discrimination against women in formal credit markets reality or rhetoric abstract microenterprises receive several forms of aid but many still report limited access to formal finance it is often argued that women entrepreneurs face discrimination in formal credit markets in this study of ecuadorian microenterprises the results of a multinomial logit model show that although a smaller number of women than men entrepreneurs applied for loans a larger percentage of women than men typically apply for loans the equally small probabilities of both male and female entrepreneurs being quantity rationed for loans implies that this form of credit rationing is not widely practiced in special microenterprise programs in ecuador

information rigidities and the news adjusted output gap a vector autoregressive model of actual output and expected output obtained from surveys is used to test for information rigidities and to provide a characterisation of output dynamics that accommodates these information structures news on actual and expected outputs is decomposed to identify innovations understood to have short lived effects and these are used with the model to derive a news adjusted output gap measure the approach is applied to us data over 1970q1 2014q2 and the new gap measure is shown to provide a good leading indicator of inflation

will the true labor share stand up an applied survey on labor share measures labor s share of income is a key variable in economics it plays a leading role in analysis of in equality globalization technical change growth theories etc notwithstanding this broad application there are many different definitions of the labor share understanding and synthesizing those differences is the purpose of this applied survey empirical measures may vary reflecting the allocation of income components that cannot be directly ascribed to capital or labor we examine the alternative assumptions made in the literature in this regard and quantify and motivate the resulting discrepancies focusing mostly on us data we show that different measures can have very distinct properties in terms of the observed stochastic trends shares of short medium and long run variation and volatilities persistence and mean reversion properties and susceptibility to structural breaks for instance while short run properties of the surveyed labor share measures are relatively consistent across all definitions and countercyclical their medium and long run trends may diverge substantially and are procyclical to substantiate our analysis we document the implications of discrepancies in the empirical labor share definition for growth accounting analyzing the effect of technology shocks and for estimating inflation dynamics

income distribution transaction costs and market fragmentation in informal credit markets in an environment characterized by inequitable wealth distribution and limited market infrastructural institutions the trust component of credit transactions is founded on personal relations through these information and transaction costs advantages are provided but also control and unequal bargaining power can be exercised in the informal sector transaction and information costs will lead to non price closure in credit markets while behavioral differences in lenders will lead to manipulation of prices as well as of quantities the quantity closure rules are modeled and tested for two types of informal lenders in the agricultural sector of the philippines the trader lenders and the farmer lenders it is found that the two groups of lenders systematically sort their borrowers and ration credit copyright 1992 by oxford university press

overtime labor employment frictions and the new keynesian phillips curve abstract this paper presents a new keynesian nk model that is extended to differentiate between straight time and overtime work the model proposes that the new keynesian phillips curve nkpc should be estimated with marginal cost measured in terms of overtime labor the resulting coefficient estimates are in accordance with theory and statistically significant for the hybrid nkpc which allows for backward looking price setters but not for the purely forward looking nkpc in the hybrid model backward looking behavior is found to be predominant the paper also shows that the incorporation of employment frictions predetermined employment and convex adjustment costs in nk models helps reconcile the frequent price changes found in the microdata with the degree of sluggishness in inflation adjustment to output changes at the macro level

elusive persistence wage and price rigidities the new keynesian phillips curve and inflation dynamics abstract we review the main new keynesian inflation equations that have arisen as a result of aggregation from individual firms price rigidities we find that on the whole they cannot account for inflation persistence a key feature of the empirical dynamics of inflation and with important policy implications the only exceptions seem to be when indexation is allowed in price setting or when price stickiness is combined with wage rigidity and staggering

rural financial markets in low income countries recent controversies and lessons abstract recently some researchers have criticized traditional agricultural credit policies in low income countries this article identifies the major points of controversy between traditional views and these new views and also summarizes the primary lessons learned from these controversies savings mobilization more flexible interest rate policies less loan targeting and greater emphasis on improving the quality of financial services in rural areas are new views that are emphasized

