CAPITAL CONTROLS,MONETARY POLICY,AND BALANCE SHEETS IN A SMALL OPEN ECONOMY

We develop a small open economy, New Keynesian model that incorporates a financial accelerator in combination with liability dollarization. Applying a Ramsey‐type analysis, we compare the welfare implications of an optimal monetary policy under flexible exchange rates and an optimal capital control policy under fixed exchange rates. In an economy without the financial accelerator, an optimal monetary policy under flexible exchange rates is superior to an optimal capital control policy under fixed exchange rates. In contrast, in an economy with the financial accelerator, an optimal capital control under fixed exchange rates yields higher welfare than an optimal monetary policy under flexible exchange rates.(JEL E44, E52, F32, F38, F41)     

FINANCIAL FRICTIONS AND THE CHOICE OF EXCHANGE RATE REGIMES

This article provides a quantitative assessment of the role of financial frictions in the choice of exchange rate regimes. I use a two‐country model with sticky prices to compare different exchange rate arrangements. I simulate the model without and with borrowing constraints on investment, under monetary policy and technology shocks. I find that the stabilization properties of floating exchange rate regimes in face of foreign shocks are enhanced relative to fixed exchange rate in presence of credit frictions. In presence of symmetric and correlated shock, fixed exchange rates regimes can perform better than floating. This analysis can have important policy implications for accession countries joining the European Exchange Rate Mechanism II system and with high degrees of credit frictions. (JEL E3, E42, E44, E52, F41)     

Legal pluralism and the Shari'a: a comparison of Greece and Turkey

The creation of a national and unified legal system was an important aspect of the rise of the modern state and national citizenship. However, this interpretation of legal rationalization has been challenged by sociologists of law such as Eugene Ehrlich (1862–1922) who claimed that this juridical theory of state‐centred law masked the presence of customary laws outside this formal system. In critical theories of the law, legal pluralism is proposed against the idea of legal sovereignty or legal centralism. In this article we explore the implications of the growth of the Shari'a as an example of legal pluralism. We take Turkey and Greece as two interesting but different examples of legal pluralism and consider the implications of these case studies for debates about liberalism, multiculturalism and citizenship in multi‐faith societies.     

The Psychology of Working: A New Framework for Counseling Practice and Public Policy

The authors present the psychology‐of‐working perspective (D. L. Blustein, 2006; N. Peterson & R. C. González, 2005; M. S. Richardson, 1993) as an alternative to traditional career development theories, which have primarily explored the lives of those with choice and volition in their working lives. The major historical and conceptual features of the psychology of working are reviewed, with a focus on how this framework provides a more inclusive and, ideally, more just vision for the career counseling field. Implications for career counseling and a case presentation are provided to examine how this new perspective can inform counseling practice. A brief overview of public policy implications concludes the article.     

“THE WAR FOR THE FARE”: HOW DRIVER COMPENSATION AFFECTS BUS SYSTEM PERFORMANCE

Prior to 2007, two systems of bus driver compensation coexisted in Santiago, Chile: one paid drivers per passenger transported, while the other paid a fixed wage. Per‐passenger drivers engaged in “The War for the Fare,” altering their driving patterns to compete for passengers. Examining these systems on similar routes in Santiago, we observed two key findings. Compared with the fixed‐wage system, the per‐passenger system leads to (1) 13% shorter passenger wait times, via reduced bunching of buses and (2) 67% more accidents per kilometer driven, via more aggressive driving. We discuss implications for the design of incentives in public transit. (JEL L92, M52, R41)     

ELASTIC CAPITAL SUPPLY AND THE EFFECTS OF FISCAL POLICY

Existing analyses of the effects of fiscal policy in general equilibrium models have typically been conducted under the assumption that the long-run supply of capital is perfectly elastic at a fixed rate of time preference. These analyses have shown that the long-run response of the capital stock to changes in fiscal policy is crucial to generating the potential for “multiplier” effects in these models. In this paper we ask, what are the implications of relaxing the assumption of perfectly elastic capital supply for the analysis of fiscal policy? We show that with less than perfectly elastic capital supply, the potential for multipliers is actually enhanced. (JEL E62, D90)     

