Levis A. Kochin

Searching for an Explanation of Unemployment in Interwar Britain

From 1921 to 1938 unemployment in Britain averaged 14 percent and never fell below 9.5 percent. Three largely independent sets of evidence indicate that the prolonged high unemployment was due to the operation of an unemployment insurance scheme that paid benefits that were high relative to wages and available subject to few restrictions. We estimate that the insurance system raised the unemployment rate by five to eight percentage points on average and that in the absence of the system unemployment would have been at normal levels through much of the period. Although a few interwar observers saw clearly the effects of unemployment insurance, Keynes and his followers did not.

Local economic effects of bank failures

This study tests the hypothesis that bank failures have adverse effects on economic activity in the communities where the failed banks are located. The literature on the economic effects of credit constraints provides the theoretical foundation for adverse economic effects of bank failures. The data are for rural counties in Kansas, Nebraska, and Oklahoma. The measures of local economic activity are the value of sales and employment. The empirical results indicate that bank failures depress local sales, and, for some of the states, the closing of failed banks depresses local employment.

Unemployment and Unemployment Benefits in Twentieth-Century Britain: A Reply to Our Critics [Searching for an Explanation of Unemployment in Interwar Britain]

A computing system includes a central processor unit (CPU) in combination with external memory units. The CPU includes an arithmetic logic (ALU), an instruction register, a random access memory, and a control system for interconnecting the functional elements of the CPU via sequential use of a common parallel buss, enabling the CPU to be defined on a single chip. The ALU is capable of performing eight separate arithmetic and logic functions utilizing common logic gates.

When is buying votes wrong

In modern liberal democracies, offering individual voters in political elections money for their votes is wrong and illegal; offering groups of voters particular benefits in exchange for their votes is constitutionally protected. Voters do not sell their votes; instead, voters assign their votes to legislative representatives who sell or trade for them.Examining the role of coalition costs in political and corporate elections, we argue that these rules protect voters from themselves, from being compelled to approve proposals that leave them individually worse off. Simultaneously, these rules allow voters to seek particular benefits through collective organization and legislative representation.

The Success of the Fed and the Death of Monetarism

We propose an explanation for the demise of monetarism in the United States. We show that optimal monetary policy would lead to zero correlation between monetary aggregates and inflation if the effect of monetary aggregates on inflation is known precisely and to negative correlations if there is coefficient uncertainty. From 1960 to 1982 the correlation of the monetary base and inflation was positive and so the variance in the growth rate of monetary base in the United States was clearly too large monetary base growth destabilized inflation. However, from 1983 to 2003 variations in monetary base growth were clearly stabilizing and could have been just right. (JEL E52, E31, E32)