Rik Hafer

• PhD
• Adjunct Professor at Southern Illinois University Edwardsville

This book details the history of how rainbow trout were first introduced to Missouri streams in the latter half of the nineteenth century. The story includes a brief history of the U.S. Fish Commission, and how railroads came to be key participants in this adventure. Though focusing on Missouri, the story is applicable to many other states.

It has been shown that country-level IQ and aggregated performance by school-age children on international assessment tests in math and science are by-in-large capturing analogous indicators of the cognitive human capital. We expand that analysis by comparing country-level IQ to the World Economic Forum’s Human Capital Index (HCI). This index, comp...

Based on previous work which has found that human capital development is a key factor, and work that has shown nation-level IQ to be a robust predictor of entrepreneurial activity, the author tests whether IQ, all else the same, helps predict female entrepreneurship, measured using the Female Entrepreneurship Index developed in 2015 by Siri Terjese...

Previous research has found that there is a statistically significant, positive link between country-level IQ and various measures of aggregate production, such as GDP. This study extends that analysis by estimating the relationship between IQ and a new measure of economic welfare. Developed by Jones and Klenow (2016), welfare is not a measure of s...

Research finds that individuals with higher levels of intelligence are likely to save relatively more than others. Evidence from macro-level studies shows that countries with higher than average IQs also are characterized by greater levels of saving. These two outcomes suggest the testable hypothesis: Do countries with higher national average IQs,...

We utilize two measures of entrepreneurial activity not often used in previous research to investigate the relationship between economic freedom and entrepreneurship. One is the Global Entrepreneurship and Development Index. The second is the number of newly formed corporations in a country from the World Bank. We use the Fraser Institute’s Economi...

Do national differences in cognitive skills (CS) predict a nation’s likelihood of generating high-quality entrepreneurs who create and expand high-value businesses? We answer this question by estimating cross-country regressions that use the Acs and Szerb Global Entrepreneurship Development Index (GEDI) and a measure of national CS. After including...

Purpose The purpose of this paper is to test whether entrepreneurship is a significant factor in explaining economic growth at the state level. Design/methodology/approach This paper, unlike previous work, uses the Kauffman Index of Entrepreneurial Activity (KIEA) as the measure of entrepreneurial activity. Based on standard growth regressions usi...

There is evidence at the individual level that alcohol consumption and IQ are positively related as individuals with higher IQ scores choose to consume more alcohol. The purpose of this paper is to empirically test whether this relationship holds at the national level as well. Using national IQ measures and data on per capita alcohol consumption, w...

We investigate the relationship between economic freedom and bond ratings at the state level by asking: Are state bond ratings, ceteris paribus, positively related to economic freedom? Using bounded Tobit we test for the relationship between economic freedom and an aggregate index comprised of ratings by S&P, Moody’s and Fitch. We also test the rel...

This article arises from two related research programs. One examines the relationship between financial development and economic growth. The basic conclusion from this work is that countries that experience greater financial development also experience faster rates of economic growth and higher levels of income per capita (King and Levine 1993a, 19...

In this paper we test the relationship between changes in economic freedom and wellbeing. Unlike previous work which has relied on international data sets, the novelty of this paper is that we use state-level data. Using the economic freedom measures provided by the Fraser Institute and a recently published data set on well-being across states, we...

National measures of cognitive skill, including IQ tests, have received attention recently as a possible driver of cross-country productivity differences. In a parallel literature, national measures of entrepreneurial activity and pro-entrepreneurship policies have received similar attention. This paper is the first to demonstrate that higher natio...

There is ample evidence that well-being, measured in various ways, is positively related to economic freedom across countries. Does this relationship hold at the sub-national level? Answering that question is the purpose of this study. Using regression analysis, we test whether economic freedom has an independent effect on well-being across states...

In the cross-country literature, cognitive skills are robust predictors of economic growth. We investigate claims by psychologists that the same is true at the state level. In a variety of specifications using four proxies for average state IQ used in the psychology literature, little evidence is found for a robust IQ-growth relationship at the sta...

When money is added to a dynamic IS model, evidence from six countries indicates that money growth usually helps predict the GDP gap and that the predictive power of a short-term real interest is much weaker than previous work suggests. Thus, for dynamic IS models such as that used by Rudebusch, G.D., Svensson, L.E.O. [1999. Policy rules and inflat...

There is an emerging consensus that money can be largely ignored in making monetary policy decisions. Rudebusch and Svensson [1999, Policy Rules and Inflation Targeting. In Taylor, J.B. (Ed.), Monetary Policy Rules. University of Chicago Press, Chicago, 203–246; 2002, Eurosystem Monetary Targeting: Lessons from US Data. European Economic Review 46,...

The stock market—the virtual place where corporations raise capital—has come to symbolize business more profoundly than any other entity or institution. This book provides a glimpse into the history, development, regulation, and increasing importance that the stock market plays in business and economic growth, as well as the investment strategies o...