OPTIMAL COPYRIGHT LENGTH AND EX POST INVESTMENT: A MICKEY MOUSE APPROACH

This paper considers a theoretical model of copyright protection in which the value of an intellectual work changes over time because of depreciation and value‐enhancing ex post investments. The first main finding is that, in the case of a single project, granting infinitely lived copyright protection maximizes social welfare when the return on ex post investments is high relative to the return on the initial investment. We also provide simulation results of our model for the case of multiple heterogeneous projects that show how social welfare varies with the length of copyright protection and the returns on initial and ex post investments. We then consider what our framework says concerning the social‐welfare effects of the 1998 Copyright Term Extension Act. Here we show that, depending on the importance of ex post investments, the act may have either increased or decreased social welfare. Our final analysis considers the social‐welfare implications of replacing fixed‐length copyright protection with Landes and Posner's (University of Chicago Law Review, 70(2), 2003, 471–518) idea of indefinitely renewable copyright protection. We find that implementing indefinitely renewable copyright protection frequently increases social welfare provided the returns on ex post investments are sufficiently large. We also provide a brief history of Disney's Mickey Mouse and argue that the history of that character matches quite well with the predictions of our theoretical approach. (JEL O34, K00, L82)     

HORIZONTAL MERGERS IN THE PRESENCE OF CAPACITY CONSTRAINTS

We examine a merger between two competitors in a Bertrand‐Edgeworth model. We find that the effects of merger depend on the tightness of capacity constraints. The combination of two firms has no price effect if and only if the capacity constraints of all firms are binding both before and after the merger. However, a merger may turn a binding capacity constraint into a slack one, which results in higher prices. In an industry where excess capacity drives the premerger prices of all firms to the marginal cost, a merger may cause prices to rise even though aggregate capacity remains constant. (JEL L13, L40)     

Antisocial Propensity,Adolescent School Outcomes,and the Risk of Criminal Conviction

Data from the 1986 Northern Finland Birth Cohort Study (n = 4,645) were used to examine the influence of mid‐adolescent (age 15) school outcomes on late‐adolescent (ages 17–19) risk of criminal conviction. Consistent with social‐developmental theories of offending, we found that poor academic performance and reduced school attachment increase the risk of criminal conviction independently of pre‐existing differences in antisocial propensity and other confounding factors identified in prior research. Moreover, in support of an integrated model, our research suggests that academic performance and school attachment mediate the effects of childhood antisociality and learning difficulties on late‐adolescent risk of criminal conviction. The implications of findings for policy and future research are discussed.     

What Drives Progressive Policy? Institutional Politics,Political Mediation,Policy Feedbacks,and Early U.S. Old‐Age Policy

What drives progressive public policy? Because progressive policy challenges the interests of powerful people and interests that dominate policy making, it is puzzling that progressive policy ever happens. This article addresses this question by modeling and appraising institutional political, political mediation, and policy feedback theories and models of progressive policy making. Institutional political theory focuses on political institutional conditions, bureaucratic development, election results, and public opinion. Political mediation theory holds that social movements can have influence over progressive policy under favorable political conditions. Policy feedback theory holds that programs will be self‐reinforcing under certain conditions. The article goes beyond previous research by including and analyzing public opinion in institutional political and political mediation models and addressing positive policy feedbacks. We appraise five models derived from these three theories through fuzzy set qualitative comparative analyses of the generosity of early old‐age policy across U.S. states at two key moments. We find some support for each theory, and the results suggest that they are complementary. Left regimes or social movements can initiate progressive policy, which can be reinforced for the long term through positive policy feedback mechanisms. We discuss the implications for current U.S. politics and for progressive policy elsewhere.     

