Model misspecification effects for biased samples

The model misspecification effects on the maximum likelihood estimator are studied when a biased sample is treated as a random one as well as when a random sample is treated as a biased one. The relation between the existence of a consistent estimator under model misspecification and the completeness of the distribution is also considered. The cases of the weight invariant distribution and the scale parameter distribution are examined and finally an example is presented to illustrate the results.     

Working and Caring for a Child with Chronic Illness: Challenges in Maintaining Employment

This paper shares some pertinent findings from an initial, qualitative stage of a larger, national study currently being undertaken in Australia, exploring the support needs of parents who are working full time and caring for a child with chronic illness. The findings presented here depict the negative impact of these parents caring responsibilities on their work life and the increased stress they experience trying to maintain full time employment. In-depth interviews revealed how these parents had to rearrange their working hours, use up their leave entitlements, work unsatisfactory hours, sacrifice their careers and even change their jobs in order to balance their dual roles. In addition, the findings also highlight the negative and unsupportive attitude that employers had towards these parents. These employment conditions were extremely stressful and frustrating for parents affecting their physical and emotional well being.     

Aggregate stock market behavior and investors’ low risk aversion

This paper studies whether investors’ high risk aversion can be avoided in a representative-agent model that is able to explain aggregate stock market behavior in the US financial market. We present a consumption-based asset pricing model with a representative agent who has a ‘catching up with the Joneses’ preference to show that high risk aversion can be avoided in a representative-agent model that can help explain many of the empirically observed properties of the aggregate stock market return, including the equity premium and risk-free rate puzzles, the predictability of long-horizon stock returns, and the ‘leverage effect’ in return volatility.     

Why the structure of capital and the useful lives of its components matter: A test based on a model of Austrian descent

This paper centers on the structure of capital and the useful lives of its components by considering an economy with two representative firms, one producing a necessity and another producing a luxury. This difference determines their reinvestment opportunities. Therefore, while the one applies replacement, the other adopts scrapping. However, as these capital policies lead to different service lives, the analysis confronts the issues raised by Miller (Review of Income and Wealth 29:284–296, 1982, Review of Income and Wealth 36:67–82, 1990) and deals with them by drawing on Haavelmo’s (A study in the theory of investment, Chicago: The University of Chicago Press, 1960) suggestions regarding the aggregation of capital. Among other findings, it turns out that the simulation results are highly robust, thus demonstrating that real-world implications may be even stronger than strictly suggested by the model.

Liquidity traps, learning and stagnation

We examine global economic dynamics under learning in a New Keynesian model in which the interest-rate rule is subject to the zero lower bound. Under normal monetary and fiscal policy, the intended steady state is locally but not globally stable. Large pessimistic shocks to expectations can lead to deflationary spirals with falling prices and falling output. To avoid this outcome we recommend augmenting normal policies with aggressive monetary and fiscal policy that guarantee a lower bound on inflation. In contrast, policies geared toward ensuring an output lower bound are insufficient for avoiding deflationary spirals.     

The information content of the Reserve Bank of Australia's inflation forecasts

In this article, the inflation forecasts produced by the Reserve Bank of Australia (RBA) and that generated by private forecasters, are used to assess whether the Reserve Bank possesses information about inflation that the private sector does not have. The results show that the Reserve Bank inflation forecasts embody useful predictive information about inflation, beyond that contained in private forecasts, over the recent inflation targeting period.     

Crude oil price forecasting based on internet concern using an extreme learning machine

The growing internet concern (IC) over the crude oil market and related events influences market trading, thus creating further instability within the oil market itself. We propose a modeling framework for analyzing the effects of IC on the oil market and for predicting the price volatility of crude oil’s futures market. This novel approach decomposes the original time series into intrinsic modes at different time scales using bivariate empirical mode decomposition (BEMD). The relationship between the oil price volatility and IC at an individual frequency is investigated. By utilizing decomposed intrinsic modes as specified characteristics, we also construct extreme learning machine (ELM) models with variant forecasting schemes. The experimental results illustrate that ELM models that incorporate intrinsic modes and IC outperform the baseline ELM and other benchmarks at distinct horizons. Having the power to improve the accuracy of baseline models, internet searching is a practical way of quantifying investor attention, which can help to predict short-run price fluctuations in the oil market.     

The time cost of food at home: general and food stamp participant profiles

Little is known about the cost of time in food preparation at home. Yet, this economic variable is a common thread running through recent concerns about obesity and the Food Stamp (FS) program. This article provides initial estimates of the time cost in food preparation at home for the United States. Two standard methods of estimation are implemented and three demographic profiles are considered: (i) the general population, (ii) the typical FS participant and (iii) the typical FS participant following the United States Department of Agriculture Thrifty Food Plan. For the general population and averaging across methods, the time cost share of total food cost is about 30% if the individual works in the market and at home, but it is about 49% if the individual does not work in the market. For the typical FS participant, especially one following the Thrifty Food plan, the time cost share of total food cost can be as much as 26% higher than the general population. These substantial percentages provide strong incentives to purchase food away from home and help undermine overall diet quality and the efficacy of the FS program, which ignores the time cost in food at home production.     

Competition and the relative productivity of large and small firms

Using a comprehensive dataset on the incidence of price-fixing across British manufacturing industries in the 1950s, I compare collusive and competitive industries and find evidence of a negative relationship between collusion and the labour productivity of larger firms relative to smaller firms. In particular, collusion is associated with a reduction or even a reversal of the productivity gap between larger and smaller firms. This result is robust to controlling for the potential endogeneity of collusion.