can producer currency pricing models generate volatile real exchange rates if the elasticities of substitution between traded and nontraded and between home and foreign traded goods are sufficiently low then the real exchange rate generated by a model with full producer currency pricing is as volatile as in the data

boom and bust cycles external imbalances and the real exchange rate when the current account balance and net capital outflows do not exactly offset each other international payment flows arise payment flows into a country push the real exchange rate up payment outflows push it down this article uses a model of optimal consumption and portfolio choice to determine the factors that drive international payment flows during boom and bust cycles it shows that during such episodes capital inflows first exceed the deficit on current account strengthening the currency later on when the return on domestic capital reverts to its normal level the current account recovers yet the overall decline of the net foreign asset position provokes a fall of the real exchange rate even below its initial level case studies of countries experiencing rapid economic expansions followed by economic and financial meltdowns confirm the article s theoretical predictions

accounting for changes in the labor supply of recently divorced women how much of the rise in women s labor supply associated with divorce can be attributed to observable changes in the wife s environment such changes include a reduction in nonwage family income a rise in her after tax wage rate changes in the number of children present and a reduction in husband s hours at home we use panel data to address this question when we do not account for individual effects we find that changes in observables are important but a residual effect dependent solely on marital status remains in estimates that do control for individual heterogeneity observable changes in the wife s environment account for even less of the total shift in labor supply

revisiting the importance of non tradable goods prices in cyclical real exchange rate fluctuations abstract in an influential paper engel 1999 argues that essentially all the fluctuations in the real exchange rate can be attributed to fluctuations in the relative price of traded goods and that only a small part of the fluctuations can be attributed to changes in the relative price of non tradables we revisit this important issue and our main finding suggests that the relative distribution wedge i e the relationship between traded goods prices at the dock and the retail prices of those goods is key to understanding real exchange rate fluctuations importantly our results suggest that variations in the relative wedge are driven by fluctuations in mark ups and not in distribution costs

labour supply estimation and public policy abstract economists devote considerable energies towards refining their econometric techniques to overcome difficulties connected with conducting empirical research despite advances in technique it is not clear whether further refinement in this direction is worthwhile for policy purposes it may be that no further amount of statistical adjustment of inadequate data will increase understanding and that better data is simply necessary to add to our knowledge but rarely is sufficient credit paid to new forms of data in short econometric technique is emphasized to the neglect of data innovation as if new data were merely lying about waiting for an ingenious suggestion for use this paper surveys advances of the last twenty five years in estimating labour supply for policy purposes with a view towards appreciating the relative contribution of both improvements in econometric technique as well as developments of new data after briefly detailing the key parameters which economists have sought to estimate we describe the early first generation research circa 1970 which is plagued by problems of unobservable variables measurement errors truncation and selectivity bias and non linear budget constraints second generation research constitute attempts to resolve one or more of these difficulties and the respective contribution of econometric technique and new data is acknowledged and assessed including the contribution of data generated by large scale social experiments in which participants are randomly assigned to different guaranteed income plans and their labour supply behaviour measured

capital flows and real exchange rate fluctuations following spain s entry into the european community abstract spain s 1986 entry into the european community was followed by a dismantling of restrictions on international capital flows initial trade deficits and real exchange rate appreciation were followed by trade surpluses and real exchange rate depreciation this paper analyzes spain s financial liberalization using a dynamic general equilibrium model with a traded and nontraded good where a capital poor country opens itself to its capital rich neighbors a carefully calibrated model has trouble accounting for the large changes in relative prices observed given the small changes in quantities variants of the model with frictions in factor mobility between sectors fare better

a dynamic general equilibrium analysis of deviations from the laws of one price abstract using disaggregated west german prices this study documents movements in relative export and producer prices and in relative import and producer prices which are variable and highly autocorrelated this suggests the presence of time varying persistent deviations from the laws of one price perfect competition monopoly and monopolistic competition with constant mark up pricing are inconsistent with the variability in relative export and producer prices furthermore cournot oligopoly is inconsistent with the variability in relative import and producer prices a dynamic general equilibrium model with differentiated oligopolistic competition and strategic pricing is shown to generate variable and persistent movements in both measures of relative prices

