measuring the spillovers from technical advance mainframe computers in financial services measuring the social gains from recent technological advances is difficult because there are no output indexes from some important adopters measurement methods that infer the willingness to pay of theadopting industries from the derived demand curve for a new technologyovercome this difficulty the derived demand for high speed computersfor use in banks finance and insurance is shown to imply a very largesocial gain to computerization that is not captured by computer manufacturers copyright 1986 by american economic association

a dual definition for the factor content of trade and its effect on factor rewards in us manufacturing sector we introduce a dual definition of the factor content of trade fct using the concept of the equivalent autarky equilibrium estimating a symmetric normalized quadratic revenue function for the u s manufacturing sector between 1965 and 1991 we find that the fct for capital is positive while the fct for skilled and unskilled labor is negative suggesting that the leontief paradox is not present then the growth rate of the factor rewards is decomposed to the fct endowments and technological change effects we find that technological change is the most important determinant in explaining wage inequality between skilled and unskilled labor

modeling economies of scale the case of us electric power companies modeling and validating the existence of technical progress within the neoclassical production function specification has been facilitated through the translog functional form however attempts to separate out the effects of technical progress and returns to scale has been limited this study develops and presents a model for testing the existence of these two separate effects using data from a sample of us electric power companies the analysis found that for these electric utilities there existed increasing returns to scale and technical progress that was energy using but capital neutral however scale effects were found to be a dominant factor in lessening the impact of declining average productivity

the relation between price and marginal cost in u s industry a contradiction in a recent article in this journal hall 1988 examined productivity shocks at the industry level derived from constant returns to scale production functions in which firms were assumed to be competitive hall had two important conclusions first he showed that productivity shocks i e solow residuals were correlated with aggregate demand variables implying that the former are not exogenous impulses second his results implied that firms persistently charge prices above marginal costs making inappropriate the constant returns to scale competitive production function assumed in many theoretical frameworks because of the importance of hall s findings the article has led to many extensions evans 1992 confirms the empirical finding of significant correlations between productivity shocks and aggregate demand variables burnside eichenbaum and rebelo 1993 show that this correlation can be explained by introducing labor hoarding into a theoretical model with competitive firms and constant returns to scale production functions the markups above marginal cost are explained by eden and griliches 1991 and galeotti and schiantarelli 1991 by modifying the theoretical production function caballero and lyons 1992 using the hall data and methodology examine the possibility of external economies in the aggregate manufacturing production finally waldmann 199 1 argues in this journal that the

capital quality improvement and the sources of economic growth in the euro area sources of growth europe s growth slowed in the 1990s reinforcing the overall impression of a need to catch up with the us regarding standards of living in reaction eu leaders adopted the famous lisbon agenda in 2000 the agenda is now under review the aim being to determine why progress on its pro growth goals has been unsatisfactory and what can be done about it the first crucial step in this process is to understand the true sources of the european growth slowdown sources of growth calculations have always been imprecise but evidence from the us suggests that quality upgrading especially in capital goods has substantially worsened the precision problem since the 1990s unfortunately quality adjusted sources of growth calculations however have not performed satisfactorily for europe so europe s leaders are working with potentially misleading accounts of europe s growth slowdown redressing this omission is the goal of this paper failure to account properly for capital quality improvements leads to two mistakes first overall gdp is underestimated our calculations for example show that euro area gdp growth was underestimated on average by 0 7 percentage points annually in the late 1990s however similar quality adjustment figures raise us growth figures in the same period by even more so quality adjusting suggests that the us eu growth gap was even more pronounced than previously believed secondly the sources of growth calculations used to prioritize europe s pro growth policies are skewed our calculations show that the contribution of the slowdown in disembodied technical progress to the overall slowdown is more pronounced after quality adjustment our findings point to the need for adoption of microeconomic measures aimed at enhancing overall efficiency and boosting innovation activity such measures would aim at a better business environment e g by easing regulatory and administrative burden and liberalizing energy and telecommunications markets plutarchos sakellaris and focco vijselaar

