places of employment. However, virtually none of this research pertains to the role of the firm and its decisions in determining job creation and destruction. Previous research and data-gathering efforts have focused on employment at individual physical locations called establishments, or plants. This neglect leaves fundamental questions regarding the role of firms unanswered. Job reallocation occurring within firms may have very different causes and consequences from that occurring between firms. In this article the authors provide initial results from their ongoing study of the role of firms and corporate reorganization in the determination of job creation and destruction. Their results are striking Most job flows are between firms for small firms, but intrafirm flows dominate for very large firms. Most plants are in volatile small-firms, but employment is concentrated mainly in relatively stable large firms. While the small firm sector seems to be in constant flux, the large manufacturing firm sector appears to operate in a relatively steady, and perhaps planned fashion. C1 Fed Reserve Bank Boston, Boston, MA 02106 USA. RP Schuh, S (reprint author), Fed Reserve Bank Boston, Boston, MA 02106 USA. NR 9 TC 3 Z9 3 U1 0 U2 0 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD MAR-APR PY 2000 BP 29 EP + PG 17 WC Economics SC Business & Economics GA 319BD UT WOS:000087318400003 ER PT J AU Whitehead, JC AF Whitehead, JC TI Not-for-profits: An underdeveloped asset for America SO PROCEEDINGS OF THE AMERICAN PHILOSOPHICAL SOCIETY LA English DT Article C1 Federal Reserve Bank NY, New York, NY USA. RP Whitehead, JC (reprint author), Federal Reserve Bank NY, New York, NY USA. NR 0 TC 0 Z9 0 U1 0 U2 0 PU AMER PHILOSOPHICAL SOC PI PHILADELPHIA PA 104 SOUTH FIFTH ST, PHILADELPHIA, PA 19106-3387 USA SN 0003-049X J9 P AM PHILOS SOC JI Proc. Amer. Philos. Soc. PD MAR PY 2000 VL 144 IS 1 BP 77 EP 82 PG 6 WC Humanities, Multidisciplinary SC Arts & Humanities - Other Topics GA 317UR UT WOS:000087245800005 ER PT J AU Dolmas, J Huffman, GW Wynne, MA AF Dolmas, J Huffman, GW Wynne, MA TI Inequality, inflation, and central bank independence SO CANADIAN JOURNAL OF ECONOMICS-REVUE CANADIENNE D ECONOMIQUE LA English DT Article ID GROWTH AB What can account for the different contemporaneous inflation experiences of various countries, and of the same country over time? We present an analysis of the determination of inflation from a political economy perspective. We document a positive correlation between income inequality and inflation and then present a theory of the determination of inflation outcomes in democratic societies that illustrates how greater inequality leads to greater inflation, owing to a desire by voters for wealth redistribution. We conclude by showing that democracies with more independent central banks tend to have better inflation outcomes for a given degree of inequality. JEL Classification E5, H0. C1 So Methodist Univ, Dallas, TX 75275 USA. Fed Reserve Bank, Dallas, TX USA. RP Dolmas, J (reprint author), So Methodist Univ, Dallas, TX 75275 USA. NR 19 TC 11 Z9 11 U1 0 U2 5 PU UNIV TORONTO PRESS INC PI TORONTO PA JOURNALS DIVISION, 5201 DUFFERIN ST, DOWNSVIEW, TORONTO, ON M3H 5T8, CANADA SN 0008-4085 J9 CAN J ECON JI Can. J. Econ.-Rev. Can. Econ. PD FEB PY 2000 VL 33 IS 1 BP 271 EP 287 DI 10.1111/0008-4085.00015 PG 17 WC Economics SC Business & Economics GA 298UM UT WOS:000086157600015 ER PT J AU Robertson, J AF Robertson, J TI Forecasting economic time series. SO ECONOMIC JOURNAL LA English DT Book Review C1 Fed Reserve Bank, Atlanta, GA USA. RP Robertson, J (reprint author), Fed Reserve Bank, Atlanta, GA USA. NR 1 TC 0 Z9 0 U1 0 U2 0 PU BLACKWELL PUBL LTD PI OXFORD PA 108 COWLEY RD, OXFORD OX4 1JF, OXON, ENGLAND SN 0013-0133 J9 ECON J JI Econ. J. PD FEB PY 2000 VL 110 IS 461 BP F187 EP F188 PG 2 WC Economics SC Business & Economics GA 292CM UT WOS:000085776600010 ER PT J AU Carlson, JA Osler, CL AF Carlson, JA Osler, CL TI Rational speculators and exchange rate volatility SO EUROPEAN ECONOMIC REVIEW LA English DT Article DE exchange rate; exchange rate volatility; rational speculation; noise traders ID MARKET; VOLUME; PRICES AB This paper suggests a plausible microstructural connection between rational speculative activity and exchange rate volatility. When Friedman (Essays in Positive. Economics, University of Chicago Press, 1953) claimed that rational speculators must smooth exchange rates, he excluded interest rate differentials from his interpretation of speculator behavior. Informed, rational speculators who consider interest differentials will magnify the exchange rate effects of interest shocks and could increase overall exchange rate volatility. This connection between speculators and volatility, which does not rely on asymmetric information, is structural because speculators affect the exchange rate's generating process. Rational speculation is stabilizing at low levels of speculative activity and destabilizing at high levels. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: F31; G12. C1 Fed Reserve Bank New York, New York, NY 10045 USA. Purdue Univ, Krannert Sch Management, W Lafayette, IN 47907 USA. RP Osler, CL (reprint author), Fed Reserve Bank New York, 33 Liberty St, New York, NY 10045 USA. NR 31 TC 7 Z9 7 U1 0 U2 2 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0014-2921 J9 EUR ECON REV JI Eur. Econ. Rev. PD FEB PY 2000 VL 44 IS 2 BP 231 EP 253 DI 10.1016/S0014-2921(98)00070-1 PG 23 WC Economics SC Business & Economics GA 269MV UT WOS:000084482900002 ER PT J AU Imrohoroglu, A Merlo, A Rupert, P AF Imrohoroglu, A Merlo, A Rupert, P TI On the political economy of income redistribution and crime SO INTERNATIONAL ECONOMIC REVIEW LA English DT Article ID VOTING MODELS; TAX; TAXATION; SPECIFICATION; EQUILIBRIUM; PUNISHMENT; INSURANCE; TIME AB This article analyzes a general equilibrium model in which agents choose to specialize in either legitimate or criminal activities. Expenditures on police to apprehend criminals, as well as income redistribution, are determined endogenously through majority voting. We investigate how crime, redistribution, and police expenditures depend on characteristics of the underlying distribution of income-earning abilities and on the apprehension technology. Our model accounts for the positive correlation between inequality and crime, the positive correlation between expenditures on police and redistribution, and the lack of correlation between crime and redistribution observed in U.S. data. C1 Univ So Calif, Los Angeles, CA 90089 USA. NYU, New York, NY 10016 USA. Fed Reserve Bank, Cleveland, OH USA. RP Imrohoroglu, A (reprint author), Univ So Calif, Los Angeles, CA 90089 USA. NR 41 TC 30 Z9 31 U1 0 U2 4 PU UNIV PENN PI PHILADELPHIA PA DEPT ECON MCNEIL BLDG CR, PHILADELPHIA, PA 19174 USA SN 0020-6598 J9 INT ECON REV JI Int. Econ. Rev. PD FEB PY 2000 VL 41 IS 1 BP 1 EP 25 DI 10.1111/1468-2354.00053 PG 25 WC Economics SC Business & Economics GA 312YL UT WOS:000086971500001 ER PT J AU Iwamoto, Y van Wincoop, E AF Iwamoto, Y van Wincoop, E TI Do borders matter? Evidence from Japanese regional net capital flows SO INTERNATIONAL ECONOMIC REVIEW LA English DT Article ID SAVING-INVESTMENT CORRELATIONS; REAL BUSINESS CYCLES; SMALL OPEN-ECONOMY; PRODUCTIVITY SHOCKS; DOMESTIC SAVINGS; MOBILITY; COUNTRIES AB Are international borders barriers to capital flows? We use evidence on net capital Rows among regions within a country as a benchmark. For this purpose we develop a data set of saving and investment rates of Japanese prefectures. We find that the correlation between saving and investment rates is higher for OECD countries than for Japanese regions in both time-series and cross-sectional data. After controlling for factors that are expected to contribute to a positive correlation in the absence of barriers to capital flows, we conclude that primarily long-term capital flows are hindered by national borders, as reflected in the cross-sectional evidence. C1 Kyoto Univ, Inst Econ Res, Kyoto, Japan. Fed Reserve Bank New York, New York, NY 10045 USA. RP Iwamoto, Y (reprint author), Kyoto Univ, Inst Econ Res, Kyoto, Japan. EM eric.vanwincoop@ny.frb.org NR 40 TC 12 Z9 13 U1 0 U2 3 PU WILEY-BLACKWELL PI MALDEN PA COMMERCE PLACE, 350 MAIN ST, MALDEN 02148, MA USA SN 0020-6598 J9 INT ECON REV JI Int. Econ. Rev. PD FEB PY 2000 VL 41 IS 1 BP 241 EP 269 DI 10.1111/1468-2354.00063 PG 29 WC Economics SC Business & Economics GA 312YL UT WOS:000086971500011 ER PT J AU Kamin, SB Rogers, JH AF Kamin, SB Rogers, JH TI Output and the real exchange rate in developing countries: an application to Mexico SO JOURNAL OF DEVELOPMENT ECONOMICS LA English DT Article DE contractionary devaluation; Mexico ID RATE-BASED STABILIZATIONS; MONETARY-POLICY; DEVALUATION; DISINFLATION; INFLATION; PROGRAMS AB Since Mexico's devaluation in 1994, some observers have called for policies designed to keep the real exchange rate highly competitive in order to promote exports and output growth. However, over the past few decades, devaluations have been associated nearly exclusively with economic contraction, while real appreciations have been followed by expansions. We attempt to disentangle the possible factors underlying this correlation (1) reverse causation from output to the real exchange rate, (2) spurious correlation with third factors such as capital account shocks, and (3) temporary contractionary effects of devaluation - and determine whether a positive long-run effect of real depreciation on output is in the data. Based on the results of several VAR models, we conclude that even after sources of spurious correlation and reverse causation are controlled for, real devaluation has led to high inflation and economic contraction in Mexico. While changes in Mexico's economic structure and financial situation may qualify the future applicability of this conclusion, our findings point to substantial risks to targeting the exchange rate at too competitive a level. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: F41; F31. C1 Fed Reserve Syst, Board Governors, Int Finance Div, Trade & Financial Studies, Washington, DC 20551 USA. Fed Reserve Syst, Board Governors, Int Finance Div, Int Dev, Washington, DC 20551 USA. RP Rogers, JH (reprint author), Fed Reserve Syst, Board Governors, Int Finance Div, Trade & Financial Studies, Washington, DC 20551 USA. NR 31 TC 49 Z9 50 U1 1 U2 2 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3878 J9 J DEV ECON JI J. Dev. Econ. PD FEB PY 2000 VL 61 IS 1 BP 85 EP 109 DI 10.1016/S0304-3878(99)00062-0 PG 25 WC Economics SC Business & Economics GA 286NL UT WOS:000085452000004 ER PT J AU Iyigun, MF AF Iyigun, MF TI Timing of childbearing and economic growth SO JOURNAL OF DEVELOPMENT ECONOMICS LA English DT Article DE human capital; fertility; family size; economic growth ID FERTILITY AB This paper incorporates the timing of childbearing into a growth model with endogenous fertility. It analyzes a model in which individuals' human capital stock depends positively on their education and parental human capital and in which producing and raising children and acquiring human capital are time intensive. The model highlights how changes in the human capital stock interact with individuals' timing of childbearing in affecting the evolution of the economy. It shows that increases in the human capital stock raise the opportunity cost of having children while young and induce individuals to delay childbearing. That, in turn, accelerates human capital accumulation in the future. The model also demonstrates that early childbearing may lead to a development trap with low human capital. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: J13; J24; O11; O40. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Iyigun, MF (reprint author), Fed Reserve Syst, Board Governors, Mail Stop 23, Washington, DC 20551 USA. EM murat.iyigun@frb.gov NR 15 TC 6 Z9 6 U1 2 U2 4 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3878 J9 J DEV ECON JI J. Dev. Econ. PD FEB PY 2000 VL 61 IS 1 BP 255 EP 269 DI 10.1016/S0304-3878(99)00066-8 PG 15 WC Economics SC Business & Economics GA 286NL UT WOS:000085452000010 ER PT J AU Laderman, E Passmore, W AF Laderman, E Passmore, W TI Do savings associations have a special commitment to housing? SO JOURNAL OF FINANCIAL SERVICES RESEARCH LA English DT Article DE housing; real estate; thrifts; banks; mortgages; lending AB In this paper, we investigate whether elimination of the savings association charter might reduce lending to nontraditional mortgage borrowers. We present a theoretical model of lender portfolio choice, in which nontraditional lenders have some market power and traditional lenders are price takers in the mortgage market. The comparative statics indicate differences between nontraditional and traditional lenders in terms of their asset allocation responses to changes in borrower income and house prices. Empirical tests indicate the absence of such differences between savings associations and commercial banks, suggesting that elimination of the savings association charter would not impair lending to nontraditional mortgage borrowers. C1 Fed Reserve Bank San Francisco, San Francisco, CA 94105 USA. Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Laderman, E (reprint author), Fed Reserve Bank San Francisco, San Francisco, CA 94105 USA. NR 15 TC 1 Z9 1 U1 0 U2 0 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0920-8550 J9 J FINANC SERV RES JI J. Financ. Serv. Res. PD FEB PY 2000 VL 17 IS 1 BP 41 EP 68 DI 10.1023/A:1008167425192 PG 28 WC Business, Finance SC Business & Economics GA 332LU UT WOS:000088076400004 ER PT J AU Bacchetta, P van Wincoop, E AF Bacchetta, P van Wincoop, E TI Trade in nominal assets and net international capital flows SO JOURNAL OF INTERNATIONAL MONEY AND FINANCE LA English DT Article ID REAL BUSINESS CYCLES; SMALL OPEN-ECONOMY; CURRENT ACCOUNT; EXCHANGE-RATE; TERMS; RISK; DYNAMICS; MONETARY; MARKETS; PRICES AB Nominal assets play a major role in international financial markets, while trade in indexed bonds is limited. As a result, agents are exposed to both price and exchange rate uncertainty. Nonetheless, previous research on net capital flows has assumed the presence of a risk-free vehicle to intertemporal asset trade. In this paper we develop a general equilibrium intertemporal model with trade limited to nominal bonds and equity. We find that exposure to nominal risk dampens net capital flows, thus making economies effectively more closed. (C) 2000 Elsevier Science Ltd. All rights reserved. C1 Fed Reserve Bank New York, New York, NY 10045 USA. Univ Lausanne, Studienzentrum Gerzensee, CH-1015 Lausanne, Switzerland. RP Fed Reserve Bank New York, 33 Liberty St, New York, NY 10045 USA. NR 32 TC 6 Z9 6 U1 1 U2 3 PU ELSEVIER SCI LTD PI OXFORD PA THE BOULEVARD, LANGFORD LANE, KIDLINGTON, OXFORD OX5 1GB, OXON, ENGLAND SN 0261-5606 EI 1873-0639 J9 J INT MONEY FINANC JI J. Int. Money Finan. PD FEB PY 2000 VL 19 IS 1 BP 55 EP 72 DI 10.1016/S0261-5606(99)00039-X PG 18 WC Business, Finance SC Business & Economics GA 285RV UT WOS:000085402600003 ER PT J AU Ahmed, S Rogers, JH AF Ahmed, S Rogers, JH TI Inflation and time great ratios: Long term evidence from the US SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE inflation; investment; great ratios; Tobin effect; Fisher effect ID UNIT-ROOT; RUN GROWTH; MONEY; MODEL; SUPERNEUTRALITY; HYPOTHESIS; TAXATION; SERIES; REAL AB Using over 100 years of U.S. data, we find that the long-run effects of inflation on consumption, investment, and output are positive. Also, great ratios like the consumption and investment rates are not independent of inflation, which we interpret in terms of the Fisher effect. However, the variability of the stochastic inflation trend is small relative to the variability of the productivity and fiscal trends. Thus, models generating long-term negative effects of inflation on output and consumption seem to be at odds with data from the moderate inflation rate environment we consider. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: E31 and E32. C1 Fed Reserve Syst, Board Governors, Div Int Finance, Washington, DC 20551 USA. RP Ahmed, S (reprint author), Fed Reserve Syst, Board Governors, Div Int Finance, Washington, DC 20551 USA. NR 44 TC 34 Z9 34 U1 0 U2 3 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD FEB PY 2000 VL 45 IS 1 BP 3 EP 35 DI 10.1016/S0304-3932(99)00040-9 PG 33 WC Business, Finance; Economics SC Business & Economics GA 280UR UT WOS:000085122600001 ER PT J AU Jayaratne, J Morgan, DP AF Jayaratne, J Morgan, DP TI Capital market frictions and deposit constraints at banks SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Article ID TRANSMISSION AB Following the investment-cash flow literature, we test whether bank lending is constrained by the availability of insured deposits-a necessary condition for the existence of a bank lending channel of monetary policy. We treat insured deposits as a type of "internal fund," similar to cash hows. We use a simple model to sort out the possible identification issues in interpreting the correlation between lending and deposit growth, including reverse causality and omitted-variable bias. To minimize the latter, we control for loan demand; we use Tobin's Q and other proxies. We also split the sample by capital ratios under the assumption that the frictions facing banks in capital markets should be most severe for poorly capitalized banks. The results are consistent with the existence of frictions in capital markets facing banks, and show that such frictions forge a Link between the supply of bank loans and the supply of insured deposits. The frictions seem to matter only at small banks, suggesting that the potential for a bank lending channel is limited. C1 Charles River Associates, New York, NY USA. Fed Reserve Bank New York, New York, NY 10045 USA. RP Jayaratne, J (reprint author), Charles River Associates, New York, NY USA. NR 17 TC 34 Z9 36 U1 1 U2 9 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD FEB PY 2000 VL 32 IS 1 BP 74 EP 92 DI 10.2307/2601093 PG 19 WC Business, Finance; Economics SC Business & Economics GA 287YH UT WOS:000085534700005 ER PT J AU White, LH Boudreaux, DJ AF White, LH Boudreaux, DJ TI Is nonprice competition in currency inefficient? A reply by Lawrence H. White and Donald J. Boudreaux SO JOURNAL OF MONEY CREDIT AND BANKING LA English DT Editorial Material C1 Univ Georgia, Terry Coll Business, Athens, GA 30602 USA. Fdn Econ Educ, Irvington On Hudson, NY USA. RP White, LH (reprint author), Fed Reserve Bank, Atlanta, GA USA. NR 4 TC 1 Z9 1 U1 0 U2 0 PU OHIO STATE UNIV PRESS PI COLUMBUS PA 1050 CARMACK RD, COLUMBUS, OH 43210 USA SN 0022-2879 J9 J MONEY CREDIT BANK JI J. Money Credit Bank. PD FEB PY 2000 VL 32 IS 1 BP 150 EP 153 DI 10.2307/2601098 PG 4 WC Business, Finance; Economics SC Business & Economics GA 287YH UT WOS:000085534700010 ER PT J AU Cochrane, JH Saa-Requejo, J AF Cochrane, JH Saa-Requejo, J TI Beyond arbitrage: Good-deal asset price bounds in incomplete markets SO JOURNAL OF POLITICAL ECONOMY LA English DT Article ID MODELS; ECONOMIES; RETURNS AB One often wants to value a risky payoff by reference to prices of other assets rather than by exploiting full-fledged economic models. However, this approach breaks down if one cannot find a perfect replicating portfolio. We impose weak economic restrictions to derive usefully tight bounds on asset prices in this situation. The bounds assume that investors would want to buy assets with high Sharpe ratios-"good deals"-as well as pure arbitrage opportunities. We show how to calculate the price bounds in one-period, multiperiod, and continuous-time contexts. We show that the multiperiod problem can be solved recursively as a sequence of one-period problems. We calculate bounds in option pricing examples including infrequent trading and an option written on a nontraded event, and we use the bounds to explore the economic significance of option pricing predictions. We find that much variation in S&P 500 index option prices over time and across strike prices fits within the bounds. C1 Univ Chicago, Fed Reserve Bank Chicago, Chicago, IL 60637 USA. Natl Bur Econ Res, Cambridge, MA 02138 USA. RP Cochrane, JH (reprint author), Univ Chicago, Fed Reserve Bank Chicago, Chicago, IL 60637 USA. NR 25 TC 130 Z9 132 U1 0 U2 6 PU UNIV CHICAGO PRESS PI CHICAGO PA 5720 SOUTH WOODLAWN AVE, CHICAGO, IL 60637-1603 USA SN 0022-3808 J9 J POLIT ECON JI J. Polit. Econ. PD FEB PY 2000 VL 108 IS 1 BP 79 EP 119 DI 10.1086/262112 PG 41 WC Economics SC Business & Economics GA 284LH UT WOS:000085333500004 ER PT J AU Wheelock, DC Wilson, PW AF Wheelock, DC Wilson, PW TI Why do banks disappear? The determinants of US bank failures and acquisitions SO REVIEW OF ECONOMICS AND STATISTICS LA English DT Article ID PRODUCT MIX ECONOMIES; COX REGRESSION-MODEL; DEPOSIT INSURANCE; EFFICIENCY SCORES; COMMERCIAL-BANKS; COST EFFICIENCY; INEFFICIENCY; LIKELIHOOD; BOOTSTRAP; SCALE AB This paper seeks to identify the characteristics that make individual U.S. banks more likely to fail or be acquired. We use bank-specific information to estimate competing-risks hazard models with time-varying covariates. We use alternative measures of productive efficiency to proxy management quality, and find that inefficiency increases the risk of failure while reducing the probability of a bank's being acquired. Finally, we show that the closer to insolvency a bank is (as reflected by a low equity-to-assets ratio) the more likely is its acquisition. C1 Fed Reserve Bank St Louis, St Louis, MO 63102 USA. Univ Texas, Austin, TX 78712 USA. RP Wheelock, DC (reprint author), Fed Reserve Bank St Louis, St Louis, MO 63102 USA. RI Wheelock, David/I-5757-2016 OI Wheelock, David/0000-0002-2702-8164 NR 45 TC 129 Z9 132 U1 4 U2 15 PU MIT PRESS PI CAMBRIDGE PA 55 HAYWARD STREET, CAMBRIDGE, MA 02142 USA SN 0034-6535 J9 REV ECON STAT JI Rev. Econ. Stat. PD FEB PY 2000 VL 82 IS 1 BP 127 EP 138 DI 10.1162/003465300558560 PG 12 WC Economics; Social Sciences, Mathematical Methods SC Business & Economics; Mathematical Methods In Social Sciences GA 291WH UT WOS:000085761300012 ER PT B AU Brady, P Cronin, JA Houser, S AF Brady, P Cronin, JA Houser, S BE Kenyon, DA TI The mortgage interest deduction: A regional perspective SO 92ND ANNUAL CONFERENCE ON TAXATION, PROCEEDINGS LA English DT Proceedings Paper CT 92nd Annual Conference on Taxation CY OCT 24-26, 1999 CL ATLANTA, GA SP Natl Tax Assoc C1 Fed Reserve Board Governors, Washington, DC USA. NR 13 TC 0 Z9 0 U1 0 U2 0 PU NATL TAX ASSOC-TAX INST AMER PI COLUMBUS PA 5310 E MAIN ST, SUITE 104, COLUMBUS, OH 43213 USA PY 2000 BP 269 EP 277 PG 9 WC Business, Finance SC Business & Economics GA BT35T UT WOS:000172722500034 ER PT B AU Coronado, JL AF Coronado, JL BE Kenyon, DA TI The pros and cons of individual accounts in reforming social security SO 92ND ANNUAL CONFERENCE ON TAXATION, PROCEEDINGS LA English DT Proceedings Paper CT 92nd Annual Conference on Taxation CY OCT 24-26, 1999 CL ATLANTA, GA SP Natl Tax Assoc C1 Fed Reserve Board, Washington, DC USA. NR 8 TC 0 Z9 0 U1 0 U2 0 PU NATL TAX ASSOC-TAX INST AMER PI COLUMBUS PA 5310 E MAIN ST, SUITE 104, COLUMBUS, OH 43213 USA PY 2000 BP 323 EP 327 PG 5 WC Business, Finance SC Business & Economics GA BT35T UT WOS:000172722500040 ER PT J AU Berkowitz, J Birgean, I Kilian, L AF Berkowitz, J Birgean, I Kilian, L TI On the finite-sample accuracy of nonparametric resampling algorithms for economic time series SO ADVANCES IN ECONOMETRICS, VOL 14 SE ADVANCES IN ECONOMETRICS : A RESEARCH ANNUAL LA English DT Article ID COVARIANCE-MATRIX ESTIMATION; STATIONARY-SEQUENCES; BLOCKWISE BOOTSTRAP; BUSINESS-CYCLE; MODELS AB In recent years, there has been increasing interest in nonparametric bootstrap inference for economic time series. Nonparametric resampling techniques help protect against overly optimistic inference in time series models of unknown structure. They are particularly useful for evaluating the fit of dynamic economic models in terms of their spectra, impulse responses, and related statistics because they do not require a correctly specified economic model. Notwithstanding the potential advantages of nonparametric bootstrap methods, their reliability in small samples is questionable. In this paper, we provide a benchmark for the relative accuracy of several nonparametric resampling algorithms based on ARMA representations of four macroeconomic time series. For each algorithm, we evaluate the effective coverage accuracy of impulse response and spectral density bootstrap confidence intervals for standard sample sizes. We find that the autoregressive sieve approach based on the encompassing model is most accurate. However, care must be exercised in selecting the lag order of the autoregressive approximation. C1 Fed Res Board, Washington, DC USA. Univ Michigan, Dept Econ, Ann Arbor, MI 48109 USA. RP Berkowitz, J (reprint author), Fed Res Board, Washington, DC USA. NR 42 TC 2 Z9 2 U1 3 U2 4 PU JAI PRESS INC PI STAMFORD PA 100 PROSPECT STREET, STAMFORD, CT 06901-1640 USA J9 ADV E PY 2000 VL 14 BP 77 EP 107 PG 31 WC Economics; Social Sciences, Mathematical Methods SC Business & Economics; Mathematical Methods In Social Sciences GA BQ26X UT WOS:000087752600004 ER PT J AU Ginther, DK AF Ginther, DK TI A nonparametric analysis of the US male earnings distribution SO ADVANCES IN ECONOMETRICS, VOL 14 SE ADVANCES IN ECONOMETRICS : A RESEARCH ANNUAL LA English DT Article ID INEQUALITY; EXPLANATIONS; REGRESSION; WAGES AB Several researchers have used parametric estimation methods to characterize changes in the U.S. earnings distribution. This study uses nonparametric mean and quantile regression to compare changes in the earnings distribution conditional on years of schooling and experience for male workers in the United States between 1975 and 1994. Similar to previous research, this study finds increasing wage inequality between and within groups defined by schooling and experience. In addition, nonparametric methods have contributed to our understanding of changes in the earnings distribution. First, a comparison of nonparametric and parametric specifications indicates that nonparametric methods reveal nonlinearities in earnings profiles that are not realized in previous studies. Second, increases in the returns to schooling vary by years of experience. Third, only workers with more than 16 years of schooling were better off in real wage terms in 1994 than similar workers in 1975. Fourth, changes in within-group and between-group inequality did not increase by similar amounts at all points in the conditional distribution. C1 Fed Reserve Bank Atlanta, Res Dept, Atlanta, GA 30303 USA. RP Ginther, DK (reprint author), Fed Reserve Bank Atlanta, Res Dept, Atlanta, GA 30303 USA. RI Ginther, Donna/F-7317-2016 OI Ginther, Donna/0000-0002-0881-7969 NR 19 TC 0 Z9 0 U1 1 U2 1 PU JAI PRESS INC PI STAMFORD PA 100 PROSPECT STREET, STAMFORD, CT 06901-1640 USA J9 ADV E PY 2000 VL 14 BP 275 EP 307 PG 33 WC Economics; Social Sciences, Mathematical Methods SC Business & Economics; Mathematical Methods In Social Sciences GA BQ26X UT WOS:000087752600012 ER PT J AU Jorgenson, DW Stiroh, KJ AF Jorgenson, DW Stiroh, KJ TI Raising the speed limit: US economic growth in the information age SO BROOKINGS PAPERS ON ECONOMIC ACTIVITY LA English DT Article; Proceedings Paper CT 69th Conference on Brookings-Panel-on-Economic-Activity CY MAR 30-31, 2000 CL WASHINGTON, D.C. ID NETWORK EXTERNALITIES; PRODUCTIVITY C1 Harvard Univ, Cambridge, MA 02138 USA. Fed Reserve Bank Boston, New York, NY USA. RP Jorgenson, DW (reprint author), Harvard Univ, Cambridge, MA 02138 USA. NR 95 TC 54 Z9 59 U1 0 U2 4 PU BROOKINGS INST PI WASHINGTON PA 1775 MASSACHUSETTS AVE NW, WASHINGTON, DC 20036 USA SN 0007-2303 J9 BROOKINGS PAP ECO AC JI Brook. Pap. Econ. Act. PY 2000 IS 1 BP 125 EP 235 PG 111 WC Economics SC Business & Economics GA 348BA UT WOS:000088963100004 ER PT J AU Reinhart, V Sack, B AF Reinhart, V Sack, B TI The economic consequences of disappearing government debt SO BROOKINGS PAPERS ON ECONOMIC ACTIVITY LA English DT Article ID INTEREST-RATES; NETWORK EXTERNALITIES; BUDGET DEFICITS; RETURNS; POLICY C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Reinhart, V (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 47 TC 10 Z9 12 U1 0 U2 3 PU BROOKINGS INST PI WASHINGTON PA 1775 MASSACHUSETTS AVE NW, WASHINGTON, DC 20036 USA SN 0007-2303 J9 BROOKINGS PAP ECO AC JI Brook. Pap. Econ. Act. PY 2000 IS 2 BP 163 EP 220 PG 58 WC Economics SC Business & Economics GA 396CE UT WOS:000166618100004 ER PT J AU Fleming, MJ AF Fleming, MJ TI Financial market implications of the federal debt paydown SO BROOKINGS PAPERS ON ECONOMIC ACTIVITY LA English DT Article ID SPECIAL REPO RATES; MONETARY-POLICY; UNITED-STATES; LIQUIDITY; YIELDS; MODEL C1 Fed Reserve Bank New York, New York, NY 10045 USA. RP Fleming, MJ (reprint