Common currencies affect trading costs and, thereby, the amounts of trade, output, and consumption. From the perspective of monetary policy, the adoption of another country's currency trades off the benefits of commitment to price stability (if a committed anchor is selected) against the loss of...

Why is GDP growth so much more volatile in poor countries than in rich ones? We identify three possible reasons: (i) poor countries specialize in fewer and more volatile sectors; (ii) poor countries experience more frequent and more severe aggregate shocks (e.g., from macroeconomic policy); and...

For U.S. annual data that include World War II, the estimated multiplier for temporary defense spending is 0.4--0.5 contemporaneously and 0.6--0.7 over 2 years. If the change in defense spending is "permanent" (gauged by Ramey's defense news variable), the multipliers are higher by 0.1--0.2....

Among 188 countries, 72 had no state religion in 2000, 1970, and 1900; 58 had a state religion throughout; and 58 had 1 or 2 transitions. We use a Hotelling spatial competition model to analyze the likelihood that the religion market would be monopolized. Similar forces influence a government's...

The neoclassical growth model is modified to include a variable rate of time preference. With no commitment ability and log utility, the equilibrium features a constant effective rate of time preference and is observationally equivalent to the standard model. The extended framework yields...

Politicians face a trade-off between the policies that maximize their chances of reelection and their most preferred policies (or the policies most preferred by the constituency which they represent). This paper analyzes this trade-off in a dynamic electoral model in which the voters are not...

This paper studies what determines group formation and the degree of participation when the population is heterogeneous, both in terms of income and race or ethnicity. We are especially interested in whether and how much the degree of heterogeneity in communities influences the amount of...

We present a model that links heterogeneity of preferences across ethnic groups in a city to the amount and type of public goods the city supplies. We test the implications of the model with three related data sets: U. S. cities, U. S. metropolitan areas, and U. S. urban counties. Results show...

The study examines the historical origins of existing cross-cultural differences in beliefs and values regarding the appropriate role of women in society. We test the hypothesis that traditional agricultural practices influenced the historical gender division of labor and the evolution of gender...