American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 17 3 Summer 2003 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=17&issue=3&issue_date=Summer 2003 Journal Article The Economics and Law of Sexual Harassment in the Workplace KaushikBasu 141 157 Suppose a firm has a widespread reputation for sexually harassing its employees. When a person signs up to work for such a firm, it would appear that both the firm and the worker are better off by virtue of the "exchange". Is there a case then for government to ban sexual harassment in the workplace? Starting from this question, this paper constructs an argument for legislative intervention. This "economic approach" is applied to other labor market practices and is used to evaluate and critique the current law concerning sexual harassment in the U.S. and other nations. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=17&issue=3&article=1&issue_date=Summer 2003 10.1257/089533003769204399 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 17 3 Summer 2003 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=17&issue=3&issue_date=Summer 2003 Journal Article Halving Global Poverty TimothyBesley RobinBurgess 3 22 The Millennium Development Goals--global targets that the world's leaders set at the Millennium Summit in September 2000--are an ambitious agenda for reducing poverty. As a central plank, these goals include halving the proportion of people living below a dollar a day from around 30 percent of the developing world's population in 1990 to 15 percent by 2015--a reduction in the absolute number of poor of around one billion. This paper examines what economic research can tell us about how to fulfill these goals. It begins by discussing poverty trends on a global scale--where the poor are located in the world and how their numbers have been changing over time. It then discusses the relationship of economic growth and income distribution to poverty reduction. Finally, it suggests an evidence-based agenda for poverty reduction in the developing world. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=17&issue=3&article=2&issue_date=Summer 2003 10.1257/089533003769204335 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 17 3 Summer 2003 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=17&issue=3&issue_date=Summer 2003 Journal Article Can Foreign Aid Buy Growth? WilliamEasterly 23 48 The widely publicized finding that "aid promotes growth in a good policy environment" is not robust to the inclusion of new data or alternative definitions of "aid," "policy" or "growth." The idea that "aid buys growth" is on shaky ground theoretically and empirically. It doesn't help that aid agencies face poor incentives to deliver results and underinvest in enforcing aid conditions and performing scientific evaluations. Aid should set more modest goals, like helping some of the people some of the time, rather than trying to be the catalyst for society-wide transformation. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=17&issue=3&article=3&issue_date=Summer 2003 10.1257/089533003769204344 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 17 3 Summer 2003 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=17&issue=3&issue_date=Summer 2003 Journal Article The Trouble with Stock Options Brian J.Hall Kevin J.Murphy 49 70 The benefits of stock options are often not large enough to offset the inefficiency implied by the large divergence between the cost of options to companies and the value of options to risk-averse, undiversified executives and employees. Moreover, the benefits of options can often be achieved more effectively and economically through other means. Why are options so prevalent? Several explanations include changes in corporate governance, reporting requirements, taxes, the bull market and managerial rent-seeking. We offer an alternative hypothesis: boards and managers incorrectly perceive stock options to be inexpensive because options create no accounting charge and require no cash outlay. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=17&issue=3&article=4&issue_date=Summer 2003 10.1257/089533003769204353 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 17 3 Summer 2003 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=17&issue=3&issue_date=Summer 2003 Journal Article Executive Compensation as an Agency Problem Lucian AryeBebchuk Jesse M.Fried 71 92 Executive compensation has long attracted a great deal of attention from financial economists. Indeed, the increase in academic papers on the subject of CEO compensation during the 1990s seems to have outpaced even the remarkable increase in CEO pay itself during this period (Murphy, 1999). Much research has focused on how executive compensation schemes can help alleviate the agency problem in publicly traded companies. To understand adequately the landscape of executive compensation, however, one must recognize that the design of compensation arrangements is also partly a product of this same agency problem. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=17&issue=3&article=5&issue_date=Summer 2003 10.1257/089533003769204362 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 17 3 Summer 2003 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=17&issue=3&issue_date=Summer 2003 Journal Article Why Have Americans Become More Obese? David M.Cutler Edward L.Glaeser Jesse M.Shapiro 93 118 Americans have become considerably more obese over the past 25 years. This increase is primarily the result of consuming more calories. The increase in food consumption is itself the result of technological innovations which made it possible for food to be mass prepared far from the point of consumption, and consumed with lower time costs of preparation and cleaning. Price changes are normally beneficial, but may not be if people have self-control problems. This applies to some, but not most, of the population. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=17&issue=3&article=6&issue_date=Summer 2003 10.1257/089533003769204371 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 17 3 Summer 2003 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=17&issue=3&issue_date=Summer 2003 Journal Article The Negative Income Tax and the Evolution of U.S. Welfare Policy Robert A.Moffitt 119 140 The negative income tax proposed by Milton Friedman represents one of the fundamental ideas of modern welfare policy. However, the academic literature has raised two difficulties with it, one challenging its purported work incentives and the other suggesting the possible superiority of work requirements. In addition, work requirement approaches have gained ground in actual U.S. welfare policy over the last 30 years and the number of different programs has proliferated, another development counter to the negative income tax. On the other hand, the Earned Income Tax Credit has produced a negative-income-tax-like program on a vast scale. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=17&issue=3&article=7&issue_date=Summer 2003 10.1257/089533003769204380 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 17 3 Summer 2003 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=17&issue=3&issue_date=Summer 2003 Journal Article In Honor of Matthew Rabin: Winner of the John Bates Clark Medal ColinCamerer Richard H.Thaler 159 176 Although there is some evidence that Matthew Rabin existed before 1990, we had the pleasure of discovering him for ourselves when, in the early 1990s, he sent each of us a copy of his manuscript "Incorporating Fairness into Game Theory and Economics" [2]. Matthew was, at this time, an assistant professor in Berkeley's economics department, having recently finished his graduate training at MIT. The paper was remarkable in many ways, and it induced us both to call around and ask: "Who is this guy Rabin?" Now, just a decade later, we find ourselves writing an article in honor of his winning the John Bates Clark award. So, who is this guy? http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=17&issue=3&article=8&issue_date=Summer 2003 10.1257/089533003769204407 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 17 3 Summer 2003 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=17&issue=3&issue_date=Summer 2003 Journal Article Retrospectives: Who Invented Instrumental Variable Regression? James H.Stock FrancescoTrebbi 177 194 This feature addresses the history of economic words and ideas. The hope is to deepen the workaday dialogue of economists, while perhaps also casting new light on ongoing questions. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=17&issue=3&article=9&issue_date=Summer 2003 10.1257/089533003769204416 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 17 3 Summer 2003 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=17&issue=3&issue_date=Summer 2003 Journal Article Recommendations for Further Reading BernardSaffran 195 202 This section will list readings that may be especially useful to teachers of undergraduate economics, as well as other articles that are of broader cultural interest. In general, the articles chosen will be expository or integrative and not focus on original research. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=17&issue=3&article=10&issue_date=Summer 2003 10.1257/089533003769204425 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 17 3 Summer 2003 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=17&issue=3&issue_date=Summer 2003 Journal Article Comments 203 206 http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=17&issue=3&article=11&issue_date=Summer 2003 10.1257/089533003769204434 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 17 3 Summer 2003 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=17&issue=3&issue_date=Summer 2003 Journal Article Notes 207 213 http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=17&issue=3&article=12&issue_date=Summer 2003 10.1257/089533003769204443