THE ROLE OF THE MEDIAN LEGISLATOR IN U.S. TRADE POLICY: A HISTORICAL ANALYSIS

In this historical analysis of U.S. trade policy, we apply the median voter model to explain legislative decision making. In this model, the level of tariff protection is expected to change with changes in the median legislator. We show that this simple model does a remarkable job if explaining trade policy until the mid-1930s, when it breaks down. We offer several possible explanations for the breakdown of this model, focusing particularly on the impact of domestic and international institutional changes that may have altered the role of the median legislator in trade policy formation.     

THE TECHNOLOGY FACTOR AND THE EXPORT PERFORMANCE OF U.S. MANUFACTURING INDUSTRIES

The paper examines two central theories advanced to explain the revealed comparative advantage of U.S. industries. The neo-technological account centers on the process of innovation among industries and is represented in the regression analysis by an R&D intensity variable. The neofactor theory advances both human and "physical" capital as important variables in determining countries' comparative advantage. Foreign protection is postulated to affect the export performance of U.S. industries. Generally the results suggest that U.S. revealed comparative advantage is most pronounced in R&D intensive industries that give the U.S. a temporary technological lead in world markets.     

TRADE,GEOGRAPHY AND THE SKILL PREMIUM IN U.S. MANUFACTURING

A number of studies have suggested that countries (or regions) with access to larger markets have higher wages. In this paper, we examine whether access to larger markets affects skilled and unskilled workers differently. We develop a model relating two key measures of market size, market and supplier access, to industry value added prices. We then estimate the effects of growth in these measures on factor returns in U.S. manufacturing industries between 1984 and 1996. We find that growth in these measures can explain around 5% of the rise in the skill premium over the sample period. (JEL F12, F16, L60)     

WITHIN U.S. TRADE AND THE LONG SHADOW OF THE AMERICAN SECESSION

Using data from U.S. commodity flow survey, we show that the historical Union–Confederacy border lowers contemporaneous trade between U.S. states by about 13%. The finding is robust over econometric models, survey waves, or aggregation levels. Including contemporaneous controls, such as network or institutional variables, lowers the estimate only slightly. Historical variables, such as slavery, do not explain the effect. Adding U.S. states unaffected by the Civil War, we argue that the friction is not merely reflecting unmeasured North–South differences. Finally, the border effect is larger for differentiated than for homogeneous goods, stressing the potential role for cultural factors and trust. (JEL F15, N72, N92, Z10)     

THE DYNAMIC EFFECTS OF U.S. FOOD AID

Although food aid may have important medium- to long-term effects, there is a glaring absence of empirical research on food aid dynamics. This paper applies vector autoregression methods to data from 18 countries over the period 1961–95. We find evidence that food aid has a pronounced J-curve effect on recipient country per capita commercial food imports but only negligible negative effects on recipient country per capita food production. The commercial export gains are primarily enjoyed, however, by the donors' competitors, revealing heretofore unrecognized positive pecuniary trade externalities associated with foreign assistance. ( JEL F14, O13, Q17, Q18)     

WOMEN CANDIDATES IN THE NEWS: AN EXAMINATION OF GENDER DIFFERENCES IN U.S. SENATE CAMPAIGN COVERAGE

By covering male and female candidates differently, the newsmedia may influence the success of female candidates for publicoffice. A content analysis was conducted to assess potentiallyimportant differences in the newspaper coverage of a sampleof male and female U.S. Senate candidates in the elections of1982–86. The results of the study show that female candidates for the U.S. Senate are treated differently by the press.Female candidates receive less news coverage and the coveragethey do receive concentrates more on their viability and lesson their issue positions. Furthermore, female candidates' viabilitycoverage is more negative than that of their male counterparts.Given these gender differences in press treatment, we wouldexpect voters' recognition of male candidates to exceed thatof female candidates and we would also expect evaluations offemale candidates to be tied more closely to their perceivedviabil ity. Because female candidates are often considered noncompetitiveby the press, this attention to the horserace may lead votersto develop more negative evaluations of female candidates. Theseresults suggest that current patterns of press coverage mayserve as a critical obstacle for women running for the U.S.Senate.     

