the outlook for us oil dependence abstract oil dependence is defined as a dynamic problem of short and long run market power the potential monopoly power of an oil cartel depends on its market share and the elasticities of oil supply and demand while the economic vulnerability of oil consuming states depends most directly on the quantity of oil imported and the oil cost share of gross domestic product gdp of these factors only the market share of the organization of petroleum exporting countries opec cartel and the rate of growth of world oil demand are clearly different than they were 25 years ago opec still holds the majority of world oil and in the future will regain market share a hypothetical 2 year supply reduction in 2005 2006 similar in size to those of 1973 1974 or 1979 1980 illustrates the potential benefits to opec and harm to the us economy of a future oil price shock opec s revenues are estimated to increase by roughly 0 7 trillion while the us economy loses about 0 5 trillion strategic petroleum reserves seem ineffective against a determined multi year supply curtailment increasing the market s price responsiveness by improving the technologies of oil supply and oil demand can greatly reduce the costs of oil dependence each element of this interpretation of the oil dependence problem is well supported by previous studies this paper s contribution is to unite these elements into a coherent explanation and to point out the enormously important implications for energy policy

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

search theoretic models of the labor market a survey we survey the literature on search theoretic models of the labor market we show how this approach addresses many issues including the following why do workers sometimes choose to remain unemployed what determines the lengths of employment and unemployment spells how can there simultaneously exist unemployed workers and unfilled vacancies what determines aggregate unemployment and vacancies how can homogeneous workers earn different wages what are the tradeoffs firms face from different wages how do wages and turnover interact what determines efficient turnover we discuss various modeling choices concerning wage determination and the meeting process including recent models of directed search

inter relationships between spot and sticky price markets for crude oil a diagrammatic analysis abstract transfers of crude oil have generally involved both spot market transactions and sticky price transactions under longer term contractual arrangements or at official opec prices under normal conditions when the opec cartel has been functioning effectively the sticky price market tends to drive the spot market under other conditions like an international supply crisis or weak cohesion in opec spot and sticky prices may deviate considerably and the spot market drives the sticky price market

job search and unemployment insurance new evidence from time use data article i nfo this paper provides new evidence on job search intensity of the unemployed in the u s modeling job search intensity as time allocated to job search activities the major findings are 1 the average u s unemployed worker devotes about 41 min to job search on weekdays which is substantially more than their european counterparts 2 workers who expect to be recalled by their previous employer search substantially less than the average unemployed worker 3 across the 50 states and d c job search is inversely related to the generosity of unemployment benefits with an elasticity between 1 6 and 2 2 4 job search intensity for those eligible for unemployment insurance ui increases prior to benefit exhaustion and 5 time devoted to job search is fairly constant regardless of unemployment duration for those who are ineligible for ui

the impact of the potential duration of unemployment benefits on the duration of unemployment abstract this paper examines the impact of the potential duration of unemployment insurance ui benefits on unemployment in the united states first we use a large sample of household heads to examine differences in the unemployment spell distributions of ui recipients and nonrecipients sharp increases in the escape rate from unemployment both through recalls and new job acceptances are apparent for ui recipients around the time of benefits exhaustion such increases are not apparent at similar points of spell duration for nonrecipients second our analysis of accurate administrative data from 12 states indicates that a one week increase in potential benefit duration increases the average duration of the unemployment spells of ui recipients by 0 16 to 0 20 weeks

big locational unemployment differences despite high labor mobility considerable labor mobility exists across us states enough that if migration arbitrages local unemployment one might expect very low unemployment differences across states however cross state data reveal large unemployment differences an equilibrium multi location model with stochastic worker location match productivity and within location trading frictions can account for these facts in the model some workers move to or stay in a location with high unemployment because they are more productive there than elsewhere according to the model labor mobility and aggregate unemployment are negatively related this prediction is in stark contrast to standard sectoral reallocation theory but consistent with the us data