DUBIOUS AND DUBIOUSER: CONTINGENT VALUATION AND THE TIME OF DAY

We collect contingent valuation data from 524 student survey respondents over a 3‐day, 72‐hour period. Data analysis of a hypothetical campus referendum focuses on time‐of‐day effects on willingness to pay for a renewable energy project. We find that subjects responding to the survey during the night‐time hours (i.e., between 12 a.m. and 6 a.m.) do not display the law of demand, offering theoretically invalid responses to questions with important policy implications. Results from this research may have serious implications for the contingent valuation method (CVM). In short, just like your father said, nothing good happens after midnight when using the CVM. (JEL Q51)     

The persistence of cliques in the post‐communist state. The case of deniability in drug reimbursement policy in Poland

This article explores a key question in political sociology: Can post‐communist policy‐making be described with classical theories of the Western state or do we need a theory of the specificity of the post‐communist state? In so doing, we consider Janine Wedel's clique theory, concerned with informal social actors and processes in post‐communist transition. We conducted a case study of drug reimbursement policy in Poland, using 109 stakeholder interviews, official documents and media coverage. Drawing on ‘sensitizing concepts’ from Wedel's theory, especially the notion of ‘deniability’, we developed an explanation of why Poland's reimbursement policy combined suboptimal outcomes, procedural irregularities with limited accountability of key stakeholders. We argue that deniability was created through four main mechanisms: (1) blurred boundaries between different types of state authority allowing for the dispersion of blame for controversial policy decisions; (2) bridging different sectors by ‘institutional nomads’, who often escaped existing conflicts of interest regulations; (3) institutional nomads’ ‘flexible’ methods of influence premised on managing roles and representations; and (4) coordination of resources and influence by elite cliques monopolizing exclusive policy expertise. Overall, the greatest power over drug reimbursement was often associated with lowest accountability. We suggest, therefore, that the clique theory can be generalized from its home domain of explanation in foreign aid and privatizations to more technologically advanced policies in Poland and other post‐communist countries. This conclusion is not identical, however, with arguing the uniqueness of the post‐communist state. Rather, we show potential for using Wedel's account to analyse policy‐making in Western democracies and indicate scope for its possible integration with the classical theories of the state.     

SPORTS FAN BINGE DRINKING: AN EXAMINATION USING LOW SELF-CONTROL AND PEER ASSOCIATION

Research has shown a connection between being a college sports fan and binge drinking; however, no research uses criminological theories when examining this connection. The purpose of the present study is to examine the ability of self-control and differential association theories to determine whether the relationship between college sports fans and binge drinking is individual or group situated. Using self-report data from (n = 693) college students from four southern universities, the results show that the connection between being a college sports fan and binge drinking can be accounted for by both low self-control and differential association. These results are discussed and policy implications are presented.     

ASSET PRICE BUBBLES AND TECHNOLOGICAL INNOVATION

We introduce borrowing constraints into a two‐sector Schumpeterian growth model and examine the impact of asset price bubbles on innovation. In this environment, rational bubbles arise when the intermediate good producing R&D sector is faced with adverse productivity shocks. Importantly, these bubbles help alleviate credit constraints and facilitate innovation in the stagnant economy. On the policy front, we make a case for debt financed credit to the R&D sector. Further, we establish that a constant credit growth rule (akin to the Friedman rule) outperforms the often prescribed counter‐cyclical “lean against the wind” credit policy. (JEL E32, E44, O40)     

A SIMPLE MODEL OF OPTIMAL HATE CRIME LEGISLATION

We present a simple model of the effects of hate crime legislation. We show that even if the direct harm to victims of hate crime is the same as for other crimes, because of other differences in the effects it may still be optimal to exert a different level of law‐enforcement effort to deter or prevent hate crime. These differences also have previously unrecognized effects on the optimal level of effort by potential hate crime victims to avoid being victimized, thus affecting the efficiency of government policies that encourage or discourage such effort. In some cases, the optimal level of government effort may be lower for hate crimes than for other crimes. Our analysis suggests a role for policy tools that influence individual avoidance effort directly. We discuss the implications of our results for similar types of crime, including terrorism. (JEL K42, K14, D02)     