real exchange rates and relative prices an empirical investigation abstract this paper uncovers a striking empirical regularity the consumer price of a good relative to a different good within a country tends to be much less variable than the price of that good relative to a similar good in another country this fact seems to hold for all goods except very simple homogeneous products models of real exchange rates are likely to have predictions regarding this relation so this fact may provide a useful gauge for discriminating among models

tastes and technology in a two country model of the business cycle explaining international trade on international financial markets allows people to insure country specific risk and smooth consumption intertemporally equilibrium models of business cycles with trade on global financial markets typically yield international consumption correlations near one and excessive volatility of investment the authors incorporate nontraded goods in the model and find that the implications for aggregate consumption investment and the trade balance are consistent with business cycle properties of industrialized countries however the model driven by technology shocks alone yields counterfactual implications for comovements between consumption and prices at the sectoral level taste shocks produce price quantity relationships more consistent with the data copyright 1995 by american economic association

new evidence on labor supply employment versus hours elasticities by sex and marital status using the tri annual micro panel data of the survey of income and program participation we estimate fixed effects labor supply models separating the extensive and intensive margins the employment elasticity is 0 6 for single men versus 1 1 for married men the employment elasticity is 2 4 for single women versus 1 8 for married women the compensated hours worked elasticity is 0 4 for employed single and married men and 0 7 for employed single and married women the implied aggregate employment elasticity of 1 5 and hours per employee elasticity of 0 5 indicate employment fluctuations account for three fourths of wage induced variation in labor hours

married womens tastes and the decision to participate in the labour market results from a fixed effects model in the paper we report estimates from two logit models of women s labour force participation a model with out fixed effects estimated from cross sectional data indicates a significant postive relation between work experience and particiption we ask whether the relation is due to a causal influence extered by the former variable on the latter or to a common underlying variable taste for market attachement to answer this question we present results from a fixed effects model estimated from panel data in this model the estimated coefficients of experience are insignificant suggestion that a taste for market attachement underlies both experience and participation is the presence of preschool children

an empirical model of labor supply in a life cycle setting this paper formulates and estimates a structural intertemporal model of labor supply using theoretical characterizations derived from an economic model of lifetime behavior a two step empirical analysis yields estimates of intertemporal and uncompensated substitution effects which provide the information needed to predict the response of hours of work to life cycle wage growth and shifts in the lifetime wage path

no fault divorce laws and the labor supply of women with and without children we use a difference in difference in difference estimator to compare changes in labor force participation weeks and hours of work associated with no fault divorce laws allowing for differential responses for married women with and without children although other research has found that the labor supply of women in general does not respond to no fault divorce laws we find that no fault divorce laws are associated with increases in the labor supply of married mothers relative to married nonmothers even after controlling for changes in female labor supply in states without no fault divorce laws and for property division rules associated with the laws

u s real exchange rate fluctuations and relative price fluctuations abstract traditional theory attributes fluctuations in real exchange rates to changes in the relative price of nontraded goods this paper studies the relation between the united states bilateral real exchange rate and the associated bilateral relative price of nontraded goods for five of its most important trade relationships we find that this relation depends crucially on the choice of price series used to measure relative prices and on the choice of trade partner the relation is stronger when we measure relative prices using producer prices rather than consumer prices the relation is stronger the more important is the trade relationship between the united states and a trade partner even in cases where there is a strong relation between the real exchange rate and the relative price of nontraded goods however a large fraction of real exchange rate fluctuations is due to deviations from the law of one price for traded goods

labor supply hours constraints and job mobility if hours can be freely varied within jobs the effect on hours of changes in preferences for those who do change jobs should be similar to the effect on hours for those who do not change jobs conversely if employers restrict hours choices then changes in preferences should affect hours more strongly when the job changes than when it does not change for a sample of married women we find that changes in many of the labor supply preference variables produce much larger effects on hours when the job changes

the relevance of p star analysis to uk monetary policy recent articles have attempted to restore the use of a simple measure of the money supply as an indicator of future price levels p star and to reestablish a causal link from money to prices in this paper we argue that the p star approach is flawed it is certainly more complex than traditional monetarist approaches but the fundamental questions of causality are in no way either affected or resolved we argue that the p star relationship does not have a causal link with prices but rather the causality runs from prices to money we also find that there is some causality running from money to real income so that monetary conditions do seem to have some predictive power for future levels of activity copyright 1994 by royal economic society

