online and official price indexes measuring argentina s inflation abstract prices collected from online retailers can be used to construct daily price indexes that complement official statistics this paper studies their ability to match official inflation estimates in five latin american countries with a focus on argentina where official statistics have been heavily criticized in recent years the data were collected between october 2007 and march 2011 from the largest supermarket in each country in brazil chile colombia and venezuela online price indexes approximate both the level and main dynamics of official inflation by contrast argentina s online inflation rate is nearly three times higher than the official estimate

state aid programs for equalizing spending across local school districts does the structure of the program matter or only it s size this paper provides interesting insights into an important causal mechanism underlying murray evans and schwab s am econ rev 88 4 789 812 1998 finding that court mandated reforms result in less inequality in spending per pupil levels across rich and poor school districts within a state treating the choice of an education program s structure as endogenous following the analysis of leyden public finance finances publiques 47 229 247 1992 public choice 115 1 2 83 107 2003 yields empirical results suggesting that court mandated reforms increase the likelihood that a program s structure will include a price effect and that the inclusion of a price effect in turn results in a decrease in spending inequality

data watch research data in the economics of education economists have developed a wide variety of policy relevant empirical research projects that address the role of education in promoting individual and social welfare recent examples include studies on the impact of school spending on educational outputs the differences between public and private schools the effects of competition among schools the determinants of teacher quality the impact of unions on schools and the consequences of education finance reform one reason for the proliferation of such empirical studies has been the emergence of high quality micro level data on education in this paper we discuss three broad types of data sets data on educational institutions data on educational outcomes at the individual level and data sets from school reforms and experiments in each section we summarize some of the leading surveys discuss the general availability of the data and identify some but certainly not all of the research that has utilized these data this review is by no means exhaustive we have restricted our attention to analyses of data sets describing primary and secondary education moreover we emphasize data sets that are excellent sources of information but are less wellknown and utilized by economists in particular two obvious omissions from this review are the national longitudinal survey of youth nlsy and the panel study of income dynamics psid both are broad based studies that track people over periods of time gathering information both on educational attainment and on many other issues as well

explaining business cycles in small open economies abstract this paper analyzes the role of world price shocks fluctuations in the prices of capital intermediate and primary goods and in the world real interest rate in the generation and propagation of business cycles in small open developing countries i construct a stochastic dynamic multi sector small open economy model the model is a variant of the specific factors model and reflects the major structural characteristics of developing economies i utilize variance decomposition methods to quantitatively evaluate the impact of world price shocks the results indicate that world price shocks account for a significant fraction of business cycle variability in developing countries

tracking the slowdown in long run gdp growth using a dynamic factor model that allows for changes in both the long run growth rate of output and the volatility of business cycles we document a significant decline in long run output growth in the united states our evidence supports the view that most of this slowdown occurred prior to the great recession we show how to use the model to decompose changes in long run growth into its underlying drivers at low frequencies a decline in the growth rate of labor productivity appears to be behind the recent slowdown in gdp growth for both the united states and other advanced economies when applied to real time data the proposed model is capable of detecting shifts in long run growth in a timely and reliable manner

on the sources of aggregate fluctuations in emerging economies recent research on macroeconomic fluctuations in emerging economies has advocated introducing a stochastic productivity trend or allowing for interest rate shocks and financial frictions we estimate a model that encompasses these two approaches shedding light on their relative merits and on how financial frictions affect the transmission of shocks the model accounts for aggregate fluctuations by assigning a dominant role to financial frictions in amplifying conventional temporary productivity shocks whereas trend shocks play a minor role a link between spreads and expected future productivity emerges as essential for a reasonable approximation to the data

strikes and holdouts in wage bargaining theory and data we develop a private information model of union contract negotiations in which disputes signal a firm s willingness to pay previous models have assumed that all labor disputes take the form of a strike yet a prominent feature of u s collective bargaining is the holdout negotiations often continue without a strike after the contract has expired production continues with workers paid according to the expired contract we analyze the union s decision to strike or hold out and highlight its importance to strike activity strikes are more likely to occur after a drop in the real wage or a decline in unemployment

