computer use and earnings in britain this paper estimates various models of the effect of computer use on earnings using recent ncds data the cross section estimates are large and significant while the standard fixed effects estimates are small or insignificant the panel estimates change considerably once we allow the coefficients to differ across individuals conditional on assumptions about when individuals use computers conventional panel estimates may not identify the crucial parameters and alternative methods are needed we conclude that there was a substantial premium associated with computer use for some individuals in the uk

if not computers then what returns to computer use in the uk revisited in recent years much attention has been paid to the effect on wages of skill biased technology especially the use of computers although empirical studies have shown a positive relationship between computer use and earnings doubts have been cast on whether this is a causal relationship or merely represents unobserved other factors which are themselves positively linked to computer usage this study provides evidence that computers themselves raise wages although their impact on wages falls as other controls are included in the regression it still remains significant whilst the effect of another proxy for unobserved factors becomes insignificant furthermore improvements in computer use have an additional impact on earnings supporting the productivity interpretation

the future of macroeconomics macro theory and models at the bank of england abstract the adoption as policy models by central banks of representative agent new keynesian dynamic stochastic general equilibrium models has been widely criticised including for their simplistic micro foundations at the bank of england the previous generation of policy models is seen in its 1999 medium term macro model mtmm instead of improving that model to correct its considerable flaws many shared by other non dsge policy models such as the federal reserve s frb us it was replaced in 2004 by the dsge based beqm though this clearly failed during and after the global financial crisis it was replaced in 2011 by the dsge compass complemented by a suite of models we provide a general critique of dsge models for explaining forecasting and policy analyses at central banks and suggest new directions for improving current empirical macroeconomic models based on empirical modelling broadly consistent with better theory rather than seeking to impose simplistic and unrealistic theory

international trade and renewable resources under asymmetries of resource abundance and resource management this paper examines the interaction between relative resource abundance and resource management regimes in determining trade patterns and gains from trade in a two country model with a renewable resource a model developed by brander and taylor brander ja taylor ms 1997b resour energy econ 19 267 297 is extended it is shown that relative resource abundance determines trade patterns if resource abundance is similar in both countries and the relative demand for the resource good is moderate or if resource abundance is sufficiently different and the relative demand is not so high otherwise a difference in resource management regimes determines trade patterns even under an open access regime the resource scarce country gains from trade unless resource abundance is similar and the relative demand is low

nonmonetary effects of the financial crisis in propagation of the great depression this paper examines the effects of the financial crisis of the 1930s onthe path of aggregate output during that period our approach is complementary to that of friedman and schwartz who emphasized the monetary impact of the bank failures we focus on non monetary primarily credit related aspects of the financial sector output link and consider the problems of debtors as well as those of the banking system we argue that the financial disruptions of 1930 33 reduced the efficiency of the credit allocation process and that the resulting higher cost and reduced availability of credit acted to depress aggregate demand evidence suggests that effects of this type can help explain the unusual length and depth of the great depression this abstract was borrowed from another version of this item

irving fisher on the international transmission of booms and depressions through monetary standards the role of monetary standards in the international transmission of economic fluctuations particularly the role of the gold standard in the depression has attracted considerable recent attention for instance from choudhri and kochin 1980 hamilton 1988 temin 1989 1993 eichengreen 1992 and bernanke 1995 however this literature has overlooked a pioneering precursor irving fisher are booms and depressions transmitted internationally through monetary standards 1935 which has also been neglected in the literature on fisher i examine fisher s contribution in the context of later research on the topic and explore the place of fisher 1935 in fisher s work

does inequality matter for the consumption wealth channel empirical evidence abstract this paper studies the heterogeneity of the marginal propensity to consume out of wealth based on french household surveys this heterogeneity is driven by differences in both wealth composition and wealth levels we find a decreasing marginal propensity to consume out of wealth across the wealth distribution for all net wealth components the marginal propensity to consume out of financial assets tends to be higher compared with the effect of housing assets except at the top of the wealth distribution the marginal propensity to consume out of housing wealth increases with debt pressure and depends on debt composition based on a simulation exercise we find a limited effect of wealth shocks on consumption inequality an increase in stock prices tends however to slightly increase consumption inequality especially at the top of the distribution

