money and capital abstract the effects of money anticipated inflation on capital formation is a classic issue in macroeconomics previous papers adopt reduced form approaches putting money in the utility function or imposing cash in advance but using otherwise frictionless models we follow instead a literature that tries to be explicit about the frictions making money essential this introduces new elements including a two sector structure with centralized and decentralized markets stochastic trading opportunities and bargaining these elements matter quantitatively and numerical results differ from findings in the reduced form literature the analysis also reduces a gap between microfounded monetary economics and mainstream macro

central bank design abstract starting with a blank slate how could one design the institutions of a central bank for the united states this paper explores the question of how to design a central bank drawing on the relevant economic literature and historical experiences while staying free from concerns about how the fed got to be what it is today or the short term political constraints it has faced at various times the goal is to provide an opinionated overview that puts forward the trade offs associated with different choices and identifies areas where there are clear messages about optimal central bank design

choosy search and the mismatch of talents this article proposes a multi sector matching model where workers have symmetric sector specific skills and the search market is segmented by sector workers choose the range of markets they are willing to participate in i identify a composition externality workers do not take into account the impact of their choice on sector specific mean productivity among the pools of job seekers consequently workers prospect too many market segments and there is room for public policy even when the so called hosios condition holds

opening the black box of agglomeration economies for measuring cities competitiveness through international firm networks the ability of cities to operate in global networks is usually measured according to their central position within multinational firm linkages these measures are often used at the interurban level and neglect the intraurban processes of multiplier effects the present study demonstrates that this affects the measurement of city centrality in business networks intraurban capabilities of interaction are considered in the measurement of interurban indices the study is based on hypothetical networks at a micro level between long range links and it mobilises processes as agglomeration economies social capital developments and transaction costs these processes at the intraurban level strengthen the efficiency of interurban linkages it is suggested that the indices used to measure city centrality should include these local effects applied to a small sample of six firm networks the methodology shows advantages for emerging large metropolises but insufficient local effects for specialised clusters the mu

equilibrium price dispersion with sequential search abstract the paper studies equilibrium pricing in a product market for an indivisible good where buyers search for sellers buyers search sequentially for sellers but do not meet every seller with the same probability specifically a fraction of the buyers meetings lead to one particular large seller while the remaining meetings lead to one of a continuum of small sellers in this environment the small sellers would like to set a price that makes the buyers indifferent between purchasing the good and searching for another seller the large seller would like to price the small sellers out of the market by posting a price that is low enough to induce buyers not to purchase from the small sellers these incentives give rise to a game of cat and mouse whose only equilibrium involves mixed strategies for both the large and the small sellers the fact that the small sellers play mixed strategies implies that there is price dispersion the fact that the large seller plays mixed strategies implies that prices and allocations vary over time we show that the fraction of the gains from trade accruing to the buyers is positive and nonmonotonic in the degree of market power of the large seller as long as the large seller has some positive but incomplete market power the fraction of the gains from trade accruing to the buyers depends in a natural way on the extent of search frictions

job to job movements in a simple search model on the job search is a key feature of real life labor markets yet traditional equilibrium unemployment theory has not been able to account for on thejob search in a satisfactory manner in this paper we present an equilibrium model which includes on thejob search as an optimal response to search frictions and differences in firm productivity our model is laid out in detail in ongoing research by garibaldi and moen 2009 in our model on the job search is an optimal response to firm heterogeneity and search frictions in the labor market the model has three key elements first it applies the competitive search equilibrium concept initially proposed by moen 1997 thus firms post wages and vacancies to minimize search and waiting costs and the labor market is endogenously separated into submarkets second firms have convex costs of maintaining vacancies in our simulations the number of vacancies per firm is fixed third contracting between a firm and its employees is efficient so that their joint income is maximized the model tends toward an equilibrium characterization in which there is a job ladder in the labor market low productivity firms pay low wages face high turnover rates grow slowly and hire directly from the unemployment pool more efficient firms pay higher wages grow more quickly and hire from the employment pool this characterization is qualitatively consistent with a variety of stylized facts about industry dynamics and worker ows 1 workers move from low wage to high wage occupations 2 more productive firms are larger and pay higher wages than less productive firms 3 job to job mobility falls with average firm size and worker tenure 4 wages increase with firm size and 5 wages are higher in fast growing firms we also show that compared to traditional labor market models our equilibrium model with on thejob search delivers unexpected effects even though

