Endogenous Growth, Public Capital, and the Convergence of Regional Manufacturing Industries

Several explanations can be offered for the unbalanced growth of U.S. regional manufacturing industries in the decades after World War II. The convergence hypothesis suggests that the success of the South in catching up to the Northeast and Midwest should be understood by analogy with the economic success of Japan and the rest of the G-7 in closing the gap relative to the U.S. as a whole. Endogenous growth theory, on the other hand, assigns a central role to capital formation, broadly defined. A variant of endogenous growth theory focuses on investments in public infrastructure as a key determinant of regional growth. Finally, traditional location theory stresses the evolution of regional supply and demand and the role of economies of scale and agglomeration. This paper compares these alternative explanations of U.S. regional growth by testing their predictions about the productive efficiency of regional manufacturing industries. We find little evidence that technological convergence explains the regional evolution of U.S. manufacturing industry, or that endogenous growth was an important factor. We also find little evidence that public capital externalities played a significant role in explaining the relative success of industries in the South and West. The main engine of differential regional manufacturing growth over the period 1970-86 seems to be inter-regional flows of capital and labor. The growth of multifactor productivity is essentially uniform across regions, although there is some variation in the initial levels of efficiency.

Income Originating in the State and Local Sector

In this paper we develop an accounting framework for the state and local sector which is consistent with the accounting framework for the private sector of the economy. We show that the public sector capital stock generates an imputed return which takes the form of a reduction in local taxes and that failure to recognize this income distorts the measurement of the output of this sector, confuses the debate over federal tax reform, and hides the distinction between general subsidies for capital formation. Our implementation of those accounts for the 1959- 1985 period indicates that current national income accounting procedures misstate the amount of income originating in the state and local sector; in recent years this misstatement has been on the order of $100 billion. We also show that the state and local sector is one of the more capital intensive sectors of the economy.

(WP 2017-02) The Great Recession and Public Education

We examine the impact of the Great Recession on K-12 education finance and employment and generate five key results. First, nearly 300,000 school employees lost their jobs. Second, schools that were heavily dependent financially on state governments were particularly vulnerable to the recession. Third local revenues from the property tax actually increased during the recession, primarily because millage rates rose in response to declining property values. Fourth, inequality in school spending rose sharply during the Great Recession. Fifth, the federal government’s efforts to shield education from some of the worst effects of the recession achieved their major goal

Disgruntled Employee Retaliation: Does the Employer Have Responsibility?

CASE DESCRIPTION: This short case focuses on harassment and intimidation problems faced by a manager and his family shortly after an employee has been terminated. Whether the departed employee is the intimidator, whether the employer is obligated to investigate and get involved in the matter, and which options or possible actions the manager and his family can take are the key issues in the case. The case has a difficulty level of four, and is best-suited for use in junior or senior undergraduate-level courses in human resource management or employment law. This case can be presented and discussed in about one and a half hours, and is expected to require about two hours of outside preparation by each student. CASE SYNOPSIS: This is a case about a disgruntled employee at a software development company that was being downsized. The employee became upset when he was terminated, claimed he was fired because of his Iranian background, and had to be escorted from the premises by a security guard. A few weeks later, his former manager started receiving bills for hundreds of dollars of purchases that neither he nor his wife had ordered, such as magazine subscriptions, life insurance policies, and gifts. The manager thought the terminated employee was probably doing this, but he only had a few forged signatures on some order cards as evidence. The company HR Director was informed about these harassment incidents and shown the signature cards, but didn\u27t offer to get involved to resolve the situation. As more magazines, pornographic pictures, suggestive notes, and even a note with a veiled threat to the wife and baby arrived in the daily mail, the manager realized that his family was being intimidated and threatened in a criminal way. This was no longer just a prank. The police were called and an investigation was begun, but there still seemed to be little support from the company and the HR Director. Does the employer have a responsibility to protect its managers and their families from work-related harassment? What should the manager do now? Should the family move to a safer place? Should they wait for the police to do something? Should the manager leave his job at the company? Should they retain a lawyer and sue the company?

The Great Recession and Public Education

We examine the impact of the Great Recession on public education finance and employment. Five major themes emerge from our work. First, nearly 300,000 school employees lost their jobs. Second, schools that were heavily dependent financially on state governments were particularly vulnerable to the recession. Third, local revenues from the property tax actually increased during the recession, primarily because millage rates rose in response to declining property values. Fourth, inequality in school spending rose sharply during the Great Recession. We argue, however, that we need to be very cautious about this result. School spending inequality has risen steadily since 2000; the trend in inequality we see in the 2008-13 period is very similar to the trend we see in the 2000-08 period. Fifth, the federal government\u27s efforts to shield education from some of the worst effects of the recession achieved their major goal

Sparse Deterministic Approximation of Bayesian Inverse Problems

We present a parametric deterministic formulation of Bayesian inverse problems with input parameter from infinite dimensional, separable Banach spaces. In this formulation, the forward problems are parametric, deterministic elliptic partial differential equations, and the inverse problem is to determine the unknown, parametric deterministic coefficients from noisy observations comprising linear functionals of the solution. We prove a generalized polynomial chaos representation of the posterior density with respect to the prior measure, given noisy observational data. We analyze the sparsity of the posterior density in terms of the summability of the input data's coefficient sequence. To this end, we estimate the fluctuations in the prior. We exhibit sufficient conditions on the prior model in order for approximations of the posterior density to converge at a given algebraic rate, in terms of the number $N$ of unknowns appearing in the parameteric representation of the prior measure. Similar sparsity and approximation results are also exhibited for the solution and covariance of the elliptic partial differential equation under the posterior. These results then form the basis for efficient uncertainty quantification, in the presence of data with noise

Detection of Voigt Spectral Line Profiles of Hydrogen Radio Recombination Lines toward Sagittarius B2(N)

We report the detection of Voigt spectral line profiles of radio recombination lines (RRLs) toward Sagittarius B2(N) with the 100-m Green Bank Telescope (GBT). At radio wavelengths, astronomical spectra are highly populated with RRLs, which serve as ideal probes of the physical conditions in molecular cloud complexes. An analysis of the Hn(alpha) lines presented herein shows that RRLs of higher principal quantum number (n>90) are generally divergent from their expected Gaussian profiles and, moreover, are well described by their respective Voigt profiles. This is in agreement with the theory that spectral lines experience pressure broadening as a result of electron collisions at lower radio frequencies. Given the inherent technical difficulties regarding the detection and profiling of true RRL wing spans and shapes, it is crucial that the observing instrumentation produce flat baselines as well as high sensitivity, high resolution data. The GBT has demonstrated its capabilities regarding all of these aspects, and we believe that future observations of RRL emission via the GBT will be crucial towards advancing our knowledge of the larger-scale extended structures of ionized gas in the interstellar medium (ISM)

Consumption Taxes in a Life-Cycle Framework: Are Sin Taxes Regressive?

In this paper we construct measures of tax incidence over the life-cycle and compare these measures to traditional measures based on annual data. We show that annual measures of the incidence of taxes on consumption goods may differ from life-cycle measures for three reasons. First, annual measures of income reflect transitory components which should have smaller effects on consumption than permanent changes in income. Second, income measured in a single period differs from lifetime income due to age-related differences in earnings. Third, consumption of certain items follows life-cycle patterns independent of changes in income. Surprisingly, we find that these effects cause almost no change in the assessment of the incidence of taxes applying to the consumption of cigarettes. For alcohol, however, we find that a tax on its consumption is slightly less regressive when measured with respect to lifetime income than when measured with respect to annual income.