the gender gap fertility and growth changes in fertility have long been recognized as important correlates of economic growth with the relationship between the level of fertility and the level of income per capita being one of the strongest observable correlations in cross country data this paper examines the linkages between fertility and growth theory the structure of the model is presented in sections on production couples decision making system dynamics and steady state equilibria the first component of the model is that increases in capital per worker raise womens relative wages since capital is more complementary to womens labor input than to mens the second component is that increasing womens relative wages reduces fertility by raising the cost of children more than household income finally lower fertility raises the level of capital per worker a positive feedback loop generates demographic transition a rapid decline in fertility accompanied by accelerated output growth

is the co2 emissions reduction from scale change structural change or technology change evidence from non metallic sector of 11 major economies in 1995 2009 the contribution of non metallic sector to global co2 emissions is increasing however there are very few studies on non metallic sector co2 emissions from international comparative perspective this paper proposes an integrated model employing lmdi logarithmic mean divisia index decomposition technique and topsis the technique for order preference by similarity to ideal solution method to contribute to the existing literature by filling the gap that the drivers of aggregate and national level non metallic sector co2 emissions and its impacts on co2 emissions reduction have not been estimated by relevant models first we analyze drivers of non metallic sector co2 emissions in bric countries and g7 countries using lmdi decomposition method second we evaluate the low carbon development of non metallic sector in the 11 major economies from a comprehensive viewpoint of main drivers using topsis assessment model finally based on the results of the model this paper presents some implications for the non metallic sector co2 emissions reduction and low carbon development

the regional dimension of competitiveness in manufacturing productivity employment and wages in northern ireland and the united kingdom borooah v k and lee k c 1991 the regional dimension of competitiveness in manufacturing productivity employment and wages in northern ireland and the united kingdom reg studies 25 219 229 the regional dimension of competitiveness in manufacturing industry is examined by comparing the uk with one of its poorest regions northern ireland an overview is provided of total factor productivity and real wage developments in northern ireland and the uk over the last two decades these developments are then investigated econometrically through the estimation of labour demand and wage equations the paper identifies a number of factors which may have eroded the competitiveness and hence the employment prospects of the region relative to the uk as a whole over the period borooah v k et lee k c 1991 la competitivite de l industrie manufacturiere sous un optique regional productivite emploi et salaires en irlande du nord et au royaume uni reg studies 25 219 229 on examine les aspects region

sectoral shocks and aggregate fluctuations abstract this paper presents a multisector dynamic general equilibrium model of business cycles with a distinctive feature aggregate fluctuations are driven by independent sectoral shocks the model hypothesizes that trade among sectors provides a strong synchronization mechanism for these shocks due to the limited but locally intense interaction that is characteristic of such input trade flows limited interaction characterized by a sparse intermediate input use matrix reduces substitution possibilities among intermediate inputs which strengthens comovement in sectoral value added and leads to a postponement of the law of large numbers in the variance of aggregate value added the chief virtue of this model is that reliance on implausible aggregate shocks is not necessary to capture the qualitative features of macroeconomic fluctuations building on horvath 1998 review of economic dynamics 1 781 808 which establishes the theoretical foundation for the relevance of limited interaction in the context of a stylized multisector model this paper specifies a more general multisector model calibrated to the us 2 digit standard industrial code economy simulations prove the model is able to match empirical reality as closely as standard one sector business cycle models without relying on aggregate shocks

production function regressions returns to scale and externalities a number of recent papers have used simple linear regressions in an attempt to identify market structure the extent of returns to scale and possible external effects in u s manufacturing industries the results obtained from these regressions have important implications for several branches of modern macroeconomics as a result the macro literature frequently cites specific numerical evidence from caballero and lyons 1992 and hall 1990 which suggests that there are quantitatively significant increasing returns to scale or external effects in u s manufacturing in contrast it is the argument of this paper that this evidence is not convincing the most robust evidence suggests that the typical u s manufacturing industry displays constant returns with no external effects on the other hand there is significant heterogeneity across industries