product introduction with network externalities the authors study the introduction of a new product in a market with network externalities there is a common presumption that such markets exhibit excess inertia i e that they are biased toward existing products in contrast the authors provide conditions under which equilibrium involves insufficient friction i e a tendency to rush into new incompatible technologies they also analyze the firms incentives to make their products compatible and they show that the firm introducing the new technology is biased against compatibility copyright 1992 by blackwell publishing ltd

job search with bidder memories this paper revisits the no recall assumption in job search models with take it or leave it offers workers who can recall previously encountered potential employers in order to engage them in bertrand bidding have a distinct advantage over workers without such attachments firms account for this difference when hiring a worker when a worker first meets a firm the firm offers the worker a sufficient share of the match rents to avoid a bidding war in the future the pair share the gains to trade in this case the diamond paradox no longer holds

competitive search equilibrium in this paper i construct an equilibrium for markets with frictions which is competitive in the sense that all agents are price takers and maximize utility subject to a set of market parameters i show that the equilibrium allocation is socially optimal i also show how the competitive search equilibrium can be achieved if employers with vacancies can advertise publicly the wages they pay

installed base and compatibility innovation product preannouncements and predation a good is often more valuable to any user the more others use compatible goods the authors show that this effect may inhibit innovation if an installed base exists and transition to a new standard must be gradual early adopters bear a disproportionate share of transient incompatibility costs this can produce excess inertia the installed base however is stranded if the new standard is adopted this may create excess momentum these dynamic effects have strategic implications temporary price cutting can permanently prevent entry and product preannouncements can be critical in innovation these strategic actions have ambiguous welfare effects

life cycle equilibrium unemployment this paper extends the job creation job destruction approach to the labor market to take into account a deterministic finite horizon as hirings and separations depend on the time over which investment costs can be recouped the life cycle setting implies age differentiated labor market flows while search by the unemployed falls with age the separation rate is rather u shaped over the life cycle worker heterogeneity in the context of undirected search implies an intergenerational externality which is not eliminated by the hosios condition we show that age specific policies are required to attain the first best allocation

the european central bank s monetary pillar after the financial crisis abstract we apply a structural topic model stm to analyze european central bank ecb communication regarding the monetary pillar of its monetary policy strategy we do so by quantifying the transcripts of the ecb president s introductory statements at the press conferences that accompany the regular meetings of the ecb governing council our evidence shows that within its monetary pillar the ecb has gradually shifted its focus away from a genuine monetary analysis towards monitoring the stability of the european financial system we go on to augment a standard taylor rule by quantitative indicators obtained from the stm to assess whether the monetary pillar in general and the shift in focus in particular has had a measurable impact on the ecb s monetary policy stance we find that the monetary analysis has had a bearing on the interest rate setting in the early years of the ecb s existence but this influence completely disappears in the latter years of the sample furthermore we find no evidence that financial stability considerations in the ecb communication have influenced interest rate decisions either before or after the financial crisis

do polycentric urban regions promote functional spillovers and economic performance evidence from china although the literature often suggests that the economic prowess of polycentric urban regions partly results from the ability of their constituent cities to promote functional spillovers through

