coalitional manipulation on networks abstract we study allocation rules that are robust to coalitional manipulation by transferring merging or splitting individual characteristics among coalition partners e g merging or splitting claims in bankruptcy problems coalition formation is restricted by an exogenous network a non directed graph so that only connected subsets of agents can form a coalition we offer a full characterization of non manipulable rules without any assumption on the network structure this result yields a variety of useful corollaries for specific networks such as complete network trees and networks without a bridge and corollaries for specialized models dealing with bankruptcy surplus sharing cost sharing income redistribution social choice with transferable utility etc

sharing the proceeds from a hierarchical venture we consider the problem of distributing the proceeds generated from a joint venture in which the participating agents are hierarchically organized we introduce and characterize a family of allocation rules where revenue bubbles up in the hierarchy the family is flexible enough to accommodate a no transfer rule where no revenue bubbles up and a full transfer rule where all the revenues bubble up to the top of the hierarchy intermediate rules within the family are reminiscent of popular incentive mechanisms for social mobilization our benchmark model refers to the case of linear hierarchies but we also extend the analysis to the case in which hierarchies may convey a general tree structure and include joint ownerships

international environmental agreements for river sharing problems we study partial coalition formation and the strategic timing of membership of an iea for environmental issues in the coalitional bargaining game cbg of gomes econometrica 73 1329 1350 2005 we apply the cbg to a specific river sharing problem with two symmetric upstream agents each at a tributary and one downstream agent located at the junction of tributaries we identify five regions in the parameter space of a discount factor and a productivity parameter for water in one region the grand coalition always forms immediately in two other regions immediate formation of the grand coalition and gradual coalition formation both occur with positive probability in another two regions only gradual coalition formation occurs in one of these latter regions a region with discount factors close to one both upstream agents form a monopoly with positive probability formation of the monopoly persists in the limit as the discount factor goes to one

non manipulable division rules in claim problems and generalizations abstract when resources are divided among agents the characteristics of the agents are taken into consideration a simple example is the bankruptcy problem where the liquidation value of a bankrupt firm is divided among the creditors based on their claims we characterize division rules under which no group of agents can increase the total amount they receive by transferring their characteristics within the group by allowing agents characteristics to be multi dimensional and choosing the meaning of variables appropriately our model can subsume a number of existing and new allocation problems such as cost sharing social choice with transferable utilities income redistribution bankruptcy with multiple types of assets probability updating and probability aggregation a number of existing and new results in specific problems are obtained as corollaries

structural evolution of the postwar u s economy we consider a time varying parameter vector autoregressive model with stochastic volatility and mixture innovations to study the empirical relevance of the lucas critique for the postwar u s economy the model allows blocks of parameters to change at endogenously estimated points of time contrary to the lucas critique there are large changes at certain points of time in the parameters associated with monetary policy that do not correspond to changes in reduced form parameters for inflation or the unemployment rate however the structure of the u s economy has evolved considerably over the postwar period with an apparent reduction in the late 1980s in the impact of monetary policy shocks on inflation though not on the unemployment rate related we find changes in the phillips curve tradeoff between inflation and cyclical unemployment measured as the deviation from the time varying steady state unemployment rate implied by the model in the 1970s and especially since the mid 1990s

the other margin do minimum wages cause working hours adjustments for low wage workers this paper estimates the impact of the introduction of the uk minimum wage on the working hours of low wage employees using difference in differences estimators the estimates using the employer based new earnings surveys indicate that the introduction of the minimum wage reduced the basic hours of low wage workers by between one and two hours per week the effects on total paid hours are similar indicating negligible effects on paid overtime and lagged effects dominate the smaller and less significant initial effects within this estimates using the employee based labour force surveys are typically less significant

