Inflation regimes and the stability of the pass-through of wages to consumer prices in Canada

This article has formally identified distinct historical inflation regimes in Canada since 1961 in order to facilitate an investigation of the impact of regime changes on the wage-price dynamics in the economy. Both in and out-of-sample evidence suggest that wage growth exerts an influence on inflation only during a high-inflation regime but inflation exerts a more systematic and quantitatively stronger influence on wage growth regardless of the prevailing inflation regime. Overall, the results do not support either the ‘cost-push’ view of inflation or the ‘new view’ that claims that increased globalization during the 1990s has reduced the feedback from wage growth to inflation by weakening the bargaining power of workers.     

The broadband bonus: Estimating broadband Internet's economic value

How much economic value did broadband Internet create? Despite the importance of this question for national policy, no research has estimated broadband's incremental contribution to U.S. GDP by calibrating against historical adoption and incorporating counterfactuals. This study provides benchmark estimates for 1999 through 2006 and finds that broadband accounts for $28 billion of the $39 billion observed in 2006. Depending on the estimate, households generated $20-$22 billion of broadband revenue and approximately $8.3-$10.6 billion was additional revenue created between 1999 and 2006. Consumer surplus accounted for $4.8-$6.7 billion of this amount, which is not measured in GDP. An Internet-access Consumer Price Index would have to decline by 1.6-2.2% per year for it to reflect this unmeasured value. These estimates differ from existing benchmarks by an order of magnitude and relate to several policy debates.     

An Examination of the Quality of Jobs in the Call Center Industry

This paper examines jobs in the information society and the new economy, taking as its focus the call center industry. More specifically, the study analyzes the degree of variability of the quality of call center jobs. In order to achieve this objective, an index of job quality is generated, and an empirical analysis of the characteristics of jobs in call centers is carried out. This allows us to determine the level and variability of quality of jobs in this sector and to establish whether the reality of these jobs is as good as the forecasts for work in the new economy.      

Trust, reputation and relationships in grazing rights markets: An experimental economic study

Trust is frequently a requirement for economic exchanges and the management of natural resources. Providing public information on past actions can promote trust through the formation of reputations. We developed an economic experiment to test whether a formal reputation mechanism could facilitate trusting relationships in the tradable grazing rights markets. Providing information to create formal public reputations for market participants did not increase the overall efficiency of the market. However, it did result in greater equality of income between partners, suggesting that participants showed more concern for their partners when they knew they would be rated. Even with public reputation information, bilateral relationships remained central to the market. Market failures in existing grazing rights markets may be better addressed by measures to increase communication between partners rather than simply relying on a formal reputation mechanism.     

Optimum government credibility in an open-economy fiscal expansion

A real open-economy model is constructed in which the government's commitment to a future fiscal expansion is not credible. Government credibility (measured by the growth rate of the probability that the expansion will occur) becomes a parameter of the system and appears directly in the eigenvalues. Simulations are performed demonstrating the effect of credibility on GNP, the exchange rate, and other variables. Lastly, the optimum credibility is determined which minimizes a loss function associated with deviations from full employment.