Ken McCormick
Keynes famously asserted that dead economists exert influence on madmen
in authority. For Hitler, the economist appears to be Malthus. Hitler was obsessed with
the Malthusian idea that the amount of available land limits population. Hitler never gave
credit to anyone else for his ideas, so it is impossible to be certain about their origin. A
case can be made that Hitler was influenced by Malthus as interpreted by Arthur Moeller
van den Bruck, whose book The Third Reich captivated the Nazi party (B10, N44).
Jeffrey Edwards
This paper addresses the possibility of a correlation between inflation and
investment for countries with inflation below 20%. The existing literature typically finds
no correlation below this level of inflation. By instrumenting with an extensive set of
political stability and regime variables, I have shown that within a lower range of inflation
rates, between 5% and 9%, this correlation is positive, highly significant, and shows no
signs of reverse causality (E0, E5).
Mesghena Yasin
This paper explores the long run relationship between wages in manufacturing
and globalization using panel data from three developing countries for the period 1980-
2001. Globalization is measured by foreign direct investment inflows and trade openness
of a country. Recently developed techniques for testing panel cointegration hypotheses
are applied to test the null of no cointegration. The panel cointegration test statistics
indicate that wages in manufacturing are cointegrated with both measures of globalization.
The results thus provide some evidence for the existence of a long run relationship
between globalization and wages in manufacturing for this sample of countries. The panel
Fully Modified OLS estimation method is then used to obtain the cointegrating
coefficients and test their statistical significance. The panel group mean statistics show that
the average slope coefficients between the two measures of globalization and wages are
significantly different from zero. The null hypothesis that the individual coefficients are
all zero is thus rejected. (F15)
Joseph G. Eisenhauer
Conventional analyses of taxpayer behavior predict that individuals will fulfill
their tax obligations completely if and only if the expected net gain from tax evasion is
zero or negative. In practice, however, taxpayers commonly pay their full taxes despite
what appears to be a strong financial incentive for noncompliance. A simple intertemporal
model based on audit lags helps to resolve the discrepancy between theory and practice by
showing that full compliance may indeed be utility maximizing despite the expectation of
positive net gains from evasion, depending upon the taxpayer’s future income, propensity
for saving, and degree of risk aversion. (H26, D81)
Peter M. Kerr, Bruce R. Domazlicky, Adam P. Kerr, Joseph R. Knittel
The effect of service quality on tipping is not well documented. Surveys
indicate at least a weak relationship between service quality and the size of the tip. We
look at an objective measure of service, the time it takes a delivery driver to deliver an
order to a customer and relate it to the subsequent tip. We estimate a regression model that
confirms that the tip percentage increases as the time to delivery decreases, while
controlling for such factors as income, gender, and race. Therefore, while tipping is
subject to strong social norms, we at least provide some evidence that service quality also
affects the probability and size of a tip. (D12, C20, A12)
Mohammad Ashraf and Khan A. Mohabbat
In this study, using the Phillips curve type models, we use four different
measures of U.S. output to test the hypothesis that there is a positive correlation between
the output-gap and wage inflation. We measure the output-gap using a constant natural
level of output as well as a Kalman filter where the natural level of output changes over
time. Neither the use of real GDP nor services sector data generated any support for the
hypothesis. However, we found overwhelming evidence of positive correlation between
the output-gap and wage inflation in the durable goods industries. Our results suggest that
a requiem for the Phillips curve may be premature (E24, E31).