who minimum wage increases bite an analysis using monthly data from the sipp and the cps 1 introduction neoclassical competitive models of firm behavior predict that wage increases reduce the quantity of labor demanded by firms and holding the wage rate constant that the least valued workers are the first fired or the last hired minimum wage legislation exogenously increases the price of labor and data from periods when the minimum wage changes can be used to empirically test its effect on the employment of vulnerable workers however a new body of research using such data suggests that minimum wage increases do not reduce employment and may even increase it card 1992a b katz and krueger 1992 card katz and krueger 1994 card and krueger 1994 1995 from a theoretical perspective this new economics of the minimum wage has been characterized as an assault on the law of demand ehrenberg 1995 if modest increases in the minimum wage have no employment effects then the appropriateness of this method in helping the working poor is strictly a distributional issue 2 however if minimum wage increases reduce employment and if the jobs lost are concentrated among the vulnerable groups the policy claims to assist then policy makers must consider this unintended consequence hence estimating the elasticity of employment with respect to minimum wage increases is more than simply an empirical test of economic theory in this paper we use monthly data from the survey of income and program participation sipp and the current population survey cps to examine the effect of raising the minimum wage on employment in contrast to much of the new minimum wage literature we find that minimum wage increases significantly reduce employment moreover we find that the elasticity of demand for labor with respect to increases in the minimum wage is greatest for the most vulnerable groups in the working age population young adults who have low levels of education young black adults and teenagers and teenagers we also find that minimum wage increases reduce the overall employment of young adults and teenagers though the estimated elasticities are smaller 2 the new economics of the minimum wage the new minimum wage literature is dominated by studies that find that minimum wage increases have an insignificant or in some cases a positive and significant effect on the employment of young adults and teenagers aged 16 24 or on other subgroups within that population card 1992a b katz and krueger 1992 card katz and krueger 1994 card and krueger 1994 1995 most of these studies have now generated replies arguing that raising the minimum wage significantly decreases employment in these populations neumark and wascher 1992 1994 1996 in press deere murphy and welch 1995 taylor and kim 1995 burkhauser couch and wittenburg in press because these new studies of the minimum wage vary widely in their techniques we focus our discussion on those that use cps data and employ an estimation strategy related to the one we use in this paper neumark and wascher 1992 1994 1996 card katz and krueger 1994 card and krueger 1995 deere murphy and welch 1995 burkhauser couch and wittenburg in press 3 specifically we review studies that use a pooled time series cross sectional approach to estimate the employment effects of minimum wage increases on vulnerable groups such as teenagers with cps data deere murphy and welch 1995 also use pooled repeated cross sectional data from the cps to estimate the impact of minimum wage increases but their specification differs in some important ways from the studies discussed above deere murphy and welch 1995 estimate the effect of minimum wage increases over the period from 1985 through 1993 they construct intervals of monthly data from 1985 through 1993 that begin on the first day of april of each year and end on the last day of match during the following year for each interval they create annual averages of variables

loss allocation in energy transmission networks abstract in this paper we study a cost allocation problem that is inherent to most energy networks the allocation of losses in particular we study how to allocate gas losses between haulers in gas transmission networks we discuss four allocation rules two of them have already been in place in real networks and two others that are defined for the first time in this paper we then present a comparative analysis of the different rules by studying their behavior with respect to a set of principles set forth by the european union this analysis also includes axiomatic characterizations of two of the rules finally as an illustration we apply them to the spanish gas transmission network

marketing models and the lucas critique the lucas critique has been largely ignored in the marketing literature we present a number of conditions under which the critique is most likely to also apply in marketing settings next we provide some perspectives on how to diagnose and accommodate the lucas critique and identify various avenues for future research

employment effects of minimum and subminimum wages panel data on state minimum wage laws using panel data on state minimum wage laws and economic conditions for the years 1973 89 the authors reevaluate existing evidence on the effects of a minimum wage on employment their estimates indicate that a 10 increase in the minimum wage causes a decline of 1 2 in employment among teenagers and a decline of 1 5 2 in employment for young adults similar to the ranges suggested by earlier time series studies the authors also find evidence that youth subminimum wage provisions enacted by state legislatures moderate the disemployment effects of minimum wages on teenagers

