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58261. A Variance Screen for Collusion

Author:
Rosa M. Abrantes-Metz, Luke M. Froeb, John F. Geweke, and Charles T. Taylor
Publication Date:
03-2005
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
In this paper, we examine price movements over time around the collapse of a bid-rigging conspiracy. While the mean decreased by sixteen percent, the standard deviation increased by over two hundred percent. We hypothesize that conspiracies in other industries would exhibit similar characteristics and search for "pockets" of low price variation as indicators of collusion in the retail gasoline industry in Louisville. We observe no such areas around Louisville in 1996-2002.
Topic:
Economics, Emerging Markets, Industrial Policy, and International Trade and Finance

58262. Optimal Inflation Persistence: Ramsey Taxation with Capital and Habits

Author:
Sanjay Chugh
Publication Date:
03-2005
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Ramsey models of fiscal and monetary policy with perfectly-competitive product markets and a fixed supply of capital predict highly volatile inflation with no serial correlation. In this paper, we show that an otherwise-standard Ramsey model that incorporates capital accumulation and habit persistence predicts highly persistent inflation. The result depends on increases in either the ability to smooth consumption or the preference for doing so. The effect operates through the Fisher relationship: a smoother profile of consumption implies a more persistent real interest rate, which in turn implies persistent optimal inflation. Our work complements a recent strand of the Ramsey literature based on models with nominal rigidities. In these models, inflation volatility is lower but continues to exhibit very little persistence. We quantify the effects of habit and capital on inflation persistence and also relate our findings to recent work on optimal fiscal policy with incomplete markets.
Topic:
Economics, Emerging Markets, Industrial Policy, and International Trade and Finance

58263. Working for Women, Worldwide

Author:
Paula J. Dobriansky
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
In 1995, at one of the largest international conferences ever held, women from around the world, representing both governments and the private sector, gathered in Beijing to set forth a platform for the political, economic, and social empowerment of women.
Topic:
International Relations, Development, and Gender Issues
Political Geography:
United States and Beijing

58264. Investment-Specific and Multifactor Productivity in Multi-Sector Open Economies: Data and Analysis

Author:
Luca Guerrieri, Dale W. Henderson, and Jinill Kim
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
In the last half of the 1990s, labor productivity growth rose in the U.S. and fell almost everywhere in Europe. We document changes in both capital deepening and multifactor productivity (MFP) growth in both the information and communication technology (ICT) and non-ICT sectors. We view MFP growth in the ICT sector as investment-specific productivity (ISP) growth. We perform simulations suggested by the data using a two-country DGE model with traded and nontraded goods. For ISP, we consider level increases and persistent growth rate increases that are symmetric across countries and allow for costs of adjusting capital-labor ratios that are higher in one country because of structural differences. ISP increases generate investment booms unless adjustment costs are too high. For MFP, we consider persistent growth rate shocks that are asymmetric. When such MFP shocks affect only traded goods (as often assumed), movements in 'international' variables are qualitatively similar to those in the data. However, when they also affect nontraded goods (as suggested by the data), movements in some of the variables are not. To obtain plausible results for the growth rate shocks, it is necessary to assume slow recognition.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
United States and Europe

58265. Financial Market Developments and Economic Activity during Current Account Adjustments in Industrial Economies

Author:
Steven B. Kamin, Sylvain Leduc, and Hilary Croke
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Much has been written about prospects for U.S. current account adjustment, including the possibility of what is sometimes referred to as a “disorderly correction”: a sharp fall in the exchange rate that boosts interest rates, depresses stock prices, and weakens economic activity. This paper assesses some of the empirical evidence bearing on the likelihood of the disorderly correction scenario, drawing on the experience of previous current account adjustments in industrial economies. We examined the paths of key economic performance indicators before, during, and after the onset of adjustment, building on the analysis of Freund (2000).
Topic:
Development, Economics, Industrial Policy, and International Trade and Finance
Political Geography:
United States

