THE HYPOTHESIS IS INVESTIGATED THAT THE TIMING OF STATE AND LOCAL GOVERNMENT CAPITAL OUTLAYS DEPENDS ON THE DIFFERENCE BETWEEN THE ACTUAL AND THE EXPECTED INTEREST RATE. THIS HYPOTHESIS IS FORMALIZED IN THE STOCK ADJUSTMENT MODEL IN WHICH THE ADJUSTMENT COEFFICIENT VARIES WITH THE DIFFERENCE BETWEEN THE ACTUAL AND THE EXPECTED INTEREST RATE. A STOCK ADJUSTMENT MODEL WITH A VARIABLE ADJUSTMENT COEFFICIENT WAS SET UP TO EXPLAIN STATE AND LOCAL GOVERNMENT CAPITAL OUTLAYS FOR HIGHWAYS FROM 1951 THROUGH 1966. THE MODEL IS DESCRIBED BY FIVE EQUATIONS WHICH EMBODY THE IDEA THAT CHANGES IN MONETARY POLICY CAUSE UNEXPECTED CHANGES IN INTEREST RATES THAT AFFECT THE SPEED OF ADJUSTMENT OF THE ACTUAL TO THE LONG RUN EQUILIBRIUM STOCK OF HIGHWAYS. THE ADJUSTMENT COEFFICIENT EQUATION MEASURES THE RATE AT WHICH STATE AND LOCAL GOVERNMENTS ADAPT THE ACTUAL STOCK OF HIGHWAYS PER HEAD TO ITS LONG RUN EQUILIBRIUM LEVEL. ONE TERM IN THIS EQUATION MAKES ALLOWANCE FOR THE FACT THAT UNEXPECTED CHANGES IN INTEREST RATES AFFECT THE TIMING OF DECISIONS ON INVESTMENT EXPENDITURES BY AFFECTING THE TIMING OF BOND SALES. TO TEST THE VALIDITY OF THE VARIABLE ADJUSTMENT COEFFICIENT HYPOTHESIS, IT IS NECESSARY TO MAKE AN ASSUMPTION ABOUT HOW STATE AND LOCAL FINANCE OFFICERS MAKE MUNICIPAL BOND RATE FORECASTS. EQUATIONS EMBODYING TWO THEORIES OF THE EXPECTED INTEREST RATE WERE TRIED. IT IS CONTENDED THAT IN THE PERIOD UNDER STUDY, THE INTEREST RATE DID NOT AFFECT THE LEVEL OF THE DESIRED CAPITAL STOCK. PERSONAL INCOME WAS USED AS A PROXY FOR THE DEMAND FOR TRAVEL BECAUSE IT INDICATES THE DEMAND FOR HIGHWAY SERVICES INDEPENDENTLY OF THE ACTUAL CURRENT STOCK OF HIGHWAYS. PERSONAL INCOME AND FEDERAL AID ARE TWO COMPONENTS WHICH APPEAR SEPARATELY IN THE DESIRED CAPITAL STOCK EQUATION BECAUSE EACH HAS A DIFFERENT IMPACT ON THE LEVEL OF PLANNED CAPITAL OUTLAYS. TEST RESULTS STRONGLY SUPPORT THE PRINCIPAL HYPOTHESIS. TABLES SHOW THE REGRESSION COEFFICIENT ESTIMATED WITH THE VARIABLE ADJUSTMENT COEFFICIENT MODEL THAT BEST EXPLAINS THE DATA, AND THE IMPACT OF CHANGES IN MONETARY POLICY ON THE LEVEL OF STATE AND LOCAL HIGHWAY INVESTMENT. IN THIS MODEL THE IMPACT OF A CHANGE IN MONETARY POLICY DEPENDS ON TWO THINGS: (1) THE SIZE OF THE UNEXPECTED CHANGE IN THE INTEREWT RATE, AND (2) THE SIZE OF THE GAP BETWEEN THE ACTUAL AND THE LONG RUN EQUILIBRIUM CAPITAL STOCK. THE MODEL IMPLIES THAT IF THE MONETARY AUTHORITIES SHOULD WANT TO DELAY EXPENDITURES FOR SEVERAL YEARS, THEY WOULD HAVE TO INCREASE INTEREST RATES CONTINUALLY.

William Baumol has written a very provocative article on the social rate of discount [1]. There is no doubt that the specification of the discount rate for evaluating governmental projects has perplexed economists for quite some time and will probably continue to do so. Baumol's major contribution to this problem is his formulation which, unfortunately, he did not fully exploit. Using his formulation, I will show that his conclusions are merely special cases of the general case; in addition the following conclusions emerge: (1) the social rate of discount is a weighted average of observable pre-tax market rates of return and is not itself directly observable. The weights depend on how individuals in the private sector react to the transferral of resources. (2) Both risks and time preferences are given their appropriate consideration in this weighting process and neither need to be explicitly considered again. Hence, the indeterminacy or the inconsistency that Baumol found disappears, and the question about what is the appropriate rate of discount becomes an empirical one. Section I contains an analysis of the social rate of discount when there are no risks in the economy and time preferences are ignored. Risks are introduced in Section II and time preferences in Section III.

Чрезвычайно полезная статья об истории такого важного и противоречивого понятия как РЕНТА. Автор подробно рассматривает происхождение этого термина (в том числе его семантику) и подходы различных экономистов к его определению и встраиванию в теорию цены. В ходе изложения различных подходов автор пытается устранить возникающие двусмысленности и сделать теорию ренты универсальной концепцией, применимой к любым факторам производства.

In representative democracies, such as the United States, legislatures provide the transmission mechanism through which pressure from private interests becomes public policy. Considerable attention has been given in the literature to explanations of the relevant forces that appear to be driving the legislative process. For example, much research has focused on the relative impact of economic vs. ideological influences on congressional voting behavior. In this approach, the way that legislators vote on proposed legislation is modeled as a function of the preferences of various economic and ideological interests groups, including the legislator's own preferences for wealth and ideology (James Kau and Paul Rubin, 1979; Joseph Kalt and Mark Zupan, 1984; Sam Peltzman, 1985). Missing from this approach is the idea that when legislatures are the transmission mechanism, they are costly and imperfect organizations for generating political influence (Gary Becker, 1983). As such, rules and institutions will emerge that are related to problems of internal control within the organization of a legislature. In this paper, we focus on the role of floor voting from the standpoint of legislator organization and control. We seek to expand the interpretation of the meaning of floor voting activity by examining the timing, sequence, and outcomes of such votes. Specifically, we look at final floor voting in the U.S. Congress. The patterns described in the analysis below suggest that a broader analytical perspective on the economic function of floor voting is required. The findings also suggest that to identify more precisely the forces that are driving legislator voting behavior, it is important to recognize the role of legislative transactional costs and institutional constraints. In Section I, the conceptual framework for the empirical results is discussed in more detail. The purpose is not to develop a fullblown theory of legislative organization, rather, it is to focus the reader's attention on several hypotheses about the function of final floor voting as a device for controlling legislator behavior within the legislature. Empirical results, including an explanation of the timing and sequence of final votes on bills, are reported in Section II. The data for these tests are drawn from legislative activities in the U.S. House of Representatives during the 96th and 98th Congresses. Some concluding remarks are offered in Section III.