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Does the life cycle of economic papers differ across fields of economic research? By constructing and analyzing a large dataset that combines information on 9,672 articles published in the top five economic journals from 1970 to 2000 with detailed yearly citation data obtained from Google Scholar, we find that published articles do have a life cycle that differs across fields of economic research (which we divide into the categories of applied, applied theory, econometric methods, and theory). Applied and applied theory papers are the clear winners in terms of citation counts. For the first years after their publication, they receive higher numbers of citations per year than papers in other fields of research do. They also reach a higher peak number of citations per year and apparently sustain those peak levels for longer, in addition to being cited over longer periods of time (i.e., they have a longer lifespan). Citation patterns are much less favorable for theoretical papers, which are the object of fewer citations per annum in the first years following publication, have lower peak numbers and a shorter lifespan. Econometric method papers are a special case; the pattern for most of these papers is similar to the pattern for theory papers, but the most successful papers (as measured by the number of citations) on econometric methods are also the most successful papers in the entire discipline of economics. ( JEL A14) [ABSTRACT FROM AUTHOR]

In the summer of 1861, the United States embarked on its first widespread use of paper money: the Demand Notes of 1861. Although their convertibility into gold ended at the end of that year, they remained acceptable for tariff payment at a par with gold coin while they were gradually replaced with paper money that did not share this provision, the Greenbacks. We present daily observations of exchange rates between the Notes, Greenbacks, and gold for the extended period during which they simultaneously circulated. These exchange rates substantiate our revisionist notion that the Notes were replaced because the tariff provision prevented them from generating sufficient seigniorage for wartime needs. ( JEL E42, N12, N22) [ABSTRACT FROM AUTHOR]

We study the evolution of topics in economics and their geographical specialization by analyzing 13,233 papers from seven top journals between 1985 and 2012 and their forward citations. The share of U.S. publications declines from 75% to 64% with a corresponding increase of the European share from 12% to 24%. We use topic modeling and document the evolution of the discipline over 27 years. We estimate, with a quasi‐structural model, the citation lag distribution for 18 different topics and three large geographical areas. The modal citation lag is about 6.7 years in the entire sample and 4.8 years for citations from the top 100 journals. We quantify (1) the home bias effect in citations, (2) how it fades away over time, (3) the long lasting impact of U.S. publications vis‐à‐vis other geographical areas, and (4) the higher speed of diffusion and faster obsolescence in the United States. [ABSTRACT FROM AUTHOR]

Assesses important methodological pitfalls in studies which suggest that some interest rates and interest rate spreads contain more information about economic activity than monetary aggregates. Effect of monetary policy innovations; Sensitivity of causality statistics to sample period; In-sample versus out-of-sample metrics; State of the international banking system.

In 1893, Andreas Heinrich Voigt argued that utility admits only an ordinal characterization. We discuss the apparent impact of Voigt's now forgotten early argument for an ordinal approach to utility on later economists. Edgeworth cited Voigt's ordinal-cardinal distinction several times in the Economic Journal, bringing both the concept and the terminology into Anglophone economics. In 1927, Rosenstein-Rodan, too, cited Voigt's argument for ordinal utility. Since Hicks apparently learned the cardinal-ordinal terminology from Edgeworth, and discussed utility theory and complementarity with Rosenstein-Rodan, it appears that Voigt's 1893 article is the original source of ordinal utility in economics. ( JEL B13, B21) [ABSTRACT FROM AUTHOR]

This paper investigates the link between the optimal level of nonfinancial firms’ short-term leverage and macroeconomic and idiosyncratic sources of uncertainty. We develop a structural model of a firm’s value maximization problem that predicts a negative relationship between uncertainty and optimal levels of borrowing. This proposition is tested using a panel of nonfinancial U.S. firms drawn from the COMPUSTAT quarterly database covering the period 1993–2003. The estimates confirm that as either form of uncertainty increases, firms decrease their levels of short-term leverage. This effect is stronger for macroeconomic uncertainty than for idiosyncratic uncertainty. ( JEL C23, D8, D92, G32) [ABSTRACT FROM AUTHOR]

