In public discussions of policy, evidence that import‐competing sectors earn low or falling incomes is often used to argue for protection. This paper rationalizes the apparent effectiveness of this argument in both direct and indirect democracies. In direct democracies, a small degree of voter altruism leads to protection in the specific factors model when the import‐competing sector earns little. Similarly, voter altruism creates an incentive in representative democracies for self‐interested parties to present evidence to legislators on the income of import‐competing factors. This leads to a theory in which campaign contributions buy access to legislators rather than buy votes.

This paper presents the competitive equilibrium of an economy in which people hold money for transactions purposes. It studies both the steady states that result from different rates of monetary expansion and the effects of such non-steady-state events as an open-market operation. Even though the model features no uncertainty and perfect foresight, open-market operations affect aggregate output. In particular, a simultaneous increase in money and governmental holdings of capital temporarily raises aggregate capital and output while it lowers the real rate of interest on capital.

The authors construct a dynamic general equilibrium model in which the typical industry colludes by threatening to punish deviations from an implicitly agreed-on pricing path. They use methods similar to those of F. Kydland and E. Prescott (1982) to calibrate linearized versions of both their model and an analogous perfectly concerning model. The authors then compute the two models' predictions concerning the economy's responses to a change in military spending. The responses predicted by the oligopolistic model are closer to the empirical responses estimated with postwar U.S. data than the corresponding predictions of the competitive model.