A theory of growth and volatility at the aggregate and firm level

We present an endogenous growth model that explains the evolution of the first and second moments of productivity growth at the aggregate and firm level during the post-war period. Growth is driven by the development of both (i) idiosyncratic R&D innovations and (ii) general innovations that can be freely adopted by many firms. Firm-level volatility is affected primarily by the Schumpeterian dynamics associated with the development of R&D innovations. The variance of aggregate productivity growth is driven by the arrival rate of general innovations. Ceteris paribus, the share of resources spent on development of general innovations increases with the stability of the market share of the industry leader. As market shares become less persistent, the model predicts an endogenous shift in the allocation of resources from the development of general innovations to the development of R&D innovations. This results in an increase in R&D, an increase in firm-level volatility, and a decline in aggregate volatility. The effect on productivity growth is ambiguous.On the empirical side, this paper presents new cross-country evidence that R&D subsidies are not significantly associated with higher growth but are associated with lower aggregate volatility. It also documents an upward trend in the instability of market shares, a positive association between firm volatility and R&D spending, and a negative association across sectors between R&D and how correlated the sector is with the rest of the economy.     

Macroeconomic dynamics in a model of goods,labor, and credit market frictions

Goods market frictions drastically change the dynamics of the labor market, both in terms of persistence and volatility. In a model with three imperfect markets – goods, labor, and credit – we find that credit and goods market imperfections are substitutable in raising volatility. Goods market frictions are unique in generating persistence. Two key mechanisms in the goods market generate large hump-shaped responses to productivity shocks: countercyclical goods market tightness and prices alter future profit flows and raise persistence; procyclical search effort of consumers and firms raises amplification. Goods market frictions are thus key in understanding labor market dynamics.     

Downward wage rigidity and business cycle asymmetries

The growth rates of wages, unemployment and output of a number of OECD countries have a strongly skewed distribution. In this paper we analyze to what extent downward wage rigidities can explain these empirical business cycle asymmetries. To this aim, we introduce asymmetric wage adjustment costs in a New-Keynesian DSGE model with search and matching frictions in the labor market. Increasing wages is less costly than cutting them. It follows that wages increase relatively fast and thus limit vacancy posting and employment creation, but they decline more slowly, leading to a strong reduction in vacancies and employment. The presence of downward wage rigidities strongly improves the fit of the model to the observed skewness of labor market variables and the relative length of expansions and contractions in the output and the employment cycles. The asymmetry also explains the differing transmission of positive and negative monetary policy shocks from wages to inflation.     

Consumption heterogeneity,employment dynamics and macroeconomic co-movement

Real-business-cycle models rely on total factor productivity (TFP) shocks to explain the observed co-movement among consumption, investment and hours. However an emerging body of evidence identifies “investment shocks” as important drivers of business cycles. This paper shows that a neoclassical model consistent with observed heterogeneity in labor supply and consumption across employed and non-employed can generate co-movement in response non-TFP shocks. Estimation reveals fluctuations in the marginal efficiency of investment that explain the bulk of business-cycle variance in consumption, investment and hours. A corollary of the model׳s empirical success is the labor wedge that is not important at business-cycle frequencies.     

The Impact of Firing Costs on Turnover and Unemployment: Evidence from the Colombian Labour Market Reform

Reductions in firing costs are often advocated as a way of increasing the dynamism of labour markets in both developed and less developed countries. Evidence from Europe and the U.S. on the impact of firing costs has, however, been mixed. Moreover, legislative changes both in Europe and the U.S. have been limited. This paper, instead, examines the impact of the Colombian Labour Market Reform of 1990, which substantially reduced dismissal costs. I estimate the incidence of a reduction in firing costs on worker turnover by exploiting the temporal change in the Colombian labour legislation as well as the variability in coverage between formal and informal sector workers. Using a grouping estimator to control for common aggregate shocks and selection, I find that the exit hazard rates into and out of unemployment increased after the reform by over 1\% for formal workers (covered by the legislation) relative to informal workers (uncovered). The increase of the hazards implies a net decrease in unemployment of a third of a percentage point, which accounts for about one quarter of the fall in unemployment during the period of study.     

Managerial power, compensation gap and firm performance — Evidence from Chinese public listed companies

We study the relationship between compensation gap and firm performance in the Chinese market. Extant studies have shown that, for the publicly traded companies in China, compensation gap between senior executives plays a tournament role and motivates managers to achieve higher level of performance. Ordinary least squares (OLS) regression results confirm the above result. However, simultaneous regression results indicate that the tournament effect is more significant in firms with high managerial powers. Our finding suggests that previous findings using OLS might be incomplete. We also show that firms with better performance and greater managerial power tend to have greater compensation gap. Meanwhile, the relationship between managerial power and firm performance is, on average, negative.     

Unionization,product market competition,and strategic disclosure

We examine the disclosure policies of non-unionized firms operating in unionized industries. We test the hypothesis that non-unionized firms have an incentive to disclose more information when their unionized rivals are engaged in labor renegotiations; that is, to weaken them. We find that non-unionized firms disclose more information and more good news when renegotiations are ongoing. This behavior is stronger for larger firms, firms with fewer peers in the industry, and firms more similar to their renegotiating rivals. We also find some evidence that unionized firms are harmed by this behavior and that non-unionized firms benefit from their increased disclosures.     

行政操控、投机主导与股市困境——中国股票市场20年回顾

规范的股票市场具有筹措资金、优化资源配置、改善公司治理、价格发现及促进经济发展等重要功能,是国民经济的“晴雨表”。由于上市公司违规猖獗加之市场监管不力,中国股票市场成为造假圈钱、投机冒险、杀贫济富、权贵洗钱的场所。20年当中既没有成就一家世界级企业,也没有引发全民财富效应。相反,它浪费社会资源,将中产阶级打回原形,严重伤害民众参与改革的热情。     

防风险调结构稳增长促进保险市场又好又快发展

2009年以来,面对严峻复杂的国际国内环境,全行业牢牢把握保险工作的主动权。上半年保险业较好地实现了防风险、调结构、稳增长的目标,形势比年初预期的要好。总的来看,保险业面临的形势依然十分复杂,既有积极因素,也存在一定的困难和挑战。下半年,全行业要继续贯彻落实全保会和监管会的部署,按照防风险、调结构、稳增长的工作要求,结合经济金融形势和保险市场运行的新情况新变化,巩固和发展深入学习实践科学发展观活动成果,创造性地推进各项工作,促进保险市场又好又快发展,更好地服务经济社会发展全局。