global networks cities and economic performance observations from an analysis of cities in europe and the usa the network paradigm has been highly influential in spatial analysis in the globalisation era as economies across the world have become increasingly integrated so called global cities have come to play a growing role as central nodes in the networked global economy the idea that a city s position in global networks benefits its economic performance has resulted in a competitive policy focus on promoting the economic growth of cities by improving their network connectivity however in spite of the attention being given to boosting city connectivity little is known about whether this directly translates to improved city economic performance and if so how well connected a city needs to be in order to benefit from this in this paper we test the relationship between network connectivity and economic performance between 2000 and 2008 for cities with over 500 000 inhabitants in europe and the usa to inform european policy

clusters dispersion and the spaces in between for an economic geography of the banal while the geographical clustering of economic activities remains an enduring feature of the industrial landscape and a perennial source of theoretical and empirical interest the geographical scale at which external economies and agglomerative effects are now claimed to operate is on the increase such changes in the spatial form and potential causes of agglomeration over time pose important questions how should we analyse changes in the spatial extent of external economies and agglomerative effects ought we to pay more attention to the sorts of banal economic spaces thrown up as part of increasingly diffuse forms of agglomeration to answer the first of these questions it is noted how economists and geographers have explained agglomerations often in the rather singular and invariant categories of pecuniary and marshallian externalities respectively this paper considers the relevance of neo marshallian analysis and the concept of borrowed size as variations on these classical principles to an analysis of the mobility and fixity of external economies and contemporary diffuse forms of agglomeration whilst reflecting important changes in the spatial extent of industrial agglomerations they are insufficiently sensitive to the interaction of different types of external economies with different scale dependencies in answering the second question it is noted that part of the value of analysing the economic basis of largely overlooked banal intermediate places lies in what they may reveal about the functioning of diffuse forms of agglomeration

stretching the concept of borrowed size borrowed size is an emerging policy concept in several european countries presenting theoretical potential to explain contemporary urban dynamics unaddressed through conventional urban growth theories that emphasise the role of agglomeration economies in its original conceptualisation by alonso the concept describes and explains the situation that especially smaller cities that are located in a larger megapolitan complex do perform better because they have access to agglomeration benefits of larger neighbouring cities this paper scrutinises the concept of borrowed size thereby focusing on its conceptualisation and reviewing its empirical justification thus far our empirical analyses show that the concept must be stretched in terms of scale and scope to enhance its policy value borrowed size occurs when a city possesses urban functions and or performance levels normally associated with larger cities this is enabled through interactions in networks of cities across multiple spatial scales these networks serve as a substitute for the benefits of agglomeration theoretically the borrowed size concept demands a recasting of the geographical foundations of agglomeration theory

central bank transparency and the volatility of exchange rates abstract we analyze the effect of monetary policy transparency on bilateral exchange rate volatility we test the theoretical predictions of a stylized model using panel data for 62 currencies from 1998 to 2010 we find strong evidence that an increase in the availability of information about monetary policy objectives decreases exchange rate volatility using interaction models we find that this effect is more pronounced for countries with a lower flexibility of goods prices a lower level of central bank conservatism and a higher interest rate sensitivity of money demand

competing for order flow in otc markets we develop a model of a two sided asset market in which trades are intermediated by dealers and are bilateral dealers compete to attract order flow by posting the terms at which they execute trades which can include prices quantities and execution times and investors direct their orders toward dealers that offer the most attractive terms of trade equilibrium outcomes have the following properties first investors face a trade off between trading costs and speeds of execution second the asset market is endogenously segmented in the sense that investors with different asset valuations and different asset holdings will trade at different speeds and different costs for example under a leontief technology to match investors and dealers per unit trading costs decrease with the size of the trade in accordance with the evidence from the market for corporate bonds third dealers implicit bargaining powers are endogenous and typically vary across sub markets finally we obtain a rich set of comparative statics both analytically by studying a limiting economy where trading frictions are small and numerically for instance we find that the relationship between trading costs and dealers bargaining power can be hump shaped

exploring the significance of domestic investment for foreign direct investment in china a city network approach this article uses a network approach and a negative binomial regression model nbrm to shed light on the association between domestic investment di and foreign direct investment fdi in interli