THE DETERMINANTS OF CAMPAIGN SPENDING: THE ROLE OF THE GOVERNMENT JACKPOT

To raise money for their campaigns, political candidates auction a part of government wealth (the jackpot) to contributors. The larger the jackpot, the more candidates spend. Data on the gubernatorial races of 1978 and 1986 indicate that (1) for every dollar increase in the per capita jackpot, campaign spending rises by 0.0004 cents per voter, (2) balanced budget laws hinder the candidate's ability to raise money, (3) in states that give the governor more power over the budget (measured by a "Schlesinger" index) candidates raise more. The paper emphasizes that candidates willingly limit their spending to avoid indebtedness to contributors.     

MARKET STRUCTURE AND PRICE-COST MARGINS:A COMPARATIVE ANALYSIS OF U.K. AND U.S. MANUFACTURING INDUSTRIES

This paper reports a comparative study of market structure- performance relations in U. K. and U.S. manufacturing indus- tries. The multivariate regression results support the hypothesis of homogeneity of the links between market structure and the price-cost margin dimension of performance in manufacturing industries of the two countries. Furthermore, the results indicate that the differences in the legal and cultural environments of U.K. and U.S. industries do not significantly affect the pattern of similarity in the links.     

WHY DO ENERGY PRICES MATTER? THE ROLE OF INTERINDUSTRY LINKAGES IN U.S. MANUFACTURING

There is considerable empirical evidence that energy prices had a large effect on the U.S. economy between World War II and the 1980s. This paper argues that linkages between manufacturing industries amplify the effect of an energy price shock and help explain the large effect. In particular, energy-intensive industries are important input suppliers to other industries. When the price of energy increases, energy-intensive industries contract, raising materials prices for other industries. Because of the reduction in materials supply, the downstream industries also contract, which I refer to as the supply effect. Using data from the Census of Manufactures, I find that the supply effect accounted for about one half of the sensitivity of value added to the price of energy. I use plant-level census data to show that the supply effect caused similar changes in value added per plant as in value added per industry. A price increase caused a small, although statistically significant, decrease in entry and had no effect on exit. Finally, the supply effect reduced plant-level labor demand . ( JEL E32, Q43)     

STABILITY AND CHANGE IN THE U.S. PUBLIC'S KNOWLEDGE OF POLITICS

The U.S. public's current knowledge about politics is comparedwith levels of knowlege in the 1940s and 1950s. Fourteen questionsasked by Gallup on various surveys from 1945 to 1957 were includedon a larger survey of political knowledge conducted by telephonein 1989 with a randomly selected sample of 610 adult U.S. residents.On 8 of the 14 items, the percentage answering correctly in1989 was higher than in the earlier surveys (by 4–15 points).One item showed an increase of 1 percent, two were down 1 percent,and three others declined by 5 percent, 9 percent, and 10 percent.When level of education is controlled, however, levels of knowledgeappear to have declined for most of the items. A reanalysisof some of the original Gallup data is used to estimate theeffectiveness of schools in transmitting political informationin 1989 compared with the earlier years.     

THE ROLE OF REGULATORY ARBITRAGE IN U.S. BANKS' INTERNATIONAL FLOWS: BANK‐LEVEL EVIDENCE

I study the prevalence and profitability of regulatory arbitrage in U.S. banks' foreign activities. I analyze a publicly available bank‐level data set on bilateral lending flows to 75 countries over 2003–2013. U.S. banks' affiliates lend less to borrowers in host countries with stricter bank capital regulations, and are less likely to maintain affiliates in such countries. Banks substitute from (host‐regulated) affiliate toward (U.S.‐regulated) cross‐border lending in hosts with strict bank capital rules. This is particularly so for low‐capitalized banks with lower foreign ownership shares. Banks that reduce their exposure to stricter host capital rules are more profitable in foreign activities. (JEL F3, F4, G2)     