NUDGING LIFE INSURANCE HOLDINGS IN THE WORKPLACE

Using data from a university, we analyze a policy designed to increase employer‐sponsored life insurance. The university increased basic life insurance holdings, which nudged employees with supplemental coverage to have more life insurance. In large part due to inertia, the nudge increased life insurance holdings one‐for‐one for those who could have undone it. Additionally, we find that expanding coverage options significantly increased total life insurance holdings for new hires who were not subject to inertia. These policy changes reduced uninsured vulnerabilities for two‐thirds of employees. Our findings have important policy implications for addressing widespread disparities in life insurance coverage. (JEL D31, G22, D03, J32, J33, J38, H20)     

Producing More with Less? Community Forestry in Durango,Mexico in an Era of Trade Liberalization*

Abstract Through a qualitative case study of peasant‐organized forestry in Durango, Mexico, this paper examines how neoliberal policy reform is reshaping the community forestry sector. Post‐1992 agrarian and forestry laws facilitate the emergence of new forms of association in ejidos (collective property communities created by agrarian reform) and agrarian communities, and reorganize the delivery of forestry technical services. These developments indirectly undermine peasants' capacity to deal with the sector's long‐standing internal problems, putting at risk their ability to provide themselves with the services they need for sustainable community livelihoods and forest exploitation. Nevertheless, this study of a forest peasant federation shows that institutional change is a process peopled by groups of social agents who respond creatively to external structure from local organizational and community contexts. Ethnographic methods can be used fruitfully to study complex interactions between multiple levels of political‐economic structure and local action, which both constrain and provide opportunities for the organization of common‐pool resource management regimes.     

RANKING DISCLOSURE POLICIES IN ALL‐PAY AUCTIONS

In this paper, we study information disclosure policies in all‐pay auctions with incomplete information. Two symmetric players have either high or low private value. The contest organizer observes players' values ex post, and can commit ex ante to four different symmetric information policies exhaustively: She can fully disclose or conceal the players' types, and she can disclose their types if and only if when both are high or if and only if when both are low. We characterize the unique equilibriums, and completely rank the four policies by various criteria. We find the full concealment policy extracts highest aggregate expected effort, followed by the policy of disclosing types if and only if when both are high. The policy of disclosing types if and only if when both are low induces least aggregate expected effort. Players enjoy highest expected payoffs under the policy of disclosing types if and only if when both are low; the other three policies yield the same expected payoffs to players. In terms of prize allocation efficiency, the full concealment policy is ranked highest and the full disclosure policy is ranked lowest. In between, the other two policies' rankings depend on the probability of high type. (JEL C72, D44, D82, D83, J48).     

Use of social impact bonds to address social problems: Understanding contractual risks and transaction costs

Social impact bonds, a recent innovation in social finance, are designed to harness capital and knowledge from private nonprofit, for‐profit, and public entities to address pressing social problems. Although there is great policy interest in understanding how social impact bonds can be used to tackle social problems, the emergent nature of social impact bonds makes it hard to find relevant data and evidence. To overcome this challenge, we use single‐significant‐case sampling as our research design strategy. We conduct an in‐depth case study of the Social Innovation Financing Youth Recidivism Project in Massachusetts. Our case study is comprised of a qualitative analysis of the multiparty contract and multiyear quantitative benefit–cost analysis to understand transaction costs. We draw upon contract theory to develop an analytical framework for the case analysis and highlight the risks and safeguards for the various parties to the contract, and conduct a formal benefit–cost analysis to map out transaction costs. We conclude with a discussion of study implications and future research.     

THE POLITICAL ECONOMY OF BITCOIN

The recent proliferation of bitcoin has been a boon for users but might pose problems for governments. Indeed, some governments have already taken steps to ban or discourage the use of bitcoin. In a model with endogenous matching and random consumption preferences, we find multiple monetary equilibria including one in which bitcoin coexists with official currency. We then identify the conditions under which government transactions policy might deter the use of bitcoin. We show that such a policy becomes more difficult if some users strictly prefer bitcoin because they can avoid other users holding the official currency in the matching process. (JEL C78, E41, E42, E50)