Notes

Journal of Economic Perspectives, Winter 2001

Front Matter

Journal of Economic Perspectives, Winter 2001

Exchange Rate Regimes: Is the Bipolar View Correct?

By Stanley Fischer

Journal of Economic Perspectives, Spring 2001

The bipolar or two-corner solution view of exchange rates is that intermediate policy regimes between hard pegs and floating are not sustainable. This paper argues that the proponents of the bipolar view have probably exaggerated their point. The right st...

An Economist's Guide to U.S. v. Microsoft

[Symposium: The Microsoft Case]

By Richard J. Gilbert and Michael L. Katz

Journal of Economic Perspectives, Spring 2001

We analyze the central economic issues raised by U.S. v Microsoft. Network effects and economies of scale in applications programs created a barrier to entry for new operating system competitors, which the combination of Netscape Navigator and the Java pr...

The Microsoft Case: What Can a Dominant Firm Do to Defend Its Market Position?

[Symposium: The Microsoft Case]

By Benjamin Klein

Journal of Economic Perspectives, Spring 2001

This paper examines the competitive actions taken by Microsoft in its "browser war" with Netscape, most importantly Microsoft's decisions to give away Explorer free of charge, integrate Explorer into its dominant Windows operating system and pay online se...

Exclusivity and Tying in U.S. v. Microsoft: What We Know, and Don't Know

[Symposium: The Microsoft Case]

By Michael D. Whinston

Journal of Economic Perspectives, Spring 2001

U.S. v. Microsoft involved the allegation that Microsoft violated the U.S.antitrust laws by engaging in a variety of practices aimed at excluding rivals and potential rivals, most notably the Netscape Corporation’s Navigator web browser. The government ...

Capital Structure

[Symposium: Changes in Corporate Structure]

By Stewart C. Myers

Journal of Economic Perspectives, Spring 2001

Research on capital structure attempts to explain how corporations finance real investment, with particular emphasis on the proportions of debt vs. equity financing. There is no universal theory of the debt-equity choice, and no reason to expect one. But ...

New Evidence and Perspectives on Mergers

[Symposium: Changes in Corporate Structure]

By Gregor Andrade, Mark Mitchell, and Erik Stafford

Journal of Economic Perspectives, Spring 2001

As in previous decades, merger activity clusters by industry during the 1990s. One particular kind of industry shock, deregulation, becomes a dominant factor, accountings for nearly half of the merger activity since the late 1980s. In contrast to the 1980...

Corporate Governance and Merger Activity in the United States: Making Sense of the 1980s and 1990s

[Symposium: Changes in Corporate Structure]

By Bengt Holmstrom and Steven N. Kaplan

Journal of Economic Perspectives, Spring 2001

This paper describes and considers explanations for changes in corporate governance and merger activity in the United States since 1980. Corporate governance in the 1980s was dominated by intense merger activity distinguished by the prevalence of leverage...

The Venture Capital Revolution

[Symposium: Changes in Corporate Structure]

By Paul Gompers and Josh Lerner

Journal of Economic Perspectives, Spring 2001

Venture capital has emerged as an important intermediary in financial markets, providing capital to young high-technology firms that might have otherwise gone unfunded. Venture capitalists have developed a variety of mechanisms to overcome the problems th...

The Record and Prospects of the All-Volunteer Military in the United States

By John T. Warner and Beth J. Asch

Journal of Economic Perspectives, Spring 2001

From the onset of World War II until July 1973, the draft was a fact of life for male youth in the United States. Since then, America's armed forces have been staffed by volunteers. Recent recruiting difficulties have precipitated calls from some quarters...

Tobacco at the Crossroads: The Past and Future of Smoking Regulation in the United States

By Jonathan Gruber

Journal of Economic Perspectives, Spring 2001

The past five years have seen a dramatic turn of events against the tobacco industry, raising the question of the appropriate future path for smoking policy in the U.S. This paper discusses the theory and evidence on regulation of smoking. I begin by revi...

Early Childhood Education Programs

By Janet Currie

Journal of Economic Perspectives, Spring 2001

This paper discusses early childhood education programs: their goals; effectiveness; optimal timing, targeting, and content; and costs and benefits. Early intervention has significant short- and medium-term benefits: most notably it reduces grade repetiti...

The National Longitudinal Surveys

By Michael R. Pergamit, Charles R. Pierret, Donna S. Rothstein, and Jonathan R. Veum

Journal of Economic Perspectives, Spring 2001

This article describes the design features and topical coverage of the National Longitudinal Surveys (NLS). The NLS are perhaps the oldest and most widely used panel surveys of individuals in the United States. These surveys were started in the mid-1960s ...

Recommendations for Further Reading

By Bernard Saffran

Journal of Economic Perspectives, Spring 2001

Notes

Journal of Economic Perspectives, Spring 2001

The Life-Cycle Model of Consumption and Saving

[Symposium: Consumption Behaviour]

By Martin Browning and Thomas F. Crossley

Journal of Economic Perspectives, Summer 2001

A central implication of life-cycle models is that agents smooth consumption. We review the empirical evidence on smoothing at frequencies from within the year up to across a lifetime. We find that life-cycle models--particular those which incorporate rea...

A Theory of the Consumption Function, with and without Liquidity Constraints

[Symposium: Consumption Behaviour]

By Christopher D. Carroll

Journal of Economic Perspectives, Summer 2001

This paper argues that the modern stochastic consumption model, in which impatient consumers face uninsurable labor income risk, matches Milton Friedman's (1957) original description of the Permanent Income Hypothesis much better than the perfect foresigh...

The Hyperbolic Consumption Model: Calibration, Simulation, and Empirical Evaluation

[Symposium: Consumption Behaviour]

By George-Marios Angeletos, David Laibson, Andrea Repetto, Jeremy Tobacman, and Stephen Weinberg

Journal of Economic Perspectives, Summer 2001

Laboratory and field studies of time preference find that discount rates are much greater in the short run than in the long run. Hyperbolic discount functions capture this property. This paper presents simulations of the savings and asset allocation choic...

The WTO as a Mechanism for Securing Market Access Property Rights: Implications for Global Labor and Environmental Issues

[Symposium: Trade, Labor and the Environment]

By Kyle Bagwell and Robert W. Staiger

Journal of Economic Perspectives, Summer 2001

Can the World Trade Organization (WTO) contribute to the attainment of sound labor and environmental policies? An answer requires an understanding of WTO rules. We argue that the purpose of WTO rules is to create a negotiating forum where governments can ...