AEAweb: AER: Contents: September 2000

American Economic Review
Vol. 90, No. 4, September 2000

Contents

Orchestrating Impartiality: The Impact of "Blind" Auditions on Female Musicians
Claudia Goldin and Cecilia Rouse      715-741

Wage Shocks and North American Labor-Market Integration
Raymond Robertson      742-764

Mentoring and Diversity
Susan Athey, Christopher Avery, and Peter Zemsky      765-786

Asset Pricing with Distorted Beliefs: Are Equity Returns Too Good to Be True?
Stephen G. Cecchetti, Pok-sang Lam, and Nelson C. Mark      787-805

Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond
Oded Galor and David N. Weil      806-828

Endogenous Growth and Cross-Country Income Differences
Peter Howitt      829-846

Aid, Policies, and Growth
Craig Burnside and David Dollar      847-868

A Reassessment of the Relationship Between Inequality and Growth
Kristin J. Forbes      869-887

Intelligence, Social Mobility, and Growth
John Hassler and José V. Rodríguez Mora    888-908

A Representative Consumer Theory of Distribution
Francesco Caselli and Jaume Ventura       909-926

Meetings with Costly Participation
Martin J. Osborne, Jeffrey S. Rosenthal, and Matthew A. Turner      927-943

Motivating Wealth-Constrained Actors
Tracy R. Lewis and David E. M. Sappington     944-960

Demand Reduction in Multiunit Auctions: Evidence from a Sportscard Field Experiment
John A. List and David Lucking-Reiley      961-972

Does Culture Matter in Economic Behavior? Ultimatum Game Bargaining Among the Machiguenga of the Peruvian Amazon
Joseph Henrich      973-979

Cooperation and Punishment in Public Goods Experiments
Ernst Fehr and Simon Gächter      980-994

Asset Markets: How They Are Affected by Tournament Incentives for Individuals
Duncan James and R. Mark Isaac      995-1004

Losing Sleep at the Market: The Daylight Saving Anomaly
Mark J. Kamstra, Lisa A. Kramer, and Maurice D. Levi      1005-1011

Private Information and Trade Timing
Lones Smith      1012-1018

A Preference Regime Model of Bull and Bear Markets
Stephen Gordon and Pascal St-Amour      1019-1033

Learning and Forgetting: They Dynamics of Aircraft Production
C. Lanier Benkard      1034-1054

Optimal Risk Adjustment in Markets with Adverse Selection: An Application to Managed Care
Jacob Glazer and Thomas G. McGuire      1055-1071

Fair Shares: Accountability and Cognitive Dissonance in Allocation Decisions
James Konow      1072-1091

A change in the audition procedures of symphony orchestras -- adoption of "blind" auditions with a "screen" to conceal the candidate's identity from the jury -- provides a test for sex-biased hiring. Using data from actual auditions, in an individual fixed-effects framework, we find that the screen increases the probability a woman will be advanced and hired. Although some of our estimates have large standard errors and there is one persistent effect in the opposite direction, the weight of the evidence suggests that the blind audition procedure fostered impartiality in hiring and increased the proportion women in symphony orchestras.

View article in pdf format (AEA members only)
Sign up for e-AER

This study uses household-level data from the United States and Mexico to examine labor-market integration. I consider how the effects of shocks and rates of convergence to an equilibrium differential are affected by borders, geography, and demographics. I find that even though a large wage differential exists between them, the labor markets of the United States and Mexico are closely integrated. Mexico's border region is more integrated with the United States than is the Mexican interior. Evidence of integration precedes the North American Free Trade Agreement (NAFTA) and may be largely the result of migration.

View article in pdf format (AEA members only)
Sign up for e-AER

We study how diversity evolves at a firm with entry-level and upper-level employees who vary in ability and "type" (gender or ethnicity). The ability of entry-level employees is increased by mentoring. An employ receives more mentoring when more upper-level employees have the same type. Optimal promotions are biased by type, and this bias may favor either the minority or the majority. We characterize possible steady states, including a "glass ceiling," where the upper level remains less diverse than the entry level. A firm may have multiple steady states, whereby temporary affirmative-action policies have a long-run impact.

View article in pdf format (AEA members only)
Sign up for e-AER

We study a Lucas asset-pricing model that is standard in all respects, except that the representative agent's subjective beliefs about endowment growth are distorted. Using constant relative risk-aversion (CRRA) utility, with a CRRA coefficient below 10; fluctuating beliefs that exhibit, on average, excessive pessimism over expansions; and excessive optimism over contractions (both ending more quickly than the data suggest), our model is able to match the first and second moments of the equity premium and risk-free rate, as well as he persistence and predictability of excess returns found in the data.

