This paper examines the congressional passage of the American minimum wage law, the Fair Labor Standards Act of 1938. Voting on the act is modeled as a function of the concentration of the constituencies for minimum wage legislation, North-South differentials, and legislator ideology. It is shown that the House radically altered the final content of the bill, abandoning a proposed Wages and Hours Board with discretionary powers to determine minimum wages in favor of a flat rate following the objections of several interest groups; North-South divisions over the bill had little influence over congressional voting; and the influence of constituent groups increased relative to legislators' ideology as the bill became an important election issue.

This paper examines the argument presented in The Bell Curve. A central argument is that one factor--g--accounts for correlation across test scores and performance in society. Another central argument is that g cannot be manipulated. These arguments are combined to claim that social policies designed to improve social performance cannot be effective. A reanalysis of the evidence contradicts this story. The factors that explain wages receive different weights than the factors that explain test scores. More than g is required to explain either. Other factors besides g contribute to social performance, and they can be manipulated.

This paper addresses the issue of credibility from an econometric perspective. It develops a rational expectations model of inflation in which the dynamics are driven by the level of government spending and by the effect of past inflation rates on the value of real taxes. Government expenditure is modeled as an exogenous autoregressive process subject to discrete changes in regime. The regimes are defined by whether the level of spending is or is not consistent with the rate of inflation targeted by the government as part of a stabilization program. In making their money demand decision, the agents need to construct probability inferences regarding the state of the expenditure process. Credibility is quantified by the agents' inferred probability that the joint observation of inflation, the nominal interest rate, and government spending is generated by the reformed expenditure regime. In an application to Israel, results indicate that the failed stabilization program of November 1984 was less than fully credible to the agents. The uncertainty about the true nature of the expenditure process partially explains the volatility of the rate of inflation in this period. In contrast, for the July 1985 program the agents correctly inferred a change in the regime driving the government spending process.

This paper addresses the issue of credibility from an econometric perspective. It develops a rational expectations model of inflation in which the dynamics are driven by the level of government spending and by the effect of past inflation rates on the value of real taxes. Government expenditure is modeled as an exogenous autoregressive process subject to discrete changes in regime. The regimes are defined by whether the level of spending is or is not consistent with the rate of inflation targeted by the government as part of a stabilization program. In making their money demand decision, the agents need to construct probability inferences regarding the state of the expenditure process. Credibility is quantified by the agents' inferred probability that the joint observation of inflation, the nominal interest rate, and government spending is generated by the reformed expenditure regime. In an application to Israel, results indicate that the failed stabilization program of November 1984 was less than fully credible to the agents. The uncertainty about the true nature of the expenditure process partially explains the volatility of the rate of inflation in this period. In contrast, for the July 1985 program the agents correctly inferred a change in the regime driving the government spending process.

Many services provide outputs that depend partially on the customers as inputs; the presence of other customers often contributes to the output experienced by each purchaser. Higher education is the premier example; others are legion. We provide a simple model that addresses the questions of competitive pricing and allocative efficiency for these types of services. Prices that charge customers for what they get on net (output minus input) from the firm both are competitive and support efficient allocations; these prices internalize the apparent external effects of customers on each other. Few examples of such prices exist in the real world.

This paper develops a model of small business failure and sale that is motivated by recent evidence concerning how the failure and sale of small businesses vary with the age of the business and the tenure of the manager. This evidence motivates two key features of the model: a match between the manager and the business, and characteristics of businesses that survive beyond the current match. The parameters of the model are estimated, and the properties of this parametric model are studied. This analysis results in a simple characterization of the workings of the small business sector.

This paper describes aspects of the French Revolution from the perspective of theories about money and government budget constraints. We describe how unpleasant fiscal arithmetic gripped the Old Regime, how the Estates General responded to reorganize France's fiscal affairs, and how fiscal exigencies impelled the Revolution into a procession of monetary experiments ending in hyper-inflation.

This paper develops a model of small business failure and sale that is motivated by recent evidence concerning how the failure and sale of small businesses vary with the age of the business and the tenure of the manager. This evidence motivates two key features of the model: a match between the manager and the business, and characteristics of businesses that survive beyond the current match. The parameters of the model are estimated, and the properties of this parametric model are studied. This analysis results in a simple characterization of the workings of the small business sector.

This paper examines the argument presented in The Bell Curve. A central argument is that one factor--g--accounts for correlation across test scores and performance in society. Another central argument is that g cannot be manipulated. These arguments are combined to claim that social policies designed to improve social performance cannot be effective. A reanalysis of the evidence contradicts this story. The factors that explain wages receive different weights than the factors that explain test scores. More than g is required to explain either. Other factors besides g contribute to social performance, and they can be manipulated.

This paper examines the congressional passage of the American minimum wage law, the Fair Labor Standards Act of 1938. Voting on the act is modeled as a function of the concentration of the constituencies for minimum wage legislation, North-South differentials, and legislator ideology. It is shown that the House radically altered the final content of the bill, abandoning a proposed Wages and Hours Board with discretionary powers to determine minimum wages in favor of a flat rate following the objections of several interest groups; North-South divisions over the bill had little influence over congressional voting; and the influence of constituent groups increased relative to legislators' ideology as the bill became an important election issue.