This experiment examines whether there are systematic offsetting differences in the manner in which initial decision makers and reviewers attend to information which ensure that evidence inconsistent with initial judgments is given adequate consideration. Differences in attention are proposed, which result in differential recall of evidence by the initial decision maker and reviewer and thus influence what knowledge initial decision makers and reviewers bring to their discussions and subsequent decisions. The results suggest that the review process can act as an effective control by increasing the chances that the implications of inconsistent evidence are considered.

Official measures of poverty in the United States are compiled by the Bureau of the Census by comparing a household's income level to a prespecified threshold. From a theoretical perspective it is more appropriate to evaluate the level of poverty using a consumption-based measure of household welfare. In this paper I evaluate the level of poverty using expenditure data from the Consumer Expenditure Survey. I find that consumption-based poverty rates are much lower than those based on income. The trend in the poverty rate in the United States is sensitive to the price index and equivalence scales used to adjust the poverty thresholds.

Official measures of poverty in the United States are compiled by the Bureau of the Census by comparing a household's income level to a prespecified threshold. From a theoretical perspective it is more appropriate to evaluate the level of poverty using a consumption-based measure of household welfare. In this paper I evaluate the level of poverty using expenditure data from the Consumer Expenditure Survey. I find that consumption-based poverty rates are much lower than those based on income. The trend in the poverty rate in the United States is sensitive to the price index and equivalence scales used to adjust the poverty thresholds.

The literature on the Fisher effect has ignored the potential relationship between inflation and long-term interest rates. Using an expectations model of the term structure of interest rates, the authors establish the conditions under which innovations in short-term inflation will be transmitted to long-term as well as short-term interest rates. Cointegration tests find support for both the Fisher effect and the expectations theory of the term structure.

While the divestiture of AT&T was intended to produce benefits in the long-distance market, the evidence suggests it has created an unexpected side benefit in local telephone markets. The authors' results show that local exchange carriers have realized immediate cost savings in responding to competitive pressures since the breakup, with the baby Bells experiencing generally larger gains. Dynamically, these productivity gains have increased over time at a relatively constant rate. Although gains of 3-5 percent of total cost are not that large, the absolutely large costs of telephone companies imply significant cost savings of nearly $72 million for the representative firm.

According to the Diamond-Verrecchia hypothesis, if increases in short interest are correlated with information that is not yet public, they should precipitate a price adjustment. Stocks with unexpected increases in short interest are found to generate statistically significant, but small, negative abnormal returns for a short period around the announcement date. When the sample is divided into stocks with and without tradable options, nonoptioned stocks closely mimic these results but the optioned stocks do not. In a cross-sectional analysis of individual firms, the short-term negative abnormal returns are found to be 1) more negative, the higher the degree of unexpected short interest and, 2) less negative if the firm has tradable options.

In this paper we study the connections between product .market conditions. negotiated wage settlements. and union employment in the presence of foreign competition shocks. We exploit the fact that in a small open economy such as Canada the price of imports and exports should represent pure demand shocks. We specify wage and employment determination equations for a sample of collective bargaining agreements from 1965 to 1983. Our estimation strategy consists of specifying the wage as a function of firm-specific value added per worker instrumented with the price of imports and the price of exports in the industry. The OLS specification is rejected in favor of the instrumental variables specification using standard specification tests. The instrumental variables estimates imply that a 1% change in value-added per worker increases the negotiated wage settlements by 0.25%. Similarly, we specify union employment as a function of firm-specific sales instrumented by the price of imports and exports in the industry. The instrumental variables estimates are imprecise and the specification test fails to reject the OLS specification. The OLS estimates imply that a 1% change in firm-specific sales increases employment by 0.19%. We use our estimates to trace the effects of foreign competition on the industry and firm-level sales and value-added measures.