profit maximising goes global the race to the bottom we explore four decades of cyclical and long run dynamics in income distribution and economic activity for a panel of 13 oecd countries as measured by the wage share and output gap when modeled as predator prey dynamics economic activity in oecd countries is weakly profit led convergence to a long run equilibrium is relatively slow delaying the profit squeeze stage for many years our race to the bottom model suggests that the oecd countries have been engaged in undercutting each other s real unit labour costs an extension of the model shows that the long run equilibrium has been shifting south west towards a lower wage share it may even be that this race has the undesirable consequence of decreasing economic activity

wheat from chaff meta analysis as quantitative literature review abstract this paper presents and develops a quantitative method of literature reviewing and evaluating empirical research meta regression analysis or mra economics is theory driven yet we must learn empirically if economics is to advance mra offers a more objective statistical method to summarize our empirical knowledge and to explain the wide study to study variation in economic research mra is used to assess the evidence for ricardian equivalence and its findings are contrasted to those of conventional narrative review furthermore mra establishes a platform from which to distinguish genuine empirical effect from the exploitable specification error that infests applied econometrics

preferences and biases in educational choices and labour market expectations shrinking the black box of gender standard observed characteristics explain only part of the differences between men and women in education choices and labor market trajectories using an experiment to derive students levels of overconfidence and preferences for competitiveness and risk this paper investigates whether these behavioral biases and preferences explain gender differences in college major choices and expected future earnings in a sample of high ability undergraduates we find that competitiveness and overconfidence but not risk aversion is systematically related with expectations about future earnings individuals who are overconfident and overly competitive have significantly higher earnings expectations moreover gender differences in overconfidence and competitiveness explain about 18 of the gender gap in earnings expectations these experimental measures explain as much of the gender gap in earnings expectations as a rich set of control variables including test scores and family background and they are poorly proxied by these same control variables underscoring that they represent independent variation while expected earnings are related to college major choices the experimental measures are not related with college major choice

fdi and taxation a meta study despite the continuing political interest in the usefulness of tax competition and tax coordination as well as the wealth of theoretical analyses it still remains open whether or when tax competition is harmful moreover the influence of tax differentials on multinationals decisions is still insufficiently analyzed thus economists have increasingly resorted to empirical analysis in order to gain insights on the elasticity of fdi with respect to company taxation as a result the empirical literature on taxation and international capital flows has grown to a similar abundance during the last 25 years as the respective theoretical literature its heterogeneity leads to a rising need for concise reviews on the existing empirical evidence in this paper we extend former meta analyses on fdi and taxation in three ways first we add the most recent publications unconsidered in meta analyses up to date second we apply a different methodology by using a broad set of meta regression estimators and explicitly discuss which one is most suitable for application to our meta data third we address some important issues in research on fdi and taxation to the clarification of which meta analysis can make valuable contributions these issues are mainly the influence of variables which might moderate effects of tax differentials e g public spending the implications of using aggregate fdi data as opposed to firm level information on measured tax effects the implications of bilateral effective tax rates and the possible presence of publication bias in primary research

technological diffusion and asset prices in this paper we demonstrate that the gradual diffusion of technology causes the stock market to exhibit a cyclical behavior more importantly we attribute sharp declines and increases in the stock market such as the ones that occurred in the early 1970s and mid 1990s in the united states to expected rapid technological diffusion

a meta analytic reassessment of the effects of inequality on growth this paper develops a meta analysis of the empirical literature that estimates the effect of inequality on growth it covers studies published in scientific journals during 1994 2014 that examine the impact on growth of inequality in income land and human capital distribution we find traces of publication bias in this literature as authors and journals are more willing to report and publish statistically significant findings and the results tend to follow a predictable time pattern over time according to which negative and positive effects are cyclically reported after correcting for these two forms of publication bias we conclude that the high degree of heterogeneity of the reported effect sizes is explained by study conditions namely the structure of the data the type of countries included in the sample the inclusion of regional dummies the concept of inequality and the definition of income in particular our meta regression analysis suggests that cross section studies systematically report a stronger negative impact than panel data studies the effect of inequality on growth is negative and more pronounced in less developed countries than in rich countries the inclusion of regional dummies in the growth regression of the primary studies considerably weakens such effect expenditure and gross income inequality tend to lead to different estimates of the effect size land and human inequality are more pernicious to subsequent growth than income inequality is we also find that the estimation technique the quality of data on income distribution and the specification of the growth regression do not significantly influence the estimation of the effect sizes these results provide new insights into the nature of the inequality growth relationship and offer important guidelines for policy makers

