the phillips curve macroeconomic policy and the welfare of canadians a review of the two competing paradigms explaining inflation and unemployment fluctuations singles out the keynesian phillips curve as the clear empirical winner over its classic competitors reestimation of the canadian phillips curve for 1957 90 identifies a sharp structural shift toward a high degree of unemployment hysteresis after 1972 the recent attempt of macropolicy to flatten the aggregate demand curve and limit supply side shock accommodation which aims at lower and more stable inflation is then shown to make unemployment higher and more unstable on average to an extent that is an increasing function of the degree of hysteresis understanding and reducing hysteresis and developing a consensus based incomes policy that has a chance of alleviating the dismal trade off should therefore to top research and policy priorities

unionization and labor market institutions in advanced capitalism 1950 1985 this article examines the depedence of unionization on labor market institutions and long run trends in inflation unemployment and the sectoral composition of the labor force in 18 oecd countries the large number of contending explanations highlights the difficulty in comparative sociology of drawing confident conclusions when there are few cases to compare this problem is addressed through diverse evidence a review of the comparative historical record and a time series analysis to form a bayesian prior distribution which is combined with a cross sectional data set to sharpen conventional estimates of economic and institutional effects this analysis indicates working class organization in trade unions expanded in the postwar period where labor acquired an institutional influence over capitalist labor markets

marriage market divorce legislation and household labor supply this paper provides a theoretical framework for analyzing the impact of the marriage market and divorce legislation on household labor supply in our approach the sex ratio in the marriage market and the rules governing divorce are examples of distribution factors these factors are defined as variables that affect the household members bargaining position but not preferences or the joint budget set we extend the collective labor supply model developed by chiappori to allow for distribution factors we show that our model imposes new restrictions on the labor supply functions and eases the identification of individual preferences and the intrahousehold decision process the model is estimated using psid data for the year 1988 our results do not reject the restrictions imposed by the model also the sex ratio and divorce laws deemed favorable to women are found to affect labor supply behavior and the decision process in the directions predicted by the theory and to have sizable effects

the supply and demand for exports in israel abstract using annual data for israel over the period 1960 1989 we estimate an econometric model for the supply and demand for exports a novel feature is that domestic absorption crowds out export supply exports are imperfect substitutes in world markets for tradeables produced abroad the price elasticity of demand is about 1 3 while the price elasticity of supply is about 1 5 the model is simulated to calculate the effects of policy instruments and other exogenous variables on exports and export prices

how do sex ratios affect marriage and labor markets evidence from america s second generation sex ratios i e relative numbers of men and women can affect marriage prospects labor force participation and other social and economic variables but the observed association between sex ratios and social and economic conditions may be confounded by omitted variables and reverse causality this paper uses variation in immigrant flows as a natural experiment to study the effect of sex ratios on the children and grandchildren of immigrants the flow of immigrants affected the second generation marriage market because second generation marriages were mostly endogamous i e to members of the same ethnic group the empirical results suggest that high sex ratios had a large positive effect on the likelihood of female marriage and a large negative effect on female labor force participation perhaps surprisingly the marriage rates of second generation men appear to be a slightly increasing function of immigrant sex ratios higher sex ratios also appear to have raised male earnings and the incomes of parents with young children the empirical results are broadly consistent with theories where higher sex ratios increase female bargaining power in the marriage market

