Do parties matter? Yes, but not in the usual way we tend to think of them: big government Democrats and small government Republicans. Our first regression discontinuity design shows that whether the majority in the House of Representatives is Republican or Democratic does not affect the tax...

The purpose of this paper is to examine Smith's four stages theory of history as an account of economic and social development, with an emphasis on the arguments and evidence he used to support it. In his biographical account of Smith's life, his friend Dugald Stewart described Smith’s method...

This paper studies what induces governments to undertake reforms aimed at financial development. Its starting point is Abiad and Mody (AER 95(1), 2005). Rather than their ordered logit technique, it uses a within groups approach allowing for error dependence across countries and over time. This...

The invisible hand as it appears in the Theory of Moral Sentiments is commonly treated as an afterthought in discussions of the version in the Wealth of Nations, but it deserves attention in its own right. I will argue that there is an entirely coherent (if not entirely plausible) economic...

This paper generates monthly risk premia data using zero coupon government treasury bills for 43 countries over the period of 1994-2006. The measure of risk premia is based on the ARCH-in-Mean (ARCH-M) model introduced by Engle, Lilien and Robins (1987). We show that the risk premia are time...

This paper derives a Phillips curve with imported commodities as an additional input in the production process. Given greater reliance on exogenously priced imported commodities in production then changes in output lead to a reduced impact on marginal costs and prices. The Phillips curve becomes...

This paper modifies the menu-cost model that Ball and Mankiw (1995) put forward to explain the correlation between the first- and higher-moments of the distribution of US price changes by allowing for non-zero trend inflation. Simulations suggest that even if trend inflation is only mildly...

We collect and analyse data on church collections to assess whether the introduction of Euro notes and coins had real effects on giving. Data for Italy suggests that money is not completely neutral while Irish data suggests a lower degree of money illusion.

This note addresses some issues that arise when using 'normalized' CES production functions, an approach that has become popular in the literature. The results of Klump and de La Grandville (2000) provide a simple way to calibrate the parameters of the CES production function when the necessary...

The economic boom of the USA in the 1990s was remarkable in its duration, the sustained rise in equipment investment, the reduced volatility of productivity growth, and continued uncertainty about the trend growth rate. In this paper we link these phenomena using an extension of the classic...