human capital uncertain wage distributions and occupational and educational choices this study develops a model of occupational and educational choices individuals are assumed to choose careers based on expected utility maximi zation given uncertainty concerning future earnings the model directly leads to estimable equations relating career choices to the moments of occupational earnings distributions we report maximum likelihood estimates using a sample of high school graduates from maryland school districts 1951 1969 the eight observed career choices respond as expected to the first and second moments of the earnings distribution and to a measure of school quality reasonable estimates of human capital production and supply elasticities are obtained for the career choices

international prices costs and markup differences relative cross border retail prices in a common currency comove closely with the nominal exchange rate using product level prices and wholesale costs from a grocery chain operating in the united states and canada we decompose this variation into relative costs and markup components the high correlation of nominal and real exchange rates is driven mainly by changes in relative costs national borders segment markets retail prices respond to changes in costs in neighboring stores within the same country but not across the border prices have a median discontinuous change of 24 percent at the border and 0 percent at state boundaries jel f31 l11 l81

data watch the panel study of income dynamics by collecting annual economic and demographic information from a large and representative sample of u s households for over a quarter century the panel study of income dynamics has compiled a remarkably useful set of microdata this article describes the psid and how its unique longitudinal and in some cases intergenerational features have been used for studies of intertemporal models of labor supply wages employment and job tenure consumption poverty dynamics extended family behavior and the intergenerational transmission of economic status

life cycle employment and fertility across institutional environments in this paper we formulate a dynamic utility maximization model of female labor force participation and fertility choices and estimate approximate decision rules using data on married women in italy spain and france the pattern of estimated state dependence effects across countries is consistent with aggregate patterns in part time employment and child care availability suggesting that labor market rigidities and lack of child care options are important sources of state dependence simulations of the model reveal that italian and spanish women would substantially increase their participation rates were they to face the french institutional environment

the effect of health insurance on married female labor supply we investigate the effects of employer provided health insurance on the labor supply of married women because health benefits commonly are restricted to full time workers wives who prefer to work short hours but have no alternate source of insurance may work long hours in order to acquire coverage for their families we use data from the april 1993 current population survey benefits supplement and we exploit variation in coverage under husbands health plans to estimate the magnitude of this effect our reduced form labor supply models indicate a strong negative effect of husbands health insurance on wives work hours particularly in families with children this effect persists when we replace husbands insurance coverage with husbands offered insurance and when we use a multinomial logit model that accounts for unobserved heterogeneity in family labor supply preferences

nontraded goods market segmentation and exchange rates abstract empirical evidence suggests that movements in international relative prices are large and persistent nontraded goods both in the form of final consumption goods and as an input into the production of final tradable goods are an important aspect driving international relative price movements in this paper we show that nontraded goods play an important role in the context of an otherwise standard open economy macromodel our quantitative study with nontraded goods generates implications along several dimensions that are more closely in line with the data relative to the model that abstracts from nontraded goods

state dependence serial correlation and heterogeneity in intertemporal labor force participation of married women a dynamic search framework is developed to analyze the intertemporal labor force participation behavior of married women using longitudinal data to allow for a rich dynamic structure the sensitivity to alternative distributional assumptions is evaluated using linear probability and probit models the dynamic probit models are estimated using maximum simulated likelihood msl estimation to overcome the computational difficulties inherent in maximum likelihood estimation of models with nontrivial error structures the results find that participation decisions are characterized by significant state dependence unobserved heterogeneity and negative serial correlation in the error component the hypothesis that fertility decisions are exogenous to women s participation decisions is rejected when dynamics are ignored however there is no evidence against this hypothesis in dynamic model specifications women s participation response is stronger to permanent than current nonlabor income reflecting unobserved taste factors

the solow growth model vector autoregression var and cross section time series analysis the paper examines whether the mankiw et al results regarding the solow model are specific tothe statistical methodology used therefore instead of using cross section data annual data were used and the solow model was investigated using a vector autoregression var analysis for the g7 countries and cross section time series data for the g3 countries analysis shows that in both cases the mankiw et al results generally hold it also shows that the use of annual data can play an important and complementary role in revealing the differences in the growth process between individual countries

