Copyright (c) 2009 All rights reserved. http://works.bepress.com/brad_delong Recent documents in J. Bradford DeLong en-us Sun, 31 May 2009 03:58:25 PDT 3600 http://works.bepress.com/brad_delong/12 http://works.bepress.com/brad_delong/12 Tue, 24 Oct 2006 10:39:13 PDT J. Bradford DeLong http://works.bepress.com/brad_delong/11 http://works.bepress.com/brad_delong/11 Tue, 24 Oct 2006 10:28:43 PDT This paper uses John Taylor's model of overlapping contracts to show that increased wage and price flexibility can easily be destabilizing because of the Mundell effect. Simulations based on "realistic" parameter values suggest that increases in price flexibility might well increase the cyclical variability of output in the United States. J. Bradford DeLong International Finance Stabilization Policy http://works.bepress.com/brad_delong/9 http://works.bepress.com/brad_delong/9 Tue, 22 Aug 2006 17:40:33 PDT We use disaggregated data from the United Nations International Comparison Project and the Penn World Table to examine the association between different components of investment and economic growth over 1960–85. We find that producers’ machinery and equipment has a very strong association with growth: in our cross section of nations each percent of GDP invested in equipment raises GDP<br />growth rate by 1/3 of a percentage point per year. This is a much stronger association than can be found between any of the other components. We interpret this association as revealing that the marginal product of equipment is about 30 percent per year. The cross nation pattern of equipment prices, quantities, and growth is consistent with the belief that countries with rapid growth have favorable supply conditions for machinery and equipment. The pattern is not consistent with the belief that some third factor both pushes up the rate of growth and increases the demand for machinery and equipment. J. Bradford DeLong International Finance http://works.bepress.com/brad_delong/8 http://works.bepress.com/brad_delong/8 Tue, 22 Aug 2006 17:37:20 PDT J. Bradford DeLong International Finance http://works.bepress.com/brad_delong/6 http://works.bepress.com/brad_delong/6 Tue, 22 Aug 2006 17:29:40 PDT There are eras when advancing technology and changing business organizations transform economies and societies. Such episodes do not just amplify productivity in one leading sector. Instead they give all economic sectors powerful new "tools." Today we are living through such a shift in our economic landscape, a shift that warrants a new name: the "E-conomy." Information technologies, data communication and data processing technologies, are tools to manipulate, organize, transmit, and store information in digital form. They are tools for thought that amplify brainpower in the way the technologies of the Industrial Revolution amplified muscle power. The story of the revolution in information technology is at once a story of technology and a story of innovations in business organization and practice. The two stories are yoked together; they pull forward together. The technology story is underpinned, and measured, by the doubling of semiconductor capability and productivity every-eighteen-months -a rate that has carried us from the room-sized vacuum-tube computers to the modern Internet -- and by the complementary surge in the capacity of the communications network to transmit digital information. Changes in business organization and practice are the second driver of this transformation. The E-conomy is as much a story about changes in business organization, market structures, government regulations, and human experience as it is about new technology. While these changes are spreading across industries and countries, they are more difficult to measure. Taken together, the business innovations represent a new business ecology that includes a prominent role for venture capital, the start-up, the spinoff, and new option based ways of compensating skilled workers and entrepreneurs - innovations that have unleashed a tsunami wave of new business and new technology. The E-conomy is generating substantial and unexpected increases in productivity that have motored our recent surge in economic growth and that have enlarged the margin for monetary policy. But the economic transformation is not about soft landings, smooth growth, permanently rising stock prices, government surpluses, and low rates of interest and inflation. It is about structural transformation and developments that carry disruption and change. The policy issues are moving rapidly from the narrowly technical through the narrowly legal into fundamental questions of how to organize our markets and society. Under the best of circumstances the risks of policy making are high. This background briefing on the E-conomy is aimed to provide a context and a structure for policy debate by defining the stakes, the forces, the issues at play, and an agenda - not a choice of outcomes. For the past fifty years, US government policy has played a major role in enabling America to lead in developing information technology--and just as important--in creating the conditions for America to lead in the use of information technology throughout the economy. The American government largely got policy right under three important headings -- headings we use to structure the agenda that follows: 1) Public investment in science and technology and in the technological-age education of people needed to realize the benefits of the E-conomy. Included under this heading is the re-opened question of the role of government and the institutional structures that create the next generations of technology and equip them with launch markets. 2) Rule making for the E-conomy, which extends across such thorny issues as privacy, security, and the definition of new property rights and responsibilities necessary for markets to function effectively in consonance with enduring values and purposes. 3) Flexibility and inclusion: the basic issues of institutional and labor flexibility and fairness. Compounding the policymaking challenge is the fact that the E-conomy is necessarily global. It is a network of networks that crosses borders in a world organized into nation-states. This requires, if not common rules, then harmonization, compatible rules that allow the economic networks to operate as a single large global system.It is a tough agenda. Stephen S. Cohen International Finance http://works.bepress.com/brad_delong/5 http://works.bepress.com/brad_delong/5 Tue, 22 Aug 2006 17:29:39 PDT The difference in unfunded obligations observed by Professor Chyla is explained by the difference between 75-year and infinite-horizon projections. James B. DeLong International Finance http://works.bepress.com/brad_delong/4 http://works.bepress.com/brad_delong/4 Tue, 22 Aug 2006 17:29:38 PDT Fifteen years ago, I found it easy to be in favor of international capital mobility -- the free flow of investment financing from one country to another. Then it was easy to preach for an end to all systems of controls on capital that hindered this flow. Now it is harder. J. Bradford DeLong International Finance http://works.bepress.com/brad_delong/3 http://works.bepress.com/brad_delong/3 Tue, 22 Aug 2006 17:29:37 PDT Is the U.S. vulnerable to a full-blown dollar crisis? Why are international finance economists scared and jittery, but domestically-oriented macroeconomists much less concerned? J. Bradford DeLong International Finance http://works.bepress.com/brad_delong/2 http://works.bepress.com/brad_delong/2 Tue, 22 Aug 2006 17:29:35 PDT Bradford Delong and Konstantin Magin remind us that a decade ago, many thought the stock market overvalued, and yet on balance the last decade has been good for investors who bought and held. What does this tell us? J. Bradford DeLong International Finance http://works.bepress.com/brad_delong/1 http://works.bepress.com/brad_delong/1 Tue, 22 Aug 2006 17:29:33 PDT The success of the Internet in the U.S. fundamentally rests on 30 years of consistent FCC policy which sought to maintain network openness by making key network components available to all, on cost-effective terms, so as to foster competition and innovation. The Internet today enters a third phase of its history, when a critical mass of users are about to experience "always-on" high-speed access to the Internet from their home. At this crucial time, the FCC may abandon its successful policy and allow owners of the broadband infrastructure to foreclose access to the infrastructure they own. This is, we show, precisely the wrong time for such a reversal. While the current debate is forced by AT&T's acquisition of TCI, its proposed acquisition of MediaOne, and the companies' ties to Excite@Home, this particular matter simply forces us to address the more general issue. What should be the terms of access to emerging network infrastructures when competition exists, but reflects "collective dominance" of a few players? We argue that policy inaction places network innovation in jeopardy and threatens the continuation of successful infrastructure re-invention. François Bar International Finance