the world on a cross of gold for many years the yin and yang of the debate about the causes of the great depression were the monetary history of the united states 1867 1960 by milton friedman and anna schwartz 1963 and peter temin s 1976 book did monetary forces cause the great depression as all monetary economists know in their book friedman and schwartz made the depression a central case study in support of their contention that historically monetary instability has been a major source of fluctuations in the real economy in their famous chapter on the great contraction which was later released as a separate volume friedman and schwartz attributed the collapse of production and prices in the united states particularly the disastrous 1931 33 slide to a precipitous decline in the u s money supply the proximate cause of this monetary contraction was not any direct action by the monetary authorities but rather a series of severe banking crises between late 1930 and early 1933 spasmodic panics induced the public to convert deposits into currency raising the aggregate currency deposit ratio and causing a decline in the ratio of inside money to the monetary base despite the largely unintended nature of the monetary contraction however friedman and schwartz placed the major portion of blame for the depression on the shoulders of the federal reserve which

the stability pact more than a minor nuisance stability pact more than a minor nuisance the stability and growth pact will lead member countries to aim for cyclically balanced budgets until this steady state is reached europe will continue its efforts at de cit cutting while so doing politicians are less likely to undertake the dif cult labour market reforms that are really needed is further scal retrenchment wise the paper reviews the reasons that have been advanced in favour of a stability pact and nds them wanting the most serious justi cations such as the systemic risk of bank crisis following a government s failure to service its debt can be better dealt with in other ways for example by prudential limits on banks exposure to public debts moreover our analysis reveals that the macroeconomic costs of the stability pact while sizeable are not as dangerous as often believed the costs will be barely visible once the steady state is reached the true macroeconomic costs are front loaded they concern the next few years after a decade already dominated by convergence efforts barry eichengreen and charles wyplosz

transmission of the great depression to a first approximation the question of how the great depression spread from country to country is short and straightforward fixed exchange rates under the gold standard transmitted negative demand shocks the first half of this paper consequently will describe current thinking about the relationship between the gold standard and the great depression the second half of the paper will look at a phenomenon not included in this first approximation financial crises many have noted that banking panics and currency crises are bad for national economies but few have tried to model their international spread

financial factors in the great depression eginning with irving fisher 1933 and john maynard keynes 1931 b 1963 macroeconomists have argued that financial markets were important sources and propagators of decline during the great depression turning points during the depression often coincided with or were preceded by dramatic events in financial markets stock market collapse waves of bankruptcy and bank failure and contractions in the money stock but the mechanism through which financial factors contributed to the depression has been a source of controversy as has been the relative importance of financial factors in explaining the origins and persistence of the depression this essay reviews the literature on the role of financial factors in the depression and draws some lessons that have more general relevance for the study of the depression and for macroeconomics i argue that much of the recent progress that has been made in understanding some of the most important and puzzling aspects of financial real links in the depression followed a paradigm shift in economics a central neglected theoretical piece of the story for financial factors was the allocative effects of imperfections in capital markets which can imply links between disruptions in financial markets and subsequent economic activity also the increasing emphasis on learning and path dependence in economics has helped to explain why financial shocks during the 1930s were so severe and why policy makers failed to prevent the depression

links between economic liberalization and rural resource degradation in the developing regions this paper examines evidence of the effects of economic liberalization and globalization on rural resource degradation in developing countries the principal resource effects of concern are processes of land use change leading to forestland conversion degradation and deforestation the main trends in globalization of interest are trade liberalization and economy wide reforms in developing countries that have opened up the agroindustrial sectors thus increasing their export orientation such reforms have clearly spurred agroindustrialization rural development and economic growth but there is also concern that there may be direct and indirect impacts on rural resource degradation the direct impacts may occur as increased agricultural activity leads to conversion of forests and increased land degradation from unsustainable production methods however there may also be indirect effects if agroindustrial development displaces landless near landless and rural poor generally who then migrate to marginal agricultural lands and forest frontier regions this paper explores these direct and indirect effects of globalization and agroindustrialization on rural resource degradation both generally plus through examining case study evidence the paper focuses in particular on the examples of structural adjustment trade liberalization and agricultural development in ghana and maize sector liberalization in mexico under north american free trade agreement nafta

