The labor wedge as a matching friction

We use a search and matching model to decompose the labor wedge into three classes of labor market frictions and evaluate their role for the labor wedge and unemployment. We find that there is an asymmetric effect of labor market frictions on the labor wedge and unemployment. While the wedge is to a large extent explained by changes in matching efficiency, unemployment is accounted for by the combination of frictions to matching efficiency, job destruction and bargaining. If search and matching frictions give rise to the labor wedge, then it is relevant for explaining unemployment mainly through changes in matching efficiency.     

Static efficiency decompositions and capacity utilization: integrating economic and technical capacity notions

Starting from existing static decompositions of overall economic efficiency on nonparametric production and cost frontiers, this article proposes more comprehensive decompositions including several cost-based notions of capacity utilization. Furthermore, in case prices are lacking, we develop additional decompositions of overall technical efficiency integrating a technical concept of capacity utilization. These new efficiency decompositions provide a link between short and long run economic analysis and, in empirical work, avoid conflating inefficiency and differences in capacity utilization. An empirical analysis using a monthly panel of Chilean hydro-electric power plants illustrates the potential of these decomposition proposals.     

Labor adjustment costs and complex eigenvalues

Aggregate variables display both persistence and damped oscillations in response to temporary external shocks. The standard real business cycles (RBC) model cannot explain these patterns, because its stable eigenvalues are positive and real. We demonstrate that this model with labor adjustment costs can yield complex eigenvalues. However, numerical experiments suggest that the model cannot display distinguishable damped oscillations of aggregate variables.     

Threshold cointegration between inflation and US capacity utilization

An analogue to the Phillips curve shows a positive relationship between inflation and capacity utilization. Some recent empirical work has shown that this relationship has broken down when using data after the mid-1980s. We empirically investigate this issue using several threshold error correction models. We find, in the long run, a 1% increase in the rate of inflation leads to approximately a 0.0046% increase in capacity utilization. The asymmetric error correction structure shows that changes in capacity utilization show significant corrective measures only during booms while changes in inflation correct during both phases of the business cycle with the corrections being stronger during recessions. We also find that, in the short run, changes in the inflation rate do Granger cause capacity utilization while changes in capacity utilization do not Granger cause inflation. The Granger causality from inflation to capacity utilization can be interpreted as supporting recent calls made in the popular press by some economists that it may be desirable for the Federal Reserve Bank to try to induce some inflation. However, it is also possible to interpret these Granger causality results as arising because both variables respond to some more fundamental set of variables with the inflation rate simply responding sooner. The lack of Granger causality from capacity utilization to inflation casts doubt on the older view that capacity utilization could be a leading indicator for future inflation.     

Elasticity of substitution and productivity, capital and skill intensity differences across firms

This paper, instrumented with six theorems, shows that differences between firms in labor productivity, capital intensity and relative demand for skilled labor can be explained by differences in the substitution parameters between capital, skilled and unskilled labor in the presence of skill biased technical change.     

The Schumpeterian role of financial innovations in the New Economy's business cycle

Alan Greenspan claims that modern financial innovations, especiallyfinancial derivatives, were major contributors to a Schumpeterianprocess of ‘creative destruction’ which produceda high-growth ‘New Economy’ and opposes their regulation.A different perspective emerges when it is recognised that the‘New Economy’ followed the general contours of aSchumpeterian business cycle, and the role of modern financialinnovations is examined in that context. The authors argue thatthe primary role of financial derivatives has been in contributingto ‘reckless finance’ and speculative excesses inthe second phase of that cycle, and that Schumpeter would favoursubjecting the use of derivatives to more regulation.     

