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1657 publications found
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Public Policy Brief No.11
03 March 1994
A Path to Good Jobs?
AbstractRobert M. Hutchens examines three paths by which a young person with limited academic credentials may avoid a life of unemployment and low wages: obtaining additional formal schooling, securing a job that provides secure employment at “good” wages, or acquiring a job that provides skills and thereby opens a door to good future jobs. He finds that the policy most likely to reduce the supply of unskilled labor would include enhancing early childhood education programs, disbursing training vouchers to young adults, and restricting the immigration of unskilled workers. Owing to the difficulty of identifying jobs, occupations, and industries that would consistently result in financial security for those with limited academic skills, Hutchens concludes that, with few exceptions, demand-side interventions will not work.
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Working Paper No.106
01 March 1994
The Role of Consistent Implementation of Policy
AbstractNo further information available.
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Working Paper No.105
01 March 1994
The Collapse of Low-skill Male Earnings in the 1980s
AbstractNo further information available.
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Working Paper No.104
04 February 1994
The Anatomy of Changing Male Earnings Inequality
AbstractNo further information available.
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Working Paper No.103
03 February 1994
Business Tax Incentives and Investments
AbstractNo further information available.
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Working Paper No.102
01 January 1994
Credibility of the Interwar Gold Standard, Uncertainty, and the Great Depression
AbstractNo further information available.
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Book Series
01 December 1993
Poverty and Prosperity in the USA in the Late Twentieth Century
AbstractThe fact that levels of poverty and inequality showed an unprecedented rise in the 1980s in the United States despite a sustained expansion beginning in 1983 raises concerns about appropriate policy actions needed to offset these developments. The papers in this volume explore manifestations of this inequality, including unexpectedly high poverty rates, shrinkage of the middle class, a growing intergenerational wage gap, a growing earnings gap between college and high school graduates, and increasing dispersion of the distribution of family income even with increased participation of female household members in the labor force. Measurement issues explored include the use of earnings capacity, health status, and indicators of living conditions to define poverty status. Contributors to this volume include Robert B. Avery, Rebecca M. Blank, Alan S. Blinder, David Bloom, Sheldon Danziger, William T. Dickens, Greg Duncan, Richard B. Freeman, Robert Haveman, Christopher Jencks, Susan E. Mayer, Timothy M. Smeeding, Barbara Wolfe, and Edward N. Wolff.
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Public Policy Brief No.10
10 November 1993
Job-lock: An Impediment to Labor Mobility?
AbstractRecent survey results and anecdotal evidence appear to indicate that workers sometimes sacrifice job opportunities by remaining in their current position in order to retain health benefits. If “job-lock” is real, the nation pays an economic price in terms of a misallocation of workersamong productive opportunities, higher relocation and training costs for workers who have stayed too long in their jobs, and the loss of innovation, employment, and competition associated with start-up ventures. Douglas Holtz-Eakin suggests that the incidence of job-lock may be overstated. Therefore, reform programs proposing to dismantle the current system of employer-provided insurance in order to improve labor mobility are misguided. Rather, policy should aim to improve access to health care, improve the efficiency of insurance operations, and guarantee the portability of insurance coverage and premium expenses.
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Working Paper No.101
01 November 1993
Technological Change and the Demand for Skills in the 1980s
AbstractNo further information available.
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Working Paper No.100
20 October 1993
Avoiding a Future of Unemployment and Low Wages
AbstractNo further information available.
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Public Policy Brief No.9
09 October 1993
The Investment-Finance Link
AbstractThe author of this brief offers evidence that policies aimed at stimulating private sector investment through interest rate reductions are, at best, misguided. He concludes that, while there may be benefits from policies aimed at increasing saving or lowering the budget deficit, a higher level of business investment is not one of them. Rather, because of the sizable effects of the business cycle and financial channels on investment, such a program will weaken the economy in the short run and curtail investment, with lower interest rates having little counteracting effect. A similar argument can be made about programs that attempt to reduce interest rates by promoting a rise in saving. If policymakers aspire to raise investment, they should look to actions that affect firms’ access to internal finance directly, such as an investment tax credit.
