Knowledge that Transforms

This paper develops an infinite horizon model of public spending and taxation in which policy decisions are determined by legislative bargaining. The policy space incorporates both productive and distributive public spending and distortionary taxation. The productive spending is investing in a public good that benefits all citizens (e.g., national defense or air quality) and the distributive spending is district-specific transfers (e.g., pork barrel spending). Investment in the public good creates a dynamic linkage across policy-making periods. The analysis explores the dynamics of legislative policy choices, focusing on the efficiency of the steady state level of taxation and allocation of tax revenues. The model sheds new light on the efficiency of legislative policy-making and has a number of novel positive implications.

Este trabajo analiza la duración del liderazgo en la industria tomando como base las cuotas de mercado de las empresas líderes en 45 industrias japonesas a lo largo de 23 años. Para ello, se propone una nueva relación escalar entre la cuota de mercado de una empresa y la desviación estándar de los cambios en dicha cuota de mercado. Esta relación discrimina de forma poderosa entre los modelos teóricos candidatos de la dinámica de participación en el mercado. También hace posible una simplificación útil a la hora de contrastar un modelo de tipo markoviano. En relación a este modelo se halla que al menos algunas industrias muestran un sesgo “chandleriano” hacia duraciones más largas del liderazgo que la representada en el modelo de referencia.

The Committee presented three paper sessions at the 2007 AEA meetings in Chicago. A session on “The Market and Premarket for Graduate Students in Economics” was organized and chaired by Alan Krueger. One paper in the session, by Paul Oyer (Stanford), investigates how macroeconomic conditions affect initial placements, how initial placement affects long-term success, and how patterns in career progression relate to the organizational form of economics departments. A paper by Wayne Grove (LeMoyne College) and Stephen Wu (Hamilton College) studies the relationship between graduate school admissions criteria, degree completion rates, and career publications. A third paper, by Susan Athey (Harvard), Lawrence Katz (Harvard), Alan Krueger (Princeton), Steven Levitt (Chicago), and James Poterba (MIT), investigates how well GRE scores predict student performance in both microeconomics and macroeconomics, the relationship between first-year performance in graduate school and attrition rates for males and females, first-year performance as a predictor of job market placements across different subfields, and the effect of firstyear performance in student choices of courses and fields in the second year of their programs. Three Committee members—David Colander, Michael Salemi, and Wendy Stock—were discussants. These three papers are published in this issue of the AER. The second session dealt with the “Evaluation and Time Allocations in Teaching Economics.” It was organized by Michael Watts and chaired by Barry Chiswick. Four papers were included: “Student Evaluation of Teaching Revisited” by Bruce Weinberg, Belton Fleisher, and Masanori Hashimoto (all of Ohio State); “Time Allocations and Reward Structures for Academic Economists from 1995–2005” by Cynthia Harter (Eastern Kentucky), William Becker (Indiana University), and Michael Watts (Purdue); “Time Allocations to Undergraduate and Graduate Teaching in Economics and Other Disciplines” by Sam Allgood and William Walstad (both at Nebraska, Lincoln); and “Long-Term Effects of Economics Coursework on College Graduates’ Behaviors and Outcomes in the Labor Market” by Report of the Committee on Economic Education