only the economy's competitive position internationally, but also the nation's moral fiber. In the liberal camp, the present confusion, which has arisen out of attempts to reconcile Reagan's New Federalism with longstanding Democratic demands for a large share of public goods in the economy, has been camouflaged by the visions of Felix Rohatyn and Lester Thurow, who want to rebuild America's in-
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Kaempfer et al. (1983) studied this question.