real wage rigidities and the new keynesian model most central banks perceive a trade off between stabilizing inflation and stabilizing the gap between output and desired output however the standard new keynesian framework implies no such trade off in that framework stabilizing inflation is equivalent to stabilizing the welfare relevant output gap in this paper we argue that this property of the new keynesian framework which we call the divine coincidence is due to a special feature of the model the absence of nontrivial real imperfections we focus on one such real imperfection namely real wage rigidities when the baseline new keynesian model is extended to allow for real wage rigidities the divine coincidence disappears and central banks indeed face a trade off between stabilizing inflation and stabilizing the welfare relevant output gap we show that not only does the extended model have more realistic normative implications but it also has appealing positive properties in particular it provides a natural interpretation for the dynamic inflation unemployment relation found in the data

credit constraints credit unions and small scale producers in guatemala abstract efficient and equitable development outcomes may depend in part on whether formal financial institutions leave low wealth producers tightly constrained in their access to credit if so can cooperative institutions efficiently relax these constraints these issues are explored using survey data gathered from 950 small scale producer households in areas of guatemala with market oriented credit unions that mobilize savings and make unsubsidized loans nonprice rationing by banks is found to be common among lower wealth households while credit unions relax credit constraints for a significant portion of those rationed by banks but not the poorest of the study households

drift and breaks in labor productivity abstract we use endogenous break tests and the stock watson tvp mub methodology to investigate changes in the equilibrium rate of growth of labor productivity in the u s the eurozone the u k australia and japan since wwii results for the u s well capture the conventional wisdom of a golden era of high productivity growth the 1950s and 1960s a marked deceleration starting from the beginning of the 1970s and a strong growth resurgence starting from mid 1990s results for the eurozone point towards a deceleration since the early 1980s with the equilibrium rate of growth of output per hour falling to 0 9 in 2004 4

access to capital and agrarian production organisation there are two problems both universal that entrepreneurs in any economy must contend with firstly an agent generally has access only to a limited amount of working capital secondly workers hired by an agent are subject to moral hazard and this necessitates their supervision this paper models for an agrarian economy the constraints imposed on entrepreneurs activities by these two problems and endogenously determines the various organisational forms of production as well as the allocation of resources that will obtain with a simple model we endeavour to explain a diverse set of empirical observations pertaining to the less developed countries in terms of the general processes that determine the distribution of income among the various agents and the hierarchical relationships that develop among them agricultural production typically involves a period of several months between the time the inputs are purchased and the time the output is marketed access to working capital and hence to the credit market thus plays an important role in a farmer s production decisions the distribution of access to credit in turn tends to be an important determinant of income distribution in poor agrarian economies credit is invariably rationed according to the ability to offer collateral the amount of working capital a farmer can mobilise therefore depends on the amount of land he owns which is often a good proxy for his overall wealth and thus his ability to offer collateral further since hired hands have a propensity to shirk they need to be supervised and therefore the

the un importance of forward looking behavior in price specifications the seminal work of edmund s phelps 1978 john b taylor 1980 and guillermo a calvo 1983 developed forward looking models of price determination that imparted inertia to the price level these models incorporate expectations of future prices and excess demand by imposing constraints typically lag lead symmetry constraints that force future variables to enter the specification in this paper the author tests the empirical significance of future prices in specifications like those of taylor he finds that expectations of future prices are empirically unimportant in explaining price and inflation behavior however the dynamics of a model that includes a purely backward looking inflation specification differ substantially and not altogether pleasingly from those with a forward looking specification copyright 1997 by ohio state university press

indivisible labor lotteries and equilibrium abstract this paper considers an economy where labor is indivisible and agents are identical although the discontinuity in labor supply at the individual level disappears as a result of aggregation it is shown that indivisible labor has strong consequences for the aggregate bahavior of the economy it is also shown that optimal allocations involve lotteries over employment and consumption

weak instrument robust tests in gmm and the new keynesian phillips curve we discuss weak instrument robust statistics in gmm for testing hypotheses on the full parameter vector or on subsets of the parameters we use these test procedures to reexamine the evidence on the new keynesian phillips curve model we find that u s postwar data are consistent with the view that inflation dynamics are predominantly forward looking but we cannot rule out the presence of considerable backward looking dynamics moreover the phillips curve has become flatter recently and this is an important factor contributing to its weak identification

