This paper studies tax reforms in a dynamic model of a global economy calibrated to current U.S. and European tax policies. World capital markets add consumption-smoothing and income-redistribution effects that alter closed-economy predictions. In the absence of taxes on foreign interest, welfare gains of eliminating U.S. income taxes are enlarged by up to 34 percent, at the expense of European losses caused by transitional declines in consumption and leisure, and a permanent capital outflow. In contrast, if foreign interest is taxed, the same tax reform reduces U.S. welfare 0.7 percent and increases European welfare 1.8 percent.

The Family Support Act of 1988 called for a scientific review of the official U.S. measure of poverty, reflecting a general dissatisfaction with the current measure, which has not been revised since the mid-1960's. A National Research Council (NRC) Panel of the National Academy of Sciences undertook that review and called for a new approach to poverty measurement.' The NRC Panel criticized the current Census Bureau methodology because the current measure of poverty has failed to reflect important economic trends or policies aimed to alleviate the condition it attempts to measure, economic poverty. This paper presents estimates of how the Panel's recommendations would alter the picture of the number and composition of the poor in the United States over the time period from 1979 to 1994, focusing on trends in poverty among children and the elderly. The current official series shows that the relative gap in poverty rates between children and the elderly has grown since 1979. We present evidence that the poverty gap between children and the elderly is narrowing, not widening, when the Panel's measure of family resources is employed.

Transactions take place in the rm rather than in the market because the rm o ers agents who make speci c investments power. Past literature emphasizes the allocation of ownership as the primary mechanism by which the rm does this. Within the contractibility assumptions of this literature, we identify a potentially superior mechanism, the regulation of access to critical resources. Access can be better than ownership because: i) the power agents get from access is more contingent on them making the right investment; ii) ownership has adverse e ects on the incentive to specialize. The theory explains the importance of internal organization and third party ownership. A preliminary version of this paper circulated with the title \\Implicit Property Rights in a Theory of the

We compare dividend policies of U.S. and Japanese firms, partitioning the Japanese data into keiretsu, independent, and hybrid firms. We examine the correlation between dividend changes and stock returns, and the reluctance to change dividends. Results are consistent with the joint hypotheses that Japanese firms, particularly keiretsu-member firms, face less information asymmetry and fewer agency conflicts than U.S. firms, and that information asymmetries and/or agency conflicts affect dividend policy. Japanese firms experience smaller stock price reactions to dividend omissions and initiations, they are less reluctant to omit and cut dividends, and their dividends are more responsive to earnings changes.

We compare dividend policies of U.S. and Japanese firms, partitioning the Japanese data into keiretsu, independent, and hybrid firms. We examine the correlation between dividend changes and stock returns, and the reluctance to change dividends. Results are consistent with the joint hypotheses that Japanese firms, particularly keiretsu‐member firms, face less information asymmetry and fewer agency conflicts than U.S. firms, and that information asymmetries and/or agency conflicts affect dividend policy. Japanese firms experience smaller stock price reactions to dividend omissions and initiations, they are less reluctant to omit and cut dividends, and their dividends are more responsive to earnings changes.