intergenerational economic mobility in the united states 1940 to 2000 we estimate trends in intergenerational economic mobility by matching men in the census to synthetic parents in the prior generation we find that mobility increased from 1950 to 1980 but has declined sharply since 1980 while our estimator places greater weight on location effects than the standard intergenerational coefficient the size of the bias appears to be small our preferred results suggest that earnings are regressing to the mean more slowly now than at any time since world war ii causing economic differences between families to become more persistent however current rates of positional mobility appear historically normal

does fact finding promote settlement theory and a test nonbinding recommendations such as provided by fact finders are shown to significantly increase voluntary settlements in bargaining theoretically it is unclear whether recommendations will increase settlement rates a recommendation may reduce outcome uncertainty thereby chilling bargaining and increasing dispute rates on the other hand a recommendation may give the parties a focal point around which an agreement is made which of these effects dominates is a question that we consider using theory and data from controlled bargaining experiments the data show the dominance of a focal point effect for suggestions highlighting their potential role in improving dispute settlement procedures

understanding the mechanisms through which an influential early childhood program boosted adult outcomes a growing literature establishes that high quality early childhood interventions targeted toward disadvantaged children have substantial impacts on later life outcomes little is known about the mechanisms producing these impacts this paper uses longitudinal data on cognitive and personality traits from an experimental evaluation of the influential perry preschool program to analyze the channels through which the program boosted both male and female participant outcomes experimentally induced changes in personality traits explain a sizable portion of adult treatment effects

the nature and nurture of economic outcomes this paper uses data on adopted children to examine the relative importance of biology and environment in determining educational and labor market outcomes i employ three long term panel data sets which contain information on adopted children their adoptive parents and their biological parents in at least two of the three data sets the mechanism for assigning children to adoptive parents is fairly random and does not match children to adoptive parents based on health race or ability i find that adoptive parents education and income have a modest impact on child test scores but a large impact on college attendance marital status and earnings in contrast with existing work on iq scores i do not find that the influence of adoptive parents declines with child age this abstract was borrowed from another version of this item

emerging economies business cycles the role of commodity terms of trade news abstract recent empirical work has challenged the hypothesis that terms of trade shocks are an important source of cyclical fluctuations in emerging economies we show that ignoring the news component in the terms of trade movements results in misleading conclusions about their importance as a source of cyclical fluctuations using a sample of latin american countries we identify news augmented commodity terms of trade ctot shocks by maximizing the forecast error variance share of the ctot series at a finite future horizon our identification does not rely on zero impact restrictions typically used in the literature for recovering news shocks accounting for news almost doubles the contribution of ctot to explain cyclical fluctuations news augmented ctot shocks explain almost half of output variations in emerging economies

rich dad smart dad decomposing the intergenerational transmission of income we construct a simple model consistent with becker and tomes that decomposes the intergenerational income elasticity into the causal effect of financial resources the mechanistic transmission of human capital and the role that human capital plays in the determination of fathers permanent incomes we show how a particular set of instrumental variables could separately identify the money and human capital transmission effects using data from a 35 percent sample of swedish sons and their fathers we show that only a minority of the intergenerational income elasticity can be plausibly attributed to the causal effect of fathers financial resources

monetary policy and exchange rate volatility in a small open economy we lay out a small open economy version of the calvo sticky price model and show how the equilibrium dynamics can be reduced to a simple representation in domestic inflation and the output gap we use the resulting framework to analyse the macroeconomic implications of three alternative rulebased policy regimes for the small open economy domestic inflation and cpi based taylor rules and an exchange rate peg we show that a key difference among these regimes lies in the relative amount of exchange rate volatility that they entail we also discuss a special case for which domestic inflation targeting constitutes the optimal policy and where a simple second order approximation to the utility of the representative consumer can be derived and used to evaluate the welfare losses associated with the suboptimal rules