sources of mistrust an experimental case study of a central asian water conflict with the disintegration of the ussr a conflict arose between kyrgyzstan uzbekistan and kazakhstan over the transboundary syr darya river upstream kyrgyzstan controls the toktogul reservoir which generates hydropower demanded mainly in winter for heating downstream uzbekistan and kazakhstan need irrigation water in summer primarily to grow an export crop cotton regional agreements obliging kyrgyzstan to higher summer discharges in exchange for fossil fuel transfers from downstream riparians in winter have been unsuccessful due to lack of trust between the parties striving for self sufficiency in irrigation water uzbekistan initiated new reservoir construction this paper examines their economic impact we report a laboratory experiment modelling the syr darya scenario as a multi round three player trust game with non binding contracts payoff schemes are estimated using real life data while basinwide efficiency maximisation requires regional cooperation our results demonstrate that cooperation in the laboratory is hard to achieve uzbek reservoirs improve cooperation only weakly and their positive impact is limited to low water years

decentralization hierarchies and incentives a mechanism design perspective separation of ownership from management multidivisional firm organizations delegation of production decisions to worker teams delegation of pricing and advertising decisions to retail franchisers reliance on intermediaries in trade or finance and distribution of regulatory authority across different agencies represent examples of organizations that delegate and distribute decision making authority instead of centralizing it this paper reviews literature on costs and benefits of delegated decision making in hierarchical organizations or contracting networks with regard to problems of incentives and coordination it starts by describing incentive and coordination costs of delegation in simple canonical examples of hierarchies where both information and incentives of different decisionmakers differ one class of models pertain to contexts where the classical revelation principle applies i e where costs of contractual complexity information processing or communication are absent agents do not collude and the mechanism designer can commit to the mechanism delegation may conceivably entail a loss of control and coordination arising from the divergence of information and incentives sufficient and necessary conditions for this loss to be mitigated entirely include risk neutrality top down contracting and monitoring of transfers or production assignments between subordinates the next class of models introduces communication costs that restrict the performance of centralized arrangements relative to delegation owing to a resulting loss of flexibility which has to be traded off against possible control losses of delegation finally consequences of collusion among agents is discussed which typically enlarge the range of circumstances under which delegation can attain optimal second best outcomes the paper concludes with a discussion of the relevance of this theoretical literature to recently emerging empirical studies of industrial organizations where delegated decision making plays an important role adoption of innovative human resource management practices new information technologies and retail franchising

uniform externalities two axioms for fair allocation abstract positive resp negative preference externalities say that an agent always prefers his actual welfare to his virtual welfare should other agents share his preferences resp prefers his virtual to his actual welfare negative group externalities say that an agent never prefers his actual welfare to his virtual welfare should he be the sole user of the resources these two axioms unify several familiar fairness properties and yield some new ideas as well in the division of unproduced commodities and the cooperative production of a private or a public good we also discuss their compatibility with no envy and resource monotonicity

the effect of the tipped minimum wage on employees in the u s restaurant industry according to federal law in 2013 employers can take a credit of up to 5 12 for tips received by workers in satisfying the minimum wage requirement of 7 25 this article uses interstate variation in laws regarding tip credits and minimum wages to identify the effects of reducing or eliminating the tip credit on employment hours and earnings in the u s restaurant industry using data from the quarterly census of employment and wages and the current population survey we find that a reduction in the tip credit increases weekly earnings but reduces employment in the full service restaurant industry and for tipped workers the results are robust to controls for spatial heterogeneity in employment trends and are supported by a series of falsification tests

rational expectations and the paradox of policy relevant natural experiments abstract policy experiments using large microeconomic datasets have recently gained ground in macroeconomics imposing rational expectations we examine robustness of evidence derived from ideal natural experiments applied to atomistic agents in dynamic settings paradoxically once experimental evidence is viewed as sufficiently clean to use it then becomes contaminated by ex post endogeneity measured responses depend upon priors and the objective function into which evidence is fed moreover agents policy beliefs become endogenously correlated with their causal parameters severely clouding inference e g sign reversals and non invertibility may obtain treatment control differences are contaminated for non quadratic adjustment costs constructively we illustrate how inference can be corrected accounting for feedback and highlight factors mitigating contamination

