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602. The Case for Price Stability with a Flexible Exchange Rate in the New Neoclassical Synthesis
- Author:
- Marvin Goodfriend
- Publication Date:
- 03-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- The New Neoclassical Synthesis is a natural starting point for the consideration of welfare-maximizing monetary arrangements in the international context. Alternatively known as the New Keynesian model, this consensus model of monetary policy deserves our attention because it embodies cumulative advances in theory and policy informed by decades of monetary experience from around the world. The consensus model with its prescription for price stability serves today as the foundation for thinking about monetary policy at central banks and universities worldwide.
603. Monetary Policy and the Legacy of Milton Friedman
- Author:
- Anna J. Schwartz
- Publication Date:
- 03-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- So many well-deserved tributes have been paid to the memory of Milton Friedman that I propose to pay him tribute in a special way by talking about my long association with him. Before I do so, I note his activities before the 1950s, when we started working together. For the record, Friedman was not a monetarist when our collaboration began.
604. Milton Friedman and the Euro
- Author:
- Antonio Martino
- Publication Date:
- 03-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- Milton Friedman did not like the euro. In early 1999 I wrote to him mentioning my daughter Erika's thesis and, in a letter dated March 12, 1999, he wrote back: Erika's thesis on “The Euro and the Dollar” is one of the subjects I have been maintaining a real interest in. As you know, I am very negative about the euro and I am very doubtful about how it will work out. However, I am less pessimistic about it now than I was earlier simply because I never expected that the various countries would display the kind of discipline that was required in order to qualify for the euro. The convergence in inflation rates, interest rates, and so on was greater and more rapid than I would have expected.
605. Friedman: Float or Fix?
- Author:
- Steve H. Hanke
- Publication Date:
- 03-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- With the passing of Milton Friedman on November 16, 2006, we lost one of the great champions of free markets. Friedman's obituaries and commentaries on his life's work and enormous influence have invariably mentioned his advocacy of floating exchange rates, leaving the impression that he always favored floating rates. This was not the case.
606. Milton Friedman and the Case against Currency Monopoly
- Author:
- George Selgin
- Publication Date:
- 03-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- A longstanding tradition in economics, dating back at least to Adam Smith, looks askance at statutory monopolies, condemning almost all of them as unnecessary barriers to economic progress. Thanks largely to this tradition most of the monopolies present in Smith's day are no longer tolerated. The few exceptions are found mainly in less developed countries, where they remain a cause of impoverishment. Needless to say, economists have also generally opposed the monopolization by fiat of undertakings that were already at least somewhat competitive in Smith's day.
607. The Federal Reserve's Role in the Great Contraction and the Subprime Crisis
- Author:
- Richard H. Timberlake
- Publication Date:
- 03-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- Milton Friedman liked to recall that his experience with the Great Depression as a young man living in New York had a major effect on his career decision to study economics. So, we can count at least one good thing that came out of that tragic, unnecessary experience.
- Political Geography:
- New York
608. Economic Development and the Role of Currency Undervaluation
- Author:
- Surjit S. Bhalla
- Publication Date:
- 03-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- This article is concerned with the determinants of economic growth, and, in particular, with the role of policy in directing the pattern of growth in developing economies. Over the years, economists and policymakers have focused primarily on fiscal and exchange rate policy. While the role of fiscal deficits is well understood, the same agreement does not hold with regard to exchange rate policy.
609. Book Review: Freedom from Want: American Liberalism and the Global Economy by Edward Gresser
- Author:
- Daniel Griswold
- Publication Date:
- 03-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- Trade policy has become a partisan affair in Washington. Major trade bills in Congress typically pit pro-trade Republicans backed by big business against trade-skeptic Democrats aligned with labor unions. And as the two major parties arm themselves for the 2008 general election, trade policy promises to provide one of the sharper contrasts between them.