This paper develops a dynamic model with overlapping generations where there are two possible equilibria: one without child labor, and one with it. It is shown that intergenerational transfers can eliminate the child labor equilibrium and that this intervention is Pareto improving. However, if society does not believe that the government will implement the transfer program, it won’t, reinforcing society’s expectations. This is true even if the transfer program would have been implemented in the absence of uncertainty. Thus a government may be powerless to prevent the child labor equilibrium if it does not command the confidence of their populace, leaving the country in an expectations trap. ( JEL D91, E60, J20, O20) [ABSTRACT FROM AUTHOR]

Recent research has shown that the presence of peers can increase individual output both in the lab and the field. This paper tests for negative side effects of such peer settings. We investigate whether peer settings are particularly prone to cheating even if they do not provide additional monetary benefits of cheating. Participants in our real‐effort experiment had the opportunity to cheat when declaring their output levels. Although cheating did not have different monetary consequences when working alone than when working in the presence of a peer, we find that cheating is a more severe problem in peer settings.(JEL J20, J30, M50) [ABSTRACT FROM AUTHOR]

We analyze the effect of open access (OA) status of journal articles on citations. Using cross‐sectional and panel data from mathematics and economics, we perform negative binomial, Poisson, and generalized method of moments/instrumental variable methods regressions. We benefit from a natural experiment via hybrid OA pilot agreements. Citations to pre‐prints allow us to identify the intrinsic quality of articles prior to journal publication. Overall, our analysis suggests that there is no hybrid OA citation benefit. However, for the subpopulation of articles without OA pre‐ or post‐prints, we find positive hybrid OA effects for the full sample and each discipline separately. (JEL L17, O33, A11) [ABSTRACT FROM AUTHOR]

This paper examines the demand for hockey game trips among metropolitan and nonmetropolitan residents of Alberta, Canada. Using data on both revealed and stated preference game-trip behavior from a telephone survey conducted throughout Alberta, we estimate the effect of ticket prices, team quality, arena amenities, and capacity on the latent demand for National Hockey League hockey games. We find that lower ticket prices, higher team quality, and additional capacity encourage attendance. In the status quo scenario, consumer surplus per game is $50 for those who had attended hockey games and about 50% less for those who had not attended games. Exploiting the stated preference data, we develop a number of other consumer surplus estimates. We also include travel costs in the estimation of the demand function and estimate the full value of the game trip considering both ticket prices and travel costs. Sold-out arenas in Calgary and Edmonton generate annual consumption benefits of $40 and $35 million when only ticket prices are used to calculate consumer surplus (i.e., excluding travel costs). Considering the full-price consumer surplus for the Calgary Flames of $103 per game trip, the annual consumption benefits may be as high as $82 million. [ABSTRACT FROM AUTHOR]

In the theoretical literature on contract delegation, it is assumed that the contractor has all the bargaining power when contracts are proposed to the subcontractee. In this case, the principal prefers centralized to decentralized contracting structures. This paper analyzes the consequences of relaxing this assumption. It is shown that when contracts are determined by bargaining, the principal might prefer decentralization to centralization. Furthermore, it is shown that this can happen even when subcontractees have very little bargaining power. The results explain, for example, the coexistence of centralized and decentralized contracting in public procurement. [ABSTRACT FROM AUTHOR]

This paper empirically investigates the relative importance of productivity, factor endowments, trade costs, and tastes in determining the current pattern of trade and specialization. The results show that productivity and taste differences are the first and second most significant determinants of trade and specialization. Factor endowments are the least influential for the average country in the data set, but their effects are much greater in the poorer than richer countries. The results also show the substantial role of trade costs, which is amplified through interactions with other determinants of trade. Trade costs affect the relative costs of intermediate inputs and final goods, link preferences with specialization, and reduce the geographical range of comparative advantages. [ABSTRACT FROM AUTHOR]

The model of compensating differentials in regional labor and land markets was formalized by Roback (1982) . The model interprets regional differences in constant quality wages and rents as compensating firms and residents for inter-regional differences in amenities. This paper extends the Roback model to allow for moving costs which vary among a city's residents and businesses. This modification of the model generates new interpretations of regional differences in rents and wages. The theoretical results suggest that the interpretation of inter-city rent and wage differentials as compensating is misguided, that such differentials are inappropriate as weights in Quality of Life (QOL) comparisons, and stresses the importance of local housing market parameters in the determination of these differentials. The importance of amenities is retained, but housing supply becomes the main other determinant of regional rents. Housing supply was ignored in the literature following on Roback's initial insight. We show that interactions between amenities and housing supply will bias QOL rankings. Finally, we support the empirical importance of heterogeneous moving costs by demonstrating the effects of exogenous supply constraints on local housing prices. [ABSTRACT FROM AUTHOR]

