cores of inventory centralization games abstract consider a set of n stores with single item and single period demands assume an option of centralized ordering and inventory with holding and penalty costs only in this case a cooperative inventory centralization game defines allocations of the cost we examine the conditions under which such an inventory centralization game has a nonempty core we prove the existence of nonempty core for demands with symmetric distributions and the existence of nonempty core for joint multivariate normal demand distribution we establish the equivalency of four different nonempty core conditions for the newsboy problem and demonstrate their efficacy for discrete independent and identically distributed iid demands journal of economic literature classification numbers c44 c62 c71

what do we know about macroeconomics that fisher and wicksell did not the answer to the question in the title is a lot in this essay i argue that the history of macroeconomics during the 20th century can be divided into three epochs

the input output approach to instrument selection this article proposes a new method of selecting demand shift instruments for disaggregated industries i use prior information from input output tables to identify industries whose output fluctuations are likely to function as approximately exogenous demand shocks for other industries after motivating this idea theoretically i implement the input output approach using data from the 1977 detailed input output study i conduct a systematic instrument search for over 450 u s manufacturing industries and find over 200 industries possessing plausible instruments i conclude with a brief application showing how input output instruments can be used to estimate the short run supply curve of the cement industry

framing effects and impatience evidence from a large scale experiment we confront a representative sample of 1102 dutch individuals with a series of incentivized investment decisions and also elicit their time preferences there are two treatments that differ in the frequency at which individuals decide about the invested amount the low frequency treatment stimulates decision makers to frame a sequence of risky decisions broadly rather than narrowly we find that the framing effect is significantly larger for impatient than for patient individuals this result is robust to controlling for various economic and demographic variables and for cognitive ability

production function regressions returns to scale and externalities a number of recent papers have used simple linear regressions in an attempt to identify market structure the extent of returns to scale and possible external effects in u s manufacturing industries the results obtained from these regressions have important implications for several branches of modern macroeconomics as a result the macro literature frequently cites specific numerical evidence from caballero and lyons 1992 and hall 1990 which suggests that there are quantitatively significant increasing returns to scale or external effects in u s manufacturing in contrast it is the argument of this paper that this evidence is not convincing the most robust evidence suggests that the typical u s manufacturing industry displays constant returns with no external effects on the other hand there is significant heterogeneity across industries

the impact of the us sales tax rate on city size and economic activity a cge approach this paper analyses the effects of the change in the us sales tax on economic activity and city size using a computable general equilibrium cge model previous works have been designed to isolate

the impact of land use planning and tax subsidies on the supply and price of housing in britain this article presents new empirical estimates of the impact of two types of policy intervention tax subsidies and land use planning on the housing market in britain the estimates are derived from a set of models representing the demand and supply sides of the market for the new private housebuilding which include an explicit land supply element the models are fitted to cross sectional data at the inter urban local authority level and then employed in medium period simulations of alternative policies modelling at this level enables estimates to be made of the extent of variation between local markets in the elasticity of supply and also in the impacts of policy measures including the capitalisation of tax subsidies

fickle consumers durable goods and business cycles abstract this paper develops a three sector dynamic general equilibrium model with the specific aim of evaluating the role of consumer durables in the generation and propagation of business cycles the model displays indeterminacy at commonly considered realistic parameter restrictions and basically constant returns to scale if calibrated at modest increasing returns to scale the sunspots driven model version produces a close match to moments of aggregate u s data journal of economic literatureclassification numbers e00 e32

product market competition and the industry price cost markup fluctuations abstract we examine the role played by imperfect competition in the response of markups to energy price and monetary changes we find i for concentrated industries markups increase with monetary expansion and decrease when energy prices increase the elasticity with respect to energy prices is greater than monetary changes ii for low concentration industries markups are virtually unaffected by monetary changes and the energy price elasticities are statistically insignificant iii markups are procyclical over the industry specific cycle and iv increased import competition lowers markups only in the concentrated industries the energy price increases decreases during the 1970s 1980s may have been a key factor contributing to the narrowing widening of the markup gap between high and low concentration industries we provide evidence that procyclical markups in concentrated industries are not being driven by differences in the degree of labor hoarding between low and high concentration industries

