finance inflation and employment a post keynesian kaleckian analysis the purpose of this paper is to contribute to the post keynesian kaleckian macroeconomic literature we develop a macroeconomic model that explicitly integrates the role of borrowing and cash payment commitments on outstanding debt interest plus principal repayment into the consumption and investment expenditures as well as into the inflation generating process we explore the way that finance influences the distribution effects of inflation in the demand side of a money credit using economy we suggest a new phillips curve that encapsulates the impact of financial commitments on wage and profit claims we argue that high debt and cash payment commitments are likely to be associated with a positive demand side effect of inflation on the rate of employment and that they might be conducive to a negative supply side effect of employment on the inflation rate the author 2011 published by oxford university press on behalf of the cambridge political economy society all rights reserved

brand equity and vertical product line extent this paper addresses the question of how the vertical structure of a product line relates to brand equity does the presence of premium or high quality products in a product line enhance brand equity conversely does the presence of economy or low quality products in a product line diminish brand equity economists and marketing researchers refer to variation in quality levels of products within a category as vertical differentiation whereas variation in the function or category of the products is referred to as horizontal differentiation much of the existing research on the relationship between product line structure and brand equity has focused on the horizontal structure of the product lineand has been primarily concerned with brand extensions what happens when the product line of a brand is extended horizontally into new categories researchers have been concerned primarily with how the extension fares but the effect of the extension on the core products is also important there is an analogous question of what happens when the product line of a brand is extended vertically either up market or down market this question of vertical extensions is part of the more general issue of how the vertical structure of a product line relates to brand equity the specific research questions addressed in this paper are 1 do premium or high quality products enhance the brand equity associated with the other products in the line 2 conversely do economy or low quality products diminish the brand equity associated with the other products in the line these research questions are relevant to three managerial issues in product line strategy first what are the costs and benefits of including down market products within a brand second what are the implications of including high end models within a brand third when should high end and low end products be offered under an existing brand umbrella and when should these products be offered under separate brands we address these research questions empirically through an analysis of the models and brands within the u s mountain bicycle industry we use price premium above that which can be explained by the physical characteristics of the bicycle as a metric for brand equity we then test several hypotheses related to the relationship between extension of the product line upward and downward and the price premium commanded by the brand we further support this analysis with a simple laboratory experiment the analysis reveals that price premium in the lower quality segments of the market is significantly positively correlated with the quality of the lowest quality model in the brand s product line and that for the upper quality segments of the market price premium is also significantly positively correlated with the quality of the highest quality model in the brand s product line the results of the analysis are supported by the outcome of an experiment in which 63 percent of the subjects preferred a product offered by a high end brand to the equivalent product offered by a low end competitor these results imply that managers wishing only to maximize the equity of their brands would offer only high quality products and avoid offering low quality products however this result must be moderated by the overall objective of maximizing profits maximizing profits is likely to involve a tradeoff between preserving high brand equity and therefore high margins and pursuing the volume typically located in the lower end of the market one of the most significant implications of this research is that product line managers need to be mindful not just of the incremental cannibalization or stimulation of sales of products that are immediate neighbors of an extension to the product line but also the effect of such an extension on the brand equity in other possibly quite different parts of the product line

measuring and assessing capacity utilization in the manufacturing sectors of nine oecd countries following a tradition established by cassels klein and hickman we employ the economic theory of cost and production and define economic capacity output as that output at which short and long run average total cost curves are tangent to one another capacity utilization cu rates are then computed as the ratio of actual to capacity output we implement this framework empirically by specifying and estimating a translog variable cost function for the manufacturing sectors of nine oecd countries we find that by the end of the historical sample the early 1980s pervasive and chronic excess capacity exists while the average cost consequence of excess capacity was relatively modest in the 1960s the burden increased considerably after opec i and after opec ii the premium was as large as 15 of average total costs we also find that electricity and fuel price increases had small impacts on capacity output relative to that from labor or capital finally we adjust conventional measures of multifactor productivity growth for changes in cu and find that the adjusted growth is larger after 1973 than that based on traditional procedures

the constitution of economic policy one of the most exciting intellectual moments of my career was my 1984 discovery of knut wicksell s unknown and untranslated dissertation finanztheoretische untersuchungen buried in the dusty stacks of chicago s old harper library only the immediate post dissertation leisure of an academic novice allowed for the browsing that produced my own dramatic example of learning by serendipity wicksell s new principle of justice in taxation gave me a tremendous surge of self confidence wicksell who was an established figure in the history of economic ideas challenged the orthodoxy of public finance theory along lines that were congenial with my own developing stream of critical consciousness from that moment in chicago i took on the determination to make wicksell s contribution known to a wider audience and i commenced immediately a translation effort that took some time and considerable help from elizabeth henderson before final publication this abstract was borrowed from another version of this item

oil price shocks and the macroeconomy this paper examines the impact of oil price shocks and attempts to explain why the rise in oil prices up to 2008 had little impact on the world economy it makes three main arguments first that oil prices have never been as important as is popularly thought second that the most important route through which oil prices affect output is monetary policy when oil prices pass through to core inflation monetary authorities raise interest rates slowing growth based on the second argument the third argument is that high oil prices have not reduced growth in recent years because they no longer pass through to core inflation so the monetary tightening previously seen in response to high oil prices is absent it also argues that oil prices had little impact on the global recession of 20089