trends in intergenerational income mobility previous studies of recent u s trends in intergenerational income mobility have produced widely varying results partly because of large sampling errors by making more efficient use of the available information in the panel study of income dynamics we generate more reliable estimates of the recent time series variation in intergenerational mobility our results which pertain to the cohorts born between 1952 and 1975 do not reveal major changes in intergenerational mobility

the rise of the states u s fiscal decentralization in the postwar period article i nfo article history one of the most dramatic changes in the fiscal federalism landscape during the postwar period has been the rapid growth in state budgets which almost tripled as a share of gdp and doubled as a share of government spending between 1952 and 2006 we argue that the greater role of states cannot be easily explained by changes in tiebout forces of fiscal competition such as mobility and voting patterns and are not accounted for by demographic or income trends rather we demonstrate that much of the growth in state budgets has been driven by changes in intergovernmental interactions restricted federal grants to states have increased and federal policy and legal constraints have also mandated or heavily incentivized state own source spending particularly in the areas of education health and public welfare these outside pressures moderate the forces of fiscal competition and must be taken into account when assessing the implications of observed revenue and spending patterns

final offer arbitration with uncertainty averse parties abstract final offer arbitration foa is a widely used binding dispute resolution mechanism where an impartial arbitrator is constrained to choose one of the two final offers proposed by two disputing parties we build an equilibrium model of foa with players averse to arbitral uncertainty to study three important issues the role of foa in incentivizing negotiated settlements the convergence of final offers and the normative effect of diversity of arbitrator opinion we show that increase in arbitral uncertainty increases the likelihood of negotiated agreements and make the final offers converge to each other risk aversion is not necessary for convergence of offers precision and mean of arbitral uncertainty matter differently and can be controlled separately moreover as also argued by the industry practitioners carefully selected level of diversity of opinion in the arbitrator roster increases the welfare of negotiating parties

competition for university places and parental time investments evidence from the united kingdom across the industrialized world college educated parents invest more time in their children relative to noncollege educated parents yet the reason for the education gradient in parental time investments is not well understood using 24 hour diary surveys since the 1970s we document an inverse u shape in the education gradient in the united kingdom theories unfolding gradually and monotonically cannot easily explain this pattern using an exogenous increase in the number of students going on to university in the 1980s we show that an alternative explanation based on competition for university places can explain the temporal and spatial variation in the education gradient jel j13 j24

does education expansion increase intergenerational mobility education expansion may lead to over education where the social connections of parents may exert more significant influence on the return to education of children with the assumption of a positive correlation between return on human capital and parental income in the presence of over education we show that i the expansion of education may cause horizontal inequity in education opportunities and inefficiency in human capital accumulation ii the positive correlation between return on human capital and parental income causes a more persistent intergenerational immobility iii an expansion of education especially higher education leads to more persistent intergenerational immobility

the changing roles of education and ability in wage determination this study examines changes in returns to formal education and cognitive skills over the past 20 years using the 1979 and 1997 waves of the national longitudinal survey of youth we show that cognitive skills had a 30 50 larger effect on wages in the 1980s than in the 2000s returns to education were higher in the 2000s these developments are not explained by changing distributions of workers observable characteristics or by changing labor market structure we show that the decline in returns to ability can be attributed to differences in the growth rate of technology between the 1980s and 2000s

education finance reform and the distribution of education resources between 1971 and 1996 opponents of local funding for public schools successfully challenged the constitutionality of school finance systems in sixteen states using the variation across states in the timing of these cases the authors investigate the impact of reform on the distribution of school resources their results suggest that court ordered finance reform reduced within state inequality in spending by 19 to 34 percent successful litigation reduced inequality by raising spending in the poorest districts while leaving spending in the richest districts unchanged thereby increasing aggregate spending on education reform led states to fund additional spending through higher state taxes copyright 1998 by american economic association

on the political economy of zoning abstract households choose a community in a metropolitan area and collectively set a minimum housing quality and a property tax to finance a local public good the collective imposition of a lower bound on housing consumption induces an income stratified equilibrium in a specification where meaningful community differentiation would not arise without zoning we show computationally that zoning restrictions are likely to be stringent with a majority facing a binding constraint in communities that permit it by inducing a stratified equilibrium zoning causes tiebout welfare gains in aggregate but with large welfare transfers relative to stratified equilibrium without zoning the zoning equilibrium is significantly more efficient as it reduces housing market distortions

