Is labour becoming more or less flexible? Changing dynamic behaviour and asymmetries of labour input in US manufacturing

Have employment and hours become more flexible over time? Vectorauto-regressions are estimated using monthly time-series datato generate impulse responses, which reflect the dynamic responseof employment and average hours of labour input following agiven shock in output demand. A marked change in the US manufacturingsector occurred after 1979. Although there is heterogeneityby industry and asymmetry over the business cycle, hours havebecome somewhat more and employment considerably less flexible,particularly during expansion phases. Employers are apparentlydelaying hiring and relying more on using hours as a bufferto absorb fluctuations in output demand.     

The demand for home mortgage assets by savings and loan associations

The purpose of this article is to analyze empirically the factors that enabled S&Ls to respond, concerning their demand for home mortgage assets, to the record high interest rates, inverted yield curves, and new competition for deposits by money market mutual funds. These factors include changing regulatory accounting procedures, increased participation in the secondary mortgage market, and increased asset diversification allowed for by Garn-St. Germain. The empirical results are based on a model of the demand for home mortgage assets specified in terms of an optimal marginal portfolio adjustment model. The results show that changing regulatory procedures and the subsequent impact on secondary mortgage markets had the most impact. The increased lending power granted by Garn-St. Germain had little effect on the demand for home mortgage assets by S&Ls.