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Interview with Robert A. Mundell
Howard R. Vane and Chris Mulhearn
Abstract
Robert A. Mundell has been Professor of Economics at Columbia University in New York City, New York, since 1974 and University Professor since 2001. In 1999, he was awarded the Nobel Memorial Prize in Economic Science ?for his analysis of monetary and fiscal policy under different exchange rate regimes and his analysis of optimum currency areas.? We interviewed Professor Mundell at his hotel in Boston, Massachusetts, on January 7, 2006, while attending the annual meeting of the Allied Social Science Associations.
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Avoiding Invalid Instruments and Coping with Weak Instruments
Michael P. Murray
Abstract
Archimedes said, ?Give me the place to stand, and a lever long enough, and I will move the Earth.? Economists have their own powerful lever: the instrumental variable estimator. The instrumental variable estimator can avoid the bias that ordinary least squares suffers when an explanatory variable in a regression is correlated with the regression?s disturbance term. But, like Archimedes? lever, instrumental variable estimation requires both a valid instrument on which to stand and an instrument that isn?t too short (or ?too weak?). This paper briefly reviews instrumental variable estimation, discusses classic strategies for avoiding invalid instruments (instruments themselves correlated with the regression?s disturbances), and describes recently developed strategies for coping with weak instruments (instruments only weakly correlated with the offending explanator).
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The Homecoming of American College Women: The Reversal of the College Gender Gap
Claudia Goldin, Lawrence F. Katz and Ilyana Kuziemko
Abstract
Women are currently the majority of U.S. college students and of those receiving a bachelor?s degree, but were 39 percent of undergraduates in 1960. We use three longitudinal data sets of high school graduates in 1957, 1972, and 1992 to understand the narrowing of the gender gap in college and its reversal. From 1972 to 1992 high school girls narrowed the gap with boys in math and science course taking and in achievement test scores. These variables, which we term the proximate determinants, can account for 30 to 60 percent of the relative increase in women?s college completion rate. Behind these changes were several others: the future work expectations of young women increased greatly between 1968 and 1979 and the age at first marriage for college graduate women rose by 2.5 years in the 1970s, allowing them to be more serious students. The reversal of the college gender gap, rather than just its elimination, was due in part to the persistence of behavioral and developmental differences between males and females.
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The London Congestion Charge
Jonathan Leape
Abstract
By the 1990s, the average speed of trips across London was below that at the beginning of the twentieth century?before the car was introduced?and by the end of that decade, public concern over levels of traffic congestion was high. In early 2003, London imposed a congestion charge?a daily charge for driving or parking a vehicle on public roads within central London between the hours of 7:00 a.m. and 6:30 p.m. on workdays. Traffic congestion has declined substantially, and the program is largely popular. This article describes the origins of the London congestion charge, how it overcame practical and theoretical difficulties, and what effects it has had. The introduction of the London congestion charge is, in important respects, a triumph of economics. It represents a high-profile public and political recognition of congestion as a distorting externality and of road pricing as an appropriate policy response.
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How Richard Nixon Pressured Arthur Burns: Evidence from the Nixon Tapes
Burton A. Abrams
Abstract
Evidence from the Nixon tapes, now available to researchers, shows that President Richard Nixon pressured the chairman of the Federal Reserve, Arthur Burns, to engage in expansionary monetary policies in the run-up to the 1972 election. This paper quotes the relevant conversations from the Nixon tapes. Questions remain as to whether Burns followed an expansionary policy in an already-inflationary environment out of conviction or because of political pressure.
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What Has Mattered to Economics Since 1970
E. Han Kim, Adair Morse and Luigi Zingales
Abstract
Citations are one way that past research echoes through time. In this paper, we compile a list of articles published in major refereed economics journals in the last 35 years that have received more than 500 citations as of June 2006. We then use this list to examine various trends: what fields of economics are most in vogue; what types of articles generate the most interest; and which institutions host the production of these articles and train their authors.
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Features
Markets: The U.S. Lodging Industry
Arturs Kalnins
Abstract
The U.S. lodging industry appears highly competitive. Ownership concentration appears to be low. Fixed costs are high relative to variable costs and unused rooms cannot be stored for future sale, so price-cutting should be attractive. However, this paper argues that, unexpectedly, oligopolistic market structures in many local lodging markets, combined with behavioral norms of cooperation, sustain profits in what might otherwise be an industry of cutthroat competition. I describe the patterns of competition and cooperation in the U.S. lodging industry, summarizing theoretical arguments, empirical research, descriptive statistics from industry and government sources, and anecdotal evidence from the trade press and from interviews conducted with managers of over 200 properties nationwide.
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Policy Watch: Examining the Justification for Residential Recycling
Thomas C. Kinnaman
Abstract
There are 8,875 municipalities in the United States that have initiated curbside recycling programs over the past two decades to help reduce residential solid waste. Four thousand of these municipalities encourage recycling by requiring households to pay a fee for each unit of garbage presented at the curb for collection. How beneficial have the various recycling policies been in practice? This article examines the empirical lessons gained from twenty years of solid waste policy in the United States and argues for the replacement of several state recycling mandates with a moderate landfill tax.
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Recommendations for Further Reading
Timothy Taylor
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