58266. International Risk-Sharing and the Transmission of Productivity Shocks

Author:
Sylvain Leduc, Giancarlo Corsetti, and Luca Dedola
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
A central puzzle in international finance is that real exchange rates are volatile and, in stark contradiction to efficient risk-sharing, negatively correlated with cross-country consumption ratios. This paper shows that a standard international business cycle model with incomplete asset markets augmented with distribution services can account quantitatively for these properties of real exchange rates. Distribution services, intensive in local inputs, drive a wedge between producer and consumer prices, thus lowering the impact of terms-of-trade changes on optimal agents' decisions. This reduces the price elasticity of tradables separately from assumptions on preferences.
Topic:
Development, Economics, International Trade and Finance, and Science and Technology
Political Geography:
United States

58267. An Assessment of the Impact of Japanese Foreign Exchange Intervention: 1991-2004

Author:
Alain P. Chaboud and Owen Humpage
Publication Date:
01-2005
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
We analyze the short-term price impact of Japanese foreign exchange intervention operations between 1991 and 2004, using official data from Japan's Ministry of Finance. Over the period as a whole, we find some evidence of a modest "against the wind" effect, but interventions do not have value as a forecast that the exchange rate will move in a direction consistent with the operations. Interventions conducted between 1995 and 2002, which were large and infrequent, met with a much higher degree of success. For the most recent episode of intervention, in 2003 and 2004, despite the record size and frequency of the overall episode, it is difficult to statistically distinguish the pattern of exchange rate movements on intervention days from that of all the days in that particular subperiod, showing little effectiveness. Still, while the evidence of Japanese intervention effectiveness is modest overall, it appears to be stronger than that found using similar techniques for U.S. intervention operations conducted in the 1980s and 1990s.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
Japan and Israel

58268. Going the Distance: The U.S. Tsunami Relief Effort

Publication Date:
01-2005
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
On December 26, 2004, a magnitude 9.0 earthquake off the west coast of Northern Sumatra, Indonesia, triggered a tsunami—a series of giant waves—that inundated coastal areas of Indonesia, Thailand, Sri Lanka, India, and Malaysia, as well as Indian Ocean islands and parts of East Africa.
Topic:
International Relations, Development, Economics, and International Cooperation
Political Geography:
Indonesia, Malaysia, India, Sri Lanka, Thailand, and East Africa

58269. Expansionary Fiscal Shocks and the Trade Deficit

Author:
Luca Guerrieri, Christopher Gust, and Christopher Erceg
Publication Date:
01-2005
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
In this paper, we use an open economy DGE model (SIGMA) to assess the quantitative effects of fiscal shocks on the trade balance in the United States. We examine the effects of two alternative fiscal shocks: a rise in government consumption, and a reduction in the labor income tax rate. Our salient finding is that a fiscal deficit has a relatively small effect on the U.S. trade balance, irrespective of whether the source is a spending increase or tax cut. In our benchmark calibration, we find that a rise in the fiscal deficit of one percentage point of GDP induces the trade balance to deteriorate by less than 0.2 percentage point of GDP. Noticeably larger effects are only likely to be elicited under implausibly high values of the short-run trade price elasticity.
Topic:
Conflict Resolution, Economics, and International Trade and Finance
Political Geography:
United States

58270. The Sources of Stigma for Means-Tested Government Programs

Author:
Jennifer Stuber and Mark Schlesinger
Publication Date:
03-2005
Content Type:
Working Paper
Institution:
Robert Wood Johnson Health Society Scholars Program
Abstract:
Stigma has been shown to discourage participation in means-tested government programs. Prior research cannot explain why this deterrent effect varies in intensity across different individuals and programs. We develop a more comprehensive model of the possible determinants of stigma associated with means-tested programs than has previously been suggested by studies of welfare stigma. We test hypotheses using unique data based on interviews with 1405 respondents in ten states and the District of Columbia. The results suggest that there are two distinct forms of stigma related to participation in means-tested government programs: one related to self-identity, the other to threats of negative treatment. Both forms of stigma are more pronounced for welfare compared to Medicaid. The sources of stigma identified by conventional treatments of welfare stigma (e.g. individual attributions of responsibility for poverty) have significant explanatory power, but neglect other important influences. We find that stigma is exacerbated by poor health and by minority status. Stigma is also fostered by the ways in which means-tested programs are implemented, including negative interactions with case workers, long waiting times and for Medicaid, applications for benefits in alternative enrollment sites such as health centers or hospitals. These findings suggest new points of leverage for addressing the potentially deleterious consequences of stigma.
Topic:
Development, Government, Health, and Human Welfare
Political Geography:
Colombia

