Economics

Residential Mobility and Mortgages

Residential Mobility and Mortgages
Regional Science and Urban Economics 26(3-4), June 1996, pages 287-311.

Sewin Chan
06/01/1996

Mortgage applications are a detailed and accurate source of household information that is verified by underwriters, making it a more accurate data source than self-reported survey answers. This paper discusses how mortgage data can be applied to areas of economics outside mortgage finance. As a supplement to variables from the application form, the self-selection of mortgage points is used to infer expected mobility. A duration model of housing spells is estimated, and the points indicator is shown to be highly significant in predicting mobility for low loan-to-value borrowers. The findings demonstrate the potential fruitfulness of using this new data source.

Public Infrastructure, Private Input Demand and Economic Performance in New England Manufacturing

Public Infrastructure, Private Input Demand and Economic Performance in New England Manufacturing
Journal of Business and Economic Statistics, Vol. 14, No. 1, Jan, pp 91-102.

Schwartz, A.E. & Morrison, C.
01/01/1996

Much of the current debate on the economic performance impacts of public infrastructure investment relates to the input-specific effects of such investment. In this article we explore these impacts by evaluating substitution patterns affecting private input use in New England manufacturing. Using a cost-based methodology, we find that, in the short run, public capital expenditures provide cost-saving benefits that exceed the associated investment costs due to substitutability between public capital and private inputs. Over time, however, stimulating investment in private capital increases economic performance more effectively than public capital expenditures alone and in fact reduces the cost incentive for such expenditures. In addition, growth in output motivated by infrastructure investment increases employment opportunities because this growth overrides short-run substitutability.

State Infrastructure and Productive Performance

State Infrastructure and Productive Performance
American Economic Review, December 1996, Vol. 86, No. 5, pp 1095-1111.

Schwartz, A.E. & Morrison, C.
01/01/1996

Recent research on productivity growth has focused on public infrastructure and its impact on economic growth and productivity. We construct a model of firms' technology and behavior, taking advantage of the analytical framework provided in the cost-function-based applied production-theory literature, and apply it to state-level data for U.S. manufacturing. We find that infrastructure investment provides a significant return to manufacturing firms and augments productivity growth. The net benefits of infrastructure investment may or may not be positive, depending upon the social costs of infrastructure investment and the relative growth rates of output and infrastructure.

Decentralization, Externalities, and Efficiency

Decentralization, Externalities, and Efficiency
Review of Economic Studies 62, April 1995, 223-247.

Morduch, J. Klibanoff, P.
01/01/1995

In the competitive model, externalities lead to inefficiencies, and inefficiencies increase with the size of externalities. However, as argued by Coase, these problems may be mitigated in a decentralized system through voluntary coordination We show how coordination is limited by the combination of two factors: respect for individual autonomy and the existence of private information. Together they imply that efficient outcomes can only be achieved through coordination when external effects are relatively large Moreover, there are instances in which coordination cannot yield any improvement at all, despite common knowledge that social gains from agreement exist This occurs when external effects are relatively small, and this may help to explain why coordination is so seldom observed in practice. When improvements are possible, we describe how simple subsidies can be used to implement second-best solutions and explain why standard solutions, such as Pigovian taxes, cannot be used. Possible extensions to issues arising in the structure of research joint ventures, assumptions in the endogenous growth literature, and the location of environmental hazards are also described.

Income Smoothing and Consumption Smoothing

Income Smoothing and Consumption Smoothing
Journal of Economic Perspectives 9(3), Summer 1995, 103-114.

Morduch, J.
01/01/1995

Examines the ways in which farm households in developing countries may self-insure, with a particular emphasis on the idea that farm households may seek to smooth their consumption by altering their methods of production. Quantifying the importance of risk; Consumption smoothing and risk; Income smoothing; Simplicity and complexity in low-income economies.

Infrastructure in a structural model of economic growth

Infrastructure in a structural model of economic growth
Regional Science & Urban Economics, April, Vol. 25 Issue 2, p131, 21p.

Holtz-Eakin, D. & Schwartz, A.E.
01/01/1995

Proposes a neoclassical economic growth model to show the connection between infrastructure and productivity growth. Model as a framework for analyzing the empirical importance of public capital accumulation to productivity growth in the United States between 1971 and 1986; Characteristics of the growth path toward the steady state; Econometric implications.

Individual production, community characteristics and the provision of local public services

Individual production, community characteristics and the provision of local public services
Journal of Public Economics, Feb 93, Vol. 50 Issue 2, p277, 13p.

Schwartz, A.E.
02/01/1993

Suggests a method of indexing local public services using community characteristics to allow the isolation of movements in prices and quantities from expenditure data. Differences in individual production functions for commodities where both private goods and community characteristics are inputs of production; Impact of government activities on community characteristics and production.

Cutback Budgeting: The Long-Term Consequences

Cutback Budgeting: The Long-Term Consequences
Journal of Policy Analysis & Management, Fall 93, Vol. 12 Issue 4, p664-684, 21p

Berne, R. & Stiefel, L.
01/01/1993

Analyzes whether short-term cutbacks made during a fiscal crisis become permanent once fiscal conditions improve. Economic and fiscal history of New York City from the 1970s through the 1980s; Framework for studying the long-term effects of budgetary cutbacks; Methodology for studying the long-term effects of 1976 and 1977 budgetary cutbacks; Effects on dollars, services, teacher characteristics and capital constructions.

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