Economics

Financial development and pathways of growth: State branching and deposit insurance laws in the United States from 1900 to 1940

Financial development and pathways of growth: State branching and deposit insurance laws in the United States from 1900 to 1940
Journal of Law and Economics 50 (2007) 239-272.

Dehejia, R.H. & Lleras-Muney, A.
01/01/2007

This paper studies the effect of state-level banking regulation on financial development and on components of state-level growth in the United States from 1900 to 1940. We use these banking laws to assess the findings of a large recent literature that has argued that financial development contributes to economic growth. We contend that the institutional mechanism leading to financial development is important in determining its consequences and that some types of financial development can even retard economic growth.

For the United States from 1900 to 1940, we argue that the financial expansion induced by expanded bank branching accelerated the mechanization of agriculture and spurred growth in manufacturing. In contrast, financial expansions induced by state deposit insurance had negative consequences for both the agricultural and manufacturing sectors.

Two Wrongs Do Not Make a Right

Two Wrongs Do Not Make a Right
National Tax Journal, Sep 2006, Vol. 59 Issue 3, p491-508, 18p.

Furman, J.
09/01/2006

This paper analyzes proposals to remedy tax-induced distortions in health care by using new tax incentives and retaining all of the existing distortionary tax incentives. In the process of remedying some distortions, this approach magnifies others--most notably increasing the total tax preference for health care. The paper considers two examples--the Bush administration's FY 2007 budget proposal and a plan by Cogan, Hubbard and Kessler (2005)--and shows that both could result in higher health spending and reduced welfare. Finally, the paper discusses the circumstances in which tax incentives could be warranted to remedy market failures in health insurance.

Gasoline Prices, Interest Rates, and the 2008 Election

Gasoline Prices, Interest Rates, and the 2008 Election
The New York Observer June

Moss, M.
06/01/2006

Forget immigration, global warning, Donald Rumsfeld and abortion rights.

The hot issues of today will quickly fade away if the current surge in gasoline prices and home-mortgage rates continues unabated. And all indications are that both the price of gas and the cost of borrowing are moving in one direction only: north.

 

Financing Pro-poor Governance in Africa

Financing Pro-poor Governance in Africa
in Karen Millet, Dele Olowu and Robert Cameron (eds), Local Governance and Poverty Reduction in Africa (Tunis: Joint Africa Institute of the African Development Bank)

Smoke, P.
01/01/2006

Defines key lessons on financing pro-poor governance based on cases from Latin America, Asia and Africa (Colombia, Indonesia, Kenya and Uganda). The starting point for pro-poor fiscal decentralisation is that its major goals should be improved governance and performance, specifically, higher efficiency and equity in service delivery, economic development, and poverty alleviation. The enabling environment for fiscal decentralisation involves first the functions and the resources that might normally be allocated to local governments. Second, it can include alternative models and mechanisms to finance local governments, including intergovernmental transfers, markets, capital and donor financing.

New York City: IN THE 21st CENTURY

New York City: IN THE 21st CENTURY
Economic Development Journal, Spring 2006, Vol. 5 Issue 2, p7-16, 10p.

Moss, M. L.
01/01/2006

The article reflects on the role of New York City in the 21st century which includes bringing people together with other people to generate the information and products that are then sold around the world. It also presents a brief history of the city in becoming a leading city in the global economy. It also discusses the economic and technological innovations the city had undertaken to become a leading city and the reforms it is planning to implement to maintain its status.

Risks and Costs of a Terrorist Attack on the Electricity System

Risks and Costs of a Terrorist Attack on the Electricity System
The Economic Impacts of Terrorist Attacks Volume 2, edited by H.W. Richardson, P. Gordon and J.E. Moore II, Cheltenham, UK: Edward Elgar Publishers.

Zimmerman, R., Restrepo, C., Simonoff, J.S. & Lave, L.B.,
01/01/2006

As suggested by the title, this is a collection of essays on the economic effects of successful terrorist attacks focusing on the electrical transmission, and transportation infrastructure of the United States. Those familiar with the literature on the economic effects of natural disasters will
find the arguments and economic models quite familiar. The individual essays are by leading experts who do not necessarily agree on the most appropriate methods or policy conclusions. This provides a refreshing measure of potential controversy.

Child labor: The role of income variablity and access to credit in a cross section of countries

Child labor: The role of income variablity and access to credit in a cross section of countries
Economic Development and Cultural Change, Col. 53, Number 4 (July 2005), pg. 913-932.

Dehejia, R.H. & Gatti, R.
07/01/2005

Even though access to credit is central to child labor theoretically, little work has been done to assess its importance empirically. Dehejia and Gatti examine the link between access to credit and child labor at a cross-country level. The authors measure child labor as a country aggregate, and proxy credit constraints by the level of financial market development.

These two variables display a strong negative (unconditional) relationship. The authors show that even after they control for a wide range of variables-including GDP per capita, urbanization, initial child labor, schooling, fertility, legal institutions, inequality, and openness-this relationship remains strong and statistically significant. Moreover, they find that, in the absence of developed financial markets, households resort to child labor to cope with income variability.

This evidence suggests that policies aimed at increasing households'access to credit could be effective in reducing child labor.

Assessing New York's Borders Needs

Assessing New York's Borders Needs
Rudin Center for Transportation Policy and Management, NYU Robert F. Wagner Graduate School of Public Service, and the University Transportation Research Center at City College, City University of New York, June 2005

de Cerreño, A.L.C., Goldman, T. & Seaman, M.
06/01/2005

Rapidly growing international trade and heightened security requirements are leading to increasingly congested conditions at the border, threatening the economic competitiveness of Upstate New York. In light of these challenges, the Rudin Center for Transportation Policy & Management at New York University's Robert F. Wagner Graduate School of Public Service and the University Transportation Research Center (UTRC) at City College, CUNY, undertook a study, funded by the New York State Department of Transportation and the United States Department of Transportation, to examine New York State's border infrastructure needs.

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