the newsvendor game has a nonempty core we settle an open conjecture regarding the newsvendor game we prove that its core is always non empty for all possible joint distributions of the random demands we give sufficient conditions under which the core is a singleton or it contains non negative elements

hypothetical intertemporal consumption choices the paper extends and replicates part of the analysis by barsky juster kimball and shapiro 1997 which exploits hypothetical choices among different consumption streams to infer intertemporal substitution elasticities and rates of time preference we use a new and much larger dataset than barsky et al furthermore we estimate structural models of intertemporal choice while parameterizing the parameters of interest as a function of relevant individual characteristics we also consider lobehaviorallc extensions like habit formation models with habit formation appear to be superior to models with intertemporally additive preferences

firm level investment spikes and aggregate investment over the great recession it is widely accepted that firm level investment is characterized by periods of low investment punctuated by spikes but widely debated whether such lumpiness matters for aggregate investment we provide new empirical evidence that variation in uk aggregate investment is driven by variation in the number of firms undertaking investment spikes this pattern holds for all sectors and across the business cycle we set out and estimate a tractable firm level model of the timing of investment spikes that incorporates the effect of specific macroeconomic factors and aggregates to match observed variation in aggregate investment using simulations we establish that low demand growth was the dominant factor inhibiting uk firms investment spikes immediately following the great recession while heightened uncertainty prolonged low investment and prevented a v shaped economic recovery we use the great recession as a source of exogenous variation with which to study heterogeneity in response to aggregate shocks we find that the minority of firms operating with persistently high debt levels and therefore with balance sheets more exposed to the costs of financial distress were significantly less likely to undertake an investment spike following the recession

immigration and house prices under various labour market structures in england and wales this article estimates the impact of immigration on local house prices under various local labour market structures in england and wales typically for the nation as a whole newly arriving immigr

is addiction rational theory and evidence this paper makes two contributions to the modeling of addiction first we provide new and convincing evidence that smokers are forward looking in their smoking decisions using state excise tax increases that have been legislatively enacted but are not yet effective and monthly data on consumption second we recognize the strong evidence that preferences with respect to smoking are time inconsistent with individuals both not recognizing the true dife culty of quitting and searching for self control devices to help them quit we develop a new model of addictive behavior that takes as its starting point the standard rational addiction model but incorporates time inconsistent preferences this model also exhibits forward looking behavior but it has strikingly different normative implications in this case optimal government policy should depend not only on the externalities that smokers impose on others but also on the internalities imposed by smokers on themselves we estimate that the optimal tax per pack of cigarettes should be at least one dollar higher under our formulation than in the rational addiction case

industrial output variability and real wage fluctuations determinants and implications i introduction the study of business cycles has been at the heart of macroeconomic theory for decades theoretical efforts have focused on providing an adequate explanation for sources of economic fluctuations and toward this explanation new keynesian models have emphasized rigidity that interferes with market forces and exacerbates the effects of demand fluctuations on the supply side of the economy the form of rigidity is in sharp contrast between sticky wage and sticky price models sticky wage models have emphasized rigidity in the labor market to explain economic fluctuations labor contracts specify in advance the nominal wage that prevails for the contract duration following contract negotiation a positive disturbance to aggregate demand raises the price of the output produced in the absence of any stipulation for wage indexation the increase in price lowers the real product wage faced by firms causing it to fall below its market clearing value the fall in the real wage causes output and employment to rise above their natural full equilibrium levels output adjustments moderate the increase in price that is necessary to clear the product market in addition sticky price models have emphasized rigidity in the product market to explain economic fluctuations monopolistically competitive firms face small menu costs when they change prices menu costs are resources involved in announcing and implementing a price change firms may opt therefore to change prices at specific intervals given price rigidity producers adjust output in the face of demand shocks accordingly an increase in the real wage correlates with an increase in output in the face of demand shocks to test competing theoretical explanations efforts have focused on the cyclical behavior of the real wage and accompanying output fluctuations in the face of demand shocks 1 the evidence appears conflicting and therefore does not convincingly support a given explanation 2 unlike previous empirical research on the subject the objective of this investigation is to study the cyclical behavior of the real wage and the relative response of the nominal wage and price to demand shocks toward this objective the present investigation estimates the time series response of real wage rates to aggregate demand shocks in each of 28 private industries of the united states listed in appendix table a1 differences in the response across industries are then used to discriminate between sticky wage and sticky price explanations the evidence establishes the relation between output fluctuations and the response of the real wage to demand shocks across industries the results across industries of the united states produce the following evidence contrary to the implications of sticky wage models the price response to demand shocks does not move closely with the nominal wage response consistent with the implications of sticky wage models however an increase in nominal wage flexibility rigidity moderates exacerbates industrial output fluctuations in the face of demand shocks nonetheless an increase decrease in price flexibility relative to nominal wage flexibility moderates increases the output response to demand shocks across industries consistently industrial output fluctuations increase with the cyclical response of the real wage to demand shocks for example an increase in the real wage correlates with an increase in real output during periods of expansionary demand in general industrial prices adjust independently of the nominal wage to demand shocks increasing real wage variability further industrial real output variability does not vary significantly with nominal wage flexibility in the face of demand shocks in contrast an increase in the price response to demand shocks moderates output variability across industries consistently an increase in the real wage response to demand shocks correlates with an increase in industrial real output variability as predicted by sticky price models of business cycles

