Macroeconomics

I examine the impact of a property tax relief program in New York State that lowered the marginal cost of school expenditure to homeowners. I find that a typical school district, which received 20% of its revenue through the program in the school year 2001–2002, raised expenditure by 4.1% and local property taxes by 6.8% in response to the program. I then examine how the preferences of various groups of local taxpayers affect educational spending by identifying systematic variation across districts in the response to fiscal incentives.

In this paper, we measure the extent to which subjective and objective evaluations of new teachers in New York City can predict their future impacts on student achievement. Specifically, we examine evaluations of applicants to an alternative certification program, evaluations of new teachers by mentors that work with them during their first year, and evaluations based on student achievement data from their first year of teaching. We use a large sample, relative to prior work, and, unlike other studies (with the exception of John H. Tyler et al.

Teaching may be the most-scrutinized occupation in the economy. Over the past four decades, empirical researchers—many of them economists—have accumulated an impressive amount of evidence on teachers: the heterogeneity in teacher productivity, the rise in productivity associated with teaching credentials and on-the-job experience, rates of turnover, the costs of recruitment, the relationship between supply and quality, the effect of class size and the monetary value of academic achievement gains over a student's lifetime.

We consider a simple variant of the standard real business cycle model in which shareholders hire a self-interested executive to manage the firm on their behalf. Delegation gives rise to a generic conflict of interest mediated by a convex (option-like) compensation contract which is able to align the interests of managers and their shareholders. With such a compensation contract, a given increase in the firm's output generated by an additional unit of physical investment results in a more than proportional increase in the manager's income.

Using micro data on virtually all of the drugs and diseases of over 500,000 people enrolled in Puerto Rico's Medicaid program, the impact of the vintage (original FDA approval year) of drugs used to treat a patient on the patient's three-year probability of survival, controlling for demographic characteristics (age, sex, and region), utilization of medical services, and the nature and complexity of illness are examined. It is found that people using newer drugs during January-June, 2000, were less likely to die by the end of 2002, conditional on the covariates.

Economics is the study of how scarce resources are allocated. Operations research studies how to accomplish goals in the least costly manner. These fields have much to offer each other in terms of challenging problems that need to be solved and the techniques to solve them. This was the case after World War II, partly because the individuals who went on to be the leading scholars in economics and operations research worked together during WWII. In fact, the two fields share many early luminaries, including Arrow, Dantzig, Holt, Kantorovich, Koopmans, Modigliani, Scarf, and von Neumann.

We prove generic existence of recursive equilibrium for overlapping generations economies with uncertainty. "Generic" here means in a residual set of utilities and endowments. The result holds provided there is sufficient intragenerational household heterogeneity.