The Federal Reserve System, founded in 1913, is recognized as one of the most influential policy-making bodies in the United States. Its duties including managing the country's monetary policy, regulating and supervising banks, and monitoring the financial system, set it apart from other government agencies. Hafer provides a comprehensive explanati...

There is substantial research effort devoted to identifying a sufficient statistic for monetary policy. The purpose of this paper is to broaden the scope of the on-going investigation along three dimensions. First, we follow up the Rudebusch-Svensson claim of parameter instability in the output regressions by examining the statistical stability of...

This paper tests whether financial innovations in the Philippines distorted the long-run relation between real money balances, income and interest rates. Using data for the monetary base, M1 and M3 over the period 1980--1998, we cannot reject the hypothesis that there does not exist a standard money demand relation between M1 and M3, real income an...

Darryl Francis was president of the Federal Reserve Bank of St. Louis from 1966 to 1975. Throughout those years he was a leading critic of U.S. monetary policy. Francis argued in policy meetings and public venues that monetary policy should focus on maintaining a stable price level. In contrast, most policymakers at the time believed it possible to...

An important policy question is whether nominal money is relatively more useful than interest rates in explaining movements in real output. Previous analyses usually rely only on U.S. data or other financially developed countries from a specific region, such as the EU. This study examines the empirical relation between money, interest rates, and ou...

An important policy question is whether nominal money is relatively more useful than interest rates in explaining movements in real output. Previous analyses usually rely only on U.S. data or other financially developed countries from a specific region, such as the EU. This study examines the empirical relation between money, interest rates, and ou...

In October 1979 the Federal Reserve, in an attempt to curb double-digit inflation, announced that it would place more weight on monetary aggregates in policy deliberations. This policy shift helped reduce inflation but sent the economy into a recession. Three years later the Fed abandoned monetary targets and returned to targeting the federal funds...

From the 1960s to the 1980s, the Federal Reserve Bank of St. Louis played an important and highly visible role in the development and advocacy of stabilization policy based on the targeting of monetary aggregates. Research conducted at the St. Louis Bank extended earlier monetarist analysis that had focused on the role of money in explaining econom...

This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection a...

This article describes a data set consisting of weekly observations of prices for U.S. and state bonds. The period covered is from January 1855 through November 1865. This high-frequency set of asset prices is available for a period that includes significant economic, military, and political events, such as the Panic of 1857, the Civil War, and the...

Monetary policy was freed from the straightjacket of pegging U.S. Treasury interest rates following the Treasury-Federal Reserve Accord in 1951. This newfound freedom led to a growing debate inside and outside the Federal Reserve System about the appropriate measures to use as operating guides. This article examines the contributions of Malcolm Bry...

Despite the long history and the substantial evidence supporting the conclusion that persistent changes in the price level are associated with changes in the money supply, the predicted association remains dis-puted. Is it debated because the empirical relationship holds over time periods so long that it may be uninformative for practitioners and p...

Projected surpluses in the federal government's budget have generated fanfare sometimes verging on euphoria. Because the federal government last had a surplus in 1969, a projected surplus for fiscal year 1998 and later years is being viewed as something of a milestone. Unlike policies of the last three decades that have at least paid lip service to...

We test for the link among selected EMS term structures during 1979–1995. By decomposing each term structure into its common trend and transitory components, we find that EMS common trends move together over time, that the German trend is not the driving source of the shared co-movements, and that the transitory components (‘spread’) are more loose...

Recent studies have found that money loses its explanatory power over output if the 1980s are included in the sample. Interest rates, not money, appear to predict output. Using annual data for 1915-93 and quarterly data for 1960-93, the authors demonstrate that the supposed breakdown in the money-output relationship stems from the type of stationar...

Monetary policy rules which rely on the monetary base have been advocated by Meltzer and McCallum. Proponents claim that following monetary base rules would minimize fluctuations around the target growth rate for nominal GNP. Critics of such rules contend that currency has not been properly accounted for in their analysis. This paper examines McCal...

Some critics of recent monetary policy have focused on slow M2 growth, claiming that the Federal Reserve is too interested in price stability and is forsaking its growth mandate. Others criticize the Fed for achieving price stability too cautiously and urge the adoption of a rule that seeks to eliminate inflation more quickly. ; R. W. Hafer, Joseph...

Monetary policy rules that rely on the monetary base have been forwarded by Meltzer (1984) and McCallum (1988). They claim that following monetary base rules would minimize fluctuations around the target growth rate for nominal GNP. Critics of such rules contend that currency has not been properly accounted for in their simulations. This paper exam...

A preliminary for European monetary union is convergence of the European Monetary System's members' policies. Using a cointegration framework with short-term interest rates and monetary bases as monetary policy measures, the authors find policy convergence has not occurred. Nor, contrary to popular beliefs, does the Bundesbank dominate other member...

Recent changes to China's financial system, in particular ongoing interest rate liberalization, gradual movement toward a more flexible exchange rate regime, and rapid development of capital markets, have changed substantially the environment in which monetary policy operates. In light of these changes, we estimate an error correction model using a...