credit constraints and the labour supply of immigrant families in canada the hours of work decisions in immigrant and nonimmigrant families are compared using an intertemporal labor supply model estimated over data from the 1981 and 1991 census of canada surveys the family investment hypothesis is evaluated the hypothesis states that the immigrant family is unable to borrow in the first years after migration and that the immigrant wife responds by working longer hours so as to support family consumption and her husband s labor market adjustment the empirical evidence in general supports the hypothesis since credit constraints are found to significantly distort the labor supply decisions of recently arrived immigrant families

part time participation over the life cycle among married women who work in the market reported here are the estimates from two logit models of married women s labour force employment a pooled unconditional logit that does not control for fixed effects and a conditional logit model incorporating fixed effects both sets of results indicate the presence of occupational segregation between part time and full time employment since the amount of part time experience a woman has obtained increases the probability of part time employment these results are in agreement with those reported in previous studies that the presence of preschool children differentially encourages part time employment

the life cycle labor supply of married women and its implications for household income inequality i introduction there has been an abundance of papers on female labor supply over the years but most do not rigorously test the life cycle model of labor supply and none focus on the potentially important role of nonlabor income in shaping labor supply 1 their primary focus is on the wage elasticity and most recently on the intertemporal wage elasticity the intertemporal wage elasticity or the change in labor supply as wages change over the woman s life cycle is economically cleaner to interpret because it contains only a substitution effect the income effect is constant over the life cycle but this advantage comes at a cost we learn nothing about why labor supply varies across women such variability is extremely important for policy purposes because for example it has implications for income inequality the popular press often creates the impression that income inequality is worsening as upper income men marry upper income women the implication is that the rising labor force participation rate of women is increasing family income inequality on the other hand it is possible that the income of wealthy husbands exerts a negative income effect on their wives labor supply so income inequality is little changed or declines as participation rates of wives rise the objectives of this paper are twofold to estimate a life cycle labor supply model with panel data that emphasizes the husband s income effect on the wife s hours of work and to draw implications for family income inequality i provide new estimates of the income elasticity that nest the life cycle hypothesis of labor supply with the current income hypothesis the life cycle model suggests that it is the permanent income of the husband that matters not his current income yet nearly all models of female labor supply include only current income the exception is jakubson 1988 i include both and add a varying parameters specification for changes in tastes the implications for income inequality arise as an application of the life cycle labor supply model a summary of the empirical results is contained in the conclusion this paper is unusual in that it covers two relatively disparate topics though their linkage is important and demands their integration in one paper ii specification of the labor supply model following the standard life cycle labor supply model assume that an individual maximizes lifetime utility v where utility is separable over time and separable between consumption and leisure 2 mathematical expression omitted where c and l are consumption and hours of leisure for individual i rho is the rate of time preference gamma sub it reflects consumers tastes for home production leisure etc and omega is less than 1 is fixed across individuals the lifetime budget constraint is mathematical expression omitted for interest rate r wage rate w sub it hours of work h sub it and the present value of nonlabor income a sub i for an interior solution the leisure equation is 2 ln l sub it 1 omega 1 ln lambda sub i ln gamma sub it ln omega ln 1 r sup t 1 rho sup t ln w sub it where lambda sub i is the marginal utility of lifetime wealth the marginal utility of wealth lambda sub i is a fixed effect that captures all the permanent income effects that influence labor supply including expected lifetime potential wages and lifetime nonlabor income for the labor supply of a married woman the largest wealth effect is likely to be her husband s income as it enters through lambda an increase in the husband s lifetime earnings will decrease the marginal utility of lifetime wealth and decrease the wife s labor supply 3 incorporating this relationship in the parameterization of lambda mathematical expression omitted where mathematical expression omitted is the husband s lifetime income education e

border prices and retail prices abstract we analyze retail prices and at the dock import prices of specific items in the bureau of labor statistics bls cpi and ipp databases using both databases simultaneously to identify items that are identical in description at the dock and when sold at retail this identification allows us to measure the distribution wedge associated with bringing traded goods from the point of entry into the united states to their retail outlet we find that overall u s distribution wedges are 50 70 around 10 to 20 percentage points higher than that reported in the literature we discuss the implications of this for measuring the size of the pure tradeables sector exchange rate pass through and real exchange rate determination we find that distribution wedges are very stable over time but there is considerable variation across items there is some variation across the country of origin for the imported item for our major trading partners but not as much as the cross item variation we also investigate the determinants of distribution wedges finding that wedges do not vary systematically with exchange rates but are related to other features of the micro data