The Summer Olympics bring hundreds of thousands of visitors and generate upward of $10 billion in spending for the host city. This large influx of tourism dollars is only part of the overall impact of hosting the Olympic Games. In order to host the visitors and sporting events, cities must make sizable investments in infrastructure such as airports, arenas, and highways. Additionally, the publicity and international exposure of a host city may benefit international trade and capital flows. Proponents argue that this investment will pay off through increased economic growth, but research confirming these claims is lacking. This paper examines whether hosting an Olympiad improves a city's long-term growth. In order to control for the self-selection of cities that host Olympic Games, this paper matches Olympic host cities with cities that were finalists for the Olympic Games, but were not selected by the International Olympic Committee. A difference-in-difference estimator examines post-Olympic impacts for host cities between 1950 and 2005. Regression results provide no long-term impacts of hosting an Olympics on two measures of population, real Gross Domestic Product per capita and trade openness. ( JEL O18, R11) [ABSTRACT FROM AUTHOR]

In this paper, we develop a signaling model of rational lovemaking. In the act of lovemaking, a man and a woman send each other possibly deceptive signals about their true state of ecstasy. For example, if one of the partners is not in ecstasy, then he or she may decide to fake it. The model predicts that (1) a higher cost of faking lowers the probability of faking; (2) middle-aged and old men are more likely to fake than young men; (3) young and old women are more likely to fake than middle-aged women; and (4) love, formally defined as a mixture of altruism and demand for togetherness, increases the likelihood of faking. The predictions are tested with data from the 2000 Orgasm Survey. Besides supporting the model's predictions, the data also reveal an interesting positive relationship between education and the tendency to fake in both men and women. ( JEL D82, J16) [ABSTRACT FROM AUTHOR]

This paper studies the impact of HIV/AIDS on per capita income and education. It explores two channels on how HIV/AIDS affects income that have not been sufficiently stressed by previous literature: the reduction of the incentives to stay in school due to shorter expected longevity and the reduction in productivity of experienced workers. In the model, individuals live for three periods, may get infected in the second period, and with some probability die of AIDS before reaching the third period of their lives. Parents care for the welfare of the future generations so that they will maximize lifetime utility of their dynasty. The simulations predict that the most affected countries in Sub-Saharan Africa in the future will be, on average, 30% poorer than they would be without AIDS. Schooling will decline in some cases by 40%. These figures are dramatically reduced with widespread medical treatment, as it increases the survival probability and productivity of infected individuals. ( JEL O11, I12, C15, O55) [ABSTRACT FROM AUTHOR]

This paper is the first to examine the welfare consequences of a public firm in a traditional model of spatial price discrimination. It demonstrates that when a private firm acts as a Stackelberg location leader, the presence of a public firm always improves welfare. Moreover, when three firms locate sequentially, the presence of a public firm improves social welfare unless it locates last. Thus, despite examining a variety of location timings, including simultaneous location, privatization never improves welfare and usually harms welfare. This conclusion differs from several currently in the literature in which privatization often improves welfare. ( JEL L13, L32, L33, L52) [ABSTRACT FROM AUTHOR]

This paper examines the explicit loss born by workers who face constraints in their working hours by analyzing differences in actual and desired hours and wages. Men tend to be underemployed while women are evenly split between over- and underemployment. Losses in surplus are generally small, but 10% of underemployed men and women experience losses of more than 34% or 50% of surplus, respectively. The loss measure is also an important determinant in predicting labor market transitions, meaning increases in surplus losses generate a higher probability of changing from workers’ present jobs or changing the number of hours. ( JEL J22, J41) [ABSTRACT FROM AUTHOR]

It has been found that the consumption-wealth ratio (cay) constructed from revised data is a strong predictor of stock market returns. This paper shows that its out-of-sample forecasting power becomes substantially weaker if cay is estimated using information available at the time of forecast. The difference, which mainly reflects periodic revisions in consumption and labor income data, is consistent with the conjecture that cay is a theoretically motivated variable. That is, revised data outperform real-time data because the former have smaller measurement errors. Nevertheless, practitioners should be cautious when they need to use real-time cay as a forecasting variable. ( JEL G10, G14) [ABSTRACT FROM AUTHOR]

The article discusses various reports published within the issue, including the theoretical, empirical, and experimental studies relative from labor and industrial organization to macroeconomics, public choice, and health economics.

