The WTO has delivered policy outcomes that are very different from those likely to emerge out of the recent wave of preferential trade agreements (PTAs). Should economists see this as an efficient institutional hand-off, where the WTO has carried trade liberalization as far as it can manage, and is now passing the baton to PTAs to finish the job? We survey a growing economics literature on international trade agreements and argue on this basis that the WTO is not passé. Rather, and subject to some caveats, our survey of research to date suggests that the WTO warrants strong support while a more cautious view of PTAs seems appropriate. (JEL F13, F14, K33, N70)

We propose a Bayesian-averaging portfolio choice strategy with excellent out-of-sample performance. Every period a new model is born that assumes means and covariances are constant over time. Each period we estimate model parameters, update model probabilities, and compute robust portfolio choices by taking into account model uncertainty, parameter uncertainty, and non-stationarity. The portfolio choices achieve higher out-of-sample Sharpe ratios and certainty equivalents than rolling window schemes, the 1/N approach, and other leading strategies do on a majority of 24 datasets.

Using 1979–2012 CPS data for the United States and 1975–2012 NES data for Great Britain, we study wage behavior in both countries, with particular attention to the Great Recession. Real wages are procyclical in both countries, but the procyclicality of real wages varies across recessions, and does so differently between the two countries, in ways that defy simple explanations. We devote particular attention to the hypothesis that downward nominal wage rigidity plays an important role in cyclical employment and unemployment fluctuations. We conclude that downward wage rigidity may be less binding and have lesser allocative consequences than is often supposed.

Aged people face the problem of allocating over the rest of their lifetimes the wealth that they have accumulated during their working years. This problem is fairly complex, because they are uncertain about the dates of their death and because they may wish to use their wealth to finance general consumption, or hold it to meet emergencies, leave estates, or maintain power or status. Whether skilled at dynamic programming or not, aged people effectively do make these decisions. What are the results? Some studies of the entire lifetime pattern of saving and wealth tend to support the simple life cycle model, in which the aged use up their wealth to help finance consumption. Harold Lydall, for example, found saving rates to increase and then decrease with age in the whole population and to be negative for the group aged 65 and over. Guarded support for the theory was found by Franco Modigliani and Albert Ando in Britain and by Dorothy Projector in the United States. More recently, A.F. Shorrocks examined the lifetime pattern of wealth holding in estate-tax data for a single cohort and found the hump pattern that is characteristic of life cycle saving. Other evidence on wealth holding runs contrary to this, however. In a study of estate-tax returns in Washington, D.C., James D. Smith found that wealth increased with age among the aged, after controlling for other demographic variables. Examining national estate-tax data, John Brittain found wealth to increase with age in the United States and A. B. Atkinson and A. J. Harrison reported the same pattern in England and Wales. In a sample of (TIAA) annuity recipients analyzed by James Mulanaphy, over half reported that their total savings had increased during retirement and another quarter reported that their savings had remained about the same. In this paper, I examine wealth holding patterns among aged married couples, using survey data representing the entire aged population of the United States in 1968. The statistical analysis serves as a test of the hypothesis that emerges from life cycle theory and provides some further exploration into the economic behavior of the aged. I find that the aged tend to increase their wealth over time.

asks it in a new context. The old question is a paraphrase of the title of Herbert Spencer's famous essay What Knowledge is of Most Worth? The new context is to pose the question for undergraduate students majoring in economics. My intent is to engage you in reflecting about what kinds of knowledge and skills our economics majors should master-what proficiencies they should be able to demonstrate-by the time they graduate from college. My focus is on not the select few who plan to enter graduate economics programs, but rather the vast majority who go out into the world and will become the next generation of leaders. I propose a list of knowledge and skills, perhaps a better word is proficiencies, that we might reasonably expect our majors to demonstrate upon graduation. This is by no means a final or definitive list; rather it is offered to stimulate discussion about the meaning of the economics major and how to give it more meaning.

Both the distribution of income and the role of ethnicity in economic behavior can be illuminated by an analysis of ethnic differences in married women's labor supply. Differences in wives' labor supply are the main source, beside differences in rates of female headship and wages, of the disparities in family income among racial and ethnic groups in the United States (see my 1984 article). Moreover, differences among ethnic subcultures may affect the labor supply of wives more than they influence many other types of economic behavior. Ethnic groups are distinguished by, among other things, views about male and female roles in the family and about wives and mothers working outside the home, as well as by the value placed on children, family size, household composition, and the education of women. These differences may give rise to systematic differences in utility functions that lead to systematic differences in behavior by women in different ethnic or nativity groups who face the same constraints or opportunity set. Such cultural differences in utility functions no doubt are historically shaped by economic as well as other circumstances, and they evolve, but more slowly than the economic conditions. Ethnic differences in attitudes are, therefore, presumably more pronounced in the first generation of immigrants than in their American-born descendants. These cultural attitudes may have both direct and indirect effects on wives' labor supply. They directly affect the allocation of time between home and market work by women with the same education, number of children, etc. They also affect decisions about education, fertility, and other choices which in turn influence the market work opportunities and value of home time, and so indirectly affect labor force participation. Virtually all of the numerous studies of black-white differences in female labor supply have found that black wives have higher labor force participation rates (LFPR) than whites, even after adjusting for differences in measured variables such as age, children, education, location, other family income, and wages. (For a summary of the results, see Mark Killingsworth, 1983, pp. 122, 195, 202, 404; and Phyllis Wallace, 1982, ch. 2.) Several explanations have been suggested-such as blacks' greater marital instability, their extended-family households, black husbands' lower wages and less stable employment-but none has proved satisfactory. It seems that black wives' higher labor force participation is in large part a cultural difference, rooted in the historical experience of blacks in America, and not explainable by current conditions alone. No one has yet attempted to measure and account for the differences in wives' labor supply among the other ethnic and nativity groups, as this paper will do. These differences are large, with the variation in annual LFPRs among ethnic and nativity groups being greater than the variation in annual hours worked for those in the labor force, as shown in Table 1. The ranking of groups in terms of annual hours worked by those in the labor force differs from the ranking in terms of LFPRs. This suggests that different parameters govern the participation and hours worked decisions, perhaps because the groups face different fixed costs of working. These two aspects of labor supply therefore need to be analyzed separately. In this paper I focus on the differences in labor force participation rates. *Department of Economics, Hunter College, and Graduate School of the City University of New York, 695 Park Avenue, New York, NY 10021. I thank Cecilia Conrad for helpful discussions. A PSC-CUNY Research Award helped support this research.