the sensitivity of an empirical model of married women s hours of work to economic and statistical assumptions this study undertakes a systematic analysis of several theoretic and statistical assumption s used in many empirical models of female labor supply using a singl e data set psid 1975 labor supply data the author is able to replic ate most of the range of estimated income and substitution effects fo und in previous studies in this field he undertakes extensive specif ication tests and finds that most of this range should be rejected du e to statistical and model misspecifications the two most important assumptions appear to be the tobit assumption used to control for sel f selection into the labor force and exogeneity assumptions on the wi fe s wage rate and her labor market experience copyright 1987 by the econometric society

consistent estimation of censored demand systems using panel data we derive a joint continuous censored commodity demand system for panel data applications unobserved heterogeneity is controlled for using a correlated random effects specification and a generalized method of moments framework used to estimate the model while relatively small differences in elasticity estimates are found between a flexible random effects specification and one that restricts the random effect coefficient to be time invariant larger differences are observed when comparing the flexible model to a pooled cross sectional estimator the results suggest the limited ability of such estimators to control for preference heterogeneity and unit value endogeneity leads to parameter bias

jointly determined saving and fertility behaviour theory and estimates for germany italy uk and usa abstract the comparative statics predictions of models of the joint determination of household saving and fertility are derived under various hypotheses self interest altruism of parents towards children altruism of children towards parents etc and compared with those of models which determine saving under the assumption of exogenous fertility country specific saving and fertility equations are then estimated using time series data for germany italy uk and usa for each of the countries considered the estimates are consistent with the hypothesis that saving and fertility are jointly determined by self interested parents and reject the alternative hypotheses the data also show that a self financing expansion of social security discourages fertility and generally raises household saving

intertemporal substitution in labor supply evidence from micro data the sensitivity of the supply of labor to intertemporal variation in the wage is an important issue in macroeconomics the analysis of social security and pensions and the study of life cycle patterns of work this paper explores two approaches to the measurement of intertemporal substitution that have appeared in the literature the first approach is to use consumption to control for wealth and unobserved expectations about future wages in the labor supply equation the second approach is to estimate a first difference equation for hours in which labor supply from the previous period serves as a control for wealth and wage expectations the results indicate that intertemporal substitution elasticity for married men is positive but small

hospital cost containment and length of stay an econometric analysis 1 introduction concern in the united states over the rising share of national resources consumed by health care costs has become widespread in recent years hospitals accounting for approximately 40 of this expense have been a primary focus of cost control strategy as both government and private insurers have pressured them to absorb an increasing portion of the financial risks associated with their treatment decisions a predominant response to these pressures has been reduction in the number of days that patients remain hospitalized perceptions of compromised medical care quality following this practice and others have prompted policy makers to consider stricter regulation of the conduct of health care providers and insurance organizations the length of hospitalization issue has become prominent with the general public and for some procedures has been widely criticized for being extreme maternity and newborn care for example became a heavy target for insurers who in many cases were limiting reimbursement for stays to only 24 hours this case became very controversial eventually rising to high political ground and resulting in recent congressional action requiring insurers to cover 48 hours of hospitalization for these patients the u s congress as well as numerous state legislatures currently face a number of articles of proposed legislation that directly or indirectly regulate the length of hospitalizations these include measures that give physicians more authority over treatment decisions that make health plans legally liable for their actions and that establish appeals procedures for treatment not deemed medically necessary or appropriate by health plans while controversy surrounding length of stay reductions have focused on the quality of service being delivered by the health care system attention given to the economics of this strategy is limited it is unclear to what extent length of stay reductions are responsible for decreasing hospital costs presumably the inpatient days that are now being eliminated are the least costly ones a provocative stance has been taken by reinhardt 1996 who argues that the strategy of length of stay reduction in the united states is single minded and unproductive he hypothesizes that the hospital is not the expensive setting that is commonly perceived researchers have tracked carefully the trends in hospital lengths of stay and have explored the effects of various reimbursement strategies on hospital utilization previous studies have also addressed the potential tradeoff between length of stay and quality of care if quality has not diminished then longer hospitalizations may have been largely superfluous this is a clinical issue little empirical effort however has been aimed at determining what costs are actually saved by these measures this paper aims to provide evidence on this point rather than asking what health interests might be foregone as a result of shorter hospitalizations the inquiry here is what economic benefits are being gained this research takes a hospital cost function approach to measuring the cost savings achieved by u s hospitals through reduction in length of hospital stays the remainder is organized as follows section 2 provides background to the problem and the next section describes an econometric model for addressing it section 4 presents the data and describes the functional form section 5 discusses empirical results and section 6 provides discussion the final section concludes 2 background and institutional framework broad attempts at controlling hospital expenditures began in the 1980s the most notable single event was the step taken in 1983 by medicare the government program of health care funding for the elderly and hospitals largest third party payer medicare adopted the prospective payment system pps that altered the basis of reimbursement from reasonable cost to prices based on historical costs for specific diagnoses across hospitals