fortunate sons new estimates of intergenerational mobility in the united states using social security earnings data previous studies relying on short term averages of fathers earnings have estimated the intergenerational elasticity ige in earnings to be approximately 0 4 due to persistent transitory fluctuations these estimates have been biased down by approximately 30 or more using administrative data containing the earnings histories of parents and children the ige is estimated to be around 0 6 this suggests that the united states is substantially less mobile than previous research indicated estimates of intergenerational mobility are significantly lower for families with little or no wealth offering empirical support for theoretical models that predict differences due to borrowing constraints

the economics of schooling production and efficiency in public schools n recent years public and professional interest in schools has been heightened by a spate of reports many of them critical of current school policy these policy documents have added to persistent and long standing concerns about the cost effectiveness and fairness of the current school structure and have made schooling once again a serious public issue as in the past however any renewed interest in education is likely to be short lived doomed to dissipate as frustration over the inability of policy to improve school practice sets in this frustration about school policy relates directly to knowledge about the educational production process and in turn to underlying research on schools although the educational process has been extensively researched clear policy prescriptions flowing from this research have been difficult to derive 2 there exists however a consistency to the research findings that does have an immediate application to school policy schools differ dramatically in quality

economic and mechanical models of intergenerational transmission the author critically examines gary beckers attempt to integrate the theory of income distribution intragenerational differences with the theory of mobility intergenerational differences in an economic model of the family he assesses beckers claims of distinctiveness integration explanatory power and surprise and arrives at a rather skeptical view of the contribution that the core of microeconomics has made to this study of the family a reply by becker is included pp 514 8 excerpt

does parents money matter abstract this paper asks whether parents income per se has a positive impact on children s abilities previous research has established that income is positively correlated across generations this does not prove that parents money matters however since income is presumably correlated with ability this paper estimates the impact of parents income by focusing on income variation due to factors union industry and job loss that arguably represent luck i find that changes in parents income due to luck have a negligible impact on children s human capital for most families although parents money does matter for families whose father has low education

business cycle implications of rising household credit market participation in emerging countries abstract a small open emerging economy model is extended with a household sector financial constraint to investigate business cycle implications of a rise in household access and use of financial services estimating the model on mexican data and consistent with empirical findings this paper finds that a rise in household credit market participation 1 yields larger aggregate consumption volatility and 2 amplifies the effects of shocks in the domestic economy particularly those transmitted through the interest rate channel the estimated model also highlights that 3 the lesser financial frictions are the lower is the increase of consumption growth and trade balance volatility driven by a rise in household credit market participation and 4 trend productivity shocks become a more relevant source of business cycle fluctuations finally standard measures of predictive accuracy suggest that the extended model outperforms the baseline emerging market model

does money matter for intergenerational income transmission the intergenerational income elasticity iie is a crucial measure of income mobility in this article we develop a structural model to examine the channels through which this elasticity operates using data from the panel study of income dynamics we separately identify the human capital and the financial components the human capital component examines the transmission of human capital independent of financial investments whereas the financial component examines the impact of income that is uncorrelated with human capital that is exogenous income using a two stage framework we show that the iie operates through both channels moreover our estimates show that the financial component may have a larger effect than previously estimated plausibly attributing to 36 of intergenerational income transmission indeed this result holds even when the financial component is defined in an incredibly narrow manner this suggests that cash payments could promote intergenerational mobility

galton versus the human capital approach to inheritance a century ago francis galton proposed a simple yet powerful model of inheritance gary backer s human capital model is often used to analyze important empirical and policy questions but does it dominate galton s from a positive point of view i derive nine implicatiions of the human capital approach that are distinct from galton s evidence from the pis scf and nlsy micro data sets as well as results reported in previous literatures suggest that four of the unique implications are refuted two implications are verified and mixed results are obtained for three others some extensions of economics recently developed by becker and others when applied to inheritance may improve economics predictions

