A SEARCH‐EQUILIBRIUM APPROACH TO THE EFFECTS OF IMMIGRATION ON LABOR MARKET OUTCOMES

We analyze the impact of the U.S. skill‐biased immigration influx that took place between 2000 and 2009 within a search and matching model that allows for skill heterogeneity, differential search cost, and capital‐skill complementarity. We find that although the skill‐biased immigration raised the overall net income to natives, it had distributional effects. Specifically, unskilled native workers gained in terms of both employment and wages. Skilled native workers, however, gained in terms of employment but lost in terms of wages. Nevertheless, in an extension where skilled natives and immigrants are imperfect substitutes, even the skilled wage rises.     

COMPARING PARTIAL AND GENERAL EQUILIBRIUM ESTIMATES OF THE WELFARE COST OF INFLATION

Reserve banks worldwide have been moving towards zero inflation policies. Confusion clouds the welfare cost of maintaining such inflation policies despite the best attempts at clarification. Monetary theory research has shifted from partial to general equilibrium economies. This shift has left the partial equilibrium estimates of the welfare cost of inflation below most of the general equilibrium estimates. Put on a comparable basis, partial equilibrium estimates compare more closely with the general equilibrium estimates. Furthermore, evidence suggests that integration under the money demand function appears applicable in general equilibrium economies. Finally, the estimates depend on the elasticities of money demand and the underlying structural parameters.     

GENERAL AND PARTIAL EQUILIBRIUM THEORY IN BORK'S ANTITRUST ANALYSIS

In applying economic theory to evaluate antitrust laws, Judge Robert Bork explicitly favors a partial equilibrium over a general equilibrium approach. He believes the general model assumes away too many real-world aspects to be usefully employed as a criterion by which to judge real-world laws.
However, Bork's partial equilibrium replacement, the Oliver Williamson trade-off model, implicitly contains many of the same assumptions as general equilibrium theory. Equilibrium prices in all industries, an absence of external effects, and well-defined demand curves are assumptions of both general equilibrium theory and the Williamson trade-off model. If one theory is judged inadequate because of these assumptions, so should the other.
Bork's analysis is more consistent with market process theory than with his own partial equilibrium approach. Market process theory assumes neither the absence of externalities, nor the presence of well-defined demand and equilibrium prices in all industries.     

SPECIALISATION AND THE EXISTENCE PROBLEM IN GENERAL EQUILIBRIUM THEORY

When the division of labour has been once thoroughly established,it is but a very small part of a man's wants which the produceof his own labour can supply... Every man thus lives by exchanging,or becomes in some measure a merchant and the society itselfgrows to be what is properly a commericial society (Smith, 1776,p. 22).     

MODELING THE EVOLUTION OF EXPECTATIONS AND UNCERTAINTY IN GENERAL EQUILIBRIUM

We develop methods to solve general equilibrium models in which forward‐looking agents are subject to waves of pessimism, optimism, and uncertainty that turn out to critically affect macroeconomic outcomes. Agents in the model are fully rational and conduct Bayesian learning, and they know that they do not know. Therefore, agents take into account that their beliefs will evolve according to what they will observe. This framework accommodates both gradual and abrupt changes in beliefs and allows for an analytical characterization of uncertainty. We use a prototypical Real Business Cycle model to illustrate the methods.     

HUMAN CAPITAL ACCUMULATION AND LABOR MARKET EQUILIBRIUM*

We analyze an equilibrium labor market with on‐the‐job search and experience effects (as workers learn by doing). The analysis yields a Mincer wage equation with worker fixed effects and endogenously determined firm fixed effects. Equilibrium sorting—where over time more experienced workers also tend to move to better paid employment—has a significant impact on wage inequality.     