- Political Geography:
- Washington
610. Book Review: The Cult of Statistical Significance: How the Standard Error Costs Us Jobs, Justice, and Lives by Stephen T. Ziliak and Deirdre N. McCloskey
- Author:
- Peter Van Doren
- Publication Date:
- 03-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- How do many scientific disciplines estimate and report results? Practitioners estimate regression models or conduct difference-of means tests through experiments. And they report which results are significant and which are not (i.e., different from zero with 95 percent confidence). In this important book, Ziliak and McCloskey have three objectives: to remind us that such research may be mindless, unscientific, and costly; to explicate the intellectual history of significance testing and the struggles among those professors who developed sampling and statistical testing; and to illustrate the correct way to conduct research and praise those few who report their research properly.
611. Book Review: My Grandfather's Son by Clarence Thomas; Supreme Discomfort: The Divided Soul of Clarence Thomas by Kevin Merida and Michael A. Fletcher
- Author:
- Ilya Shapiro
- Publication Date:
- 03-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- Whatever you think of his politics or jurisprudence, Clarence Thomas is a remarkable man. Born into desperate poverty in the Jim Crow South and raised by his illiterate grandfather, he would graduate from (and be completely disillusioned by) Yale Law School while battling personal and political demons that would have felled lesser mortals many times over. Now on the Supreme Court bench for over 15 years, Justice Thomas has established himself as a force to be reckoned with, a strong voice who has accepted and transcended his unfortunate notoriety.
612. Book Review: Rumsfeld's Wars: The Arrogance of Power by Dale R. Herspring
- Author:
- Ionut Popescu
- Publication Date:
- 03-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- Donald Rumsfeld will go down in history as one of the worst secretaries of defense since the end of World War II. This is the conclusion reached by Dale Herspring, a political science professor at the University of Kansas, in a new book transparently titled Rumsfeld's Wars: The Arrogance of Power. Without much effort to give the former secretary any benefit of the doubt, Herspring blames him directly for causing our military to become “demoralized” and “broken.”
613. Book Review: World War IV: The Long Struggle against Islamofascism by Norman Podhoretz
- Author:
- Christopher Preble
- Publication Date:
- 03-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- “9/11 constituted an open declaration of war on the United States and … the war into which it catapulted us was nothing less than another world war.” So says Norman Podhoretz in the opening passage of this alarmist, rambling screed. The enemy is Islamofascism, a “monster with two heads, one religious and the other secular.” This scourge, Podhoretz warns darkly, may be “even more dangerous and difficult to beat” than Nazi Germany or the Soviet Union.
- Political Geography:
- United States and Soviet Union
614. Executive Pay: Regulation vs. Market Competition
- Author:
- Ira T. Kay and Steven Van Putten
- Publication Date:
- 09-2008
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- The economic slowdown and the active political season are generating calls for imposing new regulations on executive pay. The presidential candidates of the two major parties have lashed out at what they perceive to be excessive pay for certain executives or for corporate executives in general.
- Topic:
- Economics, Government, and Markets
615. Markets vs. Monopolies in Education: A Global Review of the Evidence
- Author:
- Andrew J. Coulson
- Publication Date:
- 09-2008
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- Would large-scale, free-market reforms improve educational outcomes for American children? That question cannot be answered by looking at domestic evidence alone. Though innumerable “school choice” programs have been implemented around the United States, none has created a truly free and competitive education marketplace. Existing programs are too small, too restriction laden, or both. To understand how genuine market forces affect school performance, we must cast a wider net, surveying education systems from all over the globe. The present paper undertakes such a review, assessing the results of 25 years of international research comparing market and government provision of education, and explaining why these international experiences are relevant to the United States.
- Topic:
- Economics, Education, Government, and Markets
- Political Geography:
- United States
616. A Fork in the Road: Obama, McCain, and Health Care
- Author:
- Michael Tanner
- Publication Date:
- 07-2008
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- Healthcare reform will be one of the top issues of the 2008 presidential election. In the face of widespread public demand for changes in the U.S. health care system, both Barack Obama and John McCain have offered detailed proposals for reform.