Two popular methods of forecasting inflation are evaluated in an international setting. Forecasts derived from interest rate models and time-series models are evaluated in terms of their ability to improve on naive, no change forecasts. Both forecasting methods are found to generally improve upon the naive alternative over an evaluation period enco...

In this article, four readily available one-quarter-ahead forecasts of the three-month U.S. Treasury bill rate are compared. The forecasts considered are (1) a prediction from the futures market, (2) a forecast derived from an implicit forward rate calculation, (3) a survey-gathered forecast, and (4) a no-change forecast. Each forecast is examined...

This paper uses recent cointegration test procedures to investigate the underlying economic relationship between real money balances, real income, and interest rates for the United States. Unlike recent studies of money demand, the authors' analysis uses quarterly data spanning the period 1915-88, thus providing a sample encompassing a wide variety...

There has been relatively little systematic investigation of the sensitivity of policy inferences derived from vector autoregressive models to changes in the lag structure. The authors investigate this issue using a simple macro model consisting of output, prices, money, and interest rates. Using six different lag length selection criteria that var...

Forecasts are an inherent part of economic science and the quest for perfect foresight occupies economists and researchers in multiple fields. The release of economic forecasts (and its revisions) is a popular and often publicized event, with a multitude of institutions and think-tanks devoted almost exclusively to that task. The European Central B...

It has been suggested that inflation forecasts derived from short-term interest rates are as accurate as time-series forecasts. Previous analyses of this notion have focused on U.S. data, providing mixed results. In this article, the authors extend previous work by testing the hypothesis using data taken from the United States and five other countr...

Gerald P. Dwyer, Jr. and R. W. Hafer The articles and commentaries included in this volume were presented at the Federal Reserve Bank of St. Louis' thirteenth annual economic policy conference, held on October 21-22, 1988. The conference focused on the behavior of asset market prices, a topic of increasing interest to both the popular press and to...

Although numerous articles examine the effect on VAR forecasts from changes in the variables included in a model, little has been done to examine the effect that changing the lag structure has on forecasting accuracy. The latter analysis is made difficult by the fact that no overriding rule exists for ex ante selection of lag length in such models....

bill futures rates are better predictors of the future Treasury bill rate than forward rates. In a recent paper, MacDonald and Hem (1989) analyze 44 separate contracts delivered during the period 1977-87 for forecast horizons ranging from two days ahead to 91 days ahead. Their evidence shows that the Treasury bill futures rate generally delivers a...

It has been one year since the global decline in stock prices and the principal cause remains a mystery. For some observers, the decline was a natural conclusion to an unfounded run-up in prices that occured especially during 1987, both in the United States and abroad. For example, the Brady Commission noted that “[Ails in the U.S., stock valuation...

Does an increase in the federal debt cause inflation? Gerald P. Dwyer (1982), us ing a par value measure of debt, finds no such causal link. W. Michae l Cox (1985), using a market value measure, finds that increases in d ebt produce higher inflation rates. The authors reconcile these resul ts by demonstrating that failure to capture the interest ra...

A substantial literature has examined the effects of the weekly MI announcement on financial market variables. This work generally has investigated the temporal nature of this relationship by relying on the well-known policy regime changes that occurred in October 1979 and October 1982 as likely points of structural change. We examine this issue us...

Also called: Inflation and stock prices: a long term view

This paper tests Milton Friedman's hypothesis that increases in inflation uncertainty, ceteris paribus, yield higher levels of unemployment. Tests are made using quarterly measures of inflation uncertainty taken from the ASA-NBER survey. Based on data from the 1972–1984 period, we find general support for the hypothesis.

Previous studies of relative price variability assume that all supply changes are unanticipated or that supply elasticities are equal across markets. In this paper, we extend these models by relaxing these restrictive assumptions. Our resulting theoretical expression for relative price dispersion reveals an independent role for unanticipated and an...

This paper derives one-month ahead forecasts of the money (M I) multiplier using the Multi-State Kalman Filter and Box-Jenkins ARIMA methods. A comparison of the forecasts far the period 1980-82 reveals that the Multi-State Kalman Filter procedure was generally superior to the ARIMA procedure In terms of most summary statistics. The superiority is...

/'ll, NUMBER of studies have demonstrated a r'ela- tively close empirical relationship between changes in a transaction-based measure of money and changes in nominal income. This relationship, found for a variety of economies, suggests that monetary policymakers can directly influence the path of nominal income over time by changing the growth of t...

A vast and often confusing economics literature relates competition to investment in innovation. Following Joseph Schumpeter, one view is that monopoly and large scale promote investment in research and development by allowing a firm to capture a larger fraction of its benefits and by providing a more stable platform for a firm to invest in R&D. Ot...

A vast and often confusing economics literature relates competition to investment in innovation. Following Joseph Schumpeter, one view is that monopoly and large scale promote investment in research and development by allowing a firm to capture a larger fraction of its benefits and by providing a more stable platform for a firm to invest in R&D. Ot...