on the job search and the wage distribution the article structually estimates an on the job search model of job separations given each employer pays observably equivalent workers the same but wages are dispersed across employers an employer s separation flow is the sum of an exogenous outflow unrelated to the wage and a job to job flow that decreases with the employer s wage using data from the danish integrated database for labour market research the empirical results imply as predicted by theory that search effort declines with the wage furthermore the estimates explain the employment effect defined as the horizontal difference between the distribution of wages earned and the wage offer distribution

demand uncertainty and returns policies for a seasonal product an alternative model abstract marvel and peck international economic review 36 1995 691 714 considered the following seasonal product problem a manufacturer sets wholesale price p w unit and return credit r unit the retailer then sets retailer price p r unit and order quantity q how should the manufacturer set p w and r demand uncertainty consists of two components valuation and customers arrivals our more realistic models reveal effects unobservable from marvel peck s e g i setting r 0 benefits the manufacturer much more than the retailer ii valuation but not customer arrival uncertainty is imperative for the retailer without it the manufacturer can set p w and r such that he reaps most of the profits

the empirical role of the exchange rate on the crude oil price formation this paper adopts a novel empirical approach to the crude oil price formation for the purpose of understanding the price reactions of opec member countries to changes in the exchange rate of the us dollar against other major currencies and prices of other members the results are broadly consistent with the view of the absence of a unified opec determined price in the international crude market literature in addition the results also highlight a cross regional dimension of the crude oil market

hysteresis in a new keynesian model this paper examines hysteresis in which persistent unemployment takes on structural characteristics over time hysteresis is modeled as deterioration in labor market matching efficiency as the average duration of unemployment increases this is embedded in a simple new keynesian macro model a decline in labor market matching efficiency would be consistent with the observed rightward shift of the beveridge curve since the 2007 09 recession hysteresis is shown to lead to larger and more persistent responses of the unemployment rate and unemployment duration to productivity intertemporal preference and monetary shocks hysteresis also generates an increase in the natural rate of unemployment

the changing structure of the international oil industry implications for opec this paper examines the changes in international oil market structure observed in the 1980s and early 1990s and assesses possible effects on oil market conditions in the future and implications for opec it focuses on the trend toward a more vertical organization mainly resulting from substantial purchases of downstream assets by state owned oil companies in major oil producing countries while the gulf war prevented greater horizontal concentration of oil reserves it merely interrupted the trend toward vertical concentration in the international oil industry the vertical integration of only some of the opec members will cause a further divergence of goals within the organization resulting in a lower likelihood of opec regaining its former position as an effective cartel if the trend toward greater vertical concentration increases future oil prices will in part be affected by decisions made by vertically integrated firms

time use during the great recession using data from the american time use survey between 2003 and 2010 we document that home production absorbs roughly 30 percent of foregone market work hours at business cycle frequencies leisure absorbs roughly 50 percent of foregone market work hours with sleeping and television watching accounting for most of this increase we document significant increases in time spent on shopping child care education and health job search absorbs between 2 and 6 percent of foregone market work hours we discuss the implications of our results for business cycle models with home production and non separable preferences jel codes d13 e32 j22

an equilibrium model of sectoral reallocation this paper constructs a two period two sector model in which there are permanent sectoral shocks it analyzes the equilibrium path of individual labor supply sectoral employment and duration of unemployment in response to these shocks equilibrium allocations are shown to be easy to characterize and comparative statics results are provided

opec and cheating revisiting the kinked demand curve abstract given a formal or tacit group agreement by an oligopoly such as opec it is still necessary to understand what pricing and output decisions individual members actually make the well known kinked demand curve model of oligopoly behaviour is useful in this regarg the model is usually applied to a price and market share fixing oligopoly in a deterministic world with appropriate modifications it can be applied to opec as a price fixing cartel with varying degrees of cohesion from 1973 1986 and as a quantity fixing cartel since 1986 operating in an uncertain world

