Politico-economic inequality and the comovement of government purchases

This paper explores the implications of economic and political inequality for the comovement of government purchases with macroeconomic fluctuations. We set up and compute a heterogeneous-agent neoclassical growth model, where households value government purchases which are financed by income taxes. A key feature of the model is a wealth bias in the political aggregation process. When calibrated to U.S. wealth inequality and exposed to aggregate productivity shocks, such a model is able to generate weaker positive comovement of government purchases than models with no political wealth bias. The wealth bias that matches the cross-sectional campaign contribution distribution by income is consistent with the mild positive comovement of government purchases in the aggregate data. We thus provide an empirically relevant example where economic and political heterogeneity matter for aggregate dynamics.     

Resource allocation in a general equilibrium model of production under uncertainty: The case of variable supply of labor

This paper examines the effects of a marginal change in uncertainty on resource allocation and factor rewards by relaxing the assumption of factor inelasticity. We demonstrate that integrating a variable labor supply into Batra's two-sector uncertainty model can mitigate or reverse many of the earlier results. Specifically, a marginal increase in uncertainty may trigger the resource to move from the certainty sector to the uncertainty sector in the presence of a backward-bending labor supply curve.     

Productivity,earnings, and profit sharing — An econometric analysis of alternative models

The theoretical status of the relationship between productivity, wages, and profit sharing (PS) is poor. Only some alternative hypotheses can be formulated. From these explanations six different econometric models are derived. Using data of the German Socio-Economic Panel the models are estimated and tests and indicators are employed to choose the best model. Our investigation speaks in favour of hybrid simultaneous Tobit models where the level of profit sharing is positively correlated with productivity which induces positive wage effects on the one hand. But on the other hand the level of wages is also relevant to the question whether a firm introduces or decides to continuePS and which amount ofPS should be paid.What is obvious is not always true and introspection is a notoriously unreliable guide to empirical magnitudes. Blinder (1990, p.2)     

Competitive search markets for durable goods

Summary. This paper considers a dynamic version of Akerlof's (1970) lemons problem where buyers and sellers must engage in search to find a trading partner. We show that if goods are durable, the market itself may provide a natural sorting mechanism. In equilibrium, high-quality goods sell at a higher price than low-quality goods but also circulate longer. This accords with the common wisdom that sellers who want to sell fast may have to accept a lower price. We then compare the equilibrium outcomes under private information with those under complete information. Surprisingly, we find that for a large range of parameter values the quilibrium outcomes under the two information regimes coincide, despite the fact that circulation time is used to achieve separation. Received: August 24, 2000; revised version: October 24, 2000     

International parity relationships between Germany and the USA revisited: evidence from the post-DM period

In this study, we show the interrelation of the purchasing power parity and the uncovered interest rate parity between the US and Germany for the recent period running from 1999:01 to 2014:04. This study extends the literature by testing both hypotheses simultaneously in a multivariate ECM. This has the advantage that interactions between capital and goods markets can be considered simultaneously. Our finding of two long-run relationships between the variables shows that a disequilibrium in one of the two markets leads to a disequilibrium in the other. While analysing the reaction to cumulative shocks, we show that US variables have a greater impact on German variables than vice versa. Therefore, the rising importance of the euro and the increased integration of the European Union in the recent decade have not changed this relation.     

Hoarding behavior among consumers: Conceptualization and marketing implications

In the western world, and in the United States in particular, there has been an abundance of food, materials and fuel over the past several decades. However, many futurists suggest this condition will soon change and a wide range of scarcities will result. Conditions in underdeveloped countries suggest one probable reaction to shortages in hoarding. In light of the predicted shortages this paper (1) develops definition and conceptualization of what constitutes hoarding, and (2) examines the influence hoarding activities have on channel decisions. An overriding purpose of the paper is to generate interest and research into the topic before conditions necessitate that concern.     

A comparative analysis of multiattribute attitude models

In the consumer behavior context, multiattribute attitude models used to predict consumer choice in multiple criteria decision making situations have produced mixed results. Prediction of consumer behavior from attitudes, consequently, has been highly debated in recent years with researchers using beliefs-only, full, and extended multiattribute attitude models. The research underlying this paper was designed to compare the predictive superiority of the beliefs-only model, the full multiattribute attitude model, and a new representation identified as the combined multiattribute/determinant attribute attitude model. Data concerning patronage of fast-food chains were collected from a student panel for seven weeks. Predictive superiority was determined by average adjusted R² using the patronage behavior dependent variable. All models were tested in aggregated and disaggregated form.     

Motivating Through Delegating Tasks or Giving Attention

An important role of managers is to motivate subordinates. Monetaryrewards have been the focus of economic analysis. Managers alsouse other means to influence subordinates. If a manager canbetter assess the subordinate's ability than the subordinatehimself, and if ability and effort are complements, the managerfinds it hard not to overstate a junior's ability. Talk is cheap.We analyze under what conditions a manager can use organizationalpractices such as delegation and the selective provision ofattention to credibly communicate his assessment. We comparetheir desirability. Delegation is preferable in case the manager'sassessment is fairly accurate; attention is inescapable if itis inaccurate.