Journal of Economic Issues

The author investigates income distribution according to gender and race differences in mortality rates in the United States. "This study merges economic and epidemiological literatures. A more extensive application of the Paglin (1975) life cycle hypothesis is proposed. Not only are adjustments made for varying ages, they are also made for varying survival probabilities from one age to the next. Finally, some consideration is also given to the implications of varying morbidity rates across race and gender for the distribution of economic well-being."

PIP Flaws in the discussion of the baby-boom retiree problem make the Social Security problem seem worse than it really is. Problems include the overwhelming emphasis upon fiscal and related financial aspects at the expense of consideration of the output of goods and services, and the almost total neglect of projected real income and productivity rises. Rather, baby-boom retirees can be coped with on the basis of hypothetically reasonable projected magnitudes. It is currently being argued that the future US economy cannot provide Social Security support for the upcoming baby-boom retirees. However, people who support such an argument fail to consider the main determinant of capacity to support. That determinant is the historically established rise in productivity as expressed in per capita output or output per hour of the employed population. Maintaining Social Security pension support through 2030 involves little to no strain upon society, while abolishing such support would cause considerable strain. The authors describe who Social Security supports now and in the future, and explain the capacity of US society to fund Social Security in the decades ahead.

PIP The relationships among rural-urban migration, underemployment, and government policy are explored using data from two surveys on female migration to Fortaleza, Brazil. The results suggest that for this segment of the labor force, the unfavorable responses to government policy predicted by Michael Todaro and others do not occur.

PIP The concept of the feminization of poverty in the United States is examined from a demographic perspective, in particular by a comparative analysis of poverty among female-headed and other-headed households. The author concludes that the growth of female-headed households has been an important factor in the feminization of poverty and that the gap in relative affluence between female-headed and other households is increasing. She also notes that female-headed households suffer most from economic downturns because of sex segregation in the work force.

The author examines some aspects of the current situation concerning immigration to the United States. He predicts that the 1990s will witness the largest flow of immigrants into the population and labor force of any decade in the country's history; furthermore, since there is no universally accepted right to immigrate, the adoption of migration policy is one area of economic policymaking that is not controlled by market forces. He also notes that while the country's need is for a highly skilled, motivated, and educated labor force, the majority of current immigrants have low skill levels and relatively little education. The need to develop and implement a migration policy that is in tune with the country's economic objectives is stressed. He concludes that "the resurrection of mass immigration from out of the nation's distant past was a political accident; its perpetuation in the 1990s is contrary to national interest. Immigration reform, therefore, needs to be [in] the forefront of the nation's economic policy agenda."

PIP The debate between those, like the Ehrlichs, who see population growth as a global problem and those, like Julian Simon, who maintain that population growth acts as a catalyst for development is reviewed. The author maintains that both schools are at fault in focusing on the number of people rather than on their behavior. He concludes that the carrying capacity of the planet is indeed limited, whether an ecological or an economic approach to the problem is employed.

PIP The authors present a case for including the patriarchal model into the analysis of female labor force participation in the United States. They argue that only if it is assumed that the division of labor and distribution of goods and services are structured to benefit the male head of the family can various trends be explained, including the low relative income of women compared to men, the increase in female labor force participation without a corresponding increase in household work by men, and the increasing number of divorces initiated by women despite the fact that divorce increases female poverty.

PIP This article applies a gender perspective to a consideration of the recent economic and political reforms in Eastern and Central Europe. After an introduction and a brief overview of recent empirical studies of the impact of women's economic, political, and social status, the paper explores the difficulties inherent in attempts to create an East-West dialogue on women's interests. The article proposes that these difficulties can be articulated by 1) identifying whether a political regime uses an essentialist (men and women have fundamentally different biological natures) or a social constructionist (most observed differences between men and women are socially created) view to define the nature of women; 2) identifying how these distinct views of gender relations are articulated in the philosophical underpinnings of the two political regimes (the liberal Western system that strictly separates the public and private spheres while assigning different activities for men and women and the socialistic/communistic system that subordinates social reproduction to the sphere of production); and 3) comparing how these views have been articulated in social and institutional arrangements of gender relations in the two regimes. The article then claims that an understanding of the interaction between gender relations, political theory, and social practices in both the West and the East is essential for understanding the problems involved in discussions of the political-economic transition and how it affects men and women.