markets institutions and forestry the consequences of timber trade liberalization in ecuador abstract although barriers to international trade were removed during the 1990s log prices remain inefficiently low in ecuador oligopsonistic conditions which prevailed in the forestry sector under protectionism have not been relieved by increased competition the problem is that new investment is discouraged by weak property rights corruption and dated legislation that hinders forest dwellers participation in the market economy unless and until institutional reform is undertaken to stimulate investment and competition the prospects for ecuador s tropical forests which are among the most biodiverse in the world will continue to be bleak

returns from computer use a simple test on the productivity interpretation abstract this paper finds that returns from computer use do not vary with the intensity of computer use this is evidence against the productivity interpretation of these returns and supports the view that returns from computer use can be attributed to unobserved heterogeneity

facts and ideas in microeconomic theory the title of my lecture is quite pretentious therefore let me first restrict the subject somewhat i will not speak on microeconomics in general but on demand theory in particular the less pretentious title facts and ideas in demand theory would be a fairer description of the content of my lecture if it comes to demand theory i enjoy reading in hicks a reoision of demand theory i read this book in parts again and again let me quote now a few lines on p 4

computer use and wages evidence from taiwan we find a significant positive relationship between computer use and wages using taiwan microdata controlling for endogeneity of computer use with simultaneous equations suggests that although ols estimates are biased upward workplace computer use increases productivity d 2003 elsevier b v all rights reserved

the spectre of deflation a review of empirical evidence what explains the widespread fear of deflation this article reviews the history of thought economic history and empirical evidence on deflation with a view to answering this question it also outlines informally the main effects of deflation in applied monetary models the main finding is that for both historical and contemporary deflations there are many open empirical questions that could be answered using the tools economists use to study inflation and monetary policy more generally qu est ce qui explique la peur tres repandue de la deflation ce memoire fait un tour d horizon de l histoire de la pensee economique de l histoire economique et des resultats empiriques quant aux effets de la deflation en vue de repondre a cette question on fait aussi echo informellement aux effets principaux de la deflation dans les modeles monetaires appliques ce qui ressort principalement de ce travail est que tant pour les deflations dans l histoire que dans le monde contemporain il y a bien des questions empiriques encore irresolues auxquelles on pourrait donner une reponse en utilisant l outillage mental que les economistes utilisent pour etudier l inflation et la politique monetaire plus generalement sp c tre n thing that is thought to be seen but has no material existence haunting presentiment of ruin war madness etc

if tropical log export bans are so perverse why are there so many abstract a substantial number of tropical timber owning nations have enacted bans or similar provisions constraining the export of crude logs job creation capturing value added and improving the efficiency of domestic processing are often given as reasons for such bans however neoclassical economics finds such bans uneconomic and development agencies often support their repeal this paper examines this contradiction and offers reasons why a log export bans are defensible in certain realistic circumstances and b certain theoretical arguments against log export bans often lack relevance

forest sustainability and trade policies abstract many analyses of trade and environment have concluded that trade liberalization is pareto improvement with pigovian tax systems even when production and consumption processes bring non market externalities but in case of global forest issue there are many accusations that the trade liberalization of forest products has caused the degradation of forest sustainability in this paper we try to explain the gap between the theory and the real situation from theoretical point of view we will analyze comprehensively about free trade and forest sustainability by partial and general equilibrium analyses pigovian systems work well under the assumption of complete substitutivity of consumption between external effects and marketable commodities if it were not satisfied it is inevitable to levy import tariff or to take some domestic price support systems to guide the production point into sustainable forests

debt deflation theory and evidence abstract in the early 1990s the most severe recessions occurred in those countries which had experienced the largest increases in private debt burdens was this an accident of history or did it reflect deeper forces affecting market economies the paper comprises three parts first it presents three stylised facts about debt and its impact on consumption growth in the 1930s and the 1990s second it discusses the reception of irving fisher s work on debt deflation by his contemporaries and argues that it is helpful to think of debt deflation as a real business cycle phenomenon third there is a theoretical discussion of the reaction of debt and consumption to shocks in the context of a model of precautionary saving central to the model is the role of distributional shocks which implies that aggregate demand may be a nonmonotonic function of the price of assets in terms of the consumption good multiple equilibria may exist leading to the possibility of financial instability the analysis of debt deflation requires the construction of real business cycle models without a representative consumer