Capacity utilization is a closely watched macroeconomic indicator because rising utilization may signal rising inflationary pressures. However, recent technological changes have increased the flexibility of relationships between inputs and outputs, potentially eroding the predictive value of the utilization rate. This paper examines relationships between technology, capital spending, and capacity utilization. After establishing conceptually that the effect of recent technological changes on capacity utilization is ambiguous, we investigate the effect empirically using panel data on 111 manufacturing industries. Our results suggest that, for the average industry, the technological change of the 1974–2000 period lowered capacity utilization by 0.2–2.3 percentage points. ( JEL D24, E22, E31) [ABSTRACT FROM AUTHOR]

The labor force in Japan is projected to fall from 64 million in 2014 to 20 million in 2100, signaling unprecedented tax/transfer adjustments to achieve fiscal sustainability. In this paper, we develop a quantitative overlapping generations model to measure the impact of guest worker programs in Japan. Against a baseline general equilibrium transition in which the consumption tax adjusts to achieve fiscal sustainability, we compute alternative transitions with guest worker programs. Depending on the size and skill distribution of guest workers, these programs may mitigate Japan's fiscal imbalance problem with a relatively manageable increase in the consumption tax. ( JEL E2, E6, H5, J11, J15) [ABSTRACT FROM AUTHOR]

This paper empirically examines the impact of competition in the television (TV) industry on the number of movie theaters, their attendance, and their box office revenues. Studies of firm entry usually focus on the impact of regulation on economic outcomes within an industry, thereby neglecting its impact on neighboring industries. Using changes in regulation in the Spanish local TV station industry, we estimate the impact of TV entry on the movie theater industry between 1993 and 2005. Our findings show that local TV entry decreased the number of theaters and screens in a province, as well as movie attendance and box office revenues. ( JEL L11, L43, L82) [ABSTRACT FROM AUTHOR]

We investigate state‐dependent effects of fiscal multipliers and allow for endogenous sample splitting to determine whether the U.S. economy is in a slack state. When the endogenized slack state is estimated as the period of the unemployment rate higher than about 12%, the estimated cumulative multipliers are significantly larger during slack periods than nonslack periods and are above unity. We also examine the possibility of time‐varying regimes of slackness and find that our empirical results are robust under a more flexible framework. Our estimation results point out the importance of the heterogenous effects of fiscal policy and shed light on the prospect of fiscal policy in response to economic shocks from the current COVID‐19 pandemic. [ABSTRACT FROM AUTHOR]

This paper investigates zoning in a duopoly model of spatial price discrimination. We find that the zone in which the firms are not allowed to locate depends on the bias of the regulator. A bias toward firms is deduced when locations around the central area are forbidden, and a bias toward consumers exists when firms are only allowed to locate at places around the central area. The design of the zoned area guarantees that firms locate optimally and works under simultaneous or sequential choice of locations by the two firms. (JEL L13, R38 ) [ABSTRACT FROM AUTHOR]

In this paper we examine the implications of two theories of informational frictions, signal extraction (SE) and rational inattention (RI), for optimal decisions and economic dynamics within the linear-quadratic-Gaussian (LQG) setting. We first show that if the variance of the noise and channel capacity (or marginal information cost) is fixed exogenously in the SE and RI problems, respectively, the two environments lead to different policy and equilibrium asset pricing implications. Second, we find that if the signal-to-noise ratio and capacity in the SE and RI problems are fixed, respectively, the two theories generate the same policy implications in the univariate case, but different policy implications in the multivariate case. We also show that our results do not depend on the presence of correlation between fundamental and noise shocks. We then discuss the applications to macroeconomic models of permanent income and price-setting. ( JEL C61, D81, E21) [ABSTRACT FROM AUTHOR]

This paper considers the role of alcohol in agency problems in order to provide an economic rationale for alcoholics and workaholics. In our model, alcohol reduces productivity, but also can make imbibers blurt private information. We show that in the optimal contract, low-productivity workers are compelled to over-indulge in alcohol, while high-productivity workers overproduce output. Thus, workers are made into 'alcoholics' and 'workaholics' depending on their productivity. We conclude that excessive drinking (working) may be the result, not the cause, of low (high) productivity of workers. ( JEL D82, VSOP) [ABSTRACT FROM AUTHOR]