accounting for intergenerational income persistence noncognitive skills ability and education we analyse in detail the factors that lead to intergenerational persistence among sons where this is measured as the association between childhood family income and later adult earnings we seek to account for the level of income persistence in the 1970 bcs cohort and also to explore the decline in mobility in the uk between the 1958 ncds cohort and the 1970 cohort the mediating factors considered are cognitive skills non cognitive traits educational attainment and labour market attachment changes in the relationships between these variables parental income and earnings are able to explain over 80 of the rise in intergenerational persistence across the cohorts

does school quality matter returns to education and the characteristics of public schools in the united states this paper estimates the effects of school quality measured by the pupil teacher ratio average term length and relative teacher pay on the rate of return to education for men born between 1920 and 1949 using earnings data from the 1980 census we find that men who were educated in states with higher quality schools have a higher return to additional years of schooling rates of return are also higher for individuals from states with better educated teachers and with a higher fraction of female teachers holding constant school quality measures however we find no evidence that parental income or education affects average state level rates of return

changes in the characteristics of american youth implications for adult outcomes we examine changes in the characteristics of american youth between the late 1970s and the late 1990s with a focus on characteristics that matter for labor market success the current generation is more skilled than the previous one blacks and hispanics have gained relative to whites and women have gained relative to men however the skill distribution has widened overall shifts in parental education generate many of the observed changes we also provide speculative estimates suggesting that if recent trends in technology and the supply of human capital continue wage inequality will increase substantially by 2025

world shocks world prices and business cycles an empirical investigation abstract svar models that include a single world price such as the terms of trade predict that world shocks explain a small fraction of movements in domestic output typically less than 10 this paper presents an empirical framework in which multiple commodity prices transmit world disturbances estimates on a panel of 138 countries over the period 1960 2015 indicate that world shocks explain on average 33 of output fluctuations in individual economies this figure doubles when the model is estimated on post 2000 data the findings reported here suggest that one world price specifications significantly underestimate the importance of world shocks for domestic business cycles

life cycle variations in the association between current and lifetime income replication and extension for sweden we apply haider and solon s generalized errors in variables model to swedish income tax data to produce estimates of the association between current and lifetime income our estimates demonstrate strong life cycle patterns this implies that the widespread use of current income as a proxy for lifetime income leads to inconsistent parameter estimates i e life cycle bias even when the proxy is used as the dependent variable estimates for comparable cohorts of swedish and american men demonstrate surprising similarities there are however significant gender and cohort differences in this association that lead to statistically significant and quantitatively meaningful differences in life cycle biases

legal constraints and the choice of educational grant structures recent empirical work suggests that legalconstraints are significant in choosingstate educational grant structures unfortunately the literature has not takensuch constraints into account thus callinginto question particular grant structurerecommendations this paper studies theconditions under which a legislature underorder to reform its educational grantstructure prefers foundation grants overdistrict power equalization grants atheoretical model is presented in which thechoice is shown to depend on the legalbasis of the court s decision and theempirical validity of this conclusion isdemonstrated using connecticut data and aseparate model of school districtexpenditure choice

the terms of trade the real exchange rate and economic fluctuations this paper examines the relationship between terms of trade and business cycles using a three sector intertemporal equilibrium model and a large multicountry database results show that terms of trade shocks account for nearly one half of actual gdp variability the model explains weak correlations between net exports and terms of trade the harberger laursen and metzler effect and produces large and weakly correlated deviations from purchasing power parity and real interest rate parity terms of trade shocks cause real appreciations and positive interest differentials although productivity shocks have opposite effects the puzzle that welfare gains of international asset trading are negligible is left unresolved copyright 1995 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

