Simple Inference on Functionals of Set-Identified Parameters Defined by Linear Moments

This paper considers uniformly valid (over a class of data generating processes) inference for linear functionals of partially identified parameters in cases where the identified set is defined by linear (in the parameter) moment inequalities. We propose a bootstrap procedure for constructing uniformly valid confidence sets for a linear functional of a partially identified parameter. The proposed method amounts to bootstrapping the value functions of a linear optimization problem, and subsumes subvector inference as a special case. In other words, this paper shows the conditions under which ``naively'' bootstrapping a linear program can be used to construct a confidence set with uniform correct coverage for a partially identified linear functional. Unlike other proposed subvector inference procedures, our procedure does not require the researcher to repeatedly invert a hypothesis test, and is extremely computationally efficient. In addition to the new procedure, the paper also discusses connections between the literature on optimization and the literature on subvector inference in partially identified models

Catastrophe Insurance, Capital Markets and Uninsurable Risks

This paper examines the causes of the failure of the private market for catastrophe insurance and examines some public solutions. Although the standard explanations of insurance market failure (adverse selection and moral hazard, large imprecise risks) are present, we argue that the primary explanation for the failure of this market lies in the inability of insurance companies to arrange for the level of capital necessary to settle a large loss. We examine four reasons for this: a) accounting provisions which preclude the setting up of reserves against losses anticipated but not yet incurred, b) the absence of tax incentives to reserve, c) management fear of loss of control associated with takeovers of companies with large stocks of free cash, and d) reluctance of regulators to raise the rates of firms with large holdings of cash. We examine new capital instruments (catastrophe options, contingency bonds) but find that these new instruments at present fail to provide adequate quantities of capital to meet a large loss. We then examine public schemes in California, Florida, and Hawaii, and argue that if the accounting, tax and regulatory advantages enjoyed by these schemes were made available to the private sector, private corporations would be likely to reenter this market. This paper was presented at the Financial Institutions Center's May 1996 conference on "

Economic freedom and employment growth in U.S. states

The authors extend earlier models of economic growth and development by exploring the effect of economic freedom on U.S. state employment growth. They find that states with greater economic freedom—defined as the protection of private property and private markets operating with minimal government interference—experienced greater rates of employment growth. In addition, they find that less-restrictive state and national government labor market policies have the greatest impact on employment growth in U.S. states. Beyond labor market policies, state employment growth is influenced by state and local government policies, but not the policies of all levels of government, including the national government. Their results suggest that policymakers concerned with employment should seriously consider the degree to which their own labor market policies and those of the national government may be limiting economic growth and development in their respective states.Economic development ; Employment

On the size and growth of government

The size of the U.S. federal government, as well as state and local governments, increased dramatically during the 20th century. This paper reviews several theories of government size and growth that are dominant in the public choice and political science literature. The theories are divided into two categories: citizen-over-state theories and state-over-citizen theories. The relationship between the 16th Amendment to the U.S. Constitution and the timing of government growth is also presented. It is likely that portions of each theory can explain government size and growth, but the challenge facing economists is to develop a single unifying theory of government growth.Economic development ; Expenditures, Public ; Local government ; Federal government

Social security versus private retirement accounts: a historical analysis

This paper compares Social Security benefits relative to those paid from private investments: specifically, whether 2003 retirees would gain more retirement income if they had invested their payroll taxes in private accounts during their working years. Three different retirement ages and four possible earnings levels are considered for two private investments-6-month CDs or the S&P 500. On average, the results suggest less than 5 percent of current retirees would receive a higher monthly benefit with Social Security. Several Social Security reform proposals are described.Social security ; Pensions ; Individual retirement accounts

Does government spending really crowd out charitable contributions? new time series evidence

We exploit the time series properties of charitable giving data to provide additional insights into the crowding out of charitable contributions in response to government spending. We find that the short-run and long-run government spending and charitable giving relationships are quite different - the long run relationship appears to be largely spurious, and estimates of the short-run relationship provide only weak evidence of crowding out. We also find that system estimation can improve upon the efficiency of single equation models used in previous works. Our results support the prestige theory of charitable giving and the rational ignorance of citizens.Nonprofit organizations ; Charitable bequests

Disallowances and overcapitalization in the U.S. electric utility industry

Regulation of an industry often produces unintended consequences. Averch and Johnson (1962) argue that certain regulation of electric utilities provides utilities the incentive to purchase an inefficiently large amount of capital. Another possible and related unintended consequence of electric utility regulation is that regulatory cost disallowances on capital may also increase utilities' incentives to overcapitalize. The authors provide theoretical evidence that capital expenditure disallowances will increase the Averch and Johnson effect in some instances and thus may have contributed to the overcapitalization problem that regulation was designed to discourage. Our model shows that disallowances can reduce the rate of return on investment and thereby increase the Averch and Johnson distortion.Electric utilities ; Energy industries

Transcriptome-Wide Analysis of VSV Strains with Varying Ability to Block NF-κB

Vesicular stomatitis virus (VSV) is a negative sense, single-stranded RNA (ssRNA) virus that is currently studied for its uses as a vaccine viral vector and its potential in oncolytic therapy. The M protein of VSV is the active participant in the virus’s abrogation of the host innate immune response. This activity is thought to be due to the M protein’s ability to downregulate overall host transcription by blocking nuclear transport. A VSV mutant containing a D52G mutation in the M protein (22-20) has been shown to block nuclear transport while being defective as a suppressor of NF-κB activation. It is thus believed that while previous M protein mutant viruses are defective in both host transcription suppression and NF-κB activation, 22-20 is deficient in only one of these activities. This study aims to identify differentially expressed genes (DEGs) and pathways through transcriptome analysis of host response to VSV mutants. Our research leads us to believe that 22-20 does in fact down regulate overall host transcription, while being inefficient in suppressing NF-κB mediated immune response pathways. We also discovered important DEGs in the apoptosis pathway, including the antiapoptotic protein Mcl1, where downregulated by 22-20 to a greater degree than another mutant, 22-25. This combination of factors, deficiency in NF-κB suppression and increased apoptotic activation, could make 22-20 an interesting candidate for oncolytic research