stochastic linear programming games with concave preferences abstract we study stochastic linear programming games a class of stochastic cooperative games whose payoffs under any realization of uncertainty are determined by a specially structured linear program these games can model a variety of settings including inventory centralization and cooperative network fortification we focus on the core of these games under an allocation scheme that determines how payoffs are distributed before the uncertainty is realized and allows for arbitrarily different distributions for each realization of the uncertainty assuming that each player s preferences over random payoffs are represented by a concave monetary utility functional we prove that these games have a nonempty core furthermore by establishing a connection between stochastic linear programming games linear programming games and linear semi infinite programming games we show that an allocation in the core can be computed efficiently under some circumstances

the cyclical behavior of the price cost markup countercyclical markups constitute the key transmission mechanism for monetary and other demand shocks in new keynesian models this paper tests the foundation of those models by studying the cyclical properties of the markup of price over marginal cost the first part of the paper studies markups in the aggregate economy and the manufacturing sector we use bils s 1987 insights for converting average cost to marginal cost but do so with richer data we find that all measures of markups are either procyclical or acyclical moreover we show that monetary shocks lead markups to fall with output the second part of the paper merges input output information on shipments to the government with detailed industry data to study the effect of demand changes on industry level markups industry level markups are found to be acyclical in response to demand changes

rational addiction with learning and regret we present a theory of rational behavior in which individuals maximize a set of stable preferences over goods with unknown addictive power the theory is based on three fundamental postulates that consumption of the addictive good is not equally harmful to all that individuals possess subjective beliefs concerning this harm and that beliefs are optimally undated with information gained through consumption although individual actions are optimal and dynamically consistent addicts regret their past consumption decisions and regret their initial assessment of the potential harm of the good addict prone individuals who believe it could not happen to them are most likely to be drawn into a harmful addiction

evidence on preferences and subjective beliefs of risk takers the case of smokers abstract one reason that cigarette consumption is highly regulated is because of the paternalistic view that smokers would not make rational choices even if fully informed about the risks a deficiency of this view is that in the presence of preference heterogeneity regulating smoking may lead to smokers finding ways to circumvent the regulations though there is widespread recognition that preference heterogeneity may exist there is very little documentation of it in this study we provide empirical evidence on the relationship between smoking status and time and risk preference valuation of health and subjective beliefs about future macroeconomic events using panel data from the health and retirement study we find that smokers are more impatient than nonsmokers and are more pessimistic about future macroeconomic events which may reinforce their present orientation smokers are also more risk tolerant this suggests that smokers may more willingly bear risk and trade off current utility against future costs of smoking however they do not value being in excellent health differently from others our results also suggest that being more present oriented and risk tolerant is not caused by smoking but represents innate characteristics an implication of our results for product regulation is that restricting access to cigarettes is likely to be circumvented by smokers through other means in particular our results are consistent with the finding that smokers in states with higher taxes smoke longer cigarettes that are also higher in nicotine and tar content