author), Fed Reserve Bank New York, New York, NY 10045 USA. NR 46 TC 4 Z9 5 U1 0 U2 5 PU BROOKINGS INST PI WASHINGTON PA 1775 MASSACHUSETTS AVE NW, WASHINGTON, DC 20036 USA SN 0007-2303 EI 1533-4465 J9 BROOKINGS PAP ECO AC JI Brook. Pap. Econ. Act. PY 2000 IS 2 BP 221 EP 301 PG 81 WC Economics SC Business & Economics GA 396CE UT WOS:000166618100005 ER PT S AU Kahn, JA AF Kahn, JA BE McCallum, BT Plosser, CI TI An empirical model of inventory investment by durable commodity intermediaries - A comment SO CARNEGIE-ROCHESTER CONFERENCE SERIES ON PUBLIC POLICY, VOL 52, JUNE 2000 SE CARNEGIE-ROCHESTER CONFERENCE SERIES ON PUBLIC POLICY LA English DT Proceedings Paper CT Carnegie-Rochester Conference on Public Policy CY APR, 1999 CL UNIV ROCHESTER, ROCHESTER, NY HO UNIV ROCHESTER AB George Hall and John Rust have made an important contribution to the growing literature on the microeconomics of inventory behavior. They have assembled fascinating data on the inventory behavior of a wholesaler of steel products, and have formulated a theoretical model that captures many aspects of that data. My comments will touch on three issues: First, the strengths and weaknesses of the data set; second, the specification of the model, and its connection with existing literature; and, third, the broader implications of their findings. C1 Fed Reserve Bank, New York, NY USA. NR 7 TC 0 Z9 0 U1 0 U2 0 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA SARA BURGERHARTSTRAAT 25, PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0167-2231 J9 CARN ROCH CONF SERIE PY 2000 VL 52 BP 215 EP 220 DI 10.1016/S0167-2231(00)00023-3 PG 6 WC Public Administration SC Public Administration GA BR64Y UT WOS:000167093500010 ER PT S AU Sakellaris, P Spilimbergo, A AF Sakellaris, P Spilimbergo, A BE McCallum, BT Plosser, CI TI Business cycles and investment in human capital: international evidence on higher education SO CARNEGIE-ROCHESTER CONFERENCE SERIES ON PUBLIC POLICY, VOL 52, JUNE 2000 SE CARNEGIE-ROCHESTER CONFERENCE SERIES ON PUBLIC POLICY LA English DT Proceedings Paper CT Carnegie-Rochester Conference on Public Policy CY APR, 1999 CL UNIV ROCHESTER, ROCHESTER, NY HO UNIV ROCHESTER ID COLLEGE AB We study the effect of economic fluctuations on investment in higher education for a wide range of countries. Our main focus is on foreign students who come to the United States to attend universities. There is a strong relation between enrollment and the business cycle in the sending country. The cyclical pattern of enrollment is sharply different for two groups of countries. For OECD countries enrollment is countercyclical, whereas for non-OECD countries it is procyclical. At business cycle frequencies, opportunity cost plays a dominant role in explaining enrollment from OECD countries, whereas ability to pay and credit constraints seem more prevalent at non-OECD countries. The results are confirmed using data on domestic enrollment from national sources. C1 Univ Maryland, Board Governors, Fed Reserve Syst, College Pk, MD 20742 USA. NR 18 TC 11 Z9 11 U1 0 U2 0 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA SARA BURGERHARTSTRAAT 25, PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0167-2231 J9 CARN ROCH CONF SERIE PY 2000 VL 52 BP 221 EP 256 DI 10.1016/S0167-2231(00)00024-5 PG 36 WC Public Administration SC Public Administration GA BR64Y UT WOS:000167093500011 ER PT S AU Anderson, GS AF Anderson, GS BE Holly, S TI A reliable and computationally efficient algorithm for imposing the saddle point property in dynamic models SO COMPUTATION IN ECONOMICS, FINANCE AND ENGINEERING: ECONOMIC SYSTEMS SE IFAC SYMPOSIA SERIES LA English DT Proceedings Paper CT IFAC Symposium on Computation in Economics, Finance and Engineering: Economic Systems CY JUN 29-JUL 01, 1998 CL CAMBRIDGE, ENGLAND SP Int Federat Automat Control, Soc Computat Econ AB (Anderson and Moore, 1983; Anderson and Moore, 1985) describe a powerful method for solving linear saddle point models. The algorithm has proved useful in a wide array of applications including analyzing linear perfect foresight models, providing initial solutions and asymptotic constraints for for nonlinear models. Although widely used at the Federal Reserve, few outside the central bank know about or have used the algorithm. This paper attempts to present the current algorithm in a more accessible format in the hope that economists outside the Federal Reserve may also find it useful. In addition, over the years there have been many undocumented changes in approach that have improved the efficiency and reliability of algorithm. This paper describes the present state of development of this set of tools. This paper analyzes a general linear saddle point model with a unique steady state and a unique solution converging to that steady state for any set of temporally predetermined variables. We prove that any such model has a reduced form relating the solution sequence entirely to its history, and we present an efficient procedure for computing the reduced form coefficients. The procedure is a generalization of the familiar saddlepoint analysis, and it is straightforward to program. The procedure consists of efficient library routines for matrix rank determination and invariant space calculation embedded in a simple control structure. The algorithm solves linear probles with dozens of lags and leads and hundreds of equations in seconds. The technique works well for both symbolic algebra and numerical computation. Copyright (C) 1998 IFAC. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Anderson, GS (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 14 TC 0 Z9 0 U1 0 U2 0 PU PERGAMON-ELSEVIER SCIENCE LTD PI KIDLINGTON PA THE BOULEVARD, LANGFORD LANE,, KIDLINGTON OX5 1GB, OXFORD, ENGLAND SN 0962-9505 BN 0-08-043048-1 J9 IFAC SYMP SERIES PY 2000 BP 355 EP 366 PG 12 WC History & Philosophy Of Science; Mathematics SC History & Philosophy of Science; Mathematics GA BT50H UT WOS:000173158300058 ER PT B AU Key, SJ AF Key, SJ BE Tilly, R Welfens, PJJ TI Trade liberalization and prudential regulation: The international framework for financial services SO ECONOMIC GLOBALIZATION, INTERNATIONAL ORGANIZATIONS AND CRISIS MANAGEMENT: CONTEMPORARY AND HISTORICAL PERSPECTIVES ON GROWTH, IMPACT AND EVOLUTION OF MAJOR ORGANIZATIONS IN AN INTERDEPENDENT WORLD LA English DT Proceedings Paper CT Conference on Economic Globalization, International Organizations and Crisis Management CY DEC 04-07, 1997 CL POTSDAM, GERMANY ID CONTESTABILITY; MARKETS C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 22 TC 0 Z9 0 U1 0 U2 0 PU SPRINGER-VERLAG BERLIN PI BERLIN PA HEIDELBERGER PLATZ 3, D-14197 BERLIN, GERMANY BN 3-540-65863-7 PY 2000 BP 321 EP 337 PG 17 WC Economics; Management SC Business & Economics GA BV13F UT WOS:000177911500021 ER PT J AU Edison, HJ Luangaram, P Miller, M AF Edison, HJ Luangaram, P Miller, M TI Asset bubbles, leverage and 'lifeboats': Elements of the East Asian crisis SO ECONOMIC JOURNAL LA English DT Article; Proceedings Paper CT Conference on the Origins and Management of Financial Crises CY JUL 11-14, 1997 CL BANK ENGLAND, LONDON, ENGLAND SP CEPR, ESRC, Global Econ Inst Programme HO BANK ENGLAND ID MONETARY AB Collapsing credit markets have been blamed for the depth and persistence of the Great Depression in the United States. Could similar mechanisms have played a role in ending the East Asian economic miracle - and in creating fragility in global financial markets? After a brief account of the nature of the East Asian crises of 1997/8, we use the framework of highly-leveraged, fully-collaterised firms due to Kiyotaki and Moore (1997) to explore the impact of a credit crunch. The paper emphasises the fragility of equilibrium and how rapidly boom can turn to bust. C1 Fed Reserve Syst, Board Governors, Div Int Finance, Washington, DC 20551 USA. Univ Warwick, Coventry CV4 7AL, W Midlands, England. RP Edison, HJ (reprint author), Fed Reserve Syst, Board Governors, Div Int Finance, Washington, DC 20551 USA. RI Edison, Hali/A-7550-2009; Miller, Marcus/A-2123-2009 NR 23 TC 12 Z9 12 U1 3 U2 11 PU BLACKWELL PUBL LTD PI OXFORD PA 108 COWLEY RD, OXFORD OX4 1JF, OXON, ENGLAND SN 0013-0133 J9 ECON J JI Econ. J. PD JAN PY 2000 VL 110 IS 460 BP 309 EP 334 DI 10.1111/1468-0297.00503 PG 26 WC Economics SC Business & Economics GA 278XB UT WOS:000085013300016 ER PT B AU Greenspan, A AF Greenspan, A GP FRBKC FRBKC TI Global economic integration: Opportunities and challenges SO GLOBAL ECONOMIC INTEGRATION: OPPORTUNITIES AND CHALLENGES LA English DT Proceedings Paper CT Symposium on Global Economic Integration - Opportunities and Challenges CY AUG 24-26, 2000 CL JACKSON HOLE, WY SP Fed Reserve Bank Kansas City C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 0 TC 0 Z9 0 U1 0 U2 0 PU FEDERAL RESERVE BANK KANSAS CITY PI KANSAS CITY PA 925 GRAND AVE, KANSAS CITY, MO 64198 USA PY 2000 BP 1 EP 7 PG 7 WC Economics SC Business & Economics GA BU26K UT WOS:000175520600002 ER PT B AU Kahn, GA AF Kahn, GA GP FRBKC FRBKC TI Global economic integration: Opportunities and challenges - A summary of the Bank's 2000 economic symposium - Foreword SO GLOBAL ECONOMIC INTEGRATION: OPPORTUNITIES AND CHALLENGES LA English DT Proceedings Paper CT Symposium on Global Economic Integration - Opportunities and Challenges CY AUG 24-26, 2000 CL JACKSON HOLE, WY SP Fed Reserve Bank Kansas City C1 Fed Reserve Bank, Kansas City, MO 64198 USA. NR 0 TC 0 Z9 0 U1 0 U2 0 PU FEDERAL RESERVE BANK KANSAS CITY PI KANSAS CITY PA 925 GRAND AVE, KANSAS CITY, MO 64198 USA PY 2000 BP XVII EP XXIX PG 13 WC Economics SC Business & Economics GA BU26K UT WOS:000175520600001 ER PT B AU Harrigan, J AF Harrigan, J BE Feenstra, RC TI International trade and American wages in general equilibrium, 1967-1995 SO IMPACT OF INTERNATIONAL TRADE WAGES SE NATIONAL BUREAU OF ECONOMIC RESEARCH CONFERENCE REPORT LA English DT Proceedings Paper CT National-Bureau-of-Economic-Research Conference CY FEB 27-28, 1998 CL MONTEREY, CA SP Ford Fdn, Natl Bur Econ Res ID DEMAND; MODEL C1 Fed Reserve Bank New York, New York, NY 10045 USA. NR 17 TC 14 Z9 14 U1 0 U2 0 PU UNIV CHICAGO PRESS PI CHICAGO PA 1427 E 60 ST, CHICAGO, IL 60637 USA BN 0-226-23963-2 J9 NBER CONF R PY 2000 BP 171 EP 196 PG 26 WC Economics SC Business & Economics GA BR40Z UT WOS:000166320600006 ER PT B AU Goldberg, L Tracy, J AF Goldberg, L Tracy, J BE Feenstra, RC TI Exchange rates and local labor markets SO IMPACT OF INTERNATIONAL TRADE WAGES SE NATIONAL BUREAU OF ECONOMIC RESEARCH CONFERENCE REPORT LA English DT Proceedings Paper CT National-Bureau-of-Economic-Research Conference CY FEB 27-28, 1998 CL MONTEREY, CA SP Ford Fdn, Natl Bur Econ Res C1 Fed Reserve Bank New York, New York, NY 10045 USA. NR 15 TC 9 Z9 9 U1 0 U2 0 PU UNIV CHICAGO PRESS PI CHICAGO PA 1427 E 60 ST, CHICAGO, IL 60637 USA BN 0-226-23963-2 J9 NBER CONF R PY 2000 BP 269 EP 307 PG 39 WC Economics SC Business & Economics GA BR40Z UT WOS:000166320600009 ER PT J AU Ackert, LF Church, BK Sankar, MR AF Ackert, LF Church, BK Sankar, MR TI Voluntary disclosure under imperfect competition: experimental evidence SO INTERNATIONAL JOURNAL OF INDUSTRIAL ORGANIZATION LA English DT Article DE information disclosure; private information; product market competitors ID INFORMATION; TESTS; FORECASTS; OPPONENT; EARNINGS; POLICY; SHARE AB This study investigates disclosure behavior when a firm has incentives to influence the actions of a product market rival in a Cournot quantity game. Using an experimental economics method, we find that when the film receives private information about industry-wide cost, unfavorable (favorable) information is disclosed (withheld) and the rival adjusts production accordingly. In contrast, when the firm receives private information about firm-specific cost, disclosure behavior is not affected by the favorableness of the information aid the rival's production decision is insensitive to the firm's disclosure choice. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: D82; L10. C1 Fed Reserve Bank Atlanta, Dept Res, Atlanta, GA 30303 USA. Georgia Tech, DuPree Coll Management, Atlanta, GA 30332 USA. Univ So Calif, Leventhal Sch Accounting, Los Angeles, CA 90089 USA. RP Ackert, LF (reprint author), Fed Reserve Bank Atlanta, Dept Res, 104 Marietta St NW, Atlanta, GA 30303 USA. NR 23 TC 2 Z9 2 U1 4 U2 6 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0167-7187 J9 INT J IND ORGAN JI Int. J. Ind. Organ. PD JAN PY 2000 VL 18 IS 1 BP 81 EP 105 DI 10.1016/S0167-7187(99)00035-1 PG 25 WC Economics SC Business & Economics GA 272MF UT WOS:000084653700006 ER PT J AU Kanodia, C Mukherji, A Sapra, H Venugopalan, R AF Kanodia, C Mukherji, A Sapra, H Venugopalan, R TI Hedge disclosures, future prices, and production distortions SO JOURNAL OF ACCOUNTING RESEARCH LA English DT Article ID NOISY RATIONAL-EXPECTATIONS; MARKETS; INFORMATION AB In this paper, we identify social benefits to hedge accounting disclosures that have not previously been examined. We show that from the perspective of price efficiency in the futures market the key information that is provided by hedge accounting is information about firms' underlying risk exposures. Without this information, the futures price confounds information regarding firms' hedge-motivated trades with their speculative trades, making the futures price inefficient. Our model shows that an inefficient futures price causes significant externalities by distorting the production choices of an entire industry. In the presence of hedge disclosures, the futures price appropriately informs production decisions in the whole industry. In addition to distortion in production choices, we also investigate the effect of an inefficient futures price on the risk-sharing role of the futures market. We find that lack of appropriate information about hedge disclosures also distorts the risk-sharing role of the futures market, thereby resulting in an increase in risk premium embedded in the futures price. Using numerical calculations, we demonstrate that the magnitude of the distortions in expected industry output can be substantial. C1 Univ Minnesota, Minneapolis, MN 55455 USA. Fed Reserve Bank Minneapolis, Minneapolis, MN 55480 USA. Univ Chicago, Chicago, IL 60637 USA. RP Kanodia, C (reprint author), Univ Minnesota, Minneapolis, MN 55455 USA. NR 17 TC 13 Z9 14 U1 2 U2 6 PU BLACKWELL SCIENCE INC PI MALDEN PA 350 MAIN ST, MALDEN, MA 02148 USA SN 0021-8456 J9 J ACCOUNTING RES JI J. Account. Res. PY 2000 VL 38 SU S BP 53 EP 82 DI 10.2307/2672908 PG 30 WC Business, Finance SC Business & Economics GA 473JK UT WOS:000171037600003 ER PT J AU Mingo, JJ AF Mingo, JJ TI Policy implications of the Federal Reserve study of credit risk models at major US banking institutions SO JOURNAL OF BANKING & FINANCE LA English DT Article; Proceedings Paper CT Conference on Credit Risk Modelling and the Regulatory Implications CY SEP 22, 1998 CL LONDON, ENGLAND SP Bank England, Bank Japan, US Fed Reserve Board, Board Governors, Fed Reserve Syst, Fed Reserve Bank New York DE banks; capital; regulation; credit risk AB The current regulatory capital standard for banks - the Basle Accord - is a lose/lose proposition. Regulators cannot conclude that a bank with a nominally high regulatory capital ratio has a correspondingly low probability of insolvency. On the other hand, because the Accord often levies a capital charge out of proportion to the true economic risk of a position, banks must engage in "regulatory capital arbitrage" (or exit their low risk business lines). Since such arbitrage is costly, the capital regulations keep banks from maximizing the value of the financial firm. Regulators need to answer three questions: (1) What are the goals of prudential regulation and supervision? (2) How should bank "soundness" be defined and quantified? (3) At what level should a minimum "soundness" standard be set in order to meet the (perhaps conflicting) goals of prudential regulation and supervision? possible answers to these questions are attempted, then the paper analyzes the two leading proposals for rationalizing the Accord - a "modified-Basle" (or ratings-based) approach and a "full-models" approach. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: G2; G18; G28. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Mingo, JJ (reprint author), Mingo & Co, 6013 Valerian Lane, N Bethesda, MD 20852 USA. NR 17 TC 9 Z9 9 U1 1 U2 3 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 J9 J BANK FINANC JI J. Bank Financ. PD JAN PY 2000 VL 24 IS 1-2 BP 15 EP 33 DI 10.1016/S0378-4266(99)00051-5 PG 19 WC Business, Finance; Economics SC Business & Economics GA 270NE UT WOS:000084541500002 ER PT J AU Jones, D AF Jones, D TI Emerging problems with the Basel Capital Accord: Regulatory capital arbitrage and related issues SO JOURNAL OF BANKING & FINANCE LA English DT Article; Proceedings Paper CT Conference on Credit Risk Modelling and the Regulatory Implications CY SEP 22, 1998 CL LONDON, ENGLAND SP Bank England, Bank Japan, US Fed Reserve Board, Board Governors, Fed Reserve Syst, Fed Reserve Bank New York DE securitization; capital regulation; bank regulation ID LOAN SALES; REQUIREMENTS AB In recent years, securitization and other financial innovations have provided unprecedented opportunities for banks to reduce substantially their :regulatory capital requirements with little or no corresponding reduction in their overall economic risks a process termed "regulatory capital arbitrage". These methods are used routinely to lower the effective risk-based capital requirements against certain portfolios to levels well below the Basel Capital Accord's nominal 8% total risk-based capital standard. This paper discusses the principal techniques used to undertake capital arbitrage and the difficulties faced by bank supervisors in attempting to deal with these activities under the current capital framework. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: G18; G21; G28. C1 Fed Reserve Syst, Board Governors, Div Res & Stat, Washington, DC 20551 USA. RP Jones, D (reprint author), Fed Reserve Syst, Board Governors, Div Res & Stat, Washington, DC 20551 USA. NR 18 TC 77 Z9 78 U1 0 U2 17 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 J9 J BANK FINANC JI J. Bank Financ. PD JAN PY 2000 VL 24 IS 1-2 BP 35 EP 58 DI 10.1016/S0378-4266(99)00052-7 PG 24 WC Business, Finance; Economics SC Business & Economics GA 270NE UT WOS:000084541500003 ER PT J AU Gordy, MB AF Gordy, MB TI A comparative anatomy of credit risk models SO JOURNAL OF BANKING & FINANCE LA English DT Article; Proceedings Paper CT Conference on Credit Risk Modelling and the Regulatory Implications CY SEP 22, 1998 CL LONDON, ENGLAND SP Bank England, Bank Japan, US Fed Reserve Board, Board Governors, Fed Reserve Syst, Fed Reserve Bank New York DE credit risk; comparative analysis; financial products AB Within the past two years, important advances have been made in modeling credit risk at the portfolio level. Practitioners and policy makers have invested in implementing and exploring a variety of new models individually. Less progress has been made, however, with comparative analyses. Direct comparison often is not straightforward, because the different models may be presented within rather different mathematical frameworks. This paper offers a comparative anatomy of two especially influential benchmarks for credit risk models, the RiskMetrics Group's CreditMetrics and Credit Suisse Financial Product's CreditRisk+. We show that, despite differences on the surface, the underlying mathematical structures are similar. The structural parallels provide intuition for the relationship between the two models and allow us to describe quite precisely where the models differ in functional form, distributional assumptions, and reliance on approximation formulae. We then design simulation exercises which evaluate the effect of each of these differences individually. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: G31; C15; G11. C1 Fed Reserve Syst, Board Governors, Div Res & Stat, Washington, DC 20551 USA. RP Gordy, MB (reprint author), Fed Reserve Syst, Board Governors, Div Res & Stat, Washington, DC 20551 USA. OI Gordy, Michael/0000-0002-5229-4608 NR 11 TC 180 Z9 196 U1 3 U2 20 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 J9 J BANK FINANC JI J. Bank Financ. PD JAN PY 2000 VL 24 IS 1-2 BP 119 EP 149 DI 10.1016/S0378-4266(99)00054-0 PG 31 WC Business, Finance; Economics SC Business & Economics GA 270NE UT WOS:000084541500005 ER PT J AU Lopez, JA Saidenberg, MR AF Lopez, JA Saidenberg, MR TI Evaluating credit risk models SO JOURNAL OF BANKING & FINANCE LA English DT Article; Proceedings Paper CT Conference on Credit Risk Modelling and the Regulatory Implications CY SEP 22, 1998 CL LONDON, ENGLAND SP Bank England, Bank Japan, US Fed Reserve Board, Board Governors, Fed Reserve Syst, Fed Reserve Bank New York DE credit risk models; bank regulation; forecast evaluation AB Over the past decade, commercial banks have devoted many resources to developing internal models to better quantify their financial risks and assign economic capital. These efforts have been recognized and encouraged by bank regulators. Recently, banks have extended these efforts into the field of credit risk modeling. However, an important question for both banks and their regulators is evaluating the accuracy of a model's forecasts of credit losses, especially given the small number of available forecasts due to their typically long planning horizons. Using a panel data approach, we propose evaluation methods for credit risk models based on cross-sectional simulation. Specifically, models are evaluated not only on their forecasts over time, but also on their forecasts at a given point in time for simulated credit portfolios. Once the forecasts corresponding to these portfolios are generated, they can be evaluated using various statistical methods. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: G2; G28; C52. C1 Fed Reserve Bank, Econ Res Dept, San Francisco, CA 94105 USA. Fed Reserve Bank New York, Res & Market Anal Grp, New York, NY 10045 USA. RP Lopez, JA (reprint author), Fed Reserve Bank, Econ Res Dept, 101 Market St, San Francisco, CA 94105 USA. NR 23 TC 49 Z9 52 U1 1 U2 15 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 J9 J BANK FINANC JI J. Bank Financ. PD JAN PY 2000 VL 24 IS 1-2 BP 151 EP 165 DI 10.1016/S0378-4266(99)00055-2 PG 15 WC Business, Finance; Economics SC Business & Economics GA 270NE UT WOS:000084541500006 ER PT J AU Treacy, WF Carey, M AF Treacy, WF Carey, M TI Credit risk rating systems at large US banks SO JOURNAL OF BANKING & FINANCE LA English DT Article; Proceedings Paper CT Conference on Credit Risk Modelling and the Regulatory Implications CY SEP 22, 1998 CL LONDON, ENGLAND SP Bank England, Bank Japan, US Fed Reserve Board, Board Governors, Fed Reserve Syst, Fed Reserve Bank New York DE ratings; credit risk; risk management; bank risk AB Internal credit risk rating systems are becoming an increasingly important element of large commercial banks' measurement and management of the credit risk of both individual exposures and portfolios. This article describes the internal rating systems presently in use at the 50 largest US banking organizations. We use the diversity of current practice to illuminate the relationships between uses of ratings, different options for rating system design, and the effectiveness of internal rating systems. Growing stresses on rating systems make an understanding of such relationships important for both banks and regulators. (C) 2000 Published by Elsevier Science B.V. All rights reserved. JEL classification: G20; G21. C1 Fed Reserve Board, Washington, DC 20551 USA. RP Carey, M (reprint author), Fed Reserve Board, Washington, DC 20551 USA. NR 19 TC 71 Z9 73 U1 4 U2 27 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0378-4266 J9 J BANK FINANC JI J. Bank Financ. PD JAN PY 2000 VL 24 IS 1-2 BP 167 EP 201 DI 10.1016/S0378-4266(99)00056-4 PG 35 WC Business, Finance; Economics SC Business & Economics GA 270NE UT WOS:000084541500007 ER PT J AU Wright, JH AF Wright, JH TI Alternative variance-ratio tests using ranks and signs SO JOURNAL OF BUSINESS & ECONOMIC STATISTICS LA English DT Article DE conditional heteroscedasticity; exchange-rate returns; long memory; nonparametrics; rank tests; variance ratio ID FOREIGN-EXCHANGE RATES; RANDOM-WALK; ORTHOGONALITY AB This article proposes using variance-ratio tests based on the ranks and signs of a time series to test the null that the series is a martingale difference sequence. Unlike conventional variance-ratio tests, these tests can be exact. In Monte Carlo simulations, I find that they can also be more powerful than conventional variance-ratio tests. I apply the proposed tests to five exchange-rate series and find that they are capable of detecting Violations of the martingale hypothesis for all five series, whereas conventional variance-ratio tests yield ambiguous results. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Wright, JH (reprint author), Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. NR 14 TC 76 Z9 79 U1 0 U2 2 PU AMER STATISTICAL ASSOC PI ALEXANDRIA PA 1429 DUKE ST, ALEXANDRIA, VA 22314 USA SN 0735-0015 J9 J BUS ECON STAT JI J. Bus. Econ. Stat. PD JAN PY 2000 VL 18 IS 1 BP 1 EP 9 DI 10.2307/1392131 PG 9 WC Economics; Social Sciences, Mathematical Methods; Statistics & Probability SC Business & Economics; Mathematical Methods In Social Sciences; Mathematics GA 273YX UT WOS:000084737900001 ER PT J AU Koo, J Phillips, KR Sigalla, FD AF Koo, J Phillips, KR Sigalla, FD TI Measuring regional cost of living SO JOURNAL OF BUSINESS & ECONOMIC STATISTICS LA English DT Article DE ACCRA index; characteristicity; cost-of-living index; CPI data; transitivity ID MULTILATERAL COMPARISONS; INDEXES AB Accurate measures of regional cost of living are vital to businesses and individuals. We compare a commonly used regional cost-of-living index, produced by the American Chamber of Commerce Research Association (ACCRA), to an index we calculate using Consumer Price Index data and research from Kokoski, Cardiff, and Moulton. We find significant differences between the ACCRA and the new indexes that are likely due to theoretical design, data collection, and sampling design The comparison of these indexes highlights sources of differences in regional cost-of-living measures and suggests caution in the use of ACCRA indexes. C1 Fed Reserve Bank, Res Dept, Dallas, TX 75201 USA. RP Koo, J (reprint author), Fed Reserve Bank, Res Dept, Dallas, TX 75201 USA. NR 18 TC 26 Z9 26 U1 0 U2 9 PU AMER STATISTICAL ASSOC PI ALEXANDRIA PA 1429 DUKE ST, ALEXANDRIA, VA 22314 USA SN 0735-0015 J9 J BUS ECON STAT JI J. Bus. Econ. Stat. PD JAN PY 2000 VL 18 IS 1 BP 127 EP 136 DI 10.2307/1392142 PG 10 WC Economics; Social Sciences, Mathematical Methods; Statistics & Probability SC Business & Economics; Mathematical Methods In Social Sciences; Mathematics GA 273YX UT WOS:000084737900012 ER PT J AU Clark, TE AF Clark, TE TI Forecasting an aggregate of cointegrated disaggregates SO JOURNAL OF FORECASTING LA English DT Article DE error correction; aggregation; Monte Carlo ID SELECTION; VECTORS AB This study examines the problem of forecasting an aggregate of cointegrated disaggregates. It first establishes conditions under which forecasts of an aggregate variable obtained from a disaggregate VECM will be equal to those from an aggregate, univariate time Series model, and develops a simple procedure for resting those conditions. The paper then uses Monte Carlo simulations to show, for a finite sample, that the proposed test has good size and power properties and that whether a model satisfies the aggregation conditions is closely related to out-of-sample forecast performance. The paper then shows that ignoring cointegration and specifying the disaggregate model as a VAR in differences can significantly affect analyses of aggregation, with the VAR-based test for aggregation possibly leading to faulty inference and the differenced VAR forecasts potentially understating the benefits of disaggregate information. Finally, analysis of an empirical problem confirms the basic results. Copyright (C) 2000 John Wiley & Sons, Ltd. C1 Fed Reserve Bank Kansas City, Div Res, Kansas City, MO 64198 USA. RP Clark, TE (reprint author), Fed Reserve Bank Kansas City, Div Res, 925 Grand Blvd, Kansas City, MO 64198 USA. NR 18 TC 8 Z9 8 U1 1 U2 1 PU JOHN WILEY & SONS LTD PI W SUSSEX PA BAFFINS LANE CHICHESTER, W SUSSEX PO19 1UD, ENGLAND SN 0277-6693 J9 J FORECASTING JI J. Forecast. PD JAN PY 2000 VL 19 IS 1 BP 1 EP 21 PG 21 WC Economics; Management SC Business & Economics GA 280EB UT WOS:000085088300001 ER PT S AU Chang, R Velasco, A AF Chang, R Velasco, A BE Bernanke, BS Rotemberg, JJ TI Liquidity crises in emerging markets: Theory and policy SO NBER MACROECONOMICS ANNUAL 1999 SE NBER MACROECONOMICS ANNUAL LA English DT Article; Proceedings