Forecasting employment : The role of forward-looking behaviour

Manufacturing output per head rose at an unprecedented rate in the UK in 1981/2, and conventional econometric relationships failed to forecast the associated falls in employment. In this paper we estimate manufacturing employment equations in which output expectations play a central role. These compare fabourably with alternative models, and are able to predict most of the large falls in employment over this period.     

Do oil tariffs lower wages?

An oil tariff has potential to alter the pattern of production and income distribution across productive factors. This paper use a general equilibrium model of production and trade with inputs of capital, labor, and international energy to examine the effects of an oil tariff. Under a range of conditions, higher energy prices created by oil tariffs would lower the ratio of wages to capital rents, and production of labor intensive goods would fall. This paper concentrates on the potential of oil tariffs to alter patterns of production and income distribution.     

Call for papers and participation

Call for papers and participation     

The informational role of supermajorities

We study a collective decision making environment where an agenda setter makes strategic proposals to privately informed voters who vote strategically. We show that, consistent with empirical evidence, it can be optimal for the agenda setter to propose supermajorities. Due to an informational role that we unveil, optimal supermajorities can be less costly than minimum winning coalitions, even though more voters are awarded a positive share. We also examine consequences in terms of quality of decision making. We show that the introduction of a strategic agenda setter can lead to socially suboptimal decisions.     

Mixed estimation based on quasi-prior judgments

The mixed estimation procedure for inference in the linear model is extended to the case in which prior judgments on parameters are correlated with the sample. The discussion includes an application, a test for the compatibility of prior and sample information, and measures for their shares of the posterior precision.     

Firms' acquisition decisions and Tobin's q ratio

We develop the hypothesis that Tobin's q ratio signals favorable opportunities for a firm to make acquisitions and then undertake an empirical test of this hypothesis within the context of a more general “multicausal” model. The results of this test support our hypothesis. The empirical study is also notable in that our data consists of a representative sample of large manufacturing firms (selection to the sample is not conditional upon merger activity) and the time period covered (1971–1978) postdates the conglomerate merger boom era of the 1960s.