formation of inflation expectations in british manufacturing industries over the past decade increasing use has been made of direct information on price expectations in empirical studies of the expectations formation process in the united states livingston s inflation expectation series have been extensively analysed by turnovsky i970 turnovsky and wachter i972 pesando i975 mcguire i976 carlson i977 mullineaux i978 i980 jacobs and jones i980 figlewski and wachter i98i and others in the united kingdom the general public expectations of consumer prices made available in the gallup polls have been studied by carlson and parkin i975 holden and peel i977 smith i982 severn 1983 and evans and gulamani i984 similar studies have also been carried out with respect to surveys conducted in germany france and most other oecd countries however despite the apparent importance of businessmen s expectations for the understanding of the inflationary process the empirical research on inflation expectations in the united kingdom has been mainly concerned with the consumers price expectations the present paper is an attempt to rectify this shortcoming by extending the empirical analysis of the inflation expectation process to british manufacturing industries using the results of the industrial trend surveys conducted by the confederation of british industries cbi the plan of the paper is as follows section i deals with the methodological problems of deriving quantitative inflation expectations series from qualitative responses such as the ones reported in the cbi surveys the subjective probability method due to theil carlson and parkin and the regression method recently proposed by the author pesaran i984 for the conversion of categorical responses to quantitative measures are briefly discussed section ii sets out the alternative models of inflation expectations formation section iii describes the data on inflation expectations in british manufacturing industries and discusses the forecasting value of alternative measures of inflation expectations section iv focuses on the issue of measurement errors in expectations and the econometric problems involved section v reports the results of estimation of alternative models of inflation expectations and investigates the quantitative impact of government policy and general economic conditions on inflation

the economics of worldwide stagflation the last fifteen years have witnessed dramatic changes in economics not only in the manner in which the economics profession views economics but also in the manner in which the general public views economics and economists by the late 1960 s there had emerged more or less a consensus macroeconomic framework that is an agreed upon structure to be used to study economic problems at the aggregate level robert solow stated as quoted in leijonhufvud 1968

externally validating contingent valuation an open space survey and referendum in corvallis oregon abstract we ask whether respondents report the same decisions in non binding surveys as they do in real elections we study a corvallis or referendum to raise open space funds and find survey and election compatibility pivots on the characterization of undecided responses the survey and referendum percentage of yes votes match closely only if undecided responses are treated as no we compare survey based mean willingness to pay wtp estimates with election based estimates household wtp averages us 48 89 using election results while survey based wtp averages us 75 43 excluding undecided responses us 49 67 treating undecided responses as no and between us 49 96 and 80 05

what caused the rise of conservatism a french view conservatism daniel cohen existing theories of political cycles fail to provide an adequate explanation for the widespread shift to conservative economic policies on one view political parties merely court the median voter but this theory is incomplete because it fails to explain why the median voter has become conservative other theories differentiate parties by their ideologies but they wholly fail to explain where changes of ideology come from this author proposes an explanation that does not need to rely on changes in the underlying preferences of voters or parties but in which changing economic conditions lead to different policy choices thus while ends remain unchanged the means to achieve these ends may vary over time the distinction between right and left is still portrayed by the classical trade off between economic efficiency and equity in order to promote equity the government can always redistribute wealth but in order to preserve economic efficiency wealth redistribution should not be expected to be repeated systematically hence the median voter will prefer a laissez faire to an interventionist government when the economy is understood to be affected by a persistent disturbance and the converse when disturbances are temporary thus the shift to conservatism is seen as the result of the sometimes belated realization by the electorate that the shocks of the 1970s were long lasting current forecasts that unemployment in europe is unlikely to fall suggest the continuation of conservative policies irrespective of whether they are implemented by the right or the left

a satisfactory benefit cost indicator from contingent valuation abstract standard economic concepts are used to develop a model of individual behavior when subject to the constraints of the contingent valuation choice context the model yields refutable consequences that are consistent with previously reported empirical findings including some that have been thought to be anomalous the model is used to show that different contingent valuation formats have predictably different performance characteristics notably the hicksian compensating measures are satisfactory benefit cost indicators when elicited using any one of several formats identified in the text of the formats examined one form of a policy referendum appears to have the most satisfactory characteristics overall we conclude that contingent valuation is a progressing research program

home ownership as status competition some theory and evidence abstract in this paper we explore the implications of home ownership as a status good for housing prices more concretely if a family s housing wealth relative to others is an important sorting variable for relative attractiveness in the marriage market then competition for marriage partners might motivate people to pursue a bigger and more expensive house apartment to test the hypothesis we explore regional variations in the sex ratio for the pre marital age cohort across china as a proxy for differential strength for concerns for status we find that the evidence is consistent with the status competition hypothesis