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

aggregate consequences of limited contract enforceability we study a general equilibrium model in which entrepreneurs finance investment with optimal financial contracts because of enforceability problems contracts are constrained efficient we show that limited enforceability amplifies the impact of technological innovations on aggregate output this implies that economies with lower enforceability of contracts are characterized by greater macroeconomic volatility a key assumption for the amplification result is that defaulting entrepreneurs are not excluded from the market

speculative growth hints from the u s economy we propose a framework for understanding episodes of vigorous economic expansion and extreme asset valuations we interpret this phenomenon as a high valuation equilibrium with a low cost of capital based on optimism about future funding the key ingredient for such equilibrium is feedback from increased growth to a decline in the long run cost of capital this feedback arises when an expansion comes with technological progress in the capital sector when fiscal rules generate procyclical fiscal surpluses when the rest of the world has lower expansion potential or high saving needs and when financial constraints are relaxed by the expansion itself

stabilizing non fundamental asset price movements under discretion and limited information abstract inflation output and interest rate stabilization are all potential central bank objectives we explore whether monetary policy should respond to asset price fluctuations when they are driven by irrational expectational shocks to the future returns to capital in our model an optimistic shock to future returns generates both an increase in equity prices and physical investment the increased investment is inefficient and thus a central bank optimally responds to this expectations shocks this induces a trade off between stabilizing nominal prices and non fundamental asset price movements we compare the optimal policy under different assumptions full versus limited information and commitment versus discretion if the central bank has limited information about whether an asset price movement has a fundamental or non fundamental origin then the central bank responds less aggressively to the non fundamental exuberance shocks than under full information without commitment a central bank responds more aggressively to non fundamental exuberance shocks

pareto optimality and competition there is a general consensus that u s financial markets are very competitive and efficient with prices quickly reflecting the available information there is also a widespread belief that these competitive and efficient markets enable the efficient allocation of scarce capital among alternative investment opportunities this belief is not based on direct observation it is virtually impossible to obtain the data concerning the joint probability distribution of returns to all possible projects which would be required for a direct assessment of the efficiency of the resource allocations to which the market gives rise rather it is based on the well known result that perfectly competitive markets generate pareto efficient resource allocations the object of this paper is to question that conclusion to show that even with apparently competitive and efficient markets resource allocations may not be pareto efficient

a meta analysis of the international gender wage gap abstract since the early 1970s a number of authors have calculated gender wage differentials between women and men of equal productivity this meta study provides a new quantitative review of this vast amount of empirical literature on gender wage differentials as it concerns not only differences in methodology data and time periods but also different countries we place particular emphasis on a proper consideration of the quality of the underlying study which is done by a weighting with quality indicators the results show that data restrictions i e the limitation of the analysis to new entrants never marrieds or one narrow occupation only have the biggest impact on the resulting gender wage gap moreover we are able to show what effect a misspecification of the underlying wage equation like the frequent use of potential experience has on the calculated gender wage gap over time raw wage differentials worldwide have fallen substantially however most of this decrease is due to better labor market endowments of females

language and the estimates of the gender wage gap in this paper we link the estimates of the gender wage gap with the gender sensitivity of the language spoken in a given country we find that nations with more gender neutral languages tend to be characterized by lower estimates of gwg the results are robust to a number of sensitivity checks

spatial growth and industry age between 1970 and 2000 employment growth across u s counties exhibited very different patterns in manufacturing and services whereas manufacturing employment growth was negatively related to initial manufacturing employment across the entire distribution of counties service employment growth was positively related to initial service employment for intermediate sized counties this paper presents a theory to rationalize these facts local sectoral growth is driven by technological diffusion across space and depends on the age of the sector the theory correctly predicts the relation between county employment growth and initial county employment in manufacturing at the turn of the 20th century

the gender wage gap and the role of reservation wages new evidence for unemployed workers this paper examines the importance of differences in reservation wages for the gender wage gap based on two waves of rich survey data for a sample of newly unemployed individuals in germany we perform a decomposition analysis including measures for reservation wages detailed information on education socio demographics labor market history as well as personality traits in order to address the potential endogeneity of reservation wages we exploit a generated instrumental variable strategy that relies on heteroscedasticity of the error terms our findings indicate that the gender wage gap becomes small and statistically insignificant once we control for reservation wages moreover we perform a subgroup analysis that provides valuable insights about the importance of potentially unobserved characteristics that affect reservation wages and realized wages simultaneously reasons for differences in reservation wages could arise from productivity differences the fact that women anticipate discrimination and different unobserved traits or preferences

