Knowledge that Transforms

The theoretical public-choice literature suggests that vote trading is an important determinant of congressional voting behavior. Yet empirical voting models do not allow for vote trading. These models recognize that observed ideology may influence legislative behavior but do not correct for unobserved ideology. This study devises new tests for logrolling and ideology. The empirical model controls for logroll agreements and unobserved ideological interest via the correlation of unobserved variables. The results reflect the presence of vote-trading coalitions on some votes but not on others. The results cast doubt on the importance of personal ideological interests of legislators.

We contrast properties of real quantities with those of price levels and stocks of money for ten countries over the last century. Although the magnitude of output fluctuations has varied across countries and periods, relations among real quantities have been remarkably uniform. Properties of price levels, however, exhibit striking differences between periods. Inflation rates are more persistent after World War II than before, and price-level fluctuations are typically procyclical before World War II and countercyclical afterward. Fluctuations in money are less highly correlated with output in the postwar period but are no more persistent than in earlier periods.