Curiously and in spite of its name, very few business cycle theories actually treat it as a cycle. Mainstream economists, for example, model all macroeconomic fluctuations as a function of exogenous forces. In their view, the economy remains at full employment indefinitely unless impacted by some external event. Post Keynesian economists disagree strongly with this characterization, arguing instead that business-cycle fluctuations are endogenously generated. The goal of this paper is to compare the explanatory power of four business cycle models - three mainstream and one Post Keynesian - for the U.S. economy since 1971. While the test employed is a simple one, the results are very clear: no model's performance comes even close to that of the one based on Keynes's seventy-year old analysis.

The Argentine political economy has experienced a number of adverse developments, especially during the last three decades. We analyze the country's development trajectory with the help of a framework based on the writings of C. E. Ayres. This framework integrates the cumulative nature of technological progress and the ceremonial-instrumental dichotomy in the nature of institutions. An improved understanding of the causes as well as consequences of the development process is gained as we can identify more clearly how agents' decisions led to a weakening of the skill-and equipment-base in the country, significantly weakening its economic potential.

This paper updates and extends my earlier work on how the middle class fares throughout the world based on the microdata sets that comprise the Luxembourg Income Study (LIS). Wave #6 LIS data, recently released and centered around 2004, provides an opportunity to assess what has happened to the size of the middle class around the world in the early 2000s. In contrast to the 1980s and 1990s, there was no noticeable decline in the middle class during the early 2000s. The paper provides further evidence that the size of the middle class in each nation depends mainly on government tax and spending policies. In particular, it shows the key role played by family allowances and paid family leave in supporting a national middle class.

It is well accepted among Institutionalist and Post Keynesian scholars that portfolio investment markets are driven by agents' expectations rather than "the fundamentals." This explains, it is argued, why asset and currency prices are so much more volatile than and often clearly out of line with what we would otherwise consider to be their underlying determinants. What is rarely addressed, however, is how those expectations are formed. This paper fills the void by proposing a specific view of agents' expectations based on the mental model they employ to understand currency movements. The paper derives this schematic by examining market participants' psychological propensities and the world view of the subculture of which they are members. It will be shown that the model is consistent with the salient features of the foreign exchange market and it is employed to explain the dollar's fall from 2001 through 2008.

We have used original survey data on French firms to investigate whether there is a difference in the determinants of ISO (International Organization for Standardization) 9000 certification between the manufacturing and service sectors. Using an empirical approach, our findings reveal for the first time that the determinants of ISO 9000 certification significantly differ between manufacturing and service firms, especially when we examine features of the internal strategy of these firms (quality improvement, cost reduction and innovation). However, we have also obtained evidence that the characteristics of firms (firm size, corporate status and previous experience with similar standards) and features of their external strategy (export and customer satisfaction) play a significant role in the ISO 9000 certification across both manufacturing and service sectors. The results of this study could enable policy-makers to better formulate and effectively apply regulations affecting the business success of firms in both the manufacturing and service sectors.

Clarence Ayres wished to avoid moral relativism or agnosticism in the social sciences, yet he also rejected what he called the âtranscendentalâ epistemology of classical philosophy, an epistemology grounded in the desire to know absolute or ultimate truths. He wanted to find a middle ground between absolutism and relativism by separating âtechnologyâ from âceremony,â and by replacing the ends/means >i>dichotomy>/i> with an ends/means >i>continuum>/i>. This paper examines his articulation of the issues, and in this context also examines the work of two more recent theorists, Gary Becker and Richard Posner. We conclude that Ayres' epistemological middle ground remains elusive.

This article highlights Simon Patten's contributions to the institutionalist method and view of abundance. It illustrates Patten's role in the cross-fertilization between early institutionalists and the German Historicists. Patten's views on the societal transition to abundance, the method of social inquiry, and the role of social scientists are re-examined in light of the current exigencies of a climate-constrained, post-industrial economy. The policy implications that emerge from Patten's rejection of the presumption of scarcity are examined in a contemporary context. The article suggests that the historical and evolutionary approach that Patten fostered among institutionalists is essential to the identification and implementation of the socio-economic reform requisite of an age of abundance.