delphic and odyssean monetary policy shocks evidence from the euro area abstract what drives the reaction of financial markets to central bank communication on the days of policy decisions we highlight the role of two factors that we identify from high frequency monetary surprises news on future macroeconomic conditions delphic shocks and news on future monetary policy shocks odyssean shocks these two shocks move the yield curve in the same direction but have opposite effects on financial conditions and macroeconomic expectations they also have a different impact on macroeconomic outcomes so that central bankers cannot infer the degree of stimulus they provide by looking at the mere reaction of the yield curve

on the economic foundation of the urban network paradigm spatial integration functional integration and economic complementarities within the dutch randstad conceptually the degrees of spatial and functional integration and urban complementarities in economic network relations are hypothesised to be important in this paper data on interfirm relations in the dutch randstad are used to test conditions for integration and the existence of economic complementarities a clear hierarchy is observed in the different types of spatial interdependencies in the randstad in which the central place model prevails furthermore no evidence is found for the functional integration of municipalities in the randstad it is concluded that at this moment the randstad does not function as a spatially and functionally integrated region and that spatial economic policy can better focus on smaller regions within the randstad this also calls into question the applicability of the urban network concept in general as the dutch randstad is usually seen as a prime example of an economically successful polycentric urban system

competitive equilibrium and the core in club economies with anonymous crowding in club economies with anonymous crowding competitive equilibrium states of the economy are efficient and coincide with the core when there is only one private good anonymous admission prices permit consumers with different tastes to share facilities consumers might do so when their demands for facility size and crowding coincide in which case sharing is efficient thus similarity of demands is the relevant consideration for efficiently grouping consumers with different tastes

measuring euro area monetary policy abstract we map ecb policy communication into yield curve changes and study the information flow on policy dates a byproduct is the publicly available euro area monetary policy event study database ea mpd containing intraday asset price changes we find that policy target forward guidance and quantitative easing factors capture about all the variation in the yield curve with different factors appearing in the windows covering the policy decision announcement and the press conference and having time varying variance shares we study sovereign yields exchange rates stock prices persistence of effects and response asymmetry our methodology can be implemented for any policy related event

equilibrium wage dispersion and interindustry wage differentials this paper develops a search theoretic explanation of interindustry wage differentials given coordination problems in the labor market the probability of filling a vacancy is an increasing function of the wage offered in equilibrium firms that find vacancies more costly will offer higher wages the model thus explains the persistence of interindustry wage differentials and their correlation with industry average capital labor ratio and profitability additionally the model predicts that high wage firms will receive more applications per job opening and that wages in the labor market will behave as strategic complements

starting from a blank page semantic similarity in central bank communication and market volatility abstract central banks often draft press releases announcing monetary policy decisions starting from the previous release this makes it straightforward to see how the content has evolved but may make substantial updates harder to interpret as markets learn to expect only minor updates using variation in the drafting process at the bank of canada this paper finds that similar press releases reduce market volatility whereas volatility rises when substantial changes occur after sequences of similar statements a comparison over time and across central banks shows that market sensitivity to similarity adjusts to the drafting practice of central banks

spatial structure and labour productivity evidence from prefectures in china this paper examines the effect of spatial structure as measured on the monocentricity polycentricity dimension on labour productivity at the prefectural level in china using pooled cross section

central bank communication and monetary policy a survey of theory and evidence over the last two decades communication has become an increasingly important aspect of monetary policy these real world developments have spawned a huge new scholarly literature on central bank communication mostly empirical and almost all of it written in this decade we survey this ever growing literature the evidence suggests that communication can be an important and powerful part of the central bank s toolkit since it has the ability to move financial markets to enhance the predictability of monetary policy decisions and potentially to help achieve central banks macroeconomic objectives however the large variation in communication strategies across central banks suggests that a consensus has yet to emerge on what constitutes an optimal communication strategy

