Teacher Quality and the Future of America

I argue in this paper that we do not pay teachers enough to get high-quality applicants. The reasons we find ourselves in this inferior equilibrium are rooted in our history. Most American teachers are and have been women; we have not accommodated to the increasing opportunities for women in the economy today. Schools are locally funded, and we also have not accommodated to the declining effectiveness of the property tax. The result of having low-quality teachers is that current reforms sub-optimize with the current stock of teachers and therefore result at best in only small gains in educational quality. We are in danger of losing the educational advantage that the United States enjoyed in the 20th century.

Interest rate restrictions in a natural experiment: loan allocation and the change in the usury laws in 1714

This article studies the effects of interest rate restrictions on loan allocation. The British government tightened the usury laws in 1714, reducing the maximum permissible interest rate from 6% to 5%. A sample of individual loan transactions reveals that average loan size and minimum loan size increased strongly, while access to credit worsened for those with little social capital. Collateralised credits, which had accounted for a declining share of total lending, returned to their former role of prominence. Our results suggest that the usury laws distorted credit markets significantly; we find no evidence that they offered a form of Pareto-improving social insurance.Economic development, banking, financial repression, usury laws, credit rationing, natural experiments, lending decisions

Banking as an emerging technology: Hoare's Bank, 1702-1742

London’s financial market underwent dramatic change after 1700. More limited than Paris or Amsterdam in the seventeenth century, London became the leading financial centre in Europe in the eighteenth century. There is an extensive and growing literature on the causes of this change, but comparatively little on the change itself. This article provides detailed information on the operation of the London financial market around 1700 by describing the operations of a nascent London bank.

Credit rationing and crowding out during the Industrial Revolution: Evidence from Hoare's Bank, 1702-1862

Crowding-out during the British Industrial Revolution has long been one of the leading explanations for slow growth during the Industrial Revolution, but little empirical evidence exists to support it. We argue that examinations of interest rates are fundamentally misguided, and that the eighteenth- and early nineteenth-century private loan market balanced through quantity rationing. Using a unique set of observations on lending volume at a London goldsmith bank, Hoare’s, we document the impact of wartime financing on private credit markets. We conclude that there is considerable evidence that government borrowing, especially during wartime, crowded out private credit.Credit rationing, Napoleonic wars, Industrial Revolution, technological change, crowding out

Start With a Girl: A New Agenda for Global Health

Examines how social factors shape the health issues adolescent girls face in developing countries. Calls for a health agenda for girls, including focused HIV prevention and maternal health advocacy; elimination of child marriage; and secondary education

Banking systems and economic growth: lessons from Britain and Germany in the pre-World War I era - commentary

Banks and banking - History ; Banks and banking - Germany ; Banks and banking - Great Britain ; Germany ; Great Britain

Using the general equilibrium growth model to study great depressions : a rejoinder to Kehoe and Prescott

February 27, 200

Inequality and Institutions in 20th Century America

We provide a comprehensive view of widening income inequality in the United States contrasting conditions since 1980 with those in earlier postwar years. We argue that the income distribution in each period was strongly shaped by a set of economic institutions. The early postwar years were dominated by unions, a negotiating framework set in the Treaty of Detroit, progressive taxes, and a high minimum wage -- all parts of a general government effort to broadly distribute the gains from growth. More recent years have been characterized by reversals in all these dimensions in an institutional pattern known as the Washington Consensus. Other explanations for income disparities including skill-biased technical change and international trade are seen as factors operating within this broader institutional story.