- Topic:
- Government, Health, and Politics
- Political Geography:
- United States
617. The Klein Doctrine: The Rise of Disaster Polemics
- Author:
- Johan Norberg
- Publication Date:
- 05-2008
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- Naomi Klein's The Shock Doctrine ;purports to be an exposé of the ruthless nature of free-market capitalism and its chief recent exponent, Milton Friedman. Klein argues that capitalism goes hand in hand with dictatorship and brutality and that dictators and other unscrupulous political figures take advantage of "shocks"-catastrophes real or manufactured-to consolidate their power and implement unpopular market reforms. Klein cites Chile under General Augusto Pinochet, Britain under Margaret Thatcher, China during the Tiananmen Square crisis, and the ongoing war in Iraq as examples of this process.
- Topic:
- Democratization, Economics, and Markets
- Political Geography:
- China and Chile
618. Asset Bubbles and Their Consequences
- Author:
- Gerald P. O'Driscoll Jr.
- Publication Date:
- 05-2008
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- In the past, the federal government has introduced moral hazard in the banking system through deposit insurance. Banks underpriced risk because of the federal guarantee that backed deposits. After banking crises in the 1980s and 1990s, deposit insurance was put on a sound basis and that source of moral hazard was mitigated. In its place, monetary policy has become a source of moral hazard. In acting to counter the economic effects of declining asset prices, the Federal Reserve has come to be viewed as underwriting risky investments. Policy pronouncements by senior Fed officials have reinforced that perception. These actions and pronouncements are mutually reinforcing and destructive to the operation of financial markets. The current financial crisis began in the subprime housing market and then spread throughout credit markets. The new Fed policy fueled the housing boom. Refusing to accept responsibility for the housing bubble, the Fed's recent actions will likely fuel a new asset bubble. The cumulative effects of recent monetary policy undermine the case for free markets.
- Topic:
- Economics, Government, and Markets
- Political Geography:
- United States
619. FASB: Making Financial Statements Mysterious
- Author:
- T.J. Rodgers
- Publication Date:
- 08-2008
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- Since the passage of the Sarbanes-Oxley Act in 2002, the Financial Accounting Standards Board has passed rules that it promises will make corporate accounting more transparent. In fact, its revised Generally Accepted Accounting Principles have made it difficult for investors — or even CEOs — to understand a company's financial report.
- Topic:
- Economics, Government, and Markets
- Political Geography:
- United States
620. Freddie Mac and Fannie Mae: An Exit Strategy for the Taxpayer
- Author:
- Arnold Kling
- Publication Date:
- 09-2008
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- The Fannie Mae-Freddie Mac crisis may have been the most avoidable financial crisis in history. Economists have long complained that the risks posed by the government-sponsored enterprises were large relative to any social benefits.
- Topic:
- Economics, Government, and Financial Crisis
- Political Geography:
- United States
621. Rails Won't Save America
- Author:
- Randal O'Toole
- Publication Date:
- 10-2008
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- Rising gas prices and concerns about greenhouse gases have stimulated calls to build more rail transit lines in urban areas, increase subsidies to Amtrak, and construct a large-scale intercity high-speed rail system. These megaprojects will cost hundreds of billions of dollars, but they won't save energy or significantly reduce greenhouse gas emissions.
- Topic:
- Development, Economics, and Government
- Political Geography:
- United States
622. Does Barack Obama Support Socialized Medicine?
- Author:
- Michael F. Cannon
- Publication Date:
- 10-2008
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- Democratic presidential nominee Sen. Barack Obama (IL) has proposed an ambitious plan to restructure America's health care sector. Rather than engage in a detailed critique of Obama's health care plan, many critics prefer to label it "socialized medicine." Is that a fair description of the Obama plan and similar plans? Over the past year, prominent media outlets and respectable think tanks have investigated that question and come to a unanimous answer: no.
