Crowding out: A test of some direct substitutability hypotheses

The crowding-out effect has received considerable attention in recent years. Models of crowding out can be categorized into ex-ante and ex-post theories. Within the category of ex-ante theories are those models that rely upon direct substitution effects [e.g., Bailey (1972), David and Scadding (1974)). This paper presents a theoretical model that includes different theories of direct substitution effects as special cases. Once parameter restrictions are associated with the various forms of direct substitutability, the paper performs tests of the alternative hypotheses.     

A test of the household income process using consumption and wealth data

The evolution of household income can be explained almost equally well by rival models. However, rival models have very different implications for other household behaviours, such as consumption. I therefore test between two prominent models in the UK using panel data on consumption and wealth, as well as income, over 1991–2006. To operate the test, I show that long-lived income shocks transmit far less than one-for-one through to consumption, and particularly so for younger households. I then compare these estimates of transmission with estimates of households’ ability to smooth shocks, captured by the data on wealth. Conditional on the suitability of the consumption model, my estimates provide evidence against the restricted income process (RIP) and in favour of an alternative heterogeneous income process (HIP). This finding also explains why cross-sectional consumption inequality grew slowly over the period even though the variance of long-lived shocks was high. Finally, I conclude that it is important to consider mean reversion of shocks when constructing life-cycle consumption models.     

On Intersectoral allocations,factors substitutability and multiple long-run growth paths

Summary. This article considers a two-sector model of economic growth with “labour-augmenting” intersectoral external effects stemming from the aggregate capital stock. It is shown that equilibrium balanced growth paths with a non-trivial labour allocation scheme become available. A set of sufficient conditions for the existence of multiple equilibrium growth rays is provided and their determinacy properties are then characterised. Finally, examination of a parameterised C.E.S. economy illustrates the central role of non-unitary values for the elasticity of substitution in the multiplicity issue. Received: October 31, 2000; revised version: September 25, 2001     

Market timing: Recent development and a new test

Henriksson-Merton's market timing test suffers nontrivial size distortion when the event forecast is autocorrelated. A new test is suggested to detect the dependence of two autocorrelated binary time series. It complements the existing tests due to better test power.     

The substitutability between parent company and foreign affiliate employment in Europe

This paper examines the substitution pattern between parent company and foreign affiliate employment of European multinationals. The data is drawn from the AMADEUS and BANKSCOPE firm-level databases and covers parent companies in 14 high-wage European countries (EUR14) and their affiliated companies in the wider Europe including locations in the low-wage Central and East European countries (CEEC) for the period 2000–2004. We find that the substitution elasticity between employment of the EUR14 parent companies and employment in their foreign affiliates in the CEEC is quite low. Furthermore, the substitution possibilities are higher between parent company and affiliate employment in other West European countries than those between parent company and affiliate employment in the CEEC. Finally, we find that the output change of the parent company and to a lesser extent that of the foreign affiliates is more important than changes in relative wages in determining the relative labour demand.     

Dynamic mechanism design with hidden income and hidden actions

We develop general recursive methods to solve for optimal contracts in dynamic principal-agent environments with hidden states and hidden actions. Starting from a general mechanism with arbitrary communication, randomization, full history dependence, and without restrictions on preferences or technology, we show that the optimal contract can be implemented as a recursive direct mechanism. A curse of dimensionality which arises from the interaction of hidden income and hidden actions can be overcome by introducing utility bounds for behavior off the equilibrium path. Environments with multiple actions are implemented using multiple layers of such off-path utility bounds.     