public open access and private timber harvests theory and application to the effects of trade liberalization in mexico a common popular assertion is that trade liberalization encourages deforestation but whether this is true depends on how trade policies affect the allocation of land among competing uses and how they influence illegal cutting of public forests a model is presented that allows for forests to be either public or private and public forests are divided into protected or managed and threatened categories effects of price changes are shown on each part of the forest an empirical version of the model is applied to the case of mexico with nafta most scenarios considered show that nafta will have positive long run effects on forest cover in mexico but that this is net of losses on private lands

the nation in depression t he economic cataclysm of the 1930s was an international phenomenon experienced by countries in all parts of the globe countries as diverse as the united states germany chile and japan all experienced significant depressions in the 1930s thus the title of charles kindleberger s classic book the world in depression 1973 captures an important feature of the great depression these international aspects especially the importance of the gold standard in causing the downturn and transmitting depression from one country to another have been emphasized in recent years in excellent books by peter temin 1989 and barry eichengreen 1992 these books have rightly received widespread attention and have successfully changed the focus of much analysis of the great depression from the united states to the world economy while such a change from american provincialism is surely healthy and warranted adopting an international perspective on the great depression risks losing sight of the many ways in which the u s depression differed in timing and severity from depressions elsewhere more important it may obscure the many uniquely american causes of america s great depression this paper examines the ways in which the u s experience during the 1930s resembled that of other countries in some regards and fundamentally differed in other aspects i also evaluate the evidence on the causes of the great depression in the united states and the sources of the eventual recovery i suggest that the path of american output and unemployment before 1931 can be explained quite well with only domestic factors even after 1931

household debt and spending during the financial crisis evidence from danish micro data abstract we use data for nearly 500 000 danish households to study the relationship between household leverage prior to the financial crisis of 2007 2009 and the development in spending over the course of the crisis we find a strong negative correlation between pre crisis leverage and the change in spending during the crisis this reflects that highly levered households spent a larger share of their income than their less levered peers prior to the crisis resulting in larger increases in debt in these years once we condition on the size of the pre crisis change in debt a high level of debt is no longer associated with a larger spending decline our results suggest that the larger decline in spending among high leverage households is the result of a spending normalization pattern that is also found in other years rather than a causal effect of high debt levels suppressing household spending during the crisis

the effects of structural adjustment on deforestation and forest degradation in lowland bolivia bolivia s structural adjustment policies initiated in 1985 increased poverty among certain groups but this did not lead to widespread migration to the agricultural frontier nor did adjustment greatly affect the average area planted in annual crops by small lowland farmers structural adjustment contributed to large scale forest clearing for soybean production for export and to a lesser extent forest degradation by lumber companies the economic benefits generated by soybean and timber expansion may have outweighed the environmental costs but alternative policies might have reduced those costs and improved the distribution of the benefits

full insurance in the presence of aggregate uncertainty this paper tests implications of full consumption insurance the object is to determine how much mileage can be obtained from a model with complete markets with such features as private information or liquidity constraints omitted the implication exploited is that individual consumption responds to aggregate risk but not to idiosyncratic risk the test involves regressing the change in household consumption onto the change in aggregate consumption and other right hand side variables such as the change in household income and change in employment status all variables other than the change in aggregate consumption are predicted to be insignificant in explaining the change in household consumption with observations on consumption and income for 10 695 households from the consumer expenditure survey the results are mixed the results for one specification exponential utility are mostly consistent with full consumption insurance the results for the other specification power utility are not