- Topic:
- Economics, Government, Health, and Markets
- Political Geography:
- United States
623. Learning the Right Lessons from Iraq
- Author:
- Benjamin H. Friedman, Harvey Sapolsky, and Christopher Preble
- Publication Date:
- 02-2008
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- Foreign policy experts and policy analysts are misreading the lessons of Iraq. The emerging conventional wisdom holds that success could have been achieved in Iraq with more troops, more cooperation among U.S. government agencies, and better counterinsurgency doctrine. To analysts who share these views, Iraq is not an example of what not to do but of how not to do it. Their policy proposals aim to reform the national security bureaucracy so that we will get it right the next time.
- Topic:
- Foreign Policy and War
- Political Geography:
- United States, Iraq, and Middle East
624. Parting with Illusions: Developing a Realistic Approach to Relations with Russia
- Author:
- Nikolas Gvosdev
- Publication Date:
- 02-2008
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- A review of America's post-Soviet strategy toward Russia is long overdue. The illusions that once guided policy are now at an end. What is needed is a dispassionate approach to Russia, wherein Americans would neither magnify nor excuse the virtues and vices of the Russian Federation but would accept the following realities: Russia is unlikely to become integrated into the Euro-Atlantic community and is unwilling to adjust its foreign policy priorities accordingly; There is broad-based support within Russia for the direction in which Vladimir Putin has taken the country; Russia has undergone a genuine—if limited— recovery from the collapse of the 1990s; Washington lacks sufficient leverage to compel Russian acquiescence to its policy preferences; and On a number of critical foreign policy issues, there is no clear community of interests that allows for concepts of "selective partnership" to be effective.
- Topic:
- International Relations and Diplomacy
- Political Geography:
- Russia, United States, America, Europe, Asia, and Soviet Union
625. Electronic Employment Eligibility Verification: Franz Kafka's Solution to Illegal Immigration
- Author:
- Jim Harper
- Publication Date:
- 03-2008
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- In last summer's debate over immigration reform, Congress treated a national electronic employment eligibility verification (EEV) system as a matter of near consensus. Intended to strengthen internal enforcement of the immigration laws, electronic EEV is an Internet-based employee vetting system that the federal government would require every employer to use.
- Topic:
- Economics, Government, and Politics
- Political Geography:
- United States
626. The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World
- Author:
- Michael Tanner
- Publication Date:
- 03-2008
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- Critics of the U.S. health care system frequently point to other countries as models for reform. They point out that many countries spend far less on health care than the United States yet seem to enjoy better health outcomes. The United States should follow the lead of those countries, the critics say, and adopt a government- run, national health care system.
- Topic:
- Government and Health
- Political Geography:
- United States and Europe
627. Organ Sales and Moral Travails: Lessons from the Living Kidney Vendor Program in Iran
- Author:
- Benjamin E. Hippen
- Publication Date:
- 03-2008
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- Kidney transplantation in the United States is burdened by a terrible policy failure. The cost of this failure will be paid in the currency of years of human lives unnecessarily lost, as well as a massive increase in federal expenditures over the next decade and beyond. The number of patients with end-stage renal disease (ESRD) in the United States has grown, but the supply of kidneys—for the preferred treatment for ESRD, kidney transplantation— has not kept pace with the demand. Unfortunately, the issue is not simply one of supply and demand: in the United States the supply of kidneys for transplantation is kept artificially low by a prohibition on the sale of human organs.
- Topic:
- Health, Human Welfare, and Markets
- Political Geography:
- United States, Iran, and Middle East
628. Does Rail Transit Save Energy or Reduce Greenhouse Gas Emissions?
- Author:
- Randal O'Toole
- Publication Date:
- 04-2008
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- Far from protecting the environment, most rail transit lines use more energy per passenger mile, and many generate more greenhouse gases, than the average passenger automobile. Rail transit provides no guarantee that a city will save energy or meet greenhouse gas targets.
