COMMITTEE ASSIGNMENTS, CONSTITUENT PREFERENCES, AND CAMPAIGN CONTRIBUTIONS

We model the behavior of a vote-maximizing legislator in order to predict interest group campaign contributions to incumbent politicians. We show that committee assignments and voter preferences affect the price a legislator requires to produce policies for any interest group. An econometric analysis of actual interest group contributions shows that these groups make significantly larger contributions to legislators on committees with jurisdiction over especially relevant policy issues and to incumbents with non-hostile constituencies. These results support our theory; interest groups act as if committees matter in the determination of policy and voters' interests constrain interest group behavior.     

THE POLITICAL ECONOMY OF MINIMUM WAGE LEGISLATION

Two questions are addressed in this paper. (A) Why do labor unions and certain employer organizations respectively promote and impede minimum wage legislation? (B) Do these groups have significant impacts on minimum wages? Question (A) is examined in the context of models that identify the economic self-interest of unionized skilled workers and capitalists in legal wage floors. Question (B) is approached by a median legislator utility maximization model that leads to Tobit estimation of the relationship between state minimum wage rates and measures of statewide organized labor and capital and average hourly earnings.     

Sincere versus sophisticated voting when legislators vote sequentially

Elsewhere (Groseclose and Milyo 2010), we examine a game where each legislator has preferences over (i) the resulting policy and (ii) how he or she votes. The latter preferences are especially important when the legislator is not pivotal. We show that when the game follows the normal rules of legislatures—most important, that legislators can change their vote after seeing how their fellow legislators have voted—then the only possible equilibrium is one where all legislators ignore their policy preferences. That is, each legislator votes as if he or she is not pivotal. The result, consistent with empirical studies of Congress, suggests that legislators should tend to vote sincerely, rather than sophisticatedly. In this paper we examine how outcomes change if we change the rules for voting. Namely, instead of a simultaneous game, we consider a game where legislators vote sequentially in a pre-determined order. We show that, opposite to the simultaneous game, an alternative wins if and only if a majority of legislators’ policy preferences favor that alternative. Our results suggest that if Congress adopted this change in rules, then sophisticated voting would become frequent instead of rare.     

Public Policies,Stakeholder Interest,and Nonprofit Development: The Case of Trade Associations in Shanghai,China

This study examines the reform and development of trade associations in Shanghai, China, one of the main economic hubs of the country and marked by a substantial growth in trade associations since the reform and “opening-up” in 1978. We analyze public policies pertaining to trade associations, survey data collected from 212 local trade associations in Shanghai, and interviews of government officials and trade association leaders. The research results show that trade associations are significantly less dependent on the government and they seem to be more oriented to providing services for and representing corporate members. We trace these changes to public policy reforms and growth in private businesses. The transition reflects the dynamic and changing relationship among the government, trade associations, and business in China. We conclude with a model of these dynamics and a discussion of the implications of this study.     

Impact of the tariff concessions of the RCEP agreement on the structure and evolution mechanism of manufacturing trade networks

In the world’s largest free trade area, the Regional Comprehensive Economic Partnership (RCEP) agreement will gradually eliminate tariffs on over 90% of member countries’ goods over the next 36 years. We construct a tariff policy effects evaluation framework based on the complex network theory. In this framework, the standard Global Trade Analysis Project (GTAP) model is recursively extended to generate forecasted data of bilateral trade. Based on this, we model the RCEP manufacturing trade networks and analyze the response of its core–periphery structure to the tariff concessions. Then, we evaluate policy effects on the evolution of trade patterns based on motif analysis. Finally, we construct separable temporal exponential family random graph models (STERGM) to explore the influence path and degree of the new tariff agreement on the evolutionary mechanisms of trade networks.     

Interlegislator Relations and Policy Making: A Sociological Study of Roll‐Call Voting in a State Legislature1

Legislative roll‐call voting is crucial in policy making. Standard approaches to studying roll‐call voting focus on legislator attributes, ignoring how social factors, such as legislator relations, may drive voting. Using original data based on a state legislature, I adopt a relational approach to examine how legislator relations impact roll‐call voting net of attributes. Results show that relations strongly influence voting, adding significantly to the explanatory power of the models. These results imply that standard approaches to studying roll‐call voting should incorporate consideration of social factors, suggesting the value of social influence models in studies of political phenomena.     

