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.

The Long Game: Hamas, The IRA, and the Politics of Radicalization in Palestine and Northern Ireland

The value of a comparative study of the two conflicts stems from a remarkable similarity in the structural organization of political violence by its most influential practitioners: the IRA and Hamas. At the core, I have merely tried my best to approach a beguiling question in a fresh, dynamic way. The stultifying discourse of conflict that serves as lingua franca for the Israeli‐Palestinian issue has largely reduced strategic debate to how best the conflict can be managed – not ended. Prime Minister Benjamin Netanyahu’s focus on “economic peace” and unwillingness to commit to a two‐state solution – the consensus that has governed peacemaking for decades – belies such thinking. The Clinton Administration’s cadre of Mideast negotiators operated amidst the most rapid institutionalization of Palestinian democracy in history ‐ yet remained obsessed with Israeli‐Arab “confidence‐building” measures, doing little to legitimize the gains of Oslo. So long as Palestinians continue to view the creation of Israel as “al‐Nakba” – the catastrophe – whilst successive Israeli governments refuse to grant their aspirations any legitimacy, there can be no progress. Peace requires empathy, a substantial compromise in the context of internecine conflict. The “long war” both conflicts have become mandates an equally expansive, broad‐based and labor‐intensive approach – a demanding process that can only be called The Long Game.