Carnegie-Rochester Conference Series on Public Policy最新文献

A simple aggregative model is calibrated to data from Great Britain in 1850 and used to study the role of growing foreign trade, the declining cost of power, and technical change in manufacturing over the period 1780–1850. The model shows that growth in trade played an important role in redistributing income away from land and toward labor, as it reduced the share of agriculture and increased the share of manufactured goods in aggregate output. Both types of technical change contributed significantly to growth, but the change in manufacturing was about three times as important as that in the energy sector.

Measured productivity growth increased substantially during the second half of the 1990s. This paper examines whether this increase owes to an increase in the rate of technological change or whether it can be explained by non-technological factors relating to factor utilization, factor accumulation, or returns to scale. It finds that the recent increase in productivity growth does appear to arise from an increase in technological change. Cyclical utilization raised measured productivity growth relative to technology growth in the first part of the expansion, but lowered it subsequently. Factor adjustment leads to a steady-state understatement of technology growth by measured productivity growth. The understatement was greater in the second half of the expansion than the first. Changes in the distribution of inputs across industries with different returns to scale lead to a modest understatement in the growth in technology. Although the increase technological change is most pronounced in durable manufacturing, technological change also increased outside of manufacturing.

Over the past 25 years, the US and the UK experienced sharp increases in wage inequality and rapid deunionization. We argue that these two phenomena are related, and that skill-biased technical change has been an important factor in deunionization as well as in the rise in inequality. Skill-biased technical change causes deunionization because it increases the outside option of skilled workers, undermining the coalition among skilled and unskilled worker in support of unions. Our approach implies that although deunionization is not the underlying cause of the increase in inequality, it amplifies the direct effect of skill-biased technical change by removing the wage compression imposed by unions. We also show that deunionization may happen inefficiently.

We construct a random matching model to study the effects of clearing arrangements for private money on the prices at which private monies trade, the volume of exchange, and welfare. In a model with full information, clearing arrangements eliminate discounts on private monies issued in other locations, the volume of exchange increases, and welfare increases. However, with private information about the quality of non-local monies, clearing arrangements may discourage the circulation of high-quality monies, and there may exist welfare-dominated equilibria with low-quality monies.

While the empirical association between a financial institution's, or country's, short-term borrowing and susceptibility to crises may, in fact, exist, the direction of causality is often precisely opposite to that traditionally suggested. Banks or countries that want to finance illiquid investments have to borrow short-term. Thus it is the increasing illiquidity of the investment being financed that necessitates short-term financing, and causes the susceptibility to crises. Once illiquid investments have been financed, a ban on short-term financing may precipitate a more severe crisis, while, a priori, it reduces investment. Banning short-term debt deals with symptoms rather than underlying causes.

This is a theoretical study of optimal bank regulation in the presence of governmentally provided deposit insurance. The regulator has two policy instruments, a capital requirement and ex-post taxation of bank profits. It is shown that imposing capital standards can frequently improve welfare. However, it is also shown that a combination of capital standards and ex-post taxation often does better than capital standard alone.

A modern banking crisis is a substantially different species of animal from a historical banking panic. And, in modern banking crises, contractions in bank lending or large scale withdrawals of resources from the banking system do not generally occur.We must, therefore, look elsewhere for the causes of the recessions and the other real effects that appear to be associated with banking crises. The best current evidence appears to be that these consequences derive from changes in the rate of growth of bank liabilities that are used in payments. And, this observation seems to argue for the importance of analyzing banking crises in environments where there are explicit interconnections between the banking system and the monetary/payments system. Such analyses do, in fact, exist. Examples appear in the work of Champ, Smith, and Williamson (1996), and Chang and Velasco (2000).

We study bank capital regulation using a two-dimensional moral-hazard model. Banks choose capital and portfolio risk. They also choose their level of costly screening, which determines their mean portfolio return. Screening and risk are private information. Deposit insurance gives low franchise-value banks an incentive to choose a suboptimally high level of risk and a suboptimally low level of screening. Ex ante capital regulation can mitigate this problem. Optimal capital requirements are generally non-monotonic in franchise value. Adding ex post fines to capital requirements improves welfare by significantly reducing the use of costly capital. Optimal fine schedules are characterized by fines on the extreme right-hand tail of the return distribution.