58271. U.S. Policy in Colombia

Author:
William Wood
Publication Date:
06-2005
Content Type:
Working Paper
Institution:
The Wilson Center
Abstract:
LEE H. HAMILTON: Good morning to all of you. Good morning. Thank you very much for coming to the Wilson Center this morning. We're delighted to have you here.
Topic:
Foreign Policy and Arms Control and Proliferation
Political Geography:
United States, Colombia, and South America

58272. Nontraditional Security Threats in the U.S.-Mexico Bilateral Relationship: Overview and Recommendations

Author:
John Bailey
Publication Date:
01-2005
Content Type:
Working Paper
Institution:
The Wilson Center
Abstract:
Before September 11, 2001, security—primarily, anti-drug trafficking efforts—ranked among the top two or three issues in Mexico-U.S. relations. Since that day, security has dominated the U.S. policy agenda in foreign affairs, including the bilateral agenda. Mexico, which had put more emphasis on migration reform, has accepted the new reality as defined by the United States. This background paper identifies some of the more pressing nontraditional security threats in the U.S.-Mexico bilateral relationship and suggests recommendations to address them. Inevitably somewhat U.S.-centric, my approach is to cover a good deal of ground in broad-brush strokes, providing only enough detail to buttress the main points and illustrate the recommendations.
Topic:
International Relations, Security, and Regional Cooperation
Political Geography:
United States and Mexico

58273. Challenges in Competitiveness: Infrastructure Development

Author:
Raul Rodriguez
Publication Date:
01-2005
Content Type:
Working Paper
Institution:
The Wilson Center
Abstract:
Cross-border cooperation between the U.S. and Mexico in infrastructure development has been the topic of a vast number of conferences, discussion groups and reports for quite some time. But actual cooperation pales in comparison to the dramatic strides achieved in economic and business links between both countries.
Topic:
International Relations, Economics, Poverty, and Regional Cooperation
Political Geography:
United States and Mexico

58274. No Illusions-Paradigm Shifting on Mexican Migration to the US in the Post- 9-11 World

Author:
T. Alexander Aleinikoff
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
The Wilson Center
Abstract:
The U.S.-Mexican immigration relationship has never been good. For most of their histories, the two countries have determined policy unilaterally despite a multitude of interconnections and a shared border of thousands of miles. The willful refusal to recognize common interests, the ability to pretend that sound policies can be crafted in isolation, is remarkable—and deeply counterproductive. Hopes for a “grand bargain” under the leadership of Presidents Fox and Bush faded quickly after the events of September 11, 2001. There may be a time in the future when such an agenda might be fruitfully pursued—and Andrés Rozental's pa per makes eminently sensible suggestions as to the elements that might constitute a grand bargain. But at the moment, at least on the U.S. side, policy development is viewed primarily—if not exclusively—as a matter of domestic politics and legislation. Interestingly, however, the debate on the American side may well play out in terms that are compatible with the elements of a “grand bargain.” I will argue that this result is due to shifting paradigms in the understanding of the U.S.-Mexican relationship: the Bush Administration's immigration proposals show movement away from a paradigm of control and toward one of a hemispheric labor market.
Topic:
International Relations, Security, and Regional Cooperation
Political Geography:
United States and Mexico

58275. A U.S.-Mexico Partnership in Energy- A Policy of Convenience

Author:
José Alberro
Publication Date:
01-2005
Content Type:
Working Paper
Institution:
The Wilson Center
Abstract:
Four years have come and gone in the Mexico-US relationship since the almost simultaneous inaugurations of Presidents Bush and Fox. The optimism bred by their first auspicious meetings has given way to aloofness and/or irritation in the post 9/11 era. Indeed, for some in the United States, Porfirio Díaz's dictum should be turned on its head to state “poor United States, so far away from God and so close to Mexico.” The fact remains that geography is destiny. Moreover, in the post-9/11, post-PRI environment, Mexico and the United States have complementary needs that could become the foundation of a policy of convenience and be the basis for a commitment to further strengthen their long- term economic ties.
Topic:
International Relations, Security, and Regional Cooperation
Political Geography:
United States and Mexico

