New Economics Papers
on Business, Economic and Financial History
Issue of 2006‒12‒22
seven papers chosen by

  1. A Note on Post-Modern Monetary Policy By Thierry Warin
  2. The CEP-OECD Institutions Data Set (1960-2004) By William Nickell
  3. Economic Performance and Work Activity in Sweden after the Crisis of the Early 1990s By Steven J. Davis; Magnus Henrekson
  4. Productivity and ICT: A Review of the Evidence By Mirko Draca; Raffaella Sadun; John Van Reenen
  5. Top Ten Myths Of Social Security Reform By Jeffrey Brown; Kevin Hassett; Kent Smetters
  6. The Diffusion of Mexican Immigrants During the 1990s: Explanations and Impacts By David Card; Ethan G.Lewis
  7. Can migration reduce educational attainments? Depressing evidence from Mexico By David McKenzie; Hillel Rapoport

  1. By: Thierry Warin
    Abstract: This paper surveys the roots of the modern literature on monetary policy, and illustrates the convergence that occurs between open-economy approaches and the micro foundations of monetary policy. From the Banking School versus Currency School debate to the “credibility versus flexibility” refinement, monetary policy has a long history of scholarly works. Although it may be hard to imagine that there is still room for innovations, the current developments of the literature on open-economy monetary policy seem to spawn a new and essential branch.
    Keywords: : monetary policy, rules versus discretion, credibility versus flexibility, Banking School, Currency School
    JEL: E4 E5 E6 F0
    Date: 2006
  2. By: William Nickell
    Abstract: This dataset contains information about the evolution of labour market institutions in twenty OECD countries from 1960 to 2004.The countries in the sample are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, United States Where possible the data refers to West Germany throughout. Note that the temporal coverage of these data differs from series to series and country to country. The accompanying data can be downloaded at the link above
    Keywords: OECD Institutions, Data
    Date: 2006–11
  3. By: Steven J. Davis; Magnus Henrekson
    Abstract: Following a severe contraction in the early 1990s, the Swedish economy accumulated a strong record of output growth coupled with a disappointing performance in the labor market. As of 2005, hours worked per person 20-64 years of age are 10.5 percent below the 1990 peak and a mere one percent above the 1993 trough. Employment rates tell a similar story. Our explanation for Sweden's weak performance with respect to market work activity highlights the role of high tax rates on labor income and consumption expenditures, wage-setting arrangements that compress relative wages, business tax policies that disfavor labor-intensive industries and technologies, and a variety of policies and institutional arrangements that disadvantage younger and smaller businesses. This last category includes tax policies that penalize wealth accumulation in the form of owner-operated businesses, a pension system that steers equity capital and loanable funds to large incumbent corporations, and legally mandated job-security provisions that weigh more heavily on smaller and younger businesses. We describe these features of the Swedish institutional setup and provide evidence of their consequences based largely on international comparisons.
    JEL: D13 H30 J20 L52 O52
    Date: 2006–12
  4. By: Mirko Draca; Raffaella Sadun; John Van Reenen
    Abstract: We survey the micro and macro literature on the impact of Information and CommunicationTechnologies (ICTs) on productivity. The "Solow Paradox" of the absence of an impact ofICT on productivity no longer holds, if it ever did. Both growth accounting and econometricevidence suggest an important role for ICTs in accounting for productivity. In fact, theempirical estimates suggest a much larger impact of ICT on productivity than would beexpected from the standard neoclassical model that we focus on. We discuss the variousexplanations for these results, including the popular notion of complementary organizationalcapital. Finally, we offer suggestions for where the literature needs to go.
    Keywords: ICT, productivity, organisation
    JEL: E22 E23 F1 O11
    Date: 2006–08
  5. By: Jeffrey Brown; Kevin Hassett; Kent Smetters
    Abstract: This paper critically examines ten leading myths that have gained currency in the debate about reforming the U.S. Social Security system, including myths that have been propagated by both proponents and opponents of including personal accounts as part of any reform package.
    Keywords: social security, pensions, reform packages
    Date: 2006–06–21
  6. By: David Card (Department of Economics, UC Berkeley and NBER); Ethan G.Lewis (Federal Reserve Bank of Philadelphia)
    Abstract: Mexican immigrants were historically clustered in a few cities, mainly in California and Texas. During the past 15 years, however, arrivals from Mexico established sizeable immigrant communities in many “new” cities. We explore the causes and consequences of the widening geographic diffusion of Mexican immigrants. A combination of demand-pull and supply push factors explains most of the inter-city variation in inflows of Mexican immigrants over the 1990s, and also illuminates the most important trend in the destination choices of new Mexican immigrants – the move away from Los Angeles. Mexican inflows raise the relative supply of low-education labor in a city, leading to the question of how cities adapt to these shifts. One mechanism, suggested by the Hecksher Olin model, is shifting industry composition. We find limited evidence of this mechanism: most of the increases in the relative supply of loweducation labor are absorbed by changes in skill intensity within narrowly defined industries. Such adjustments could be readily explained if Mexican immigrant inflows had large effects on the relative wage structures of different cities. As has been found in previous studies of the local impacts of immigration, however, our analysis suggests that relative wage adjustments are small.
    Date: 2005–07
  7. By: David McKenzie (Development Research Group, World Bank); Hillel Rapoport (Department of Economics, Bar-Ilan University, CADRE, University of Lille II, and Stanford Center for International Development)
    Abstract: This paper examines the impact of migration on educational attainments in rural Mexico. Using historical migration rates by state to instrument for current migration, we find evidence of a significant negative effect of migration on schooling attendance and attainments of 12 to 18 year-old boys and of 16 to 18 year-old girls. IV-Censored Ordered Probit results show that living in a migrant household lowers the chances of boys completing junior high-school and of boys and girls completing high-school. The negative effect of migration on schooling is somewhat mitigated for younger girls with low educated mothers, which is consistent with remittances relaxing credit constraints on education investment for the very poor. However, for the majority of rural Mexican children, family migration depresses educational attainment. Comparison of the marginal effects of migration on school attendance and on participation to other activities shows that the observed decrease in schooling of 16 to 18 year olds is accounted for by current migration of boys and increases in housework for girls.
    Keywords: Migration, migrant networks, education attainments, Mexico
    JEL: O15 J61 D31
    Date: 2006–03

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