wage norms capital accumulation and unemployment a post keynesian view the paper presents a post keynesian view of unemployment it argues first that the effective labour demand need not be downward sloping with respect to real wages and aggregate demand need not be downward sloping with respect to inflation second that there is a broad case for unemployment hysteresis understood as endogeneity of the non accelerating inflation rate of unemployment nairu based on social norms in wage bargaining and on the supply side effects of capital accumulation and third that much as keynes argued capital investment rather than labour market institutions is the key variable to explain changes in aggregate unemployment performance across countries and over time overall the paper advocates a keynesian view of the nairu where effective demand determines unemployment in the short run and the deviation of actual unemployment from the nairu determines the change in inflation in the medium term the nairu is endogenous and follows actual unemployment copyright 2011 oxford university press

new hedonic technique for estimating attribute demand an application to the demand for automobile fuel efficiency a new hedonic procedure is applied to estimate the effects of gasoline price on the demand for automobile attributes and fuel efficiency direct application of a comparative statics analysis circumvents the problems of identification and severe multicollinearity affecting previous hedonic studies the results indicate that the effect of induced changes in automobile attributes in response to increases in the price of gasoline is to substantially increase fuel efficiency the estimated elasticities of fuel efficiency with respect to the price of gasoline imply that the long run own price elasticity of demand for gasoline is greater than unity 31 references

the significance of quality differences for the united states and canada wheat trade some insights are provided as to why the united states the fifth largest wheat producer in the world imports a significant amount of wheat from canada after reviewing intra industry trade theory and the relevant empirical constructs an implicit price function of the import demand for wheat focusing on the physical and intrinsic characteristics of wheat is estimated the results are revealing there is a premium for the protein content and the percentage of heat damaged kernels in wheat clearly the fact that wheat is a differentiated commodity possessing a mix of physical and intrinsic characteristics together with price considerations helps to explain why the import of canadian wheat by the united states exists and why this became a significant issue in 1993

the efficiency of used vehicle markets the case of technological obsolescence and differential repair records this paper examines the effect of technological oboslescence differential maintanance expenditures and differential fuel efficiencies on the depreciated value of automobiles our results support the widely held belief that used vehicle markets are efficient we show that the significant decline in the depreciated values of used automobiles is predominantly due to age we also conclude that technological obsolescence causes a once and for all decrease in the depreciated value of used automobiles that for imported vehicle lines differential maintanance expenditures affect depreciated value and that for domestic vehicle lines differential fuel efficiencies impact depreciated value

is demand for polluting goods manageable an econometric study of car ownership and use in mexico abstract our motivation for estimating a demand system for gasoline and cars is its strategic relevance to policy objectives such as pollution control if demand is responsive to pricing demand reductions for polluting goods will provide an important share of the pollution reductions otherwise cleaner technologies will have to do most of the job we estimate a model of gasoline demand and car ownership in mexico using a panel of annual observations by state key features that we introduce include instrumental variables on differenced data and the treatment of possible dynamics measurement errors in the data and unobserved individual state characteristics we use tests of serial correlation in the a residuals to model the dynamics properly the resulting demand system is quite responsive to pricing even in the short term 0 6 for the own price elasticity of gasoline but we emphasize a medium to long term perspective of 5 10 years as most relevant for policy five to ten year elasticity estimates are in the range of 1 25 to 1 13 applying these elasticity estimates to data on pollution control options for the vehicle fleet in mexico city the costs of reaching a target for pollution reductions would be 45 more expensive if one were not willing to use a demand management instrument such a gasoline tax in the control program

transport costs and urban property values in the 1970s in this paper we use data on property values published annually for the 56 local government areas in the melbourne metropolitan area to investigate the response of the property market to the oil price rises of the seventies we show that property values appeared to have responded rapidly to the australian petrol price increase of 1978 more accessible properties gaining in value relative to less accessible the 1973 increase was not passed on to australian consumers but the depression in manufacturing industry which started after it also had an impact on the property market as values in areas where manufacturing workers lived fell in value relative to others

automobile prices and quality did the gasoline price increases change consumer tastes in the u s a hedonic model of automobile prices that takes gasoline costs into account is developed and used to examine whether gasoline price increases especially those related to the 1973 and 1979 oil shocks changed consumer evaluations of the relative qualities of used cars in the u s during 1970 1981 we test the null hypothesis that the characteristics coefficients remained constant over time it is rejected if gasoline costs are excluded from the model but not if they are included alternative approaches are developed to show that the gasoline price increases alone can explain much of the observed changes in the coefficients

energy crises and change of technology a production model is formulated for the finnish metal product and machinery industry for studying energy crises related structural changes two models are estimated a partial static equilibrium model where capital is treated as a fixed input in the short run and a dynamic model where adjustment costs of the capital input are taken into account alternative hypotheses of structural change are formulated as gradual parameter shifts the results show that some of the energy related parameters have changed over time also the contributions of parameter changes and variations in the average values of the variables on the changes in the energy demand elasticities are studied the most important effect is the strengthening of the energy saving bias in technical change