the new econometrics of structural change dating breaks in u s labor productivity we have seen the emergence of three major innovations in the econometrics of structural change in the past fifteen years 1 tests for a structural break of unknown timing 2 estimation of the timing of a structural break and 3 tests to distinguish unit roots from broken time trends these three innovations have dramatically altered the face of applied time series econometrics in this paper we review these three innovations and illustrate their application through an empirical assessment of u s labor productivity in the manufacturing durables sector

aggregate stability and balanced budget rules it has been shown that under perfect competition and a cobb douglas production function a basic real business cycle model may exhibit indeterminacy and sunspot fluctuations when income tax rates are determined by a balanced budget rule bbr this paper introduces in an otherwise standard real business cycle model a more general and data coherent class of production functions namely a constant elasticity of substitution production function we show that the degree of substitutability between production factors is a key ingredient to understanding the de stabilizing properties of a bbr then we calibrate the model consistently with the empirical evidence that is we set the elasticity of substitution between labor and capital below unity we show that compared to the cobb douglas case the likelihood of indeterminacy under a bbr is greatly reduced in the u s the eu and the uk

agro export production and peasant land access examining the dynamic between adoption and accumulation abstract new technologies and export opportunities have often contributed to dualistic agrarian structure and intense social conflict in latin american a switching regression model developed in this paper explicitly links export adoption and land accumulation patterns controlling for pre existing differentiation processes applied to survey data gathered from peasant households in guatemala the model provides evidence of equitable structural change induced by a recent export boom in vegetable crops however the optimism of these results is tempered by consideration of the unfavorable longer term market dynamics confronting small scale producers

modeling inflation dynamics a critical review of recent research in recent years a broad academic consensus has arisen around the use of rational expectations sticky price models to capture inflation dynamics these models are seen as providing an empirically reasonable characterization of observed inflation behavior once suitable measures of the output gap are chosen and moreover are perceived to be robust to the lucas critique in a way that earlier econometric models of inflation are not we review the principal conclusions of this literature concerning 1 the ability of these models to fit the data 2 the importance of rational forward looking expectations in price setting and 3 the appropriate measure of inflationary pressures we argue that existing rational expectations sticky price models fail to provide a useful empirical description of the inflation process especially relative to traditional econometric phillips curves of the sort commonly employed for policy analysis

factor hoarding and the propagation of business cycles shocks this paper analyzes the role of variable capital utilization rates in propagating shocks over the business cycle to this end we formulate and estimate an equilibrium business cycle model in which cyclical capital utilization rates are viewed as a form of factor hoarding we find that variable capital utilization rates substantially magnify and propagate the impact of shocks to agents environments the strength of these propagation effects is evident in the dynamic response functions of various economy wide aggregates to shocks in agents environments in the statistics that we construct to summarize the strength of the propagation mechanisms in the model and in the volatility of exogenous technology shocks needed to explain the observed variability in aggregate u s output other authors have argued that standard real business cycle rbc models fail to account for certain features of the data because they do not embody quantitatively important propagation mechanisms these features include the observed positive serial correlation in the growth rate of output the shape of the spectrum of the growth rate of real output and the correlation between the forecastable component of real output and various other economic aggregates allowing for variable capital utilization rates substantially improves the ability of the model to account for these features of the data

factor complementarity and labour market dynamics abstract we propose and estimate a dynamic stochastic general equilibrium model featuring search and matching frictions deep habits and a ces production function the model successfully replicates the cyclical properties of labour market variables in the us economy for three main reasons first two of the endogenous mechanisms of the model factor complementarity and unemployment benefits play a key role for explaining the amplification in unemployment and vacancies second deep habits have a smaller but significant role as an endogenous mechanism third capital augmenting productivity investment specific and matching efficiency innovations explain large part of the variation in labour market variables

rural financial markets in developing countries their use and abuse until recently the use of agricultural credit as a developmental tool seemed clear and straightforward most concerned people believed that increases in the volume of cheap credit were necessary to boost agricultural production and that the rural poor could be brought into the mainstream of development through supervised credit programs it seemed that certain ideal types of rural credit institutions offered the promise of meeting farmers credit needs and that experience in the industrialized countries with cooperatives and specialized agricultural finance institutions could be effectively transplanted to low income countries this collection of readings highlights facets of rural financial markets that have often been neglected in discussions of agricultural credit in developing countries it moves beyond a narrow concern with the simple provision of credit to a broad consideration of the performance of rural financial markets and of ways to improve the quality and range of financial services for low income farmers it reflects new thinking on the design administration evaluation and policy framework of rural finance and credit programs in developing countries