Cyclical behavior of the financial stability of eurozone commercial banks

In light of the financial crisis and the European sovereign debt crisis, we investigate the cyclical behavior of the financial stability of banks of the Eurozone, using an unbalanced dynamic panel of 722 commercial banks covering the period 1999–2013, and the generalized method of moments system. We find a negative relationship between business cycle and bank risk-taking, indicating that financial stability is procyclical. In addition, the study shows that lending activity increases risk-taking while rising capital requirements boost financial stability. Moreover, our findings suggest positive co-movements between the business cycle and lending, compared to bank's capital, whereby the procyclicality of lending and bank capital have negative effects on the financial stability of commercial banks in the Eurozone. We notice then that the cyclical behavior of commercial banks, in terms of capital requirements and lending activities, depends on their size. Therefore, lending and capital of smaller banks are procyclical while lending and capital of larger banks are countercyclical. Finally, we find the Troika institutions’ bailouts programs significantly impacted banking stability in the Eurozone.     

Forecasting stock market volatility: The role of technical variables

Accurate volatility forecasts are required by both market participants and policy makers. In this paper, we forecast stock return volatility by using a wide range of technical indicators constructed based on the past behavior of stock price, volatility and trading volume. Our out-of-sample results indicate that the incorporation of technical variables in the autoregression benchmark can produce significantly more accurate volatility forecasts. The forecasting performance of the combination of technical indicators is further compared with that of the popular economic indicators. Technical variables perform better than economic variables when the economy is an expansion, while the economic variables generate more accurate forecasts when the economy belongs a recession. These two types of variables provide complementary information over the business cycle. We obtain more reliable forecasts by combining all economic and technical information together than by combining either type of information alone.     

Trade liberalization and capacity utilization: New evidence from the Turkish rubber industry

This study empirically tests the hypothesis that trade liberalization increases capacity utilization. It calculates capacity utilization for the Turkish rubber industry by using a production theory framework. More specifically, plant-level capacity utilization levels are calculated using a Generalized Leontief cost function system. Capacity utilization levels were low but improved when the trade regime shifted from a restrictive to a more liberalized one. The size and location of plants were two significant factors which created capacity utilization differences within the industry. However, capacity utilization levels appeared to improve primarily because of trade liberalization.Also, a scholar-in-residence, Department of Economics, Duke University. My particular thanks go to Patrick Conway, Marjorie McElroy, Edward Tower, participants of the International Economics Workshops at Duke University, and the anonymous referee for helpful suggestions. Any errors are mine.     

劳动、价值和企业所有权——马克思劳动价值论的现代拓展

现代“管理革命”和“资本革命”改变了马克思价值理论得以孕育的客观条件。在出资、创业、管理三种职能分离的当代大型企业中 ,创造价值的劳动是包含创业者、管理者及专业资本经营者在内的组合劳动。相应 ,剩余价值也由过去的资本独占演变成了由资本与劳动分享。而两者的分享比例则受创业必要资本量和劳动的人力资本特征(创新性、可测性 )等变量的影响。至于资本报酬及资本所有权的原因 ,则是资本的稀缺性。简言之 ,劳动分享净剩余的根源是劳动知识化 ,而资本分享净剩余则源于资本稀缺性的继续存在。本文最后简述了上述观点对我国社会主义改革的几点启示。     

中国农村人力资本收益率研究

本项研究依据的数据资料是“中国人力资本投资与城乡就业相关性研究”课题组在 2 0 0 2年 7月至 2 0 0 3年 1月对全国 1 5省市进行的问卷调查。在对数据进行分析的基础上 ,使用计量经济学的相关模型估计了中国农村不同形式人力资本收益率。     

关于发展不同要素密集型产业的理论争论及其启示

支持发展劳动密集型产业的经济学家们认为,发展中国家资本匮乏,而劳动力资源丰富,发展劳动密集型产业,符合比较优势原则,有利于解决就业问题;而反对者则指出了比较优势战略理论的三点不足,并认为,从长期看,资本密集型产业可以更多地促进就业。两方的争论,对我们的产业结构调整和技术进步政策有重要的启发。     

当前我国经济运行的周期性波动特征

目前我国经济运行正处于存货投资短周期波动的扩张期、固定资产投资增长短周期和中周期波动的扩张期、产业结构升级中周期波动的衰退期和中长周期波动的复苏期。与这一系列经济活动的周期性变化特征相对应 ,我国GDP增长正处于短周期波动的扩张期、中周期波动的复苏期和中长周期波动的谷底。我国经济已进入了新一轮的快速增长期 ,而且短期内不会出现大幅度波动现象 ,政府仍应采取中性宏观经济政策。     