employer skill demands and labor market outcomes of blacks and women the author uses data from a 1992 94 survey of employers in four metropolitan areas to investigate the effects of skill demands as measured by hiring requirements and job tasks on the wages and employment of newly hired workers skill demands were generally associated with lower employment of blacks than whites and with higher employment of women than men most tasks and requirements had statistically significant positive effects on starting hourly wages together these effects help to account for some of the differences between the hourly wages of white and black men and for some of the trends over time in the relative wages and employment of race and gender groups

is gender pay discrimination on the wane evidence from panel data 1968 1989 previous studies of the gender pay gap in the united states have found a narrowing of that gap in the past two decades but have differed substantially in the reported magnitude of that change this study calculates gender earnings differences using panel study of income dynamics data for 1968 89 a longer time series than has been examined by any similar study it also employs improved statistical techniques notably an adjustment for selection bias and a recently recommended modification of the most commonly used decomposition technique the author finds a significant decline both in the portion of the differential due to observed differences between men s and women s characteristics and in the unexplained component which is often attributed to discrimination the results of one analysis show that over the 1968 89 period the gender pay gap narrowed to as little as 47

financialisation and the new swedish model most studies of swedish political economy are too optimistic about the condition and prospects of the reformed swedish model e g bergh 2014 steinmo 2010 indeed the swedish economy has responded to the global financial crisis gfc in what appears to be a successful manner this comparativist literature nevertheless omits in depth analysis of the impact of financialisation partly due to its neglect of long term dialectical processes of change cf ogden et al 2014 there is a small literature on financialisation in sweden e g belfrage 2008 forslund 2008 kallifatides et al 2010 ryner 2013 belfrage 2015 andersson and jonung 2015 kallifatides 2016 however it has not clarified what the dynamics contradictions and crisis tendencies of the resulting finance dominated accumulation regime in sweden are drawing on document analysis and statistics and based on regulation theory e g aglietta 1979 this paper does just that it thus corrects an overly idealised picture of swedish economy and society as well as more broadly holding the swedish case up as a critical case study for the sustainability of the finance dominated growth regime in europe we argue that there is a looming crisis in the swedish economy today as the acceleration of financialisation following the gfc is shifting the economy away from being export led to becoming debt led and asset based and thus moving the economy closer to the uk and us economies as such the swedish case suggests that the finance dominated growth regime may be unsustainable in europe more generally

declining bias and gender wage discrimination a meta regression analysis this paper extends tests and revises a previous meta regression analysis of the gender wage gap stanley and jarrell 1998 we find that there remains a strong though dampened tendency for discrimination estimates to fall and male researchers still report significantly larger amounts of wage discrimination against women this extensive research base containing 104 estimates suggests that there is less need to correct for selection bias an indirect sign of lessened discrimination there is evidence that gender research is changing and improving although gender wage discrimination has lessened the research base still finds a significant gender wage inequality

