Forecasting the resurgence of the U.S. economy in 2010: An expert judgment approach

This paper describes a forecast, performed in December 2008, of the time of the recovery of the U.S. economy from the contraction that began in December 2007. As in two earlier papers, the forecast uses an expert judgment approach, the Analytic Hierarchy Process (AHP), within the framework of decision theory, as well as its generalization to dependence and feedback in the form of the Analytic Network Process (ANP). The findings of this paper are that the economy would begin its recovery in July-August, 2010. While forecasting is always hazardous, our 2001 paper successfully forecast the date the recovery began. Since 1920 the validating authority for the turnaround dates has traditionally been the widely recognized National Bureau of Economic Research (NBER). The Bureau usually releases an official statement with their finding many months after the event (and of course after the forecasts had been done). Our results on the month in which the recovery began in 2001 were confirmed by the NBER in July 2003. We will again await the NBER determination of the time of recovery from the current recession.     

Structural evolution of the postwar U.S. economy

We consider a time-varying parameter vector autoregressive model with stochastic volatility and mixture innovations to study the empirical relevance of the Lucas critique for the postwar U.S. economy. The model allows blocks of parameters to change at endogenously estimated points of time. Contrary to the Lucas critique, there are large changes at certain points of time in the parameters associated with monetary policy that do not correspond to changes in “reduced-form” parameters for inflation or the unemployment rate. However, the structure of the U.S. economy has evolved considerably over the postwar period, with an apparent reduction in the late 1980s in the impact of monetary policy shocks on inflation, though not on the unemployment rate. Related, we find changes in the Phillips curve tradeoff between inflation and cyclical unemployment (measured as the deviation from the time-varying steady-state unemployment rate implied by the model) in the 1970s and especially since the mid-1990s.     

An extreme value analysis of the last century crises across industries in the U.S. economy

The two large scale crises that hit the world economy in the last century, i.e. the Great Depression and the Great Recession, have similar outbreak and recovery patterns with respect to several macroeconomic variables. In particular, the largest depressions are likely to be accompanied by stock-market crashes. This study investigates the behavior of the U.S. stock market before, during and after deep downturns, focusing particularly on the tails of the return distribution. We develop two automatic procedures to identify multiple change-points in the tail of financial time series as well as in the co-crash and co-boom probabilities of different markets. We then apply our methodology to twelve time series representative of the sectors of the U.S. economy. We find that regime shifts in the lower tail of the distribution tend to co-occur before deep downturns. Our results contribute to a better understanding of the origin and systemic nature of large scale events to make policy interventions more timely and effective.     

Investment incentives and the demand for labor in U.S. regions

Most studies of federal investment incentives are limited to those policies' effects on capital formation. This paper departs from this tradition by examining the employment consequences, in general, and by industry and metropolitan area. In particular, it asks whether the accelerated depreciation allowance and investment tax credit: (1) generally displace more jobs (via the substitution effect) than they create (via the scale effect), (2) affect the overall employment situation in some metropolitan areas more than in others, and (3) help reallocate jobs across industries and metropolitan areas. Using data from Los Angeles and Philadelphia in two production models, the paper concludes that each of these outcomes is likely, though (2) depends on metropolitan areas' particular mixes of industries.     

Performance pay and changes in U.S. labor market dynamics

A shift in the design of labor compensation occurred at around the mid-1980s in the U.S. and deals with an increased role of performance pay in driving the cyclical movements of wages. Using a DSGE model we show that this structural change accounts at least qualitatively for many observed changes in the U.S. labor market dynamics. It generates the disappearance of the procyclical response of labor productivity to non-technology shocks and the reduction of the contractionary effects of technology shocks on hours. Moreover, it is conducive to a drop in the volatility of output, a parallel increase in the volatility of wages and to changes in unconditional correlations consistent with what documented in the U.S. between the pre- and post-1984 periods.     

