This paper is a cross-section study of the effect of real devaluations on capacity utilization during stabilization programs in LDCs. It finds that such devaluations had a significant negative effect on output as predicted in many recent papers. This was not because devaluation caused a rise in aggregate saving but more because of a sharp contraction in investment. External factors, such as terms of trade and the capacity to import, had a significant positive impact while monetary and fiscal policy played only a minor role.

Using micro-data from the Current Population Survey, the author examines the sensitivity of conclusion regarding time-series changes in inequality to the measure of inequality employed and to the population group analyzed. Although changes in inequality over time are sensitive to the measure of inequality, the author finds a general pattern of stable or decreasing inequality throughout the 1970s followed by a period of increasing inequality. Based upon a decomposition analysis, the author concludes that these changes are not simply the results of the changing employment distribution among groups, defined by sex, age, education or industry. Instead the rise in inequality results from an increase in inequality within these groups.

This paper examines money-income causality using band spectral filtering techniques. The paper's central finding is that relatively low frequency movements in outside money are responsible for the relationship between money and economic activity. This result is inconsistent with theoretical models in which unanticipated changes in money are responsible for movements in real activity. Reverse causality is also examined. The results are not supportive of a strong feedback relationship from income to inside money. However, there is evidence of strong feedback from income to outside money.

This paper examines whether experienced players in Major League Baseball are paid more than their contribution to team revenue. The author shows that wages increase with experience independently of productivity gains. The results, therefore, contradict the human capital model of investment. The evidence is in fact consistent with implicit contract models because most older players are relatively overpaid.

We analyze taxpayer choices of return preparation services. We distinguish between two types of nonpaid preparers, six types of paid third parties, and self-preparation. Among other things, we find significant differences in the factors which explain the demand for paid third parties who are and are not able to represent clients before the IRS. Among these factors are increases in IRS audit rates and the frequency of IRS penalties.

Robert A. Pollak, Terence J. Wales, Price-Augmenting Returns to Scale: An Application to Nonseparable Two-Stage Technologies, The Review of Economics and Statistics, Vol. 74, No. 2 (May, 1992), pp. 213-220

Mark C. Berger, Dan A. Black, Child Care Subsidies, Quality of Care, and the Labor Supply of Low-Income, Single Mothers, The Review of Economics and Statistics, Vol. 74, No. 4 (Nov., 1992), pp. 635-642

A procedure is proposed to test for the existence of a fully causal relationship between two variables. The method involves contrasting the probabilistic forecasting performance of a univariate and bivariate specification for the same variable Y. If there exists some theory or belief that X causes Y, and the addition of a variable X to the information set of a prequential forecasting system for a variable Y reduces miscalibration and/or the level of forecast uncertainty with respect Y's distribution for the next period, then a fully causal effect running from X to Y may be inferred. Vector autoregression allows testing for feedback. The method is to be applied to the issue of causality between the live cattle futures market and a major slaughter cattle cash market.

Nasser Daneshvary, Henry W. Herzog, Jr., Richard A. Hofler, Alan M. Schlottmann, Job Search and Immigrant Assimilation: An Earnings Frontier Approach, The Review of Economics and Statistics, Vol. 74, No. 3 (Aug., 1992), pp. 482-492

This paper investigates interstate variation in income inequality. By avoiding inequality indices and focusing directly on the Lorenz curve, the authors provide a more general explanation of the differences in inequality. They find that mean family income, the standard deviation of years of schooling, per capita educational expenditure, and property income are robust predictors of inequality. Of particular interest is their finding that, ceteris paribus, higher per capita education expenditures tend to be associated with states that have income inequality which is greater than the U.S. average.