price and investment dynamics theory and plant level data we construct a model of a firm competing for market share in a customer market and making investments in physical capital the firm is financially constrained and there are implementation lags in investment our model predicts that product prices should depend on costs and competitors prices but respond weakly to demand shocks also prices should be strongly related to investment we estimate price and investment equations on panel data for swedish manufacturing plants and find results that are qualitatively in line with these predictions though the relation between investment and prices is stronger than predicted by our model

land use planning and the housing market a comparative review of the uk and the usa this paper provides a review of some of the key articles and research examining the relationship between planning regulation and its impact on the housing market in the uk and the us in both count

stability and monotonicity in newsvendor situations this study considers a supply chain that consists of n retailers each of them facing a newsvendor problem and a supplier groups of retailers might increase their expected joint profit by joint ordering and inventory centralization however we assume that the retailers impose some level of stock that should be dedicated to them in this situation we show that the associated cooperative game has a non empty core afterwards we concentrate on a dynamic situation where several model cost parameters and the retailers dedicated stock levels can change we investigate how the profit division might be affected by these changes we focus on four monotonicity properties we identify several classes of games with retailers where some of the monotonicity properties hold moreover we show that pairs of cooperative games associated with newsvendor situations do not necessarily satisfy these properties in general when changes in dedicated stock levels are in concern

a three stage model for a decentralized distribution system of retailers we present and study a three stage model of a decentralized distribution system consisting ofn retailers each of whom faces a stochastic demand for an identical product in the first stage before the demand is realized each retailer independently orders her initial inventory in the second stage after the demand is realized each retailer decides how much of her residual supply demand she wants to share with the other retailers in the third stage residual inventories are transshipped to meet residual demands and an additional profit is allocated our model is an extension of the two stage model of anupindi et al abz 2001 which implicitly assumes that all residuals enter the transshipment stage we show however that allocation rules in the third stage based on dual solutions which were used in the abz model may induce the retailers to hold back some of their residual supply demand in general we study the effect of implementing various allocations rules in the third stage on the values of the residual supply demand the retailers are willing to share with others in the second stage and the trade off involved in achieving an optimal solution for the corresponding centralized system

stated and revealed heterogeneous risk preferences in educational choice abstract we develop a structural microeconometric model of educational choice with unobserved heterogeneity in risk aversion and estimate the model parameters using panel survey data we assess the credibility of the model by linking the estimated structural parameters of risk aversion to the self reported willingness to take risks which is directly elicited in the survey the risk aversion parameters revealed from educational choices decrease with the willingness to take risks stated by the survey respondents this indicates consistency between stated and revealed risk preferences we suggest that this method could be applied more generally to support or reject the joint validity of structural models and survey measures of preferences

an investigation of time preferences life expectancy and annuity versus lump sum choices can smoking harm long term saving decisions abstract we exploit the fact that israeli pension insurance policies do not take health conditions or smoking status into account in annuity pricing to investigate the potential effect of being a smoker on retirement payout choices contrary to the idea that smokers have higher discount rates and thus should prefer the lump sum option and even though the insurance pricing mechanism means that smokers would be offered the same annuity as nonsmokers all else equal we find that smokers do not prefer the lump sum option we offer and test several potential explanations for our findings illusions regarding life expectancy self control and advantageous selection

transshipment of inventories among retailers myopic vs farsighted stability the author considers a model of a decentralized distribution system consisting of n retailers selling an identical product retailers face a stochastic demand and must order their initial inventory before this demand is realized after demand realization retailers decide how much of their unsold inventory or unsatisfied demand they want to share with other retailers this is followed by a transshipment of leftover inventories and distribution of the additional profit generated through inventory sharing the author addresses the following issue suppose that the retailers distribute the profit from inventory sharing according to an allocation rule that induces retailers to share their residuals in a way that maximizes the additional profit such as the shapley value but may not belong to the core is it likely that in this framework all retailers will jointly share their residuals and not form subcoalitions previous research has looked at this problem from a myopic viewpoint and concluded that the grand coalition is not stable unlike the prior work the author looks at stability in a farsighted sense that is retailers do not consider only their immediate payoffs but are also concerned with reactions of other retailers to their actions in a symmetric setting with identical additional unit revenues from transshipments generated by all retailers farsighted retailers always maximize their allocations by not defecting from the grand coalition the author also provides conditions when the same is true for nonidentical additional unit revenues

