Fluctuations in convex models of endogenous growth, II: Business cycle properties

Using ideas from the endogenous growth literature, we present a model of the endogenous determination of productivity growth based on individual worker decisions about human capital investment. We calibrate a version of the model to match long run growth facts from the US and study the business cycle properties of this model. This approach offers improvements along several dimensions over standard exogenous growth methodologies. Most importantly, our stochastic endogenous growth model generates much greater serial correlation in output growth and labor supply volatility relative to its real business cycle counterpart. We conclude that using the extra discipline of reproducing the trend productivity growth features of the data endogenously constitutes an important missing component from the real business cycle approach.     

Nonconvexity,efficiency and equilibrium in exhaustible resource depletion

We consider the problem of efficiency and existence of a competitive equilibrium in exhaustible resource markets where extraction costs are nonconvex. Nonconvexity is shown to imply that (1) (efficient) extraction ceases to the left of the minimum efficient scale, i.e., where average costs exceed marginal costs; and (2) a competitive equilibrium does not exist. Introduction of a backstop technology (which induces a flat portion of the industry demand curve) restores both existence and efficiency, provided that the backstop price is sufficiently low. If firms face even a small amount of uncertainty regarding their rivals' stocks, a backstop technology is sufficient to restore existence of competitive equilibrium, even if the backstop price is very high. In this case, however, the competitive equilibrium is not efficient.     

QUADRATIC SINGLE AND MULTI-COMMODITY MODELS OF SPATIAL EQUILIBRIUM: A SIMPLIFIED EXPOSITION

This paper presents a somewhat simplified exposition of quadratic single and multi-commodity models of spatial equilibrium. The intent is to facilitate their understanding by students and researchers. A graphical model is presented which illustrates the necessary conditions for spatial equilibrium. Then single commodity programming models with, first, quantities and, subsequently, prices in the decision domain are constructed. The equivalence of the graphical and programming models, as well as application of the necessary conditions as constraints in the programming models, are ilustrated. Finally, a multi-commodity model with asymetric demand and supply coefficients is constructed as a primal-dual formation in which the constraints are the necessary conditions for spatial equilibrium.
Cet exposé présnte une interprétation assez simplifiée de modéles quadratiques d'équilibre spatial à produits individuels et multiples. Son dessein est de faciliter aux étudiants et aux rechercheurs leur compréhension de ces modèles. Un modèle graphique qui montre les conditions nécessaires à I'équilibre spatial est présenté. Ensuite, des modèles de programmation à produits individuels sont construits avec, premièrement, des quantités dans le domaine de la prise des décisions et, par la suite, avec des prix dans ce mème domaine. L'équivalence des modèles graphiques et des modèles de programmation, aussi bien que l'application des conditions nécessaires comme contraintes dans les modèles de programmation, y sont illustrés. Enfin, un modél à produits multiples, avec coefficient asymétriques de demande et d'offre, est construit comme formulation unique/double dans laquelle les contraintes sont les conditions nécessaires à l'équilibre spatial.     

Regional Economic Impacts of Fusarium Head Blight in Wheat and Barley

Fusarium Head Blight is a fungus affecting wheat and barley in the upper Midwest region of the United States. The purpose of this study is to estimate the direct and secondary regional economic impacts of Fusarium Head Blight infestations from 1998 to 2000. Cumulative direct production and price impacts from Fusarium Head Blight in hard red spring, soft red winter, durum wheat, and barley are estimated at $871 million over the period, with secondary economic losses of $1.8 billion. The total impacts of $2.7 billion were concentrated in North Dakota and Minnesota, which accounted for 55% of total losses over the period.     

Has bank holding companies' diversification affected their risk of failure?

The effect of nonbank activities on the riskiness of banking organizations is an important issue in capital regulation and deciding whether banking firms should be allowed to perform additional activities. This paper explores the potential effect of deregulation by examining the effect of existing nonbank subsidiaries on the riskiness of bank holding companies. The results provide no evidence to suggest that deregulation would increase banking organizations' risk and weak evidence that deregulation might decrease risk.