Since March 2008 we have witnessed a flurry of government "bailouts," directed to assist financial institutions. What has made these more or less acceptable to the public is the hope that they are temporary, implemented in a state of emergency, and that they offer market solutions and won't structurally change capitalist relations. However, no temporary stimulus and bailouts can address the systemic instability in financial capitalism identified by Post Keynesians and Institutionalists. © 2009, Journal of Economic Issues / Association for Evolutionary Economics.

India's wastelands have been classified as both over utilized and underutilized. Perplexingly, an apparent tragedy of the commons exists alongside extensive official management powers. In this paper, I argue that the complexity of governance structures may be inadvertently worsening the situation. Looking to recent work on contested property and the anticommons concept, I suggest that an anticommons amongst those officially controlling the lands is casting a long and unexpected shadow by encouraging the emergence of open-access de facto resource exploitation and discouraging de facto management. This extension of the anticommons concept implies that the effects of anticommons are not necessarily limited to under exploitation, as most commonly used in the developing anticommons literature. It points to a wider examination of the harmful effects of anticommons situations.

Health policy in the United States struggles with apparently conflicting purposes: (1) access to health care and (2) cost-containment. The failures of policy to resolve this apparent conflict have produced inequities in the health system and the perverse outcomes of high costs and poor access. The failures of policy are associated with the third-party payment system that has become a "rationing transaction" in John R. Commons' hierarchy of transactions. The dominion of private interests over the payment system elevates the financial interests of insurers over the interests of patients. Commons' approach to "reasonable value" as a means of resolving conflicts of interest through a process that engages all participants in the going concern suggests a strengthened role for the public sector in the payment system to achieve the public purposes of the health system.

The present paper explores the relationship between corporations' ability to generate free cash, the lopsided current account, and recent speculation in stocks and housing. It argues that some portion of recently generated free cash is related to the outsourcing of production. Over the last two decades, foreign saving, consequent on the lopsided U.S. current account could not be absorbed by a corporate world beset by its own plethora of saving. Consequently, excess saving, both domestically grown and imported flowed toward speculative avenues â in the 1990s in stocks and more recently in housing.

We examine the extent to which neoliberal or post-neoliberal forces have been generating a new global or regional social structure of accumulation (SSA) or mode of regulation (MOR) through enhancing growth, productivity and financial stability. After outlining the contours of neoliberalism and post-neoliberalism, the record of economic performance is reviewed over the 1950s-2000s. We conclude that highly advanced capitalist economies have mostly been undergoing regime maturation while numerous nations of Asia (especially China) have been transforming their SSAs or MORs. Neoliberal or post-neoliberal institutions must necessarily be supplemented by changes in many other areas for long wave upswing to emerge.

This article reviews and assesses Elinor Ostrom's Institutional Analysis and Development (IAD) framework and Paul A. Sabatier's Advocacy Coalition Framework (ACF) to determine their usefulness to institutional economics with regard to the theory of normative criteria and policymaking. The conclusions are that (1) Ostrom's IAD is not of assistance to institutional economics, (2) Sabatier's ACF and institutional economics have four important ideas in common, (3) the different levels of normative beliefs found from ACF studies have not been integrated into institutional economics, and (4) the technological and ecological criteria found in institutional economics have not been integrated into ACF.

A main implication of C.E. Ayres tool-combination principle is that the goal of technical progress is best served by a non-proprietary, open science public policy. Joseph Schumpeter claimed that new combinations are consequential only when they have been successfully commercialized. The capacity to privatize knowledge is, moreover, a powerful stimulus to innovation. This paper reexamines the Ayresian and Schumpeterian positions using evidence from the Bayh Dole experiment. The Bayh Dole Act, which gave universities title to inventions resulting from federally-sponsored research, created a laboratory wherein the trade-offs between diminution of the appropriable knowledge fund (due to patenting) and incentives to commercialization can be appraised.

In 1963, the North Dakota Legislature amended the North Dakota Century Code to ensure that all licensed community pharmacies in the State are majority owned by pharmacists registered in the State. During the 2008-2009 legislative session, a debate arose about whether this law should be repealed. Those in favor of repeal attacked the law using the neoclassical arguments of efficiency, competition and lower prices. Those opposed to the law's repeal argued that pharmacists must own pharmacies in order to protect the public's welfare. This paper explores the arguments made for and against this law and draws two major conclusions. First, the arguments made by both sides are flawed because neither side fully incorporates the historical, physical and cultural characteristics of North Dakota communities into their analyses. Second, North Dakota legislators voted overwhelmingly to retain the law. Moreover, prima fascia evidence indicates that the legislators based their decisions on Institutional considerations.