primary commodity prices manufactured goods prices and the terms of trade of developing countries what the long run shows the authors revisit in this article the empirical foundation of the alleged secular decline in the prices of primary commodities relative to those of manufactures they use a newly constructed index of commodity prices and two modified indexes of manufactured good prices and find that from 1900 to 1986 the relative prices of all primary commodities fell on trend by 0 5 percent a year and those of nonfuel primary commodities by 0 6 percent a year they thus confirm the sign but not the magnitude of the trend implicit in the work of prebisch but even the more limited secular decline shown by their relative price indexes may be magnified by an incomplete account of quality improvements in manufactures they then show that the evolution of terms of trade of nonfuel primary commodities is not the same as that of the net barter terms of trade of non oil exporting developing countries finally they find that despite the decline that has probably occurred during the current century in the terms of trade of nonfuel primary commodities the purchasing power of total exports of these products has increased considerably similarly the fall that may have occurred after world war ii in the net barter terms of trade of developing countries seems to have been more than compensated for by the steady improvement in their income terms of trade

was this time different fiscal policy in commodity republics abstract we revisit the issue of fiscal procyclicality in commodity rich nations commodity republics in the nomenclature of this paper since commodity prices are plausibly a main driver of fiscal policy outcomes in these countries we focus on the behavior of fiscal variables across the commodity cycle in contrast to behavior across the output cycle which has been the main focus of earlier research on fiscal procyclicality we present evidence of reduced fiscal policy procyclicality in a number of countries our empirical results suggest that improvements in institutional quality have led to a more countercyclical fiscal policy stance in a number of countries the presence of fiscal rules also seems to have made a difference countries that use them displayed a larger shift toward fiscal counter cyclicality between the two episodes

efficiency and disagreement in repeated infinite horizon bargaining games m satterthwaite and s williams 1987 characterize regular equilibria of the sealed bid k double auction that in some cases are efficient the sealed bid k double auction specifies one period of simultaneous offers and requires agents to sometimes disagree at the end of the first period when gains from continued bargaining exist this paper constructs a theory of disagreement based on reputation in repeated bargaining games agents make the offers of a satterthwaite williams regular equilibrium in the first round of a negotiation then if no trade results the agents terminate the negotiation in spite of possible gains from the option of continued bargaining copyright 1991 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

government spending and intergenerational mobility abstract the standard model of intergenerational mobility suggests that holding constant endowments investments in children s human capital increases their future income if true the source of the investment should not matter even though almost all research on intergenerational mobility considers only parental investment much government spending is intended to reduce the investment gap between rich and poor children we assess the relationship between government spending and intergenerational economic mobility using data from the panel study of income dynamics and data on state spending from the u s census of governments we find greater intergenerational mobility in high spending states compared to low spending states two additional findings also suggest that government spending increases intergenerational mobility first the difference in mobility between advantaged and disadvantaged children is smaller in high spending compared to low spending states and second expenditures aimed at low income populations increase the future income of low income but not high income children

bargaining with noisy delegation principals delegate to an agent in the context of the nash bargaining model but communicate instructions to their agents imperfectly numerical methods are used to find a unique equilibrium in the principals strategies agents fail to agree with a positive probability invoking a secondary mechanism for the resolution of disputes such as arbitration comparative statics are informative the risk sensitivity of the nash bargaining solution is mitigated but not eliminated as uncertainty goes to zero a stable unique limiting equilibrium is identified from the set of multiple equilibria identified in a model in which principals delegate without trembles

changing roles of ability and education in u s intergenerational mobility using data on young adults from the 1979 and 1997 national longitudinal survey of youth we investigate the changing roles of ability and education in the transmission of economic status across generations we find that ability plays a substantially diminished role for the most recent cohort whereas education plays a much larger role the first finding results primarily from a smaller effect of children s ability on status the second from an increased correlation between parental status and educational attainment a replication of the analysis by gender reveals that the changes in the role of ability are largely driven by men whereas the changes in education s role are largely driven by women jel j62 i24

