One of the central features of classical models of competitive markets is the generic determinacy of competitive equilibria. For smooth economies with a finite number of commodities and a finite number of consumers, almost all initial endowments admit only a finite number of competitive equilibria, and these equilibria vary (locally) smoothly with endowments; thus equilibrium comparative statics are locally determinate. This paper establishes parallel results for economies with finitely many consumers and infinitely many commodities. The most important new condition we introduce, quadratic concavity, rules out preferences in which goods are perfect substitutes globally, locally, or asymptotically. Our framework is sufficiently general to encompass many of the models that have proved important in the study of continuous-time trading in financial markets, trading over an infinite time horizon, and trading of finely differentiated commodities.
A Dream Deferred or Realized: The Impact of Public Policy on Fostering Black Homeownership in New York City Throughout the 1990's by Lance Freeman and Darrick Hamilton. Published in volume 92, issue 2, pages 320-324 of American Economic Review, May 2002
Did Community Rating Induce an Adverse Selection Death Spiral? Evidence from New York, Pennsylvania, and Connecticut by Thomas Buchmueller and John Dinardo. Published in volume 92, issue 1, pages 280-294 of American Economic Review, March 2002
Time limits are among the most fundamental of recent welfare reforms. Whereas welfare benefits were an entitlement under the old Aid to Families with Dependent Children (AFDC) program, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), which replaced AFDC with the Temporary Aid to Needy Families (TANF) program, restricts most families to 60 months of federally funded benefits. Although the states are free to extend benefits further using their own funds, almost all have incorporated some sort of time limit into their TANF programs. Time limits may affect welfare receipt in two distinct ways. The most obvious effect is mechanical, reducing welfare use once recipients exhaust their benefits. However, time limits may also reduce welfare receipt before recipients reach the limit. If families are forwardlooking, they may reduce their current welfare use in order to preserve their benefits for the future. The purpose of this paper is to provide evidence on such anticipatory, or behavioral, effects of time limits. I use data from the Survey of Income and Program Participation (SIPP) to replicate my earlier estimates based on the Current Population Survey (CPS). I also exploit the SIPP to relax some of the restrictive assumptions that were implicit in my previous work.
The proliferation of economics courses offered partly or completely online (Arnold Katz and William E. Becker, 1999) raises important questions about the effects of the new technologies on student learning. Do students enrolled in online courses learn more or less than students taught face-to-face? Can we identify any student characteristics, such as gender, race, ACT scores, or grade averages, that are associated with better outcomes in one technology or another? How would the online (or face-to-face) students fare if they had taken the course using the alternative technology? This paper addresses these questions using student data from our Principles of Microeconomics courses at Michigan State University.
Successful cooperative businesses create wealth and help their members accumulate wealth. In the first three years of its existence, BIG Wash Laundromat, for example, returned dividends to the original investors equal to 185 percent of their holdings (David Montgomery, 1999). After four years they paid off one of their two bank loans, and at least one share of stock sold for six times its original value (Rita Bright, personal communication). Worker-owners of Cooperative Home Care Associates earned annual dividends between $250 and $500 on their initial investment of $1,000 during the first ten years in existence (Sigmund Shipp, 2000). A study of 15 Mutual Benefit Service Sector Cooperatives in California found that these co-ops provided higher wages for members than the national minimum wage and wages higher than entry-level jobs in retail and manufacturing for unskilled, non-English-speaking immigrants (their members). Some engaged in profitsharing and were able to return surplus earnings to members. Six of 15 provided some form of benefits (Nancy Conover et al., 1993). Childspace develops worker-owned, child care cooperatives which provide above average salaries for the industry, with full medical coverage, child-care services for all worker-owners, and access to a career ladder. The Childspace Development Training Institute also instituted an individual development account program for worker-owners whose incomes are 200 percent or less of the federal poverty level (Christine Clamp, 2001). The above is anecdotal evidence from onetime case studies of specific cooperatives. Most of these are also examples from majoritypeople-of-color-owned and majority-womenowned cooperatives. Such examples of wealth creation exist around the country for mainstream populations as well as for marginal populations, and across the globe as well. Is this typical?' Are such achievements generalizable? The original title of this paper was: How Cooperative Ownership of Businesses and Homes Contributes to Wealth Accumulation in African American Communities: Preliminary Analysis. This was to be an exploration into how cooperative ownership creates and builds wealth, especially for those who do not start with much wealth. I quickly found that few scholars have addressed this issue, and most of what does exist is not from official data. In fact, there is not much data or analysis at all on wealth accumulation from co-op ownership in general, let alone from predominantly AfricanAmerican-owned cooperatives. In general, most cooperatives do not trade publicly or even trade much stock at all, and sometimes they do not distribute dividends. Often much of the co-op's wealth is retained in the enterprise and not distributed. Therefore, calculating return on investment is difficult. In addition, cooperative businesses are not identified as a separate category in government statistics, and so traditional data sets are difficult or impossible to use. Below I discuss what is known in this area. I end with questions and issues that need to be addressed if more progress is to be made on this topic.
Monetary policy in the United States in the 1950s was remarkably modern. Analysis of Federal Reserve records shows that policymakers had an overarching aversion to inflation and were willing to accept significant costs to prevent it from rising to even moderate levels. This aversion to inflation was the result of policymakers' beliefs that higher inflation could not raise output in the long run, that the level of output that would trigger increases in inflation was only moderate, and that inflation had large real costs in the medium and long runs. Furthermore, both narrative and empirical analysis indicates that policymakers were not wedded to free reserves or other faulty indicators in their implementation of policy. Empirical estimates of a forward-looking Taylor rule show that policymakers in the 1950s raised nominal interest rates more than one-for-one with increases in expected inflation, and suggests that monetary policy in the 1950s was more similar to policy in the 1980s and 1990s than to that in the late 1960s and 1970s. One implication of these findings is that the inflation of the late 1960s and 1970s must have been the result of a change in the conduct of policy.