sourcing decisions with capacity reservation contracts abstract by committing to long term supply contracts buyers seek to lower their purchasing costs and have products delivered without interruption when a long term contract is available suppliers are less pressured to find new customers and can afford to charge a price lower than the prevailing spot market price we examine sourcing decisions of a firm in the presence of a capacity reservation contract that this firm makes with its long term supplier in addition to the spot market alternative this contract entails delivery of any desired portion of a reserved fixed capacity in exchange for a guaranteed payment by the buyer we investigate rational actions of the two parties under two different types of periodic review inventory control policies used by the buyer the two number policy and the base stock policy when typical demand probability distributions are considered inclusion of the spot market source in the buyer s procurement plan significantly reduces the capacity commitments from the long term supplier

capacity reservation contracts for high tech industry abstract capacity reservation provides a risk sharing mechanism that encourages a manufacturer to expand its capacity more we propose a deductible reservation dr contract where customers reserve future capacity with a fee that is deductible from the purchasing price the manufacturer s ex ante announcement of the excess capacity that she will have in addition to the reservation amount is a unique feature of the dr contract an individually rational dr contract that provides channel coordination always exists since there is a unique nash equilibrium for the reservation game among multiple customers the main results of the one customer case can be extended to the n customer case the dr contract is compared with another capacity reservation contract called take or pay while the manufacturer may gain more profit under a take or pay contract there may not be a channel coordinated contract that is also individually rational for the customer finally the similarities and differences between the capacity reservation contracts and other well known supply contracts are discussed

opec behavior a test of alternative hypotheses since interpretations of past and future oil price patterns depends on the model chosen the author tests and compares alternative theories of opec as a first step in validating the choice on any one model the results show that among opec countries the partial market sharing cartel model is the only model not rejected by at least some of the 11 members and gives the best explanation of production in comparison with 11 non opec countries the competitive model could not be rejected for 10 of the 11 non opec producers this raises the question of why if opec is a cartel friedman s predictions have not come true and introduces new questions for future research 19 references 3 tables

building a composite help wanted index abstract this paper builds a measure of vacancy posting over 1951 2009 that captures the behavior of total print and online help wanted advertising and can be used for time series analysis of the us labor market

a quantitative analysis of unemployment benefit extensions abstract extensions of unemployment insurance ui benefits have been implemented in response to the great recession this paper measures the effect of these extensions on the unemployment rate using a calibrated structural model featuring job search and consumption saving decisions skill depreciation and ui eligibility the ongoing ui benefit extensions are found to have raised the unemployment rate by 1 4 percentage points which is about 30 of the observed increase since 2007 moreover the contribution of the ui benefit extensions to the elevated unemployment rate increased during 2009 2011 while the number of vacancies recovered the successive extensions kept search intensity down

unemployment fluctuations over the life cycle abstract in this paper we show that i the volatility of worker flows increases with age in us cps data and ii a search and matching model with life cycle features endogenous separation and search effort is well suited to explain this fact with a shorter horizon on the labor market older workers outside options become less responsive to new employment opportunities thereby making their wages less sensitive to the business cycle their job finding and separation rates are then more volatile along the business cycle the horizon effect cannot explain the significant differences between prime age and young workers as both age groups are far away from retirement a lower bargaining power on the youth labor market brings the model closer to the data

comparative advantage and unemployment worker heterogeneity in productivity and labor supply is introduced into a matching model workers who earn high wages and work high hours are identified as those with strong market comparative advantage high rents from being employed the model is calibrated to match separation job finding and employment in the sipp data the model predicts a big drop in employment for workers with weak comparative advantage during recessions but the data show that workers with strong comparative advantage also display sizable employment fluctuations implying that aggregate employment fluctuations are not explained by the responses of workers with small rents to employment