markup pricing in petroleum refining abstract this paper describes a structural model of markup pricing under joint production with quasi fixed inputs of capital labor and inventories the price cost markups are functions of the inverse price elasticity of demand an industry average conjectural variation elasticity and the inventory to sales ratio our empirical findings suggest significant markups over marginal cost that differ considerably by product this study also estimates the elasticities of markups with respect to supply and demand shocks

a theory of rational addiction we develop a theory of rational addiction in which rationality means a consistent plan to maximize utility over time strong addiction to a good requires a big effect of past consumption of the good on current consumption such powerful complementarities cause some steady states to be unstable they are an important part of our analysis because even small deviations from the consumption at an unstable steady state can lead to large cumulative rises over time in addictive consumption or to rapid falls in consumption to abstention our theory also implies that cold turkey is used to end strong addictions that addicts often go on binges that addicts respond more to permanent than to temporary changes in prices of addictive goods and that anxiety and tensions can precipitate an addiction

do supply curves slope up this paper examines the short run responses of price and quantity to exogenous demand shocks for disaggregated u s manufacturing industries using prior information on input output linkages to identify industries whose fluctuations are likely to function as approximately exogenous demand shocks for other industries i find that demand shocks induce positive covariation between price and quantity for 16 out of 26 sample industries controlling for observable cost shift variables when sample industries are pooled i estimate that a demand shock which initially raises industry output by 1 percent generates a price increase of 0 182 percent within one year i find that input output instruments detect upward sloping supply curves more readily than least squares or other commonly used demand shift instruments

planning and housing supply in two speed britain modelling local market outcomes summary economic research on uk housing markets has only recently got to grips with measuring and modelling the impact of planning and other public interventions although their importance has long been recognised in theory the interurban panel dataset utilised in this study does represent a step forward by permitting more robust econometric estimation and by incorporating a wider more balanced range of determinant factors a coherent set of relationships governing the key market outcomes house prices new building migration and vacancies can be established the modelling framework is used to explore differences in behavioural responses between markets in high and low demand states simulations are used to track the impact on market outcomes of different policy strategies applied in different types of locality supply measures needed to achieve national targets for house price growth reduction are assessed measures acting on both demand side and supply side variables in areas of high and low demand are compared these suggest that output is more sensitive than price to policies and that quite strong concerted policies would be needed to impact significantly on the major market imbalances currently seen

investment tax incentives prices and the supply of capital goods using data on the prices of capital goods this paper shows that much of the benefit of investment tax incentives does not go to investing firms but rather to capital suppliers through higher prices the reduction in the cost of capital from a 10 percent investment tax credit increases equipment prices 3 5 7 0 percent this lasts several years and is largest for assets with large order backlogs low import competition or with a large fraction of buyers able to use investment subsidies capital goods workers wages rise too instrumental variables estimates of the short run supply elasticity are around 1 and can explain the traditionally small estimates of investment demand elasticities in absolute value the demand elasticity implied here exceeds 1

housing investment in the united states a supply determined model of housing investment is estimated from quarterly data over the 1963 83 period the model is built on dynamic marginal cost pricing considerations and allows short and long run supply elasticities to differ these are estimated as 1 0 and 3 0 respectively but most of the long run response occurs within 1 year rapid adjustment speed and the sizable long run elasticity of supply are important factors in understanding the volatility of housing investment the data also suggest some anomalies in the expected present value theory of asset pricing for housing capital

planning policy planning practice and housing supply this paper outlines a brief history of planning policy in england as it relates to housing it discusses briefly the issues raised by a plan led system and the uncertainties of household projections evidence on the relationship between house prices and housing supply and on house builders landbanks suggests that planning constraints are a key factor behind the long term upward trend in house prices though over shorter periods other factors such as long term real interest rates will be more important it concludes that the environmental constraints on additional housing supply albeit important can be overstated while there are serious adverse social consequences of the way in which the english housing market works today it is not yet clear that the largely welcome policy steps taken over the past 3 years will prove sufficient to resolve this problem

