a theory of voting equilibria a voting equilibrium arises when the voters in an electorate acting in accordance with both their preferences for the candidates and their perceptions of the relative chances of various pairs of candidates being in contention for victory generate an election result that justifies their perceptions voting equilibria always exist and the set of equilibria can vary substantially with the choice of voting system we compare equilibria under the plurality rule approval voting and the borda system we consider a candidate positioning game and find that the plurality rule imposes little restriction on the position of the winning candidate in three candidate races while approval voting leads to a winner positioned at the median of the voter distribution we contrast campaign activities intended to influence voter preferences with activities meant to influence only perceptions of candidate viability

union wages and union decline evidence from the construction industry two well documented empirical findings are that unionized employees typically receive substantially higher compensation than their non union counterparts and that union representation in the united states has declined over time some observers have hypothesized a causal link between these two phenomena the achievement of a union wage premium they argue hastened union decline both by reducing union firms economic competitiveness and by inducing employers to adopt various union avoidance strategies using data from the current population survey and the census bureau s census of construction the authors test this hypothesis for the construction industry even in estimations that allow for a lagged response and incorporate a variety of controls they find no evidence that high union nonunion wage ratios in construction in the 1970s or 1980s resulted in lower union membership in 2000

strategic competition in sequential election contests this paper studies a sequential election contest such as theamerican presidential primary in which several electionsoccur one at a time until a single winner emerges theconventional wisdom is such a system benefits a candidatefavored in the initial elections because of momentum thispaper uncovers a potentially opposing force if participationis costly and candidates exit when they have unfavorablefuture prospects a candidate with friendly elections at theend of the contest will typically benefit from the resultinggame theoretic competition tension between this strategic effect and momentum helpsexplain several empirical regularities of presidentialprimaries

did the us consumer overreact a test of rational expectations abstract using data for the us economy from 1995 to 2008 i estimate a business cycle model in which consumers form expectations rationally and an alternative model that explicitly allows for deviations from rational expectations in the form of overreaction to noisy signals the second model does not have any advantage in explaining the movements in consumption and productivity in this period therefore i cannot reject the hypothesis that consumers behaved rationally the rather exuberant movements of this episode are rationalized by a story in which permanent income consumers find it hard to distinguish between permanent movements in productivity and temporary ones consumers who update their beliefs about trends in productivity on the basis of fairly noisy signals adjust their behavior very slowly after the 1995 2000 productivity boom consumers learnt very slowly about a subsequent decline in productivity growth which led to financial and trade imbalances that ended in a correction starting around 2007 the whole boom bust cycle was long taking about 14 years to complete

news noise and fluctuations an empirical exploration a common view of the business cycle gives a central role to anticipations consumers and firms continuously receive information about the future which is sometimes news and sometimes just noise based on this information consumers and firms choose spending and because of nominal rigidities spending affects output in the short run if ex post the information turns out to be news the economy adjusts gradually to a new level of activity if it turns out to be just noise the economy returns to its initial state therefore the dynamics of news and noise generate both short run and long run changes in aggregate activity this view appears to capture many of the aspects often ascribed to fluctuations the role of animal spirits in affecting demand spirits coming here from a rational reaction to information about the future the role of demand in affecting output in the short run together with the notion that in the long run output follows a natural path determined by fundamentals in this paper we examine whether this view is consistent with the data we reach three main conclusions the first two methodological the third substantive structural vars typically cannot recover news and noise shocks the reason is straightforward if agents face a signal extraction problem and are unable to separate news from noise then the econometrician faced with either the same data as the agents or a subset of these data cannot do it either while structural estimation methods cannot recover the actual time series for news and noise shocks either they can recover underlying structural parameters and thus the relative role and dynamic effects of news and noise shocks estimation of both a simple model and then of a more elaborate dsge model suggest that agents indeed solve such a signal extraction problem and that noise shocks play an important role in determining short run dynamics recent efforts to estimate business cycle models in which expectations about the future play an important role include christiano et al 2010 and schmitt grohe and uribe 2012 those papers follow the approach of jaimovich and rebelo 2009 and model news as perfectly anticipated productivity changes that will occur at

accounting for the decline in union membership 1950 1980 this study analyzes the components of the post 1950 trends in the share of the private work force organized by unions which rose from 1950 to 1954 and then fell steadily to 1980 the authors decompose the sources of growth and decline into changes in organizing activity success in certification elections losses from decertification elections and net growth due to economic causes the last a residual measure designed to capture the effect of factors such as plant closings layoffs and new hires they find that all factors except decertifications accounted for a substantial part of the decline since 1954 when the level of aggregate economic activity is held constant loss of membership due to other economic causes shows no downward trend a finding that challenges the view that the decline in the unionized share of the work force has been due primarily to a secular decline in employment in the strongly unionized industries