View article in pdf format (AEA members only)
Sign up for e-AER

This paper develops a unified growth model that captures the historical evolution of population, technology, and output. It encompasses the endogenous transition between three regimes that have characterized economic development. The economy evolves from a Malthusian regime, where technological progress is slow and population growth prevents any sustained rise in income per capita, into a Post-Malthusian regime, where technological progress rises and population growth absorbs only part of output growth. Ultimately, a demographic transition reverses the positive relationship between income and population growth, and the economy enters a Modern Growth regime, with reduced population growth and sustained income growth.

View article in pdf format (AEA members only)
Sign up for e-AER

A multicountry Schumpeterian growth model is constructed. Because of technology transfer, R&D-performing countries converge to parallel growth paths; other countries stagnate. A parameter change that would have raised a country's growth rate in standard Schumpetarian theory will permanently raise its productivity and per capita income relative to other countries and raise the world growth rate. Transitional dynamics are analyzed for each country and for the world economy. Steady-state income differences obey the same equation as in neoclassical theory, but since R&D is positively correlated with investment rates, capital accumulation accounts for less than estimated by neoclassical theory.

View article in pdf format (AEA members only)
Sign up for e-AER

This paper uses a new database on foreign aid to examine the relationships among foreign aid, economic policies, and growth per capita GDP. We find that aid has a positive impact on growth in developing countries with good fiscal, monetary, and trade policies but has little effect in the presence of poor policies. Good policies are ones that are themselves important for growth. The quality of policy has only a small impact on the allocation of aid. Our results suggest that aid would be more effective if it were more systematically conditioned on good policy.

View article in pdf format (AEA members only)
Sign up for e-AER

This paper challenges the current belief that income inequality has a negative relationship with economic growth. It uses an improved data set on income inequality, which not only reduces measurement error, but also allows estimation via a panel technique. Panel estimation makes it possible to control for time-invariant country-specific effects, therefore eliminating a potential source of omitted-variable bias. Results suggest that in the short and medium term, an increase in a country's level of income inequality has a significant positive relationship with subsequent economic growth. This relationship is highly robust across samples, variable definitions, and model specifications.

View article in pdf format (AEA members only)
Sign up for e-AER

We develop a model where the allocation of human resources, intergenerational social mobility, and technological growth are jointly determined. High Growth endogenously increases the equilibrium return to innate cognitive ability and makes the allocation of individuals depend more on innate ability and less on social background. Individuals with a higher level of innate cognitive ability can deal better with less known, bur more productive, technologies and thus choose a higher rate of technological growth. A social allocation based on innate ability and high growth will thus reinforce each other, implying the possibility of multiple endogenous growth equilibrium.

View article in pdf format (AEA members only)
Sign up for e-AER

This paper introduces various sources of consumer heterogeneity in one-sector representative consumer (RC) growth models and develops tools to study the evolution of the distribution of consumptions, assets, and incomes. These tools are applied to the Ramsey-Cass-Koopmans model of optimal savings and the Arrow-Romer model of productive spillovers. The RC property per se places very few restrictions on the nature of observed distributions, and a wide range of distributive dynamics and income mobility patterns can arise as the equilibrium outcome. An example illustrates how to use these tools to generate quantitative predictions and compare them to the data.

View article in pdf format (AEA members only)
Sign up for e-AER

We study a collective decision-making process in which people interested in an issue may participate, at a cost, in a meeting, and the resulting decision is a compromise among the participants' preferences. We show that the equilibrium number of participants is small and their positions are extreme, and when the compromise is the median, the outcome is likely to be random. The model and its equilibria are consistent with evidence on the procedures and outcomes of U.S. regulatory hearings.

View article in pdf format (AEA members only)
Sign up for e-AER

We examine how owners of productive resources (e.g. public enterprises or financial capital) optimally allocate their resources among wealth-constrained operators of unknown ability. Optimal allocations exhibit: (1) shared enterprise profit -- the resource owner always shares the operator's profit; (2) dispersed enterprise ownership -- resources are widely distributed among operators of varying ability; (3) limited benefits of competition -- the owner may not benefit from increased competition for the resource; and, sometimes (4) diluted incentives for the most capable -- more capable operators receive smaller shares of the returns they generate. Implications for privatizations and venture capital arrangements are explored.

View article in pdf format (AEA members only)
Sign up for e-AER

No abstract available.

View article in pdf format (AEA members only)
Sign up for e-AER

No abstract available.

View article in pdf format (AEA members only)
Sign up for e-AER

No abstract available.

View article in pdf format (AEA members only)
Sign up for e-AER

No abstract available.

View article in pdf format (AEA members only)
Sign up for e-AER

No abstract available.

View article in pdf format (AEA members only)
Sign up for e-AER

No abstract available.

View article in pdf format (AEA members only)
Sign up for e-AER

No abstract available.

View article in pdf format (AEA members only)
Sign up for e-AER

No abstract available.

View article in pdf format (AEA members only)
Sign up for e-AER

No abstract available.

View article in pdf format (AEA members only)
Sign up for e-AER

No abstract available.

View article in pdf format (AEA members only)
Sign up for e-AER

Back to Contents