Economic Literacy and Inflation Expectations: Evidence from a Laboratory Experiment

We present experimental evidence of a link between economic literacy and inflation forecast accuracy. The experiment investigates two channels through which economic literacy may enable better forecasts: (i) choice of information and (ii) use of information. More literate subjects choose more relevant information and use the given information more effectively. Starting from a 10th percentile score, the boost in literacy from taking an economics course predicts a 0.64 standard deviation decline in mean absolute forecasting error. Our findings suggest that a significant portion of demographic heterogeneity in inflation expectations—observed in survey data—may be driven by heterogeneity in economic literacy.     

Downward Nominal Wage Rigidities Bend the Phillips Curve

We introduce a model of monetary policy with downward nominal wage rigidities and show that both the slope and curvature of the Phillips curve depend on the level of inflation and the extent of downward nominal wage rigidities. This is true for the both the long‐run and the short‐run Phillips curve. Comparing simulation results from the model with data on U.S. wage patterns, we show that downward nominal wage rigidities likely have played a role in shaping the dynamics of unemployment and wage growth during the last three recessions and subsequent recoveries.     

THE COST OF WASHING CLOTHES: SOURCES OF VARIATION

This paper develops the national average cost of washing clothes by examining consumer research data on the frequencies of using various water temperature settings and laundry additives and by utilizing national surveys of laundry product prices. Variations in these costs are shown to be significantly affected by three variables: (1) costs increase with family size due to the higher number of loads washed, (2) costs increase in areas where phosphate detergents are not available due to an increased use of hot water and laundry additives and (3) costs increase in harder water areas due to an increased use of hot water and fabric softener. The average increased cost for energy and laundry additives per family due to the nonavailability of phosphate detergents exceeds $11.00 per year. In addition to this amount, increased wear on washing machine parts and fabrics from the use of carbonate-built detergents significantly increases the costs to consumers in nonphosphate areas.     

PECTIN METHYLESTERASE ACTIVITY AND THE TEXTURE OF CARROT SLICES COOKED IN AN ELECTRIC CASSEROLE*

Carrot slices cooked for 11 hours on the LOW setting of an electric casserole were firmer and less acceptable than those which had been boiled for 25 minutes; when slices were cooked on the HIGH setting of the casserole for 6 hours they became as soft as boiled slices. Short periods of heat treatment in the casserole on LOW, followed by boiling for 25 minutes, produced slices which were firmer and less acceptable than those which had simply been boiled. These observations may be explained in terms of the action of the enzyme pectin methylesterase (PME) which at certain temperatures can cause firming of plant tissue. During the early stages of casserole treatment on LOW, considerable PME activity could be detected in carrot slices whereas on the HIGH setting, thermal inactivation was more rapid. When using the casserole on LOW, undesirable firmness in carrot tissue could be prevented by subjecting slices 1 cm thick to a preliminary 2 minute blanch in boiling water.     

Food patterns of two-parent,two-child households of urban South Louisiana

Food patterns of 105 two-parent, two-child households in South Louisiana were studied. A survey questionnaire was used for data collection. Age of youngest child was a highly significant factor in determining nutritional adequacy of family dietaries as measured by servings from the basic four food groups. Families with young children prepared more fruit and vegetables. Educational level of the spouse was an important factor in breakfast patterns; those with partial college educations served more meat. Part-time employed homemakers served more breakfast meals and used more convience feeds.     

HUMAN CAPITAL FORMATION AND CONTINUOUS TRAINING: EVIDENCE FOR EU COUNTRIES

This paper links data on continuous training from the EU Labour Force Survey (LFS) to information on skill levels and earnings from the EU KLEMS growth and productivity accounts, to examine the relative magnitudes of continuous workforce training versus human capital formation through the general education system in the European Union. The measurement methodology draws from the literature on measuring intangible investments by firms and sources of growth in an accounting framework. The results suggest that in the EU15 group of countries, intangible investments in continuous training represent just under 2 percent of GDP or about 35 percent of expenditure on general education. The share of GDP accounted for by training is less than a third as large in the new member states. A growth accounting method is employed to show that failure to account for continuous training leads to an underestimate of the impact of human capital on output growth in the EU.