CITY EQUILIBRIUM WITH BORROWING CONSTRAINTS: STRUCTURAL ESTIMATION AND GENERAL EQUILIBRIUM EFFECTS

This article develops a general equilibrium model of location choice where mortgage approval rates determine household‐specific choice sets. Estimation of the model using San Francisco Bay area data reveals that the price sensitivity of borrowing constraints explains about two‐thirds of the price elasticity of neighborhood demand. General equilibrium analysis of the 2000–2006 relaxation of lending standards predicts the following impacts on prices and neighborhood demographics: (i) an increase in house prices accompanied by a compression of the price distribution and (ii) a reduction in the isolation of Whites reflecting gentrification. Both predictions are supported by empirical observation.     

THE LIMITS TO AUSTRALIAN IMMIGRATION.

Abstract of a Paper by Professor Brigden, read before the Hobart and Melbourne Branches of the Society     

INPUT AND OUTPUT INVENTORIES IN GENERAL EQUILIBRIUM*

We build and estimate a two‐sector dynamic stochastic general equilibrium model with two types of inventories: Input inventories facilitate the production of finished goods, output inventories yield utility services. The estimated model replicates the volatility and cyclicality of inventory investment and inventory‐to‐target ratios. Although inventories are an important element of the model’s propagation mechanism, shocks to inventory efficiency are not an important source of business cycles. When the model is estimated over two subperiods (pre‐ and post‐1984), changes in the volatility of inventory shocks or in structural parameters associated with inventories play a small role in reducing the volatility of output.     

动态随机一般均衡模型： 文献研究与未来展望

动态随机一般均衡 （DSGE） 模型是近10多年来宏观经济学发展的主要标志物。它为研究经济增长和经济波动提供了统一的分析框架。DSGE模型的产生和发展大体上经历了实际的经济周期（RBC）模型和新凯恩斯主义DSGE模型两个阶段。DSGE模型是一种动态模型,又考虑了随机冲击,还具有所需数据信息较少的简约化特征,因而受到政策制定者尤其是中央银行的青睐。DSGE模型现在在理论基础、理论模型与实际数据的匹配性、模型的估计方法等方面还存在这样那样的问题,但是这个模型体现着现代宏观经济学的许多共识和发展趋势,随着贝叶斯方法与DSGE模型的有机融合,随着计算机性能和计算能力的不断提高,DSGE模型将会得到进一步发展和改进。     

INCENTIVES AND THE COST OF FIRING IN AN EQUILIBRIUM LABOR MARKET MODEL WITH ENDOGENOUS LAYOFFS*

I study the effects of firing costs in an equilibrium model of the labor market with moral hazard. Layoff is an incentive device, modeled as termination of the optimal long‐term contract. When the economy’s stock of firms is fixed, firing costs could reduce layoffs and increase worker welfare. In the long run when firms are free to enter and exit the market, firing costs generate not only lower employment, longer unemployment durations, and lower aggregate output, but also lower welfare for both employed workers and new labor market entrants.     

调整过程中的价格刚性与失业要素波动:一个动态一般均衡角度的分析

运用多产品和多要素的动态一般均衡模型,该文研究了从一个均衡价格向另一个均衡价格过渡的调整过程.应用搜寻模型,该文建立了一种联系产品市场和要素市场的调整技术,随后求解了一个最优控制问题,并证明最优价格调整路径必然是渐进的、逐步的.     

BUSINESS CYCLES IN THE EQUILIBRIUM MODEL OF LABOR MARKET SEARCH AND SELF‐INSURANCE*

I introduce risk‐aversion, labor‐leisure choice, capital, individual productivity shocks, and market incompleteness to the standard model of labor search and matching and investigate the model’s cyclical properties. I find that the model can generate the observed large volatility of unemployment and vacancies with a reasonable replacement rate of unemployment insurance benefits of 64%. Labor‐leisure choice plays a crucial role through additional utility from leisure when unemployed and further amplification from adjustments of hours worked. On the other hand, the borrowing constraint or individual productivity shocks do not significantly affect the cyclical properties of unemployment and vacancies.