automakers short run responses to changing gasoline prices abstract we provide empirical evidence that automobile manufacturers use cash incentives to offset how gasoline price fluctuations affect the expected fuel expenses of automobile buyers regressions based on a database of incentives over 2003 to 2006 suggest that on average manufacturers offset 40 of the change in relative fuel costs between vehicles due to gasoline price fluctuations the results highlight that carbon taxes and emissions trading programs likely would generate substantial substitution within vehicle classes and studies that ignore manufacturer discounting likely underestimate consumer demand for fuel economy the results also have implications for the optimal design of feebate programs

the recent slowdown of productivity growth the slowdown of productivity growth in the developed countries during the seventies will in this paper be viewed as a combined effect of three closely interacting forces i a long term deterioration in the efficiency and flexibility of some basic mechanisms of the economic and political systems of these countries ii the fading away of a number of uniquely favourable circumstances for productivity growth during the fifties and sixties and iii the exposure of these economies to unusually severe macroeconomic disturbances in the seventies careful inspection of time series with attempted modifications for cyclical factors suggests that there was hardly any general slowdown of productivity growth among developed countries before approximately i972 4 1 as we know the situation is radically different since then labour productivity growth per year for the entire national economy gdp per man hour seems to have fallen between the periods i960 73 and i973 9 by about i 2 percentage points in the united states 45 by about 24 percentage points in western europe2 45 and by about 5 9 percentage points in japan 6o table i see also fig i the slowdown was of about the same size in the business and manufacturing sectors see table i to calculate the extent of the slowdown of total factor productivity growth is of course a much more hazardous matter to which i will return later if just the various system changes and the fading away of the uniquely favourable factors had been the dominating forces behind the productivity growth slowdown we would expect the slowdown to have been gradual rather than abrupt as it turned out to be this abruptness as well as its timing makes the dramatic macroeconomic disturbances around i972 4 a prime suspect when looking for the villain behind the productivity growth slowdown indeed it is a basic hypothesis of the paper that these macroeconomic disturbances were not only by themselves strongly unfavourable for productivity growth but that they also revealed and accentuated the gradual deterioration of the

energy price shocks and productivity growth in us and uk manufacturing because sustained changes in the trend of productivity growth are so very important for people s long run economic welfare the dramatic productivity growth slowdown of the 1970 s and early 1980 s has been the focus of much analysis and discussion for some observers it was much more than coincidence that the oil price shocks of 1973 74 accompanied the sharp slowdowns in traditionally measured productivity growth not only in the united states and the united kingdom but throughout the industrialised world however establishing quantifying and explaining sig nificant linkages between energy price shocks and productivity growth has proved to be most difficult traditional and time honoured relationships involving productivity growth have all seemed incapable of explaining this slowdown for example edward denison author of several widely cited productivity studies has concluded that energy had essentially no role in explaining the productivity growth slowdown and that moreover what happened is to be blunt a mystery 1979 p 4

the impact of monetary policy on unemployment hysteresis this article investigates the hypothesis that the extent to which hysteresis occurs in the aftermath of recessions depends on monetary policy reactions the degree of hysteresis is explained econometrically by the extent of monetary easing during a recession and by standard variables for labour market institutions in a pooled cross country analysis using quarterly data the sample includes 40 recessions in 19 organization for economic co operation and development oecd countries for which the required data is available the time period lasts for the period from 1980 to 2007 this article builds on ball 1999 and extends the sample of countries the time period under investigation and the set of control variables

the assessment productivity and competitiveness in british manufacturing this issue of the oxford review examines productivity and competitiveness in british manufac turing the simplest and most widely used measure of productivity is output per head from this definition sprout at once the horns of a dilemma for an economy facing unemployment on the present scale for a given rate of expansion of output the higher the rate of productivity growth the greater the decline in employment or at least the smaller its growth on the other hand in an economy open to international competition a high rate of productivity growth relative to that of other countries is the long term key to achieving the favourable international competitive po sition necessary to sustain growth and a low level of unemployment

gasoline prices fuel economy and the energy paradox abstract policymakers often assert that consumers undervalue future gasoline costs when they buy automobiles we test this by measuring whether relative prices of vehicles with different fuel economy ratings fully adjust to variation in gasoline prices vehicle prices move as if consumers are indifferent between 1 00 in discounted future gas cost and 0 76 in vehicle purchase price we show how corrections for endogenous market shares and utilization measurement error and different gasoline price forecasts affect the results we also provide unique evidence of sticky information vehicle markets respond to changes in gasoline prices with up to a six month delay

audience characteristics and bundling a hedonic analysis of magazine advertising rates abstract increasingly magazines are able to offer potential advertisers all their readers pure bundling only specific reader segments pure components pricing or a combination of the two mixed bundling using data on advertising rates and reader demographics the authors estimate the implicit prices of reader characteristics within a hedonic framework the results suggest that the magnitude of the price and revenue premiums earned by unbundling a magazine s readers can be substantial

