Decomposing Consumer Wealth Effects: Evidence on the Role of Real Estate Assets Following the Wealth Cycle of 1990-2002

During the period of 1990-2002 US households experienced a dramatic wealth cycle, induced by a 369% appreciation in the value of real per capita liquid stock market assets followed by a 55% decline. However, consumer spending in real terms continued to rise throughout this period. Using data from 1990-2005, traditional life-cycle approaches to estimating macroeconomic wealth effects confront two puzzles: (i) econometric evidence of a stable cointegrating relationship among consumption, income, and wealth is weak at best; and (ii) life-cycle models that rely on aggregate measures of wealth cannot explain why consumption did not collapse when the value of stock market assets declined so dramatically. We address both puzzles by decomposing wealth according to the liquidity of household assets. We find that the significant appreciation in the value of real estate assets that occurred after the peak of the wealth cycle helped sustain consumer spending from 2001 to 2005.

Socio-cultural Degeneration and State Patronage of the Arts: Mapplethorpe, Cultural Crisis, and the NEA

The goal of this paper is to investigate how the Untied States federal government, specifically through the National Endowment for the Arts, or NEA, has acted in the position of an arts patron in the past few decades. Specifically, this paper will focus on the past decade and a half since the 'arts crisis' of the late 1980s and the social and political backlash against the art community in the 1990s, which was only against ‘offensive’ art that was seen as morally and culturally corruptive. I explore the political, social, and economic forms the backlash took, particularly rooted in a perceived fear of degenerative arts as a corruption of and a catalyst for the eventual collapse of American culture and values. Additionally, I analyse the role the federal government played in ‘ameliorating’ the situation. I investigate how state arts patronage has affected and continues to affect both the concepts behind and the manifestations of art, as well as who is encouraged, sanctioned, or neglected in the production of art. To accomplish this, I explore how and why the federal government employs the arts to define and redefine morality and culture, and how does it express/allow the expressions of these through art.