computing productivity firm level evidence we explore the effect of computerization on productivity and output growth using data from 527 large us firms over 1987 1994 we find that computerization makes a contribution to measured productivity and output growth in the short term using one year differences that is consistent with normal returns to computer investments however the productivity and output contributions associated with computerization are up to five times greater over long periods using five to seven year differences the results suggest that the observed contribution of computerization is accompanied by relatively large and time consuming investments in complementary inputs such as organizational capital that may be omitted in conventional calculations of productivity the large long run contribution of computers and their associated complements that we uncover may partially explain the subsequent investment surge in computers in the late 1990s

broadband adoption and firm productivity evaluating the benefits of general purpose technology we examine the relationship between the deployment of broadband which we classify as a general purpose technology and the productivity of the deploying firms using panel data that comprises information on all the major local exchange carriers in the united states telecommunications industry from 1995 to 2000 this relationship is an important indicator of the economic impact of new technology adoption we provide a comprehensive analysis of the literature on general purpose technologies as well as on the economic consequences of information and communications technology diffusion and develop a framework to empirically assess the impact of broadband deployment on the productivity our results find a positive relationship between broadband deployment and the carriers productivity and suggest that encouraging the deployment of broadband technologies in addition to the benefits to consumers and firms at the receiving end of the new technology create the potential for better technological efficiencies and increased productivity for the deploying firms the benefits can be enhanced as the firms studied operate in two sided markets where the network effects brought about by the multitude of interconnections can be substantial because of possible second order spillovers of productivity copyright 2010 the author 2009 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

cyclical productivity in a model of labor hoarding abstract this paper develops a dynamic model of labor hoarding to explain two empirical facts the cyclical behavior of total factor productivity and the dynamic correlations of sectoral productivity with aggregate variables the model features convex costs of adjusting the labor force which induce firms to vary the intensity of labor utilization over the cycle in particular cyclical variations in labor effort take place as a response to expected future changes in industry conditions i test the restrictions imposed by the model for several two digit manufacturing industries under different assumptions about market structure and returns to scale then using the assumption that aggregate variables carry information about future changes in industry conditions i simulate the model s dynamic response of hours and productivity to aggregate innovations and compare them to those estimated from the data

the discrete charm of the bourgeoisie quantum and continuous perspectives on innovation and growth this paper discusses the relative merits of discrete versus continuous perspectives on innovation technical change and economic growth it discusses the innovation time series literature in some detail to extract the continuous and clustering properties of the historical record on innovation it then proposes a mosaic avalanche model based on percolation theory and self organized criticality to address this question

computer use and productivity growth in us federal government agencies 1987 92 we examine the impact of information technology it on productivity in the public sector econometrically using data from the bls federal productivity measurement program and from computer intelligence infocorp and by interviewing some government officials we estimate a production function for government services that includes it capital as an input and find a strong positive relationship across federal agencies between productivity growth and computer intensity growth during the period 1987 92 controlling for growth in compensation and other outlays per employee and in the number of employees our estimates are consistent with the hypothesis that there are excess returns to it capital

computers and productivity are aggregation effects important this paper examines the empirical implications of aggregation bias when measuring the productive impact of computers to isolate two specific aggregation problems relating to aggregation in variables and aggregation in relations we compare various production function estimates across a range of specifications econometric estimators and data levels the results show that both sources of bias are important especially as one moves from the sector to the economy level and when the elasticity of all types of non computer capital are incorrectly restricted to be equal in terms of computers however the estimated elasticity is surprisingly stable between industry and sector regressions and does not appear to be biased by the incorporation of a restrictive measure of non computer capital the data consistently show that computers have a large impact on output

