When markets are incomplete, individuals may choose to marry to diversify their labor income risk. Love, however, can complicate the picture. If love is fleeting or the resolution of agents’ income uncertainty occurs predominantly later in life, then marriages with good economic matches last longer. In contrast, if love is persistent and the resolution of uncertainty to agents’ income occurs early, then marriages with good economic matches are more likely to be caught short with too little love to save a marriage. Consequently, once married, the partners will be more likely to divorce. Evidence is provided to distinguish between these alternative scenarios.

The invisible hand is not a power that makes the good of one the good of all, and it is not any of a number of other things it is said to be. It is simply the inducement a merchant has to keep his capital at home, thereby increasing the domestic capital stock and enhancing military power, both of which are in the public interest and neither of which he intended. Smith's exposition discloses how his rhetorical sallies could disfigure his economics, confuse his argument for free trade, and make him play fast and loose with facts and the ideas of others.

Over last two decades punitiveness of juvenile justice system has declined substantially relative adult courts. During that same time period juvenile violent rates have grown almost twice as quickly as adult crime rates. This paper examines degree to which those two empirical observations are related, finding that changes in relative punishments can account for 60 percent of differential growth rates in juvenile and adult violent between 1978 and 1993. Juvenile offenders appear be at least as responsive sanctions as adults. Moreover, sharp changes in criminal involvement with transition from juvenile adult court suggest that deterrence, rather than simply incapacitation important role. There does not, however, appear be a strong relationship between the punitiveness of juvenile justice system that a cohort faces and extent of involvement for that cohort later in life.

This paper reports overwhelming evidence against the hypothesis that the federal funds rate follows a martingale over the 2-week reserve maintenance period, establishing that banks do not regard reserves held on different days of the week to be perfect substitutes. A theoretical model of the federal funds market is proposed that could account for these empirical regularities as the result of line limits, transaction costs, and weekend accounting conventions. The paper concludes that such transaction costs lie at the heart of the liquidity effect that enables the Federal Reserve to change the interest rate on a daily basis.

Previous studies of congressional spending have typically found a large positive effect of challenger spending but little evidence for effects of incumbent spending. Those studies, however, do not adequately control for inherent differences in vote-getting ability across candidates. This paper examines elections in which the same two candidates face one another on more than one occasion; differencing eliminates the influence of any fixed candidate or district attributes. Estimates of the effects of challenger spending are an order of magnitude below those of previous studies. Campaign spending has an extremely small impact on election outcomes, regardless of who does the spending.

Previous studies of congressional spending have typically found a large positive effect of challenger spending but little evidence for effects of incumbent spending. Those studies, however, do not adequately control for inherent differences in vote-getting ability across candidates. "High-quality" challengers are likely to receive a high fraction of the vote and have high campaign expenditures, even if campaign spending has no impact on election outcomes. To avoid that bias, this paper examines elections in which the same two candidates face one another on more than one occasion; differencing eliminates the influence of any fixed candidate or district attributes. Estimates of the effects of challenger spending are an order of magnitude below those of previous studies. Campaign spending has an extremely small impact on election outcomes, regardless of who does the spending. Campaign spending limits appear socially desirable, but public financing of campaigns does not.

This paper develops new indicators of accumulated academic science and tests their explanatory power on productivity data from manufacturing industries. Knowledge is found to be a major contributor to productivity growth. Furthermore, a lag in effect of roughly 20 years is found between the appearance of research in the academic community and its effect on productivity in the form of knowledge absorbed by an industry. Academic technology and academic science filtered through interindustry spillovers exhibit lags of roughly 10 and 30 years each. Thus implied search and gestation times far exceed developmental periods in studies of R & D. A clear implication is that basic research declines relative to development in the face of an exogenous rise in the real of interest.