Ken McCormick

Private Goods, Club Goods, And Public Goods As A Continuum ∗

A recent paper in this review [Cowen, 1985] examined the commonly used distinction between private and public goods and services, whereby private goods are said to be both rival in consumption and excludable from non-payers, while public goods are non-rival and non? excludable. In that paper Cowen correctly pointed out that such a dichotomous distinction is woefully inadequate in categorizing real world phenomena, particularly when one considers such things as the number of consumers, the location of the good, and the institutional manner of provision. However, contrary to what Cowen implied, the real problem does not lie with the concepts of rivalry and excludability (or public and private goods) per se. Instead, the difficulties he described stem from a failure to recognize that: (1) these characteristics are actually matters of degree, and (2) rivalry and excludability in consumption are in fact distinct and independent characteristics. Thus, a classification system which separates these features and allows them to be present in varying degrees is required. The purpose of this paper is to present such an expanded system of classification; this improved taxonomy resolves the problems posed by Cowen.

Monetary stability and interest-free banking: the case of Iran

Previous research has suggested that Islamic banking systems may be more stable than Western systems. However, this contention has only been tested empirically for the case of Tunisia, a country with no significant history of Islamic banking. This paper replicates the study done on Tunisia for the case of Iran, a country with some history of Islamic banking. The results are mixed, with some evidence both for and against the hypothesis of greater stability for Islamic banking. It is suggested that a good deal more work must be done to prove claims about the relative stability of Islamic banking.

The Traditional Distinction between Public and Private Goods Needs to Be Expanded, Not Abandoned

Observations that goods and services cannot legitimately be divided into just two categories - private and public - have led to a proposal, published in this journal, that the traditional concept of public goods be abandoned. In this paper it is suggested that the problems of the private versus public dichotomy be solved by expanding the taxonomy, not by abandoning it. Non-rivalry and non-excludability are independent characteristics (i.e. one can exist without the other), and they can be present in varying degrees (i.e. they are not all-or-nothing characteristics). Recognizing this, an expanded taxonomy is constructed which is not subject to the valid criticisms which have been made of the too simple private versus public dichotomy.

Islamic Banking and Friedman's Rule

The recent resurgence of Islamic scholarship has revived the ancient controversy concerning the legitimacy of interest payments. It has also fueled a debate about whether a modern economy can exist without interest. In this paper, we review the arguments against interest presented both in Islam and in the West. It is then suggested that there are two ways to achieve a zero interest rate: impose a zero price ceiling in the credit market and suffer the consequences of the resulting market distortions, or conduct monetary policy so as to reach a zero interest rate through the market itself. This latter approach, derived from Friedmans Rule, suggests that Islamic bankingif done properly, may allow Islamic societies to have the best of both worlds, i.e. they can follow their religious precepts without creating serious distortions in their economies. Finally, the recent performance of Islamic Banking in Iran and Pakistan is briefly reviewed.

The Aggregate Demand Curve and Its Proper Interpretation

Textbook authors, in their presentations of aggregate demand–aggregate supply, are admonished to set their houses in order. The writers suggest the continued usefulness of the traditional “Keynesian cross” model as a pedagogical device and present a version that they allege to be superior to the popular AD–AS models found in many contemporary texts.

Veblen and globalization: a comment on Wellington and Zandvakili

Purpose – The purpose of the paper is to examine the claim made by Wellington and Zandvakili that Thorstein Veblen would be opposed to globalization. Design/methodology/approach – The approach of the paper is to examine what Veblen actually said in order to provide evidence from Veblens own pen. Findings – Veblen forcefully argued that trade barriers are another form of business sabotage. Trade barriers increase business profits but harm the community as a whole. That is because trade barriers inhibit specialization, and specialization is required for technological progress. Trade barriers therefore impede progress from the standpoint of humanity as a whole. Practical implications – National boundaries impede technological development because they reduce specialization. Trade barriers make the problem worse, and therefore are harmful. Trade barriers help business at the expense of the general public. Originality/value – The paper offers an argument for reducing trade barriers that is not derived from neoclassical economics. It should be of interest to anyone interested in the debate about globalization as well as those interested in Thorstein Veblen.

Income, Education, and Three Dimensions of Religiosity in the USA

We use American Time Use Survey data and a two-part econometric model to investigate the relationship of income and education to religiosity in the USA. We find some evidence that people are less likely to be religious as their income increases and that religious people spend less time performing religious activities as their incomes rise. The effect of additional education is ambiguous. We also find that while women are more likely to be religious than men and immigrants are more likely to be religious than natives, among religious people there is no significant difference in religiosity by gender or origin.

Aggregate Demand in Principles Textbooks

In 1985 we wrote an article critical of the aggregate demand curve as presented in most principles textbooks (Hansen, McCormick and Rives, 1985). The essence of our argument was that the reasons given for the negative slope of the aggregate demand curve in price level/real GDP space were not convincing. Writing in 1997, we note that, with one minor exception, very little has changed.1

The effect of religion on women's labor force participation rates in Indonesia

ABSTRACT Modest increases in womens labor force participation rates could boost world GDP by at least six trillion dollars; full equality for women could increase world GDP by

An Essay on the Alleged Death of Socialism

28 trillion. One factor limiting womens labor force participation may be religion. We test the effect of religion on womens labor force participation rates in Indonesia. Using data from Indonesias 2010 Census, we run a logit model for married rural women, married urban women, single rural women, and single urban women. We find that holding other factors equal, married Hindu women in urban areas are as much as 31 percentage points more likely to work than married Muslim urban women, while married Confucian women in rural areas are as much as 31 percentage points less likely to work than married Muslim rural women. These and other results are robust across different specifications and are both economically and statistically significant.