- Topic:
- Civil Society, Energy Policy, and Environment
- Political Geography:
- United States
629. Dismal Science: The Shortcomings of U.S. School Choice Research and How to Address Them
- Author:
- John Merrifield
- Publication Date:
- 04-2008
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- Pressing questions about the merits of market accountability in K-12 education have spawned a large scholarly literature. Unfortunately, much of that literature is of limited relevance, and some of it is misleading. The studies most widely cited in the United States used intense scrutiny of a few small-scale, restriction-laden U.S. programs—and a handful of larger but still restriction-laden foreign school choice expansions—to assert general conclusions about the effects of "choice," "competition," and "markets." The most intensely studied programs lack most or all of the key elements of market systems, including profit, price change, market entry, and product differentiation—factors that are normally central to any discussion of market effects. In essence, researchers have drawn conclusions about apples by studying lemons.
- Topic:
- Economics, Education, and Markets
- Political Geography:
- United States
630. Roadmap to Gridlock: The Failure of Long-Range Metropolitan Transportation Planning
- Author:
- Randal O'Toole
- Publication Date:
- 05-2008
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- Federal law requires metropolitan planning organizations in urban areas of more than 50,000 people to write long-range (20- to 30- year) metropolitan transportation plans and to revise or update those plans every 4 to 5 years. A review of plans for more than 75 of the nation's largest metropolitan areas reveals that virtually all of them fail to follow standard planning methods. As a result, taxpayers and travelers have little assurance that the plans make effective use of available resources to reduce congestion, maximize mobility, and provide safe transportation facilities.
- Topic:
- Civil Society, Development, and Government
- Political Geography:
- United States
631. The Fiscal Impact of a Large-Scale Education Tax Credit Program
- Author:
- Andrew J. Coulson
- Publication Date:
- 07-2008
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- In this paper we estimate the budgetary impact of the Cato Institute's Public Education Tax Credit model legislation on five states and presents a generalized spreadsheet tool (“the Fiscal Impact Calculator”) that can estimate the program's effect on any other state for which the necessary input data are supplied. It is estimated that, in its first 10 years of operation, savings from the PETC program would range from $1.1 billion for South Carolina to $15.9 billion for Texas. Illinois, Wisconsin, and New York are estimated to enjoy 10-year savings within that range.
- Topic:
- Education and Government
- Political Geography:
- United States and New York
632. Friedman and Russia
- Author:
- Andrei Illarionov
- Publication Date:
- 01-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- One day I asked Milton Friedman a question. That question was in my mind every time we met: “Could he have achieved the same status he did in America if he had lived in Russia—not only in terms of his research, but in shaping his outlook on life and in his under-standing of freedom?” Having kept silent for a moment, he answered: “no.”
- Topic:
- Economics
- Political Geography:
- Russia, United States, America, Europe, and Asia
633. An Indian Economic Miracle?
- Author:
- Deepak Lal
- Publication Date:
- 01-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- In explaining the acceleration in Indian growth, and to judge if an Indian economic miracle is on its way, it is first necessary to establish when this acceleration began, as this is still subject to controversy. Second it is necessary to identify the sources of this acceleration and to see to what extent these are the results of policy. Third, to provide some reading of the tea leaves until 2030, it is necessary to outline the current constraints on growth. But before that, the current change in Indian economic fortunes needs to be put into historical perspective. This is done in the first part of this article, followed by the next three parts, which deal with the other three broad themes outlined above. As this article is in honor of Angus Maddison, I rely wherever possible on the growth accounting method that he has made so much his own.
- Topic:
- Economics
- Political Geography:
- India and Asia
634. Human Rights, Limited Government, and Capitalism
- Author:
- Erich Weede
- Publication Date:
- 01-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- By and large, there are two distinct intellectual traditions in social theorizing. One is normative. It addresses how people should live or how the social order should be arranged. Much of the human rights discourse belongs to this tradition. The other tradition attempts to analyze the world as it is. Within this second tradition theories are evaluated according to criteria such as falsifiability, compatibility with known facts, explanatory power, or predictive value. If one is interested in feasibility, and if one links rights with corresponding obligations, then the separation between these intellectual traditions is regrettable. Then it makes little sense to generate long lists of human rights without knowing whether or not they ever can be implemented.