Nation states having prompted powerful opposition with their claim to be solely responsible for the management of drinking water, the norms controlling governance of this resource have become increasingly fragmented between different normative powers, each defending a distinct "model." To put these models into perspective, it is suggested that the action stratification analysis developed by Giddens (1984) should be used, for it may prove revealing when applied to the question of water services governance. It is capable of demonstrating how the different institutional levels fit together in providing a framework for local practices, stressing the importance of "intersubjectivity" in the process of creating meaning and ultimately underlining the importance of recursive practices in reproducing and transforming the institutions under consideration.

This article conducts a field-level analysis of institutional change in the pulp and paper industry in the state of Maine over the past 30 years. Furthermore, it considers the natural environment as a field-level actor, which can focus and redirect attention and resources, serve as a constraint on previously acceptable behavior, and act as a catalyst for institutional change.

One of the key issues in K. Polanyi’s (1944, 1957) work is that capitalist markets maybe inconsistent with societal values. This (external) inconsistency eventually leads to areaction against the rationale of the market, what Polanyi refers to with the notion of thedouble movement. The double movement, in turn, may disrupt the (internal) consistencyof the market, thereby leading to dramatic consequences for society, as was the case withfascism and nazism. A crucial question therefore is how to achieve a protective responsewithout undermining society. The paper contends that the two types of (in)consistencybasically depend on the shared knowledge available in a given society. It therefore discusseshow that knowledge arises and how actors may favor or prevent change by acting onlearning processes. The aim is to stress that a policy for change not only requires ascientific perspective that is not restricted within disciplinary boundaries, it also requiresa dialogue between social scientists, policy-makers and all those sections of society whocan be affected by a change in the status quo.

Gunnar Myrdal made important contributions to policy advice that address the problem of international inequalities. These emerged from his attack on mainstream equilibrium analyses as applied to underdevelopment. In reacting to this attack, the mainstream drew upon its theory of commercial policy, and classified him as a protectionist and supporter of import-substituting industrialization. This paper clarifies that he was in support of both export promotion and import substitution. He also showed a good awareness of the desirability in different contexts of the main trade-policy instruments, but was by no means reaching knee-jerk conclusions in ranking them as the subscribers to the theory of commercial policy do. This is in harmony with his concept of development as involving an upward movement of the entire social system, including the recognition that trade policy is only one component of any development plan and that there have to be domestic reforms as well.

Paul Dale Bush analyzed the conditions under which "progressive" institutional change is likely to occur. After 60 years of failed development policies, Africa is in desperate need of such change. However, the IMF and World Bank continue to support corrupt dictatorships and retard the forces of progressive institutional change. This paper outlines the case for a new policy approach that emphasizes democracy, accountability and economic flexibility as crucial ingredients to create the conditions for progressive institutional change in Africa. The paper develops policy recommendations emphasizing political conditionality and economic unconditionality to lay the foundations for a developmental state in Africa.

The use of height data to measure living standards is now a well-established method in the economic literature. While much is known about nineteenth century Southern black legal and material conditions, less is known about how their nineteenth century biological conditions were related to institutional change and the physical environment. Average Southern black statures ironically increased during the antebellum period and declined â at least temporarily - after emancipation. On the other hand, average Southern white statures declined throughout the nineteenth century. It is geography and direct sunlight (insolation) that present an additional attribute of nineteenth century black and white stature, and greater insolation is documented here to be associated with taller black and white statures.

In the attempt to deepen the understanding of Keynes' thought as an international macroeconomist, we explore the hypothesis of consistency between his general methodological approach to the economic material and his way of reasoning about international economic relations. As a first step toward this direction, we investigate the methodology of >i>The Economic Consequences of the Peace>/i> and find that it reflects Keynes' attempt to cope with the attributes of the complexity characterizing the European settlement for the post-war period, e.g., 1) organic interdependence among variables at play, 2) irreducible dilemmas and situations of conflict, as well as 3) the need for external, public assistance to overcome the impasse and promote a "shared responsibilities" approach to the imbalances. Striking similarities appearing with the method of Keynes' economic diplomacy in the 1940s are shown to substantiate the current rediscovery of his plans for Bretton Woods.