regime shifts and the stability of backward looking phillips curves in open economies abstract we assess the stability of open economy backward looking phillips curves estimated over two different exchange rate regimes we calibrate a new keynesian monetary policy model and employ it for producing artificial data a monetary policy break replicating the move from a target zone regime to a free floating regime implemented in sweden in 1992 is modeled we employ two different plausibly calibrated taylor rules to describe the swedish monetary policy conduct and fit a reduced form phillips curve to the artificial data while not rejecting the statistical relevance of the lucas critique we find that its economic importance does not seem to be overwhelming

estimating new keynesian phillips curves a full information maximum likelihood approach abstract the new keynesian phillips curve has recently become an important ingredient in monetary policy models however using limited information methods the empirical support for the new keynesian phillips curve appear to be mixed this paper argues by means of monte carlo simulations with a simple new keynesian sticky price model that single equations methods e g gmm are likely to produce imprecise and biased estimates then it is argued that estimating the model with full information maximum likelihood fiml is a useful way of obtaining better estimates finally a version of the model used in the monte carlo simulations is estimated on u s data with fiml and although the pure forward looking new keynesian phillips curve is rejected a version with both forward and backward looking components provides a reasonable approximation of u s inflation dynamics

sharing a river abstract a group of agents located along a river have quasi linear preferences over water and money we ask how the water should be allocated and what money transfers should be performed the core lower bounds require that no coalition should get less than the welfare it could achieve by using the water it controls the aspiration upper bounds demand that no coalition enjoy a welfare higher than what it could achieve in the absence of the remaining agents exactly one welfare distribution satisfies the core lower bounds and the aspiration upper bounds it is the marginal contribution vector corresponding to the ordering of the agents along the river journal of economic literature classification numbers d62 c71

inflation forecast targeting implementing and monitoring inflation targets abstract inflation targeting is shown to imply inflation forecast targeting the central bank s inflation forecast becomes an explicit intermediate target inflation forecast targeting simplifies both implementation and monitoring of monetary policy the weight on output stabilization determines how quickly the inflation forecast is adjusted towards the inflation target money growth or exchange rate targeting is generally inferior than inflation targeting and leads to higher inflation variability commitment to target rules may be better than commitment to instrument rules

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 and the business cycle abstract a growth model with shocks to technology is studied labor is indivisible so all variability in hours worked is due to fluctuations in the number employed we find that unlike previous equilibrium models of the business cycle this economy displays large fluctuations in hours worked and relatively small fluctuations in productivity this finding is independent of individuals willingness to substitute leisure across time this and other findings are the result of studying and comparing summary statistics describing this economy an economy with divisible labor and post war u s time series

ordinal cost sharing abstract we ask how the best known mechanisms for solving cost sharing problems with homogeneous cost functions the value proportional and serial mechanisms should be extended to arbitrary problems we propose the ordinality axiom which requires that cost shares should be invariant under essentially all increasing transformations of the measuring scales following thevalueapproach first we present an axiomatization of the shapley shubik rule based on ordinality next we define and axiomatize two extensions of theserialmechanism which contrary to the friedman moulin rule are ordinal finally we note that the aumann shapley extension of theproportionalmechanism is not ordinal we propose and defend an alternative proportional extension which does satisfy ordinality journal of economic literatureclassification numbers d63 c71

comments on competitive responsiveness marketing science features many and diverse articles that analyze competitive responsiveness although recent marketing science editorials e g shugan 2002 suggest that competitive responsiveness is only a part of a comprehensive competitive marketing strategy it remains a vital part for that reason and many others marketing science is particularly proud of this special issue edited by david j reibstein and dick r wittink before introducing and vigorously applauding both the editors and authors of this excellent special issue we emphasize that competitive responsiveness raises numerous issues including whether one can forecast outcomes of new policies based on past observations made under old policies i e the lucas critique and decisions regarding which variables should be considered endogenous shugan 2004 i e determined within the model perhaps normative models are inherently perishable evolution in market structure requires modifications over time also although complete consistency within the world of the model is aesthetically pleasing imposing industry specific exogenous constraints that might appear unrelated to the modeling assumptions is sometimes necessary