returns to investors in stocks in new industries i introduction one thousand dollars invested in america online s initial public offering ipo in march 1992 became 295 545 by the end of 2000 when aol was purchased by time warner this is an extraordinary payoff for shareholders over 5 per month while this investment has an outstanding return new industries have high risk and their stocks are likely to have high expected returns on the other hand the extraordinary behavior of dot corn stocks makes this conclusion less than obvious the stratospheric prices of dot corn stocks and returns to some shareholders suggest that expected returns in a new industry may well be dominated by forces not common in more mature industries one possibility is euphoria or craziness an explanation given more plausibility by the boom and bust in dot corn stock prices another explanation is that such stocks are similar to options and lottery tickets this possibility has occurred to many observers among them alan greenspan who observed that when you are dealing with stock the possibilities of which are either it s going to be valued at zero or some huge number you get a premium in that stock price which is exactly the same sort of price evaluation process that goes on in the lottery blumberg capital 1999 perhaps stocks in new industries have a distribution of returns that includes the possibility of large gains and small losses if so then investors may buy stocks for the same reasons that people are willing to pay for lottery tickets this explanation could be consistent with high valuations and even negative expected returns because investors are willing to pay on average to have a small probability of a large gain 1 indeed the limited history of dot corns suggests realization of substantial negative returns the geometric return to shareholders averaged across dot coms is 4 3 per month even so the history of dot coms probably is too short to deliver very reliable evidence on the expected return in new industries this average return to stockholders is based on the same firms as in the study by hand 2001 but there are only five firms in the center for research in security prices crsp data for these firms as recently as 1995 and the financial crisis of 2007 and 2008 would suggest ending the data in 2006 we estimate expected returns in new industries by examining new industries with longer experiences than dot coms many analogies have been drawn between dot coms and earlier industries as far back as railroads and telegraphs for example in business week mandel 1999 hof and hamm 2002 the economist 2000 nairn 2002 and perez 2002 2 among these analogies is the importance of network effects network effects are important for dot coms and they are important for some of the industries examined in this paper industries examined in this paper include network industries if a network industry is defined as one in which a standard for the product or the availability of complementary inputs has high marginal value for the industry one such industry is the automobile industry which standardized on gasoline engines instead of electricity or steam another is the telegraph industry for which interconnection is as crucial as for the internet while it is less obvious interconnection is an important issue for railroads as well when differences in track width gauge are large enough connections across lines can require unloading and reloading railroad cars gauge was not standardized in the united states until the 1880s and even today gauge in spain and portugal is different than in the rest of europe in this paper we examine the returns in major new industries in the united states and summarize the distribution of returns over the period of the industry s development our paper is related to papers by fama and french 2001 and gompers and lerner 2003 fama and french 2001 examine the returns on newly listed firms in the crsp data set from 1926 to 2000 and find that these firms returns are similar to their benchmark returns

meta regression analysis a quantitative method of literature surveys abstract pedagogically literature reviews are instrumental they summarize the large literature written on a particular topic give coherence to the complex often disparate views expressed about an issue and serve as a springboard for new ideas however literature surveys rarely establish anything approximating unanimous consensus ironically this is just as true for the empirical economic literature to harmonize this dissonance we offer a quantitative methodology for reviewing the empirical economic literature meta regression analysis mra is the regression analysis of regression analyses mra tends to objectify the review process it studies the processes that produce empirical economic results as though they were any other social scientific phenomenon mra provides a framework for replication and offers a sensitivity analysis for model specification in this brief essay we propose a new method of reviewing economic literature mra and discuss its potential

mood swings and business cycles evidence from sign restrictions this paper provides new evidence that bouts of optimism and pessimism are an important source of u s business cycles using the identification schemes based on sign restrictions we document that identified optimism and pessimism shocks account for about 30 of u s business cycle fluctuations in hours and output in addition our empirical findings are consistent with the intensive and extensive margin adjustments in the u s labor market over business cycles providing further support to optimism shocks being an important source of u s business cycles the identified optimism shocks are at least partially rational as total factor productivity is found to rise 8 12 quarters after an initial bout of optimism while this later finding is consistent with some previous findings in the news shock literature we cannot rule out that such episodes reflect self fulfilling beliefs

technological change entry and stock market dynamics an analysis of transition in a monopolistic industry we consider the share price dynamics induced by changes in technological progress perhaps due to the introduction of a new technology or institutional reforms and the resultant entry of firms the focus is not so much in comparing the steady states before or after the change but rather on the transitional dynamics of the industry or economy as it adjusts the model is one with efficient markets and perfect foresight where fundamentals drive the stockmarket value should we expect technological progress to lead only to increases in the level of the stockmarket monotonic dynamics or should we expect nonmonotonic behavior of boom followed by partial bust a u shaped or overshooting dynamic is it possible to have share values falling even when the underlying technology is improving we model a stylized monopolistic industry or economy in a continuous time generalequilibrium setting with no uncertainty and perfect foresight we adopt a model of entry found in sanghamitra das and satya p das 1997 datta and dixon 2000 and marta aloi and dixon 2001 in which the cost of entry is increasing in the flow of entry due to some congestion effect or other externality the flow of entry is determined by an intertemporal arbitrage condition that equates the cost of entry with the present value of incumbency this gives rise to a dynamic zero profit condition the present value of incumbents in each instant is equal to the cost of entry we first consider the case of a step increase in the level of technology with no other underlying growth when an unanticipated technological improvement occurs it causes a stock market boom there is a jump in the share value the current profitability of incumbents and an increase in the flow of entry however eventually entry drives the profit level back to zero and shares decline back to the initial value the initial boom is followed by a bust we next consider the case of an economy with constant exponential technology growth what happens when the pace of technological change unexpectedly increases there is an upward jump in the stock market value of firms this can overshoot the new balancedgrowth path with the possibility that there will be a u shaped dynamic the initial boom is followed by a slump before tracking back to the higher growth rate if the initial jump overshoots the new balanced growth path there is a downward pull of share prices toward the new balanced growth path which may dominate this stock market behavior reflects the behavior of entry after an initial rush there is a temporary slowdown before eventually getting back on track a similar pattern can occur if the change is anticipated we believe that this might be some part of the explanation of the behavior of the stock market in the late 1990 s although real life is much more complicated see jeremy greenwood and boyan jovanovic 1999 the initial technological change causes a bonanza of profitable investment opportunities resulting in high profits for incumbents and many new firms being set up the increase in entry reduces profitability and this may cause the flow of entry to reduce if only in the short run finally however the long run growth opportunities begin to come through and the economy gets onto the new higher growth path