- Topic:
- Human Rights
635. State Income Taxes and Economic Growth
- Author:
- Barry W. Poulson and Jules Gordon Kaplan
- Publication Date:
- 01-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- This article explores the impact of tax policy on economic growth in the states within the framework of an endogenous growth model. Regression analysis is used to estimate the impact of taxes on economic growth in the states from 1964 to 2004. The analysis reveals a significant negative impact of higher marginal tax rates on economic growth. The analysis underscores the importance of controlling for regressivity, convergence, and regional influences in isolating the effect of taxes on economic growth in the states.
636. Occupational Licensing and Asymmetric Information: Post-Hurricane Evidence from Florida
- Author:
- David Skarbek
- Publication Date:
- 01-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- Federal, state, and county governments accept the argument that occupational licensing protects consumers and improves their welfare. This argument stands in stark contrast to the apparent rent seeking that occurs with licensing. In return for gains from state-created barriers to entry, coalitions built along occupational lines support politicians (Stigler 1971: 3–21).
637. The Collateral Source Rule: Statutory Reform and Special Interests
- Author:
- David Schap and Andrew Feeley
- Publication Date:
- 01-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- Paul Rubin (2005) has addressed the evolution of American tort law from a public choice perspective. In contrast to earlier work in law and economics, which generally regarded tort law norms as efficient (Landes and Posner 1987), Rubin relied on more recent work in the field (Epstein 1988, Rubin and Bailey 1994) that regards tort law as being shaped by the special interests of plaintiff and (perhaps to a somewhat lesser extent) defense attorneys. In addition, Rubin envisioned business interests' influence toward tort reform as enhancing efficiency. He ended his article with a call for additional empirical research on modern American tort law from the public choice perspective and indeed suggested a number of specific items and areas of possible fruitful research. The spirit of Rubin's anticipated research program, as well as many of his specific suggestions, can be applied to our survey research findings concerning statutory reform of the collateral source rule.
- Political Geography:
- America
638. Currency Boards vs. Dollarization: Lessons from the Cook Islands
- Author:
- Richard C. K. Burdekin
- Publication Date:
- 01-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- Modern currency boards are not necessarily precluded from financing government spending and may feature only partial foreign reserve backing. The potential dangers are highlighted by the Cook Islands case, where accelerating rates of currency issuance, combined with rising government budget deficits, led to a crisis of confidence in 1994. It is unlikely that the seigniorage gained from the short-lived currency board experiment outweighed the costs associated with the swings in policy. In the end, delayed fiscal retrenchment was accompanied by an abrupt contraction in the money supply as the local currency was withdrawn in 1995 and full dollarization re-established.
- Political Geography:
- Island
639. Macroeconomic Effects of Central Bank Transparency: The Case of Brazil
- Author:
- Helder Ferreira de Mendonça and José Simão Filho
- Publication Date:
- 01-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- Nowadays there is a tendency for central banks to increase transparency in the conduct of monetary policy. Central bank transparency could be defined as the existence of symmetric information between monetary policymakers and other economic agents. High degrees of transparency reduce uncertainty, improve the private-sector inference about central bank goals, and increase the effectiveness of monetary policy. There is now an increasing literature that measures the effects of transparency on average inflation, output volatility (Chortareas, Stasavage, and Sterne 2002), the efficiency of monetary policy (Cecchetti and Krause 2002), and the volatility of financial markets (Ehrmann and Fratzscher 2005).
- Political Geography:
- Brazil
640. On the Death of the Resurrected Short-Run Phillips Curve: A Further Investigation
- Author:
- Masoud Moghaddam and James E. Jenson
- Publication Date:
- 01-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- In a recent issue of this journal, Richard Reichel (2004) takes issue with the resurrected Phillips curve (PC) in William Niskanen's (2002) article. Accordingly, Niskanen's reformulation of the PC provides empirical evidence for a weak, but statistically significant, short-run (in the same year) tradeoff between inflation and unemployment rates in the United States. Furthermore, the unemployment rate is directly and significantly determined by the one-period lagged value of the inflation rate, which implies an upward sloping PC, consistent with the type of PC explicated by Milton Friedman (1987). Reichel's main point of contention is that the variables in the reformulated version of PC are nonstationary, meaning that statistical properties (such as conditional mean and variance) vary with time. Thus, Niskanen's findings are spurious.