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Working Paper No.99
01 October 1993
Government Deficits, Liquidity Preference, and Schumpeterian Innovation
AbstractWray asserts that rigorous analyses of the role played by innovation in economic development must acknowledge the contribution of Joseph Schumpeter. However, the author suggests that the current stagnation confronting most developed, capitalist economies "cannot be understood without synthesizing Schumpeter’s insights with those of Kalecki and Keynes." Hence, Schumpeter’s work alone is inadequate in explaining the links between government deficits in ensuring aggregate demand and corporate profits.
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Public Policy Brief No.8
08 September 1993
Financing Prosperity in the Next Century
AbstractThe authors of this brief propose a series of reforms aimed at making bank regulations compatible with the changing financial system. They present evidence to support their contention that change in the market for financial services has reduced the importance of depositories as they have traditionally operated. A dramatic increase in nonbank competition has contributed to a substantial shrinkage in the proportion of total financial assets held by depository institutions. The authors assert that any reforms should take into account the dynamic nature of the financial marketplace. Effective reforms tackling bank regulation must pass a two-part test: they must protect the payments and credit mechanisms in order to promote systemic stability, and they must promote competition within the financial services industry.
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Working Paper No.98
01 September 1993
Investment and US Fiscal Policy in the 1990s
AbstractIn this working paper, Steven Fazzari presents new empirical research that attempts to measure the relative strength of fiscal policy on investment through the cost of capital, firms’ financial circumstances, and sales growth. Fazzari argues against the crowding-out effect and claims that even if the connection between the national budget deficit and interest rates is valid, the linkage between interest rates and private sector investment is at best, misguided. While neoclassical empirical studies have found a statistically significant relationship between investment and the cost of capital, Fazzari contends that high degree of explanatory power yielded by many of these investigations is due to the fact that they fail to separate the effects of sales or output growth from the cost of capital in determining investment, which renders the source of their significance unclear. The focus of fiscal policy is therefore difficult to determine./p>
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Working Paper No.97
01 August 1993
Is Health Insurance Crippling the Labor Market?
AbstractWhile discussion about health care encompasses a wide array of issues—inadequate access, the growing share of national resources devoted to health care, the incidence of cost-shifting from the uninsured to the insured, and differences in premium costs between seemingly similar insured individuals—growing significance has been placed on how aspects of the current system may create distortions in the labor market. Some of these issues are addressed in this working paper, including the extent to which labor market mobility is hampered by the nonportability of employer-provided insurance.
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Working Paper No.96
10 June 1993
Mortgage Default among Rural, Low Income Borrowers
AbstractIn this working paper, Quercia, McCarthy, and Stegman use data obtained on 874 low income, rural borrowers participating in the Section 502 Home Ownership program administered by the Farmer’s Home Administration (FmHA), and apply two multivariate proportional hazard models in order to analyze default decisions among these borrowers over time. The authors cite two key findings relating to default literature: (1) that contrary to prior findings, the size of the mortgage payment relative to borrower income plays a significant part in the default decision; and (2) borrower characteristics traditionally deemed risky (including minority status or being a female head of household) had no significant effect on borrower default. Rather, borrower-related factors—such as a change in marital status or the exodus of children from the household—played a larger part in the default decisions of borrowers participating in the FmHA program.
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Working Paper No.95
10 May 1993
The Community Reinvestment Act, Lending Discrimination, and the Role of Community Development Banks
AbstractThe Community Development Banks (CDBs) should not be seen as a substitute for the Community Reinvestment Act (CRA) or for other programs designed to revitalize lower income areas. Rather, they should be seen as a complement for existing programs and for other programs that will be proposed by the Clinton administration. As discussed above, the CRA process ensures that a dialogue takes place among regulators, financial institutions, and served communities: it ensures that banks identify their communities and that they satisfy some of the needs of these communities. Moreover, it helps to expand the awareness of bankers such that their expectations about presently undeserved areas are revised. It is unrealistic to expect that any financial institution can meet all the needs of any community; this, there is a role for a CDB to play in some communities that supplements the role played by traditional financial institutions. Similarly, while we believe that CDBs have an important role to play in revitalizing low income communities, we certainly do not see these as a substitute for the wide range of programs (both public and private) that will be needed to reverse long trends of deterioration experienced by some distressed communities.