identifying the role of risk shocks in the business cycle using stock price data i introduction the finance literature on the forecastibility of stock returns has concluded that stock market movements are by and large not because of changes in the expected future cash flow of firms but are primarily because of changes in the risk premium that is how the expected cash flows are discounted by stock market participants cochrane 2011 1 these changes in risk premia also have important implications for real variables in the economy especially for consumption and investment an increase in the risk premium prompts households to reduce current consumption as they start to discount expected future income more heavily more importantly changes in the required return on equity alter the cost of capital of corporations when they finance new investment for firms that rely on external debt to finance marginal investment a lower stock price translates into lower net worth and therefore a higher cost of borrowing bernanke gertler and gilchrist 1999 similarly firms that rely on new equity issues are able to raise less funds from each new share when their stock price is lower even for firms that finance investment exclusively through internal funds i e retained earnings plus depreciation allowance the required return on existing shares reveals the opportunity cost of internally financed investment tobin 1969 tobin and brainard 1977 this is because at least in principle these funds can be returned to existing shareholders as dividends and new funds can then be raised from the markets through new equity shares for which investors would demand a risk premium figure 1 omitted in the aggregate u s corporations are predominantly financed through equity the dotted line in figure 1 plots the credit market liabilities of u s non financial corporations as a percent of the sum of equity and credit market liabilities in their balance sheets 2 by this measure debt financing accounts for about a third of total financing averaged over the whole sample and equity financing accounts for about two thirds the solid line in figure 1 provides an alternative measure which takes into account all financial liabilities including items such as trade payables but nets out financial assets to obtain a measure of net debt mcgrattan and prescott 2005 now debt financing accounts for only 15 of total financing in the post war period and its importance has declined in the last two decades note that both of these series are stock measures as opposed to flow measures that is they refer to financing of all past investments and do not necessarily reflect how corporations are financing investment at the margin these measures can also be biased against debt financing because most debt items are recorded on a book value basis in the flow of funds but equity is recorded on a market value basis to overcome these caveats i consider the flow components of sources of funds i e internal funds net new equity and net new debt as a share of corporate tangible investment in figure 2 several patterns emerge first the ratio of internal funds to gross capital expenditures has been close to 1 throughout the post war period in other words at least in the aggregate u s corporate investment has been by and large financed internally second new equity issuance has not been an important source of financing in fact net new stock issues have been mostly negative in the latter part of the sample this mainly reflects the preference of corporations to distribute resources to shareholders through stock buybacks rather than ordinary dividend payments because of the preferential tax treatment of long term capital gains third net new debt has contributed to about a third of aggregate financing assuming that the discrepancy in the flow account is distributed proportionally to each financing component as internal funds and net new stock issues are fairly reliable data series we can reasonably lump the rather large discrepancy item in the ffa data with net debt

venture capital and the macroeconomy i develop a model of venture capital vc intermediation that quantitatively explains central empirical facts about vc activity and can evaluate its macroeconomic relevance the impact of vc backed innovations is significantly larger than suggested by observed aggregate venture exit valuations even after accounting for large exposures to systematic and uninsurable idiosyncratic risks the risk properties of venture capital play a quantitatively important role in both explaining empirical regularities and shaping the value of ventures contributions to economic growth the model is analytically tractable and yields exact solutions despite the presence of matching frictions imperfect risk sharing and endogenous growth received january 16 2018 editorial decision november 7 2018 by editor stijn van nieuwerburgh

