Majority voting on tax parameters: Some further results

Earlier analysis of properties of tax functions chosen by majority rule is extended to include more general characterization of individual preferences. Outcomes when preferences are not single-peaked are discussed in some detail.     

Revisions to US labor market data and the public’s perception of the economy

Using the monthly “Employment Situation” reports for 1994–2013, this paper studies the revisions to US employment data. The paper shows that the first press release underestimates net job creation in expansions and overestimates it in downturns. The “errors” in reporting the data on the labor market can distort the public’s perception about the stance of the labor market and have some political consequences. This is well reflected by the finding that the job approval rating of President Obama, the index of consumer confidence, and the economic conditions index of Gallup have all been responding to the initial news on the US labor market as they were published in the Employment Situation reports.     

A Keynesian model of search and labor market disequilibrium

The paper develops Keynesian employment dynamics in a search model with stochastic vacancy-availability playing the major role. A UV curve is derived from the search dynamics, and in effect represents a demand for searchers to maintain employment levels. The supply of searchers is determined from the real wage, the duration of the search necessary to locate a vacancy, and layoff probabilities. Persistent disequilibrium in the labor market is examined, and it is shown how a lowering of the real wage can increase employment and lower unemployment.     

Selden's model of inflation: A reexamination

Selden has presented a model which appears to offer strong support for a monetary explanation of inflation. Using bivariate regression to relate percentage changes in quarterly prices to percentage changes in M1 in previous quarters, he finds values of R² from 0.70 to 0.88 and t-statistics of 12 or more when using data for the U.S., Canada, Belgium, and the Netherlands. Unfortunately, the unreported DW statistics for the regressions range from 0.30 to 0.46. Reestimated with a correction for autocorrelation, the t-statistics collapse, values of rho are almost unity, and there is little evidence to support a monetary explanation of inflation.     

包含劳动力市场条件的劳资关系模型及实证分析

本文构建了包括城市失业人口和农村剩余劳动力的全社会角度的失业率指标,以工资和劳动生产率作为劳资之间经济利益关系的考察变量,运用自回归分布滞后模型,实证分析了我国特定劳动力市.场条件下的第二产业和建筑业工资与劳动生产率之间的关系.发现工资增长促进劳动生产率提高的效应,在建筑业存在比第二产业更显著的揭示了通过提高工资改善劳资关系的经济意义.     

Some Hicksian and Marshallian consumer's surplus estimates in discrete choice

This note describes the theory and practice of applying the Hicksian approach to cost-benefit analysis to discrete choice models. It illustrates the technique with numerical estimates of Hicksian and Marshallian consumer's surplus measures based on computer simulations using real-world data.     

Hotelling's spatial competition as a model of sales

Hotelling's spatial competition model is used to explain the existence of sales. It is shown that (1) an equilibrium in randomized strategies exists when a pure strategy equilibrium fails to exist, (2) with more dissimilarity among brands prices are chosen from a wider interval.     

A Schumpeterian model of investment and innovation with labor market regulation

Theoretical and empirical models provide ambiguous responses on the relationship between labor market regulation, innovation and investment. On the one hand, labor market regulation increases firms' adjustment costs and, ceteris paribus, decreases investment. But, on the other, it also stimulates firms to invest, innovate, increase productivity and profit in the long run. In this paper we present an endogenous growth model that describes the role of these opposite forces, and why a stricter labor market regulation may positively affect innovation and investment in the long run. Most of the theoretical and empirical results hold for Italy, Germany, France, and Spain.     

The structure of spot rates and immunization: Some further results

This paper estimates and tests a two-factor model of the term structure of interest rates based on the methodology developed by Elton, Gruber and Michaelly (1990) in an APT context. The model is then enlarged to allow its use for interest rate risk measurement through a duration vector. The results of the model using in-sample data are consistent with those obtained by Principal Components Analysis to explain the term structure behaviour. Finally, the model is tested using out-of-sample data, showing its superiority over a competing model based on the traditional Macaulay's duration.     

我国劳动力市场供求波动分析

我国劳动年龄人口将在“十二五”时期达到最高峰.庞大的劳动力供给将给就业造成非常大的压力,就业的结构性矛盾将进一步加剧,劳动力供求的变化趋势和结构性矛盾呈现出新的特点.本文通过分析2001年第一季度到2010年第四季度我国劳动力市场供求变化信息,结合同时期经济波动情况,分析劳动力供求的变动特征,以期为我国现阶段解决失业问题提供有益的政策建议.     

Termination of dynamic contracts in an equilibrium labor market model

In an equilibrium model of the labor market, workers and firms enter into dynamic contracts that can potentially last forever, but are subject to optimal terminations. Upon termination, the firm hires a new worker, and the worker who is terminated receives a termination contract from the firm and is then free to go back to the labor market to seek new employment opportunities and enter into new dynamic contracts. The model permits only two types of equilibrium terminations that resemble, respectively, the two kinds of labor market separations that are typically observed in practice: involuntary layoffs and voluntary retirements. The model allows for the simultaneous determination of a large set of important labor market variables including equilibrium unemployment and labor force participation. An algorithm is formulated for computing the model's equilibria. I then simulate the model to show quantitatively that the model is consistent with a set of important stylized facts of the labor market.     

Tests of the “convergence hypothesis”: Some further results

The article presents new tests of the convergence hypothesis. It first analyzes the unconditional pattern of growth of human and physical capital (conventionally measured by an inventory method) and shows that these tests do support the hypothesis that domestic inputs of poor countries appear to be catching up with those of rich countries. On the other hand, when one analyzes the pattern of growth of physical capital and Solow residual, then one is led to reject the convergence theory. Building on this discrepancy, I demonstrate that the poor countries have failed to catch up with rich ones because the progress that they have achieved in educating their workers (which is evidenced in the convergence of domestic inputs) is not sufficient to compensate for their poor endowment in the knowledge on which the education of workers stands.     

The labor market impact of immigration in Western Germany in the 1990s

In this article we estimate the wage and employment effects of recent immigration in Western Germany. Using administrative data for the period 1987-2001 and a labor-market equilibrium model, we find that the substantial immigration of the 1990s had very little adverse effects on native wages and on their employment levels. Instead, it had a sizeable adverse employment effect on previous immigrants as well as a small adverse effect on their wages. These asymmetric results are partly driven by a higher degree of substitution between old and new immigrants in the labor market and in part by the rigidity of wages in less than flexible labor markets. In a simple counter-factual experiment we show that in a world of perfect wage flexibility and no unemployment insurance the wage-bill loss of old immigrants would be much smaller.     

Search frictions and labor market participation

Cross-country differences in labor market participation are often larger than differences in unemployment rates. The same holds true across demographic groups within a given economy. We argue that the interaction between labor force participation decisions and labor market frictions can help us understand these patterns. This interaction highlights dynamic aspects of the participation decision, in contrast to standard textbook treatments that emphasize static costs and benefits of participation. We extend the standard labor market search problem to allow for a third state—non-participation—and assumes that stochastic participation costs precipitate flows into and out of non-participation. We fully characterize the worker's decision problem and use numerical simulations to demonstrate how participation patterns vary with individual characteristics and with labor market conditions.