Idiosyncratic risk and aggregate employment dynamics

This paper studies how idiosyncratic productivity risk impacts aggregate employment dynamics when there is a trade-off between workers' productivity and costs of job creation and destruction. In our analysis, increasing idiosyncratic risk induces a producer to move workers out of structured jobs that are costly to create and destroy and towards less productive but more flexible unstructured positions. This substitution leaves the producer's total employment more responsive to both idiosyncratic and aggregate disturbances. If all of an industry's producers respond to heightened idiosyncratic risk in this way, then industry-wide employment can respond more to a given aggregate shock. We apply this insight to connect differences between young and old manufacturing plants' aggregate employment dynamics with their corresponding differences in idiosyncratic variability.     

The new investment theory and aggregate dynamics

This paper develops a dynamic general-equilibrium model of capital adjustments under monopolistic competition. Investments are partially irreversible. The model includes microfoundations for consumption decisions and capital-adjustment strategies. The effects of the model parameters on the optimal capital-adjustment strategy are determined analytically. A major result is that the aggregate net investment is proportional to the difference between the desired and previous aggregate capital. The speed of adjustment decreases with the cost of reversibility, is invariant to the shares of labor and capital, and increases with the level of macroeconomic uncertainty. However, the latter effect is not quantitatively important.     

Understanding and forecasting aggregate and disaggregate price dynamics

There are doubts regarding the empirical benefits of forecast aggregation. Theoretical research clearly supports forecast aggregation but conflicting results exist in the empirical literature. We search the literature for empirical regularities. One important issue often cited is estimation error and papers which are unsupportive of forecast aggregation often have short spans of data. A second empirical regularity is that researchers frequently use a relatively small number of disaggregates. Our work finds that the greatest benefits to aggregation are realised when a large number of disaggregates are used. This is a natural consequence of the theoretical results. A second critical issue in forecast aggregation is model selection. We suggest a simple guide to model choice based on the empirical properties of the data. In this regard, the extent of comovements between the constituent series determines model choice.     

Labour market institutions in open economy: Sectoral reallocations,aggregate adjustments,and spillovers

We introduce frictional unemployment in a multiworker heterogeneous firm model with a dynamic matching process, one‐ and two‐sector equilibria, and international markets. A change in labour market policies transforms the share of exporters and affects average productivity. The closure of equilibrium with or without sectoral arbitrage plays an important role in generating macro‐level outcomes for employment subsidies. Unemployment benefits, on the other hand, make unemployment and openness rise, independently of sectoral reallocations. We also find that simultaneous implementation of labour market policies remove potential gain in the trade share, and, when it comes to unemployment benefits, may even be detrimental.     

Government subsidy and aggregate productivity dynamics: Evidence from China

Based on data for Chinese manufacturing firms from 1999 to 2007, this study explores the dynamic evolution of aggregate total factor productivity (TFP) from the perspective of firmsʼ entry and exit. It also quantifies how government subsidies influence the aggregate productivity growth. By decomposing aggregate productivity growth into components, including technological progress, reallocation, entry, and exit effects, we found that aggregate TFP growth in Chinese manufacturingfollows an upward trend during the sample period. This tendency originates from the contribution of technological progress, reallocation, and exit effects. Moreover, the effects of these four components on aggregate TFP growth of different industries, regions, and ownership types are different. Furthermore, technological progress, reallocation, and exit effects are important pathways for government subsidies to promote aggregate TFP growth in Chinese manufacturing.     

Convergence and growth. Labour productivity dynamics in the European Union

This paper investigates labour productivity dynamics for 1263 regional economies of the European Union during 1991–2007. Despite convergence is usually found to occur conditionally to economy-wide factors, results reveal a clear process of unconditional convergence for financial and business-related market services. Such an evidence is not found for manufacturing and aggregate productivity, for which long run distribution dynamics are characterized by bimodality. The decomposition of the growth rate of aggregate labour productivity reveals that pure productivity gains drive growth. Structural change plays a minor role in the process, however it halves the contribution of the manufacturing sector for the richest regions, while it enhances the weight of financial market services.     