how to solve the price puzzle a meta analysis the short run increase in prices following an unexpected tightening of monetary policy constitutes a frequently reported puzzle yet the puzzle is surprisingly easy to explain away when all published models are quantitatively reviewed we collect about 1 000 point estimates of impulse responses from 70 articles using vector autoregressive models and present a simple method of research synthesis for graphical results our ndings indicate publication selection in favor of the intuitive response of prices to a tightening the estimates depend systematically on study design when misspecications are

economic growth and welfare state a case study of sweden in this article we analyse the relation between the dynamics of economic growth and the welfare state using the swedish experience as a case study we defend three theses concerning the swedish experience that the deep economic crisis of 1990 93 constituted the definite breaking point for the accumulation pattern in force since the 1950s and in crisis since the mid 1970s that the new accumulation pattern eroded the long standing symbiotic relationships between economic growth and the welfare state and that the welfare state has suffered retrenchments and qualitative changes of great importance which can be fundamentally explained by the transformations in the accumulation pattern we conclude that the changes introduced in sweden have continued to subordinate the welfare state s main goals giving priority to the new accumulation pattern

women wealth and mobility using estate tax returns data we observe that the share of women among the very wealthy in the united states peaked in the late 1960s at nearly one half and then declined to one third we argue that this pattern reflects changes in the importance of dynastic wealth with the share of women proxying for inher ited wealth if so wealth mobility decreased until the 1970s and rose thereafter such an interpretation is consistent with technological change driving long term trends in mobility and inequality as well as the recent divergence between top wealth and top income shares documented elsewhere jel d31 j16 j62 033 the extent of and changes in intergenerational mobility of wealth are central to understanding dynamics of wealth inequality but are hard to measure in this paper we argue that the share of women among the wealthiest americans can be used as a proxy for the importance of inherited rela tive to self made wealth this approach assumes that women tend to inherit rather than make great fortunes if so a higher share of women among the wealthy would reflect a rise in inherited wealth at the top and thus lower wealth mobility conversely higher wealth mobility where self made wealth replaces inherited wealth would result in more men at the top of the wealth distribution judged by this proxy and corroborated by various data sources wealth mobility decreased in the period 1925 1969 and increased thereafter such a pattern is consistent with an important role for technological change in shaping the wealth distribution and can provide an explanation for why wealth concentra tion has remained stable despite increasing income concentration in the last three decades over the past century the share of women among the very wealthy followed an inverse u pattern peaking in the late 1960s according to estate tax returns in 1925 one quarter of the wealthiest 0 01 percent were women this fraction rose rapidly through world war ii wwii and then more slowly to peak in 1969 when women neared parity with men since then the decline has been marked by 2000 women s share had fallen to one third its prewar level while the rise was evident among all wealth groups in the top 1 percent of the wealth distribution the decline was confined to the very top figure ia graphs the share of women for four different groups in the top 1 percent among decedents by year figure ib does the same for the living population with the help of estate multipliers a method that treats death as a random sampling device and uses mortality rates by age and gender to infer the distribution of wealth among the living as described in the data appendix while the rise in the share of women among the wealthy until the 1960s could reflect improve ments in women s economic status labor market gains work against the recent decline for instance since the 1970s the share of women among top earners top 0 1 percent has risen by

putty clay technology and stock market volatility abstract firms first order conditions imply that stock returns equal investment returns from the production technology much applied work uses the adjustment cost technology which implies that the realized return is high when the investment capital ratio is high this paper derives for an arbitrary stochastic discount factor the investment return implied by the putty clay technology the combination of capital heterogeneity and irreversibility creates a novel channel for return volatility the investment return is high when the ratio of investment to gross job creation is low empirically the putty clay feature helps account for u s stock market data

two sides of the same coin u s residual inequality and the gender gap abstract we show that the narrowing gender gap and the growth in earnings inequality are consistent with a simple model in which skills are heterogeneous and the growth in skill prices has been particularly strong for skills with which women are well endowed empirical analysis of dot cps and nlsy79 data finds evidence to support this model a large increase in the prices of cognitive and people skills skills with which women are well endowed and a decline in the price of motor skills account for up to 40 percent of the rising inequality and 20 percent of the narrowing gender gap

contracting productivity growth in this paper we analyze the interactions between growth and the contracting environment in the production sector allowing incompleteness in contracting implies that viable production relationships for firms and workers and therefore the profitability of industries depend on the rates of innovation and growth the speed at which new innovations arrive in turn depends on the profitability of production for the usual reasons examined in the endogenous growth literature we show that these interactions can have important implications which are consistent with observed phenomena in both the micro and macro environment in particular we demonstrate that a technological shock increasing productivity of research can through this interaction lead to a productivity slowdown and a shift in labor market contracts away from firms providing implicit guarantees of lifetime employment and towards shorter term contractor type arrangements we show the consistency of an increase in the proportion of the labor force under short term employment increased relative returns of workers in high productivity sectors and increased income inequality with a productivity slowdown of finite duration