capital accumulation and unemployment new insights on the nordic experience this paper takes a fresh look at the analysis of labour market dynamics and argues that capital accumulation plays a fundamental role in shaping unemployment movements this role has generally been examined by considering indirect transmission channels of the capital stock effects i e using variables like interest rates or investment ratios in the estimation of single equation unemployment rate models here we advocate a different approach we directly estimate the effects of capital stock in the labour market by applying the chain reaction theory of unemployment and we find that capital stock is a major determinant of unemployment in the nordic countries in particular the different unemployment experiences of these economies derive from the temporary albeit prolonged negative shocks to capital stock growth in denmark and sweden and the permanent downturn of capital stock growth in finland we are thus able to explain why the crisis of the early 1990s had a more acute impact in finland than in its twin economy sweden

the market valuation of the fgis grain quality characteristics the issue addressed in this paper is whether the grain quality factors used by the federal grain inspection service in determining the quality grades of wheat exported by the united states including test weight dockage moisture content percentage of foreign material percentage of shrunken and broken kernels and protein content are characteristics that influence the price of wheat for export using shiplot data on the transactions price for hard red winter wheat hard red spring wheat and soft white wheat and the associated quality characteristics covering the period january 1990 to october 1991 and exported to 63 countires the results suggest that only the test weight and the protein content are characteristics consistently valued by the market

searching for the productivity slowdown some surprising findings from west german manufacturing we test the hypothesis of a negative long term trend and or a structural break in total factor productivity tfp after the first oil price shock for west german manufacturing industries within an econometric model based on a flexible cost function with capital as a quasi fixed factor after adjusting tfp growth for scale economies and varying capacity utilization this hypothesis is not supported by our empirical findings for the great majority of industries studied whereas the hypothesis that the log level of tfp follows a random walk with drift is not rejected by various statistical tests authors

gasoline prices and the used automobile market a rational expectations asset price approach this paper examines the impact of changes in gasoline price expectations on the market values of used automobiles an asset model of automobile valuation is used to relate year to year changes in market values to changes in the present discounted value of gasoline expenses econometric evidence from data covering the years 1972 through 1981 substantially confirms the hypothesis of the model that a gasoline price shock causes relative price changes across automobile types in proportion to the differences in their rates of fuel consumption

valuing the characteristics of natural gas vehicles an implicit markets approach this paper estimates the costs of a government mandate to use natural gas vehicles focusing on the less desirable attributes that these vehicles 9 possess a model of producer and consumer behavior in a market for a differentiated product is constructed a hedonic price function is estimated and consumer surplus losses from the substitution of natural gas cars for gasoline cars are calculated these losses are found to be significant the average per car consumer surplus loss ranges from 1100 to 3200 with 20 to nearly 50 of the loss due to changes in vehicle characteristics the costs of such a policy appear to be greater than the environmental benefits but may not be too far out of line with the costs of alternative approaches for reducing vehicular pollution copyright 1996 by mit press

monetary policy in the uk the authors argue that the institutional dimension of the bank of england monetary policy and the role the uk hm treasury assumes in this framework are both firmly based on the new consensus in macroeconomics ncm this is also the theoretical framework upon which the inflation targeting element of monetary policy is firmly based this paper discusses these aspects of uk monetary policy and then assesses the policy that has been pursued since 1997 with some reference made to the period between 1992 and 1997 when a version of the framework was introduced the strategy has been successful in terms of keeping uk inflation rates within the targets set by hm treasury however a number of problematic issues are highlighted and discussed

keynesian economic policies for the new millennium in this paper we outline an approach to economic policy in which there is an emphasis on the need for both demand side and supply side policies to secure full employment our approach can be considered keynesian in the sense that its policy implications arise from the perception of the role of aggregate demand in setting the level of economic activity and the lack of automatic forces leading a market economy to full employment our conception of the operations of a market economy is briefly outlined in section 2 this we further elaborate upon in section 3 by considering the constraints on achieving full employment that operate in a market economy this leads into section 4 in which we outline and analyse the nature of keynesian policies relating both to the demand and supply side of the economy the final main section 5 considers some of the constraints and ways of overcoming them on the implementation of the type of keynesian policies which we are advocating there are two key elements of keynes 1936 on which we draw the first is the contention that a laissez faire market economy will not usually generate full employment the obstacles to the achievement of full employment are not some imperfections like monopolistic competition or trade union activity which could potentially be removed through government action cf shapiro 1996 it is rather that a laissez faire market economy would exhibit elements of instability and does not usually generate a level of aggregate demand consistent with full employment the second is that a less unequal distribution of market power income and wealth is another desirable goal in its own right and a vehicle for increasing general prosperity as keynes 1936 remarked the outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes p 372

capital subsidies versus labor subsidies a trade off between capital and employment this paper investigates regime switching in the response of u s output to a monetary policy action we find substantial statistically significant time variation in this response that corresponds to high response and low response regimes we then investigate whether the timing of the regime shifts are consistent with three particular manifestations of asymmetry by modeling the transition probabilities governing the switching process as functions of state variables we find strong evidence that policy actions taken during recessions have larger effects than those taken during expansions we find less evidence of asymmetry related to the direction or size of the policy action