communication by central bank committee members different strategies same effectiveness the paper assesses the communication strategies of the federal reserve the bank of england and the european central bank and their effectiveness we find that the effectiveness of communication is not independent from the decision making process the paper shows that the federal reserve has been pursuing a highly individualistic communication strategy amid a collegial approach to decision making while the bank of england is using a collegial communication strategy and highly individualistic decision making the european central bank ecb has chosen a collegial approach both in its communication and in its decision making assessing these strategies we find that predictability of policy decisions and the responsiveness of financial markets to communication are equally good for the federal reserve and the ecb this suggests that there may not be a single best approach to designing a central bank communication strategy

the division of markets is limited by the extent of liquidity spatial competition with externalities liquidity considerations will limit the number of markets in a competitive economy welfare implications are ambigious since liquidity is a positive externality there may be too little liquidity per market at a noncooperative equilibrium and too many markets compared to the surplus maximizing market structure but liquidity is also self reinforcing given an existing equilibrium new markets may not open because nobody wants to use a new market with low liquidity there may be too few markets to achieve efficiency a nondiscriminating monopolist will operate smaller and more numerous markets compared to optimality as well as to the equilibrium of independent auctioneers copyright 1988 by american economic association

a search model of rental markets who should pay the commission abstract we develop a dynamic search equilibrium model of rental markets with brokerage fees an endogenous mass of landlords and tenants is active in the search market while the mass of entering tenants is exogenous the mass of entering landlords is endogenously determined by the rate at which apartments become vacant brokerage fees paid by tenants are used as a device to screen short term and long term tenants we analyze a policy that requires fees to be paid by landlords such a policy decreases efficiency by preventing efficient screening but also increases turnover and hence efficiency in the search market we further provide empirically testable implications of our theory

technology adoption in the presence of network externalities we analyze technology adoption in industries where network externalities are significant the pattern of adoption depends on whether technologies are sponsored a sponsor is an entity that has property rights to the technology and hence is willing to make investments to promote it key findings include the following 1 compatibility tends to be undersupplied by the market but excessive standardization can occur 2 in the absence of sponsors the technology superior today has a strategic advantage and is likely to dominate the market 3 when one of two rival technologies is sponsored that technology has a strategic advantage and may be adopted even if it is inferior 4 when two competing technologies both are sponsored the technology that will be superior tomorrow has a strategic advantage

optimal unemployment insurance in search equilibrium should unemployment benefits be paid indefinitely at a fixed rate or should the rate decline or increase over a worker s unemployment spell we examine these issues using an equilibrium model of search unemployment the model features worker firm bargaining over wages free entry of new jobs and endogenous search effort among the unemployed the main result is that an optimal insurance program implies a declining benefit sequence over the spell of unemployment numerical calibrations of the model suggest that there may be nontrivial welfare gains associated with switching from an optimal uniform benefit structure to an optimally differentiated system

sorting versus screening search frictions and competing mechanisms in a market where sellers compete by posting trading mechanisms we allow for a general search technology and show that its features crucially affect the equilibrium mechanism price posting prevails when meetings are rival i e when a meeting by one buyer reduces another buyer s meeting probability under price posting buyers reveal their type by sorting ex ante only if the meeting technology is sufficiently non rival price posting is not an equilibrium multiple buyer types then visit the same sellers who screen ex post through auctions

environmental policy and the equilibrium rate of unemployment abstract this paper integrates environmental policy instruments with the theory of equilibrium unemployment we investigate the question of whether a low equilibrium rate of unemployment and a high quality of the environment are complementary policy goals or must be traded off it turns out that an interval exists for a tax on emissions where the two goals are indeed complementary the tax stimulates the emergence of an abatement sector which provides pollution control and vacancies for the job seekers for constrained efficiency the policy maker operates five instruments to internalize the environmental and the search externalities a tax on emissions employment subsidies and recruiting allowances for the polluting industries are sufficient to implement the first best the optimal emission tax is an increasing function of the workers bargaining strength for labor markets where workers have a strong bargaining position the optimal pollution tax may easily exceed the pigouvian tax