new keynesian economics and the phillips curve models with sticky prices are an important part of new keynesian economics the author shows that several of the new keynesian models imply a formulation that is similar to the expectations augmented phillips curve of milton friedman and edmund phelps he then presents new estimates of the new keynesian phillips curve the author uses two proxies for price expectations survey based measures and an econometric based measure originally developed by bennett mccallum 1976 overall the results are consistent with the model but the survey based results are more precise suggesting that the surveys may be better measures of actual expectations copyright 1995 by ohio state university press

technology utilization and inflation what drives the new keynesian phillips curve we argue that the new keynesian phillips curve literature has failed to deliver a convincing measure of real marginal costs we start from a careful modeling of optimal price setting allowing for nonunitary factor substitution nonneutral technical change and time varying factor utilization rates this ensures the resulting real marginal cost measures match volatility reductions and level changes witnessed in many u s time series the cost measure comprises conventional countercyclical cost elements plus procyclical and covarying utilization rates although procyclical elements seem to dominate the components of real marginal cost components are becoming less cyclical over time incorporating this richer driving variable produces more plausible price stickiness estimates than otherwise and suggests a more balanced weight of backward and forward looking inflation expectations than commonly found our results challenge existing views of inflation determinants and have important implications for modeling inflation in new keynesian models

economic fluctuations market power and returns to scale evidence from firm level data recent research on aggregate fluctuations coupled with ongoing work in industrial organization has renewed interest in the existence magnitude and cyclical pattern of market power and the extent of increasing returns to scale by exploiting restrictions from dynamic theory and information from financial markets we present a framework for generating quantitative evidence on market power and returns to scale tailoring the econometric model to firm level panel data we calculate the percentage differential between price and marginal cost the lerner index in terms of the parameters from the econometric system results for firms in eleven industries indicate that there is a great deal of heterogeneity in the extent of market power industries with significantly positive lerner indices tend to have substantial increasing returns in the production technology we find that there is only a modest relation between our estimated lerner indices and traditional measures of market power and that when market power varies temporally it is usually procyclical thus variations in the markup of price over marginal cost may help dampen aggregate economic fluctuations

the cyclical behavior of marginal cost and price the author examines the cyclical behavior of price marginal cost margins for u s manufac turing after 1956 short run marginal cost is markedly procyclical this is primarily due to procyclical overtime payments incurred beca use employment is not perfectly flexible in most industries output price fails to respond to the cyclical movement in marginal cost so price marginal cost margins are markedly countercyclical the res ults contradict business cycle theories that explain low production i n a recession by a high real cost of producing they support theories that explain low production in a recession by the inability of firms to sell their output copyright 1987 by american economic association

on financial innovations and credit market evolution abstract this paper examines the role of financial innovations in the economic development process it discusses the place of policy intervention in the financial development of developing countries and through a case study of an innovative bank illustrates the nature and characteristics of the financial innovations necessary for financing small enterprises and mobilizing resources from low and middle income groups such financial innovations are shown to reduce transaction costs and risk and as a result to bring about widening deeping and intergration of capital markets this process accelerates economic development through a favorable impact on savings investment and output

implicit interest rates usury and isolation in backward agriculture the unusually high interest rates in many backward agricultural regions have been a source of some puzzlement to economists adding to this puzzle is the fact that these rates can take on a wide range of values often within the same region one important question is why arbitrage between sectors does not lead to more homogeneous and lower interest rates the traditional answer to this is in terms of lender s risk it is argued that moneylenders in backward regions face a great risk of default and once this is taken into account the effective interest rate turns out to be no higher than its counterpart in the organised sector consequently there is no real room for arbitrage and the high interest rates are equilibrium prices while this explanation may be of use in some situations it is in general inadequate and can even be misleading the reason which novelists describing rural india have repeatedly written about is that in these financial transactions the lender s risk frequently ranges from minimal to non existent because the personalised relation between the borrower and the lender enables the latter to extract the defaulted loan in the form of asset transfers from the borrower in a somewhat stylised manner these deals could be thought of as follows a peasant takes a loan from his employer keeping some of his assets like land a standing crop or even the promise of labour services as security or collateral a collateral price is then fixed this is the conversion price used to calculate the amount of collateral that has to be relinquished to the lender given a certain amount of default clearly the lower the collateral price the larger the quantity of collateral that the peasant has to forfeit hence the underpricing of collateral amounts to the charging of an implicit interest a widespread feature of rural credit markets reported in many diverse studies bardhan and rudra 1978 myint 1964 raj 1981 roth 1979 and sivakumar 1978 to mention just a few is the underpricing of collateral an interesting attempt to bring collateral explicitly into a model of usury was made by bhaduri 1977 see also 1983 who argued that one of the reasons why landlords raise interest rates is in fact to encourage default and to claim ownership of the asset kept as collateral a sharp contrast to the lender s risk model this hypothesis has deservedly received much attention 1

