As I document in this note, the party of a candidate for a U.S. House or Senate seat cannot be too out-of-line with his or her district. Specifically, if the district is more than 13 points different from the candidate's party (as judged by the most recent presidential election), then he or she...

An extensive number of studies investigate the effects of political relations on trade by estimating a gravity model using annual (or quarterly) data. We argue that the use of low-frequency data introduces an aggregation bias because the cycle of moderate political shocks is much shorter...

I describe and defend the dollarization of Ecuador in 1999-2000 as a bottom-up phenomenon, an expression of consumer sovereignty by money-users, to which the government finally conceded. From that perspective I rebut common top-down (social planner) arguments against dollarization, and criticize...

Using a newly discovered dataset of U.S. bank suspensions from 1921 to 1929, we discovered that banking panics were more common in the 1920s than had been believed. Besides identifying panics, we investigate their determinants, finding that local banking panics were more likely when fundamental...

Traditional Austrian cycle theory starts from general equilibrium and explains how an expansion of bank credit unmatched by an expansion of saving can create a cycle of boom-and-bust, and with the bust followed by restoration of normality. In contrast, this paper offers a non-equilibrium...

Using a field experiment in China, we study whether migration status is correlated with attitudes toward risk, ambiguity, and competitiveness. Our subjects include migrants and non-migrants. We find that, migrants exhibit no differences from non-migrants in risk and ambiguity preferences...

This essay accepts the normative vision Richard Epstein sets forth in The Classical Liberal Constitution, but refracts that vision through some considerations of positive political economy. In response to a questioner who asked at the conclusion of the Constitutional Convention what kind of...

The 1933 “Mock Trial of the Economists” is occasionally noticed and then interpreted as popular discontent with economists's “crime” of “conspiracy to spread mental fog” at evidenced by the dueling letters from the Oxbridge economists (Keynes, Pigou, et al.) and the LSE economists...

Theories of bank contagion often highlight the idea that financial crises frequently start as local shocks and then spread to other financial institutions. Conditions in Helena, Montana at the onset of the Panic of 1893 present an ideal laboratory for testing these theories. We use a unique...

This paper analyzes the concept of municipal bankruptcy in a comparative framework with commercial bankruptcy. Cities are corporate bodies that continue to exist despite the ever changing identities of the residents. The common designation of cities as municipal corporations suggests an affinity...