Knowledge that Transforms

International racial and ethnic economic inequality is examined. The international record shows disparity across nations and regions, between racial and ethnic groups within countries, and within groups in the same country. Subalternate racial and ethnic populations, whether in the majority or minority, suffer remarkably similar economic outcomes across the globe. Institutional racism and cultural discrimination affect subcultures and different classes in multiple ways. In every country, those who get the short stick continue to face poor prospects for economic inclusion and justice.

131 enroll. While membership is an entitlement that can be activated, the entitlement is restricted by family membership. As in other developing regions, formal institutions are weak in modern Africa, and persons therefore tend to organize economic relationships through social institutions. One way of augmenting the stock of capital is through education; another is through migration to the city. To a great degree, it is families who organize the flow of resources that promote both urban migration and the acquisition of skills. Recognizing the central role of families in the formation of capital, one can achieve a better grasp of the relationship between modernization and ethnicity. To a significant degree, modernization is achieved through the process of human-capital formation. This process is privately organized; that is to say, it is organized by families. Families organize the flow of resources between generations and sectors, thus promoting the acquisition of skills and urban migration, and thus the modernization of societies. It is by stabilizing the contract between generations within family units that ethnic groups facilitate the process of investment. To illustrate, I use data collected from a village in Luapula Province, Zambia, which supplies labor to the mining centers of Zambia and Congo. When conducting my field work, I focused on links between town and country and found that the income rural dwellers derived from town varied systematically with the structure (size, age composition, and education) of their families. The coefficients in the “remittance” function suggested that an additional child yields, on average, 3.23 kwacha in the form of financial Those who study modern Africa commonly highlight three features: its poverty, its instability, and its ethnic diversity. Whether in lurid popularizations (e.g., Robert Kaplan, 1994) or in social scientific research (e.g., William Easterly and Ross Levine, 1997; but see also Paul Collier and A. Hoeffler [1998]) scholars reason that Africa is poor because it is unstable and that its instability derives from its ethnic complexity. Ethnicity thus lies, it is held, at the root of Africa’s development crisis. This essay critiques the conventional wisdom by mounting an alternative interpretation. Using both qualitative and quantitative data from Africa, this article argues that:

Knowledge Spillovers and Patent Citations: Evidence from a Survey of Inventors by Adam B. Jaffe, Manuel Trajtenberg and Michael S. Fogarty. Published in volume 90, issue 2, pages 215-218 of American Economic Review, May 2000

This paper tests for the existence of asymmetric information between the Federal Reserve and the public by examining Federal Reserve and commercial inflation forecasts. It demonstrates that the Federal Reserve has considerable information about inflation beyond what is known to commercial forecasters. It also shows that monetary-policy actions provide signals of the Federal Reserve's information and that commercial forecasters modify their forecasts in response to those signals. These findings may explain why long-term interest rates typically rise in response to shifts to tighter monetary policy.

We consider a market with “red” and “green” workers, where labels are payoff irrelevant. Workers may acquire skills. Skilled workers search for vacancies, while firms search for workers. A unique symmetric equilibrium exists in which color is irrelevant. There are also asymmetric equilibria in which firms search only for green workers, more green than red workers acquire skills, skilled green workers receive higher wages, and the unemployment rate is higher among skilled red workers. Discrimination between ex ante identical individuals arises in equilibrium, and yet firms have perfect information about their workers, and strictly prefer to hire minority workers.

Casual evidence as well as daily experience suggest that many people have a strong aversion against being the 'sucker' in social dilemma situations. As a consequence, those who cooperate may be willing to punish free-riding, even if this is costly for them and even if they cannot expect future benefits from their punishment activities. A main purpose of this paper is to show experimentally that there is indeed a widespread willingness of the cooperators to punish the free-riders. Our results indicate that this holds true even if punishment is costly and does not provide any material benefits for the punisher. In addition, we provide evidence that free-riders are punished the more heavily the more they deviate from the cooperation levels of the cooperators. Potential free-riders, therefore, can avoid or at least reduce punishment by increasing their cooperation levels. This, in turn, suggests that in the presence of punishment opportunities there will be less free riding. Testing this conjecture is the other major aim of our paper.

Analysis of longitudinal data for immigrants presents a more pessimistic portrait of immigrants' economic success. First, the rate of growth of immigrant earnings was overstated in census-based studies. Second, the worsening of immigrant earnings for more recent arrival cohorts is deeper than previously suggested. Against these two negative findings, one must keep in mind an important caveat. The steeper cohort decline in earnings may be a sign of greater human-capital investment by more recent immigrants. Longitudinal data suggest a strong degree of earnings convergence: immigrants who start at lower earnings quickly make up a large part of the deficit relative to their immigrant counterparts.

The strength of incentives used in an organization and the productivity of employees that results from these incentives depend to a large degree on the characteristics of the performance measures available to the organization. Some employees work under high-powered explicit incentive contracts, while others have no explicit incentive contracts at all. The ability of agency theory to predict the pattern of incentive provision in organizations has not been very impressive, and the divergence between the prescriptions of agency theory and the actual practice of firms has been widely noted. This paper (along with both other papers in this session [Edward P. Lazear, 2000; Canice Prendergast, 2000]) attempts to fill some of the gap between theory and practice. I examine the characteristics of performance measures (those data on which explicit incentive contracts are based) to understand how firms use incentive contracting, and to predict the use of incentives in practice.