This note asks: “How much income does it take to preserve the prechild standard of living for all members of the postchild household?” Equivalence scales for Canadian two-parent families are estimated using a complete demand system approach and imposing the condition of equiva-lence scale exactness/independent of a base (Blackorby and Donaldson (1993), Lewbel (1989)). This approach has several advantages: (1) It is formally grounded in economic theory. (2) The income required for children can be estimated without ignoring the well-being of the children themselves. (3) The estimates obtained appear reasonable relative to others currently available in the literature.

This study tests for the presence of prejudicial or “noneconomic” discrimination on the part of mortgage lenders by evaluating the performance of home mortgage loans. The approach differs from that of previous studies of loan performance in that it is based on the proposition that noneconomic discrimination should be more pronounced in less competitive lending environments, while statistical discrimination should not. Using a rich set of FHA-insured loan records and measures of local market concentration to proxy the competitive environment, we test for the prediction of better loan performance by minority borrowers relative to white borrowers in more concentrated markets. We argue that this approach substantially reduces the potential for omitted-variable bias that has cast a shadow on previous studies of lending discrimination. Results fail to reject the null hypothesis of no noneconomic discrimination.

The paper develops an efficiency-wage model in which input prices affect the equilibrium rate of unemployment. We show that a simple framework based on only two prices (the real price of oil and the real rate of interest) is able to explain the main postwar movements in the rate of U.S. joblessness. The equations do well in forecasting unemployment many years out of sample, and provide evidence that the oil-price spike associated with Iraq's invasion of Kuwait appears to be a component of the “mystery” recession that followed.

We use unique data from the Medicaid program of the Commonwealth of Kentucky to examine the duration of Medicaid spells. The data set consists of a one-in-ten sample of all Medicaid recipients in Kentucky on July 1, 1986, and a similar sample of all new spells between July 1, 1986, and June 30, 1987. Because the beginning date of Medicaid recipiency is known for all spells, this mixed "stock" and "flow" sample allows us to identify the duration of Medicaid spells for up to twenty years. This is in contrast to other studies using short panels of new spells. We find significant differences in hazard functions across program eligibility categories, suggesting that the cost of expanding Medicaid or the savings from contracting it would vary depending on the eligibility group affected by the change in policy.

In this paper we examine a number of recent studies that claim to have obtained a well-defined liquidity effect using structural VAR models based on broad measures of money. These studies can be distinguished in terms of the identifying restrictions, sample periods, and frequency of data used. We show that estimation of the structural coefficients of all these models can be achieved by instrumental-variable methods, where the instruments are predetermined variables and the estimated structural errors from other equations in the system. Overall, our judgment is that the evidence for a liquidity effect from these studies is much less certain than suggested in the original papers, primarily because of the poor quality of the instruments used in estimation and the sensitivity of the estimates to the sample period used.

The actions of the novel bradycardiac agent ZD7288 [4-(N-ethyl-N-phenylamino)-1, 2-dimethyl-6-(methylamino)pyrimidinium chloride] were investigated on the hyperpolarization-activated cation current Ih and on network activity in spontaneously spindling ferret lateral geniculate (LGNd) slices in vitro using intracellular recording techniques. In voltage-clamp recordings, local application of ZD7288 (1 mM in micropipette) resulted in a complete block of Ih, whereas in current-clamp recordings, application of this agent resulted in an abolition of the depolarizing sag activated by hyperpolarization and decreased the frequency of intrinsic delta-oscillations for which Ih acts as a pacemaker current. In addition, block of Ih with ZD7288 resulted in an abolition of the afterdepolarization (ADP) that follows repetitive hyperpolarization and rebound burst firing as well as that occurring in between spindle waves. The block of the ADP was associated with a block of the spindle wave refractory period such that continuous 6- to 10-Hz oscillations were generated throughout the network. These findings give further support to the hypothesis that Ih is critically involved in the generation of slow rhythmicity in synchronized thalamic activity.

In the two years after the imposition of the Smoot-Hawley tariff in June 1930, the volume of U.S. imports fell over 40%. To what extent can this collapse of trade be attributed to the tariff itself versus other factors such as declining income or foreign retaliation? Partial and general equilibrium assessments indicate that the Smoot-Hawley tariff itself reduced imports by 4-8% (ceteris paribus), although the combination of specific duties and deflation further raised the effective tariff and reduced imports an additional 8-10%. A counterfactual simulation suggests that nearly a quarter of the observed 40% decline in imports can be attributed to the rise in the effective tariff (i.e., Smoot-Hawley plus deflation).

Emissions of carbon dioxide from the combustion of fossil fuels, which may contribute to long-term climate change, are projected through 2050 using reduced-form models estimated with national-level panel data for the period of 1950–1990. Using the same set of income and population growth assumptions as the Intergovernmental Panel on Climate Change (IPCC), we find that the IPCC's widely used emissions growth projections exhibit significant and substantial departures from the implications of historical experience. Our model employs a flexible form for income effects, along with fixed time and country effects, and we handle forecast uncertainty explicitly. We find clear evidence of an “inverse U” relation with a within-sample peak between carbon dioxide emissions (and energy use) per capita and per-capita income.

In this paper we examine whether the requirements that workers must satisfy to qualify for unemployment insurance (UI) benefits in any succeeding period of joblessness affect the duration of employment spells. This behavioral consequence of a UI system has been neglected in empirical research, which has instead focused on the effects of UI parameters on the actions of the unemployed. The effect is identified by a unique change in the eligibility requirements of the Canadian UI system in 1990, which increased the weeks of employment required to establish UI eligibility. We provide a variety of estimates of this behavioral effect. In our preferred set of results, we find a significant increase in the employment hazard in the week that an individual satisfies the eligibility requirement in many regions of the country. In the spirit of Feldstein's (1976) study of temporary layoffs, the results provide new evidence of the impact of UI system parameters on the actions of employers and workers.

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