Moral Hazard in an Economic Union: Politics, Economics, and Fiscal Gimmickry in Europe

Moral Hazard in an Economic Union: Politics, Economics, and Fiscal Gimmickry in Europe. Weatherhead Center for Inetrnational Affairs, Harvard University. James Alt et al. July 2012.

The paper examines empirically how transparency of the budget process affects fiscal rules and incentives for fiscal gimmickry or creative accounting in the European Union. Using stock-flow adjustment data for EU countries from 1990-2007, it shows that pressure from a deficit limit rule as in the Stability and Growth Pact creates incentives for fiscal gimmicks, as does political pressure from the electoral cycle and economic pressure from negative shocks in the business cycle. However, the paper shows that where institutional transparency is higher, these incentives are damped and largely disappear. [Note: contains copyrighted material].

[PDF format, 42 pages, 648.72 KB].

The Future of Higher Education

The Future of Higher Education. Pew Internet & American Life Project. Janna Anderson et al. July 27, 2012.

A majority of technology stakeholders polled in a Web-based survey anticipate that higher education in 2020 will be quite different from the way it is today. They said university-level education will adopt new methods of teaching and certification driven by opportunity, economic concerns and student and parent demands. In the Pew Internet/Elon University survey of 1,021 Internet experts, researchers, observers and users, 60% agreed with a statement that by 2020 “there will be mass adoption of teleconferencing and distance learning to leverage expert resources … a transition to ‘hybrid’ classes that combine online learning components with less-frequent on-campus, in-person class meetings.” Some 39% agreed with an opposing statement that said, “in 2020 higher education will not be much different from the way it is today.” [Note: contains copyrighted material].

[PDF format, 43 pages, 1.30 MB].

Ethics and Health Care: Rethinking End-of-Life Care

Ethics and Health Care: Rethinking End-of-Life Care. The Heritage Foundation. Daniel Callahan and Peter Lawlor. July 24, 2012.

America is undergoing a demographic revolution, with a rapidly aging population blessed with greater longevity. While this is a triumph of modern medicine, it also presents an unprecedented ethical and fiscal challenge for individuals, families, medical professionals, and policymakers. In particular, Americans need to think carefully about care at the end of life. How should we think about life and death itself, the role of family and religion, and the duties of medical professionals and the use of advanced technology in the provision of end-of-life care? What is the role of freedom and personal responsibility? [Note: contains copyrighted material].

[PDF format, 7 pages, 306.91 KB].

The Promise of (and Obstacles to) America’s Emerging Growth Story

The Promise of (and Obstacles to) America’s Emerging Growth Story. New American Foundation. Sherle R. Schwenninger and Samuel Sherraden. July 19, 2012.

Economic growth depends on the periodic emergence of several new big drivers of investment and job creation. But America’s economic growth story faces serious obstacles: economic crisis in Europe, economic weakness and renewed trade pressures from China, and the coming fiscal cliff and public sector retrenchment in the U.S. [Note: contains copyrighted material].

[PDF format, 29 pages, 1.22 MB].

The Financially Sustainable University

The Financially Sustainable University. Bain & Company. Jeff Denneen and Tom Dretler. July 2012.

A focused strategy can help colleges and universities reinvent their industry and stop spending beyond their means, say the authors. “Few industries in the United States have achieved unquestioned global leadership as consistently and effectively as our higher education system. U.S. colleges and universities are the cornerstone of our economic prosperity and the key to realizing the American dream. Thirty years of growth have confirmed the sector’s leadership and vibrancy, the result of demographic and economic factors combining to lift higher education even higher. Despite this success, talk of a higher education “bubble” has reached a fever pitch in the last year” [Note: contains copyrighted material].

[PDF format, 16 pages, 2.89 MB].

Government Transparency: Efforts to Improve Information on Federal Spending

Government Transparency: Efforts to Improve Information on Federal Spending. U.S. Government Accountability Office. July 18, 2012.

The Office of Management and Budget (OMB) and other federal agencies have taken steps to improve federal spending data available on GAO previously made several recommendations to improve these transparency efforts, including that OMB clarify guidance on reporting award data and develop a procedure to ensure agencies report required information. While GAO is not making new recommendations at this time, it underscores the importance of fully implementing its prior recommendations.

[PDF format, 20 pages, 285.96 KB].

Public Sector Pensions: How Well Funded Are They, Really?

Public Sector Pensions: How Well Funded Are They, Really? American Enterprise Institute. July 19, 2012.

The financial health of defined benefit pension plans for state and local government workers is a matter of concern for elected officials, taxpayers and the financial markets, all of whom worry about governments’ long-term ability to meet their financial obligations. These pension plans have come under increased scrutiny as funding levels have dropped and required contributions have risen. [Note: contains copyrighted material].

[PDF format, 28 pages, 445.60 KB].

Global Rebalancing: Now or Never

Global Rebalancing: Now or Never. YaleGlobal. Stephen S. Roach. July 19, 2012.

Recent history, the Latin America debt crisis, the US subprime mortgage crisis and now the European debt crisis, offers a lesson that global imbalances are unsustainable. Lured by false promises of future growth, countries borrow big, risking prosperity and stability. Global growth is in question: Wary of debt, U.S. consumers have tightened spending; India and China, as emerging economies, cannot make up that spending in the global markets. Countries, particularly the world’s leading economic partnership, U.S. and China, must confront the reality on debt and ease their imbalances, urges Roach. He lays out a rebalancing plan that includes China building the services side of its economy. Roach warns, “There are no shortcuts to sustainable prosperity.” Americans must consume less, the Chinese should consume more, and all should consume sensibly. [Note: contains copyrighted material].

[HTML format, various paging].

The Climate Policy Dilemma

The Climate Policy Dilemma. National Bureau of Economic Research. Robert S. Rindyck. July 2012.

Climate policy poses a dilemma for environmental economists. The economic argument for stringent GHG abatement is far from clear. There is disagreement among both climate scientists and economists over the likelihood of alternative climate outcomes, over the nature and extent of the uncertainty over those outcomes, and over the framework that should be used to evaluate potential benefits from GHG abatement, including key policy parameters. The author argues that the case for stringent abatement cannot be based on the kinds of modeling exercises that have permeated the literature, but instead must be based on the possibility of a catastrophic outcome. [Note: contains copyrighted material].

[PDF format, 28 pages, 609 KB].

Hydraulic Fracturing and Safe Drinking Water Act Issues

Hydraulic Fracturing and Safe Drinking Water Act Issues. Congressional Research Service, Library of Congress. Mary Tiemann and Adam Vann. July 12, 2012.

Hydraulic fracturing is a technique developed initially to stimulate oil production from wells in declining oil reservoirs. With technological advances, hydraulic fracturing is now widely used to initiate oil and gas production in unconventional (low-permeability) oil and gas formations that were previously inaccessible. This process now is used in more than 90% of new oil and gas wells.The report reviews past and proposed treatment of hydraulic fracturing under the SDWA, the principal federal statute for regulating the underground injection of fluids to protect groundwater sources of drinking water.

[PDF format, 42 pages, 661.58 KB].