The American Economist

This article tells the story of a doctoral dissertation in the Keynesian tradition defended at Princeton in the mid-1970s as the reaction to Keynesian economics at Chicago and elsewhere was gaining momentum. One of the controversies concerned interest rates. Were real interest rates immune to inflation as required by the neutrality of money? Irving Fisher had reported evidence that real interest rates were not immune, evidence that is worth recalling today when the reluctance of nominal interest rates to move into negative territory makes real interest rates clearly sensitive to inflation. This article presents new evidence from Japan and Sweden.

Information technology has the potential to decrease substantially, if not completely, the demand for base money. This poses a problem for central banks as it seemingly eliminates a role for monetary policy, at least in the traditional sense. Recently, it has become commonplace to consider the role of monetary policy and the determination of the price level without any reference to money. The two predominant methods of analysis in this regard are the New Keynesian framework articulated by Woodford and the fiscal theory of the price level as described in Cochrane. Lost in the literature on “cashless” economies is the work of Jürg Niehans who, driven by the perplexities of the Eurodollar market, considered the role of monetary policy and price-level determination in the context of a neoclassical macroeconomic model. This article contrasts the framework and conclusions of Niehans with the contemporary approaches. It is argued that Niehans successfully anticipated the conclusions of the fiscal theory of the price level.

To discuss how productivity in education might be improved, we must first measure where it stands. The U.S. Bureau of Labor Statistics reports productivity statistics for private sector industries, but not for education, leaving various researchers to attempt such calculations using various inputs and outputs. This article explores existing productivity measures in the private sector, and how these might be applied to education. It then uses examples of possible education productivity measures for the United States to explore education productivity trends over time and possible explanations for these trends. Across alternative measures, productivity in K-12 education has fallen for four decades.

Using 48,403 observations from the National Survey of College Graduates, this article examines the racial salary disparity between Black and White college graduates. We find that academic major and first higher education institution influence one’s final occupation, which in turn affects the salary disparity between Blacks and Whites. We suggest that public policy builds awareness among high school students aspiring for college of the importance of preparing for specific academic majors that lead to occupations expected to maintain an earnings premium.

Family income has long been linked to child outcomes such as educational achievement. Here, we address how poverty relates to student test scores in 495 Chicago public schools, controlling for school demographics. Focusing on recent data for Chicago public schools, one of the largest and poorest school districts in the United States, we gain a representative view of the role that poverty plays in urban education. We find that poverty varies greatly with student achievement, and results are robust to two measures of poverty. In addition to relatively large poverty effects, we find that school size and attendance rates are also important determinants of student achievement.

Identity theft occurs to 7% of the U.S. population 16 or older annually (17.6 million persons in 2014) and results in costs to those harmed of more than US$15 billion annually. The usual household response (85% of people in 2014) is to take actions to prevent identity theft, ranging from low-cost document shredding and password changes to more costly professional services. These costs are disproportionately borne by the elderly and female population cohorts, raising concerns of equity along with the more traditional efficiency emphasis of economics. Vulnerable households are forced to substantially increase monitoring costs in response to the threat of identity theft, a response that we will show to be both inefficient and inequitable vis-à-vis substituting tougher statutes against identity theft.

This article presents categorical, functional, and empirical arguments to appraise American Exceptionalism. We find these kinds of appraisals lacking in the literature, especially in areas such as politics, economics, history, and law where American Exceptionalism is most prevalent. First, we employ category theory to show how the structure of the arguments is related. Next, we specify functional relationships where it is possible to specify a model based on political, moral, psychological, and institutional foundations. Then six modal possibilities of physical, national, tyrannical, religious, constitutional, and economic nature emerge for further analysis. The focus then shifts to measurements, which enable empirical analyses of the three branches of government. Generally, while there is no shortage of criticism of American Exceptionalism, we are led to agree with Tocqueville that Americans are able to overcome their errors given the general openness of America’s institutions and political system.

This article provides a framework that can be used to increase undergraduate publishing in economics. A two-track research delivery system is outlined in detail: faculty–student co-authorship of papers targeting peer-reviewed journals, and student-authored, faculty-mentored/directed, papers intended for presentation at academic conferences offering the opportunity of publishing revised, presented papers in conference proceedings. This two-track research delivery system is inspired by three perspectives. First, the fact that completing a research project successfully, for students strongly interested in or at least potentially interested in a graduate degree in economics, significantly improves their graduate school prospects (admissions plus financial support). Second, for undergraduates who are not interested in graduate study in economics, completing a research project successfully can significantly improve employment prospects following graduation. Third, the self-confidence and satisfaction associated with publishing a research project enriches the student’s life and elevates the value of the college educational experience.

Price elasticity and the slope of a demand or supply curve are closely related concepts that address the relationship between a price change and the resulting quantity change. At times, however, the link between these two concepts can appear to be counterintuitive, presenting potential pedagogical challenge. We propose a graphical approach by expressing the elasticity as relative slopes, and perform a comprehensive examination of how price elasticity varies along a demand or supply curve, both in linear and nonlinear cases. We suggest that this less well-known technique provides a viable alternative to facilitate better understanding of the seemingly elusive link between elasticity and slope.