Competitive lobbying for a legislator's vote

This paper develops a model of interest group lobbying based on the central premise that such lobbying is fundamentally an exercise in strategic information transmission. Lobbyists typically possess information that legislators do not and, inter alia, such information is relevant to legislators when it concerns the consequences — either policy or political — of supporting one bill rather than another. However, given that the interests of lobbyists do not necessarily coincide with those of legislators, the extent to which a lobbyist is able to persuade a legislator to act in his or her interest is moot. The paper explores the extent to which lobbyists can influence a legislative decision in such a setting; in particular, we are concerned with the incentives for interest groups to acquire costly information and lobby a legislator when there exist other groups that do not share the same interests. Among the results are that a legislator will on average make better decisions with lobbying than without, and that the more important is an issue to a special interest group, the more likely is the legislator to make the correct full-information decision.Herb and Gloria Weiss are indirectly responsible for this paper. Unfortunately, neither they nor the anonymous referees can be held responsible for any errors or omissions the paper might contain.     

THE PRESIDENCY AND THE PRINT MEDIA: WHO CONTROLS THE NEWS?

Relations between the presidency and the press are often fractious. This is evident in the Nixon Administration's criticisms of the press during 1969, and the more recent charges that President Reagan has leveled at the media. In this article, we first examine three competing perspectives, termed media-subordinate, moderated-effects , and media-autonomous , that explain how the press responds to criticism from the presidency. Next, we use these perspectives to generate a set of predictions about connections between the press and the presidency. We then test the predictions with data from a random sample of 843 American daily newspapers, taken in 1970. The data demonstrate that the newspapers often did change their policies in ways desired by the Nixon Administration. Second, the data show that the more professional (and therefore presumably more autonomous) the editor of the newspaper, the more likely was the newspaper's editorial policy to change in ways desired by the Nixon Administration. These findings undercut the media-autonomous perspective. By contrast, the data provide some support for both the media-subordinate and moderated-effects perspectives. The former perspective predicted changes in newspaper policy and also a relationship between an editor's ideological leanings and changes in his newspaper's policy; the data confirmed these predictions. The latter perspective predicted that changes in newspaper policy would be intermediate in size; this prediction also was supported. In our discussion, we place our findings in the context of contemporary presidency-press relationships, and suggest ways in which the three perspectives need to be developed to account for recent changes in those relationships.     

US Free Trade Agreements and Policy Flexibility: Will New Rules Hinder Industrialisation?

Free trade agreements have become a central feature of many developing countries' growth strategies, encouraged by an evaluation literature that quantifies their positive impact on trade. However, trade gains come at the cost of policy space, particularly when the partner is a developed country, and though this cost has been acknowledged, its impact has not been explored. This article seeks to address this oversight by detailing changes to the domestic policy environment from the participation of a developing country in a US‐anchored FTA and evaluating whether the resulting policy regime is flexible enough to enable a developmental government to pursue activities associated with industrialisation.     

THE EFFECTS OF ASSET PURCHASES AND NORMALIZATION OF U.S. MONETARY POLICY

This paper examines changes in the effects of unconventional monetary policies in the United States. To this end, we estimate a Markov-switching VAR model with absorbing regimes to capture possible structural changes. Our results detect regime changes around the beginning of 2011 and the middle of 2013. Before 2011, the U.S. large-scale asset purchases (LSAPs) had relatively large impacts on the real economy and prices, but after the middle of 2013, their effects were weaker and less-persistent. In addition, after the middle of 2013, which includes the monetary policy normalization period, the asset purchase (or balance sheet) shocks had slightly weaker effects than during the early stage of the LSAPs but stronger effects than during the late stage of the LSAPs, while interest rate shocks had insignificant effects on the real economy and prices. Finally, our results suggest that the positive responses of durables and capital goods expenditures to interest rate shocks weakened the negative impacts of interest rate hikes after the middle of 2013 including the period of monetary policy normalization. (JEL C32, E21, E52)     

Transportation between Globalization and Localization

This paper positions transport at the edge of localization and globalization forces. Drastic changes in industrial organization, transportation systems, trade patterns and environmental quality conditions make the transport and communication sector an internally contrasting and disputed activity with many pros and cons, which are reflected in serious dilemmas and policy uncertainties, at different levels of governance. In order to cope with long-range uncertainties the use of scenarios analysis is advocated. The paper then develops three scenarios and analyses them by using the recently developed spider model. The paper is concluded with some policy lessons.     

