Trade-distorting practices by other states did not seriously affect U.S. commercial interests until the mid-1960's. However, growing overall and sectoral trade deficits, as well as rapid changes in trading patterns, have made such practices a more salient political issue. The modal and preferred American policy response has been to rely on U.S.supported liberal institutions, notably the General Agreement on Tariffs and Trade (GATT), to provide a framework for multilateral negotiations designed to eliminate
Whether taxation of alcoholic beverages is an appropriate means of reducing social costs of alcohol consumption is continuing public policy issue. Some argue that public health costs and other external costs associated with the consumption of alcoholic beverages are so significant as to justify substantial excise taxes on those beverages.' Others counter that a tax on alcohol would reduce consumption indiscriminately... and therefore reduce the satisfaction experienced by millions of sensible drinkers without necessarily reducing the harm caused by few excessive drinkers. 2 This paper presents and applies framework for evaluating these two views of the efficiency (welfare) effects of alcohol taxes. Determining the efficiency implications of alcohol taxes is complicated by the question of whether and how much abusers, especially alcoholics, benefit from alcohol consumption. Standard welfare theory assumes that all consumers of alcohol enjoy positive net benefits (consumer surplus). However, it is possible that alcoholics over-consume in the sense that consumer surplus from their
Payout policies based on share repurchase programs provide greater flexibility than do those based on cash dividends. We develop and test an empirical model in which strongly governed companies outperform weakly governed companies after announcing share repurchase programs. Our findings include positive associations between strong governance and both post-announcement adjusted operating performance and abnormal stock returns. The results are robust to sample selection bias, different sample criteria, governance measurement, and various control variables. In addition, governance strength is associated with larger post-announcement changes in CEO incentive compensation and merger and acquisition activity, both of which we argue are consistent with strongly governed companies using the financial flexibility derived from choosing share repurchases over cash dividends to drive better performance. Consistent with current literature on attenuation of former anomalies, the associations we find between governance and post-announcement performance tend to disappear in the latter half of our sample period.
Quarterly Journal of Economics2016131(3), 1181-1242open access
We find consistent evidence of negative autocorrelation in decision making that is unrelated to the merits of the cases considered in three separate high-stakes field settings: refugee asylum court decisions, loan application reviews, and Major League Baseball umpire pitch calls. The evidence is most consistent with the law of small numbers and the gambler’s fallacy—people underestimating the likelihood of sequential streaks occurring by chance—leading to negatively autocorrelated decisions that result in errors. The negative autocorrelation is stronger among more moderate and less experienced decision makers, following longer streaks of decisions in one direction, when the current and previous cases share similar characteristics or occur close in time, and when decision makers face weaker incentives for accuracy. Other explanations for negatively autocorrelated decisions such as quotas, learning, or preferences to treat all parties fairly are less consistent with the evidence, though we cannot completely rule out sequential contrast effects as an alternative explanation.
Robert Fogel and Stanley Engerman's (hereafter, F-E) recent article on the relative efficiency of slave agriculture is intended to be a defense of Time on the Cross, yet in it the authors silently abandon the central theme of that book. From the outset what seemed most dubious to me and to other critics was F-E's use of the efficiency calculation as a basis for quite literal-minded inferences about the quality of plantation labor.' In their latest statement I find far less to disagree with because the dubious inferences have disappeared. If we are entitled to judge from what they now omit to say, Fogel and Engerman have changed their minds and thereby silently concede a great deal to their critics. The crux of the matter is the source of efficiency. In both their book and their recent article, F-E locate one major source in the foresight, rationality, and energy with which plantation managers organized and disciplined their work force. But in the book the authors were equally enthusiasticmore so, in fact--about the slave's own personal contribution to plantation efficiency. The authors originally attributed the superior efficiency of plantations to ... the combination of the superior management of planters and the superior quality of black labor... In a certain sense, all, or nearly all of the advantage is attributable to the high quality of slave labor, for the main thrust of management was directed at improving the quality of labor. How much of the success of the effort was due to the management, and how much to the responsiveness of workers is an imperative question, but its resolution lies beyond the range of current techniques and available data. [1974, p. 210, emphasis added]
Many important questions in macroeconomics concern the impact of taxation and spending policies on private resource allocation. One approach, typified by Robert Hall (1971) and William Brock and Stephen Turnovsky (1981), is to use dynamic general equilibrium models to address basic issues in fiscal and tax policy. The objective is to explicitly examine macroeconomic issues without embracing the market imperfections (fixed prices, missing markets, money illusion, etc.) found in conventional macroeconomic analysis. There is currently great interest in dynamic fiscal policy problems. This decade has already seen two major adjustments in tax policy, and many attempts to substantially alter spending patterns. The result of this tumult has been unprecedented peacetime deficits and much uncertainty about what measures will ultimately be used to bring the budget into balance. In this paper, I discuss the impact of alternative fiscal policies in a dynamic general equilibrium model. I examine the shortrun effects of fiscal policy changes, the efficiency cost of alternative dynamic tax policies, the effects of uncertain policy formation, and the redistributive effects of factor taxation.