inflation real returns and capital investment we find evidence for the hypothesis of mundell 1963 and tobin 1965 that the expected real return component of interest rates is negatively related to the expected inflation component in the mundell tobin model the variation in expected real returns is caused by the variation in expected inflation our evidence suggests however that the variation in expected real returns is more fundamentally an outcome of the capital expenditures process equilibrium expected real returns vary directly with capital expenditures in order to induce equilibrium allocations of resources between consumption and investment this positive relation between expected real returns and real activity which comes out of the real sector combines with a negative relation between expected inflation and real activity which is traced to the monetary sector thus inducing the negative relation between expected inflation and expected real returns predicted by mundell and tobin but explained in terms of a model much different from theirs

cooperation between multiple news vendors with transshipments we study a situation with n retailers each of them facing a news vendor problem i e selling to customers over a finite period of time product with a short life cycle such as fashion groups of retailers might improve their expected joint profit by coordinating their orders followed by transshipments after demand realization is known we analyze these situations by defining a cooperative game called a general news vendor game for such a situation with n retailers we concentrate on whether it makes sense to cooperate by studying properties of general news vendor games our main result states that general news vendor games have non empty cores

the responses of prices at different stages of production to monetary policy shocks this paper examines the responses of prices at different stages of production to monetary policy shocks in aggregate price analysis the var of christiano et al 1996a 1996b is used to identify the policy shock as the federal funds rate innovation and trace out the responses of prices in disaggregate price analysis the adjustment of prices is examined by comparing inflation before and after a recent policy tightening identified by romer and romer 1989 1992 at early stages of production a monetary tightening causes input prices to fall more rapidly and by a larger amount than output prices

subjective mortality expectations and consumption and saving behaviours among the elderly life expectancy is an important factor that individuals have to take into account for saving and consumption choices the life cycle model of consumption and saving behaviour predicts that consumption growth should decrease with higher mortality rates the aim of this study is to test this hypothesis based on data about subjective longevity expectations from the health and retirement study merged with detailed consumption data from two waves of the consumption and activities mail survey this study finds that an increase in subjective mortality by 1 corresponds to an annual decrease in consumption of non durable goods of around 1 8 l esperance de vie est un facteur important dont les personnes doivent tenir compte dans leurs choix de consommation et d epargne le modele de comportement de consommation et d epargne au cours du cycle de vie predit que la croissance de la consommation devrait decroitre a mesure que le taux de mortalite augmente cette etude met au test cette hypothese a l aide de donnees sur l esperance de vie subjective tirees des resultats d une etude sur la sante et la retraite arrimes aux resultats de deux vagues d enquetes postales sur la consommation et les activites qui ont produit des donnees detaillees sur la consommation cette etude montre qu un accroissement de un pour cent dans l anticipation subjective de mortalite correspond a un declin d a peu pres 1 8 dans la consommation annuelle de biens non durables

do supply curves slope up the empirical relevance of the sraffian critique of neoclassical production economics the sraffian critique of neoclassical economics has tended to concentrate on the input rather than the output side of production processes in particular criticism of neoclassical theory when it has addressed supply questions it has been concerned more with individual commodities than aggregate supply furthermore sraffian economists have been criticized for not investigating the relevance of their hypothesis empirically this paper extends the sraffian critique of marshallian partial analysis to cover aggregate supply and reports the results of a simulation exercise based on an econometric model of u k agriculture that finds evidence of perverse supply response at the aggregate level c 1996 academic press limited copyright 1996 by oxford university press

spatial housing economics a survey this introduction to the virtual special issue surveys the development of spatial housing economics from its roots in neoclassical theory through more recent developments in social interactions modelling and touching on the role of institutions path dependence and economic history the survey also points to some of the more promising future directions for the subject that are beginning to appear in the literature the survey covers elements of hedonic models spatial econometrics neighbourhood models housing market areas housing supply models of segregation migration housing tenure subnational house price modelling including the so called ripple effect and agent based models possible future directions are set in the context of a selection of recent papers that have appeared in urban studies nevertheless there are still important gaps in the literature that merit further attention arising at least partly from emerging policy problems these include more research on housing and biodiversity