Financing constraints,firm dynamics,export decisions,and aggregate productivity

We present a dynamic model in which firms accumulate wealth to avoid bankruptcy and to overcome financing constraints that affect their fixed operational costs and the costs of becoming an exporter. Financing constraints not only affect firms directly when they are binding, but also indirectly, through precautionary saving and the selection of firms via entry and exit of the domestic and export markets. We calibrate the model and test some of its predictions using a rich dataset of Italian manufacturing firms for the period 1995–2003. Financing constraints reduce the aggregate productivity gains induced by trade liberalization by 25 percent by distorting the incentives of the most productive firms to self-select into exporting.     

Labour quality in Taiwan: measurement and contribution to economic growth

This article compiles labour input indices that capture both employment changes and quality improvement of labour in Taiwan, from 1994 to 2011. Up to 77.19% of average annual labour input growth is from quality improvement. Further decomposition reveals that the most important source of growth is educational attainment, followed by age structure. Moreover, we find that Taiwan’s average annual GDP growth rate does not result from capital investment but from the contribution of a stable labour input to economic growth. Taiwan is a newly industrialized country, but because of the diminishing returns to capital, the catch-up effect has been slower than hoped. Additional capital investment has a relatively small effect on productivity, and the main source of the continuous economic growth rate is from labour quality, especially from highly skilled human capital. Making good use of these human resources creates a stable source of sustained economic growth.     

Micro and macro dynamics: Industry life cycles,inter-sector coordination and aggregate growth

Technological change directly affects economic growth by exploiting and exploring technological opportunities, thus determining productivity growth and income. However, technological change also affects the composition of the economic system, which itself constitutes an important prerequisite for economic growth. The first aim of this paper is to show that the growing variety of the economic system, determined by the emergence of new products and services and leading to new industrial sectors, can allow the long term continuation of economic development, even when the employment creating capacity of individual sectors falls. The second aim is to illustrate the impact of micro variables on the meso-level, that is, on the sectoral composition of an economy, as well as on its macro-economic performance.      

Measuring efficiency when competitive prices aggregate differences in product quality and risk

In perfectly competitive markets with homogenous goods, prices aggregate inputs and outputs into a money metric that allows production plans and, hence, firms to be ranked by their profitability. Standard techniques of efficiency measurement use this metric to estimate cost and profit frontiers that identify “best-practice” production, conditioned on these exogenous prices. However, when prices vary due to differences among firms in the quality of outputs and inputs and in how asymmetric informational problems are resolved, both quality and the production of information can be decision variables of the firm, and prices will have endogenous components linked to production decisions. For example, in banking, prices of financial inputs and outputs are linked to credit quality and, hence, to risk and, thus, aggregate both inputs and outputs and their risk characteristics as well as reflect how informational asymmetries in credit markets are ameliorated. This paper argues that these cases pose two serious problems for the standard techniques of efficiency measurement: (1) they underestimate inefficiency because, in conditioning on prices, they fail to account for the effects of suboptimal pricing strategies on profitability; and (2) in ignoring how production plans and pricing strategies affect market-priced risk, the standard techniques neglect the effects of different pricing strategies on the discount rate, on expected profit and, hence, on market value. Two alternative techniques that do not condition their frontiers on prices and that account for risk are described to show how they measure the efficiency of different pricing strategies as well as production plans. These two alternative models for measuring efficiency are employed to study how differences in pricing strategies affect the efficiency and market value of highest-level bank holding companies in the United States in 1994.     

Heterogeneous labor and the dynamics of aggregate labor demand: Some estimations using panel data

In this article we pay attention to the conditions that make an aggregate labor demand equation consistent with the underlying model at a more disaggregated level when heterogeneity exists across firms or across workers. It is argued that this consistency rests on the condition that employment evolves in the same direction in all firms and for all skill levels.Moreover, it is shown empirically that even though the above condition is satisfied, satisfactory estimations of an aggregated model can hide misspecification problems that become apparent when one also estimates the underlying disaggregated models.     