Testing for substitutability in the mackerel market: a new method using fractional cointegration

This article seeks to extend knowledge of the mackerel (Scomber scombrus) market in the Basque Country (a region in Spain) by analysing possible relationships between this and other species with similar characteristics such as the sardine (Sardina pilchardus), the horse mackerel (Trachurus trachurus) and the Atlantic chub mackerel (Scomber colias), all of them landed at the ports of the Basque Country. Specifically, the goal is to learn whether these other species can be considered as mackerel substitutes. To that end, a fractional cointegration analysis of different series of historical prices is performed using a novel method never before used in studies of this type. The results indicate that mackerel have no substitutes, and thus form a mono-species regional market. This implies, among other things, that their price is not influenced by the prices of other species, and this should be taken into account by managers when designing management measures and policies to improve the sustainability of the fishing of this species.     

Limited factor substitutability,economic dualism,and non-saving constraints on growth

Limited substitutability has previously been defined as responsiveness of factor proportions within a certain factor-price range only, or as fixed coefficients in some sectors combined with variable proportions in others. This article explores a third definition: substitutability between some factors, combined with complementarity between those and other factors. The notion of economic dualism is thereby expanded to encompass a possible surplus not only of labor, but of any resource. The conclusion is that a non-saving constraint does not require fixed coefficients across the board, the economic dualism may therefore emerge even when commodity and factor markets are competitive.     

Factors substitutability,heterogeneity and endogenous fluctuations in a finance constrained economy

Summary.   This paper examines the local properties of perfect foresight equilibrium of a finance constrained economy featuring two classes of infinitely-lived agents with heterogeneous general preferences. It is primarily concerned with the conceivability of endogenous fluctuations for large plausible capital-labor elasticities of substitution. It is notably shown that heterogeneity in preferences allows Hopf cycles to be entirely consistent with a wide range of elasticities of substitution including the unitary one (Cobb-Douglas specifications). Received: April 23, 1999; revised version: January 24, 2000     

水权交易比率制度的设计与模拟

在传统水权交易制度下 ,不同用户之间的水权交易可能会减少交易双方之间河段、以及后续河段的留川水量。由于此第三者负效应的存在 ,水权交易一直难于应用与实施。本文设计了一套简单易行的水权交易比率制度。首先 ,政府规定各河段的最小留川水量需求 ;接着 ,根据留川水量需求决定各河段水权的初始分配 ,并根据交易双方用水的回流系数规定各用水者之间的交易比率。     

A new test for D-stability

A sufficient condition for D-stability of an n × n matrix A is the existence of a positive diagonal matrix P such that PA + A′P is negative definite. The search for P is replaced by solving a convex minimization problem.     

A Hausman test for non-ignorability

Using an empirical likelihood approach, we show that generalized linear models can still be consistently estimated even if dependent variables are not missing at random, and derive a Hausman test by comparing this estimator to the standard one.     

A new test for normality

Burr (1942) type XII distribution $\text{?(u)=kc u}{}^{\mathrm{c?1}}\text{(1+u}{}^{\mathrm{c}}\text{)}{}^{\mathrm{-(k+1)}}\text{u?0, k > 0, c > 0}$ is considered. Particular values of k and c give β₁ ? 0 and β₂ ? 3. Using this fact tests for normality of observations and regression disturbances are constructed.u.1. Introduction     

合理膳食与绿色消费

环境与健康，是当前人们最为关心的热门话题之一。我国目前人口近13亿，土地资源却十分有限，人均土地已临近国际粮农组织规定的警戒线；另一方面，近年来随着生活水平提高，我国患肥胖症人数逐年上升，高血压、高血脂、冠心病、中风等与饮食有关的疾病成为严重威胁人们健康的“头号杀手”，死亡人数、发病人数都已超过癌症。为此，我们应该从我国国情出发，积极探讨科学合理的饮食消费结构，从而求得合理膳食，实现绿色消费。绿色消费绿色消费是可持续发展思想在消费观念上的体现。要求在满足人们生产生活需要的同时，必须保护环境，保护人…     

The Market for New Ph.D. Economists

Multinomial logit analysis, based on survey questionnaires, shows that graduate program ranking, length of time in the Ph.D. program, publications, and marital status are important determinants of occupational outcome for new Ph.D. economists.