sharing a river among satiable agents abstract we consider the problem of efficiently sharing water from a river among a group of satiable agents since each agent s benefit function exhibits a satiation point the environment can be described as a cooperative game with externalities we show that the downstream incremental distribution is the unique distribution which both is fair according to the aspiration welfare principle and satisfies the non cooperative core lower bounds on the other hand the cooperative core may be empty furthermore the downstream incremental distribution satisfies all core lower bounds for all connected coalitions if and only if each agent s individual rationality constraint is independent of the behavior of the other agents

whose preferences are revealed in hours of work it has become orthodox in economics research to interpret the association between hourly earnings and working hours as the expression of the preferences of workers this convention originated in h gregg lewis explanation for the decline in hours of work since the nineteenth century his explanation rested on an explicit resolution of the identification problem inherent in any quantity hours price wage relation for over 40 years researchers have neglected this identification problem with the result that the findings in the purported labor supply literature are of questionable value jel j22 j23 c13

testing for the lucas critique a quantitative investigation this thesis contains four essays which studies the macroeconomic effects of fiscal and monetary policy quantitatively the first essay investigates whether swedish postwar business cycles have been generated by domestic or foreign shocks and finds that they are about equally important in the second essay the effects of government budget deficits on interest rates in sweden are studied in a small open economy framework the empirical results which have high power due to very large swings in deficits and interest rates provide support that larger deficits produce higher interest rates and thus give support against the ricardian view the third essay seeks to identify optimal social insurance and redistribution levels in sweden and the u s with respect to temporary and permanent idiosyncratic productivity risks the results indicate that sweden should reduce the social security level while the u s should approximately maintain the current level in the last essay the small sample properties of a well known statistical test for the lucas critique the super exogeneity test is studied in a general equilibrium environment the results indicate that the super exogeneity test do not have sufficient power in small samples

dealing with monopsony power employment subsidies vs minimum wages abstract we show in a monopsony model that accounting for changes in hours a minimum wage has ambiguous effects on employment and welfare when all workers have the same preference ordering over leisure and consumption employment subsidies unambiguously improve welfare many countries have minimum wages and also tax minimum wage workers

the anti paradox of cooperation diversity may pay abstract this paper considers the stability and success of a public good agreement we allow for any type and degree of asymmetry regarding benefits and costs we ask the question whether asymmetry and which type and degree of asymmetry is conducive to cooperation we employ a simple non cooperative game theoretic model of coalition formation and derive analytical solutions for two scenarios an agreement without and with optimal transfers a central message of the paper is that asymmetry does not have to be an obstacle for successful cooperation but can be an asset we qualify two central results in the literature firstly the paradox of cooperation known since barrett 1994 and reiterated by many others afterwards stating that under those conditions when cooperation would matter most stable agreements achieve only little secondly a kind of coalition folk theorem known without proof in the literature for a long time stating that without transfers stable coalitions will be smaller with asymmetric than symmetric players we show that even without transfers the grand coalition can be stable if there is a negative covariance between benefit and cost parameters with massive gains from cooperation moreover with transfers many distributions of benefit and cost parameters lead to a stable grand coalition again some of them implying huge gains from cooperation stability and success greatly benefit from a very skewed asymmetric distribution of benefit and costs i e diversity may pay

the effect of minimum wages on immigrants this study examines how minimum wage laws affect the employment and earnings of low skilled immigrants and natives in the united states minimum wage increases might have larger effects among low skilled immigrants than among natives because on average immigrants earn less than natives due to lower levels of education limited english skills and less social capital results based on data from the current population survey for the years 1994 2005 do not indicate that minimum wages had adverse employment effects among adult immigrants or natives who did not complete high school however low skilled immigrants may have been discouraged from settling in states that set wage floors substantially above the federal minimum

