Knowledge that Transforms

Tallest in the World: Native Americans of the Great Plains in the Nineteenth Century by Richard H. Steckel and Joseph M. Prince. Published in volume 91, issue 1, pages 287-294 of American Economic Review, March 2001

In this paper we analyze the impact of the Internet on the performance of the economy and the standard of living of average Americans. Our analyses illustrate that even though the stock market’s speculative bubble has burst, the Internet will continue to have a significant impact on old economy industries and as a result generate real benefits for the overall economy.

This paper develops a two-country model to study two questions. How do the degrees of centralization of redistribution and of factor mobility affect the productive efficiency of the economies? What degrees of centralization of redistribution and of factor mobility are likely to be chosen by majority rule? The model shows that a system of centralized redistribution can lead to less efficient outcomes if labor or capital are not mobile; and an inefficient outcome, with incomplete or no factor mobility, receives a majority of votes in both countries, whenever the structure of labor markets is very different in the two countries.

Recent research on child support issues has been concerned with normative problems involvingthe distribution of welfare between divorced parents and their children as well as with the assess-ment of the behavioral responses of parents to child support orders and custody arrangements( see, e.g., Del Boca and Flinn (1995), GarÞnkel and Klawitter (1990), Bartfeldt and GarÞnkel(1996), Del Boca (1996), Del Boca and Ribero (1998), and Flinn (2000)). While there is bynow an extensive literature analyzing the effects of child support policies on monetary transfersof noncustodial parents and the extent of compliance with child support orders, little researchhas been done on the relationship between monetary transfers between parents and the divisionof the child™s time. While income transfers to the custodial parent are no doubt importantfor the child™s consumption and general well-being, there exists considerable empirical evidencesuggesting that the division of the child™s time between the parents has important e ffects on thechild™s welfare ( Beller and Graham (1993)).There have been few analyses of this relationship.Weiss and Willis (1985) provide one theoretical motivation for the positive relationship betweenthe noncustodial parent™s contact time with the child and their level of transfers. They claimthat increased contact time allows better monitoring of the custodial parent™s expenditures onthe child, which induces higher levels of transfers to the custodial parent.We have developed a model (Del Boca and Ribero ( 1999)) in which visitations and childsupport are the outcomes of a negotiation process whereby the father exchanges income forvisitation time. Institutional agents, such as judges, state legislatures, etc, can impact thewelfareofthemembersofthenonintactfamilybyalteringtheendowmentsofeachofthe1

Iceland's Natural Experiment in Supply-Side Economics by Marco Bianchi, Bjorn R. Gudmundsson and Gylfi Zoega. Published in volume 91, issue 5, pages 1564-1579 of American Economic Review, December 2001

We use data on imports of computer equipment for a large sample of countries between 1970-90 to investigate the determinants of computer-technology adoption. We find strong evidence that computer adoption is associated with higher levels of human capital and with manufacturing trade openness vis-à-vis the OECD. We also find evidence that computer adoption is enhanced by high investment rates, good property rights protection, and a small share of agriculture in GDP. Finally, there is some evidence that adoption is reduced by a large share of government in GDP, and increased by a large share of manufacturing. After controlling for the above-mentioned variables, we do not find an independent role for the English- (or European-) language skills of the population.

The military drawdown program of the early 1990's provides an opportunity to obtain estimates of personal discount rates based on large numbers of people making real choices involving large sums. The program offered over 65,000 separatees the choice between an annuity and a lump-sum payment. Despite break-even discount rates exceeding 17 percent, most of the separatees selected the lump sum—saving taxpayers $1.7 billion in separation costs. Estimates of discount rates range from 0 to over 30 percent and vary with education, age, race, sex, number of dependents, ability test score, and the size of payment.