Currency devaluations,aggregate demand,and debt dynamics in economies with foreign currency liabilities

The article uses a post Kaleckian model to analyze how currency devaluations affect aggregate demand and capital accumulation in an economy with foreign currency liabilities in the short-run. In benchmark post Kaleckian open economy models, currency devaluations have two effects. First, they change international price competitiveness and thus affect net exports. Second, devaluations change income distribution and thereby affect consumption and investment demand. The overall effect on aggregate demand and investment is ambiguous and depends on parameter values. Existing models, however, disregard balance sheet effects that arise from foreign currency-denominated external debt. The article develops a novel post Kaleckian open economy model that introduces foreign currency-denominated external debt and balance sheet effects to examine the demand-effects of devaluations. Furthermore, the article models the dynamics of external and domestic corporate debt. It discusses how an economy may end up in a vicious cycle of foreign-currency indebtedness and derives the conditions under which indebtedness becomes stable or unstable. It shows that the existence of foreign currency-denominated debt means that contractionary devaluations are more likely, and that foreign interest rate hikes, and high illiquidity and risk premia compromise debt sustainability. Devaluations only stabilize debt ratios if they succeed in boosting domestic capital accumulation.     

Employment fluctuations and dynamics of the aggregate average wage in Poland, 1996–20031

The aggregate average wage is often used as an indicator of economic performance and welfare, and as such often serves as a benchmark for changes in the generosity of public transfers and for wage negotiations. Yet if economies experience a high degree of (non‐random) fluctuation in employment, the composition of the employed population will have a considerable effect on the computed average. In this paper we demonstrate the extent of this problem using data for Poland for the period 1996–2003. During these years the employment rate in Poland fell from 51.2 percent to 44.2 percent and most of this fall occurred between the end of 1998 and the end of 2002. We show that about a quarter of the growth in the average wage during this period could be attributed purely to changes in employment.     

Job quality and the economics of New Labour: a critical appraisal using subjective survey data

This paper assesses the record on job quality during the earlyterm of office of the New Labour government by interpreting,from a political economy perspective, changes in a variety ofsubjective measures of job quality taken from several differentdata sources. We find some improvements in job quality overthe period 1998–2004; however we argue that these improvementshave arisen not because of New Labour's policies towards theworkplace but because of low and falling rates of unemployment.Despite recent improvements, a large number of workers in Britainremain in low quality jobs and, without a radical change ofpolicy direction, sustained and substantial progress in thequality of work will remain elusive.     

Default and aggregate income

This paper studies how default varies with aggregate income. We analyze a model in which optimal contracts enable risk sharing of privately observed, idiosyncratic income by allowing for default. Default provisions allow agents with low idiosyncratic income realizations to repay less and thus provide insurance. Default penalties ensure that only these agents default. We show that default can occur under the optimal contract and that default provisions vary with aggregate income. We provide conditions such that both the amount of default and default penalties vary countercyclically with aggregate income and show that the default rate can be discontinuous.     

深化对劳动和劳动价值论的认识

《中共中央关于制定国民经济和社会发展第十个五年计划的建议》(以下简称《建议》)中关于收入分配问题的主要内容是 :在鼓励资本、技术等生产要素参与收入分配 (按劳分配与按生产要素分配相结合 )的基础上 ,进一步提出“随着生产力的发展 ,科学技术工作和经营管理作为劳动的重要形式 ,在社会生产力起着越来越重要的作用” ,并据以建立健全收入分配的激励机制和约束机制 ,对企业领导人和科技骨干实行年薪制和股权、期权试点。后来朱基在关于《建议》的《说明》中指出 :“收入分配问题是新形势下需要着力解决好的重大课题” ,要解决好这个课…     

基于劳动力市场分割的劳动力流动模型的构建

国内外学者对于劳动力流动进行了大量深入的研究,成果颇丰.然而,由于历史的原因,我国在劳动力流动方面呈现出与其他国家不同的特性,目前,我国的劳动力市场尚未发展成熟,劳动力流动存在很严重的不合理现象.因此,结合我国的现实情况对其进行研究意义更加重大.本文试图结合以往学者的研究成果,构建基于劳动力市场分割的劳动力流动模型,对其进行深入的探讨,为实现劳动力的合理流动提供帮助.     

深化对马克思劳动价值理论劳动内涵的认识

劳动是马克思劳动价值理论的核心概念。马克思对劳动内涵的界定包括三个层次 :劳动一般、生产劳动、商品生产劳动。深化对马克思劳动价值理论劳动内涵的认识 ,有利于深化和发展马克思的劳动价值理论 ,同时也可有效地消除对马克思劳动价值理论理解上的误解和分歧。