Finally, the CDBs are not intended to be welfare programs but to provide services to the community’s residents, and consequently, they must meet the long-run market tests of profitability. Aside from the service aspect, community development banks will: (i)improve the well-being of our citizens not now served because of unresponsive, yet traditional loan qualification norms, and (ii) directly increase the opportunities for potential entrepreneurs and potential employees. The basic assumption underlying the community development bank is that all areas of the country need banks that are clearly oriented toward the small customer: households that have a small net worth, a small IRA account, and a small transactions account, and businesses that need financing measured in thousands rather then millions or billions of dollars.
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Working Paper No.94
09 May 1993
Productivity, Private and Public Capital, and Real Wage in the United States, 1948–1990
AbstractNo further information available.
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Working Paper No.93
08 May 1993
Finance and Stability
AbstractOnce again the United States economy is facing a crisis, resolution of which first requires the realization that there are many types of capitalism: Solutions implemented in the past, therefore, may or may not be an appropriate solution today, as they could have been implemented as an answer to a problem posed within the context of a different model. Alternatively, the solution may lie in the implementation of a totally new economic regime in answer to reoccurring problems inherent in capitalism in general.
The implementation of a new model is not a unique happening in United States economic history. The interventionist model—set in motion by President Roosevelt in answer to the failure of the laissez-faire model in the 1930s—dealt with the obvious flaw inherent in capitalism in general namely, its inability to maintain a level of aggregate demand consistent with full employment. Implementation of the interventionist model prevented a massive depression of the type experienced in the 1930s from being repeated due to the larger role played by the government sector in maintaining demand via active fiscal policy, while moderating inflation through the use of monetary policy. The interventionist model also recognized the less obvious, deeper flaw of capitalism-namely, the manner in which the financial system can adversely affect the price of assets relative to that of current output. Absent any interventionist policy, the resulting decline in private investment and profits leads to a downward spiral and collapse of the financial sector.
The institutional roadblocks included in the interventionist model were sufficient to avert large disequilibriums in asset and output prices, thereby sustaining profits and precluding a deep recession. (Indeed, the Federal Reserve was not forced to act to avert a financial crisis until 1968, when problems arose in the commercial paper market.) The interventionist model, however, was abrogated during the 1980s with the reinstitution of a new laissez-faire model. The new model eliminated many of the restrictions imposed on financial sector, massive increases in national deficits through unproductive public sector spending (made even more inefficient by the resulting interest on the debt), and the growth of speculative financing schemes that left us with too many highly indebted firms. A large, financially induced depression was contained only through the reintroduction of massive governing monetary and fiscal intervention in the form of the S&L bailout and the maintenance of profits with massive deficits. Although the subsequent drop in interest rates has resulted in a rise in asset values and somewhat abated the turmoil in the financial markets, the economy continues to stagnate.
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Working Paper No.92
07 May 1993
The Current State of Banking Reform
AbstractBanking reform has always been a part of the political agenda, although policy tends to focus on the specific concerns of the public at the time of crisis; as times (and crises) change, so does the direction of public policy. The result has often been that change instituted in answer to one crisis has precipitated ensuing crises. The recent number of bank failures and resulting losses have caused public attention to once again focus on the banking system and what public policy can do to repair existing problems. In this light, Kaufman reviews the history, circumstances, and results banking reform in the 60 years since passage of the Glass-Steagall Act and speculates on the likelihood and direction of future reform.
