The modern welfare state and full-employment policies have common intellectual roots. In the 1930s and 1940s, Keynesian visions of full employment and Beveridge-inspired ideas of a universal welfare state grew up in about the same intellectual environment. Both ideas emphasized a government’s...

There is only one set of estimates of the prevalence of chronic undernutrition world-wide. These estimates emanate from the FAO and are claimed to be comparable across countries. In this paper it is demonstrated that the FAO has used an estimation model (and data) that induce bias in the...

Inflation targeting is shown to imply inflation forecast targeting: the central bank's inflation forecast becomes an explicit intermediate target. Inflation forecast targeting simplifies both implementation and monitoring of monetary policy. The weight on output stabilization determines how...

We present a theory of the choice of alternative democratic constitutions, a majoritarian or a consensual one, in a n unequal society. A majoritarian democracy redistributes resources from the collectivity toward relatively few people, and has a relatively small government and low level of...

Two real-world observations are not easily replicated in models of crime. First, although capital punishment is optimal in Becker’s (1968) model, it is rarely observed in the real world. Second, criminal procedure and the evaluation of evidence vary across societies and historical periods, the...

This paper is a selective survey of new or recent methods to extract information about market expectations from asset prices for monetary policy purposes. We shall discuss methods to extract market expectations of future interest rates, exchange rates and inflation rates. Traditionally, interest...

Everyone studying EMU cites the theory of Optimum Currency Areas: whether a country like Sweden should join the currency union depends on such parameters as the extent of Swedish trade with other EU members and the correlation of Sweden’s income with that of other members. Few economists have...

The recent debate over monetary policy strategies concludes that monetary targeting and inflation targeting in practice lead to very similar patterns of central bank behavior. This raises the question why central banks insist on the strategies they use. In this paper, we develop an answer from...

Over the past 40 years economists have devoted considerable effort to estimating long-run trends in real commodity prices. The results indicate that the real prices for many commodities have fallen, suggesting to the surprise of many that resource scarcity is declining over time. Almost all of...

This paper studies the relationship between investor protection, the development of financial markets and income inequality. In the presence of market frictions, investor protection promotes financial development by raising confidence and reducing the costs of external financing. Developed...