building sectoral job search indices for the united states abstract this study investigates job search activity in the united states by constructing a set of sectoral job search activity indices based on internet search volumes the indices are positively associated with countercyclical labour market measures including unemployment and layoff rates but are negatively associated with procyclical measures overall our evidence supports previous empirical findings job search intensity is countercyclical which contradicts the theoretical model s prediction

recall and unemployment abstract we document in the survey of income and program participation covering the period 1990 2013 that a surprisingly large share of workers return to their previous employer after a jobless spe

the implications of labor market network for business cycles we embed a frictional labor market with formal and informal search in an rbc model even in a model with exogenous search effort the interaction between formal and informal network search methods can help in generating more volatility in unemployment

business cycles and labor market search the quantitative implications of labor market search for economic fluctuations are evaluated in the context of a real business cycle model incorporating labor market search into the model is found to improve its empirical performance along several dimensions in particular hours now fluctuate substantially more than wages and the contemporaneous correlation between hours and productivity falls in addition the model replicates the observation that output growth displays positive autocorrelation at short horizons overall the empirical results suggest that the labor market search environment embodies a quantitatively important propagation mechanism copyright 1996 by american economic association

unemployment insurance and unemployment spells this paper tests the effects of the level and length of unemployment insurance benefits on unemployment durations the paper particularly studies individual behavior during the weeks just prior to when benefits lapse higher unemployment insurance benefits are found to have a strong negative effect on the probability of leaving unemployment however the probability of leaving unemployment rises dramatically just prior to when benefits lapse individual data are used with accurate information of spell durations and the level and length of benefits the semiparametric estimation techniques used in the paper yield more plausible estimates than conventional approaches and provide useful diagnostics copyright 1990 by the econometric society

worker search effort as an amplification mechanism abstract it is well known that the diamond mortensen pissarides model exhibits a strong trade off between cyclical unemployment fluctuations and the size of rents to employment introducing endogenous job search effort reduces the strength of the trade off while bringing the model closer to the data ignoring worker search effort leads to a large upward bias in the elasticity of matches with respect to vacancies merging the american time use survey and the current population survey new evidence in support of procyclical search effort is presented average search effort of the unemployed is subject to cyclical composition biases

price versus production postponement capacity and competition this article presents a comparative analysis of possible postponement strategies in a two stage decision model where firms make three decisions capacity investment production inventory quantity and price typically investments are made while the demand curve is uncertain the strategies differ in the timing of the operational decisions relative to the realization of uncertainty we show how competition uncertainty and the timing of operational decisions influence the strategic investment decision of the firm and its value in contrast to production postponement price postponement makes the investment and production inventory decisions relatively insensitive to uncertainty this suggests that managers can make optimal capacity decisions by deterministic reasoning if they have some price flexibility under price postponement additional postponement of production has relatively small incremental value therefore it may be worthwhile to consider flexible ex post pricing before production postponement reengineering while more postponement increases firm value it is counterintuitive that this also makes the optimal capacity decision more sensitive to uncertainty we highlight the different impact of more timely information which leads to higher investment and inventories and of reduced demand uncertainty which decreases investment and inventories our analysis suggests appropriateness conditions for simple make to stock and make to order strategies we also present technical sufficiency and uniqueness conditions under price postponement these results extend to oligopolistic and perfect competition for which pure equilibria are derived interestingly the relative value of operational postponement techniques seems to increase as the industry becomes more competitive

the determinants of equilibrium unemployment the paper takes the search and matching model of the aggregate labor market to the data it tests the model s empirical validity and employs structural estimation to generate a characterization of the optimal behavior of firms and workers the model is applied to israeli data that are uniquely suited for this kind of empirical investigation the structural estimates are used to quantify the frictions embodied in the model including the costs of search the congestion and trading externality effects and the matching process a calibration simulation analysis then studies the effect of several key variables on equilibrium unemployment

