ADJUSTMENT TO PRODUCTION UNCERTAINTY AND THE THEORY OF THE FIRM

This paper considers the behavior of the firm which faces uncertainty in its production process but can adjust its output once the uncertainty is resolved. Ex post adjustment, unlike previous treatments, involves a marginal cost penalty if more output is required and a lowering of price if too much is produced. With ex post adjustment allowed in this fashion, it is found that nonlinear risk preferences do not affect the sign of the firm's marginal risk premium at optimum ex ante output. The firm will produce less output than under certainty whether it is risk averse, risk neutral, or prefers risk.     

CONSUMERS ARE NOT RICARDIAN: EVIDENCE FROM NINETEEN COUNTRIES

I develop a model which nests both Ricardian equivalence and an alternative non-Ricardian theory. The alternative is a stochastic variant of Blanchard's [1985] model, and its empirical implications are derived. I then test Ricardian equivalence against this alternative using data from nineteen countries. Ricardian equivalence is resoundingly rejected. Moreover, the estimated deviation from Ricardian equivalence is roughly what one would expect if households faced perfect insurance markets and did no have altruistic bequest motives. For many purposes, however, the estimated deviation from Ricardian equivalence has no practical import.     

BLACK-WHITE WEALTH INEQUALITY: IS INHERITANCE THE REASON?

Racial differences in the receipt of financial inheritances he& to explain why the average difference in wealth between black and white households is larger than the average difference in income. Using data from a panel of prime-aged males and from a representative survey of the U.S. population, we document the greater likelihood of white households receiving an inheritance than black households. Controlling for other factors which contribute to racial differences in wealth, we estimate that financial inheritances may account for between 10% and 20% of the average difference in black-white household wealth.     

THE EFFECTS OF THE RACE OF THE INTERVIEWER ON RACE-RELATED ATTITUDES OF BLACK RESPONDENTS IN SRC/CPS NATIONAL ELECTION STUDIES

Previous research found substantial effects of the race of theinterviewer on measures of civic attitudes and electoral participationof blacks in NES surveys from 1964, 1976, 1978, 1980, and 1984.This study extends the previous analysis in two ways: it usesdata from two additional NES surveys, 1982 and 1986; and itfocuses on the effects of the race of the interviewer on race-relatedattitudes. Blacks interviewed by whites were much more likelyto express warmth and closeness toward whites than were blacksinterviewed by blacks. But whereas there is no race-of-interviewereffect on blacks' expressions of warmth toward blacks, thereis a clear race-of-interviewer effect on blacks' expressionsof closeness toward blacks. The pattern of responses to thecloseness items appears to result from the format of the question.The observed trend of decreasing expressed closeness of blackstoward blacks in NES surveys between 1976 and 1984 is an artifactof changes in the racial composition of the interviewer staff.     

MONEY, CREDIT, and WAGES IN HYPERINFLATION: POST-WORLD WAR I GERMANY

An important feature of the German hyperinflation is the way in which accelerating monetization of both government and private debt by the Reichsbank fueled the inflation process. The stimulus to private credit demand arising from more rapid adjustment of money wages over this period is often ignored, however. The present empirical results strongly support the importance of wage pressures in augmenting fiscal influences on nominal money growth during 1920–1923. Our findings also suggest that wage claims provided the main conduit through which higher inflationary expectations were accommodated by faster rates of monetary expansion.