Tax Competition When Governments Lack Commitment: Excess Capacity as a Countervailing Threat

By Eckhard Janeba

American Economic Review, December 2000

Selective versus Universal Vouchers: Modelling Median Voter Preferences in Education

By Zhiqi Chen and Edwin G. West

American Economic Review, December 2000

Central-Bank Credibility: Why Do We Care? How Do We Build It?

By Alan S. Blinder

American Economic Review, December 2000

Nominal Wage Rigidity and Industry Characteristics in the Downturns of 1893, 1929, and 1981

By Christopher Hanes

American Economic Review, December 2000

Money, Sticky Wages, and the Great Depression

By Michael D. Bordo, Christopher J. Erceg, and Charles L. Evans

American Economic Review, December 2000

Social Interactions and the Institutions of Local Government

By Robert W. Helsley and William C. Strange

American Economic Review, December 2000

Output Fluctuations in the United States: What Has Changed since the Early 1980's?

By Margaret M. McConnell and Gabriel Perez-Quiros

American Economic Review, December 2000

Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Reply

By David Card and Alan B. Krueger

American Economic Review, December 2000

Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Comment

By David Neumark and William Wascher

American Economic Review, December 2000

Performance Pay and Productivity

By Edward P. Lazear

American Economic Review, December 2000

Much of the theory in personnel economics relates to effects of monetary incentives on output, but the theory was untested because appropriate data were unavailable. A new data set for the Safelite Glass Corporation tests the predictions that average prod...

Aggregate Employment Fluctuations with Microeconomic Asymmetries

By Jeffrey R. Campbell and Jonas D. M. Fisher

American Economic Review, December 2000

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 of creating and destroying jobs cause shrinking p...

The Determinants of Equilibrium Unemployment

By Eran Yashiv

American Economic Review, December 2000

The paper takes the search and matching model of the aggregate labor market to the data. It tests the model's empirical validity and employs structural estimation to generate a characterization of the optimal behavior of firms and workers. The model is ap...

Economic Integration and Political Disintegration

By Alberto Alesina, Enrico Spolaore, and Romain Wacziarg

American Economic Review, December 2000

In a world of trade restrictions, large countries enjoy economic benefits, because political boundaries determine the size of the market. Under free trade and global markets even relatively small cultural, linguistic or ethnic groups can benefit from form...

Diversity and Trade

By Gene M. Grossman and Giovanni Maggi

American Economic Review, December 2000

We develop a competitive model of trade between countries with similar aggregate factor endowments. The trade pattern reflects differences in the distribution of talent across the labor forces of the two countries. The country with a relatively homogeneou...

"Globalization" and Vertical Structure

By John McLaren

American Economic Review, December 2000

This paper analyzes the effects of international openness on vertical integration. Vertical integration can confer a negative externality, by thinning the market for inputs and thus worsening opportunism problems; this induces strategic complementarity an...

Does Competition among Public Schools Benefit Students and Taxpayers?

By Caroline M. Hoxby

American Economic Review, December 2000

Tiebout choice among districts is the most powerful market force in American public education. Naive estimates of its effects are biased by endogenous district formation. I derive instruments from the natural boundaries in a metropolitan area. My results ...

Schooling, Labor-Force Quality, and the Growth of Nations

By Eric A. Hanushek and Dennis D. Kimko

American Economic Review, December 2000

Direct measures of labor-force quality from international mathematics and science test scores are strongly related to growth. Indirect specification tests are generally consistent with a causal link: direct spending on schools is unrelated to student perf...

Does Schooling Cause Growth?

By Mark Bils and Peter J. Klenow

American Economic Review, December 2000

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 calib...

Endogenous Business Cycles and the Dynamics of Output, Hours, and Consumption

By Stephanie Schmitt-Grohe

American Economic Review, December 2000

This paper studies the business-cycle fluctuations predicted by a two-sector endogenous-business-cycle model with sector-specific external increasing returns to scale. It focuses on aspects of actual fluctuations that have been identified both as defining...

Monetary Aggregates and Output

By Scott Freeman and Finn E. Kydland

American Economic Review, December 2000

We ask whether the following observations may result from endogenously determined fluctuations in the money multiplier rather than a causal influence of money on output: (i) M1 is positively correlated with real output; (ii) the money multiplier and depos...