aggregate demand conflict and capacity in the inflationary process this paper focuses on an alternative perspective on inflation to that of the non accelerating inflation rate of unemployment nairu it indicates that there are no automatic forces leading to a level of aggregate demand consistent with constant inflation inflationary pressures arise from conflict over income shares and from cost elements with the price of raw materials especially oil being the most important there are supply side factors impinging on the inflationary process which arise from the level of productive capacity relative to aggregate demand the supply side constraints are viewed as arising from capacity constraints rather than from the operation of the labour market copyright 2005 oxford university press

the wage price spiral this paper rehabilitates the old wage price spiral it shows that after an increase in aggregate demand the process of adjustment of nominal prices and nominal wages results from attempts by workers to maintain or increase their real wage and by firms to maintain or increase their markups of prices over wages under continuous price and wage setting the process of adjustment would be instantaneous under staggering of price and wage decisions the adjustment takes time the more inflexible real wages and markups are to shifts in demand the higher is the degree of price level inertia and the longer lasting are the effects of aggregate demand on output

unobservables in consumer choice residential energy and the demand for comfort a model of consumption of residential energy in dwellings is developed distinguishing between attributes of housing that provide direct benefits to consumers and attributes that serve as inputs in the production of final goods for example the thermal comfort of dwellings empirical estimates are made of the mode based upon the annual housing survey and the results are used to calculate the effects of changes in energy prices on the consumption of housing residential energy and other goods the analysis suggests that the adjustment process within the housing market permits a great deal of substitution in response to energy price changes copyright 1989 by mit press

precedence privilege preferences plus pareto principle some examples on egalitarian ethics and economic efficiency it is demonstrated how economic theory of justice as fairness pareto improvements on situations involving equity can be used to analyze the ethics contents of distributions of rights and privileges the analysis makes use of the concept of a veil of ignorance to define a status quo a property right to an ability or a privilege is interpreted as a transparency in the veil in respect to this ability or privilege three different examples are investigated focusing on rights as collective goods non transferable abilities and privileges as inherent rights

unemployment and the real exchange rate in latin america summary today unemployment rates in several latin american countries are similar or even higher than the highest unemployment rates among oecd economies open unemployment has become for the first time in the region s history a major dimension of the employment problem this paper examines the role of the real exchange rate rer in the recent unemployment performance of latin america it presents a model of the determinants of unemployment the channels through which the rer influences unemployment performance as well as the stylized facts and empirical results about this relationship giving special attention to the cases of argentina brazil chile and mexico 2006 elsevier ltd all rights reserved

hysteresis in unemployment unemployment has risen sharply in a number of countries and it appears to be becoming more persistent the experience of the 1970s and 1980s showed that adverse unemployment shocks could have long lasting effects with very serious economic and social consequences a key mechanism producing these adverse consequences was hysteresis in unemployment whereby temporary rises in unemployment generated by supply and or demand shocks had permanent or at least very persistent effects clearly it is important to understand how hysteresis mechanisms might operate in order to avoid such adverse outcomes on the other hand experience during the subsequent two decades showed that under more favourable macroeconomic conditions it is possible to observe good hysteresis effects now is a very appropriate time to re visit the issue of hysteresis in unemployment in order to avoid the errors of the 1970s and 1980s and if possible to get hysteresis effects working in a positive direction copyright 2011 oxford university press

estimating consumer preferences using market data an application to us automobile demand this paper explores the possibility of using market data to identify consumer preferences a utility function composed of homogeneous characteristics and goods specific effects is used as a basic link between the goods space and the characteristics space the functional form for the hedonic price equation the data requirements and issues of measurement errors for estimating demand and supply of characteristics are discussed we illustrate the methodology by considering the us automobile demand using 1969 86 data compiled from consumer reports and ward s automotiveyearbook

social security liquidity and early retirement abstract this paper investigates the effect of social security on retirement decisions it argues that it is important to take realistic account of how recipients evaluate potential benefit flows the paper presents a simple retirement model in which liquidity constraints prompt individuals to use higher than market discount rates in evaluating future pension benefits as a consequence even an apparently actuarially fair early retirement benefit could on average discourage continued work using data on individual retirement decisions i find support for the argument that this phenomenon contributes to some of the observed increase in early retirement

what do consumers believe about future gasoline prices a full understanding of how gasoline prices affect consumer behavior frequently requires information on how consumers forecast future gasoline prices we provide the first evidence on the nature of these forecasts by analyzing two decades of data on gasoline price expectations from the michigan survey of consumers we find that average consumer beliefs are typically indistinguishable from a no change forecast justifying an assumption commonly made in the literature on consumer valuation of energy efficiency we also provide evidence on circumstances in which consumer forecasts are likely to deviate from no change and on significant cross consumer forecast heterogeneity

gasoline cost and hedonic price indexes of u s used cars for 1970 1983 a note hedonic price indexes are estimated for u s used passenger cars for 1970 1983 a few notions of indexes that differ in the treatments of the expected present value of gasoline cost for driving a car over its remaining life are considered their relationships are obtained theoretically and examined empirically our indexes also are compared with the consumer price index