the effects of overtime pay regulation on worker compensation proponents claim that a statutory overtime premium by raising the relative cost of overtime may encourage firms to substitute employment for overtime hours the author argues that there will be no real effects if firms reduce straight time wages so as to offer the same package of weekly compensation and hours of work that was acceptable initially empirical analysis suggests that wage differentials do arise to mitigate the purely demand driven effects predicted by previous models but these differentials are not large enough to neutralize overtime pay regulation completely copyright 1991 by american economic association

factor substitution and factor augmenting technical progress in the united states a normalized supply side system approach abstract using a normalized ces function with factor augmenting technical progress we estimate a supply side system of the u s economy from 1953 to 1998 avoiding potential estimation biases that

new phillips curve under alternative production technologies for canada the united states and the euro area abstract this paper shows that alternative production technologies imply two modifications to the new phillips curve npc a specific strategic complementarity parameter that affects the relationship between real marginal cost and inflation and a specific modification to the labour share measure of real marginal cost estimates of average duration of nominal price stickiness obtained conditional on the strategic complementarity parameter are substantially smaller and therefore more plausible relative to when this parameter is ignored modifications to the marginal cost measure alone have little effect on the npc estimates the empirical fit of the npc under alternative production technologies is similar

fairness risk preferences and independence impossibility theorems the most widely used economic models of social preferences are specified only for certain outcomes there are two obvious methods of extending them to lotteries if we do so by expected utility theory so that the independence axiom is satisfied our results imply that the resulting preferences do not exhibit ex ante fairness if we do so by replacing certain outcomes with their expected utilities for each individual so that individual risk preferences are preserved then ex ante fairness may be preserved but neither the independence axiom nor ex post fairness is satisfied both ex ante and ex post fairness can be satisfied but then the individual does not have well defined preferences over own lotteries

working hours and hedonic wages in the market equilibrium in the conventional model of labor supply working hours are implicitly assumed to be divisible goods which is an obviously unrealistic assumption the purpose of this paper is to analyze working hours as indivisible goods when working hours are indivisible labors are differentiated in the market by their length and wages will be a function of working hours the main conclusions are that 1 in the market equilibrium the elasticity of the hedo nic wage curve with respect to hourly wage rates must be positive or less than a1 and 2 generally data will reveal neither demand nor su pply structures copyright 1987 by university of chicago press

equilibrium credit rationing of small farm agriculture it is often argued that externally imposed contractual restrictions lead to inequitable credit rationing this paper argues that unrestricted laissez faire markets may also inequitably ration credit a formal model which grants borrowers autonomy in credit application and use demonstrates that adverse incentive and selection effects may cause banks to endogenously impose interest rate restrictions and ration small farms out of the credit market consequently liberalization of financial markets may be insufficient to guarantee small farms access to credit

financial market efficiency in an agrarian economy microeconometric analysis of the pakistani punjab the shadow price of capital in production is a useful indicator of the efficacy of the rural financial system using data on participants and non participants in a small farm credit programme from the pakistani punjab this article estimates the shadow price of capital endogenous switching regressions techniques are employed to control for the likely heterogeneity of borrowers versus non borrowers results indicate that an individual selected at random from the population of small farmers would experience a 200 per cent rate of return on the first rupee borrowed from the small farm credit programme indicating a high shadow price of capital and a prima facie case for small farm credit programmes