Paper CT Macroeconomics 1999 Annual Conference CY 1999 CL CAMBRIDGE, MASSACHUSETTS ID BANK RUNS; MODEL AB International illiquidity-defined as a situation in which a country's consolidated financial system has potential short-term obligations in foreign currency that exceed the amount of foreign currency to which it has access on short notice-was a common element in recent financial and exchange-rate crises in Mexico, East Asia, Russia, Eduador, and Brazil. Illiquidity can render economies vulnerable to self-fulfilling panics. If creditors lose confidence and stop rolling over existing loans-whether to the private sector as in Asia or to the government as in Mexico or Brazil-the collapse of the currency or the financial system or both is the likely outcome. We build a model of crashes driven by illiquidity and show how and in what circumstances self-fulfilling collapses can occur. Vulnerability depends on a host of factors, such as the maturity and currency denomination of debts, the health of the banking sector, the fiscal stance, and the exchange-rate regime. We also use the model to analyze options for crisis prevention and crisis-management. Certain kinds of capital controls, stringent bank regulation, and flexible, exchange-rates are. among the policies that can reduce illiquidity and limit financial fragility. C1 Fed Reserve Bank Atlanta, Atlanta, GA USA. NYU, New York, NY 10016 USA. NBER, Cambridge, MA 02138 USA. RP Chang, R (reprint author), Fed Reserve Bank Atlanta, Atlanta, GA USA. NR 67 TC 11 Z9 11 U1 4 U2 9 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 0889-3365 BN 0-262-52271-3 J9 NBER MACROECON ANN PY 2000 VL 14 BP 11 EP + PG 69 WC Economics SC Business & Economics GA BU95P UT WOS:000177477100001 ER PT S AU Hoshi, T Kashyap, A AF Hoshi, T Kashyap, A BE Bernanke, BS Rotemberg, JJ TI The Japanese banking crisis: where did it come from and how will it end? SO NBER MACROECONOMICS ANNUAL 1999 SE NBER Macroeconomics Annual LA English DT Article; Proceedings Paper CT Annual Macroeconomics Conference CY 1999 CL CAMBRIDGE, MA ID CREDIT AB We argue that the deregulation leading up to the Big Bang has played a major role in the current banking problems. This deregulation allowed large corporations to switch quickly from depending on banks to relying on capital-market financing. We present evidence showing that large Japanese borrowers, particularly manufacturing firms, have already become almost as independent of banks as comparable U.S. firms. The deregulation was much less favorable for savers, and consequently they mostly continued turning their money over to the banks. However, banks were also constrained. They were not given authorization to move out of traditional activities into new lines of business. These developments together meant that the banks retained assets and had to search for new borrowers. Their new lending primarily flowed to small businesses and became much more tied to property than in the past. These loans have not fared well during the 1990s. We discuss the size of the current bad-loan problem and conclude that it is quite large (on the order of 7% of GDP). Looking ahead, we argue that the Big Bang will correct the aforementioned regulatory imbalances. This will mean that banks will have to fight to retain deposits. More importantly, we expect even more firms to migrate to capital-market financing. Using the U.S. borrowing patterns as a guide, we present estimates showing that this impending shift implies a massive contraction in the size of the Japanese banking sector. C1 Univ Calif San Diego, Grad Sch Int Relat & Pacific Studies, La Jolla, CA 92093 USA. Univ Chicago, Grad Sch Business, Chicago, IL 60637 USA. Fed Reserve Bank Chicago, Chicago, IL USA. NBER, Cambridge, MA 02138 USA. RP Hoshi, T (reprint author), Univ Calif San Diego, Grad Sch Int Relat & Pacific Studies, La Jolla, CA 92093 USA. NR 57 TC 18 Z9 18 U1 1 U2 3 PU MIT PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 0889-3365 BN 0-262-52271-3 J9 NBER MACROECON ANNU PY 2000 VL 14 BP 129 EP + PG 85 WC Economics SC Business & Economics GA BU95P UT WOS:000177477100003 ER PT S AU Alvarez, F Veracierto, M AF Alvarez, F Veracierto, M BE Bernanke, BS Rotemberg, JJ TI Labor-market policies in an equilibrium search model SO NBER MACROECONOMICS ANNUAL 1999 SE NBER MACROECONOMICS ANNUAL LA English DT Article; Proceedings Paper CT Macroeconomics 1999 Annual Conference CY 1999 CL CAMBRIDGE, MASSACHUSETTS ID UNEMPLOYMENT-INSURANCE; JOB SEARCH; EMPLOYMENT; ECONOMICS; WORK AB We explore to what extent differences in employment and unemployment across economies can be generated by differences in labor-market policies. We use a version of the Lucas-Prescott equilibrium search model with undirected search and endogenous labor-force participation. Minimum wages, degree of unionization, firing taxes, and unemployment benefits are introduced and their effects analyzed. When the model is calibrated to U.S. observations, it reproduces several of the elasticities of employment and unemployment with respect to changes in policies reported in the empirical literature. We find that: (l) minimum wages have small effects; (2) firing taxes have similar effects to those found in frictionless general equilibrium models; (3) unions have large and negative effects on employment, unemployment, and welfare; and (4) unemployment benefits substantially increase unemployment and reduce welfare. C1 Univ Chicago, Chicago, IL 60637 USA. NBER, Cambridge, MA 02138 USA. Fed Reserve Bank Chicago, Chicago, IL USA. RP Alvarez, F (reprint author), Univ Chicago, Chicago, IL 60637 USA. NR 42 TC 23 Z9 25 U1 1 U2 5 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 0889-3365 BN 0-262-52271-3 J9 NBER MACROECON ANN PY 2000 VL 14 BP 265 EP + DI 10.2307/3585315 PG 53 WC Economics SC Business & Economics GA BU95P UT WOS:000177477100005 ER PT J AU Kimball, RC AF Kimball, RC TI Failures in risk management SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article AB Risk management has received increasing attention in recent years, both from academics and from practitioners. The heightened interest is the result of a number of coincident secular trends, including increased investment in volatile emerging markets and the growing role of capital markets in both developed and emerging economies, as well as the introduction of volatile financial innovations. Risk management has also attracted attention as a result of the repeated and well-publicized failures associated with its implementation. Despite the increased attention paid to risk management, frequent instances still occur when sophisticated investors or firms experience sudden, unexpected, and devastating losses. This article discusses failures in risk management, why they occur, and what can be done to reduce their occurrence. The author discusses the nature of risk and the objectives of risk management. He argues that intuitively attractive conceptual simplifications often create significant errors in risk measurement. He describes such failures in risk management and goes on to discuss the implications, both for managers and for regulators. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. Babson Coll, Babson Pk, MA 02157 USA. RP Kimball, RC (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 21 TC 6 Z9 6 U1 0 U2 0 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD JAN-FEB PY 2000 BP 3 EP + PG 11 WC Economics SC Business & Economics GA 301DA UT WOS:000086291900001 ER PT J AU Stavins, J AF Stavins, J TI ATM fees: Does bank size matter? SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article AB ATM networks have allowed banks to charge non-customers for withdrawing money from their ATMs since 1996, but ATM surcharges have been criticized repeatedly by consumer advocates and politicians. Large banks have been especially targeted, because they are more likely to impose the fees and their fees tend to be higher than those charged by small banks. However, surveys comparing ATM fees across financial institutions do not control for differences in quality among banks of various sizes. This article analyzes differences in ATM fees among banks in order to test whether large banks impose higher fees than do small banks. The author uses regression analysis to control for quality and costs of banks' ATM services, as measured by the number of ATMs and the fraction of machines located off bank premises. Banks with more ATMs offer greater convenience to cardholders, and institutions with more off-premise machines tend to have higher costs. The author finds evidence that large banks impose higher surcharge fees, but the difference in foreign fees becomes insignificant after the number of ATMs is taken into account. She notes that there are no economic reasons to ban ATM surcharges, since customers can and, for the most part, do avoid paying surcharges by finding machines that do not impose them. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Stavins, J (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 16 TC 5 Z9 5 U1 0 U2 0 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD JAN-FEB PY 2000 BP 13 EP + PG 14 WC Economics SC Business & Economics GA 301DA UT WOS:000086291900002 ER PT J AU Kodrzycki, YK AF Kodrzycki, YK TI New England's educational advantage: Past successes and future prospects SO NEW ENGLAND ECONOMIC REVIEW LA English DT Article AB Any enumeration of New England's competitive strengths is likely to include the high education levels of its work forte. The growing availability of highly educated workers in the region has permitted the development of industries that make use of advanced skills and raised the average standard of living during the past several decades. This article investigates the sources of New England's educational advantage historically, examines recent trends in key determinants, and discusses prospects for the future. The author presents the basic facts on educational attainment in New England and the nation. She then uses a 20-year longitudinal survey to classify college graduates by region according to where they attended high school and college, showing that New England's high educational ranking is the result of sending a high share of its own schoolchildren to college and drawing college students from other locations. To the extent New England has faced growing challenges in maintaining its educational advantage during the past decade, the author finds, this is due to shrinkage in the number of bachelor's-level graduates at the region's colleges and universities, and to diminished success in drawing college-educated adults from outside the region. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Kodrzycki, YK (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 7 TC 4 Z9 4 U1 0 U2 0 PU FEDERAL RESERVE BANK BOSTON PI BOSTON PA PO BOX 2076, BOSTON, MA 02106-2076 USA SN 0028-4726 J9 NEW ENGL ECON REV JI New Engl. Econ. Rev. PD JAN-FEB PY 2000 BP 25 EP + PG 17 WC Economics SC Business & Economics GA 301DA UT WOS:000086291900003 ER PT S AU Rupert, P Rogerson, R Wright, R AF Rupert, P Rogerson, R Wright, R BE Bunzel, H Christensen, BJ Jensen, P Kiefer, NM Mortensen, DT TI Estimating the intertemporal elasticity of substitution in a model with household production: Implications for macroeconomics SO PANEL DATA AND STRUCTURAL LABOUR MARKET MODELS SE CONTRIBUTIONS TO ECONOMIC ANALYSIS LA English DT Proceedings Paper CT 4th Conference on Panel Data and Structural Labour Market Models CY JUN 13-17, 1998 CL SONDERBERG, DENMARK SP Ctr Labour Market & Social Res, Danish Social Sci Res Council, Danish Natl Res Fdn ID CYCLE; ALLOCATION; TIME AB We generalize the life cycle labor supply model to incorporate household production, argue this corrects a bias in previous studies, and show that it has important implications for macroeconomics. Using Michigan Time Use data, we construct a synthetic cohort and estimate the structural model. The finding is that without home production our estimated elasticities are low, consistent with the literature, and that adding home production substantially increases the estimates. We simulate a business cycle model incorporating preference parameters consistent with our estimate, and show this model can account for much of the observed variability in hours worked over the business cycle. C1 Fed Reserve Bank, Dept Res, Cleveland, OH 44101 USA. NR 21 TC 0 Z9 0 U1 1 U2 3 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA SARA BURGERHARTSTRAAT 25, PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0573-8555 BN 0-444-50319-6 J9 CONTRIB TO ECON ANAL PY 2000 VL 243 BP 171 EP 195 PG 25 WC Economics SC Business & Economics GA BQ27S UT WOS:000087778900008 ER PT B AU Baxter, TC Sommer, JH AF Baxter, TC Sommer, JH BE Lastra, RM TI Liquidity crises SO REFORM OF THE INTERNATIONAL FINANCIAL ARCHITECTURE SE INTERNATIONAL BANKING AND FINANCE LAW LA English DT Proceedings Paper CT Conference on Reform of the International Financial Architecture CY MAY, 1999 CL LONDON, ENGLAND SP Ctr Commercial Law Studies, London Inst Int Bank, Finance & Dev Law, SMU, Inst Int Bank & Finance, Univ Hong Kong Chinese Law Grp & Ctr Comparat & Public Law, Asian Inst Financial Law ID BANKING C1 Fed Reserve Bank New York, New York, NY USA. NR 27 TC 0 Z9 0 U1 0 U2 0 PU KLUWER LAW INTERNATIONAL PI THE HAGUE PA PO BOX 85889, 2508 CN THE HAGUE, NETHERLANDS BN 90-411-9802-4 J9 INT BANK & FINANCE L PY 2000 VL 18 BP 211 EP + PG 22 WC Business, Finance; Law SC Business & Economics; Government & Law GA BS07H UT WOS:000168551400009 ER PT B AU Carlino, GA Defina, R AF Carlino, GA Defina, R BE VonHagen, J Waller, CJ TI Monetary policy and the US states and regions: Some implications for European Monetary Union SO REGIONAL ASPECTS OF MONETARY POLICY IN EUROPE SE ZEI STUDIES IN EUROPEAN ECONOMICS AND LAW LA English DT Proceedings Paper CT International Conference on Regional Aspects of Monetary Policy in Europe CY JUL, 1998 CL UNIV BONN, CTR EUROPEAN INTEGRAT STUDIES, BONN, GERMANY HO UNIV BONN, CTR EUROPEAN INTEGRAT STUDIES C1 Univ Penn, Fed Reserve Bank Philadelphia, Philadelphia, PA 19104 USA. NR 28 TC 0 Z9 0 U1 0 U2 0 PU KLUWER ACADEMIC PUBLISHERS PI NORWELL PA 101 PHILIP DRIVE, ASSINIPPI PARK, NORWELL, MA 02061 USA BN 0-7923-8654-X J9 ZEI STUD EU ECON LAW PY 2000 VL 1 BP 45 EP 67 PG 23 WC Business, Finance; Economics SC Business & Economics GA BT61X UT WOS:000173542500002 ER PT B AU Wheelock, DC AF Wheelock, DC BE VonHagen, J Waller, CJ TI National