demand uncertainty and returns policies manufacturers facing uncertain demand may induce distributors to carry ample stocks of their products by agreeing to accept returns of unsold goods for credit the authors model the manufacturer s decision to accept returns showing that this decision depends crucially on the nature of the demand uncertainty uncertainty over customer arrivals favors returns while uncertainty over consumers valuation of the manufacturer s product leads distributors to set retail prices too high from the manufacturer s standpoint when returns are allowed the authors show that returns can be expected to raise retail prices while maintaining shrinking distributor margins copyright 1995 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

on the job search and precautionary savings in this paper i develop and estimate a model of on the job search in which risk averse workers choose search effort and can borrow or save using a single risk free asset i derive the implications for optimal savings behavior in this environment and relate this to the frictions that characterize the endogenous earnings process implied by on the job search savings behavior depends in a very intuitive way on the rate at which offers are received the rate at which jobs are destroyed and a worker s current rank in the wage distribution the implication is that workers who are identical in terms of preferences and opportunities have substantially different savings behavior depending on their history and current position in the wage distribution the mechanism that generates the substantial differences in savings behavior in the model is the dynamic of the wage ladder resulting from the search process there is an important asymmetry between the incremental wage increases generated by onthe job search climbing the ladder and the drop in income associated with job loss falling off the ladder the behavior of workers in low paying jobs is primarily governed by the expectation of wage growth while the behavior of workers near the top of the distribution is driven by the possibility of job loss the distributions of earnings wealth and consumption implied by the model suitably aggregated align reasonably well with the data with the notable exception of implying substantially less concentration of wealth among the richest one percent of the population in this paper i develop and estimate a model of on the job search in which risk averse workers choose search effort and can borrow or save using a single risk free asset i derive the implications for optimal savings behavior in this environment and relate this to the frictions that characterize the endogenous earnings process implied by on the job search savings behavior depends in a very intuitive way on the rate at which offers are received the rate at which jobs are destroyed and a worker s current rank in the wage distribution the implication is that workers at different point in the wage distribution have substantially different savings behavior resulting in wealth dispersion that is much greater than earnings dispersion the mechanism that generates the high degree of wealth dispersion in the model is the dynamic of the wage ladder resulting from the search process there is an important asymmetry between the incremental wage increases generated by on the job search climbing the ladder and the drop in income associated with job loss falling off the ladder this feature of the model generates differential savings behavior at different points in the earnings distribution the behavior of workers in low paying jobs is primarily governed by the expectation of wage growth while the behavior of workers near the top of the distribution is primarily driven by the possibility of job loss the wage growth expected by low wage workers combined with the fact that their earnings are not much higher than unemployment benefits causes them to dissave as a worker s wage increases the incentive to save increases the potential for wage growth declines and it becomes increasingly important to insure against the large income reduction associated with job loss the fact that high wage and low wage workers have such different savings behavior leads to a wealth distribution that is much more unequal 1

the beveridge curve a survey important progress has been made in economists understanding of the beveridge curve from its measurement to its expression in canonical labor market models yet enduring puzzles remain chief among these are the empirical role of vacancies in the recruitment process the amplitude comovement and persistence of cyclical unemployment vacancy dynamics and the sources of lateral shifts in the beveridge curve the synthesis of these themes identifies several priorities for ongoing research including the role of entry costs into vacancy creation in shaping beveridge dynamics the cyclicality of search intensity both off and on the job and its relation to participation and job to job transitions the theory and measurement of mismatch and the sources of hysteresis in unemployment flows

persistence and volatility of beveridge cycles this paper aims to explain the magnitude and cyclical behavior of the fluctuations in unemployment and vacancies adding demand externalities to an otherwise standard search and matching model reduces the need for exogenous shocks in explaining these fluctuations under plausible parameter values the equilibrium dynamics include a stable limit cycle that resembles the empirically observed counterclockwise cycles around the beveridge curve quantitatively these endogenous beveridge cycles can explain half of the volatility and almost all persistence of unemployment without any exogenous forces avoiding the amplification and propagation problems of the standard model