commodity booms and busts in emerging economies abstract emerging economies particularly those dependent on commodity exports are prone to highly disruptive economic cycles this paper proposes a small open economy model for a net commodity exporter to quantitatively study the triggers of these cycles the economy consists of two sectors one of which produces commodities with prices subject to exogenous international fluctuations these fluctuations affect both the competitiveness of the economy and its borrowing terms as higher commodity prices are associated with lower spreads between the country s borrowing rate and world interest rates both effects jointly result in strongly positive effects of commodity price increases on gdp consumption and investment and a negative effect on the total trade balance furthermore they generate excess volatility of consumption over output and a large volatility of investment besides explicitly incorporating a double role of commodity prices the model structure nests the various candidate sources of shocks proposed in previous work on emerging economy business cycles estimating the model on argentine data we find that the contribution of commodity price shocks to fluctuations in post 1950 output growth is in the order of 38 in addition commodity prices account for around 42 and 61 of the variation in consumption and investment growth respectively we find transitory productivity shocks to be an important driver of output fluctuations exceeding the contribution of shocks to the trend which though smaller is not negligible

the inheritance of inequality how level is the intergenerational playing field what are the causal mechanisms that underlie the intergenerational transmission of economic status are these mechanisms amenable to public policies in a way that would make the attainment of economic success more fair these are the questions we will try to answer

a multistage model of bargaining this paper presents a simple multistage model of bargaining wherein a seller makes an offer that can be either accepted or refused if rejected the process continues how the seller s ability to make commitments affects bargaining outcomes is analysed by comparing the commitment equilibria to those arising when commitment is impossible the effects of increasing uncertainty about preferences and varying the length of the bargaining horizon are analysed the ways in which the bargaining environment can be changed to improve outcomes are discussed

sequential bargaining with incomplete information this paper describes a simple two person two period bargaining game and solves it using the concept of perfect bayesian equilibrium in which the actions of each player convey information which is used by his opponent the paper examines the effects of changes in bargaining costs the size of the contract zone and the length of the bargaining process on such aspects of the solution as the probability of impasse and the likelihood of concessions the combination of information transfer and the lack of pre commitment embodied in perfectness yields many surprising results common perceptions about the effects of parameter changes on bargaining processes are suspect and should be checked in the particular game being discussed

a short note on updating the grilli and yang commodity price index the grilli and yang commodity price index is one of the most widely used commodity price series in the applied economics literature this note provides some practical advice on updating this data series by listing the base period index values identifying relevant data sources and describing a method for computing subindex weights in 1988 enzo grilli and maw cheng yang published their seminal article on the long run development of an index of 24 primary commodity prices gycpi deflated by an index of manufactured goods unit values the sample of average annual primary commodity prices covers about 54 percent of the primary commodity trade in the index reference period 1977 79 the deflators considered for manufacturing prices were the u s manufacturing price index usmpi and the manufacturing unit value index muv 1widely used and discussed the grilli and yang data set has been extended by a number of researchers the data have been employed in a variety of contexts in later studies thus the gycpi data continue to enjoy wide popularity in their own right and as a benchmark for new approaches to empirical studies

using market valuation to assess public school spending abstract we examine whether school expenditures are valued by potential residents and whether the current level of public school provision is inefficient by estimating the effect of state education aid on residential property values we find evidence that overall state aid is valued by potential residents and that school districts do not overspend on education however we find that districts may overspend in areas where residents have fewer schooling options but find no difference in efficiency by the degree of district unionization one interpretation of these results is that increased competition may reduce overspending on public schools in some areas

decomposing economic mobility transition matrices the intergenerational mobility literature has consistently found that the distribution of adult economic outcomes differ markedly depending on parental economic status yet much remains to be understood about the drivers or determinants of this relationship existing literature on potential drivers focuses primarily on mean effects to help provide a more complete picture of the potential forces driving economic persistence we propose a method to decompose transition matrices and related indices specifically we decompose differences between an estimated transition matrix and a benchmark transition matrix into portions attributable to differences in characteristics between individuals from different households a composition effect and portions attributable to differing returns to these characteristics between individuals from different households a structure effect we also incorporate a detailed decomposition based on copula theory that decomposes the composition effect into portions attributable to specific covariates and their interactions we illustrate our method using data on white men from the 1979 national longitudinal survey of youth estimation is based on an extended mincer equation that includes cognitive and non cognitive measures to address the potential endogeneity of education we implement an iv strategy that allows us to estimate causal effects and investigate the role of unobserved ability