fiscal federalism decentralization and economic growth a meta analysis the theoretical literature on fiscal federalism has identified several channels through which government decentralization could affect economic growth much of the literature focuses on the efficiency aspects of a decentralized provision of public services but decentralization may also increase growth by raising the ability of the political system to innovate and carry out reforms in contrast some authors argue that decentralization increases corruption and government inefficiency and thus may diminish growth given this theoretical ambiguity several studies have attempted to identify the effect of decentralization on economic growth empirically over the last two decades we review and conduct a meta analysis of this empirical literature based on our analysis we point out open questions and discuss possible ways to answer them jel h77 043 c52 i introduction building on various theoretical contributions an empirical literature analyzing the effect of fiscal decentralization on economic growth has emerged since the 1990s the relevant studies vary as to whether they use cross sectional time series or panel data as to whether they rely on cross country or single country samples and they vary in estimation methods decentralization measures and sample composition given the size and heterogeneity of the empirical literature it is useful to review the individual studies and summarize their main findings conducting a comprehensive search we identify 31 published and unpublished studies on the effect of fiscal decentralization on economic growth each of these studies estimates several models resulting in over 400 individual estimates while we first review these studies in a traditional manner our main aim is to analyze these estimates quantitatively specifically the main contribution of this article is to offer a meta analysis of the empirical findings on fiscal decentralization and economic growth a meta analysis is a useful methodology in our context as it is difficult to obtain clear cut conclusions with only a traditional survey of empirical literature the individual studies vary substantially in their characteristics and correspondingly in the findings they report by conducting a meta analysis however we can identify how the idiosyncratic characteristics of a particular study relate to its findings the meta analysis approach thus addresses model uncertainty with regard to each individual estimate in addition it can also serve as a partial response to the methodological critique of empirical research on fiscal decentralization by rodden 2004 as it helps to clarify the quantitative effects of different decentralization measures and estimation techniques finally as meta analytical techniques are rarely used in economics we also aim at contributing to the further establishment of this methodology stanley 2001 2008 the next section briefly discusses the various theoretical arguments as to why fiscal decentralization may affect economic growth we then provide a short traditional survey of the empirical studies in section iii we review this literature more systematically and quantitatively in section iv in section v we report the results of meta regressions and discuss how the idiosyncratic characteristics of a given study are related to its specific findings finally section vi provides a discussion of the results and some conclusions ii how could fiscal federalism affect economic growth theoretical approaches within the framework of the solow swan model solow 1956 swan 1956 fiscal federalism may be associated with a different level of efficiency in governance than unitary systems leading to a different value of solow s a the level of technology a regime change toward federalism would then be associated with temporarily different growth rates and eventually different levels of income but not with persistent growth differences

the life cycle of a competitive industry firm numbers first rise then later fall as an industry evolves this nonmonotonicity is explained using a competitive model in which innovation opportunities fuel entry and relative failure to innovate prompts exit equilibrium time paths for price and quantity also share features of the data the model is estimated using data from the u s automobile tire industry a particularly dramatic example of the nonmonotonicity in firm numbers

trends in the well being of american women 1970 1995 this paper examines the trends in the well being of american women over the last 25 years a time of significant changes in the relative economic status of women and in the labor market as a whole a broad range of indicators are considered to capture changes in women s well being in the family as well as in the labor market for virtually all age and education groups substantial evidence is obtained of rising gender equality in labor market outcomes notably labor force participation wages and occupational distributions broad evidence is also found of greater gender parity within married couple families as the housework time of husbands increased relative to wives and the relative wages of wives rose compared to their husbands however parallel to the recent evidence of the declining labor market position of lower skilled men there has been a similar deterioration in the economic status of less educated women especially high school dropouts their labor force participation rates and wages have risen at a much slower pace than those of more highly educated women while their incidence of single headship has increased much more rapidly these findings for less educated women serve to underscore the widening gap between more and less skilled americans of both sexes as well as to emphasize its broad dimensions