capital formation and unemployment this paper criticizes the current enthusiasm for labour market policies as the main route to employment creation in oecd countries such policies are normally seen as a means of encouraging more employment on existing capital stock this approach is one sided and downplays the equally important task of increasing productive capacity with more investment in productive capacity conventional labour market policies for increasing employment would be more effective and some might be unnecessary the paper analyses the role of capital stock within the framework of a simple nairu model based on previous work by the author it also presents some empirical evidence copyright 1995 by oxford university press

will productivity growth recover has it done so already the author reviews the latest information on productivity and the alternative explanations of the slowdown which he concludes was partially due to a decline in innovation and work effort and mostly due the post 1973 energy price increases identical policy responses to the worldwide inflation were also a reason why so many countries experienced slow growth at the same time as cyclical productivity declines were added to the structural decline there are signs that productivity growth is recovering which gives credence to the view that the temporary shocks of the 1970s were the culprit

how do flexible labour markets really work the role of profitability in influencing unemployment this paper assesses the theoretical justifications available for policies of flexible labour markets flms in reducing the level of unemployment in developed economies it empirically assesses the oecd s rationalisation of policy linking profitability to investment and job creation in four country cases new capital investment is found to be significant for unemployment in all cases but it is not found to be a consequence of the mechanistic achievement of normal profits without an empirically supported mechanism for how flms reduce unemployment the policy is open to the accusation of being no more than a political tool for altering distribution without concern for the wider socio economic consequences copyright the author 2008 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

hedonic prices for cars an application to the spanish car market 1981 2005 in this article we provide a comparison of different formulations for hedonic regression analysis in order to construct a quality adjusted price index for the spanish car market over the period 1981 to 2005 specifically we address the issue of instability of coefficients over time and propose two alternative estimation procedures based firstly on a moving sample of observations and secondly on a moving average of estimated coefficients in single period equations the statistical tests applied support the proposed methodologies on empirical grounds two conclusions can be emphasized firstly our study concludes that taking quality changes into account car prices in spain deflated by consumer price index cpi declined by 40 between 1981 and 2005 this result is robust to the alternative estimation procedures employed in the study secondly an analysis of convergence shows that for quality adjusted prices a clear trend in convergence emerges between 1986 and 1992 whereas such a trend does n

equality of resources implies equality of welfare if one is an egalitarian should one try to equalize resources available to agents or to equalize their welfares with a suitably general conception of what resources are these two conceptions cannot be distinguished an allocation mechanism is defined on a space of economies and is required to satisfy various axioms that are necessary conditions for equalizing resources among a population the unique mechanism satisfying these axioms on a large domain of economies is the one that allocates commodities so as to equalize utilities of the agents methodologically the theorem is a generalization of bargaining theory because the mechanisms are defined on commodity space

post keynesianism socialisation of investment and swedish wage earner funds this paper analyses the performance of one of the most controversial of recent economic policy experiments namely swedish wage earner funds wefs it examines the ability of the wefs to meet macroeconomic financial and democratic objectives the analysis indicates a favourable financial performance but little significant democratisation macroeconomic influence was constrained by the limited size of the scheme and though associated with positive changes in economic variables the experiment was ultimately overwhelmed by the collapse of an asset price bubble nevertheless the performance of the wefs has legitimised the concept of collective investment funds as an economic policy instrument copyright 2006 oxford university press

raw materials profits and the productivity slowdown a factor price frontier framework is used to clarify the analogy of an increase decrease in raw material prices with autonomous technological regress progress factor price profiles are estimated for the manufacturing sector of the united states the united kingdom germany and japan the production model in conjunction with estimates obtained from the factor price frontier attributes much of the slowdown in manufacturing productivity to the rise in relative raw material prices part of the apparent productivity riddle may have to do with the use of double deflated national accounting measures of value added which have an inherent measurement bias

motor vehicle stocks scrappage and sales this paper offers a framework for forecasting aggregate sales of new motor vehicles this framework incorporates separate models for the change in the vehicle stock and for the rate of vehicle scrappage because this approach requires only a minimal set of assumptions about demographic trends the state of the economy consumer preferences new vehicle prices and repair costs and vehicle retirements it is shown to be especially useful as a macroeconomic forecasting tool in addition this paper presents a new historical annual time series estimate of motor vehicle stocks in the united states

towards an explanation of the productivity slowdown an acceleration deceleration hypothesis after two and a half decades of prosperous post war development western industrialised countries recently experienced a slowdown of economic growth and productivity advance together with an increase in the rates of inflation and unemployment in trying to explain this malaise we are looking at a diagnosis that could help us to identify early indicators of a future turnaround or some policy variables which deserve to be included in a therapeutic programme although we shall focus on what can be measured complying with the standards of the guild we shall not refrain from considering complex relationships which can be grasped only intuitively even if they include phenomena which lie beyond the limits of official statistics 2 the outcome may be soft economics but we find some consolation in the dictum that it is better to be vaguely right than to be precisely wrong