demand shocks and open economy puzzles abstract we pose good markets frictions on top of an otherwise standard two country international real business cycle irbc model shopping for goods takes effort which prevents perfect matching between customers and producers an increase in search effort implies increased measured productivity demand shocks increase expenditures and search effort simultaneously increasing output consumption productivity and the trade deficit and appreciating the real exchange rate thus we solve the backus smith puzzle and we show that the cross country correlation of consumption is higher than that of output standard irbc models cannot account for these puzzles along with movements in tfp

taxation and redistribution of residual income inequality this paper studies the optimal redistribution of income inequality caused by the presence of search and matching frictions in the labor market we study this problem in the context of a directed search model of the labor market populated by homogeneous workers and heterogeneous firms the optimal redistribution can be attained using a positive unemployment benefit and an increasing and regressive labor income tax the positive unemployment benefit serves the purpose of lowering the search risk faced by workers the increasing and regressive labor tax serves the purpose of aligning the cost to the firm of attracting an additional applicant with the value of an application to society

competitive equilibrium with search frictions a general equilibrium approach abstract when the trading process is characterized by search frictions traders may be rationed so markets need not clear we build a general equilibrium model with transferable utility where the uncertainty arising from rationing is incorporated in the definition of a commodity in the spirit of the arrow debreu theory prices of commodities then depend not only on their physical characteristics but also on the probability that their trade is rationed the standard definition of competitive equilibrium is extended by replacing the market clearing condition with an exogenous matching function which describes a trading technology that is not frictionless as is typical in search models the matching function relates the rationing probabilities of buyers and sellers to the ratio of buyers to sellers in the market when search frictions vanish our model is equivalent to the continuous assignment model of gretsky et al 20 we adapt their approach which uses linear programming techniques and duality theory to show that a competitive equilibrium exists and is constrained efficient in our environment our competitive equilibrium notion is equivalent to that of directed or competitive search the strength of our formulation and the linear programming approach is that they allow us to generalize the constrained efficiency and existence results in the directed search literature to a much broader class of economies our framework also opens the door to the use of existing algorithms for computing equilibria and taking these models to the data

informative price advertising in a sequential search model the purpose of this paper is to study the role and implications of price advertising when shopping trips are costly to consumers to do so we introduce advertising into an optimal sequential search model information about prices is both gathered by consumers and disseminated by firms consumers search sequentially and stores advertise with various intensity when it is in their interest to do so our model has a unique equilibrium exhibiting priee dispersion the model generates predictions about the shape of the price distribution and firms advertising behavior we explore the effects of entry and find that when initial advertising costs at zero level of effort are precisely zero entry drives the equilibrium to the perfectly competitive outcome however when initial marginal advertising costs are positive entry drives prices higher and while the informed consumers almost surely locate competitive prices welfare does not necessarily increase finally we compare the effectiveness of the two informational channels when advertising costs shrink prices become competitive however when search costs shrink prices remain bounded above marginal production costs

the city network paradigm measuring urban network externalities in recent years network behaviour has been analysed extensively as the emerging model for economic growth by network behaviour a metaphor for co operative behaviour among individuals corporate

the reaction of asset markets to swiss national bank communication abstract in this paper we analyze high frequency movements in swiss asset markets in reaction to real time communication by the swiss national bank our analysis of central bank communication encompasses monetary policy announcements speeches and interviews we examine the reactions of the currency market the bond market and the stock exchange the evidence suggests that speeches and interviews along with monetary policy announcements engender a significant price reaction this paper sheds light on the relevance of communications other than monetary policy announcements