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Public Policy Brief No.6
06 May 1993
A Path to Community Development
AbstractΗ δημιουργία ενός εθνικού συστήματος τραπεζών κοινοτικής ανάπτυξης θα βοηθούσε να καλυφθεί το χρηματοδοτικό κενό σε περιοχές που δεν εξυπηρετούνται επαρκώς από τις παραδοσιακές τράπεζες παρά τις απαιτήσεις της Πράξης Κοινοτικής Επανεπένδυσης (CRA). Οι οργανισμοί αυτοί θα είχαν την ευθύνη να προσφέρουν πίστωση, υπηρεσίες πληρωμών και αποταμίευσης καθώς και βασική δανειοδότηση σε νοικοκυριά και μικρές επιχειρήσεις στις φτωχές συνοικίες. Ένα τέτοιο σύστημα δεν θα αντικαθιστούσε την CRA αλλά θα λειτουργούσε ως συμπληρωματικός παράγοντας στο σημερινό ρυθμιστικό καθεστώς. Οι προτάσεις για εξαίρεση από τους κανόνες της CRA για τα αποταμιευτικά ιδρύματα που θα επενδύουν στα ίδια κεφάλαια των τραπεζών κοινοτικής ανάπτυξης θα αποδυνάμωναν την υφιστάμενη νομοθεσία. Τέτοιου είδους προτάσεις δεν συνάδουν με το πνεύμα της CRA και θα ακύρωνε το φόρουμ διαλόγου που λαμβάνει χώρα μεταξύ ενός τραπεζικού οργανισμού και της κοινότητας μέσα στην οποία λειτουργεί.
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Public Policy Brief No.6
06 May 1993
A Path to Community Development
AbstractThe establishment of a system of federally regulated, for-profit community development banks (CDBs) would help to fill the financial gap in areas inadequately served by traditional banks, requirements of the Community Reinvestment Act (CRA) notwithstanding. These organizations would be charged with delivering credit, payment, and savings opportunities and providing basic financing to households and small businesses in underserved areas. Such a system would not substitute for the CRA, but rather act as a supplement to current regulation. Proposed exemptions from CRA compliance for depository institutions that invest in the equity of a CDB would weaken the existing law by diluting the investment of the depository institution in its own particular community. Such proposals (under which “investment” has been defined to be as little as one-quarter of one percent of total assets) are not consistent with the spirit of the CRA and would negate the beneficial dialogue that takes place between the institution and the community in which it operates.
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Public Policy Brief No.5
05 May 1993
The Limits of Prudential Supervision
AbstractAccording to Bernard Shull, although the recent round of banking legislation—most notably the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) and the Federal Deposit Insurance Corporation Improvement Act (FDICIA)—did take steps toward preventing financial crises, it did not go far enough in the area of unifying the regulatory structure. Shull proposes unifying federal bank regulatory agencies that presently have flexible authority over competing institutions. In essence, the reorganization would integrate monetary policy and deposit insurance authority with the conventional functions of regulation and supervision. Shull contends that such an integration would foster greater efficiency, improved policy planning, and better accountability while protecting against the hazards of excessive concentration of power. Among the possibilities for a consolidated regulatory agency, Shull prefers consolidation in the Federal Reserve because it is the only banking agency whose structure was originally designed to deal with concerns about concentration of power.
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Working Paper No.91
01 May 1993
A Comparison of Proposals to Restructure the US Financial System
AbstractThis paper illustrates the potential for risk diversification through the common ownership of a hypothetical bank and nonbanking firm. The illustration has several implications for proposals for restructuring the financial system. Banks are not necessarily made safer by requiring that all nonbanking activities be conducted through separate subsidiaries. On the contrary, banks may be less vulnerable to failure if some nonbanking activities are offered through the banks directly. Moreover, the expected loss of federal deposit insurance funds may be lower even if the nonbanking activities are financed through insured deposits.
The major proposals for restructuring the financial system would permit firms in various industries to buy banks and operate them as separate subsidiaries. Some of the proposals build in safeguards to prevent nonbanking firms from using the resources of their bank subsidiaries in ways that would increase both the chance for bank failure and the expected loss of the federal deposit insurance funds. These restrictions are based on the presumption that, without such safeguards, nonbanking firms would use the resources of their bank subsidiaries to benefit their nonbank subsidiaries.
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