information technology and its impact on productivity firm level evidence from government and private data sources 1977 1993 robert solow s quip that we see computers everywhere but in the productivity statistics has prompted a large and growing literature examining the information productivity paradox some aggregate and industry level studies have failed to detect a positive contribution to productivity growth from investments in computer technology more recent studies utilizing firm level data however have detected a significant contribution this paper confirms the results of these latter studies using u s firm level computer asset and financial data for nonagricultural firms during the period 1977 1993 from a variety of data sources including the u s census bureau s enterprise and auxiliary establishment surveys compustat and computer intelligence infocorp a market research firm our principal finding that computers especially personal computers do contribute positively to productivity growth suggests that the traditional information productivity paradox is largely a measurement problemn this is closely related to the more general problem of assessing service sector productivity because computers are used most intensively in the service sector and in the service functions of non service sector firms e g payroll and purchasing as zvi griliches 1994 noted these activities pose the greatest problems for output and productivity measurement moreover although we may see computers everywhere they represent only a tiny fraction of capital stock on about 2 of plant property and equipment so aggregate effects may be hard to detect oliner and sichel 1993 our data indicate that computers not only contributed to productivity growth during the period 1977 1993 but they yielded excess returns relative to other types of capital the data also suggest that computer productivity peaked around 1986 1987 3 that computers are complementary with skilled labour krueger 1993 and autor katz and krueger 1997 and that use of computers may permit reductions in inventory levels finally and perhaps most interesting the evidence

the impact of high tech capital on productivity evidence from australia i introduction the bulk of the empirical research on the relationship between high tech capital investment and productivity has been based on data for the united states given the relatively large size of the high tech capital sector in the u s economy it is likely that the united states is a special case most economies resemble australia s in being net importers of high tech capital not producing high tech capital was often cited as a weakness in these economies relative to the united states however since the end of the late 1990s tech boom there has been a reappraisal of whether the production or the use of high tech capital is most beneficial hence to shed light on this debate the main purpose of this paper is to empirically examine the relationship between high tech capital use and the multifactor productivity mfp of 10 industries in the australian market sector using annual data for 1966 2002 alternative specifications of production functions are considered and estimated alternative measures of high tech capital are included with combinations of computers software and electronics capital in the first production function high tech capital is allowed to be more or less productive than other capital to determine whether there is a relationship between high tech capital and mfp it is also possible to test whether there are excess returns to high tech capital for robustness testing purposes a second production function is specified with high tech capital as a separate input into production other potential sources of mfp growth such as public capital research and development stocks and microeconomic reform are also included in the production functions we find evidence of a positive relationship between high tech capital and mfp in the market sector there is less evidence however of excess returns to high tech capital which suggests that current investment levels are not inadequate the results by industry suggest that the benefits of investing in high tech capital are not distributed evenly across the economy with only some industries experiencing a positive relationship between high tech capital and mfp the structure of this article is as follows in section ii the theoretical contribution of high tech capital to mfp and the evidence to date is reviewed in section iii the methodology is outlined in section iv data sources and trends are described in section v the results are presented and interpreted and section vi concludes ii the impact of high tech capital on output and productivity the theory and evidence the impact of investment in high tech capital has been the subject of debate between new economy sceptics and optimists for several years it is widely accepted that mfp has increased substantially in u s high tech producing industries in which the rate of technological change has been phenomenal over the past 40 years several publications have found a quantifiable contribution by computer producing industries to u s output growth 1 however australia is not generally regarded as a producer of computers data from the organisation for economic co operation and development oecd 1998 indicate that the high tech share of australian manufacturing value added was 4 5 in 1995 compared to 15 8 in the united states therefore the substantial u s economy wide mfp improvements specifically associated with its computer producing industry are unlikely to be replicated in the australian economy over the past 30 years there has been rapid accumulation of high tech capital in many countries australia was the third most intensive user of high tech capital in the oecd in 1995 behind the united states and new zealand simon and wardrop 2002 find that this rapid accumulation of high tech capital may have substantially contributed to australia s economic growth during the 1990s this accumulation has been driven by technological change in high tech producing industries lowering the price of high tech capital