ex ante price offers in matching games non steady states a matching problem is considered in which sellers can publicly commit to a trading price that differs from the price at which buyers expect to trade elsewhere in the market when demand and supply are nearly equal the equilibrium ex ante price offer lies below the price associated with the nash bargaining split this relationship reverses when the level of excess demand is large sellers always have an incentive to make ex ante offers when prices elsewhere are determined by nash bargaining this can be interpreted to mean that nash bargaining is an unstable pricing institution copyright 1991 by the econometric society

shocking language understanding the macroeconomic effects of central bank communication we explore how the multi dimensional aspects of information released by the fomc has effects on both market and real economic variables using tools from computational linguistics we measure the information released by the fomc on the state of economic conditions as well as the guidance the fomc provides about future monetary policy decisions employing these measures within a favar framework we find that shocks to forward guidance are more important than the fomc communication of current economic conditions in terms of their effects on market and real variables nonetheless neither communication has particularly strong effects on real economic variables

induced adoption and externalities in the regional diffusion of information technology antonelli c 1990 induced adoption and externalities in the regional diffusion of information technology reg studies 24 31 40 information technology can be considered as a set of complex radical innovations which continues to evolve and has a major impact both within the plant and the office in such a context its regional diffusion is likely to be determined by relevant externalities together with the effects of a wage induced process of localized technological change and adoption data on the territorial distribution of fax machines and modems show that the levels of diffusion of information technology in italy is highly uneven favouring central regions endowed with higher levels of fixed and human capital and consequently income the econometric analysis confirms that diffusion levels of both fax and modems across provinces are significantly associated with the level of wages as is to be expected from the induced adoption hypothesis and from the existence of external factors such as the presence

decomposing the effects of monetary policy using an external instruments svar we study the effects of monetary policy on economic activity separately identifying the effects of a conventional change in the fed funds rate from the policy of forward guidance we use a structural var identified using external instruments from futures market data the response of output to a fed funds rate shock is found to be consistent with typical monetary var analyses however the effect of a forward guidance shock that increases long term interest rates has an expansionary effect on output this counterintuitive response is shown to be tied to the asymmetric information between the federal reserve and the public

regional spatial structure and retail amenities in the netherlands burger m j meijers e j and van oort f g regional spatial structure and retail amenities in the netherlands regional studies this paper examines how the presence of retail amenities in dutch regions is dependent on their spatial structure retail amenities in particular those specialized retail functions that require a large urban support base are less found in more polycentric and more dispersed regions this can be explained by the observation that in polycentric and dispersed regions the degree of market fragmentation is higher as a result of more intense regional competition and spacing between retail centres evidence is found for ways to overcome the lack of agglomeration benefits in more polycentric and more dispersed regions both concentration of retail and more complementarities between cities retail amenities may make up for the disadvantages of regions being polycentric or dispersed these findings provide a rationale to coordinate regionally specialized retailing in polycentric and

wage differentials discrimination and efficiency abstract i analyze a large labor market where homogeneous firms post wages to direct the search of workers who differ in productivity i show that the model has a unique equilibrium the wage differential depends positively on the workers productivity differential only when the latter is large when the productivity differential is small high productivity workers get a lower wage than low productivity workers this reverse wage differential remains even when the productivity differential shrinks to zero however the equilibrium is socially efficient high productivity workers always get the employment priority and higher expected wages than low productivity workers although discrimination in terms of expected wages does not exist conventional measures are likely to incorrectly find discrimination in the model

principal components at work the empirical analysis of monetary policy with large data sets the empirical analysis of monetary policy requires the construction of instruments for future expected inflation dynamic factor models have been applied rather successfully to inflation forecasting in fact two competing methods have recently been developed to estimate large scale dynamic factor models based respectively on static and dynamic principal components this paper combines the econometric literature on dynamic principal components and the empirical analysis of monetary policy we assess the two competing methods for extracting factors on the basis of their success in instrumenting future expected inflation in the empirical analysis of monetary policy we use two large data sets of macroeconomic variables for the usa and for the euro area our results show that estimated factors do provide a useful parsimonious summary of the information used in designing monetary policy copyright 2005 john wiley sons ltd

