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362. 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
363. 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
364. 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
365. 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.
366. 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).
367. 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
368. 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
369. 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
370. 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
371. 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.
372. 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
373. 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
374. 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.
375. Aggregate Supply-Driven Deflation and Its Implications for Macroeconomic Stability
- Author:
- David Beckworth
- Publication Date:
- 09-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- Deflation is generally considered to be inconsistent with macroeconomic stability. Any sustained decline in the price level is widely believed to be associated with weak to negative economic growth, a lower bound of zero on the policy interest rate, and an increase in financial disintermediation. However, a number of recent studies examining both historical, cross-country experience with deflation and more recent developments find that these concerns are not necessarily associated with deflation (Selgin 1997, 1999; Cleveland Federal Reserve 1998; Stern 2003; Bordo and Redish 2004; Bordo, Lane, and Redish 2004; Bordo and Filardo 2005; Borio and Filardo 2004; Farrell 2004; King 2004; The Economist 2004, 2005; White 2006). They show that the deflationary experiences that shape the modern economic psyche, the Great Depression in the 1930s and Japan in the 1990s, are not truly representative of all deflation outcomes. These studies contend that a broader, historical perspective reveals a more nuanced view of deflation, one that requires taking seriously the possibility of both a malign deflation, a deflation originating from a collapse in aggregate demand, and a benign deflation, a deflation originating from an increase in aggregate supply.
- Political Geography:
- Japan
376. Sustained Economic Growth: Do Institutions Matter, and Which One Prevails?
- Author:
- Abdoul' Ganiou Mijiyawa
- Publication Date:
- 09-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- In 1965, the growth rate of per capita GDP in Niger and Nigeria was 2.1 percent and 4.2 percent, respectively, and 2.9 percent in Botswana. From 1966 to 1969, however, Niger and Nigeria recorded a negative growth rate, while Botswana continued to experience a positive growth rate over the same period. In 1990, the growth rate of per capita GDP was 1 percent in Ghana and 5.2 percent in Nigeria. Yet, from 1991 to 1994, the growth rate was negative in Nigeria and positive in Ghana. Why does the trajectory of economic growth episodes differ among countries? In other words, why is economic growth more sustainable in some countries than in others?
- Topic:
- Economics
- Political Geography:
- Nigeria and Ghana
377. Censoring and Destroying Information in the Information Age
- Author:
- J. R. Clark and Dwight R. Lee
- Publication Date:
- 09-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- Almost everyone knows the importance of information and communication to economic progress. The more information we have the more productive we can be, both individually and collectively. The easier it is for us to communicate our information to others and to receive their information, the more likely we will make production and consumption choices that serve the interests of all. No wonder people are so impressed with the recent breakthroughs in information and communication technology that have moved us into what has become known as the “information age.” Who could possibly condone, much less recommend, policies that destroy and distort valuable information by censoring its communication? Far more than you might think!
- Topic:
- Communications
378. State Fiscal Crises: Are Rapid Spending Increases to Blame?
- Author:
- Dean Stansel and David T. Mitchell
- Publication Date:
- 09-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- During recessions, state governments frequently face substantial midyear budget shortfalls. Numerous states are now experiencing such crises again. These fiscal crises are often blamed on the cyclical decline in revenue growth or reductions in federal aid. Others have suggested that enacting rapid spending increases during expansionary years—rather than using the revenue windfalls for tax cuts or increases in rainy day funds—may be an important contributing factor to those budget shortfalls. Using data from the 2001 recession, we find support for that “overspending” hypothesis. While neither the mere presence nor the size of a rainy day fund were significant predictors of fiscal stress, faster increases in spending are positively and significantly associated with fiscal stress. When rainy day funds work, it is the strength of their withdrawal rules that matter. These results have important implications for fiscal policy choices. States that restrain spending growth during expansionary years and implement strong rainy day fund withdrawal rules are likely to face less severe fiscal crises during recessions.
379. Small States: Not Handicapped and Under-Aided, but Advantaged and Over-Aided
- Author:
- Swaminathan S. Anklesaria Aiyar
- Publication Date:
- 09-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- Small states have long been viewed by international organizations as a special category with special handicaps requiring special assistance. The United Nations has created an Office of the High Representative for the Least Developed Countries, Land locked Developing Countries, and Small Island Developing States. The very wording makes it clear that the UN regards small developing states that are landlocked or islands as being on par with the least developed countries. A very substantial academic literature has been devoted to small states, to which the World Bank and Common-wealth Secretariat have made contributions. They constituted a Joint Task Force that submitted a report in April 2000, Small States: Meeting Challenges in the Global Economy, proposing an agenda for assisting such states in various ways, including increasing foreign aid (World Bank 2000). This report was followed in 2005 by a review of progress on the 2000 agenda, Towards an Outward-Oriented Development Strategy for Small States(Briguglio, Persaud, and Stern 2005), henceforth referred to as the World Bank-Common-wealth review. This review also suggested increasing foreign aid. In2006, the Independent Evaluation Group (IEG 2006) of the World Bank produced an evaluation of World Bank assistance to small states. During that same year, the World Bank also commissioned four regional studies of small states, which formed the basis of a subsequent book, Small States, Smart Solutions(Favaro 2008).Finally, in 2008, the World Bank released The Growth Report, also known as the Spence Commission report, which devoted a special section to small states (World Bank 2008)
- Topic:
- United Nations
380. Parental Valuation of Charter Schools and Student Performance
- Author:
- James VanderHoff
- Publication Date:
- 09-2008
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- Students enrolled in charter schools increased by 81 percent from 2002 to 2007, and the number of charter schools increased by 52 percent. Nevertheless, many studies indicate students in charter schools do not score as highly on standard tests as students in traditional public schools. Do parents choose academically inferior schools for their children because other factors are more important? The significance of that question stems from the requirement of scholastically motivated parental choice for competition-induced improvement in public schools. Milton Friedman (1962) and other shave argued that parental choice would stimulate public schools to be more academically effective, because dissatisfied parents would move their children from inferior to superior schools, including public charter schools.