Most current empirical work finds no evidence that money shocks lower interest rates. The authors show that these nonresults are mainly due to a failure to model the conditional heteroskedasticity of interest rates. Autoregressive conditional heteroskedasiticity (ARCH) models find a significant...

This paper addresses the role of the manager in a team production setting. The coach of a basketball team faces a team production arbitrage problem. He must monitor and enforce a process that distributes shots among players such that the expectation that each shot taken will be made is...

In this paper, the authors show that current statistical measures of legislator's shirking are implicitly based on the electoral concept of a unique majority rule equilibrium point in the policy space where elections are contested. The authors note that such equilibria do not exist generically...

There is little professional consensus regarding the effect of economic conditions on House Elections. We argue that recent work still uses the paradigm of Party to organize their data and tests. Given that recent developments in the theory of congress emphasize the paradigm of Incumbency, we...

We construct an empirical model of U.S. monetary policy assuming that the Federal Reserve is an ordinary federal bureaucracy. We use the real Federal Funds rate as our policy measure and show the existence of significant executive, legislative, and bureaucratic influence on the real rate of...

We study variations in the severity of the 1997 financial crisis in a sample of 25 developing countries. We use both currency depreciation and stock market returns as crisis measures. Our key findings are that countries that started 1997 with an exchange rate peg experienced significantly...

The effect of macroeconomic fluctuations on House elections is a long debated, but still unresolved, issue. We argue that return rates are theoretically superior to vote shares as measures of electoral accountability and that incumbents, not candidates of the president's party, are the...

We study the effects of growth volatility and inflation volatility on average rates of output growth and inflation for post-war U.S. data. Our results suggest that growth uncertainty is associated with higher average growth and lower average inflation. Inflation uncertainty is significantly...