The Journal of. Economic Perspectives
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1 Summer 1994
2 A journal of the American Economic Association Editor Carl Shapiro, University of California at Berkeley Co-editor Alan B. Krueger, Princeton University Associate Editors Henry J. Aaron, The Brookings Institution Francine D. Blau, Cornell University Anne C. Case, Princeton University Gene M. Grossman, Princeton University James J. Heckman, University of Chicago N. Gregory Mankiw, Harvard University Frederic S. Mishkin, Columbia University Peter Murrell, University of Maryland at College Park Barry Nalebuff, Yale University Joseph Newhouse, Harvard University John E. Roemer, University of California at Davis Bernard Saffran, Swarthmore College Richard L. Schmalensee, Massachusetts Institute of Technology Suzanne A. Scotchmer, University of California at Berkeley Hal R. Varian, University of Michigan Gavin Wright, Stanford University Managing editor Timothy Taylor Editorial associate Juli Rae Sanderson Editorial offices: Hubert H. Humphrey Institute of Public Affairs University of Minnesota, th Ave. South Minneapolis, Minnesota gratefully acknowledges the support of Stanford University. Copyright 1994 by the American Economic Association; All Rights Reserved. Composed by Science Typographers, Inc., Medford, New York 11763, U.S.A. Printed by Banta Company, Menasha, Wisconsin 54952, U.S.A. No responsibility for the views expressed by the authors in this journal is assumed by the editors or by the American Economic Association. THE JOURNAL OF ECONOMIC PERSPECTIVES (ISSN ), Summer 1994, Vol. 8, No. 3, is published quarterly (February, May, August, November) by the American Economic Association, 2014 Broadway, Suite 305, Nashville, TN Annual fees for regular membership, of which 30 percent is for a year's subscription to this journal, are $49.00, $59.00, or $69.00, depending on income. A membership also includes the American Economic Review and the Journal of Economic Literature. In countries other than the U.S.A., add $23.00 for extra postage. Further information on subscriptions and the American Economic Association can be found at the back of this journal. Second-class postage paid at Nashville, TN and at additional mailing offices. POSTMASTER: Send address changes to the Journal of, 2014 Broadway, Suite 305, Nashville, TN 37203, U.S.A. Printed in the USA
3 Contents Volume 8 Number 3 Summer 1994 Symposia Health Care Reform Joseph P. Newhouse, "Symposium on Health Care Reform" 3 David M. Cutler, "A Guide to Health Care Reform" 13 Henry J. Aaron, "Issues Every Plan to Reform Health Care Financing Must Confront" 31 Mark V. Pauly, "Universal Health Insurance in the Clinton Plan: Coverage as a Tax-Financed Public Good" 45 Richard Zeckhauser, "Public Finance Principles and National Health Care Reform" 55 Peter A. Diamond, "Two Improvements on the Clinton Framework" 61 James M. Poterba, "A Skeptic's View of Global Budget Caps" 67 Internet Jeffrey K. MacKie-Mason and Hal Varian, "Economic FAQs About the Internet" 75 William L. Goffe, "Computer Network Resources for Economists" 97 Articles George J. Benston, "Universal Banking" 121 John McMillan, "Selling Spectrum Rights" 145 Cynthia A. Montgomery, "Corporate Diversification" 163 David Figlio, "Trends in the Publication of Empirical Economics" 179 Features Michael Perelman, "Retrospectives: Fixed Capital, Railroad Economics and the Critique of the Market" 189 Bernard Saffran, "Recommendations for Further Reading" 197 Correspondence: Should Class Attendance Be Mandatory? 205 Notes 217
4 Announcement The editorial offices of the Journal of are relocating. In August 1994, the new address becomes: Journal of Hubert H. Humphrey Institute of Public Affairs University of Minnesota th Avenue South Minneapolis, Minnesota Journal of Advisory Board Marcus Alexis, Northwestern University Elizabeth E. Bailey, University of Pennsylvania William J. Baumol, New York University Gary S. Becker, University of Chicago James M. Buchanan, George Mason University David C. Colander, Middlebury College Robert Eisner, Northwestern University W. Lee Hansen, University of Wisconsin Robert L. Heilbroner, New School for Social Research Anne O. Krueger, Stanford University Charles L. Schultze, The Brookings Institution Robert M. Solow, Massachusetts Institute of Technology James Tobin, Yale University
5 The American Economic Association Founded in 1885 Officers President Amartya Sen, Harvard University President-elect Victor R. Fuchs, Stanford University Vice-Presidents Daniel L. McFadden, University of California-Berkeley Sherwin Rosen, University of Chicago Secretary-Treasurer C. Elton Hinshaw, Vanderbilt University Editor of The American Economic Review Orley C. Ashenfelter, Princeton University Editor of Economic Literature John Pencavel, Stanford University Editor of Carl Shapiro, University of California-Berkeley Elected Members of the Executive Committee Alan J. Auerbach, University of Pennsylvania John B. Taylor, Stanford University William A. Darity, Jr., University of North Carolina-Chapel Hill Richard L. Schmalensee, Massachusetts Institute of Technology Donald J. Brown, Stanford University Donald N. McCloskey, University of Iowa Ex Officio Members William Vickrey, Columbia University Zvi Griliches, Harvard University Correspondence relating to advertising, business matters, permissions to quote, subscriptions and changes of address, should be sent to the American Economic Association, 2014 Broadway, Suite 305, Nashville, TN Please remit any membership payment with the application included elsewhere in this journal. Change of address notice must be received at least six (6) weeks prior to the publication month. A membership or subscription paid twice is automatically extended for an additional year unless otherwise requested.
6 Stfmmejr 1994, Volume 8, Number S &
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