- Political Geography:
- United States
641. Parrot Talk: The Repetition of Common Fallacies
- Author:
- Anthony de Jasay
- Publication Date:
- 01-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- Many social scientists and political journalists keep parrots as useful labor-saving pets. These parrots are hidden in their masters' bosoms and are so well trained that when they start talking, we believe we hear their masters' voices. One can nevertheless recognize that it is the parrot holding forth, by the fact that it is always the same few texts that are repeated. Most of the parrots like one or other of the brief texts that are reproduced here in italics.
642. Book Reviews: The Healthcare Fix: Universal Insurance for All Americans
- Author:
- Jagadeesh Gokhale
- Publication Date:
- 01-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- This book is about how and why a severe economic and financial crisis may well unfold in the United States within the next few years. The main reason: politicians have been increasingly profligate with the public purse—expanding government entitlement and nonentitlement spending, seemingly without regard for future economic consequences.
- Political Geography:
- United States
643. Book Reviews: See Government Grow: Education Politics from Johnson to Reagan
- Author:
- Neal McCluskey
- Publication Date:
- 01-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- Only a dozen years ago, the Republican Party platform called for abolition of the U.S. Department of Education. Perhaps a holdover from what many thought would be a government-leveling tidal wave when the GOP won control of both the U.S. House of Representatives and Senate in 1994, the 1996 platform declared that “the federal government has no constitutional authority to be involved in school curricula. . . . That is why we will abolish the Department of Education, end federal meddling in our schools, and promote family choice at all levels of learning.”
- Political Geography:
- United States
644. Book Reviews: Regulation and Public Interests: The Possibility of GOOD Regulatory Government
- Author:
- Peter Van Doren
- Publication Date:
- 01-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- In theory, scientific (positive) and philosophical (normative) inquiry are quite distinct. The former involves the testing of hypotheses through the use of experiments or the estimation of statistical models using data, while the latter utilizes theological or philosophical analysis to conclude how people and institutions should behave.
645. What Can the United States Learn from the Nordic Model?
- Author:
- Daniel Mitchell
- Publication Date:
- 11-2007
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- Some policymakers in the United States and Europe argue that it is possible to enjoy economic growth and also have a large welfare state. These advocates for bigger government claim that the so- called Nordic Model offers the best of both worlds. This claim does not withstand scrutiny. Economic performance in Nordic nations is lagging, and excessive government is the most likely explanation. The public sector in Sweden, Denmark, Norway, Finland, and Iceland consumes, on average, more than 48 percent of economic output. Total government outlays in the United States, by contrast, are less than 37 percent of gross domes- tic product. Revenue comparisons are even more striking. Tax receipts average more than 45 per- cent of GDP in Nordic nations, a full 20 percent- age points higher than the aggregate tax burden in the United States.
- Topic:
- Economics and Government
- Political Geography:
- United States and Europe
646. Do You Know the Way to L.A.? San Jose Shows How to Turn an Urban Area into Los Angeles in Three Stressful Decades
- Author:
- Randal O'Tool
- Publication Date:
- 10-2007
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- California cities have the least affordable housing and the most congested traffic in the nation. California's housing crisis results directly from several little-known state institutions, including local agency formation commissions (LAFCos), which regulate annexations and the formation of new cities and service districts; the California Environmental Quality Act, which imposes high costs on new developments; and a 1971 state planning law that effectively entitles any resident in the state to a say in how property owners in the state use their land. Cities such as San Jose have manipulated these institutions and laws with the goal of maximizing their tax revenues.