worker displacement and the added worker effect this article examines the added worker effect which is the labor supply response of wives to their husbands job losses unlike past studies which focused on the husbands current unemployment status this article analyzes wives responses before and after job losses to examine the life cycle labor supply adjustments using panel study of income dynamics data reveals small predisplacement effects and large persistent postdisplacement effects the timing of the responses differs with type of displacement possibly because of differences in the information acquired before job loss long run labor supply increases compensate for over 25 of the husbands lost income

haircuts or hysteresis sources of movements in real exchange rates abstract we empirically assess the importance of two sources of real exchange rate movements in models where ppp holds only among traded goods real exchange rate variation results from relative price movements within countries an alternative explanation relies on hysteretic price setting and nominal exchange rate changes using disaggregated price data from 11 oecd nations we find some support for the non traded goods models for example prices of haircuts in canada and the united states are unrelated in the long run we find stronger evidence to support models that emphasize sticky prices transportation costs or other impediments to frictionless trade

the sensitivity of labor supply parameter estimates to unobserved individual effects fixed and random effects estimates in a nonlinear model using panel data life cycle models of labor supply predict the presence of an unobserved individual effect in the labor supply equation that is correlated with observed explanatory variables leading to an omitted variables bias in the cross section i examine the sensitivity of parameter estimates to the presence of these effects using fixed and random effect tobit models the estimated effects of children are too large in the cross section the estimated intertemporal substitution elasticity ranges from 1 1 to 1 7 the results are similar for fixed and random effects models and for models using different specifications of the dependent variable

simulation estimation of two tiered dynamic panel tobit models with an application to the labor supply of married women in this paper a computationally practical simulation estimator is proposed for the two tiered dynamic panel tobit model originally developed by cragg 1971 the log likelihood function simulated through procedures based on a recursive algorithm formulated by the geweke hajivassiliou keane simulator is maximized the simulation estimators are then applied to study the labor supply of married women the rich dynamic structure of the labor force participation decision as well as hours worked decisions that are conditional on the participation of married women are identified by using the proposed simulation estimators the average partial effects of the participation and hours worked decisions for married women in response to fertility decisions and increases in the husband s income are also investigated it is found that the hypothesis that the fertility decision is exogenous and the hypothesis that the husband s income is exogenous to married women s labor supply function are both rejected in the dynamic and static two tiered models moreover children aged between 6 and 13 years old may have a negative impact on the hours worked decision for married women that is conditional on their participation however these children may provide some positive incentives for married women to participate in the labor force copyright 2009 john wiley sons ltd

accounting for incomplete pass through recent theoretical work has suggested a number of potentially important factors in causing incomplete pass through of exchange rates to prices including markup adjustment local costs and barriers to price adjustment we empirically analyze the determinants of incomplete passthrough in the coee industry the observed pass through in this industry replicates key features of pass through documented in aggregate data prices respond sluggishly and incompletely to changes in costs we use microdata on sales and prices to uncover the role of markup adjustment local costs and barriers to price adjustment in determining incomplete pass through using a structural oligopoly model that nests all three potential factors the implied pricing model explains the main dynamic features of short and long run pass through local costs reduce long run pass through by a factor of 59 relative to a ces benchmark markup adjustment reduces pass through by an additional factor of 33 where the extent of markup adjustment depends on the estimated super elasticity of demand the estimated menu costs are small 0 23 of revenue and have a negligible eect on long run pass through but are quantitatively successful in explaining the delayed response of prices to costs we nd that delayed passthrough in the coee industry occurs almost entirely at the wholesale rather than the retail level