This paper argues that income received via redistributive transfers, unlike labor income, requires no direct sacrifice of leisure; this makes it attractive to many voters even if it leaves them poorer. This point is made within the classic model wherein heterogeneous voters evaluate an income-redistribution program that finances a lump-sum transfer to all via a distorting income tax. The political-equilibrium policy under majority rule is the tax most preferred, utility-wise, by the median voter. Ironically, this voter, and many poorer voters, may support a redistribution policy that leaves them poorer in income terms but with higher utility. (JEL H2, E6, D72 ) [ABSTRACT FROM AUTHOR]

Firms often cooperate explicitly through activities such as research joint ventures, while competing in other markets. Cooperation in research and development can allow firms to internalize the external benefits of knowledge creation and increase the returns from research and development (R&D) expenditures. Such cooperation may spill over to facilitate collusion in the market, however, potentially lowering welfare and efficiency. This paper uses a laboratory experiment to examine if sellers successfully coordinate to fund a joint research project to reduce their costs, and how this collaboration affects their pricing behavior. The experiment includes control treatments with separate R&D cooperation and markets. Our results show that although participants usually cooperate when given an opportunity, cooperation is observed less frequently when they also compete in the market. Communication improves cooperation in all environments, particularly when the market is present. Nevertheless, the data provide no evidence of seller collusion in the market. ( JEL D43, D71, H40, O3) [ABSTRACT FROM AUTHOR]

This paper introduces trade adjustment considerations as active determinants of trade policy. Using novel U.S. data sets, I show that, despite their small monetary value, trade-induced unemployment and trade-adjustment costs can incite an incumbent politician to grant protection to an unorganized industry, even in the presence of political pressure by organized sectors. This finding complements the theoretical predictions from Grossman and Helpman (American Economic Review, 84, 1994, 833-50) who argue that the government should protect organized industries but should subsidize imports in unorganized sectors. ( JEL D73, F13, F14, F16, J68) [ABSTRACT FROM AUTHOR]

This paper presents a model of self-fulfilling expectations by firms and households which generates multiplicity of equilibria in pay and housework time allocation for ex-ante identical spouses. Multiplicity arises from statistical discrimination exerted by firms in the provision of paid-for training to workers, rather than from incentive problems in the labor market. Employers' beliefs about differences in spouses' reactions to housework shocks lead to symmetric (ungendered) and asymmetric (gendered) equilibria. We find that: (1) the ungendered equilibrium tends to prevail as aggregate productivity in the economy increases (regardless of the generosity of family aid policies), (2) the ungendered equilibrium could yield higher welfare under some scenarios, and (3) gender-neutral job subsidies are more effective that gender-targeted ones in removing the gendered equilibrium. ( JEL J16, J70, J71) [ABSTRACT FROM AUTHOR]

This paper exploits an international bilateral data set over the period 1963-1998 to investigate the relationship between foreign direct investment (FDI) and foreign-educated labor in an FDI host country. Workers educated abroad acquire country-specific human capital that is more productive in the host country of study. A foreign subsidiary sharing a parent firm's technology will invest more if it has more foreign-educated labor, since it can utilize this labor more productively because of the country-specific human capital. Consistent with our predictions, our empirical findings show that foreign-educated labor accounted for a sizable portion of growth in FDI flows. [ABSTRACT FROM AUTHOR]

This paper experimentally investigates if and how people's competitiveness depends on their own gender and on the gender of people with whom they interact. Participants are given information about the gender of the co-participant they are matched with, they then choose between a tournament or a piece rate payment scheme, and finally perform a real task. As already observed in the literature, we find that significantly more men than women choose the tournament. The gender of the co-participant directly influences men's choices (men compete less against other men than against women), but only when the gender information is made sufficiently salient. A higher predicted competitiveness of women induces more competition. Giving stronger tournament incentives, or allowing the participants to choose the gender of their co-participant, increases women's willingness to compete, but does not close the gender gap in competitiveness. [ABSTRACT FROM AUTHOR]

