An economic theory of the effectiveness of industrial pressure groups in obtaining favorable tariffs is developed and tested for the United States Tariff Act of 1824. Import duties bestow nonexclusive benefits on factors of production or costs on product users. From the theory of public goods, it is postulated that small, homogeneous, geographically concentrated groups would react more intensely to the expected effects of tariffs in attempting to influence the legislature. However, in Congress (where majority support was necessary) it was a disadvantage for an import duty to be identified as too local or narrow an interest. This paper attempts empirically to sort out these conflicting forces, and finds inter alia that the ideal industry pressure groups in 1824 had low proprietorial income shares and geographically concentrated production units, but that political effectiveness required the group to speak for many establishments with output spread fairly evenly across states.

This paper analyzes the correlation between interest rates and prices which as persisted for the past quarter of a millennium and has been termed the Gibson Paradox. Spectral techniques confirm the correlation between long-term interest rates and prices for very long-term swings (the Gibson Paradox), but indicate a significant short cycle correlation only for short-term interest rates, which we term the Kitchin Phenomenon. Past explanations of these correlations have often failed to distinguish cycle lengths and term of interest rates involved. Our analysis rejects Irving Fisher's "price expectation" explanation and the Sargent-Wicksell velocity of money explanations. We propose alternative explanations which in part relate to the characteristic behavior of governments during wartime and in part to distributional effects of unanticipated inflation. Our analysis strongly suggests that prior to World War I nominal long and short rates of interest can be regarded as real rates.

Using regression analysis we find that mental ability, education, and background factors are important determinants of earnings at several points in the individual's life cycle. Real social rates of return to education based on this analysis range from 11 percent for those with some college to about 2 percent for those with a Ph.D., while private rates are slightly higher. Rates of return to an undergraduate degree are about 8 percent. We conclude that these returns reflect, in part, the use of education as a relatively inexpensive screening device by employers, and without screening the private returns might be up to 50 percent below those mentioned above.