Legal Change and the Social Value of Lawsuits

This paper integrates the literatures on the social value of lawsuits, the evolution of the law, and judicial preferences to evaluate the hypothesis that the law evolves toward efficiency. The setting is a simple accident model with costly litigation where the efficient law minimizes the sum of accident plus litigation costs. In the steady state equilibrium, the distribution of legal rules is not necessarily efficient but instead depends on a combination of selective litigation, judicial bias, and precedent.

History of Maltreatment and Psychiatric Impairment in Children in Outpatient Psychiatric Treatment

There is increasing evidence that childhood victimization and attachment disruptions impact a child’s development. In this study, children and adolescents from an outpatient psychiatric clinic were assessed, measuring history of trauma, history of out-of-home placement, initial diagnoses, and CBCL internalizing and externalizing problem scores. Multiple regression analyses showed that both violent abuse trauma (physical/sexual abuse) and victim trauma (physical abuse/sexual abuse/witnessing domestic violence/witnessing community violence) are prevalent among patients with externalizing severity problems; concluding that diagnosis alone may not account for a history of victimization, but externalizing problem severity does. Overall, the study is consistent with past literature that it is important to acknowledge a child’s history of maltreatment and out-of-home placement when understanding their psychiatric development and diagnosis.

The Great Moderation and the Relationship between Output Growth and Its Volatility

This study examines the effect of the Great Moderation on the relationship between U.S. output growth and its volatility over the period 1947 to 2006. First, we consider the possible effects of structural change in the volatility process. In so doing, we employ GARCH-M and ARCH-M specifications of the process describing output growth rate and its volatility with and without a one-time structural break in volatility. Second, our data analyses and empirical results suggest no significant relationship between the output growth rate and its volatility, favoring the traditional wisdom of dichotomy in macroeconomics. Moreover, the evidence shows that the time-varying variance falls sharply or even disappears once we incorporate a one-time structural break in the unconditional variance of output starting 1982 or 1984. That is, the integrated GARCH effect proves spurious. Finally, a joint test of a trend change and a one-time shift in the volatility process finds that the one-time shift dominates.