A note on a theorem by Professor Chow

Dhrymes (1973) pointed out an error in the determinant-minimizing algorithm worked out by Chow (1964) to obtain the Three-State Least Squares estimator. We prove that the procedure suggested by Dhrymes (1973) in this connection does not yield the 3SLS estimator either.     

Some concepts of distributive justice in bargaining problems

In this article we study the problems associated with distributive justice in an abstract framework originally conceived for the analysis of social choice and bargaining problems. Induced social choice correspondences are derived by considering alternatives which are invariant under permutations of the status quo point. We study in particular the fairness correspondence and a generalized Walrasian bargaining solution and establish links between the two concepts. The analysis in this article can be extended far beyond the point at which it ends.     

Subjective Probability Forecasts for Recessions

Probabilistic forecasts are often more useful in business than point forecasts. In this paper, the joint subjective probabilities for negative GDP growth during the next two quarters obtained from the Survey of Professional Forecasters (SPF) are evaluated using various decompositions of the Quadratic Probability Score (QPS). Using the odds ratio and other forecasting accuracy scores appropriate for rare event forecasting, we find that the forecasts have statistically significant accuracy. However, compared to their discriminatory power, these forecasts have excess variability that is caused by relatively low assigned probabilities to forthcoming recessions. We suggest simple guidelines for the use of probability forecasts in practice. JEL Classification E32,E37