- Topic:
- Demographics, Environment, and Poverty
- Political Geography:
- United States
647. Taiwan's Defense Budget: How Taipei's Free Riding Risks War
- Author:
- Justin Logan and Ted Carpenter
- Publication Date:
- 09-2007
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- Taiwan spends far too little on its own defense, in large part because the Taiwanese believe the United States is their ultimate protector. The Taiwan legislature's six-year delay and severe down- sizing of a budget to pay for weapons systems that Washington has offered the island since 2001 is only one piece of evidence of Taiwan's free riding. Although Taiwan recently approved roughly US$300 million of the original budget of about $18 billion, the underlying problem remains: even with the new appropriation, Taiwan's overall investment in defense—approximately 2.6 percent of GDP—is woefully inadequate, given the ongoing tensions with mainland China. America is now in the unenviable position of having an implicit commitment to defend a fellow democracy that seems largely uninterested in defending itself.
- Topic:
- Conflict Prevention, Security, and Defense Policy
- Political Geography:
- United States and Asia
648. The Myth of the Rational Voter: Why Democracies Choose Bad Policies
- Author:
- Bryan Caplan
- Publication Date:
- 05-2007
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- In theory, democracy is a bulwark against socially harmful policies. In practice, however, democracies frequently adopt and maintain policies that are damaging. How can this paradox be explained? The influence of special interests and voter ignorance are two leading explanations. I offer an alternative story of how and why democracy fails. The central idea is that voters are worse than ignorant; they are, in a word, irrational—and they vote accordingly. Despite their lack of knowledge, voters are not humble agnostics; instead, they confidently embrace a long list of misconceptions.
- Topic:
- Civil Society, Democratization, and Political Economy
- Political Geography:
- United States
649. In Pursuit of Happiness Research: Is It Reliable? What Does It Imply for Policy?
- Author:
- Will Wilkinson
- Publication Date:
- 04-2007
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- “Happiness research” studies the correlates of subjective well-being, generally through survey methods. A number of psychologists and social scientists have drawn upon this work recently to argue that the American model of relatively limited government and a dynamic market economy corrodes happiness, whereas Western European and Scandinavian-style social democracies pro- mote it. This paper argues that happiness research in fact poses no threat to the relatively libertarian ideals embodied in the U.S. socioeconomic system. Happiness research is seriously hampered by confusion and disagreement about the definition of its subject as well as the limitations inherent in current measurement techniques. In its present state happiness research cannot be relied on as an authoritative source for empirical information about happiness, which, in any case, is not a simple empirical phenomenon but a cultural and historical moving target. Yet, even if we accept the data of happiness research at face value, few of the alleged redistributive policy implications actually follow from the evidence. The data show that neither higher rates of government redistribution nor lower levels of income inequality make us happier, whereas high levels of economic freedom and high average incomes are among the strongest correlates of subjective well- being. Even if we table the damning charges of questionable science and bad moral philosophy, the American model still comes off a glowing success in terms of happiness.
- Topic:
- Economics, Markets, and Political Economy
- Political Geography:
- United States, America, and Europe
650. Energy Alarmism: The Myths That Make Americans Worry about Oil
- Author:
- Daryl Press
- Publication Date:
- 04-2007
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- Many Americans have lost confidence in their country's “energy security” over the past several years. Because the United States is a net oil importer, and a substantial one at that, concerns about energy security naturally raise foreign policy questions. Some foreign policy analysts fear that dwindling global oil reserves are increasingly concentrated in politically unstable regions, and they call for increased U.S. efforts to stabilize—or, alter-natively, democratize—the politically tumultuous oil-producing regions. Others allege that China is pursuing a strategy to “lock up” the world's remaining oil supplies through long-term purchase agreements and aggressive diplomacy, so they counsel that the United States outmaneuver Beijing in the “geopolitics of oil.” Finally, many analysts suggest that even the “normal” political disruptions that occasionally occur in oil-producing regions (e.g., occasional wars and revolutions) hurt Americans by disrupting supply and creating price spikes. U.S. military forces, those analysts claim, are needed to enhance peace and stability in crucial oil-producing regions, particularly the Persian Gulf.
- Topic:
- Security, Oil, and Political Economy
- Political Geography:
- United States and America