volatility and slow technology diffusion abstract i study the effects of uncertainty on technology adoption and thereby on volatility and growth i present an analytically tractable model in which i uncertainty about the returns to adoption delays technology diffusion and ii the mean and volatility of output growth are jointly determined in equilibrium i then test the key predictions of the model by studying the introduction of three major information and communication technologies icts computers internet and cell phones i find that countries with more volatile growth rates of real gdp per capita have higher time adoption lags and lower average growth as predicted by the model

gender pay gaps and the restructuring of graduate labour markets in southern europe in this article we investigate whether education job mismatches and growing occupational diversity are important explanatory factors of gender pay gaps amongst university graduates in southern europe namely in portugal spain and italy we use standard decomposition techniques and test the implications of controlling for selection bias our results indicate that over education and greater occupational segregation associated with the emergence of new graduate job profiles are important determinants of earnings inequality whilst our focus is on graduates early careers demonstrating that occupational assignment and selection into employment shape gender pay gaps amongst the highly skilled provides a more pessimistic view on the ability of educational expansion or equal pay legislation to significantly reduce gender pay inequality southern european economies are also particularly interesting to look at since there may be a greater degree of mismatch between the pace of higher education expansion and the changes in the job structure making women particularly vulnerable to over education

varying heterogeneity among u s firms facts and implications abstract u s firms stock return volatility rose fivefold from 1971 through 2000 and then reverted to near 1971 levels by 2006 this was driven mainly by a rise and fall in the firm specific rather than systematic component of volatility firm level total factor productivity growth volatility exhibited a similar pattern we hypothesize that firm heterogeneity reflected in firm specific volatility rises as a new general purpose technology gpt propagates across the economy and then ebbs once the gpt is widespread measuring gpt adoption by information technology capital intensity we find robust cross industry empirical evidence supporting the hypothesis

viewpoint male female wage differentials how can that be abstract the paper outlines the main empirical procedures that are used to document the male female wage differential and the extent to which it reflects discrimination it then discusses the evidence on male female wage differentials their existence the extent to which they reflect discrimination their changes over time and the factors that influence the gap particular attention is paid to more recent studies that control for a wider range of conventionally unobserved factors theoretical perspectives are then outlined focusing on the issue of how discriminatory wage differentials can survive given the forces of competition the impacts of policy initiatives are also discussed

swimming upstream trends in the gender wage differential in the 1980s using michigan panel study of income dynamics data for 1979 and 1988 we analyze how a falling gender wage gap occurred despite changes in wage structure unfavorable to low wage workers the decrease is traced to gender specific factors which more than counterbalanced changes in measured and unmeasured prices working against women supply shifts net of demand were unfavorable for women generally and hurt high skilled more than middle and low skilled women by analyzing wages we find support for the notion of a gender twist in supply and demand having its largest negative effect on high skilled women

estimating a wage curve for britain 1973 90 following a w phillips s 1958 original work on the united kingdom applied research on unemployment and wages has been dominated by the analysis of highly aggregated time series data sets however it has proved difficult with such methods to uncover statistically reliable models this paper adopts a different approach it uses macroeconomic data on 175 000 british workers from 1973 to 1990 to provide evidence for the existence of a negatively sloped relationship linking the level of pay to the local rate of unemployment the paper casts doubt on standard ideas in macroeconomics regional economics and labor economics copyright 1994 by royal economic society

the information technology revolution and the stock market technological progress comes in waves the british industrial revolution 1760 1850 ushered in cort s puddling and rolling process for making iron crompton s mule for spinning cotton and the watt steam engine the second industrial revolution 1890 1930 witnessed the rise of electricity the internal combustion engine and the chemical industry the birth of information technology it may herald the start of a third industrial revolution a new technology or product is often developed by the single entrepreneur who initially finds it hard to get funds develop the product and find customers but if the product is good customers eventually line up and investors flock in other firms then move in to make the product and may drive the innovator out or acquire him whether he reaches the initial public offering ipo stage or is acquired by a listed firm though it takes time for the innovator to add value to the stock market indeed the innovation may at first reduce the market s value because some firms usually large or old will cling to old technologies that have lost their momentum figure 1 plots the market value of u s equity relative to gdp this paper argues that a the market declined in the late 1960 s because it felt that the old technologies either had lost their momentum or would give way to it and that b it innovators boosted the stock market s value only in the 1980 s if the stock market provides a forecast of future events then the recent dramatic upswing represents a rosy estimate about growth in future profits for the economy this translates into a forecast of higher output and productivity growth holding other things equal such as capital s share