This paper measures the returns to investing in violins, using two different datasets. One dataset includes 337 observations on repeat sales of the same violins at auction and at dealer sales starting in the mid-nineteenth century, and another dataset includes over 2,500 observations on sales of individual violins at auction since 1980. Overall, real returns for the dataset on repeat sales for the period 1850-2008 have been approximately 3.5%. Real returns to the overall portfolio of individual sales since 1980 have been about 3.3%. The price path has been stable with a slight negative correlation to stocks and bonds. ( JEL D44, G11, L82) [ABSTRACT FROM AUTHOR]

In this paper we present an endogenous growth model to analyze the growth maximizing allocation of public investment among N different types of public capital. Using this general model of public capital formation, we analyze the stability of the long-run equilibrium and we derive the growth-maximizing values of the shares of public investment allocated to the different types of public capital, as well as the growth-maximizing tax rate (amount of total public investment as a share of GDP). Then we proceed with an empirical investigation of the theoretical implication of the model that both the effects of the shares of public investment and the tax rate on the long-run growth rate are non-linear, following an inverse U-shaped pattern. Using data of public investment in infrastructure and military capital formation, we derive empirical estimations that confirm the theoretical implications of the model. ( JEL E62, H56, O40). [ABSTRACT FROM AUTHOR]

In this paper, we compare potential and realized cost savings from hospital mergers. Our approach isolates changes in realized cost savings due to different output mixes from systematic changes due to time and also provides a measure of the potential cost savings due to scale economies. Our findings suggest that economies of scale are present for merging hospitals and they realize these cost savings immediately following a merger. However, we also show that over time, cost savings from the merger decrease and the proportion of hospitals experiencing positive cost savings declines. ( JEL L1, I11, C14) [ABSTRACT FROM AUTHOR]

This paper explores the effect of mortalities from the 1918 influenza pandemic and World War I on wage growth in the manufacturing sector of U.S. states and cities from 1914–1919. The hypothesis is that both events decreased manufacturing labor supply, thereby initially increasing the marginal product of labor and wages. The results reveal that states and cities having had greater influenza mortalities experienced higher wage growth—roughly 2–3 percentage points for a 10% change in per capita mortalities. World War I combat mortalities also had a positive, but smaller, effect on wage growth. ( JEL N62, N32, N92, I12) [ABSTRACT FROM AUTHOR]

There is considerable empirical evidence that energy prices had a large effect on the U.S. economy between World War II and the 1980s. This paper argues that linkages between manufacturing industries amplify the effect of an energy price shock and help explain the large effect. In particular, energy-intensive industries are important input suppliers to other industries. When the price of energy increases, energy-intensive industries contract, raising materials prices for other industries. Because of the reduction in materials supply, the downstream industries also contract, which I refer to as the supply effect. Using data from the Census of Manufactures, I find that the supply effect accounted for about one half of the sensitivity of value added to the price of energy. I use plant-level census data to show that the supply effect caused similar changes in value added per plant as in value added per industry. A price increase caused a small, although statistically significant, decrease in entry and had no effect on exit. Finally, the supply effect reduced plant-level labor demand. ( JEL E32, Q43) [ABSTRACT FROM AUTHOR]

This paper uses laboratory evidence from public goods games to examine how in payoff-equivalent situations, decision makers contribute toward private or public goods when they are exposed to different kinds of risks and uncertainties in the provision of these goods. We find that location matters with subjects moving away from the environmental uncertainty in favor of strategic uncertainty when that uncertainty is located on the private good. When the uncertainty relates to the public good, subjects face both kinds of uncertainties on the same good, leading to a significant drop in contributions. An opportunity to reduce uncertainty increases cooperation. ( JEL C90, D81, H41) [ABSTRACT FROM AUTHOR]

This study investigates the completion of the Ph.D. in economics. We use ex ante information, based upon reviewing individual applications from former doctoral students. Students need different skills to succeed at each distinct stage of the doctoral program. Significant determinants for passing the comprehensive exams include Graduate Record Exam (GRE) verbal and quantitative scores, a Masters degree, and prior focus on economics. By contrast, research motivation and math preparation play significant roles in completing the dissertation. GRE scores become insignificant for completion in the generalized ordered logit estimates, which emphasize the sequential nature of the Economics Ph.D. program. ( JEL I210) [ABSTRACT FROM AUTHOR]