classification error in dynamic discrete choice models implications for female labor supply behavior two key issues in the literature on female labor supply are i whether persistence in employment status is due to unobserved heterogeneity or state dependence and ii whether fertility is exogenous to labor supply until recently the consensus was that unobserved heterogeneity is very important and fertility is endogenous hyslop 1999 challenged this using a dynamic panel probit model of female labor supply including heterogeneity and state dependence he found that adding autoregressive errors led to a substantial diminution in the importance of heterogeneity this in turn meant he could not reject that fertility is exogenous here we extend hyslop 1999 to allow classification error in employment status using an estimation procedure developed by keane and wolpin 2001 and keane and sauer 2005 we find that a fairly small amount of classification error is enough to overturn hyslop s conclusions leading to overwhelming rejection of the hypothesis of exogenous fertility

new estimates of intertemporal substitution abstract this paper estimates the intertemporal elasticity of substitution for married males taking into account that many individuals are at a corner solution for weeks worked by virtue of working year round the fact that these individuals do not choose to engage in much intertemporal substitution may simply indicate that the corner solution inhibits their ability to do so rather than indicating a low desire to intertemporally substitute our estimates are able to distinguish between these two cases with the results showing much higher intertemporal elasticities of substitution than reported in earlier studies

accounting for u s real exchange rate changes this study measures the proportion of u s real exchange rate movements that can be accounted for by movements in the relative prices of nontraded goods the decomposition is done at all possible h

testing whether unemployment represents intertemporal labour supply behaviour in the lucas rapping 1969 model of the labour market fluctuations in unemployment represent individuals optimally adjusting their labour supply behaviour in response to fluctuations in wage rates over the business cycle in this paper i propose and implement a misspecification test of the lucas rapping treatment of unemployment as labour supply behaviour using panel data this test extends previous such work with micro data by simultaneously allowing for intertemporal substitution uncertainty and endogenous unemployment using the standard specification of intertemporal labour supply behaviour i find strong evidence against this interpretation of unemployment there are two possible interpretations of the test results the first is that it is necessary to turn to alternative models of the labour market in which unemployed workers are off a supply function the second is that the test results indicate the necessity of moving to more complex models of intertemporal substitution however given current econometric techniques and data sets these alternative models of intertemporal substitution will be extremely difficult to test

real exchange rates and productivity evidence from asia this paper examines a productivity based explanation of the long run real exchange rate movements of six asian economies using industry level data we construct total factor productivities tfps for the tradable and nontradable sectors we find that a within each country the relative price of nontradable goods is cointegrated with the sectoral tfp differential and b the real exchange rates are cointegrated with the home and foreign sectoral tfp differentials using the predicted real exchange rate as a measure of the long run equilibrium we find that most asian economies real exchange rates are overvalued before the asian financial crisis

boom goes the price giant resource discoveries and real exchange rate appreciation we estimate the effect of giant oil and gas discoveries on bilateral real exchange rates the size and plausibly exogenous timing of such discoveries make them ideal for identifying the effects of an anticipated resource boom on prices we find that a giant discovery with the value of a country s gdp increases the real exchange rate by 14 within 10 years following the discovery the appreciation is nearly exclusively driven by an appreciation of the prices of non tradable goods we show that these empirical results are qualitatively and quantitatively in line with a calibrated model with forward looking behaviour and dutch disease dynamics

corrigendum on a life cycle model of female labour supply in the empirical work in our article on the intertemporal substitution of leisure time for married women heckman and macurdy 1980 we inadvertently constrained the estimated intertemporal substitution elasticity to be too high since this parameter plays a prominent role in discussions of equilibrium models of the business cycle and since our empirical work has been cited in discussions on this topic e g hall 1980 we would like to present a corrected set of empirical results for our model the period t utility function adopted in this note is in the notation of our original paper equation 15

international comparisons of pricing to market behavior this paper measures the degree of price discrimination across export destinations that is associated with exchange rate changes using u s u k german and japanese industry level data given the industries sampled more price discrimination across destinations is observed in the u k german and japanese data for industries that match across source countries however behavior is very similar across source countries furthermore destination specific price adjustment on exports to the united states from germany and japan is similar to price adjustment observed on shipments to other destinations most variation in the data appears to be related to industry copyright 1993 by american economic association