Effects of U.S. equal employment opportunity and affirmative action programs on women's employment stability

An important labor market issue in the United States is the effect that the Equal Employment Opportunity and affirmative action programs that were implemented in 1965 have had on the employment of women relative to that of men. Using time series data covering the period 1947–1988, an analysis of this issue is undertaken. The results indicate that women in the 20–54 age group benefitted in terms of greater stability of employment (i.e., less sensitivity to short run variations in employment) over the period 1965–1980 while they lost some of these gains over the period 1981–1988 (corresponding to the tenure of the Reagan Administration). Men in the same age group, on the other hand, experienced the opposite effect. That is, men in the 20–54 age group became more sensitive to short run variations in employment over the period 1965–1980 and less sensitive over the period 1981–1988. The evidence also indicates that the EEO and affirmative action programs had the effect of increasing the share of projected employment of women in the 20–54 age group and in the 55–64 age group while decreasing the share of projected employment of men in the comparable age groups.     

U.S. interstate labor force migration: An analysis of trends, net exchanges, and migration subsystems

The rich geography and complex temporal trends of U.S. interstate labor force migration are portrayed. The most commonly reported net migration statistics hide multi-faceted patterns of state-to-state exchange. Maps depicting net migration balances show that much population redistribution has been taking place counter to the popularly conceived Frostbelt-to-Sunbelt flow. Significant net migration exchange takes place within each of the major regions of the U.S. as well as between them.

Principal component analyses carried out on gross state-to-state flow tables for 1960–1965, 1965–1970, and 1970–1975 suggest the existence of a set of remarkably stable migration subsystems, despite the heralded net migration turnarounds in nonmetropolitan-to-metropolitan and south-to-north patterns of flow.     

Alternate manpower forecasts for the coming decade: Second guessing the U.S. department of labor

This paper presents alternate detailed forecasts of U.S. occupational requirements in the coming decade obtained from simulations conducted with the Center for Advanced Computation manpower forecasting model. These alternate manpower forecasts, developed on the basis of different mixes of federal social programs and budget priorities, are compared with the long-range employment projections developed by the U.S. Department of Labor, and the differences in methodology are analyzed. The sources of potential error in the Labor Department forecasts are identified, and a potentially more accurate picture of the shape of U.S. manpower requirements in the coming decade is presented.     

A longitudinal analysis of search frictions and matching in the U.S. labor market

This paper takes a partial equilibrium on-the-job search model to a decade (1996–2006) of repeated cross-sections from the U.S. Current Population Survey. Each month, a set of parameters ruling worker mobility between labor market states and along the wage ladder is estimated using wage distributions and individual transitions. In particular, job-to-job mobility is decomposed into a voluntary component (on-the-job search) and an involuntary one (job reallocation). The resulting time series of transition parameters are first used in a longitudinal analysis of labor turnover and search frictions. Job reallocations are shown to be key in the acyclical behavior of the job separation rate, and in the procyclical behavior of the probability of changing job. Moreover, an index of search frictions is computed and shown to follow no cyclical pattern. The paper then turns to an estimation of the matching function with both unemployed and employed job seekers. The transition parameters from the job search model are used as weights in an aggregate indicator of labor supply. The inclusion of employed workers increases the estimates of the elasticities of the matching function with respect to its two inputs (labor supply and job vacancies).     

Do minimum wages raise employment? Evidence from the U.S. retail-trade sector

This paper examines the impact of minimum wages on earnings and employment in selected branches of the retail-trade sector, 1990–2005, using county-level data on employment and a panel regression framework that allows for county-specific trends in sectoral outcomes. We focus on specific subsectors within retail trade that are identified as particularly low-wage. We find little evidence of disemployment effects once we allow for geographic-specific trends. Indeed, in many sectors the evidence points to modest (but robust) positive employment effects.     