THE SWINGS OF U.S. INFLATION AND THE GIBSON PARADOX

In recent business cycles, U.S. inflation has experienced a reduction of volatility and a severe weakening in the correlation to the nominal interest rate (Gibson paradox). We examine these facts in an estimated dynamic stochastic general equilibrium model with money. Our findings point at a flatter New Keynesian Phillips Curve (higher price stickiness) and a lower persistence of markup shocks as the main explanatory factors. In addition, a higher interest‐rate elasticity of money demand, an increasing role of demand‐side shocks, and a less systematic behavior of Fed's monetary policy also account for the recent patterns of U.S. inflation dynamics. (JEL E32, E47)     

THE IMPACT OF FINANCIAL RESTRUCTURING AND CHANGES IN CORPORATE CONTROL ON INVESTMENT AND EMPLOYMENT IN THE U.S. PETROLEUM INDUSTRY

This article investigates the effects of changes in market conditions and the financial structure of domestic petroleum firms on employment and investment in offshore oil leases. Important theoretical issues include the extent to which managerial power in firms has been challenged by intervention from financial markets and institutional investors and the effects of changes in financial control on employment and inventory investment. A pooled cross-section time series data set was assembled for forty large oil companies for 1978–1989. A dynamic analysis of company employment levels and investment in offshore oil leases in the Central Gulf of Mexico reveals that falling oil prices and lower domestic oil consumption reduced spending on offshore leases. Some support was found for the agency theory's claim that lower free cash flow reduced spending on offshore leases in the late eighties. Support was also found for an executive defense strategy (Useem 1993), where petroleum company managers reduced lease spending and employment as an adaptation to changes in market fundamentals and external threats from capital markets and institutional investors.     

PRODUCTIVITY PERFORMANCE OF U.S. TRUNK AND LOCAL SERVCE AIRLINES IN THE ERA OF DEREGULATION

The transition to deregulation of the U.S. air transport industry began in 1976. In this paper we measure total factor productivity growth of the airlines for the first five years of the transition (1976–1980) and compare the performance with that of the preceding years. We find that productivity growth accelerated from 2.8% per year to 5.1% per year. An analysis of covariance model with individual airlines as observations leads to the conclusion that for the trunk airlines nearly all of the acceleration can be explained by increases in output and load factor and decreases in the growth of capacity. For the local service airlines, however, less than half of the acceleration may be so-explained.     

THE SHIFTS IN LEAD-LAG PROPERTIES OF THE U.S. BUSINESS CYCLE

We document shifts in the lead-lag properties of the U.S. business cycle since the mid-1980s. Specifically, (1) the well-known inverted leading indicator property of real interest rates has completely vanished; (2) labor productivity switched from positively leading to negatively lagging output and labor inputs over the cycle; and (3) the unemployment rate shifted from lagging productivity negatively to leading positively. Many contemporary business cycle models produce counterfactual cross-correlations revealing that popular frictions and shocks provide an incomplete account of business cycle comovement. Determining the underlying sources of these shifts in the lead-lag properties and their consequences for macroeconomic forecasts is therefore a promising direction for future research. (JEL E24, E32, E43)     

DEMAND AND SUPPLY OF HOUSING IN THE U.S.: 1929–1978

Annual data for the period 1929–1978 are used to estimate a complete model of demand and supply of housing services and consumption goods in the U.S. by maximum likelihood methods. The demand functions are derived by maximizing a utility function characterized by weak inter-temporal separability. Utility in each period is assumed to be of a generalized CES type with housing services and consumption goods as arguments. The estimating demand relation is transformed into a relatively simple form by focusing on the relative demand of housing to consumption goods. It is found that the intra-temporal elasticity of substitution between housing and consumption goods is unitary. The maximum likelihood estimates of the other parameters of the elementary utility function are also presented. Finally, it is noted that by estimating the structure of individual preferences a basis is established for the calculation of long-run efficiency gains of a change in the tax treatment of housing.