土耳其对非洲地区的经贸合作

土非经贸合作近年发展迅速,引起国际社会广泛关注。这在很大程度上源于土耳其自1998年以来的一系列政策改革和相应的机制平台建设。但需要指出的是,尽管土非贸易、投资和援助都增长迅速,但土耳其对非政策改革和机制平台建设的政策效果尚未完全显现,主要因为土非经贸合作起点较低,量的增长并未导致质的变化,特别是土非贸易在土耳其对外贸易中所占的比重变化不大。因此,未来的土非经贸合作还有很大的提升空间,尽管土耳其对非政策的内部逻辑尚有待完善。     

FOREIGN BANKS AND THE BANK LENDING CHANNEL

We provide new evidence on bank ownership and transmission of monetary policy using bank‐level data on 453 banks in Central and Eastern European economies between 1998 and 2012. Only domestic banks adjust loans to changes in monetary policy, while foreign banks do not. Conventional wisdom says that this is because foreign banks can rely on parent banks' funding to insulate against monetary policy shocks. In this paper we document an alternative explanation. Deposits in foreign banks do not react to monetary policy, hence the bank lending channel is only triggered in domestic banks. (JEL E50, F36, G21)     

THE GRAVITY MODEL: AN ILLUSTRATION OF STRUCTURAL ESTIMATION AS CALIBRATION

Dawkins, Srinivasan, and Whalley (“Calibration,”Handbook of Econometrics, 2001) propose that estimation is calibration. We illustrate their point by examining a leading econometric application in the study of international and interregional trade by Anderson and van Wincoop (“Gravity with Gravitas: A Solution to the Border Puzzle,”American Economic Review, 2003). We replicate the econometric process and show it to be a calibration of a general equilibrium model. Our approach offers unique insights into structural estimation, and we highlight the importance of traditional calibration considerations when one uses econometric techniques to calibrate a model for comparative policy analysis. (JEL F10, C13, C60)     

The impact of US tariffs against China on US imports: Evidence for trade diversion?

We provide evidence on the existence of short-run trade diversion effects towards third countries as a consequence of tariff shocks. We exploit sudden policy changes in the context of the trade dispute between the United States and China in 2018. Based on a data set covering monthly product-level information on US imports from 30 countries for the period 2016 until May 2019, we employ a difference-in-differences estimation framework. Doing so, we can show a strong negative direct effect of US tariffs on US imports from China, but do not find evidence for significant short-run trade diversion effects towards third countries.     

UNION POWER,COLLECTIVE BARGAINING,AND OPTIMAL MONETARY POLICY

We study Ramsey policies and optimal monetary policy rules in a dynamic New Keynesian model with unionized labor markets. Collective wage bargaining and unions' monopoly power amplify inefficient employment fluctuations. The optimal monetary policy must trade off between stabilizing inflation and reducing inefficient unemployment fluctuations induced by unions' monopoly power. In this context the monetary authority uses inflation as a tax on union rents and as a mean for indirect redistribution. Results are robust to the introduction of imperfect insurance on income shocks. The optimal monetary policy rule targets unemployment alongside inflation. (JEL E0, E4, E5, E6)     

THE WELFARE IMPACT OF TRADE LIBERALIZATION

This paper analyzes the distributional welfare impact of trade liberalization reforms on heterogeneous households. We develop a static applied general equilibrium model, and using a Social Accounting Matrix and Household Expenditure Survey, we calibrate it to match Slovenian data. We simulate the case of Slovenia joining the EU and quantify its welfare impact on households that differ in terms of age, income, and education. Additionally, we compare this benchmark case with two alternative scenarios: (1) a free trade agreement between Slovenia and the EU and (2) a custom union arrangement where tariff revenues are rebated proportionally to the households. We find that while trade liberalization leads to falling consumer prices, increased production in the export sectors, and aggregate welfare gains, the differentiated welfare impacts across heterogeneous households vary in their degrees. (JEL D58, F14, F15)     

REAL EXCHANGE RATE,MONETARY POLICY,AND THE U.S. ECONOMY: EVIDENCE FROM A FAVAR MODEL

This paper examines the effects of exchange rate depreciation to the U.S. economy in a factor‐augmented vector autoregression model using monthly data of 148 variables for the post–Bretton Woods period of 1973–2017. Exchange rate shock is identified to reflect exogenous disturbances to the foreign exchange market, and movements in exchange rate that are not accounted for by changes in the U.S. monetary policy. We find that depreciation is expansionary and inflationary to the broad U.S. economy, the current account improves over time conforming to the J‐curve theory, and monetary policy is leaning against the wind. (JEL E3, E5, F31, F32, F41)     

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 EXTENT OF THE MARKET AND INTEGRATION THROUGH FACTOR MARKETS: EVIDENCE FROM WHOLESALE ELECTRICITY

We document the influence of factor markets in determining the extent of the market, appealing to the Mundell hypothesis that trade in goods and factor markets are substitutes. We confirm this influence using the U.S. wholesale market for electric power. Although the Eastern, Western, and Texas regions cannot trade electricity, inputs such as natural gas move freely across these regions. Through a set of price transmission ratios, and a supply model for natural gas, we find regional electricity shocks do propagate across regions. We conclude output markets institutionally in autarky achieve modest degrees of economic integration through factor markets. (JEL C32, L94, Q41)