The Role of Automatic Stabilizers in the U.S. Business Cycle

Most countries have automatic rules in their tax‐and‐transfer systems that are partly intended to stabilize economic fluctuations. This paper measures their effect on the dynamics of the business cycle. We put forward a model that merges the standard incomplete‐markets model of consumption and inequality with the new Keynesian model of nominal rigidities and business cycles, and that includes most of the main potential stabilizers in the U.S. data and the theoretical channels by which they may work. We find that the conventional argument that stabilizing disposable income will stabilize aggregate demand plays a negligible role in the dynamics of the business cycle, whereas tax‐and‐transfer programs that affect inequality and social insurance can have a larger effect on aggregate volatility. However, as currently designed, the set of stabilizers in place in the United States has had little effect on the volatility of aggregate output fluctuations or on their welfare costs despite stabilizing aggregate consumption. The stabilizers have a more important role when monetary policy is constrained by the zero lower bound, and they affect welfare significantly through the provision of social insurance.     

Reflections Toward an Enactive Psychoanalysis

The present work examines the meaning of embodied mind—a key notion in the thinking of biologist and epistemologist Francisco Varela—as an answer for the paradoxes and blind spots originated by the representationist approaches that underlie theories of the mind of most psychological and philosophical schools, including Freudian psychoanalysis. The understanding of this notion implies a radical review of our beliefs regarding the substantial reality of the self, the world, and the relationship between them. For this reason Varela suggests that only a nondiscursive nonanalytic praxis can allow the subject to carry on the observation, inquiry, and acceptance of the experience of himself or herself, the other, and the world as empty and groundless.. Two preliminary reflections are discussed in the paper: (a) the possibility of developing an enactive psychoanalysis, that is, a psychoanalysis that understands the experience of the constitutive frailty of the self as a potentially liberating one rather than as a flaw in the structuring of personality and its defense mechanisms, and (b) how to introduce the method of Mindfulness in the psychotherapeutic setting without interfering with the psychoanalytic listening or the patient and analyst’s relational work.     

Ranking opportunity sets: An approach based on the preference for flexibility

We describe a criterion to evaluate subsets of a finite set of alternatives which are considered as opportunity sets. The axioms for set comparison are motivated within the preference for flexibility framework. We assume the preference over the universal set of alternatives to be made of two disjoint binary relations. The result is the axiomatic characterization of a procedure which is formally similar to the leximax ordering, but in our case it incorporates the presence of some uncertainty about the decision-maker final tastes. Received: 20 January 1999/Accepted: 20 October 1999     

A Social Capital Basis for Environmental Concern: Evidence from Northern New England*

This study, based on a random‐digit‐dialing telephone survey of adults in Maine, New Hampshire, and Vermont, uses ordinary least squares regression to examine a relatively neglected element in the sociological literature on environmental concern, namely, the influence of an individual's social capital on the formation of environmental attitudes. We argue that it is those individuals with a greater diversity of social connections who are most likely to be influenced by ecological perspectives grounded in conservation and environmental protection. Controlling for other theoretically relevant variables, we regress an index of environmental concern that gives special emphasis to environmental‐economic trade‐offs on our measures of relational and community social capital. While confirming much of the earlier work in this area, our model provides evidence that connections to other people play an important role in determining individual concern for the environment. Specifically, the number of respondents' “weak ties”—that is, not their closest relationships—and the average occupational status of respondents' social ties, in general, were both positively correlated with environmental concern. Additionally, one of our three measures of community social capital, the number of visits from friends over the past month, was statistically significant and negatively correlated with environmental concern.     

Measuring residential segregation in multi-ethnic and unequal European cities

Immigration flows and social inequalities reflect increased social and multi-ethnic segregation in contemporary urban Europe. For a better understanding of these processes, the present study investigates the main strengths of the multi-group residential indices, testing sensitivity and reliability under different metropolitan contexts in five European countries. These indices focus on different research dimensions and approach multi-group residential segregation conceptually and mathematically in a different way. A multivariate exploratory data analysis was adopted to classify the observed segregation patterns into a few homogeneous types and to delineate the multivariate relationship between the indices. The results of principal component analysis demonstrate that the indices assessing uniformity and disproportionality of the social groups analysed (H and D) contribute largely to the diversification in today's multi-ethnic communities, clarifying the importance of the dimension of evenness. Our results highlight how segregation is more evident in economically disadvantaged metropolitan regions with high levels of social vulnerability.     

Measuring is Believing! Improving Conventional Indicators of Welfare State Development

Welfare effort (social spending as a percentage of GDP) has conventionally been the preferred measure for comparisons in space and time of the level of development of welfare states. However, a wide variety of other measuring systems are potentially available in this field, because there are different sources and different methods for calculating social spending, so a variety of indicators can be calculated, each of which best reflects a different aspect of social protection systems. This paper presents two innovations: first it proposes options other than those generally used to measure the relative development of welfare states. Secondly, it uses those new measurements to show that some widely accepted conclusions on the relative development of welfare states need to be reviewed.     

Alternative diff-in-diffs estimators with several pretreatment periods

This paper deals with the identification of treatment effects using difference-in-differences estimators when several pretreatment periods are available. We define a family of identifying nonnested assumptions that lead to alternative difference-in-differences estimators. We show that the most usual difference-in-differences estimators imply equivalence conditions for the identifying nonnested assumptions. We further propose a model that can be used to test multiple equivalence conditions without imposing any of them. We conduct a Monte Carlo analysis and apply our approach to several recent papers to show its practical relevance.     

Label‐ and Level‐Invariant Graphical Log‐Linear Models

We introduce two types of graphical log‐linear models: label‐ and level‐invariant models for triangle‐free graphs. These models generalise symmetry concepts in graphical log‐linear models and provide a tool with which to model symmetry in the discrete case. A label‐invariant model is category‐invariant and is preserved after permuting some of the vertices according to transformations that maintain the graph, whereas a level‐invariant model equates expected frequencies according to a given set of permutations. These new models can both be seen as instances of a new type of graphical log‐linear model termed the restricted graphical log‐linear model, or RGLL, in which equality restrictions on subsets of main effects and first‐order interactions are imposed. Their likelihood equations and graphical representation can be obtained from those derived for the RGLL models.