A POSITIVE THEORY OF INFLATION AND INFLATION VARIANCE

Empirically, inflation and the variance of inflation are positively associated. This paper develops a model that provides a potential explanation for this relationship in tern of the incentives facing the policymaker in a "discretionary equilibrium." The model can also account for an empirical association between inflation and measures of real output instability. There is, however, no direct causal link whatever from the average rate of inflation to either the variance of inflation or that of real output.     

RELIEF FOR THE ENVIRONMENT? THE IMPORTANCE OF AN INCREASINGLY UNIMPORTANT INDUSTRIAL SECTOR

Deindustrialization, stagnant real incomes of production workers, and increasing inequality are latter day features of many economies. It is common to assume that such developments pressure policymakers to relax environmental standards. However, when heavily polluting industries become less important economically, their political importance also tends to diminish. Consequently, a regulator may increase the stringency of environmental policies. Like some other studies, we find that declining industrial employment translates into stricter environmental standards. In contrast to previous studies, but consistent with our argument, we find that greater income inequality is associated with policies that promote a cleaner environment. ( JEL Q58, P16, J31, C23)     

Economics and the French Voter: A Microanalysis

In the United States, uncertainties surrounding the aggregatetime series evidence on economic conditions and voting behaviorled researchers to explore the relationship through individuallevel survey data. For France, aggregate time series studieshave begun to appear but, as yet, no microlevel analysis hasbeen done. My investigation attempts to resolve doubts arisingfrom the macrolevel work, by looking at individual economicperception and vote intention in surveys of the French electorate.I find that economic conditions, both personal and collective,exert a significant influence on party choice in French legislativeelections. Moreover, this economic influence appears more pervasivein France than in the United States.     

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 ECONOMICS OF FAMILY FORMATION*

In this article an economic model of the determinants of first marriage is formulated and then empirically tested. The model incorporates household production theory and search theory in order to explain the incentives to marry and the determinants of the age at first marriage. Age at first marriage is viewed as depending on the determinants of entry into the marriage market and the duration of search for a spouse. Empirical results from the 1967 Survey of Economic Opportunity show a negative effect of male wages and a positive effect of female wages on own age at marriage. Additionally, education and urbanization are found to have positive effects and number of children a negative effect.