inventory games with permissible delay in payments abstract meca et al 2004 studied a class of inventory games which arise when a group of retailers who observe demand for a common item decide to cooperate and make joint orders with the eoq policy in this paper we extend their model to the situation where retailer s delay in payments is permitted by the supplier we introduce the corresponding inventory game with permissible delay in payments and prove that its core is nonempty then a core allocation rule is proposed which can be reached through population monotonic allocation scheme under this allocation rule the grand coalition is shown to be stable from a farsighted point of view

construction elasticities and land availability a two stage least squares model of housing supply using the variable elasticity approach this paper uses data at english local authority district level to construct a simultaneous equation model of housing construction that compares elasticities of supply between two cross sectional periods 1988 boom and 1992 slump using the variable elasticity approach econometric issues raised by earlier supply studies are discussed and tested for the paper also discusses the rationale for and tests the existence of a backward bending supply relationship and finds that supply is concave in both periods and bends backwards during the boom evidence of a structural break between boom and bust is found producing average price elasticities of supply noticeably smaller in the boom 0 58 than in the slump 1 03 with considerable variation across disticts land supply elasticities are found to be more stable over time and marginally greater in the boom 0 75 than in the slump 0 71 the paper also calculates second partial derivatives based on the whole demand supply system to obtain estimates

estimating individual discount rates in denmark a field experiment we estimate individual discount rates with respect to time streams of money using controlled laboratory experiments these discount rates are elicited by means of field experiments involving real monetary rewards the experiments were carried out across denmark using a representative sample of 268 people between 19 and 75 years of age individual discount rates are estimated for various households differentiated by socio demographic characteristics such as income and age our conclusions are that discount rates are constant over the 12 month to 3 year horizons used in these experiments and that discount rates vary substantially with respect to several socio demographic variables hence we conclude that it would be reasonable to assume constant discount rates for specific household types but not the same rates across all households

setting the right incentives for global planning and operations we study incentive issues seen in a firm performing global planning and manufacturing and local demand management the stochastic demands in local markets are best observed by the regional business units and the firm relies on the business units forecasts for planning of global manufacturing operations we propose a class of performance evaluation schemes that induce the business units to reveal their private demand information truthfully by turning the business units demand revelation game into a potential game with truth telling being a potential maximizer an appealing refinement of nash equilibrium moreover these cooperative performance evaluation schemes satisfy several essential fairness notions after analyzing the characteristics of several performance evaluation schemes in this class we extend our analysis to include the impact of effort on demand

on the cyclicality of r d this paper explores the link between short run cycles and long run growth by examining the cyclicality of rd but aggregate data repeatedly show that rd but interestingly estimates using demand shift instruments suggest that it responds asymmetrically to demand shocks we propose that liquidity constraints and technology improvement cause the observed pro cyclicality of r d

indeterminacy with no income effect preferences and sector specific externalities abstract we examine a two sector real business cycle rbc model with sector specific externalities in which household utility exhibits no income effect on the demand for leisure unlike in the one sector counterpart indeterminacy can result with sufficiently high returns to scale in the investment sector moreover the smaller the labor supply elasticity the lower the level of externalities needed for indeterminacy this finding is the opposite of that in all existing rbc based indeterminacy studies finally in contrast to previous sunspot driven two sector rbc models our economy is able to match the stylized facts that sectoral labor inputs are positively correlated and consumption is procyclical

tiered housing markets and their relationship to labour market areas this paper develops a tiered geography of local housing market areas hmas that provides a national framework for spatial planning it is derived from a theoretical understanding of the economic basis of hmas the analysis explores the relationships between the tiers of the hma geography and local labour market areas drawing on this understanding the empirical research generates sets of different potential geographies of hmas for england based on an algorithm that applies criteria linked to the degree of closure of migration and or commuting patterns a range of theoretically appropriate criteria then enable the different geographies to be assessed the choice of geography is guided by chow tests of statistical differences in standardised house prices in neighbouring hmas derived from hedonic regressions finally conclusions are drawn on the validity of the approach developed the empirical work is on england and datasets drawn from the census and land registry