a randomized response approach to dichotomous choice contingent valuation in this paper we combine dichotomous choice contingent valuation dc cv with the randomized response rr method for asking sensitive survey questions rr increases respondents anonymity by allowing them to answer a sensitive question without revealing with certainty their true response we combine rr with dc cv to test for response effects in the valuation of a public good in a setting of expected social pressure while there are practical implementation issues our findings suggest that the rr technique is a useful tool for exploring social context effects rather than generalize from our pre test results we instead emphasize the development of the experimental technique

empirical analysis of macroeconomic time series var and structural models abstract var and structural econometric models have complementary roles in the modelling of macroeconomic time series a constant parameter var provided it is statistically well specified constitutes a valid basis for testing hypotheses of dynamic specification exogeneity and a priori structure thus facilitating model evaluation as well as suggesting a potentially efficient model development strategy deterministic e g trends and regime shifts and stochastic e g integrated variables non stationarities are analysable within this framework and the johansen maximum likelihood procedure for cointegrated systems is used in an analysis of the determination of earnings prices productivity and unemployment in the u k

confidence intervals for evaluating benefits estimates from dichotomous choice contingent valuation studies i evaluate the potential usefulness of nonmarket valuation concepts and techniques from environmental economics for improving wildlife conservation the concepts include distinguishing between on site recreation use value and off site passive use or

structural distortions and decentralized fiscal policies in emu the combination of discretionary monetary policy labor market distortions and nominal wage rigidity yields excessive inflation as monetary policy tries to exploit nominal wage contracts to address labor market distortions an inflation target reduces inflation but creates a conflict between monetary policy and discretionary fiscal policy if fiscal policy is set at a higher frequency than nominal wages are preventing the associated excessive accumulation of public debt calls for debt ceilings if countries differ substantially in terms of structural distortions uniform debt ceilings must be complemented by country specific debt targets in order to prevent decentralized fiscal authorities from employing debt policy strategically

selected works of michael wallerstein centralized bargaining and wage restraint the literature on corporatism has presented much evidence associating highly centralized systems of collective bargaining with wage restraint and relatively successful macroeconomic performance in addition centralized bargaining is associated with relatively small wage differentials this paper presents a model of the impact of centralized wage setting on both real wages and relative wages the central assumption is that the centralization of wage setting at the national level unites unions who are complements in production since a wage increase for one group of workers negatively affects the welfare of other workers who are complements in production centralized wage setters choose wages below the equilibrium of decentralized wage setting it is also shown that if the union confederation maximizes a utilitarian welfare function with equal weights centralized wage setting decreases wage dispersion while low paid workers clearly gain from centralized bargaining high paid workers may prefer that bargaining be decentralized

fat tails and truncated bids in contingent valuation an application to an endangered shorebird species a yes response function in a contingent valuation study is said to have fat tails if it has a high and slowly declining yes response rate at high bid levels truncated bids refer to the practice of dropping high bid offers before a yes response rate of near zero is reached this is a common practice in contingent valuation we explore the extent and implications of fat tails and truncated bids in a study of an endangered shorebird species we find among other things that mean willingness to pay is quite sensitive to the highest bid offered so much so that the choice of highest bid nearly dictates outcomes

fatter attraction anthropometric and socioeconomic matching on the marriage market we construct a marriage market model of matching along multiple dimensions some of which are unobservable in which individual preferences can be summarized by a one dimensional index combining the various characteristics we show that under testable assumptions these indices are ordinally identified and that the male and female trade offs between their partners characteristics are overidentified using psid data on married couples we recover the marginal rates of substitution between body mass index bmi and wages or education men may compensate 1 3 additional units of bmi with a 1 percent increase in wages whereas women may compensate two bmi units with 1 year of education

mating competition and entrepreneurship abstract we used a natural experiment in taiwan to test whether mating competition is a major motive for entrepreneurship after being defeated in mainland china more than half million solders retreated to taiwan in 1949 the soldiers were not allowed to get married until the military marriage ban was lifted in 1959 the policy change created a severe marriage squeeze for local men triggering their animal spirits to engage in entrepreneurial activities empirical results show that local men exposed to high sex ratios as a result of the removal of the marriage ban were more likely to become entrepreneurs later on