market power in water markets abstract we model market power in water markets as multi market cournot competition with a river structure suppliers are connected through water balances which imposes resource constraints and they are connected to heterogeneous water users via a water delivery infrastructure our model captures a wide range of specific water market structures we establish conditions for existence of an equilibrium and we assess the effects of market power on water extraction delivery and water prices although the monopoly case is similar to standard economic theory three other specific water market structures illustrate that standard intuition has to be revisited

a reassessment of the new economics of the minimum wage literature with monthly data from the current population survey we estimate the employment effects of federal minimum wage increases using monthly current population survey cps data from 1979 through 1997 we find that the empirical differences in the new minimum wage literature based on cps data primarily can be traced to alternative methods of controlling for macroeconomic conditions we argue that the macroeconomic controls commonly included in models where no employment impact is found are inappropriate we consistently find a significant but modest negative relationship between minimum wage increases and teenage employment using alternative controls or allowing employer responses to the policy to occur with some delay

minimum wage increase and firm productivity evidence from the restaurant industry abstract the purpose of this paper is to examine the effects of increasing the federal minimum wage on productivity in the restaurant industry based on the equity theory and fair wage hypothesis this study empirically investigated the relationship between the federal minimum wage and restaurant productivity the results revealed that increasing the federal minimum wage immediately enhances restaurant productivity for up to two years the results further indicated that both full service restaurants and low wage restaurants benefit from the positive effect while there is no significant effect on limited service restaurants and high wage restaurants the results suggest that restaurants should cope with minimum wage policies by focusing on implementing initiatives that can maximize enhanced work efforts and productivity more importantly the results further highlight that restaurants should consider either continuously raising wage levels or raising them every two years to consistently obtain enhanced motivation and productivity

strong tiebout equilibrium under restricted preferences domain abstract we investigate the existence and give a partial characterization of a strong tiebout equilibrium which consists of an endogenously formed partition of the individuals into disjoint jurisdictions with each jurisdiction producing and financing its own public goods and moreover there exists no group of individuals who can all benefit by establishing their own community in particular no single individual finds it desirable to migrate from his equilibrium jurisdiction the existence proof makes use of the notion of consecutive games which we introduce and show that for such games there always exists a partition with a nonempty core

three methods to share joint costs or surplus abstract we study cost sharing methods with variable demands of heterogeneous goods additive in the cost function and meeting the dummy axiom we consider four axioms scale invariance si demand monotonicity dm upper bound for homogeneous goods ubh placing a natural cap on cost shares when goods are homogeneous average cost pricing for homogeneous goods acph the random order values based on stand alone costs are characterized by si and dm serial costsharing by dm and ub the aumann shapley pricing method by si and acph no other combination of the four axioms is compatible with additivity and dummy journal of economic literature classification numbers c71 d62 d63

water sharing agreements sustainable to reduced flows by signing a water sharing agreement wsa countries agree to release an amount of river water in exchange for a negotiated compensation we examine the vulnerability of such agreements to reduced water flows among all wsas that are acceptable to riparian countries we find out the one which is self enforced under the most severe drought scenarios the so called upstream incremental wsa assigns to each country its marginal contribution to its followers in the river its mirror image the downstream incremental wsa is not sustainable to reduced flow at the source self enforcement problems can be solved by setting water releases and compensations contingent to water flow we apply our analysis to the aral sea basin we compute the upstream incremental compensations for the bishkek agreement and asses its vulnerability with historical flows

the effect of minimum wages on immigrants employment and earnings this study examines how minimum wage laws affect the employment and earnings of low skilled immigrants and natives in the u s minimum wage increases might have larger effects among low skilled immigrants than among natives because on average immigrants earn less than natives due to lower levels of education limited english skills and less social capital results based on data from the current population survey for the years 1994 2005 do not indicate that minimum wages have adverse employment effects among adult immigrants or natives who did not complete high school however low skilled immigrants may have been discouraged from settling in states that set wage floors substantially above the federal minimum jel classifications j23 j38 j15