The first chairman of the U.S. Tariff Commission, Frank W. Taussig, expected the new body to put an end to "haphazard" and "irresponsible" management of trade policy. Reforming trade agreements was a top priority. In 1922, acting on the Commission's weighty report, >i>Reciprocity and Commercial Treaties>/i> (1919), the State Department initiated a trade-agreements policy centered on the unconditional form of the most-favored-nation (MFN) principle. But after observing the program for a decade, Taussig urged that "the whole present policy should be scrapped." This essay examines the evolution of U.S. trade agreements from 1919 to 1932 and the reasons for Taussig's disaffection.

The formation of interest groups is path-dependent. The ideology and thus behavior of interest groups cannot be isolated from history, customs, economic conditions and changing alternatives open to individuals. In Australia, there were historical and traditional divisions concerning farmers producing for international markets that depend on flexible world prices and those producing for the domestic market with stabilized and subsidized prices. The National Farmers Federation (NFF) (1979) is the result of a historical-evolutionary-developmental process of preceding agricultural interest groups. Hence, an understanding of the NFF ideology that promotes free competition and the elimination of agricultural subsidies worldwide, in contrast to the agricultural interest groups in the United States and UK, requires an examination, using an institutional and economic complexity approach, of the evolution of agricultural interest groups in Australia.

The Alaska Gasline Inducement Act (AGIA) was enacted by the State of Alaska in 2007 in an attempt to progress the construction of a natural gas pipeline from the Alaska North Slope to North American markets. The Act conveys monetary inducements from the state to the exclusive licensee in exchange for certain performance requirements. The financing of any pipeline requires the contractual commitment from the shippers (producers) to pay to ship the gas over an extended period of time. However, many of the performance requirements of AGIA are antithetical to the commercial interests of the shippers. A flawed financial analysis of the project by the administration overstated the economic vitality of the project, and hence understated the severity of the commercial issues. Consequently, the prospects for success in getting a pipeline constructed appear doubtful.

This paper discusses the regressive nature of tax exemptions for children compared to child allowances and estimates the decline in child poverty in several developed countries due to child allowances. The paper then estimates the decline in child poverty in the United States due to tax exemptions for children and simulates the impact of various possible child allowance programs on child poverty in the United States. It finds that a $3000 to $4000 child allowance would reduce child poverty in the United States to the level of other developed nations and, due to the costs associated with child poverty, be a cost effective policy change.

International capital flows are constrained by a lack of complementary human capital, information asymmetries and transaction costs for small loan sizes. Extant research has provided a myriad of economic and cultural explanations of how microcredit has overcome these. Based on these, the paper develops a simple economic framework that accounts for these behavioral and institutional factors: a discontinuous marginal revenue curve and a U-shaped supply curve of capital for the microcredit environment. It then uses these analytical tools to explain capital flows and interest rates charged by traditional moneylenders. Finally, it uses these tools to present the growth of microcredit and the increase in financial flows and to explain why microcredit interest rates are lower than those of moneylenders, but higher than those of commercial banks to wealthier borrowers.

This study conceptualizes the authoritarian and elitist state that emerged in Russia by the mid-2000s as a particularly Russian type of neoliberal state and explains why at present in Russia, economic and political democratization cannot commence as a movement from below, but must be instituted from above. The paper contrasts existing viewpoints on deliberate market construction, constructivist neoliberalism and institutionalism, and elucidates why the policies of constructivist neoliberalism will not lead to democratic change in Russia. Therefore this paper argues for an institutionalist plan of democratic market construction based on ownership empowerment and discusses policy strategies for its implementation.

Corporations that can either overcome or repeal the regulations that control them should be replaced, not re-regulated. Their replacements should include municipally-owned and electric-powered mass transit systems and worker-owned cooperatives producing the needed equipment and rolling stock. We also need depositor-owned mutual banks and a democratically-controlled development bank. We need a Treasury that holds the Fed democratically accountable for interest rates and foreign exchange rates. We need a network of municipally-owned utilities connected by a power grid owned and operated by the Federal government. These are just some of the progressive alternatives to re-regulation.