the return of lockouts down under in comparative perspective globalization the state and employer militancy virtually unheard of since the great depression lockouts have reemerged strongly in australia and new zealand just as they have all but disappeared in germany the decline of lockouts in germany is convincingly attributed to the enhanced vulnerability of firms to stoppages in certain circumstances amid globalization but the small open economies of australia and new zealand are equally subject to these pressures using macro and micro level data this article illustrates that neoliberal legislative reforms and institutional change have reconfigured the risks costs and payoffs associated with lockouts amid globalization in doing so some flaws in the varieties of capitalism dual convergence literature are highlighted in particular the post hoc classification of the antipodes as liberal market economies bypasses the role of legislative reform in reconstituting employer interests and the differences in electoral party and state structures that impeded facilitated the rise of neoliberal reformers in

partially independent central banks politically responsive governments and inflation theories of central bank independence have more exact implications regarding inflation in different political economic environments than generally understood or empirically examined they imply that inflation in any given country time will be a weighted average of what it would be if the central bank completely controlled monetary policy and what it would be if the government completely controlled it with the degree of central bank independence weighting the former an equation embodying this theoretical expectation is estimated by constrained least squares from a time series cross section of inflation rates in developed democracies since the bretton woods era the results confirm that the antiinflationary benefit of central bank independence is not constant but rather depends on every variable in the broader politicaleconomic environment to which wholly autonomous central banks and governments would respond differently conversely the inflationary impacts of all such political economic variables depend on the degree of central bank independence

social norms savings behavior and growth we argue that many goods and decisions are not allocated or made through markets we interpret an agent s status as a ranking device that determines how well he or she fares in the nonmarket sector the existence of a nonmarket sector can endogenously generate a concern for relative position in for example the income distribution so that higher income implies higher status moreover it can naturally yield multiple equilibria it is thus possible to explain differences in growth rates across countries without recourse to differences in underlying preferences technologies or endowments different social organizations lead to different reduced form preferences which lead to different growth rates

an independent sample test of yea saying and starting point bias in dichotomous choice contingent valuation abstract we developed several diagnostic tools to test the convergent validity of two common contingent valuation elicitation procedures data were collected from independent samples receiving dichotomous choice and payment card questions we compared actual with counter factual responses using deterministic and monte carlo methods and we found that wtp distributions and mean values varied by the value elicitation method we also developed a paired comparison test for procedure variance which indicated that yea saying and starting point bias influenced dichotomous choice responses

relative wages under decentralized and corporatist bargaining systems in studying the relationship between wage inequality and centralization in collective bargaining we distinguish central from local systems of wage determination by assuming that a central union takes the employment effects of negotiated wages into account whereas unions disregard these effects in decentralized systems two different sources of wage differentials are studied separately i heterogeneous workers with different skills and ii heterogeneous firms with varying levels of economic rent per employee with respect to skill levels the impact of centralization is ambiguous whereas inter firm wage differentials are likely to be lower in corporatist systems

information and effort in contingent valuation surveys application to global climate change using national internet samples this contingent valuation study investigates the issues of information access and respondent effort and is based on a series of national internet samples the focus is on a split sample treatment basic information bi versus enhanced information ei in the latter significantly expanded information is provided about global climate change and the kyoto protocol using a referendum format we compare the treatment effect bi versus ei on willingness to pay wtp we develop measures of respondent effort in accessing optional information through the technology of web based surveys and jointly model effort and wtp using a simultaneous estimation approach results support the use of the joint modeling approach for objective measures of respondent effort and wtp respondent effort is shown to be positively and significantly related to wtp however use of the optional menu is rather modest counts of pages and time spent and is highly variable both across pages and respondents

