Symposium: The Political Economy of the COVID‐19 Pandemic
Peter Boettke and Benjamin Powell
The authors introduce a symposium, which seeks to analyze the political economy and institutional environments that lead to governmental policy responses, all over the world, that are inconsistent with recommendations from standard welfare economics.
The Federal Reserve's Response to the COVID‐19 Contraction: An Initial Appraisal
Nicolás Cachanosky, Bryan P. Cutsinger, Thomas L. Hogan, William J. Luther, and Alexander W. Salter
The authors summarize and evaluate the Fed's monetary and emergency lending policies through the end of 2020. They credit the Fed with promoting monetary stability while maintaining it could have achieved something approximating monetary stability withouth employing its emergency lending facilities. The authors argue some of its facilities were unwarranted and unwise as they primarily intended to allocate credit blurring the line between monetary and fisal policy.
Explorations in Economic History
The Cuban Revolution and Infant Mortality: A Synthetic Control Approach
Vincent Geloso and Jamie Bologna Pavlik
The authors employ a synthetic control method to analyze how much of the reduction in infant mortality, if any, can be attributed to the Castro's regime. They find that the infant mortality increased in the first decade of the regime, but reverted after the introduction of Soviet subsidies. However, after a second run of synthetic control test concerning the collapse of the Soviet Union, the authors find that the subsidies played no important role in determining health outcomes.
Contemporary Economic Policy
Economic Freedom and the Economic Consequences of the 1918 Pandemic
Jamie Bologna Pavlik and Vincent Geloso
The authors analyze the 1918 pandemic and the levels of economic freedom. They argument that higher levels of economic freedom mitigated the pandemic's effect as it meant greater ability to adjust shocks by reducing frictions in the reallocation of resources and the reorganization of economic activity.
Journal of Institutional Economics
The Last Guardian of the Throne: The Regional Army in the Late Qing Dynasty
The author argues that the developed organizational structure of the Xiang Army played a central role in its rise during the Qing Dynasty. Unlike the imperial arm of the central government, the Xiang Army overcame problems like poor recruitment and training soldiers, lack of incentives of fight in battles, and coordination failure.
Desocialization of Taxes: A Taxation System Proposal for Venezuela
Rafael Acevedo, Luis Cirocco, and María Lorca-Susino
The authors argue that the most important challenge for a change in the economic, fiscal, and political system of Venezuela is to limit the State and any possibilities to intervene the natural flow of the free market. Towards this purpose, the authors propose a fiscal reform based on municipalization of the taxation structure, simplification by elimination, and imitation of the market.
International Journal of Politics, Culture, and Society
Carolingians at the Doorstep? The Maturing Limited Access Order of Early Medieval Europe
The author argues the Carolingians moved Western Europe to the doorstep of an open-access society, as defined by North et al. (2009), through their large-scale distributions of confiscated/conquered lands to loyal vassals, cultivation of bonds with the Church, and the regularization of assemblies. Furthermore, the Carolingians introduced governance innovations that promoted rule of law for elites and the centralization and consolidation of violence.
Constitutional Political Economy
The Political Economy of Feudalism in Medieval Europe
The author argues that the environment of polycentric sovereignty promoted constitutional bargaining in the direction of better governance, and specifically towards greater liberty.
Journal of Comparative Economics
The Washington Consensus Works: Causal Effects of Reform, 1970-2015
Kevin Grier and Robin Grier
The authors argue that policy reform along the lines suggested by the Washington Consensus may have been prematurely discredited and, in fact, are worth considering for countries wishing to accelerate growth rates.
Advances in Decision Sciences
Rational Irrationality: A Two Stage Decision Making Model
Rafael Acevedo, Elvis Aponte, Pedro Harmath, and Jose U. Mora
The authors propose a two-stage decision making model that includes cognitive and affective systems as well as individualistic human factor and a stochastic shock. The latter being the fundamental elements that define the rational irrationality when traditional economic theory fails to explain individuals' choices.
Applied Economics Letters
Household Responses to Escalating Violence in Mexico
Luisa Blanco, Robin Grier, Kevin Grier, and Daniel Hicks
The authors show significant welfare losses in both spending changes and behavioral adjustment that should be considered from the Mexican drug war.
Journal of Institutional Economics
The Fundamental Coase of Development: Property Rights Foundations of the Effective State
Ennio Piano and Alexander Salter
The authors analyze how societies can build protective and productive states while avoiding predatory states. They identify political property rights and jurisdictional competition as two important mechanisms that drive political and economic development.
European Journal of Political Economy
What Constitutes a Constitutional Amendment Culture?
Danko Tarabar and Andrew Young
The authors analyze constitutional episodes from 1960-2014 to estimate the relationship between amendment rates and Hofstede cultural indices. They found that greater individualism and lower uncertainty avoidance are associated with higher amendment rates.
Southern Economic Journal
Promise, Trust, and Betrayal: Costs of Breaching an Implicit Contract
Daniel Levy and Andrew Young
The authors study the Coca-Cola implicit contract and the costs of breaching their promise of constant quality. Levy and Young suggest that "voice" can be, in some cases, more important than "exit" in disciplining firm behavior.
The Economist reviews Wretched Refuse? The Political Economy of Immigration and Institutions, a new Cambridge University Press book publication from Benjamin Powell and Alex Nowrasteh.
"Wretched Refuse?" is a denser book, full of charts and regression analysis. It is
also highly original, and takes a chainsaw to the most intellectually respectable
case against immigration"
Read the whole article here.
Douglas Irwin, a leading scholar on the history of international trade and senior fellow at the Peterson Institute for International Economics, writes in his recent article, "The Washington Consensus Stands Test of Time Better than Populist Policies," about the importance of the findings in Kevin Grier and Robin Grier's research, "The Washington Consensus Works: Causal Effects of Reform, 1970-2015" forthcoming in the Journal of Comparative Economics. In short, economic freedom works and economic populism doesn't.
Review of Development Economics
Is the Devil in the Shadow? The Effect of Institutional Quality on Income
Israt Jahan, Jamie Bologna Pavlik, and Ryan Blake Williams
The authors analyze the relationship between institutional quality and income, taking into account the "unofficial" economy. They find that higher-quality institutions decrease the size of the informal sector and the consequential switch to formality raises overall productivity.
Austrian Economics in the 21st Century
Bart Wilson of Chapman University visited for the Austrian Economics in the 21st Century program. He delivered a presentation for the FMI Public Speaker Series, the FMI Research Workshop, and led a graduate seminar.
More information about this and other FMI research programs is available here: Research Programs.
April 16, 2021 - "Consumer Sovereignty and W.H. Hutt's Critique of the Colour Bar" - Art Carden, Professor of Economics at Samford University
The schedule of upcoming workshops is published here: Research Workshop.
Distinguished Visiting Scholars
Bruce Benson (Professor Emeritus of Economics at Florida State University) will visit in April 2021 for the FMI Distinguished Visiting Scholars program.
More information about this program is available here: Distinguished Visiting Scholars Program.