This paper studies the spillover effects of economic fluctuations in the United States on economic activity in Latin America and the Caribbean. Fluctuations in U.S. GDP growth have spillover effects that stimulate real growth and accelerate price inflation across many countries. Underlying these spillover effects are significant movements in private consumption, and to a larger extent, private investment. Openness to the United States has significant effects that accelerate growth of exports and/or imports across many countries. The net effects on the trade and current account balances vary across countries. Overall, the evidence supports concerns about adverse spillover effects of a slowdown in the U.S. economy on neighboring countries, necessitating careful mobilization of countercyclical domestic tools to hedge against potential risk and mitigate the severity of economic downturns.

This paper interprets the "buying craze" among American tycoons between 1870 and the Second World War concerning mainly Renaissance art, particularly paintings, with the emphasis on the process of this transfer rather than on the art works and the resulting collections. It analyzes the roles of the House of Duveen, the art expert Bernard Berenson and other agents that acted as dominant intermediaries instrumental to the American Renaissance in fine art. Their efforts produced outstanding private collections and eminent art museums. Original American art, however, was crowded out, slowing down its further development for quite some time. The paper shows a slice of Thorstein Veblen's world and of its leisure-class elite engaged in conspicuous consumption and honorific expenditures in search of pecuniary decency.

This paper focuses on a number of issues that have arisen in my efforts to deal with the history of American institutional economics in the interwar period. The specific issues addressed here are (1) the choice of time frame; (2) the definition of institutionalism in terms of its commonly held ideas; (3) the treatment of the network of personal contacts that make up the institutional movement; (4) the treatment of certain institutional and cross-disciplinary connections and supports; and (5) the variety of reasons lying behind the relative decline in the position of institutional economics after World War II. Each of these issues is discussed in light of historical material and examples and with a view to detailing the specific challenges and possible solutions involved.

This inquiry explores crises facing developmental states in Latin America related to their national strategies for economic growth. Some patterns commonly associated with an import substitution strategy are argued to be rooted in structural and institutional variables related to an abundance of natural resources. However, with the demise of national development strategies after the 1980s, external and internal efforts and measures stemming from big business and financial capital challenged the developmental state. During the 1990s countries in Latin and South America followed similar patterns toward financial integration. Failures related to this recent strategy opened space for a new development policy.

This paper documents Hohfeld's influence on interwar American institutionalism. We will mainly focus on three leading figures of the movement: John Rogers Commons, Robert Lee Hale, and John Maurice Clark. They regarded Hohfeld's contribution on jural relations as a preliminary step toward the understanding of the adversarial nature of legal rights. Albeit with substantial differences in style, method and emphasis, Hohfeld's schema provided a powerful analytical and rhetorical tool for their analysis.

Transaction cost economics explains organizational forms in a market vs. hierarchy dichotomy as hybrids of those two ideal forms. The present paper, in contrast, argues that pure market and hierarchy, including their potential formal hybrids, are an empirically void set and that coordination forms have to be conceptualized in a fundamentally different way. A relevant organizational space must reflect the dilemma-prone direct interdependence in a complex world that either leads to (1) informally institutionalized, problem-solving cooperation (the instrumental dimension of institutionalization), or (2) mutual blockage, lock-in, and power- and status-based market and hierarchy failure (the ceremonial dimension of institutionalization). Institutionalized cooperation is established as a genuine organizational dimension that generates a third "attractor" in the new organizational space. Thus, an organizational triangle is constructed as a more realistic heuristic device for empirical organizational research. The Organizational Triangle is then tentatively applied in a couple of case studies.

In the traditional trade-off between internalization and externalization, economists tend to undervalue the role of intentionality (Williamson 1991) and to accord a dominant place to market coordinating devices (ex post coordination) compared to hierarchical coordinating devices (ex ante coordination). The aim of this paper is to show how the introduction of the concept of coherence, which is frequently invoked by economists in order to apprehend the firm specificities (Holmstrom 1999), may help to revaluate the trade-off between markets and firms in the advantage of the later. In particular, it will be shown that the attributes of coherence in ex post coordinating devices are fundamentally different from the ones that can be found in ex ante coordination systems.