The Journal of Economics

Volume XXXIV No. 2, 2008


Government Informational Strategies Regarding Terrorism

John L. Scott

Scholars and laymen assert that media attention is an important element in both an individual terrorist incident and in the ongoing struggle against terrorists. Thus far, economists' only concrete policy recommendation is that governments should maximize media coverage of negotiations in order to trade zero cost media attention for expensive ransom (Islam and Shahin, 1989). This policy recommendation is supported by work that suggests that media attention does not encourage future terrorism (Nelson and Scott, 1992). We apply the technique of Granger causality to a more complete data set than previous researchers have used. We find that media attention Granger causes terrorism. Our results temper the conclusions of earlier work, bringing the prescription of maximizing media attention into question. (D74, D83, K42)



Comovement in Equity Price Indexes of the EU Stock Markets: The Information Contents of Samples of Different Frequency

Yong U. Glasure and Massoud Metghalchi

Weekly and monthly samples of MSCI equity price indexes from Datastream International are used to illustrate that samples with less frequency contain less and/or different information about the causal relations among equity price indexes of and the degree of integration of the EU stock markets. Our results of the Granger causality tests indicate that the weekly sample contained more information about the short-run dynamic and long-run causal relations compared to that of the monthly sample, but the causal relationships among price indexes were quite different between the two samples of different frequency. Findings of this paper do not support Hardouvelis, Malliaropulos and Priestley’s (2006) conclusion of full integration of the EU stock markets during the 1990s. (G14)



Monetary Actions and Sub-macroeconomic Impacts: A Multi-period Assessment

Christopher Kauffman and Jean Gauger

This study investigates monetary impacts within the regional economies of the United States. It provides updated evidence on regional impacts and examines how impacts have changed over time. Using vector autoregression (VAR) methods, impacts are investigated for the overall period (1959-2003), and two sub-periods, 1959-1979 and 1980-2003. The study finds that regional economies do respond differently to monetary shocks. Evidence also indicates that these effects have changed over time; pre-1980 patterns no longer apply in many key regions. Notable in the results are the much-moderated period two impacts and shifting across region's ranking as "stronger/weaker than average" impacts. (JEL E0, E5, R11)



Returns to Human Capital and Hourly Earnings of Men with Disabilities: Evidence across the Distribution of Wages, 1988 - 2005

Michael Zimmer

Researchers and policy makers have long been concerned with the earnings disadvantage of workers with disabilities. This paper examines the wage disparity as a manifestation of returns to workers’ human capital. To the extent that disability measures a physical condition that places constraints on workers’ productivity, it should be more disruptive in occupations that require physical ability or exertion and less in those that demand cognitive or technical skills. It is well documented that, in the 1980’s, the demand for labor began to shift rapidly in favor of occupations that rely on skill biased technologies. The central proposition in this paper, referred to as the human capital hypothesis, is that workers whose skills place them in the lowest range of the wage distribution tend to possess the smallest endowments of technology- using skill, and hence experience the largest shortfall in wages. Estimates of a model of hourly earnings, using quantile regression and based on samples of males from the Current Population Survey for 1988 through 2005, offer support for the human capital hypothesis. (J14, J24, J31, J38)



How Does Employment Affect Academic Performance Among College Students?

Kathleen Arano and Carl Parker

The likelihood of working while in school for college students has been increasing particularly as the cost of education has also been rising. This paper estimates the effect of student work on academic performance. The study uses a statistical procedure to account for the possibility that the number of hours worked is endogenous when modeling academic performance. The results indicate that student employment has a negative effect on academic performance for freshmen, but for upper classmen, the negative effect only occurs after working longer hours. The negative effect is weakest for juniors, followed by seniors and sophomores. (J2, I2)