the great recession lessons from microeconomic data crises and sharp economic downturns while undesirable provide economists with a unique opportunity to test and hone economic theory indeed some of the most influential advance ments in economic thought including milton friedman s monetarist tradition john maynard keynes fiscal theory and irving fisher s debtdeflation hypothesis emerged from analysis of the great depression the current economic malaise which we refer to as the great recession provides another watershed moment to reevaluate our core economic beliefs however in contrast to our peers in previous crises we are fortunate to have access to large scale microeconomic datasets and advancements in computational capacity these advantages allow for a more rigorous analysis of the current recession and therefore a more informed understanding of its origins propagation and consequences our purpose is to highlight how a micro level analysis of the great recession provides us with important clues to understand the origins of the crisis the link between credit and asset prices the feedback effect from asset prices to the real economy and the role of household leverage in explaining the downturn we hope that our discussion also serves as an example of the useful ness of incorporating microeconomic data and techniques in answering traditional macroeco nomic questions i what were the origins of the credit cycle credit demand or credit supply

a simple test of consumption insurance are consumers effectively insured against idiosyncratic shocks to income or wealth either by formal institutions such as charities private insurance and government programs or by informal mechanisms such as gifts and loans from relatives friends and neighbors under full insurance consumption growth should be cross sectionally independent of idiosyncratic variables that are exogenous to consumers this proposition is tested by cross sectional regressions of consumption growth on a variety of exogenous variables full insurance is rejected for long illness and involuntary job loss but not for spells of unemployment loss of work due to strike and an involuntary move

who pays for bank insolvency in transition and emerging economies abstract this paper explores the equity of the way losses from bank insolvencies and their avoidance through intervention by the authorities have been distributed over creditors depositors owners and the population at large in transition and emerging economies it suggests a number of regulatory reforms that would alter the balance between seeking to avoid insolvency and lowering the costs of insolvency should it occur it considers whether a lex specialis for dealing with problem banks by prompt corrective action and if necessary resolving them if their net worth falls to zero at little or no cost to the taxpayer can be applied in the circumstances of transition and emerging economies

the returns to computer use revisited have pencils changed the wage structure too are the large measured wage differentials for on the job computer use a true return to computer skills or do they just reflect that higher wage workers use computers on their jobs we examine this issue with three large cross sectional surveys from germany first we confirm that the estimated wage differential associated with computer use in germany is very similar to the u s differential second we also measure large differentials for on the job use of calculators telephones pens or pencils or for those who work while sitting down we argue that these findings cast some doubt on the literal interpretation of the computer use wage differential as reflecting true returns to computer use or skill

forest sustainability and the free trade of forest products cases from southeast asia abstract this paper introduces the theoretical arguments for and against trade liberalization of forest products considering forest sustainability and reports on the recent circumstances of three countries in southeast asia the philippines thailand and indonesia trade liberalization raises concerns about the negative effects on forest sustainability both in log importing countries that have already cut a large portion of their natural forests by commercial logging and now face a pressing need for reforestation and in forest product exporting countries that still have large areas of natural forest and enjoy export competitiveness in forest products

asset bubbles leverage and lifeboats elements of the east asian crisis collapsing credit markets have been blamed for the depth and persistence of the great depression in the united states could similar mechanisms have played a role in ending the east asian economic miracle and in creating fragility in global financial markets after a brief account of the nature of the east asian crises of 1997 8 we use the framework of highly leveraged fully collaterised firms due to kiyotaki and moore 1997 to explore the impact of a credit crunch the paper emphasises the fragility of equilibrium and how rapidly boom can turn to bust

endogenous cycles in a stiglitz weiss economy the literature on financial imperfections and business cycles has focused onpropagation mechanisms in this paper we model a purereversion mechanism such that the economy may converge to a two period equilibrium cycle this mechanism confirms that financial imperfections may have a dramatic amplification effect unlike in some related models contracts are complete indexation is not assumed away the welfare properties of a possible stabilizing policy are analyzed the model itself is a dynamic extension of the well known stiglitz weiss model of lending under moral hazard although stylized the model still captures some important features of credit cycles

precautionary saving in the small and in the large the theory of precautionary saving is shown to be isomorphic to the arrow pratt theory of risk aversion making possible the application of a large body of knowledge about risk aversion to precautionary saving and more generally to the theory of optimal choice under risk in particular a measure of the strength of the precautionary saving motive analogous to the arrow pratt measure of risk aversion is used to establish a number of new propositions about precautionary saving and to give a new interpretation of the dreze modigliani substitution effect copyright 1990 by the econometric society