energy tax changes and competitiveness the role of adaptive capacity this paper estimates the effect of energy tax and price changes on total factor productivity tfp and net trade at the industry level using a panel of industries from european countries covering the period 1990 2003 we investigate the hypothesis that industries with high adaptive capacity measured by their relative level of labor compensation are able to mitigate the adverse effects of energy tax rises better than others we identify the pro adaptation effect by interacting wage levels a proxy for human capital with energy taxes we find that the negative marginal effect of higher energy taxes on tfp and net trade is significantly reduced for industries with stronger human capital and even turns to an overall positive effect in at least two cases up to three low wage sectors display an overall negative effect this suggests that human capital is key to adaptation to higher energy costs and climate policy in some cases making it a win win

asset prices and public information abstract this paper examines the impact of public quality information on the structure of equilibrium prices in a consumer durables market we model the link between prices and an observable quality index on the basis of the user cost approach using cross section data of the west german automobile market we show that the hypothesis of information efficiency cannot be rejected

capital accumulation and unemployment a tale of two continents in contrast to much recent work regarding the causes of european unemployment in this paper we emphasize the importance of capital accumulation but unlike the few previous studies which have examined the relationship between capital accumulation and unemployment we argue that what matters for the evolution of employment and the unemployment rate is not the absolute growth rate of a country s capital stock but its evolution relative to other countries capital stock the empirical validity of the above statement is demonstrated for almost all oecd countries using quarterly time series data for the period 1961 1995 more detailed evidence is also presented for germany japan and the united kingdom

financialisation and the slowdown of accumulation over the past decades financial investment of non financial businesses has been rising and accumulation of capital goods has been declining the first part of the paper offers a novel theory to explain this phenomenon financialization the shareholder revolution and the development of a market for corporate control have shifted power to shareholders and thus changed management priorities leading to a reduction in the desired growth rate in the second part the link between accumulation and financialization is tested econometrically by means of a time series analysis of aggregate business investment for usa uk france and germany extensive test of robustness are performed for the first three countries evidence that confirms the negative effect of financialization on accumulation is found author s abstract

the uk capital stock new estimates of premature scrapping in recent years there has been a considerable degree of interest in the measurement of the capital stock with special reference to the degree of premature scrapping of capital equipment that might have occurred it has been argued that this might be one reason for the observed slowdown in productivity growth see e g muellbauer 1984 or baily 1981 others have alleged that there has been a large decrease in manufacturing capacity in the uk since 1980 and that therefore we should not reflate the economy see e g ball 1985 for we run the risk of re igniting inflation the latter view is commonly expressed in the press both by financial commentators and politi cians it is therefore of some importance to assess the extent to which the official stock meas ures are misleading

raw materials profits and the productivity slowdown some doubts bruno 1984 argues that a fall in material input for given levels of capital and labor input can explain a measured fall in productivity growth which in most oecd countries first appeared after 1973 this comment asks the following 1 do the available output statistics show a fall in gross output as the materials hypothesis explanation of the productivity slowdown requires or do they show a fall in real value added defined as gross output less material input which indicates a fall in technical progress i conclude that the materials hypothesis cannot explain falls in productivity growth measured using gdp data but could explain partperhaps 0 5 percent per annumof the fall measured using the index of manufacturing production 2 what materials price and quantity movements have occurred to isolate the component of material prices that is exogenous common to all oecd countries and excludes energy costs i look at the u n price index for basic commodities imported by developed countries the rise in real raw material prices was much smaller in terms of its cost to importing countries than the oil price rise and by the late 1970s real industrial materials prices had fallen back to the levels of the 1960s while a general index of material input quantities is not available data for metals one major component of materials suggest that this input has fallen by about 2 percent per annum since the early 1970s relative to output and to earlier trends so statistics which directly evaluate measurement biases and material input prices and quantities suggest that substitution away from material inputs cannot explain much of the fall in productivity growth

reason and rationality during energy crises this paper develops a technique for extracting the expectations embedded in the current prices of energy using durable goods and applies it to used car markets during the two energy crises of the 1970s the resulting estimates indicate that consumers took the energy crises seriously and formed expectations about future gasoline prices that appear rational when compared with the historical gasoline price series with the forecasts of specialists and experts or with the actual postsample behavior of gasoline prices the evidence therefore supports the view that consumers are able to make rather complex choices with a great deal of rationality and casts doubt on the wisdom of policies based on assumptions to the contrary

interpreting pre trends as anticipation impact on estimated treatment effects from tort reform abstract while conducting empirical work researchers sometimes observe changes in outcomes before adoption of a new policy the conventional diagnosis is that treatment is endogenous this observation is also consistent however with anticipation effects that arise naturally out of many theoretical models this paper illustrates that distinguishing endogeneity from anticipation matters greatly when estimating treatment effects it provides a framework for comparing different methods for estimating anticipation effects and proposes a new set of instrumental variables to address the problem that subjects expectations are unobservable finally this paper examines a specific set of tort reforms that was not targeted at physicians but was likely anticipated by them interpreting pre trends as evidence of anticipation increases the estimated effect of these reforms by a factor of two compared to a model that ignores anticipation