the socially stable core in structured transferable utility games we consider socially structured transferable utility games for every coalition the relative strength of a player is measured by a power function the socially stable core consists of the socially and economically stable payoff vectors it is non empty if the game itself is socially stable the socially stable core consists of a finite number of faces of the core generically it consists of a finite number of payoff vectors convex tu games have a non empty socially stable core irrespective of the underlying social structure when the game is permutationally convex the socially stable core is shown to be non empty if the power vectors are permutationally consistent and is shown to contain a unique element if the power vectors are permutationally compatible we demonstrate the usefulness of the concept of the socially stable core by applying it to structured hierarchy games sequencing games and the distribution of water

minimum wages and poverty will a 9 50 federal minimum wage really help the working poor using data drawn from the march current population survey we find that state and federal minimum wage increases between 2003 and 2007 had no effect on state poverty rates when we then simulate the effects of a proposed federal minimum wage increase from 7 25 to 9 50 per hour we find that such an increase will be even more poorly targeted to the working poor than was the last federal increase from 5 15 to 7 25 per hour assuming no negative employment effects only 11 3 of workers who will gain live in poor households compared to 15 8 from the last increase when we allow for negative employment effects we find that the working poor face a disproportionate share of the job losses our results suggest that raising the federal minimum wage continues to be an inadequate way to help the working poor

employment effects of the new german minimum wage evidence from establishment level microdata the authors present the first evidence on the consequences of the new statutory minimum wage in germany which was implemented on january 1 2015 using the iab establishment panel they identify e

the impact of a product harm crisis on marketing effectiveness product harm crises are among a firm s worst nightmares a firm may experience i a loss in baseline sales ii a reduced own effectiveness for its marketing instruments iii an increased cross sensitivity to rival firms marketing mix activities and iv a decreased cross impact of its marketing mix instruments on the sales of competing unaffected brands we find that this quadruple jeopardy materialized in a case study of an australian product harm crisis faced by kraft peanut butter we arrive at this conclusion by using a time varying error correction model that quantifies the consequences of this crisis on base sales and on own and cross brand short and long term effectiveness the proposed modeling approach allows managers to make more informed decisions on how to regain the brands pre crisis performance levels

the lucas critique and the stability of empirical models this paper re considers the empirical relevance of the lucas critique using a dsge sticky price model in which a weak central bank response to inflation generates equilibrium indeterminacy the model is calibrated on the magnitude of the historical shift in the federal reserve s policy rule and is capable of generating the decline in the volatility of inflation and real activity observed in u s data using monte carlo simulations and a backward looking model of aggregate supply and demand we show that shifts in the policy rule induce breaks in both the reduced form coefficients and the reduced form error variances the statistics of popular parameter stability tests are shown to have low power if such heteroskedasticity is neglected in contrast when the instability of the reduced form error variances is accounted for the lucas critique is found to be empirically relevant for both artificial and actual data

bardsen gunnar eitrheim oyvind jansen eilev s and nymoen ragnar the econometrics of macroeconomic modelling

ricardian equivalence and lucas critique an alternative test of ricardian equivalence using super exogeneity tests in simulated series this article considers an alternative methodology nested on super exogeneity tests to verify the occurrence of ricardian quivalence the advantage of this new procedure is based on the intuitive appeal and the statistical procedure more appropriated than the econometric techniques previously adopted in this literature

sharing a polluted river abstract a river carries pollutants to people living along it if it is polluted to make the water in the river clean some costs are incurred this poses a question of how to split the costs of cleaning the whole river among the agents located along it to answer this question we resort to the two main advocated doctrines in international disputes the theory of absolute territorial sovereignty ats and the theory of unlimited territorial integrity uti applying these two doctrines we accordingly propose two methods the local responsibility sharing lrs method and the upstream equal sharing ues method for each method we provide an axiomatic characterization interestingly both the lrs method and the ues method coincide with the shapley value solutions to the corresponding cost games that are naturally induced according to the ats and the uti doctrines respectively