In a classic paper, Nelson and Plosser could not reject the unit root hypothesis in favor of trend stationarity for 13 out of 14 long-term annual macro series. Subsequent studies, allowing for one or two structural changes, have found more rejections with a broken trend stationary alternative. Since these changes are defined to be permanent, the rejections do not provide evidence of trend stationarity. We propose new tests for a unit root in the presence of restricted structural change. Allowing for two offsetting structural changes, we reject the unit root null in favor of restricted trend stationarity for 6 out of 13 series. ( JEL C22, E32) [ABSTRACT FROM AUTHOR]

This paper explores how the optimal mode of public finance depends on the level of economic development. The theoretical analysis suggests that in the presence of capital market imperfection and liquidity shocks, the detrimental effect of inflation on growth is stronger (weaker) at lower (higher) levels of economic development. Consequently, income taxation (seigniorage) is a relatively less distortionary way of financing public expenditure for low-income (high-income) countries. We provide empirical support for our model’s predictions using a panel of 21 Organization for Economic Cooperation and Development countries and 40 developing countries observed over the period 1972–1999. ( JEL E44, E6, H6, O42) [ABSTRACT FROM AUTHOR]

As part of the current debate on the reform of pension systems, this paper presents an original experimental test where subjects face three different payoff sequences with identical expected value. Two central questions are analyzed. First, whether the distribution of retirement benefits across time influences the retirement decision. And second, whether actuarially fair pension systems distort the retirement decision. The results indicate both that a lump-sum payment rather than annuity benefits is far more effective in delaying the retirement decision and that recent reforms that encourage the link between lifetime contributions and pension benefits to delay the retirement decision should take into account timing considerations. ( JEL C91, H55, J26) [ABSTRACT FROM AUTHOR]

Ranks core journals in economics using the textbook citation method. Role of economic theory in economics; Top nine journals identified; Status of the market share of top nine journals; Limitations of the textbook citation method.

This paper determines the optimal level of firm specific training and the optimal level of layoffs when some workers are unreliable in that they may receive and accept offers from outside the firm; more specifically, the paper determines the evolution of firm specific training and layoffs as a worker acquires a reputation for reliability with his employer. The paper shows, for example, that layoffs may be higher or lower than the level implied by the condition that a worker's value of leisure equal the value of his contribution to output. [ABSTRACT FROM AUTHOR]

Should laissez faire prevail as to the private-market supply of the AIDS antibody test? Applying a recent theorem from the economics of property rights, this paper determines that the answer is negative, and shows that the optimal policy regarding the AIDS antibody test differs according to whether individuals are at low risk or high risk. Next, using the same economic theory, this paper finds that rules guaranteeing strict confidentiality of the AIDS test result are unjustified. They also are unjustified on traditional legal grounds. [ABSTRACT FROM AUTHOR]

Many of the paradoxes in capital theory arise from seeking a purely 'physical' measure for the aggregate stock of capital. Several recent papers made it clear that heterogeneous capital outfits cannot be measured by a single aggregate index which is independent of the rate of interest. This paper defines and proves the general properties of an index of capital intensity -the degree of 'roundaboutness'--which admits both the physical and the time dimensions of capital. A modified form of the neoclassical parables is defined and proved to be universally valid despite reswitching. [ABSTRACT FROM AUTHOR]

This paper examines the consequences of a change in unemployment insurance payments. Most previous works on this topic have utilized a job search model to predict that an increase in unemployment insurance payments will lead to an increase in the expected duration of unemployment. It is shown in the paper that this conclusion rests on two assumptions of dubious validity. When these assumptions are replaced by more reasonable ones significantly different predictions are obtained. For example, an increase in unemployment insurance payments is predicted to reduce the number of long term unemployed. [ABSTRACT FROM AUTHOR]

This paper builds some bridges between economics, psychology and cybernetics by showing how a theory of learning when put into finite automaton terms yields insights about how learning is related to doing in a market enviornment. [ABSTRACT FROM AUTHOR]

We argue that an important determinant of voters' support for economic reform is the strength of family ties. While the 'crisis hypothesis' predicts that crises facilitate reform, we show in a political economy model that this relation can break down, and even reverse, when agents take into account the effect of reform on their family members. Applied to southern European countries with strong family ties, the model rationalizes why the extremely high (youth) unemployment following the Great Recession has not led to more substantial labor market reforms. In such countries austerity might block rather than foster additional structural reforms. ( JEL D64, D72, J48) [ABSTRACT FROM AUTHOR]