monetary policy by regional design: The evolving role of the Federal Reserve Banks in Federal Reserve System policy SO REGIONAL ASPECTS OF MONETARY POLICY IN EUROPE SE ZEI STUDIES IN EUROPEAN ECONOMICS AND LAW LA English DT Proceedings Paper CT International Conference on Regional Aspects of Monetary Policy in Europe CY JUL, 1998 CL UNIV BONN, CTR EUROPEAN INTEGRAT STUDIES, BONN, GERMANY HO UNIV BONN, CTR EUROPEAN INTEGRAT STUDIES C1 Fed Reserve Bank St Louis, St Louis, MO USA. NR 40 TC 0 Z9 0 U1 0 U2 0 PU KLUWER ACADEMIC PUBLISHERS PI NORWELL PA 101 PHILIP DRIVE, ASSINIPPI PARK, NORWELL, MA 02061 USA BN 0-7923-8654-X J9 ZEI STUD EU ECON LAW PY 2000 VL 1 BP 241 EP 274 PG 34 WC Business, Finance; Economics SC Business & Economics GA BT61X UT WOS:000173542500009 ER PT B AU Hetzel, RL AF Hetzel, RL BE VonHagen, J Waller, CJ TI Achieving consistency in policy while encouraging open debate SO REGIONAL ASPECTS OF MONETARY POLICY IN EUROPE SE ZEI STUDIES IN EUROPEAN ECONOMICS AND LAW LA English DT Proceedings Paper CT International Conference on Regional Aspects of Monetary Policy in Europe CY JUL, 1998 CL UNIV BONN, CTR EUROPEAN INTEGRAT STUDIES, BONN, GERMANY HO UNIV BONN, CTR EUROPEAN INTEGRAT STUDIES C1 Fed Reserve Bank Richmond, Richmond, VA USA. NR 1 TC 0 Z9 0 U1 0 U2 0 PU KLUWER ACADEMIC PUBLISHERS PI NORWELL PA 101 PHILIP DRIVE, ASSINIPPI PARK, NORWELL, MA 02061 USA BN 0-7923-8654-X J9 ZEI STUD EU ECON LAW PY 2000 VL 1 BP 275 EP 278 PG 4 WC Business, Finance; Economics SC Business & Economics GA BT61X UT WOS:000173542500010 ER PT B AU Evanoff, DD Wall, LD AF Evanoff, DD Wall, LD BE Kaufman, GG TI Subordinated debt and bank capital reform SO RESEARCH IN FINANCIAL SERVICES: PRIVATE AND PUBLIC POLICY, VOL 12, 2000: BANK FRAGILITY AND REGULATION: EVIDENCE FROM DIFFERENT COUNTRIES SE RESEARCH IN FINANCIAL SERVICES: PRIVATE AND PUBLIC POLICY LA English DT Proceedings Paper CT Annual Meeting of the Western-Finance-Association CY JUL 02, 2000 CL VANCOUVER, CANADA SP Western Finance Assoc AB In recent years there has been a growing realization that there are significant problems with the current bank risk-based capital guidelines. As financial firms have become more sophisticated and complex they have effectively arbitraged the existing capital requirements. They have become so good at avoiding the intent of capital regulation that the regulations have essentially ceased being a safety and soundness issue for supervisors and have become more a compliance issue. There is also a growing realization that bank regulation must more effectively incorporate market discipline to encourage prudent risk management. One means recommended to accomplish this is to increase the role of subordinated debt in the bank capital requirement. Arguments have been made that this could lead to improvements in both market and supervisory discipline. Although a number of such proposals have been made, there appears to be significant misunderstanding of how bank capital requirements would be modified and what might be accomplished by the modification The goal of this article is to provide a comprehensive review and evaluation of subordinated debt proposals, and to present a regulatory reform proposal that incorporates the most desirable characteristics of subordinated debt. C1 Fed Reserve Bank, Chicago, IL USA. NR 106 TC 4 Z9 4 U1 0 U2 1 PU JAI PRESS INC PI STAMFORD PA 100 PROSPECT STREET, STAMFORD, CT 06901-1640 USA BN 0-7623-0698-X J9 RES FIN SERV PY 2000 VL 12 BP 53 EP 119 PG 67 WC Business, Finance SC Business & Economics GA BR96F UT WOS:000168184100003 ER PT B AU DeYoung, R AF DeYoung, R BE Kaufman, GG TI Research in financial services: Private and public policy, vol 1, Comment SO RESEARCH IN FINANCIAL SERVICES: PRIVATE AND PUBLIC POLICY, VOL 12, 2000: BANK FRAGILITY AND REGULATION: EVIDENCE FROM DIFFERENT COUNTRIES SE RESEARCH IN FINANCIAL SERVICES: PRIVATE AND PUBLIC POLICY LA English DT Proceedings Paper CT Annual Meeting of the Western-Finance-Association CY JUL 02, 2000 CL VANCOUVER, CANADA SP Western Finance Assoc C1 Fed Reserve Bank, Chicago, IL USA. NR 7 TC 0 Z9 0 U1 0 U2 0 PU JAI PRESS INC PI STAMFORD PA 100 PROSPECT STREET, STAMFORD, CT 06901-1640 USA BN 0-7623-0698-X J9 RES FIN SERV PY 2000 VL 12 BP 163 EP 173 PG 11 WC Business, Finance SC Business & Economics GA BR96F UT WOS:000168184100005 ER PT B AU Lopez, JA Saidenberg, MR AF Lopez, JA Saidenberg, MR BE Kaufman, GG TI The development of internal models approaches to bank regulation and supervision: Lessons from the market risk amendment SO RESEARCH IN FINANCIAL SERVICES: PRIVATE AND PUBLIC POLICY, VOL 12, 2000: BANK FRAGILITY AND REGULATION: EVIDENCE FROM DIFFERENT COUNTRIES SE RESEARCH IN FINANCIAL SERVICES: PRIVATE AND PUBLIC POLICY LA English DT Proceedings Paper CT Annual Meeting of the Western-Finance-Association CY JUL 02, 2000 CL VANCOUVER, CANADA SP Western Finance Assoc AB Over the past decade, banks have devoted many resources to developing internal risk models for the purpose of better quantifying the risks they face and allocating economic capital. These efforts have been recognized and encouraged by bank regulators. For example, the 1997 Market Risk Amendment (MRA) to the Basel Capital Accord formally incorporates banks' internal, market risk models into regulatory capital calculations. That is, the regulatory capital requirements for banks' market risk exposures are explicitly a function of the banks' own value-at-risk estimates. A key component in the design and implementation of the MRA was the development of qualitative and quantitative standards that must be satisfied in order for banks' models to be used for regulatory capital purposes. In this chapter we examine the MRA and recent regulatory experience to draw out lessons for the design and implementation of internal models-based capital regimes for other types of risk. C1 Fed Reserve Bank, San Francisco, CA USA. NR 12 TC 0 Z9 0 U1 1 U2 5 PU JAI PRESS INC PI STAMFORD PA 100 PROSPECT STREET, STAMFORD, CT 06901-1640 USA BN 0-7623-0698-X J9 RES FIN SERV PY 2000 VL 12 BP 239 EP 253 PG 15 WC Business, Finance SC Business & Economics GA BR96F UT WOS:000168184100008 ER PT B AU Gilbert, RA Meyer, AP Vaughan, MD AF Gilbert, RA Meyer, AP Vaughan, MD BE Kaufman, GG TI The role of a CAMEL downgrade model in bank surveillance SO RESEARCH IN FINANCIAL SERVICES: PRIVATE AND PUBLIC POLICY, VOL 12, 2000: BANK FRAGILITY AND REGULATION: EVIDENCE FROM DIFFERENT COUNTRIES SE RESEARCH IN FINANCIAL SERVICES: PRIVATE AND PUBLIC POLICY LA English DT Proceedings Paper CT Annual Meeting of the Western-Finance-Association CY JUL 02, 2000 CL VANCOUVER, CANADA SP Western Finance Assoc ID FAILURES AB This article examines the potential contribution to bank supervision of a model designed to predict which banks will have their supervisory ratings downgraded in future periods. Bank supervisors rely on various tools of off-site surveillance to track the condition of banks under their jurisdiction between on-site examinations, including econometric models. One of the models that the Federal Reserve System uses for surveillance was estimated to predict bank failures. Because bank failures have been so rare during the last decade, the coefficients on this model have been "frozen" since 1991. Each quarter the surveillance staff at the Board of Governors provide the supervision staff in the Reserve Banks the probabilities of failure by the banks subject to Fed supervision, based on the coefficients of this bank failure model and the latest call report data for each bank The number of banks downgraded to problem status in recent years has been substantially larger than the number of bank failures. During a period of few bank failures, the relevance of this bank failure model for surveillance depends to some extent on the accuracy of the model in predicting which banks will have their supervisory ratings downgraded to problem status in future periods. This chapter compares the ability of two models to predict downgrades of supervisory ratings to problem status: the Board staff model, which was estimated to predict bank failures, and a model estimated to predict downgrades of supervisory ratings. We find that both models do about as well in predicting downgrades of supervisory ratings for the early 1990s. Over time, however, the ability of the downgrade model to predict downgrades improves relative to that of the model estimated to predict failures. This pattern reflects the value of using a model for surveillance that can be re-estimated frequently. We conclude that the downgrade model may prove to be a useful supplement to the Board's model for estimating failures during periods when most banks are healthy, but that the downgrade model should not be considered a replacement for the current surveillance framework. C1 Fed Reserve Bank, St Louis, MO USA. NR 11 TC 1 Z9 1 U1 1 U2 3 PU JAI PRESS INC PI STAMFORD PA 100 PROSPECT STREET, STAMFORD, CT 06901-1640 USA BN 0-7623-0698-X J9 RES FIN SERV PY 2000 VL 12 BP 265 EP 285 PG 21 WC Business, Finance SC Business & Economics GA BR96F UT WOS:000168184100010 ER PT B AU Morgan, DP AF Morgan, DP BE Kaufman, GG TI Research in financial services: Private and public policy - Comment SO RESEARCH IN FINANCIAL SERVICES: PRIVATE AND PUBLIC POLICY, VOL 12, 2000: BANK FRAGILITY AND REGULATION: EVIDENCE FROM DIFFERENT COUNTRIES SE RESEARCH IN FINANCIAL SERVICES: PRIVATE AND PUBLIC POLICY LA English DT Proceedings Paper CT Annual Meeting of the Western-Finance-Association CY JUL 02, 2000 CL VANCOUVER, CANADA SP Western Finance Assoc C1 Fed Reserve Bank New York, New York, NY 10045 USA. NR 0 TC 0 Z9 0 U1 0 U2 0 PU JAI PRESS INC PI STAMFORD PA 100 PROSPECT STREET, STAMFORD, CT 06901-1640 USA BN 0-7623-0698-X J9 RES FIN SERV PY 2000 VL 12 BP 329 EP 333 PG 5 WC Business, Finance SC Business & Economics GA BR96F UT WOS:000168184100013 ER PT J AU Cole, HL Kehoe, TJ AF Cole, HL Kehoe, TJ TI Self-fulfilling debt crises SO REVIEW OF ECONOMIC STUDIES LA English DT Article ID MATURITY; POLICY; MODEL AB We characterize the values of government debt and the debt's maturity structure under which financial crises brought on by a loss of confidence in the government can arise within a dynamic, stochastic general equilibrium model. We also characterize the optimal policy response of the government to the threat of such a crisis. We show that when the country's fundamentals place it inside the crisis zone, the government may be motivated to reduce its debt and exit the crisis zone because this leads to an economic boom and a reduction in the interest rate on the government's debt. We show that this reduction can be gradual if debt is high or the probability of a crisis Is low. We also show that, while lengthening the maturity of the debt can shrink the crisis zone, credibility-inducing policies can have perverse effects. C1 Fed Reserve Bank, Minneapolis, MN USA. Univ Minnesota, Minneapolis, MN USA. RP Cole, HL (reprint author), Fed Reserve Bank, Minneapolis, MN USA. NR 20 TC 98 Z9 100 U1 1 U2 11 PU REVIEW OF ECONOMIC STUDIES LTD PI OXFORD PA C/O BASIL BLACKWELL LTD, 108 COWLEY RD, PO BOX 805, OXFORD, OXON, ENGLAND OX4 1JF SN 0034-6527 J9 REV ECON STUD JI Rev. Econ. Stud. PD JAN PY 2000 VL 67 IS 1 BP 91 EP 116 DI 10.1111/1467-937X.00123 PG 26 WC Economics SC Business & Economics GA 289UL UT WOS:000085640300006 ER PT J AU Fisher, JDM Hornstein, A AF Fisher, JDM Hornstein, A TI (S, s) inventory policies in general equilibrium SO REVIEW OF ECONOMIC STUDIES LA English DT Article ID AGGREGATE FLUCTUATIONS; BUSINESS-CYCLE; INVESTMENT; MONEY; MODEL AB We study the aggregate implications of (S, s) inventory policies in a dynamic general equilibrium model with aggregate uncertainty. Firms in the model's retail sector face idiosyncratic demand risk, and (S, s) inventory policies are optimal because of fixed order costs. The distribution of inventory holdings affects the aggregate outcome in two ways: variation in the decision to order and variation in the rate of sale through the pricing decisions of retailers. We find that both mechanisms must operate to reconcile observations that orders are more volatile than, and inventory investment is positively correlated with, sales, while remaining consistent with other salient business cycle characteristics. The model exhibits strong amplification for some shocks and persistence to a limited extent. C1 Fed Reserve Bank, Chicago, IL 60604 USA. Fed Reserve Bank, Richmond, VA 23261 USA. RP Fisher, JDM (reprint author), Fed Reserve Bank, Chicago, IL 60604 USA. NR 25 TC 25 Z9 25 U1 4 U2 11 PU REVIEW OF ECONOMIC STUDIES LTD PI OXFORD PA C/O BASIL BLACKWELL LTD, 108 COWLEY RD, PO BOX 805, OXFORD, OXON, ENGLAND OX4 1JF SN 0034-6527 J9 REV ECON STUD JI Rev. Econ. Stud. PD JAN PY 2000 VL 67 IS 1 BP 117 EP 145 DI 10.1111/1467-937X.00124 PG 29 WC Economics SC Business & Economics GA 289UL UT WOS:000085640300007 ER PT J AU Duca, JV VanHoose, DD AF Duca, JV VanHoose, DD TI Has greater competition restrained US inflation? SO SOUTHERN ECONOMIC JOURNAL LA English DT Article ID MULTISECTOR ECONOMY; WAGE INDEXATION; NAIRU; POLICY AB This paper shows how increased goods market competition affects the behavior of inflation in a multisector economy. By raising the price elasticity of demand, increased goods market competition theoretically lowers inflation and makes the aggregate price level less sensitive to aggregate demand shocks. We find that proxies for the aggregate degree of goods market competition are statistically and economically significant in short-run Phillips curve models of core inflation. Evidence indicates that heightened goods market competition has flattened the slope of the short-run, expectations-augmented Phillips curve and slightly lowered the nonaccelerating inflation rate of unemployment (NAIRU). C1 Fed Reserve Bank Dallas, Dallas, TX 75265 USA. Univ Alabama, Coll Commerce & Business Adm, Tuscaloosa, AL 35487 USA. RP Duca, JV (reprint author), Fed Reserve Bank Dallas, Box 655906, Dallas, TX 75265 USA. NR 29 TC 4 Z9 4 U1 0 U2 1 PU UNIV NORTH CAROLINA PI CHAPEL HILL PA SOUTHERN ECONOMIC JOURNAL, CHAPEL HILL, NC 27514 USA SN 0038-4038 J9 SOUTHERN ECON J JI South. Econ. J. PD JAN PY 2000 VL 66 IS 3 BP 729 EP 741 DI 10.2307/1061435 PG 13 WC Economics SC Business & Economics GA 275ZE UT WOS:000084849900013 ER PT B AU Drzyzgula, B AF Drzyzgula, B GP USENIX USENIX TI Designing a data center instrumentation system SO USENIX ASSOCIATION PROCEEDINGS OF THE FOURTEENTH SYSTEMS