the environment as a commodity all economic activity is based ultimately on re sources found in nature whether it is consumption the point in exposing the morphology of produced or production or whether it is exchange the comgoods and services is not to construct a resource moditi es which are involved are made of constitutheory of a value there are any number of natural ents provided by nature thus the ingredients of resources and this alone precludes such an at any manufactured good are other produced goods tempted theory from being coherent my purpose labour time and skills and natural resources each rather is to use it to express surprise at the fact that of these constituent produced goods is in turn made despite the centrality of natural resources in eco up from the ingredients that went into its manufacnomic activity they find little room in economics ture namely labour time and skills natural rediscourses interest in resource economics more sources and further produced goods it follows particularly environmental economics has only that any manufactured commodity is ultimately a been intermittent and if we are currently witness combination of labour and natural resources ing a resurgence and this special issue is an ex ample of it we have also just lived through a labour too is a produced good even raw labour is decade long neglect during which much valuable an output manufactured by those natural resources research could have been done 2 we are way behind which sustain life resources such as the multitude where we should have been and could have been

sharing the costs of cleaning a river the upstream responsibility rule jorge alcalde unzu acknowledges the financial support from the spanish government through the project eco2012 34202 and fundacion ramon areces maria gomez rua acknowledges the finan cial support from the spanish government through the project eco2011 23460 and the galician government through the project 2013xgcedu08072013emer elena molis acknowledges the financial support from the spanish government through the projects eco2012 31346 and eco2013 44879 r from the consejeria de economia innovacion ciencia y empleo junta de andalucia through the projects sej 492 and sej 1436 and from the basque government through the project it568 13

regulation via the polluter pays principle we consider the problem of regulating an economy with environmental pollution we examine the distributional impact of the polluter pays pp principle which requires that any agent compensates all other agents for the damages caused by his or her pollution emissions with constant marginal damages we show that regulation via the pp principle leads to the unique welfare distribution that induces non negative individual welfare change and renders each agent responsible for his or her pollution impact we extend both the pp principle and this result to increasing marginal damages due to pollution we also compare the pp principle with the vickrey clark groves scheme

assessing the lucas critique in monetary policy models empirical estimates of monetary policy rules suggest that the behavior of u s monetary policymakers changed during the past few decades however for that same time period statistical analyses of lagged representations of the economy such as vars often have not rejected the null of structural stability these two sets of empirical results appear to contradict the lucas critique this paper reconciles these results with the lucas critique by showing that the apparent policy invariance of reduced forms is consistent with the magnitude of historical policy shifts and the relative insensitivity of the reduced forms of plausible forward looking macroeconomic specifications to policy shifts

the response of hours of work to increases in the minimum wage this paper examines the effect of minimum wage increases on the hours of work of teenagers ages 16 to 19 using monthly data from the current population survey our findings are consistent with the prediction from neoclassical theory that minimum wage increases have a negative effect on labor demand however the estimates we provide here for the elasticity of hours of teen labor demanded with respect to the minimum wage suggest that alternative estimates based on aggregate employment consistently understate the total impact of minimum wage increases on teenage labor utilization

comment on david neumark and william wascher employment effects of minimum and subminimum wages panel data on state minimum wage laws in their article published in the minimum wage research symposium in the october 1992 issue of this journal industrial and laborrelations review volume 45 number 1 pp 55 81 david neumark and william wascher claim to find empirical support for three propositions 1 a higher minimum wage leads to a lower teenage employmentpopulation rate 2 the effect of the minimum wage on employment can be seen within a year but becomes stronger after two years and 3 in states with legal subminimum wages a significant fraction of teenage employees are paid a subminimum wage and the availability of a subminimum wage blunts the disemployment effect of the minimum wage the same symposium contains three papers by us that present empirical evidence suggesting conclusions opposite those of neumark and wascher 1 since neumark and