The term structure of commercial paper rates

This paper tests a generalized version of the expectations hypothesis in the market for commercial paper. Our main data set, which is new to the literature, consists of daily yield indexes constructed from the market yields for nearly all commercial paper issued by US corporations between 1998 and 2004. We show that term premia for commercial paper often rise dramatically at year-end. However, once we control for these year-end effects, we find considerable support for the generalized expectations hypothesis in the market for commercial paper.     

Shifting Trends in Semiconductor Prices and the Pace of Technological Progress

Business Economics - This paper examines three questions motivated by previous research on semiconductors and productivity growth: Why did semiconductor prices fall so rapidly in the second half of...     

Mergers and the sustainability of collusion in a Cournot-Nash supergame

Cartels may apportion profit among member firms in any number of ways. This paper demonstrates that in a Cournot-Nash supergame the impact of mergers on the sustainability of industrywide collusion depends crucially on the choice of such an apportionment scheme.     

Prices of high-tech products,mismeasurement, and the pace of innovation

Introduction

Two recent papers have made compelling cases that mismeasurement of prices of high-tech products cannot explain the slow pace of labor productivity growth that has prevailed since the mid-2000s. Does that result indicate that mismeasurement of high-tech products has limited implications for patterns of economic growth? The answer in this paper is “no.”.

Results

We demonstrate that the understatement of price declines for high-tech products in official measures has a dramatic effect on the pattern of multifactor productivity (MFP) growth across sectors. In particular, we show that correcting this mismeasurement implies faster MFP growth in high-tech sectors and slower MFP advance outside the high-tech sector. If MFP growth is taken as a rough proxy for the pace of innovation, our results suggest that innovation in the tech sector has been more rapid than the rate that would be inferred from official statistics (and less rapid outside high-tech).

Conclusion

These results deepen the productivity puzzle. If the pace of innovation in high-tech sectors has been more rapid than indicated by official statistics, then it is perhaps even more puzzling that overall labor productivity growth has been so sluggish in recent years.