Philip N. Jefferson

On the geography of hate

Abstract Where do hate groups flourish? We address this question by examining characteristics of the communities where these groups are located. Our findings suggest that economic or sociological explanations for the existence of hate groups in an area are far less important than adventitious circumstances due to history and particular conditions.

‘Home’ base and monetary base rules: elementary evidence from the 1980s and 1990s

This paper evaluates the quantitative importance of removing U.S. currency held abroad from the monetary base. We nd that a simple macroeconometric model that uses home base has more explanatory power for changes in nominal income than when the total base is used. Moreover, proposed base rules for the conduct of monetary policy perform better when the model for home base is employed. The evidence from our elementary exercises suggests that accounting for foreign holdings of U.S. currency may be important in other contexts also.

Seigniorage payments for use of the dollar: 1977–1995

Abstract I compute alternative seigniorage estimates for the US and relate them to total tax receipts and GDP. The estimates indicate the proximate size of the prize coveted by emerging and transitional economies unable to provide their residents with stable national monies. Barros (1982) conjecture that Federal Reserve payments to the Treasury as percentage of corporate tax receipts would remain at early 1980s levels is examined also.

Educational Attainment and the Cyclical Sensitivity of Employment

This article examines whether there are educational premiums on the quantity side of the labor market. We document four findings: (1) Trend employment patterns shifted for most educational levels post-1977; (2) the lower the level of educational attainment, the more volatile the employment ratio; (3) the volatility of employment for female high school dropouts increased over time even as the economy became less volatile; and (4) since 1984, the responses of skilled and unskilled employment to the business cycle have become more alike. This latter finding is consistent with a reduced degree of capital-skill complementarity during this period.

Does Monetary Policy Affect Relative Educational Unemployment Rates

This paper examines the empirical relationship between relative educational unemployment rates and monetary policy. Such an examination is warranted because policymakers’ attempts to understand the distributional effects of monetary policy may be confounded by vintages of the theoretical literature that offer contrasting views of how skill-based relative unemployment (with unemployment of the less skilled in the numerator) might behave over the business cycle. A traditional view emphasizes characteristics of labor markets that could induce countercyclical movements in skill-based relative unemployment. For example, Arthur Okun (1973) argues that an important benefit of high levels of aggregate economic activity is that opportunities for employment in the high-quality jobs sector open up to the relatively unskilled. A mechanism for the relative improvement of the employment prospects of the unskilled is changes in hiring standards of high-quality job providers that occur over the cycle. Changes that occur during expansion and boom periods mentioned by Okun include accepting younger and less experienced workers or workers without diplomas and more intensive screening of applicants. A forceful statement of this highpressure economy view is contained in Rebecca Blank (2000). A more recent view of the impact of technological adoption could have quite different implications for movements in skill-based relative unemployment over the cycle. For example, Dale Mortensen and Christopher Pissarides (1999) show that, in their equilibrium search and matching framework, the relationship between skill and unemployment is convex in the presence of labor-market policies such as unemployment compensation. In this environment, skill-biased technology shocks increase overall unemployment rates with a disproportionate share of the unemployment falling on the unskilled. In his popular account of the matter, Krueger (2002) ties cyclical investment in new technologies to the conduct of monetary policy, thereby linking relative educational unemployment to monetary policy. My answer to the title question emerges from quantitative results designed to assess the dynamic effect on relative educational unemployment of a monetary policy surprise, controlling for supply shocks and the introduction of new technical ideas. These findings appear to resolve some of the tension between alternative views on relative unemployment dynamics in favor of the high-pressure economy hypothesis. † Discussants: Seth B. Carpenter, Federal Reserve Board; Jonah B. Gelbach, University of Maryland; Bridget Terry Long, Harvard University.

Deriving the GLS Transformation Parameter in Elementary Panel Data Models

The Generalized Least Squares (GLS) transformation that eliminates serial correlation in the error terms is central to a complete understanding of the relationship between the pooled OLS, random effects, and fixed effects estimators. A significant hurdle to attainment of that understanding is the calculation of the parameter that delivers the desired transformation. This paper derives this critical parameter in the benchmark case typically used to introduce these estimators using nothing more than elementary statistics (mean, variance, and covariance) and the quadratic formula.

Price dynamics when there are alternatives to cash payment

Empirical evidence from the 1980s and 1990s indicates that cash use in the U.S. remains high even though there has been a proliferation of alternatives to cash. This paper examines the dynamics of inflation and asset prices in response to innovations in the efficiency of processing noncash transactions. The quantitative results suggest that inflation is more sensitive than nominal interest rates or real equity prices to innovations in the efficiency of non-cash payments processing. Thus, as alternatives to cash payment become more prominent, the volatility of real interest rates may increase.(JELE31, E41, G12)