The effect of corruption on capital accumulation

This paper examines the effect of corruption in infrastructure development as well as in capital and labor markets, on capital accumulation and output in an overlapping generations model. Corruption affects income redistribution, government expenditures on infrastructure, firms’ incentive to invest, and workers’ incentive to supply labor. An increase in corruption in infrastructure development decreases capital accumulation and output if the decrease in the savings of ordinary workers is sufficiently large. An increase in corruption in the capital market decreases capital accumulation and output. An increase in corruption in labor market decreases capital accumulation and output when labor supply is completely inelastic. Simulation results based on plausible parameter values indicate that an increase in corruption in the labor market will also reduce labor supply, capital accumulation and output.      

The New Keynesian business cycle achievements and challenges

The New-Keynesian (NK) business cycle model has presented itself as a potential “workhorse” model for business cycle analysis. This paper seeks to assess afresh the performance of the baseline NK model and its various extensions. The main theme of the paper is that although the dynamic NK literature has secured a robust defence to criticism arising, inter alia, on account of lack of microfoundations, it still has a long way to go in terms of providing a fully satisfactory model of the business cycle. In this regard, it is conjectured that explicitly accounting for the role of heterogeneity in business-cycle dynamics could lead towards a viable solution.

Austrian persistence? Capital-based business cycle theory and the dynamics of investment spending

Survey data are used to investigate the very long spending lags estimated in neoclassical studies of investment expenditures. Neoclassical investment theory has trouble explaining the length of these lags. By recognizing the Austrian concept of the capital structure and applying it to the problem, the present paper explains the length of these lags as proceeding from interactions between types of capital. Austrian arguments stemming from Austrian business-cycle theory seem to be needed to explain these lags. JEL Code E3, E4, C1     

Margin rate and the cycle: the role of trade openness

Using three datasets of French manufacturing firms, this article studies the role of trade openness, in relation with the cycle, as a determinant of company margin rate. Margin rates increase as capacity utilization tightens (and vice versa), reflecting the procyclicality of margin rates. However, high import rates are limiting this procyclicality: when capacities are tight, domestic producers may not be able to serve demand, but foreign producers may substitute for them if they are already present on the market as reflected by the level of import rates.     

The distribution of sectoral TFP growth rates: International evidence

This paper investigates the distributional properties of TFP growth rates for countries in the G7 group. Our findings lend support to the hypothesis that multifactor productivity shocks can be plausibly fitted by a symmetric non-Gaussian stable distribution model. This leads to non-negligible implications for business cycle analysis.     

Persistent government spending and fiscal multipliers: The investment-channel

This paper inspects the mechanism shaping government spending multipliers in various small-scale DSGE setups with endogenous labor supply and capital accumulation. We analytically characterize the short-run investment multiplier, which in equilibrium can be either positive or negative. The investment multiplier increases with the persistence of the exogenous government spending process. The response of investment to government spending shocks strongly affects short-run multipliers on output and consumption.     

Overhead labour and feedback effects between capacity utilization and income distribution: estimations for the USA economy

ABSTRACT

Empirical studies on the USA have not reached a consensus on whether its demand is wage- or profit-led, leading many scholars to scrutinize what drives the empirical results. This article tests two possible explanations for profit-led results which are related to the presence of overhead labour. To do so, a vector autoregression model is estimated for the USA from 1964 to 2010 and the wage share is split between supervisors/managers and direct workers. The results support the argument that the income redistribution away from workers and towards managers increased the likelihood of profit-led demand and suggest that an increase in the workers’ share of income would stimulate the economy. Also, increases in capacity utilization negatively affect the supervisors’ share, so that short-run profit-led results may be capturing the cyclical behaviour of the profit share, but the effect becomes positive as time goes by, suggesting a complex determination of functional income distribution, as capacity utilization affects it in ambiguous ways.