ADMINISTRATION CONFERENCE (LISA XIV) LA English DT Proceedings Paper CT 14th Systems Administration Conference CY DEC 03-08, 2000 CL NEW ORLEANS, LA SP USENIX Assoc, Syst Adm Guild AB This paper describes the author's efforts in designing an external, out-of-band hardware monitoring and control system for use with microcomputer-based server, storage and communications systems deployed in a data center environment. This system, when complete, will consist of a collection of microcontroller-based monitoring nodes, one per monitored device. Each of these intelligent monitoring nodes will be able to keep track of several temperatures, power supply voltages, fan speeds, and various indicators of system activity. In addition, they will have the ability to control a monitored system under the direction of an administrator sitting at a web browser. As of this writing, much of the initial research and architectural planning is complete. One prototype board has been built and shown to function as expected, and most of the required development tools and licenses have been procured. The hardware design for the first pilot/production board is largely complete. It is expected that these first boards will be built and assembled by late 2000, and software development for this project will extend into 2001. C1 Fed Reserve Board, Automat & Res Comp Sect, Div Res & Stat, Washington, DC 20551 USA. RP Drzyzgula, B (reprint author), Fed Reserve Board, Automat & Res Comp Sect, Div Res & Stat, 20th & C St NW, Washington, DC 20551 USA. NR 48 TC 0 Z9 0 U1 0 U2 0 PU USENIX ASSOC PI BERKELEY PA SUITE 215, 2560 NINTH ST, BERKELEY, CA 94710 USA BN 1-880446-13-8 PY 2000 BP 43 EP 58 PG 16 WC Computer Science, Hardware & Architecture; Computer Science, Software Engineering SC Computer Science GA BR87E UT WOS:000167889500005 ER PT J AU Coughlin, CC Segev, E AF Coughlin, CC Segev, E TI Foreign direct investment in China: A spatial econometric study SO WORLD ECONOMY LA English DT Article ID UNITED-STATES; LOCATION C1 Fed Reserve Bank, St Louis, MO 63102 USA. RP Coughlin, CC (reprint author), Fed Reserve Bank, St Louis, MO 63102 USA. RI Coughlin, Cletus/K-6860-2016 OI Coughlin, Cletus/0000-0002-8304-2796 NR 22 TC 102 Z9 109 U1 3 U2 16 PU BLACKWELL PUBL LTD PI OXFORD PA 108 COWLEY RD, OXFORD OX4 1JF, OXON, ENGLAND SN 0378-5920 J9 WORLD ECON JI World Econ. PD JAN PY 2000 VL 23 IS 1 BP 1 EP 23 DI 10.1111/1467-9701.t01-1-00260 PG 23 WC Business, Finance; Economics; International Relations SC Business & Economics; International Relations GA 279MK UT WOS:000085048000001 ER PT J AU Bakstansky, P AF Bakstansky, P TI It's not the Fed's fault SO FORBES LA English DT Letter C1 Fed Reserve Bank New York, New York, NY 10045 USA. RP Bakstansky, P (reprint author), Fed Reserve Bank New York, New York, NY 10045 USA. NR 0 TC 0 Z9 0 U1 0 U2 0 PU FORBES INC PI NEW YORK PA 60 FIFTH AVE, NEW YORK, NY 10011 USA SN 0015-6914 J9 FORBES JI Forbes PD DEC 27 PY 1999 VL 164 IS 15 BP 24 EP 24 PG 1 WC Business, Finance SC Business & Economics GA 266DY UT WOS:000084286400002 ER PT J AU Altig, D Carlstrom, CT AF Altig, D Carlstrom, CT TI Marginal tax rates and income inequality in a life-cycle model SO AMERICAN ECONOMIC REVIEW LA English DT Article ID UNITED-STATES; REFORM ACT AB In this paper we study the quantitative impact of marginal tax rates on the distribution of income. Our methodology builds on computable general-equilibrium framework. We find that distortions from marginal tax rate changes of the sort implied by the Tax Reform Act of 1986 have sizable effects on income inequality in a reasonably quantified life-cycle setting: In our model rate changes alone capture half the increase in the pretax Gini that actually occurred between 1984 and 1989. (JEL C68, D31, H30, H20). C1 Fed Reserve Bank Cleveland, Res Dept, Cleveland, OH 44114 USA. RP Altig, D (reprint author), Fed Reserve Bank Cleveland, Res Dept, East 6th & Super, Cleveland, OH 44114 USA. NR 27 TC 16 Z9 16 U1 1 U2 5 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD DEC PY 1999 VL 89 IS 5 BP 1197 EP 1215 DI 10.1257/aer.89.5.1197 PG 19 WC Economics SC Business & Economics GA 270DM UT WOS:000084520200008 ER PT J AU Parente, SL Prescott, EC AF Parente, SL Prescott, EC TI Monopoly rights: A barrier to riches SO AMERICAN ECONOMIC REVIEW LA English DT Article ID ENTRY-DETERRENCE; COSTS; INDUSTRIALIZATION; INVESTMENT; MODEL AB Our thesis is that poor countries are poor because they employ arrangements for which the equilibrium outcomes are characterized by inferior technologies being used, and being used inefficiently. In this paper, we analyze the consequences of one such arrangement. In each industry, the arrangement enables a coalition of factor suppliers to be the monopoly seller of its input services to all firms using a particular production process. We find that eliminating this monopoly arrangement could well increase output by roughly a factor of 3 without any increase in inputs. (JEL D58, O11, O41). C1 Univ Illinois, Dept Econ, Urbana, IL 61801 USA. Univ Chicago, Dept Econ, Chicago, IL 60637 USA. Univ Minnesota, Dept Econ, Minneapolis, MN 55455 USA. Fed Reserve Bank Minneapolis, Dept Res, Minneapolis, MN 55480 USA. RP Univ Illinois, Dept Econ, 225 David Kinley Hall,1407 W Gregory Dr, Urbana, IL 61801 USA. NR 35 TC 118 Z9 121 U1 4 U2 16 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 EI 1944-7981 J9 AM ECON REV JI Am. Econ. Rev. PD DEC PY 1999 VL 89 IS 5 BP 1216 EP 1233 DI 10.1257/aer.89.5.1216 PG 18 WC Economics SC Business & Economics GA 270DM UT WOS:000084520200009 ER PT J AU Ackert, LF Hunter, WC AF Ackert, LF Hunter, WC TI Intrinsic bubbles: The case of stock prices: Comment SO AMERICAN ECONOMIC REVIEW LA English DT Editorial Material ID EXCHANGE-RATE DYNAMICS; DIVIDEND BEHAVIOR; TARGET ZONES; MARKET; SHAREHOLDERS C1 Fed Reserve Bank Atlanta, Atlanta, GA 30303 USA. Fed Reserve Bank, Dept Res, Chicago, IL 60604 USA. RP Ackert, LF (reprint author), Fed Reserve Bank Atlanta, 104 Marietta St NW, Atlanta, GA 30303 USA. NR 23 TC 10 Z9 10 U1 0 U2 4 PU AMER ECONOMIC ASSOC PI NASHVILLE PA 2014 BROADWAY, STE 305, NASHVILLE, TN 37203 USA SN 0002-8282 J9 AM ECON REV JI Am. Econ. Rev. PD DEC PY 1999 VL 89 IS 5 BP 1372 EP 1376 DI 10.1257/aer.89.5.1372 PG 5 WC Economics SC Business & Economics GA 270DM UT WOS:000084520200018 ER PT J AU Christiano, LJ Gust, CJ AF Christiano, LJ Gust, CJ TI Taylor rules in a limited participation model SO ECONOMIST LA English DT Article DE Taylor rule; monetary policy; non-neutrality of money ID DISCRETION; INFLATION; POLICY AB We use the limited participation model of money as a laboratory for studying the operating characteristics of Taylor rules for setting the rate of interest. Rules are evaluated according to their ability to protect the economy from bad outcomes such as the burst of inflation observed in the 1970s. Based on our analysis, we argue for a rule which: (i) raises the nominal interest rate more than one-for-one with a rise in inflation; and (ii) does not change the interest rate in response to a change in output relative to trend. C1 Northwestern Univ, Dept Econ, Evanston, IL 60208 USA. Fed Reserve Board, Washington, DC USA. RP Christiano, LJ (reprint author), Northwestern Univ, Dept Econ, Evanston, IL 60208 USA. NR 23 TC 8 Z9 8 U1 2 U2 3 PU KLUWER ACADEMIC PUBL PI DORDRECHT PA SPUIBOULEVARD 50, PO BOX 17, 3300 AA DORDRECHT, NETHERLANDS SN 0013-063X J9 ECONOMIST JI Economist PD DEC PY 1999 VL 147 IS 4 BP 437 EP 460 DI 10.1023/A:1003850310064 PG 24 WC Economics SC Business & Economics GA 267DG UT WOS:000084340800003 ER PT J AU Jordan, JS AF Jordan, JS TI Bank managers' opportunistic trading of their firms' shares SO FINANCIAL MANAGEMENT LA English DT Article AB Requiring managers to hold shares in the firms they manage can reduce agency problems. Despite the pivotal role of share ownership, little evidence exists concerning who determines the level of ownership, the compensation committee, or managers themselves. This differentiation is important, since timely trades by managers can weaken the role share ownership plays in reducing agency problems. I find that managers do not rely solely on the compensation committee, and that personal transactions are important. Exploiting private firm-specific information, managers make opportunistic trades that, in effect, increase the rate of return and reduce the riskiness of their investments in their firms. C1 Fed Reserve Bank Boston, Boston, MA 02210 USA. RP Jordan, JS (reprint author), Fed Reserve Bank Boston, Boston, MA 02210 USA. NR 19 TC 0 Z9 0 U1 0 U2 4 PU FINANCIAL MANAGEMENT ASSOC PI TAMPA PA UNIV SOUTH FLORIDA, COLL BUSINESS ADMINISTRATION, 4202 E FOWLER, TAMPA, FL 33620 USA SN 0046-3892 J9 FINANC MANAGE JI Financ. Manage. PD WIN PY 1999 VL 28 IS 4 BP 36 EP 51 DI 10.2307/3666302 PG 16 WC Business, Finance SC Business & Economics GA 270RK UT WOS:000084549700003 ER PT J AU Zavodny, M AF Zavodny, M TI Determinants of recent immigrants' locational choices SO INTERNATIONAL MIGRATION REVIEW LA English DT Article ID UNITED-STATES; INTERNAL MIGRATION; FOREIGN-BORN AB High levels of immigration to the United States have caused the size of the Foreign-born population to increase dramatically in recent years. Recent immigrants are concentrated in several states, particularly California. This article examines the determinants of the intended state of residence of new recipients of legal permanent resident status and new refugees From 1989 to 1994. The presence of other foreign-born people is the primary determinant of the locational choices of new legal permanent residents, but there are same differences among immigrant groups by admission category and by country of origin. Only refugees' locations appear to be sensitive to welfare generosity. C1 Fed Reserve Bank, Atlanta, GA 30303 USA. RP Zavodny, M (reprint author), Fed Reserve Bank, Atlanta, GA 30303 USA. NR 12 TC 58 Z9 59 U1 1 U2 11 PU CENTER MIGRATION STUDIES PI STATEN ISL PA 209 FLAGG PLACE, STATEN ISL, NY 10304 USA SN 0197-9183 J9 INT MIGR REV JI Int. Migr. Rev. PD WIN PY 1999 VL 33 IS 4 BP 1014 EP 1030 DI 10.2307/2547361 PG 17 WC Demography SC Demography GA 275EX UT WOS:000084807400008 ER PT J AU Wheelock, DC AF Wheelock, DC TI Monetary policy and the great inflation in the United States: The federal reserve and the failure of macroeconomic policy, 1965-79. SO JOURNAL OF ECONOMIC HISTORY LA English DT Book Review C1 Fed Reserve Bank St Louis, St Louis, MO USA. RP Wheelock, DC (reprint author), Fed Reserve Bank St Louis, St Louis, MO USA. RI Wheelock, David/I-5757-2016 OI Wheelock, David/0000-0002-2702-8164 NR 1 TC 0 Z9 0 U1 0 U2 0 PU CAMBRIDGE UNIV PRESS PI NEW YORK PA 40 WEST 20TH STREET, NEW YORK, NY 10011-4211 USA SN 0022-0507 J9 J ECON HIST JI J. Econ. Hist. PD DEC PY 1999 VL 59 IS 4 BP 1130 EP 1131 PG 2 WC Economics; History; History Of Social Sciences SC Business & Economics; History; Social Sciences - Other Topics GA 265EQ UT WOS:000084229200043 ER PT J AU Clark, TE AF Clark, TE TI Finite-sample properties of tests for equal forecast accuracy SO JOURNAL OF FORECASTING LA English DT Article DE forecast evaluation; mean squared error; root mean squared error ID MODELS; GMM; PERFORMANCE AB This study examines the small-sample properties of some commonly used tests of equal forecast accuracy. The paper considers the size and power of different tests and the performance of different heteroscedasticity and autocorrelation-consistent (HAC) variance estimators. Monte Carlo experiments show that the tests all suffer some size distortions in small samples, with the distortions varying across tests. The experiments also show that, adjusted for size distortions, the tests have broadly similar power, although some small differences exist. Finally, the experiments indicate that the size and power performances of HAC estimators vary with the features of the data. Copyright (C) 1999 John Wiley & Sons, Ltd. C1 Fed Reserve Bank Kansas City, Div Res, Kansas City, MO 64198 USA. RP Clark, TE (reprint author), Fed Reserve Bank Kansas City, Div Res, 925 Grand Blvd, Kansas City, MO 64198 USA. NR 23 TC 12 Z9 12 U1 2 U2 4 PU JOHN WILEY & SONS LTD PI W SUSSEX PA BAFFINS LANE CHICHESTER, W SUSSEX PO19 1UD, ENGLAND SN 0277-6693 J9 J FORECASTING JI J. Forecast. PD DEC PY 1999 VL 18 IS 7 BP 489 EP 504 DI 10.1002/(SICI)1099-131X(199912)18:7<489::AID-FOR727>3.0.CO;2-G PG 16 WC Economics; Management SC Business & Economics GA 274VM UT WOS:000084785800004 ER PT J AU Buchmueller, TC Valletta, RG AF Buchmueller, TC Valletta, RG TI The effect of health insurance on married female labor supply SO JOURNAL OF HUMAN RESOURCES LA English DT Article ID JOB MOBILITY; WELFARE PARTICIPATION; BENEFITS; EMPLOYMENT; DECISION; MEDICAID; ACCESS; DEMAND; WORK; LOCK AB We investigate the effects of employer-provided health insurance on the labor supply of married women. Because health benefits commonly are restricted to full-time workers, wives who prefer to work short hours but have no alternate source of insurance may work long hours in order to acquire coverage for their families. We use data from the April 1993 Current Population Survey Benefits Supplement and we exploit variation in coverage under husbands' health plans to estimate the magnitude of this effect. Our reduced-form labor supply models indicate a strong negative effect of husbands' health insurance on wives' work hours, particularly in families with children. This effect persists when we replace husbands' insurance coverage with husbands' offered insurance, and when we use a multinomial legit model that accounts for unobserved heterogeneity in family labor supply preferences. C1 Univ Calif Irvine, Grad Sch Management, Irvine, CA 92717 USA. Fed Reserve Bank, San Francisco, CA USA. RP Buchmueller, TC (reprint author), Univ Calif Irvine, Grad Sch Management, Irvine, CA 92717 USA. EM tcbuchmu@uci.edu NR 50 TC 36 Z9 36 U1 0 U2 9 PU UNIV WISCONSIN PRESS PI MADISON PA JOURNAL DIVISION, 2537 DANIELS ST, MADISON, WI 53718 USA SN 0022-166X J9 J HUM RESOUR JI J. Hum. Resour. PD WIN PY 1999 VL 34 IS 1 BP 42 EP 70 DI 10.2307/146302 PG 29 WC Economics; Industrial Relations & Labor SC Business & Economics GA 164JD UT WOS:000078459500002 ER PT J AU Rogers, JH AF Rogers, JH TI Monetary shocks and real exchange rates SO JOURNAL OF INTERNATIONAL ECONOMICS LA English DT Article DE exchange rates; monetary shocks; vector autoregressions ID TIME-SERIES; UNIT-ROOT; LONG-RUN; PRICES; POWER AB Many explanations of real exchange rate movements focus on monetary shocks, but it is often found empirically that monetary shocks are unimportant. I provide contrary evidence. Using over 100 years of data, I estimate the contribution of various shocks to explaining variation in the real pound-dollar rate. Several VAR specifications provide a range for their contributions: from 19 to 60% for monetary shocks and 4 to 26% for fiscal and productivity shocks combined. I compare this to related work. My results lend empirical support to the convention in recent quantitative general equilibrium modeling of focusing on monetary shocks. (C) 1999 Elsevier Science B.V. All rights reserved. JEL classification: F3. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP Rogers, JH (reprint author), Fed Reserve Syst, Board Governors, Mail Stop 22, Washington, DC 20551 USA. NR 36 TC 49 Z9 50 U1 0 U2 1 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0022-1996 J9 J INT ECON JI J. Int. Econ. PD DEC PY 1999 VL 49 IS 2 BP 269 EP 288 DI 10.1016/S0022-1996(98)00057-9 PG 20 WC Economics SC Business & Economics GA 258AQ UT WOS:000083816200003 ER PT J AU English, WB AF English, WB TI Inflation and financial sector size SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE inflation; money; financial services ID IN-ADVANCE ECONOMY; WELFARE COST; CASH; MONEY; CURRENCY; PAYMENT; GROWTH; CREDIT AB Traditionally the cost of expected inflation has been seen as the 'shoeleather cost' of going to the bank more often. This paper focuses on the other side of these transactions - i.e., on the increased production of financial services. I construct a model in which households must make purchases either with money or with costly transactions services produced by firms in the financial services sector. In the model, a higher inflation rate leads households to substitute purchased transactions services for money balances, thereby boosting the size of the financial services sector. A test of the model using cross-sectional data finds that the size of a nation's financial sector is strongly affected by its inflation rate. The empirical results provide an alternative way to measure the costs of inflation. These costs appear to be large. (C) 1999 Published by Elsevier Science B.V. All rights reserved. C1 Fed Reserve Syst, Board Governors, Washington, DC 20551 USA. RP English, WB (reprint author), Fed Reserve Syst, Board Governors, 20th & C St NW, Washington, DC 20551 USA. NR 41 TC 10 Z9 11 U1 0 U2 2 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD DEC PY 1999 VL 44 IS 3 BP 379 EP 400 DI 10.1016/S0304-3932(99)00033-1 PG 22 WC Business, Finance; Economics SC Business & Economics GA 263WM UT WOS:000084148300002 ER PT J AU Bullard, J Russell, S AF Bullard, J Russell, S TI An empirically plausible model of low real interest rates and unbacked government debt SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE overlapping generations model; monetary steady state; real interest rate; government debt ID LIFE-CYCLE ECONOMIES; INTERGENERATIONAL TRANSFERS; CAPITAL ACCUMULATION; DYNAMIC EFFICIENCY; TEMPORAL BEHAVIOR; VIVOS TRANSFERS; EQUITY PREMIUM; RISK-AVERSION; ASSET RETURNS; UNITED-STATES AB We study the properties of an overlapping generations model with many-period-lived agents, neoclassical production and capital accumulation, labor-leisure decisions, population growth, and technological progress. We demonstrate that a plausibly calibrated version of this model has 'monetary steady states' - Samuelson-case steady states with large real stocks of unbacked government debt. These steady states can duplicate a number of important features of US post-war data, including three phenomena that challenge other sorts of calibrated models: the low average real interest rate on US government debt, the government's success in reducing the debt/GDP ratio without running large budget surpluses and the relatively high ratio of net saving to output. (C) 1999 Elsevier Science B.V. All rights reserved. C1 Indiana Univ Purdue Univ, Dept Econ, Indianapolis, IN 46202 USA. Fed Reserve Bank, Dept Res, St Louis, MO 63166 USA. RP Russell, S (reprint author), Indiana Univ Purdue Univ, Dept Econ, 425 Univ Blvd, Indianapolis, IN 46202 USA. EM shrusse@iupui.edu RI Bullard, James/L-8120-2016 OI Bullard, James/0000-0002-1142-6803 NR 67 TC 9 Z9 9 U1 2 U2 10 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD DEC PY 1999 VL 44 IS 3 BP 477 EP 508 DI 10.1016/S0304-3932(99)00031-8 PG 32 WC Business, Finance; Economics SC Business & Economics GA 263WM UT WOS:000084148300006 ER PT J AU Krane, S Wascher, W AF Krane, S Wascher, W TI The cyclical sensitivity of seasonality in US employment SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE seasonality; employment; unobserved components; EM algorithm ID TIME-SERIES; BUSINESS CYCLES; MODELS; EXTENSIONS AB This paper investigates interactions between seasonal and cyclical movements in U.S. payroll employment. Using a multivariate unobserved components model, we test for such interactions and find that they are statistically significant in a number of industries. Still, most industry-level seasonality appears to be idiosyncratic. The model also identifies an unobserved common cycle that exhibits similar business cycle properties, but smaller seasonal variation, than aggregate payroll employment. The overall industry-level seasonal factors generated by our model do not differ much from univariate X-ll seasonals in sample, but some differences arise in out-of-sample experiments. (C) 1999 Published by Elsevier Science B.V. All rights reserved. C1 Fed Reserve Syst, Board Governors, Div Res & Stat, Washington, DC 20551 USA. RP Krane, S (reprint author), Fed Reserve Syst, Board Governors, Div Res & Stat, Mail Stop 80, Washington, DC 20551 USA. NR 27 TC 6 Z9 6 U1 1 U2 5 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD DEC PY 1999 VL 44 IS 3 BP 523 EP 553 DI 10.1016/S0304-3932(99)00036-7 PG 31 WC Business, Finance; Economics SC Business & Economics GA 263WM UT WOS:000084148300008 ER PT J AU Roberds, W Whiteman, CH AF Roberds, W Whiteman, CH TI Endogenous term premia and anomalies in the term structure of interest rates: Explaining the predictability smile SO JOURNAL OF MONETARY ECONOMICS LA English DT Article DE term structure; affine factor models ID INTEREST-RATE MOVEMENTS; RATIONAL-EXPECTATIONS; YIELD SPREADS; INFORMATION; MODEL; LONG; VIEW AB Numerous studies have documented a 'predictability smile' in the post-war term structure of interest rates: spreads between long rates and short rates predict subsequent movements in short rates provided the long horizon is less than three months or greater than two years, but not for intermediate maturities. Proposed explanations of the smile involve interest rate smoothing by the Fed, time-varying risk premia,'Peso problems', and measurement error. We show that despite their highly restrictive nature, some parameterizations of the Cox-Ingersoll-Ross (CIR) and Chen-Scott (CS) models of the term structure can account for the predictability smile. CIR and CS parameterizations which are consistent with the smile regularity are inconsistent with other features of the data, however. (C) 1999 Elsevier Science B.V. All rights reserved. C1 Fed Reserve Bank, Dept Res, Atlanta, GA 30303 USA. Univ Iowa, Dept Econ, Iowa City, IA 52242 USA. RP Roberds, W (reprint author), Fed Reserve Bank, Dept Res, 104 Marietta St NW, Atlanta, GA 30303 USA. NR 38 TC 19 Z9 19 U1 1 U2 5 PU ELSEVIER SCIENCE BV PI AMSTERDAM PA PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS SN 0304-3932 J9 J MONETARY ECON JI J. Monetary Econ. PD DEC PY 1999 VL 44 IS 3 BP 555 EP 580 DI 10.1016/S0304-3932(99)00037-9 PG 26 WC Business, Finance; Economics SC Business & Economics GA 263WM UT WOS:000084148300009 ER PT J AU Braun, RA Todd, RM Wallace, N AF Braun, RA Todd, RM Wallace, N TI A general equilibrium interpretation of damage-contingent securities SO JOURNAL OF RISK AND INSURANCE LA English DT Article ID INSURANCE FUTURES; RISK; REINSURANCE AB Cass, Chichilnisky, and Wu (1996) show in an endowment economy that mutual insurance and securities contingent on aggregate states support optimal risk-sharing. We extend their result to a model with production in which risk is endogenous and beliefs about the aggregate state vary across individuals. We use the model to interpret the role of new securities that are contingent on measures of total damage from natural catastrophes. Plausible special cases of the model predict the trade pattern in such securities across diverse regions and predict that such securities will not represent actuarially fair gambles. C1 Int Univ Japan, Yamato, Japan. Fed Reserve Bank Minneapolis, Minneapolis, MN 55480 USA. Penn State Univ, University Pk, PA 16802 USA. RP Braun, RA (reprint author), Int Univ Japan, Yamato, Japan. NR 14 TC 3 Z9 4 U1 0 U2 5 PU AMER RISK INSURANCE ASSOC, INC PI MALVERN PA 716 PROVIDENCE ROAD, PO BOX 3028,, MALVERN, PA 19355-0728 USA SN 0022-4367 J9 J RISK INSUR JI J. Risk Insur. PD DEC PY 1999 VL 66 IS 4 BP 583 EP 595 DI 10.2307/253864 PG 13 WC Business, Finance; Economics SC Business & Economics GA 295XP UT WOS:000085994200003 ER PT J AU Chatterjee, S Ravikumar, B AF Chatterjee, S Ravikumar, B TI Minimum consumption requirements: Theoretical and quantitative implications for growth and distribution SO MACROECONOMIC DYNAMICS LA English DT Article DE growth; inequality; wealth distribution; minimum consumption ID LOW-INCOME; HETEROGENEITY; CONVERGENCE; COUNTRIES; WEALTH; PANEL; INDIA AB We study the impact of a minimum consumption requirement on the rate of economic growth and the evolution of wealth distribution The requirement introduces a positive dependence between the intertemporal elasticity of substitution and household wealth. This dependence implies a transition phase during which the growth rate of per-capita quantities rise toward their steady-state values and the distributions of wealth, consumption, and permanent income become more unequal. We calibrate the minimum consumption requirement to match estimates available for a sample of Indian villagers and find that these transitional effects are quantitatively significant and depend importantly on the economy's steady-state growth rate. C1 Fed Res Bank Philadelphia, Philadelphia, PA 19106 USA. Univ Iowa, Iowa City, IA 52242 USA. RP Chatterjee, S (reprint author), Fed Res Bank Philadelphia, 10 Independence Mall, Philadelphia, PA 19106 USA. RI Ravikumar, B./K-6862-2016 OI Ravikumar, B./0000-0001-6991-4677 NR 23 TC 19 Z9 19 U1 0 U2 2 PU CAMBRIDGE UNIV PRESS PI NEW YORK PA 40 WEST 20TH STREET, NEW YORK, NY 10011-4211 USA SN 1365-1005 J9 MACROECON DYN JI Macroecon. Dyn. PD DEC PY 1999 VL 3 IS 4 BP 482 EP 505 PG 24 WC Economics SC Business & Economics GA 266WM UT WOS:000084323300002 ER PT J AU Black, SE AF Black, SE TI Investigating the link between competition and discrimination SO MONTHLY LABOR REVIEW LA English DT Article AB Evidence suggests that increased international trade in manufacturing and deregulation in the banking industry may have helped reduce discrimination against women in these industries. C1 Fed Reserve Bank New York, Res & Market Anal Grp, New York, NY 10045 USA. RP Black, SE (reprint author), Fed Reserve Bank New York, Res & Market Anal Grp, New York, NY 10045 USA. NR 6 TC 1 Z9 1 U1 0 U2 0 PU US GOVERNMENT PRINTING OFFICE PI WASHINGTON PA SUPERINTENDENT DOCUMENTS,, WASHINGTON, DC 20402-9325 USA SN 0098-1818 J9 MON LABOR REV JI Mon. Labor Rev. PD DEC PY 1999 VL 122 IS 12 BP 39 EP 43 PG 5 WC Industrial Relations & Labor SC Business & Economics GA 281AA UT WOS:000085134900005 ER PT J AU Koenig, EF AF Koenig, EF TI Achieving "program neutrality" under a national retail sales tax SO NATIONAL TAX JOURNAL LA English DT Article AB The imposition of a national retail sales tax would drive a wedge between the pretax and after-tax price levels. Failure to take the implications of this wedge fully into account has caused analysts to significantly underestimate the sales-tax rate that would be required to hold funding of current government programs constant in real terms. C1 Fed Reserve Bank, Dept Res, Dallas, TX 75201 USA. RP Koenig, EF (reprint author), Fed Reserve Bank, Dept Res, Dallas, TX 75201 USA. NR 15 TC 0 Z9 0 U1 0 U2 1 PU NATL TAX ASSN PI COLUMBUS PA 5310 EAST MAIN ST, COLUMBUS, OH 43213 USA SN 0028-0283 J9 NATL TAX J JI Natl. Tax J. PD DEC PY 1999 VL 52 IS 4 BP 683 EP 697 PG 15 WC Business, Finance; Economics SC Business & Economics GA 266AT UT WOS:000084279000003 ER PT J AU Tannenwald, R AF Tannenwald, R TI Financing federal systems: The selected essays of Edward M. Gramlich SO PUBLIUS-THE JOURNAL OF FEDERALISM LA English DT Book Review C1 Fed Reserve Bank, Boston, MA 02106 USA. RP Tannenwald, R (reprint author), Fed Reserve Bank, Boston, MA 02106 USA. NR 1 TC 0 Z9 0 U1 0 U2 0 PU PUBLIUS-JNL OF FEDERALISM PI EASTON PA MEYNER CTR STATE/LOCAL GOVT 16 KIRBY HALL CIV RIGHTS LAFAYETTE COLLEGE, EASTON, PA 18042-1785 USA SN 0048-5950 J9 PUBLIUS J FEDERALISM JI Publius-J. Fed. PD WIN PY 1999 VL 29 IS 1 BP 157 EP 160 PG 4 WC Political Science SC Government & Law GA 279UW UT WOS:000085064300008 ER PT J AU Voith, R AF Voith, R TI The suburban housing market: Effects of city and suburban employment growth SO REAL ESTATE ECONOMICS LA English DT Article ID LAND VALUES; URBAN AREA; TRANSPORTATION; LOCATION; CITIES; PRICE AB Using a data set of over 88,000 housing sales, we find that city employment growth has a significant positive effect on suburban house values; this effect is largest for housing closest to the central business district and declines with increasing distance from it. City employment growth has a negative effect on the rate of suburban house construction; the magnitude of the effect increases with distance. Suburban employment growth has little aggregate effect on house prices, and there is less variation by distance. Suburban growth has a significant effect on construction rates, especially at locations near the urban fringe. C1 Fed Reserve Bank, Philadelphia, PA 19106 USA. RP Voith, R (reprint author), Fed Reserve Bank, Philadelphia, PA 19106 USA. NR 18 TC 2 Z9 2 U1 0 U2 2 PU M I T PRESS PI CAMBRIDGE PA FIVE CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 USA SN 1080-8620 J9 REAL ESTATE ECON JI Real Estate Econ. PD WIN PY 1999 VL 27 IS 4 BP 621 EP 648 DI 10.1111/1540-6229.00786 PG 28 WC Business, Finance; Economics; Urban Studies SC Business & Economics; Urban Studies GA 384WY UT WOS:000165970800002 ER EF