strategic central bank communication discourse analysis of the bank of japan s monthly report abstract we conduct a discourse analysis of the bank of japan s monthly report and examine its characteristics in relation to business cycles we find that ambiguous expressions tend to appear more frequently with negative expressions and this tendency is more pronounced in recessions this suggests that the central bank communicates strategically by obfuscating the reports when their private information is unfavorable

monetary policy in the media just like private companies depend crucially on their ability to reach customers policymakers must communicate with private agents to be successful and much of this communication is channeled through the media this is especially true for central banks which need to build credibility among the general public this paper analyses how favorably the print media report about the european central bank s ecb monetary policy decisions favorableness is inter alia influenced by the amount of information communicated by the ecb there are however also indications of a critical monitoring role of the media which reports more negatively when inflation exceeds the inflation target

spread the word international spillovers from central bank communication abstract we construct a novel text dataset to measure the sentiment component of communications for 23 central banks over the 2002 2017 period our analysis yields three results first comovement in sentiment across central banks is not reducible to trade or financial flow exposures second sentiment shocks generate cross country spillovers in sentiment policy rates and macroeconomic variables and the fed appears to be a uniquely influential generator of such spillovers even among prominent central banks and third geographic distance is a robust and economically significant determinant of comovement in central bank sentiment while shared language and colonial ties have weaker predictive power

a walrasian theory of markets with adverse selection the paper describes a walrasian theory of markets with adverse selection and shows how refinements of equilibrium can be used to characterize uniquely the equilibrium outcome equilibrium exists under standard conditions it is shown that under certain conditions a stable set exists and is contained in a connected set of equilibria for generic models there exists a stable outcome that is all the equilibria in the stable set have the same outcome these ideas are applied to markets with one sided and two sided uncertainty under standard monotonicity conditions it is shown that the stable outcome is separating and implies a particular pattern of matches of buyers and sellers

what does monetary policy do to long term interest rates at the zero lower bound this article uses a structural var with daily data to identify the effects of monetary policy shocks on various longer term interest rates since the federal funds rate has been stuck at the zero lower bound the var is identified using the assumption that monetary policy shocks are heteroskedastic monetary policy shocks have especially high variance on days of fomc meetings and certain speeches while there is otherwise nothing unusual about these days a complementary high frequency event study approach is also used i find that stimulative monetary policy shocks lower treasury and corporate bond yields but the effects die off fairly fast

wage differentials employer size and unemployment the unique equilibrium solution to a game in which a continuum of individual employers choose permanent wage offers and a continuum of workers search by sequentially sampling from the set of offers is characterized wage dispersion is a robust outcome provided that workers search while employed as well as when unemployed the unique nondegenerate equilibrium distribution of wage offers is constructed for three cases 1 identical workers and employers 2 identical employers and an atomless distribution of worker supply prices and 3 identical workers and an atomless distribution of job productivities copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

pareto inefficiency of market economies search and efficiency wage models this paper shows that market economies with search and in which wages are affected by efficiency wage considerations are not constrained pareto efficient wages are not set at pareto efficient levels nor is the level of employment unemployment pareto efficient we identify the nature of the biases and the welfare improving government interventions this abstract was borrowed from another version of this item

comment on monetary policy communication policy slope and the stock market by andreas neuhierl and michael weber abstract this note discusses the article monetary policy communication policy slope and the stock market by andreas neuhierl and michael weber the authors document that the slope of the fed funds futures curve predicts stock returns one week ahead and is correlated with the tone of fed board member speeches over the period 1994 2007 we show that this return predictability is restricted to the subsample from 1999 to 2001 with no evidence of predictability outside of this period we further point out some issues with the proposed measure of monetary policy tone and show that the positive correlation between tone and the fed funds futures slope is driven by two speeches that when analyzed in detail do not appear particularly hawkish