Pooling forecasts in linear rational expectations models

Estimating linear rational expectations models in a limited-information setting requires replacing the expectations of future, endogenous variables either with instrumented, actual values or with forecast survey data. Applying the method of Gottfries and Persson [Empirical examinations of the information sets of economic agents. Quarterly Journal of Economics 103, 251–259], I show how to augment these methods with actual, future values of the endogenous variables to improve statistical efficiency. The method is illustrated with an application to the US hybrid new Keynesian Phillips curve, where traditional, lagged instruments and the median forecast from the Survey of Professional Forecasters both appear to miss significant information used by price-setters, so that forecast pooling with actual values improves the statistical fit to inflation.     

Competition between farmed and wild salmon: the Japanese salmon market

This article examines the Japanese market for salmon. This market is of interest, since it is the largest and most diversified salmon market in the world with wild and farmed species, from Europe and South and North America, competing in the same market. In contrast to the European Union (EU)‐ and U.S.‐markets, there have been neither trade conflicts nor trade restrictions. The Japanese market can hence provide information about the impact of bringing substantial quantities of a new product into a market, and the effect of large‐scale aquaculture on traditional fisheries. In this article, market integration between wild and farmed salmon on the Japanese market is examined, using both bivariate and multivariate cointegration analysis. Tests for the Law of One Price are also conducted. The results indicate that the species are close substitutes on the market, and that the expansion of farmed salmon has resulted in price decreases for all salmon species.     

The changing economic status of U.S. disabled men: Trends and their determinants, 1982–1991

We track the level of economic well-being of the population of men who began receiving Social Security Disability Insurance benefits in 1980–81 from the time just after they became beneficiaries (in 1982) to 1991. We present measures of the economic well-being of disabled individuals and their nondisabled peers as indicators of the relative economic position of these two groups. These measures also provide an intertemporal comparison of well-being and hardship as disabled persons and their nondisabled peers age and retire. We first show several economic well-being indicators for new male recipients of disability benefits in 1982 and 1991. We then compare their economic position to that of a matched group of nondisabled males with sufficient work histories to have been disability-insured. Because labor market changes over this decade have led to a relative deterioration in the position of younger and less-educated workers, we compare men with disabilities to those without disabilities and distinguish different age and educational levels within the groups. We conclude by assessing the antipoverty effectiveness of Social Security income support for both younger and older male SSDI recipients. First version received: May 1998/final version received: July 1999     

The impact of OSHA inspections on manufacturing injury rates.

This paper estimates the effects of OSHA inspections on injury rates at the plant level. The methodology involves comparing injury rates of plants inspected 'early'in a given year with those inspected "late" in the year, after controlling for prior injury rates and other factors. The results suggest that OSHA inspections in 1973 reduced injury rates by about 16 percent, but that 1974 inspections had no statistically significant impact.     

Competitive nonlinear tariffs

This paper generalizes the study of nonlinear tariffs, i.e., those depending nonlinearly on the quantity purchased, to the case of a symmetric oligopoly. Competitive equilibria and the corresponding tariffs are analyzed in a Cournot framework. Various equilibria are obtained, which depend both upon the number of competing suppliers and the choice of market parameters used to characterize the competitors' strategies. Buyers are classified by type, each selecting an optimal consumption level in response to the prevailing tariff. The phenomena of buyer self-selection found in monopoly nonlinear pricing and the scaling of equilibrium demand elasticity found in Cournot models both appear in the results.     

THE CONCENTRATION OF PERSONAL WEALTH IN AMERICA, 1969

This essay focuses on the problems of estimating the share of America's personal wealth in the hands of affluent individuals by a technique known as the estate multiplier method. Rather than exploring these problems in an empirical vacuum, we first present some results from the most recent estimates of the distribution of U.S. personal wealth.¹ The estimates—for the year 1969—are then used as a basis for gauging the sensitivity of estate multiplier estimates to variations in approach.
Section I presents new empirical findings dealing with the asset holdings of top wealth-holders and the super rich, and with the shares of specific assets owned by them. Also presented is information about the sex and marital status of the super rich.
Section II discusses various technical aspects of the estate multiplier as applied to federal estate tax returns. The main concern is with the weighting process, but attention is paid to the fact that estate tax returns filed in a given year are not for decedents who died in that year or any single year, and to the problems of adjusting the face value of life insurance to cash surrender value.     

FAMA ON BUBBLES

While Eugene Fama has repeatedly expressed his discontent with the notion of an “irrational bubble,” he has never publicly expressed his opinion on “rational bubbles.” On empirical grounds Fama rejects bubbles by referring to the lack of reliable evidence that price declines are predictable. However, this argument cannot be used to rule out rational bubbles because such bubbles do not necessarily imply return predictability, and return predictability of the kind documented by Fama does not rule out rational bubbles. On data samples that include the 1990s, there is evidence of an explosive component in stock market valuation ratios, consistent with a rational bubble.     

Narrativity and identity in the representation of the economic agent

We critically survey explicit discussions of the narrativity of economic agents by economists. Narrativity broadly refers to the way humans construct and use stories, notably to define their personal identity. We borrow from debates outside of economics to provide the critical dimension of our survey. Most contributions on the narrativity of economic agents do not discuss one another. To establish communication, we suggest a structure of oppositions that characterize these contributions taken as a whole. These oppositions are notably characterized by three tensions: in terms of methodological attitudes (‘scientism’ vs. ‘humanism’), of underlying theories of personal identity postulating the existence of a unique sense of self or not (‘diachronicity’ vs. ‘episodicity’) and of the normative implications of narrativity (‘welfare-increasing’ vs. ‘welfare-decreasing’). The main goal is to clarify the structure of opposite positions within a more or less explicit debate about the identity of individuals in economics.     

NEW PUBLIC MANAGEMENT: The effects of contractualism and devolution on political control

This article analyzes effects and implications of New Public Management (NPM) when implemented in the civil service systems in New Zealand and Norway, focusing especially on the effects of devolution and contractualism on political control. Using a transformative perspective, we interpret these effects as a result of a melding of environmental factors, polity features and national historical-institutional constraints. Norway scores low on both environmental and internal factors enhancing administrative reform, furthering a soft version of NPM and small changes in political control. In contrast a combination of external pressure, weak countervailing cultural forces and ‘elective dictatorship’ in New Zealand produces a radical version of NPM, resulting in a weakening of central political control.