further investigation of voluntary contribution contingent valuation fair share time of contribution and respondent uncertainty in the spirit of randall s resource energy econom 20 197 206 1998 argument for focusing on mapping the performance characteristics of alternative contingent valuation designs and formats the focus of this study is on three tests of the voluntary contribution mechanism we investigate the response effects of three crossed treatments 1 an informational treatment that randomly varies the total cost of providing the good to identify possible fair share effects 2 a split sample informational treatment that makes the time of contribution explicit and 3 elicitation formats that allow respondent uncertainty both as a follow up to a dichotomous choice question and asked directly in a split sample treatment

the rise in unemployment a multi country study one of the most remarkable features of recent economic history has been the remorseless rise in unemployment throughout the industrialized countries however while the trend to higher unemployment is universal the experience of individual countries also differs widely the increase is especially marked within the european community where unemployment rates rival those reached in the interwar years by contrast in the scandinavian countries and japan unemployment is lower and has risen very much less experience in the united states lies somewhere between these extremes and in the last few years unemployment there has fallen sharply

from made in china to innovated in china necessity prospect and challenges after more than three decades of high growth based on its low wage advantage and relatively favorable demographics in combination with market oriented reforms and openness to the world economy china is at a crossroads with a much higher wage and a shrinking workforce future growth will depend by necessity more on the generation of increased productivity and domestic innovation will play an important part in this in this paper we assess the likelihood that china can make the necessary transition using data on expenditure on research and development and patent applications receipts and citations we show that the chinese economy has become increasingly innovative we will argue that rising wages and expanding markets are among the important drivers of china s growth in innovation on the other hand we find evidence of resource misallocation in the innovation area while state owned firms receive more subsidies private firms exhibit more innovation results innovation can presumably progress even faster if resource misallocation can be tackled

addressing negative willingness to pay in dichotomous choice contingent valuation this paper has four purposes first we outline the controversy surroundingthe issue of negative willingness to pay wtp in contingent valuation cv studies second we use monte carlo simulation to examine theperformance of alternative distributionalassumptions in estimating wtp in the presenceof varying proportions of the populationholding negative wtp values we focus ondichotomous choice cv dc cv where negativewtp values may be especially difficult todetect third we extend the simulation toinvestigate the performance of the mixturemodels that have recently been proposed forhandling identifying non positive wtp values fourth we extend the simulation to investigatethe performance of the nonparametric lowerbound turnbull approach results indicate thatthe relative performance of the dc cv modelingalternatives evaluated here which assumepositive wtp varies across the simulationsetting e g proportion of negative wtp butnone can be said to reasonably solve theproblem ex post this underscores theimportance of ex ante efforts to identify ifnegative wtp is likely to be prominent in agiven valuation setting in such cases appropriately handling negative wtp must beaddressed through ex ante survey design andmodeling choices that allow negative wtp

matching and sorting in online dating using data on user attributes and interactions from an online dating site we estimate mate preferences and use the gale shapley algorithm to predict sta ble matches the predicted matches are similar to the actual matches achieved by the dating site and the actual matches are approximately efficient outof sample predictions of offline matches i e marriages exhibit assortative mating patterns similar to those observed in actual marriages thus mate pref erences without resort to search frictions can generate sorting in marriages however we underpredict some of the correlation patterns search frictions may play a role in explaining the discrepancy

how strong is the macroeconomic case for downward real wage rigidity we explore the existence of downward real wage rigidity drwr at the industry level based on data from 19 oecd countries for the period 1973 1999 the results show that drwr compresses the distributions of industry wage changes overall as well as for specific geographical regions and time periods but there are not many real wage cuts that are prevented more important however drwr attenuates larger real wage cuts thus leading to higher real wages there is stronger evidence for downward nominal wage rigidity than for drwr real wage cuts are less prevalent in countries with strict employment protection legislation and high union density

contingent valuation and social choice the contingent valuation method for estimating the existence value of natural resources is examined for psychophysical robustness statistical reliability and economic sensibility extensions of standard models for willingness to pay and suitable econometric techniques for analyzing these models are developed the analysis is applied to a series of experiments on the value of preserving wilderness areas in the western united states the results call into question the reliability of the cv method for estimating existence values