the exceptional decline of the american labor movement this paper adopts a historical new institutionalist perspective to explain why the decline of the american labor movement has been exceptional in comparison to other labor movements and especially its canadian counterpart under this perspective national founding conditions and traditions become embedded in institutional norms that shape national institutional environments and trajectories substantially constraining labor movements and hence accounting for their development and future the author argues that the founding conditions of the united states gave rise to mobilization biases biases affecting the various parties relative ability to mobilize resources and thus ultimately privileging some interests over others that explain both why the labor movement developed as it did and why it has declined he concludes that in view of these biases and the norms underpinning them the american labor movement s future unlike the future of its european counterparts lies in perpetual struggle rather than

financial crises development and growth a long term perspective observed over long periods the upward path of the output of most economies occasionally takes jagged steps down more often than not these events are associated with a variety of crises including systemic banking stresses exchange rate crashes a burst of inflation and a restructuring or default on sovereign debt using a large panel of countries over a long period we document that crises are typically associated with lower medium term growth that may be a direct causal channel a reverse channel or the influence of some other factors on both growth and finance but they tend to go together given that the forces for convergence of income across countries are estimated to be slow going off track around a crisis will likely have long lived consequences for relative economic development

technological revolutions and the three great slumps a medium run analysis abstract the great recession the great depression and the japanese slump of the 1990s were all preceded by periods of major technological innovation which happened about 10 years before the start of the decline in economic activity we estimate a model with noisy news we find that beliefs about long run income adjust to permanent shifts in productivity with an important delay the estimation tells a common and simple story for the observed dynamics of productivity and consumption on a 20 to 25 year window our analysis highlights the advantages of a look at this data from the point of view of the medium run

conflicting statutory purposes another look at fifty years of nlrb law making the author describes how in 1947 congress incorporated two conflicting statements of purpose in taft hartley a restatement of the wagner act s policy of encouraging collective bargaining and a new statement stressing the rights of individual employees and making no mention of collective bargaining as a result the author argues both liberal and conservative boards can justify their policies by choosing between the taft hartley act s inconsistent statements of intent the author s analysis draws on the language and histories of the wagner and taft hartley acts the comments of seven former chairmen of the nlrb who attended a conference at cornell commemorating the 50th anniversary of the board and the wagner act interviews with several of those chairmen and writings by former chairmen

an exploration into pigou s theory of cycles abstract this paper explores a theory of business cycles in which recessions and booms arise due to difficulties encountered by agents in properly forecasting the economy s future needs in terms of capital the idea has a long history in the macroeconomic literature as reflected by the work of pigou industrial fluctuation macmillan london 1926 the contribution of this paper is twofold first we illustrate the type of general equilibrium structure that can give rise to such phenomena second we examine the extent to which such a model can explain the observed pattern of u s recessions frequency depth without relying on technological regress we argue that such a model offer a framework for understanding elements of both the recent u s recession and of the asia downturns of the late 1990s

bandwagons and momentum in sequential voting in this paper i show that an equilibrium exists to the sequential voting game in which a bandwagon begins with probability 1 these bandwagons are driven by a combination of beliefs and the desire of voters to vote for the winning candidate significantly in this equilibrium the pivot probability for each voter is non zero even in an infinite population consequently the bandwagons do not always start after one or at most two favourable decisions as do economic cascades and varying levels of informative voting are observed consistent with observations from sequential voting in u s presidential primaries further voters are exposed to counterintuitive incentives referred to as buyers remorse that have been attributed to real primary voters i also derive equilibrium behaviour in this environment when voting is simultaneous and compare the quality of information aggregation within each mechanism i relate the conclusions to u s presidential primaries and find they are consistent with a common conclusion about the front loading of the primary process that in tight elections with no front runner simultaneous voting is preferred whereas in lopsided elections sequential voting is preferred the superior performance of sequential voting in lopsided races is precisely because bandwagons occur copyright 2007 wiley blackwell

a theory of demand shocks this paper presents a model of business cycles driven by shocks to consumer expectations regarding aggregate productivity agents are hit by heterogeneous productivity shocks they observe their own productivity and a noisy public signal regarding aggregate productivity the public signal gives rise to noise shocks which have the features of aggregate demand shocks they increase output employment and inflation in the short run and have no effects in the long run numerical examples suggest that the model can generate sizable equilibrium dsge models of the business cycle include a large number of shocks to technol ogy monetary policy preferences etc but typically do not include expectational shocks as independent drivers of short run fluctuations 1 this paper explores the idea of expectation driven cycles looking at a model where technology determines equilibrium output in the long run and consumers receive noisy signals about technology in the short run the presence of noisy signals produces expectational errors this paper studies the role of these expectational errors in gener ating volatility at business cycle frequencies the model is based on two ingredients first consumers take time to recognize permanent changes in aggregate fundamentals although they may have good information on the current state of the individual firm or sector where they operate they have only limited information regarding the long run determinants of aggregate activity second consumers have access to public information that is relevant to estimate long run productivity this includes news about technological innovations publicly released macroeconomic and sectoral statistics financial market prices and public statements by policy makers however these signals provide only a noisy forecast of the long run effects of technological innovations this opens the door to noise shocks which induce consumers to temporarily overestimate or underestimate the productive capacity of the economy

