Wm. Stewart Mounts

Ability, Age, and Performance Conclusions From the Ironman Triathlon World Championship

A person’s age is used in many ways in economic decisions due to the belief that it is a low cost proxy for ability. Even with this importance assigned to age, however, little economic research has investigated the underlying relationship between age and output. Our purpose is to consider this relationship using data from the Ironman Triathlon World Championship. Our findings indicate that men age faster than the rates estimated by others. Also, unlike other studies, these data allow inferences to be drawn about the linkage between age and ability for women. We find that women age only slightly faster than men, showing some relative increase in aging in later years. At younger ages, however, women appear more responsive to training and maturation (forms of human capital investment) than young men.

Excess reserves during the 1930s: Empirical estimates of the costs of converting unintended cash inventory into income-producing assets

It is often argued that the persistent amounts of excess reserves in the 1934–1941 period were sought either for protective liquidity or as a signal of bank safety to depositors. More recent explanations argue that these excess reserves were unintended inventory due to the high internal adjustment costs of converting reserves to income-producing assets. Our findings support the latter explanation and reveal high internal asset adjustment costs after 1933. Thus, a monetary policy focused on increasing reserves would have been ineffective. A successful monetary policy would be one that increased outside money.(JEL G210, G280, O420)

A statistical note on possible institutional regimes in budget policy

Abstract This note makes a statistical case for a shift in the regime that generates fiscal policy. Various tests clearly indicate a point of regime delineation in 1975. This year coincides with the beginning of federal budget development under the Congressional Budget and Impoundment Control Act of 1974. Single equation and multiple equation (VAR) representations are used to describe the development of fiscal policy. Also, preliminary estimates of a reduced form model and the target information content of fiscal policy are presented.

Historical Considerations, Property Rights, and Budgets: A Comment on the Use of Inputs by the Federal Reserve

ConclusionWhen considered in an alternative historical setting with a property right perspective, the extended public choice model found in AMCD offers strong confirmation for the S-T view of monetary authority behavior.In this light, a next step is to find an econometric specification that accounts for changing bureaucratic incentives within changing monetary regimes or constitutions. A rational expectations model of a bureaucratic Fed is beyond the scope of this comment. However, if a public choice approach to Fed behavior is to be useful, it must differentiate between variables, or the effects of variables, in a bureaucratic model relative to a model based on public service. For example, it is unclear how a significant debt variable in a static model of the monetary base supports or confirms a public choice view of the Fed. It is also possible that a public service oriented monetary authority could be motivated by national debt considerations. At least for now, Board employment appears to be a better public choice candidate. It is controllable by the central bankers and would be unimportant if the Fed was only interested in the public welfare.

All politics is local: The effect of fiscal and monetary constitutions on economic policy

Abstract The rules of behavior for the monetary authorities changed in 1933 and 1947 and the Fed temporarily changed its operating procedures in 1979, but these changes did not alter the fact that the monetary authorities serve as the agent of the fiscal authorities. On the fiscal side, a shift from a centralized process to one where Congress was composed of a set of individual entrepreneurs altered the fiscal focus from the national economy to one of localized interests. This change led to a more autoregressive and deficit-prone federal budget and changed the interaction between monetary and fiscal policy. It also elevated the status of monetary policy to the extent where financial markets react to every utterance from the monetary authorities.

The Structure and Use of Inputs by the Federal Reserve

Recently William Shughart and Robert Tollison (S’T), found a (chapter 4 in this volume) significant, albeit small, and causal relationship between the size of the Federal Reserve, measured by the number of system employees, and the annual growth of the monetary base. Elsewhere, Mark Toma (chapter 3 in this volume) found a positive relationship between Fed operating expenses and the level of earnings turned over to the Treasury. Both studies used a bureaucratic framework of central bank behavior as the theoretical foundation for empirical analysis. This perspective stresses the notion that bureau behavior is the result of interacting individuals (bureaucrats) pursuing self-interest within a system of institutional incentives and constraints.