the economic incidence of smoking laws although laws restricting smoking in restaurants are becoming commonplace most research has focused on either the health benefits that laws may provide customers and workers or whether laws harm owners but while smoking laws may directly alter profits owners may alter prices output and other business attributes in ways that affect the welfare of customers and workers this study examines whether restaurant and bar owners alter prices entertainment hours of operation and other business attributes in response to local smoking laws substantial support is found for these attribute changes in the wisconsin hospitality industry one implication is that an overall assessment of the desirability of smoking laws should consider economic effects imposed on owners customers and workers as well as health benefits that follow laws

interviewer effects on the valuation of goods with ethical and environmental attributes this paper investigates the impact of interviewer effects on willingness to pay wtp estimates face to face surveys were conducted with two interviewers both interviewers used a transcript and conducted the survey at the same location and at the same time we found that responses to the wtp questions differ across eco labeled products and by interviewer this interviewer effect is particularly relevant when we analyze the impact on wtp estimates for eco labeled products grown in countries associated with the origin of one of the interviewers

biological basics and the economics of the family many economic models of the family are based on a generic person one person two household or parent child family rather than their anatomically correct counterparts sons and daughters fathers and mothers and grandfathers and grandmothers these economic models can offer powerful insights into family behavior but also can leave certain patterns unexplained and neglect potentially important crosscurrents melding biological insights with family economics can cast new light on existing knowledge and open up novel paths for research for example study after study has found that putting family income in the hands of mothers rather than fathers tends to increase the consumption of children as noted in this journal in lundberg and pollak 1996 yet the way such results are usually described might strike a noneconomist as exceedingly circumspect economists point out that these findings reject the common preference model of household decision making in favor of one with independent decisionmaking spouses but usually make little mention of motherhood or fatherhood per se or consider the dramatic expansion of south african government pension programs in the early 1990s which put lots of extra money in the hands of grandparents many of whom lived with their grandchildren in a compelling and oft cited study duflo 2003 found evidence of pension spillovers to grandchildren but the most intriguing patterns were demographic pensions to maternal grandmothers redounded to the benefit of granddaughters economic analysis uncovers the income effects but turns out to be of little help for explaining why these particular gender effects predominated

bias in discrete response contingent valuation abstract the empirical literature on discrete response contingent valuation has found that seemingly innocuous changes in the statistical models estimated result in significantly different point estimates of willingness to pay this paper hypothesizes and tests several potential explanations for these results first it investigates and compares the biases inherent in single bounded and double bounded maximum likelihood estimation procedures and examines how they react to various bid designs and sample sizes then it examines the presence and identification of outliers in binary choice data and how these outliers influence estimation finally it presents an alternative approach to addressing the issue of outliers which explicitly acknowledges the possibility of upwardly biased response probabilities

measuring the existence value of wildlife what do cvm estimates really show two research programs are brought together to contribute to the growing body of work on alternatives to standard welfare based approaches to environmental valuation and policy the first is the theoretical literature undermining the new welfare

do children matter an examination of gender differences in environmental valuation abstract this paper is concerned with the role played by children in a household on choice behaviour related to willingness to pay wtp for environmental goods improvements data from a contingent valuation cvm survey dealing with three environmental improvements are used to examine three hypotheses the first is that after controlling for income individuals with children have higher wtp than childless individuals the second hypothesis is that women with children are willing to pay more for environmental improvements than men with children particularly in the case where there is concern for environmental health risks the third is that childless men and women exhibit significant differences in wtp that arise from greater time constraints faced by women estimated wtp functions are shown to be statistically different for four groups of individuals women with children men with children women without children and men without children parents of either gender are willing to pay more than their childless counterparts valuations of mothers and fathers are statistically different for only one of the three goods being evaluated interestingly it is the fathers mean valuations that are higher this may arise from the fact that these environmental improvements lead to better recreational opportunities and as indicated earlier men are less time constrained further support for this view comes from results that show that valuations of childless men are significantly greater than those for childless women for two goods the paper concludes with some directions for future research in the area