Notes

Journal of Economic Perspectives, Spring 1995

Front Matter

Journal of Economic Perspectives, Spring 1995

Recommendations for Further Reading

Journal of Economic Perspectives, Spring 1995

Distinguished Lecture on Economics in Government: The Economist vs. Madmen in Authority

By Isabel V. Sawhill

Journal of Economic Perspectives, Summer 1995

This lecture, given to the Society of Government Economists in January 1995, examines the influence of research on policy and vice versa using three widely believed propositions. The first is that government spending is wasteful or ineffective and can rea...

Are Your Wages Set in Beijing?

[Symposium: Income Inequality and Trade]

By Richard B. Freeman

Journal of Economic Perspectives, Summer 1995

The economic troubles of less-skilled workers in the United States. and OECD-Europe during a period of rising manufacturing imports from third world countries has created a debate about whether, in a global economy, wages or employment are determined by t...

Income Inequality and Trade: How to Think, What to Conclude

[Symposium: Income Inequality and Trade]

By J. David Richardson

Journal of Economic Perspectives, Summer 1995

Recent econometric work and growing analytical consensus suggest that exogenous international market pressures are a contributing factor to trends in U.S. wage/earnings inequality. Trade accounts for a share of these inequality trends close to or somewhat...

How Trade Hurt Unskilled Workers

[Symposium: Income Inequality and Trade]

By Adrian Wood

Journal of Economic Perspectives, Summer 1995

This paper argues that the main cause of the deteriorating economic position of unskilled workers in the United States and other developed countries has been expansion of trade with developing countries. In the framework of a Heckscher-Ohlin model, it out...

Symposium on Consumption Smoothing in Developing Countries

[Symposium: Consumption Smoothing in Developing Countries]

By Anne Case

Journal of Economic Perspectives, Summer 1995

This symposium explores how households in low-income countries, even without access to formal credit and insurance markets, find ways to smooth consumption in the face of large shocks to their income. This general area of risk sharing and consumption smoo...

Consumption Insurance: An Evaluation of Risk-Bearing Systems in Low-Income Economies

[Symposium: Consumption Smoothing in Developing Countries]

By Robert M. Townsend

Journal of Economic Perspectives, Summer 1995

The hypothesis of full risk sharing can be taken to data from low-income countries and evaluate formal and informal financial systems. In many contexts, idiosyncratic risks are high, so credit/insurance arrangements could be beneficial. Statistical tests ...

Income Smoothing and Consumption Smoothing

[Symposium: Consumption Smoothing in Developing Countries]

By Jonathan Morduch

Journal of Economic Perspectives, Summer 1995

One way that risk-averse households protect consumption levels is to borrow and use insurance mechanisms. Another way, common in low-income economies, is to diversify economic activities and make conservative production and employment choices. Households ...

Nonmarket Institutions for Credit and Risk Sharing in Low-Income Countries

[Symposium: Consumption Smoothing in Developing Countries]

By Timothy Besley

Journal of Economic Perspectives, Summer 1995

The design credit and risk institutions in low-income countries provides one of the most exciting testing grounds for theories of contracting with imperfect information and limited enforcement. This paper reviews some of the recent literature, with a spec...

Some Lessons from the Yield Curve

By John Y. Campbell

Journal of Economic Perspectives, Summer 1995

This paper reviews the literature on the relation between short- and long-term interest rates. It summarizes the mixed evidence on the expectation hypothesis of the term structure: when long rates are high relative to short rates, short rates tend to rise...

An Introduction to the Wage Curve

By David G. Blanchflower and Andrew J. Oswald

Journal of Economic Perspectives, Summer 1995

This paper documents a statistical regulatity or law. It shows that there exists a downward-sloping curve linking the level of a worker's pay to the unemployment rate in the worker's region. The same curve can be found in microeconomic data sets from sixt...

The Stories We Tell: A Reconsideration of AS/AD Analysis

By David Colander

Journal of Economic Perspectives, Summer 1995

This paper explains that the AS/AD model as currently presented in the tests is seriously flawed. It does not fulfill the minimum requirement of a model: logical consistency. Its component parts are derived from models that reflect different, and inconsis...

Retrospectives: Schumpeter, David Wells, and Creative Destruction

By Michael Perelman

Journal of Economic Perspectives, Summer 1995

Joseph A. Schumpeter's celebrated theory of creative destruction was anticipated by David Wells's Recent Economic Changes (1989). In some respects, Wells's treatment is superior to that of Schumpeter. Unlike Schumpeter, who believed that monopolistic comp...

Policy Watch: Did Nasdaq Market Makers Implicitly Collude?

By William G. Christie and Paul H. Schultz

Journal of Economic Perspectives, Summer 1995

This paper chronicles the research that led to the conclusion that Nasdaq marketmakers implicitly colluded to maintain supracompetitive spreads (Christie and Schultz, 1994). The paper provides a brief description of the differences between a dealer and an...

Front Matter

Journal of Economic Perspectives, Summer 1995

Recommendations for Further Reading

Journal of Economic Perspectives, Summer 1995

Notes

Journal of Economic Perspectives, Summer 1995

Symposium on the Monetary Transmission Mechanism

[Symposium: The Monetary Transmission Mechanism]

By Frederic S. Mishkin

Journal of Economic Perspectives, Fall 1995

Understanding of monetary transmission mechanisms is crucial to answering a broad range of questions. These transmission mechanisms include interest-rate effects, exchange-rate effects, other asset price effects, and the so-called credit channel. This int...