Ricardian equivalence for sub-national states

The authors test Ricardian equivalence within an endogenous growth model for U.S. states, which have high rates of migration relative to most countries. Results are consistent with both Ricardian equivalence and endogenous growth, despite the relative ease of migration. Increases in productive government expenditures increase long-run real growth by the same amount, for example, whether financed by taxes or bonds. State rules limiting the use of bond financing may play a role in supporting Ricardian equivalence. The study provides the first explicit test of Ricardian equivalence for sub-national states in the context of an endogenous growth model.endogenous growth

An Economist’s Guide to Heaven

This paper is the first to offer an economic model of God and humanity as optimizing agents in the context of concrete belief archetypes (religious ‘contracts’) in Judeo-Christian theology. Data support the model’s unique predictions, despite their otherwise counterintuitive, unlikely nature. For example, the model requires that in one belief archetype, ‘good works’ not increase with strength of faith, as one might otherwise expect, and that what appears may be God’s dominant contract precisely balances divine penalties for reneging on promises with incentives to seek divine ‘gifts’—an equivalence supported in the data.economics;religion

The rising share of nonmarital births: A response to Ermisch, Martin, and Wu

We are flattered that our recent paper in Demography, GSS (2006), has attracted such close attention from Ermisch Martin and Wu (EMW). In this response we appreciate the opportunity to expand on several key aspects of our paper, but see no reason to substantially revise any of our major conclusions based on EMW comments. Reading EMW, one might think we had proposed the demographic equivalent of Newton’s second law of thermodynamics – the existence of a universal phenomenon, manifest in identical form in all places, for all groups, during all times periods, regardless of circumstances. It will be helpful, then, to review briefly the central points in GSS before turning to the major EMW comments, along with our responses.fertility, illegitimacy ratio, marriage, nonmarital fertility ratio, nonmarital births

Debt and nonlinear fiscal policy: evidence from the states

Evidence from a half century of experience by states identifies nonlinearities in the effects of debt and fiscal policy on growth. Effects are Keynesian for low to moderate levels of debt and stimulus but anti Keynesian for sufficiently high levels of debt or stimulus. Results are broadly consistent with models by Barro (1999), Judd (1987), and others

Debt and nonlinear fiscal policy: evidence from the states

Evidence from a half century of experience by states identifies nonlinearities in the effects of debt and fiscal policy on growth. Effects are Keynesian for low to moderate levels of debt and stimulus but anti Keynesian for sufficiently high levels of debt or stimulus. Results are broadly consistent with models by Barro (1999), Judd (1987), and others

Public Infrastructure, Education, and Economic Growth: Region-Specific Complementarity in a Half-Century Panel of States

We find region-specific complementarity between investments in public infrastructure and education, both k-12 and postsecondary. The complementarity helps to explain how regions capture returns to investments in education even when residents are mobile, and is strong enough for the effect of tax-financed expenditures on either public infrastructure or education to be significantly positive when spending on the other is high, even though the independent effect of either one is negative. Effects are identified using a recursive structure, very long lags, GMM-instrumental variables, and multiple controls for heterogeneity. Estimates are robust across identification strategies, estimators, and instruments

A Birth-Cohort Test of the Wilson-Willis Model of Out-of-Wedlock Childbearing

18 pagesThis paper offers the first birth-cohort test of the Wilson-Willis model of black-white differences in nonmarital childbearing. Cohort data are uniquely suited to the model, and unlike prior evidence, support the power of the model’s predictions: For blacks, the nonmarital birth share rises, as predicted, with the ratio of female to male resources, but decreases for whites. Similarly, the nonmarital birth share for blacks decreases with the ratio of eligible men to women for blacks, as predicted, yet increases for whites. The model explains a majority of the racial difference in nonmarital birth shares

An Economist’s Guide to Heaven

This paper is the first to offer an economic model of God and humanity as optimizing agents in the context of concrete belief archetypes (religious ‘contracts’) in Judeo-Christian theology. Data support the model’s unique predictions, despite their otherwise counterintuitive, unlikely nature. For example, the model requires that in one belief archetype, ‘good works’ not increase with strength of faith, as one might otherwise expect, and that what appears may be God’s dominant contract precisely balances divine penalties for reneging on promises with incentives to seek divine ‘gifts’—an equivalence supported in the data

An Economist’s Guide to Heaven

This paper is the first to offer an economic model of God and humanity as optimizing agents in the context of concrete belief archetypes (religious ‘contracts’) in Judeo-Christian theology. Data support the model’s unique predictions, despite their otherwise counterintuitive, unlikely nature. For example, the model requires that in one belief archetype, ‘good works’ not increase with strength of faith, as one might otherwise expect, and that what appears may be God’s dominant contract precisely balances divine penalties for reneging on promises with incentives to seek divine ‘gifts’—an equivalence supported in the data