On the Technically Efficient Organization of an Industry: A Study of U.S. Airlines

In nonparametric analysis of production efficiency, the focus of attention is typically on the individual firm. In this article, we evaluate efficiency in resource utilization at the industry level. We propose an integer programming model to measure the extent of input saving possible if the observed output level of the industry is allocated to an optimal number of identical firms. This approach is applied to data for U.S. airlines covering the period 1970–84. Our results confirm that there were too few airlines prior to deregulation and suggest that there were too many firms during the early years of the post-deregulation era.     

An Examination of Proposals for a U.S. Industrial Policy

Abstract . An “industrial policy” for the U.S. appears from the writings and statements of its advocates to involve modification of federal tax laws and expenditures to allow a largely unchanged set of business institutions to better serve the public interest. It employs planning but it is planning of the sort the U.S. has always had. Those who oppose all government activity in the private sector oppose it, not realizing that the anti-trust laws, for example, do not interfere with the economy's operation but aid it to function beneficently. It is those whose activities are anti social who are loudest in their demands for business “freedom.” Does the U.S. need a more efficient economic system? Intercountry comparisons show that in many areas it lags. To achieve stability of income and employment as well as productive efficiency, the U.S. has many policy options it can consider—and it must.     

Assessing the effects of U.S. shocks on the Canadian economy using alternative identification methods

This paper investigates the extent of the transmission of U.S. supply and demand shocks to the Canadian economy using three different identification methods. Our findings are robust across identifications. We show that over the flexible exchange rate period, U.S. shocks tend to intensify Canadian business cycles, while they reduce the mean of Canadian prices and inflation. We also find that overall Canadian output is less sensitive to U.S. disturbances than found in earlier studies. Moreover, when the structural shocks are allowed to be correlated across countries, Canadian shocks explain around 18% of U.S. real GDP growth long run forecast error variance.     

Investment and employment in manufacturing in U.S. metropolitan areas 1960–1976

This paper develops a simple vintage model of the relation between investment and employment in manufacturing. Parameters of the model are estimated using time series data for the US taken from the Surveys and Censuses of Manufactures conducted from 1954–1976. The results indicate that the age of the manufacturing capital stock was increasing in most major metropolitan areas during this period. Due to capital aging, the nature of technological change, and the pattern of depreciation, the amount of annual investment per worker required to sustain employment in manufacturing rose substantially. The dispersion of growth rates across areas also increased.     

An empirical analysis of the effect of volunteer labor on public library employment

This study is an empirical investigation of the effect of library volunteers on public library demand for paid workers. Unlike previous studies, it estimates the impacts on different types of paid labor. The main purpose is to test whether volunteer labor replaced or complemented paid employees. A translog cost function is used to derive cost shares and elasticities of substitution for Pennsylvania public libraries. Cross‐elasticity estimates of substitution and input demand suggest a strong complementary relation between volunteers and professional workers. Most of the other Allen cross elasticities were not statistically significant. None of the estimates indicate that paid labor was being replaced by volunteers. Copyright © 2007 John Wiley & Sons, Ltd.     

美国物流六十年及启示

回顾了物流在美国的发展和研究状况,从历史和学术研究史的角度看,对深入认识物流的本质和未来发展趋势都有着重要的作用.同时,美国物流的发展史对我国的物流发展也有着积极的借鉴作用.     

Labor composition and long-run employment in a minimum-wage economy

This article examines the long-run consequences of minimum wage regulation within the framework of a two-labor-sector growth model, where a minimum real wage is effective only in the “unskilled” labor sector. The assumption of heterogeneous labor makes possible a stable steady-state growth equilibrium. Conditions for the stability and existence of steady-state equilibrium are presented. A significant implication of the model is that selective immigration policies that encourage the influx of skilled workers would have the long-run effect of increasing the employment rate of unskilled labor, even in cases where the two labor sectors are nearly perfect substitutes.     

美国物流六十年及启示

回顾了物流在美国的发展和研究状况,从历史和学术研究史的角度看,对深入认识物流的本质和未来发展趋势都有着重要的作用。同时,美国物流的发展史对我国的物流发展也有着积极的借鉴作用。