58276. Africa: The Development Challenges of the 21st Century

Author:
Callisto Madavo
Publication Date:
09-2005
Content Type:
Working Paper
Institution:
The Wilson Center
Abstract:
An Introduction from Africa Program Director Howard Wolpe: The following remarks were delivered by Callisto Madavo, former Vice President for Africa at the World Bank, at a Congressional Staff Forum on Africa Retreat, convened by the Woodrow Wilson International Center March 8-10, 2005. A noted Zimbabwean economist, Callisto Madavo served as World Bank Vice President 1996-2005. Over the course of a distinguished 36-year career at the Bank, which included postings in the Middle East, East Asia and Africa, Madavo witnessed both the successes and failures of poverty reduction strategies in multiple settings. Now, with the world's attention being increasingly drawn to the challenge of poverty reduction in Africa, Madavo offers an important perspective on the context and history of the economic challenges facing the continent.
Topic:
Development, Government, and Politics
Political Geography:
Africa

58277. Eye on Africa: A Scholar's Tale

Author:
Jesse Ribot
Publication Date:
06-2005
Content Type:
Working Paper
Institution:
The Wilson Center
Abstract:
Ribot is a senior associate at the World Resources Institute (WRI) in Washington and currently a Wilson Center fellow working on a new book on rural democracy in Africa. Several years ago, he was writing a history of forestry in French West Africa, a story of a supposed deforestation crisis from 1880-1920. The colonial government had devised odd policies to fix this nonexistent problem—policies that would not have fixed it had there been a crisis. Furthermore, the policies concentrated access to lucrative resources in the hands of a few elites. "The discourse of 'deforestation crisis' was being used to expropriate the people's resources," Ribot said. "That was the real story."
Topic:
Democratization, Development, and Third World
Political Geography:
Africa and Washington

58278. Resolving the Three-Headed War from Hell

Author:
John Prendergast
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
The Wilson Center
Abstract:
An Introduction from Program Director Howard Wolpe: John Prendergast, Special Advisor to the President of the International Crisis Group, is one of the country's leading Africanists, with most of his twenty-year career focused on conflict resolution in Africa, American policy toward the region, human rights promotion, and humanitarian action. During the Clinton Administration, Mr. Prendergast served as a Special Advisor, Department of State and a Director for African Affairs at the National Security Council. He has worked for a variety of nongovernmental organizations and think tanks in Africa and the United States, and has authored or co-authored seven books on Africa.This paper is based on an address delivered at a February 7, 2005 program at the Woodrow Wilson Center, cosponsored by the Center's Africa Program and Conflict Prevention Project. Mr. Prendergast wishes to acknowledge the contributions to this paper of Colin Thomas-Jensen of the International Crisis Group.
Topic:
Conflict Resolution, Politics, and War
Political Geography:
Africa

58279. Security and Sovereignty: Renewing NORAD

Author:
James Fergusson and Dwight Mason
Publication Date:
03-2005
Content Type:
Working Paper
Institution:
The Wilson Center
Abstract:
Security and Sovereignty: Renewing NORAD is the third publication in the Canada Institute's One Issue,Two Voices series. Using expertise from both sides of the Canada–U.S. border, this series is the Institute's contribution to dialogue on policy issues relevant to the bilateral relationship. The focus of this paper is the upcoming NORAD renewal negotiation process.
Topic:
Security, Politics, and Regional Cooperation
Political Geography:
United States and North America

58280. Threat Perceptions in the United States and Canada

Author:
Frank Graves and Karlyn Bowman
Publication Date:
10-2005
Content Type:
Working Paper
Institution:
The Wilson Center
Abstract:
In this fourth issue of the Canada Institute's One Issue,Two Voices publication series, authors Karlyn Bowman of the American Enterprise Institute and Frank Graves of EKOS Research Associates explore the public's perceptions of threats and security issues in both the United States and Canada. As with past issues in the series, this publication brings expertise from both sides of the border to address policy-relevant questions of significance to the bilateral relationship.
Topic:
Security, Government, and Politics
Political Geography:
North America