varieties of capitalism and job quality the attainment of civic principles at work in the united states and germany this article explores how institutional differences matter to the quality of a nation s jobs job quality is conceived as a dimension of a national economy s social performance and thus defined in accordance with civic principles focus is on the two archetypical varieties of capitalism the united states and germany using data from a 2009 telephone survey of u s and german workers we find that the overall attainment of civic principles as perceived by workers is no different in germany than in the united states even though the german institutional environment should be more conducive to them this is due to higher worker expectations in germany and a tendency for employer practices to compensate for the weaker liberal institutional environment in the united states once these are controlled german workers report substantially more positive outcomes we find that institutional differences also matter in how various employer practices are adopted and hence have indirect as well as direct implications

information animal spirits and the meaning of innovations in consumer confidence we show that unexplained innovations in several variables representing survey responses to forwardlooking questions on the michigan survey of consumers have powerful prognostic implications for the future paths of macroeconomic variables we attempt to distinguish the hypothesis that these impulse responses indicate a causal channel from autonomous movements in sentiment to economic outcomes the animal spirits view from the alternative interpretation that the surprise confidence movements summarize information about future economic prospects the information view in natural rate models animal spirits shocks are associated with overshooting of among other variables consumption that attenuates when agents come to grips with their overreaction while information shocks about the long future are followed by gradual movements in macroeconomic variables that are not subsequently reversed in a baseline vector autoregression involving consumption income and confidence the data come down sharply in favor of the information view the impulse responses of consumption and gdp show no tendency to attenuate even after a number of years further confidence innovations have strong implications for labor productivity many quarters into the future in somewhat larger vars with an information block that includes inflation and or stock prices the impulse responses to confidence innovations continue to have the permanent shape that defines information shocks but they are smaller in magnitude we demonstrate that this is due to the fact that both inflation and stock price innovations have prognostic implications for future productivity that are very similar to the implications of innovations in confidence addition of unemployment to the system induces a transitory component that changes the shape of the impulse responses and somewhat weakens the previously airtight case against animal spirits but it does not provide constructive evidence of such effects

sequential voting in large elections with multiple candidates abstract i analyze strategic voting incentives in large elections with three candidates when voting takes place sequentially voters have perfect information about their private preferences but do not know the distribution from which other voters preferences are drawn if a candidate finishes last in an early voting round voters deduce that this candidate is likely to be less popular amongst the remaining voters and the remaining voters almost always have an incentive to stop voting for this candidate by contrast sincere voting equilibria can exist under either simultaneous voting or an early voting round of sequential voting without knife edge assumptions

the eyes of the needles a sequential model of union organizing drives 1999 2004 this paper models three stages of the union organizing drive using a new dataset covering more than 22 000 drives that took place between 1999 and 2004 the correlated sequential model tracks drives through all of their potential stages holding an election winning an election and reaching first contracts only one seventh of organizing drives that filed an election petition with the nlrb managed to reach a first contract within a year of certification the model which controls for the endogeneity of unfair labor practice ulp charges finds that a ulp charge was associated with a 0 smaller cumulative chance of reaching such a contract ulp charges had less effect on the votes cast than on the decision to hold an election and the ability to reach a first contract a sequential model such as this one could be extended to test between some competing theories about the determinants of union organizing

where have all the union members gone this paper examines trends in union membership during the twentieth century the hypothesis is advanced that the provision of certain social welfare benefits by government substitutes for the private provision by unions thereby reducing the attractiveness of union membership the empirical implications of this hypothesis are examined using time series data on aggregate union membership for the period 1904 80 and using pooled state data for the period 1964 80 these latter data are used to examine the effect of departures from the traditional doctrine of employment at will both the time series and the cross section evidence suggest that government supply of union like services reduces union membership

bad news in the great depression the great recession and other u s recessions a comparative study in economic recessions consumption usually drops in tandem with other aggregate quantities as output or employment following the permanent income hypothesis these drops can be rationalized by the idea that consumers have pessimistic views about their long run income using a standard signal extraction model we show that this pessimism can be due either to a persistent fall of aggregate productivity before and during the recession signaling a future decline of income or to other negative information unrelated to contemporaneous fundamentals which we label bad news we classify u s recessions from 1919 to 2015 according to a bad news index reflecting this negative information we find that both the great depression and the great recession score highest in this index the index is such that we can rule out that this is due merely to the length or the depth of these recessions instead these two recessions are similar in that both were aggravated by a wave of pessimism about future income which cannot be related to contemporaneous fundamentals

emerging market business cycles learning about the trend abstract emerging market business cycles feature a higher variability of consumption relative to output and a strongly countercyclical trade balance an equilibrium business cycle model in which agents learn to distinguish between the permanent and transitory components of total factor productivity shocks using the kalman filter accounts for these features calibrated to mexico the model accounts for the behavior of consumption and the trade balance for a wide range of variability and persistence of permanent shocks relative to transitory shocks estimation for mexico and canada suggests more severe informational frictions in emerging markets than in developed economies