the oil price shocks and the unit root hypothesis the uk experience critics of the standard dickey fuller and augmented dickey fuller tests for unit roots argue that when there have been significant structural breaks during the sample period these tests are often biased toward acceptance allowing for a one time change in the slope of the trend function often leads to rejection of the unit root hypothesis which implies that business cycles are temporary fluctuations around a stable but possibly shifting trend path the validity of the unit root hypothesis in connection with the two oil crises in the seventies is re examined using quarterly time series data for a set of uk macroeconomic series the empirical evidence presented supports the view that only those shocks associated with the oil price crises had a persistent effect on the uk economy

hedonic price indexes with unobserved product characteristics and application to personal computers we show that hedonic price indexes may be biased when not all product characteristics are observed we derive two primary sources of bias the first source is a classical selection problem that arises due to changes over time in the values of unobserved characteristics the second comes from changes in the implicit prices of unobserved characteristics next we show that the bias can be corrected for under fairly general assumptions using extensions of factor analysis methods we test our methods empirically using a new comprehensive monthly dataset for desktop personal computer systems for these data we find that the standard hedonic index has a slight upward bias of approximately 1 4 per year we also find that omitting an important characteristic cpu benchmark causes a large bias in the index with standard methods but that this bias is essentially eliminated when the proposed correction is applied

the demand for car fuel efficiency some evidence for the uk this paper uses the atkinson halvorsen 1984 hedonic method to estimate the effect of petrol price changes on fuel efficiency and other attributes using data for new cars in the uk in contrast to atkinson and halvorsen the estimated long run petrol price elasticity of demand for fuel efficiency is very small the empirical results imply that the adjustment process within the new car market permits little substitution for more fuel efficient cars in response to petrol price changes

predicting gasoline prices using michigan survey data abstract this study investigates the predictive power of michigan surveys of consumers msc data for gasoline prices specifically we utilize the msc data on both expected inflation and consumer sentiment to construct a vector autoregressive var model for forecasting gasoline prices for 2003 2014 our findings indicate that the var forecasts are superior to the comparable benchmark forecasts obtained from a univariate integrated moving average ma model in terms of both predictive information content and directional accuracy as such we conclude that the msc data on both expected inflation and consumer sentiment have significant predictive information for gasoline prices further inspection reveals that the var forecasts are particularly accurate for the period since 2008 reinforcing the notion that consumers are economically rational

are consumers myopic evidence from new and used car purchases abstract we investigate whether car buyers are myopic about future fuel costs we estimate the effect of gasoline prices on short run equilibrium prices of cars of different fuel economies we then compare the implied changes in willingness to pay to the associated changes in expected future gasoline costs for cars of different fuel economies in order to calculate implicit discount rates using different assumptions about annual mileage survival rates and demand elasticities we calculate a range of implicit discount rates similar to the range of interest rates paid by car buyers who borrow we interpret this as showing little evidence of consumer myopia jel d12 h25 l11 l62 l71 l81

energy and depletable resources economics and policy 1973 1998 abstract this paper reviews the impact of the literature in depletable resources and energy economics over the period 1973 1998 particularly the initial period of publication of the journal of environmental economics and management 1974 1998 a discussion of prominent policy issues in this arena is provided along with an indication of what academic economics papers have contributed to that debate this is followed by a citation analysis of contributions in the fields of energy and exhaustible resource economics for each of these two fields a list of the top papers in each five year period from 1974 to 1998 is presented along with a list of the top journals in each decade based on average citations per article the top ten cited articles in the fields in the journal of environmental economics and management are also presented

phillips curves and unemployment dynamics a critique and a holistic perspective the conventional wisdom that inflation and unemployment are unrelated in the long run implies that these phenomena can be analysed by separate branches of economics the macro literature tries to explain inflation dynamics and estimates the nairu the labour macro literature tries to explain unemployment dynamics and determine the real economic factors that drive the natural rate of unemployment we show that the orthodox view that the new keynesian phillips curve is vertical in the long run and that it cannot generate substantial inflation persistence relies on the implausible assumption of a zero interest rate in the light of these results we argue that a holistic framework is needed to jointly explain the evolution of inflation and unemployment

effect of gasoline prices on car fuel efficiency evidence from lebanon abstract this paper explores how gasoline prices affect the sales of new and used cars in lebanon using a rich dataset on monthly imported cars from 2000 to 2016 a vector autoregressive analysis is used to model different consumer choices between fuel efficient cars midsize cars and fuel inefficient cars we report the first empirical evidence on this question from the middle east and north africa mena region using individual automobile data we use within sample and out of sample tests to examine whether gasoline prices influence the sale of fuel efficient cars our results show evidence against the hypothesis that rising gasoline prices shift consumers demand toward the most fuel efficient cars

car notches strategic automaker responses to fuel economy policy notches where small changes in behavior lead to large changes in a tax or subsidy gure prominently in many policies but have been rarely examined by economists in this paper we analyze a class of notches associated with policies aimed at improving vehicle fuel economy we provide several pieces of evidence showing that automakers respond to notches in fuel economy policy by precisely manipulating fuel economy ratings so as to just qualify for more favorable treatment we then describe the welfare consequences of this behavior and derive a welfare summary statistic applicable to many contexts