Robert P. Flood, Peter M. Garber; The Linkage Between Speculative Attack and Target Zone Models of Exchange Rates, The Quarterly Journal of Economics, Volu

Preferential trading arrangements are analyzed from the viewpoint of the “new political economy” that views trade policy as being determined by lobbying of concentrated interest groups. Two conclusions are reached: first, that trade-diverting preferential arrangements are more likely to be supported politically; and second, that such preferential arrangements could critically change domestic incentives so multilateral liberalization that is initially politically feasible could be rendered infeasible by a preferential arrangement. The larger the trade diversion resulting from the preferential arrangement, the more likely this will be the case.

Salesperson and executive compensation contracts typically specify a nonlinear relationship between firm revenues and pay. These agents therefore have incentive to manipulate prices, influence the timing of customer purchases, and vary effort over their firms' fiscal years. This paper empirically establishes results consistent with agents' focusing on performance over the fiscal year. Most notably, in addition to varying with the calendar business cycle, manufacturing firms' sales are higher at the end of the fiscal year, and lower at the beginning, than they are in the middle. Further evidence is found in fiscal-year price movements and patterns in the industry variation of fiscal-year effects.

This paper analyzes a newly assembled data set consisting of subjective indices of corruption, the amount of red tape, the efficiency of the judicial system, and various categories of political stability for a cross section of countries. Corruption is found to lower investment, thereby lowering economic growth. The results are robust to controlling for endogeneity by using an index of ethnolinguistic fractionalization as an instrument.

The paper demonstrates the invalidity of Levhari’s attempts to show that it is impossible for a production system that has ceased to be profitable due to a change in the rate of profits, to become profitable again when the profit rate changes further in the same direction. We first point out where Levhari’s argument fails and then show, by means of a numerical example, that such a ‘return’, or ‘switch-back’, of a production system is possible under Levhari’s own assumptions. We will then comment on the origin and implications of the error that the ‘return’ of a system reveals in traditional theory.

Economic characteristics of Denmark, 50. — Co-operation in retail trading, 52. — Trade Unions, 55. — Insurance against sickness, 58. — Unemployment insurance, 60. — Compensation in case of accident, 64. — Old age pensions, 64. — Problems still unsolved, 65.

Journal Article An Illustration of the Continuity of the Openfield System Get access P. Vinogradoff P. Vinogradoff Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 22, Issue 1, November 1907, Pages 62–82, https://doi.org/10.2307/1883351 Published: 01 November 1907

Educators worry that high-stakes testing will induce teachers and their students to focus only on the test and ignore other, untested aspects of knowledge. Some counter that although this may be true, knowing something is better than knowing nothing and many students would benefit even by learning the material that is to be tested. Using the metaphor of deterring drivers from speeding, it is shown that the optimal rules for high-stakes testing depend on the costs of learning and of monitoring. Incentives need to be concentrated for those whose costs of action are high. For high cost learners this implies announcing the exact requirements of the test. For more able students, a more amorphous standard produces superior results. This is analogous to announcing where the police are when the detection costs are high. Other applications are discussed.

Classroom education has public good aspects. The technology is such that when one student disrupts the class, learning is reduced for all other students. A disruption model of educational production is presented. It is shown that optimal class size is larger for better-behaved students, which helps explain why it is difficult to find class size effects in the data. Additionally, the role of discipline is analyzed and applied to differences in performance of Catholic and public schools. An empirical framework is discussed where the importance of sorting students, teacher quality, and other factors can be assessed.

Economics is not only a social science, it is a genuine science. Like the physical sciences, economics uses a methodology that produces refutable implications and tests these implications using solid statistical techniques. In particular, economics stresses three factors that distinguish it from other social sciences. Economists use the construct of rational individuals who engage in maximizing behavior. Economic models adhere strictly to the importance of equilibrium as part of any theory. Finally, a focus on efficiency leads economists to ask questions that other social sciences ignore. These ingredients have allowed economics to invade intellectual territory that was previously deemed to be outside the discipline's realm.