This essay examines interconnections between "race" and economic inequality in the United States, focusing on the case of African-Americans. I will argue that it is crucially important to distinguish between racial discrimination and racial stigma in the study of this problem. Racial discrimination has to do with how blacks are treated, while racial stigma is concerned with how black people are perceived. My view is that what I call reward bias (unfair treatment of persons in formal economic transactions based on racial identity) is now a less significant barrier to the full participation by African-Americans in U.S. society than is what I will call development bias (blocked access to resources critical for personal development but available only via non-market-mediated social transactions). By making these points in the specific cultural and historical context of the black experience in U.S. society, I hope to contribute to a deeper conceptualization of the worldwide problem of race and economic marginality.

Historically, the average return on S&P stocks has far exceeded the average return on short-term U.S. government debt. Rajnish Mehra and Prescott (1985), for example, found that the average difference was 6.2 percent per year in the 1889–1978 period. They tried to account for this difference by assuming it is a premium for bearing nondiversi � able aggregate risk but found that risk accounted for only a tiny fraction of the difference. They concluded that there is an “equity premium puzzle.” Here, we reexamine this puzzle, taking into account some factors ignored by Mehra and Prescott (taxes, regulatory constraints, and diversi� cation costs) and focusing on long-term

Expert Opinion and Compensation: Evidence from a Musical Competition by Victor A. Ginsburgh and Jan C. van Ours. Published in volume 93, issue 1, pages 289-296 of American Economic Review, March 2003

Organizational Design and Technology Choice under Intrafirm Bargaining: Comment by Catherine C. de Fontenay and Joshua S. Gans. Published in volume 93, issue 1, pages 448-455 of American Economic Review, March 2003

Macroeconomists have for some time been aware that the New Keynesian Phillips curve, though highly popular in the literature, cannot explain the persistence observed in actual inflation. We argue that one of the more prominent alternative formulations, the Fuhrer and Moore (1995) relative contracting model, is highly problematic. Fuhrer and Moore's 1995 formulation generates inflation persistence, but this is a consequence of their assuming that workers care about the past real wages of other workers. Making the more reasonable assumption that workers care about the current real wages of other workers, one obtains the standard formulation with no inflation persistence.

We examine the effect of the Worker Profiling and Reemployment Services system. This program “profiles” Unemployment Insurance (UI) claimants to determine their probability of benefit exhaustion and then provides mandatory employment and training services to claimants with high predicted probabilities. Using a unique experimental design, we estimate that the program reduces mean weeks of UI benefit receipt by about 2.2 weeks, reduces mean UI benefits received by about $143, and increases subsequent earnings by over $1,050. Most of the effect results from a sharp increase in early UI exits in the treatment group relative to the control group.

We investigate the performance of forecast-based monetary policy rules using five macroeconomic models that reflect a wide range of views on aggregate dynamics. We identify the key characteristics of rules that are robust to model uncertainty; such rules respond to the one-year-ahead inflation forecast and to the current output gap and incorporate a substantial degree of policy inertia. In contrast, rules with longer forecast horizons are less robust and are prone to generating indeterminacy. Finally, we identify a robust benchmark rule that performs very well in all five models over a wide range of policy preferences.