assessing energy price induced improvements in efficiency of capital in oecd manufacturing industries to assess how capital stocks adapt to energy price changes it is necessary to account for the impacts on different vintages of capital and to account separately for price induced and autonomous improvements in the energy efficiency of capital stock the results of econometric analysis for five manufacturing industries in 19 oecd countries between 1990 and 2005 indicate that higher energy prices resulted in smaller energy use due to both improved energy efficiency of capital stock and reduced demand for the energy input the investment response to energy prices varied considerably across manufacturing industries being more significant in energy intensive sectors the results of policy simulations indicate that a carbon tax can deliver significant reductions in energy consumption in the medium run with modest declines in energy using capital stock

child policy solutions for the unemployment problem abstract using a simple overlapping generations model with endogenous fertility minimum wages and involuntary unemployment it is shown that the child tax can be used as an instrument to promote population growth and restore full employment

do we have a new e conomy used properly the term new e conomy is warranted since 1995 there has been a wave of innovation associated with both the production and use of information technology that has been translated into improved us economic performance in particular there has been a substantial acceleration in trend total factor productivity growth most of this acceleration actually took place outside of the computer sector almost none of the acceleration was cyclical there is now clear supportive evidence of an acceleration of productivity in service industries that are major purchasers of information technology such as finance and wholesale and retail trade these gains reflect not only increased investment in information technology but also complementary innovations in business organization and policy to be sure as evidenced by recent financial market volatility there have been speculative excesses but these should not obscure the fundamental gains that have been made this abstract was borrowed from another version of this item

u s economic growth since 1870 one big wave it is now 25 years since the growth rate of labor productivity and of multi factor productivity mfp decelerated sharply both in the united states and in most other industrialized nations this productivity slowdown has eluded many attempts to provide single cause explanations slow productivity growth in the past 25 years echoes slow productivity growth in the late 19th century perhaps both were normal and what needs to be explained is not the post 1972 slowdown but rather the post1913 speedup that ushered in the glorious 60 years between world war i and the early 1970 s in which u s productivity growth was much faster than before or after this paper makes a sharp distinction between mfp growth calculated from inputs that combine simple measures of labor hours and the capital stock and growth based on measures that adjust for the changing composition of labor and capital the first step toward an understanding of long term trends is to compare like with like splicing mfp data based on unadjusted inputs prior to 1950 with post1950 data based also on unadjusted inputs as contrasted to the composition adjusted inputs that are now desirably incorporated into our official mfp measures the mfp record prior to 1929 still rests largely on the monumental work of john kendrick 1961 which however is based almost entirely on input quantities that lack any adjustment for changes in composition edward denison 1962 1985 and zvi griliches 1960 pioneered the development of composition adjustments for labor input dale jorgenson and zvi griliches 1967 introduced a framework that treats the problem of composition adjustment in both labor and

cyclical productivity in europe and the united states evaluating the evidence on returns to scale and input utilization this paper studies procyclical productivity growth at the industry level in the united states and three european countries france germany and the netherlands industry specific demand side instruments are used to examine the prevalence of non constant returns to scale and unmeasured input utilization for the aggregate us economy unmeasured input utilization seems to explain procyclical productivity however this correction still leaves one in three us industries with procyclical productivity this failure of the model can also be seen in europe and is mostly concentrated in services industries

technical change and the demand for skills by us industries a good match between the demand for skills and their supply is a prerequisite for any well functioning economy this is no simple matter particularly in the current period of rapid changes in the technology and organisation of production since new skills and capabilities usually require both considerable time to develop and costly personal and institutional adjustments the widely perceived inadequacy of education and job training in the us has become an increasing source of concern for policy makers but before better training processes can be designed a necessary first step is to anticipate future demands for skills in the workplace whether this can be done very well depends in part on our ability to describe and explain recent trends in skill composition previous econometric studies of inter industry differences in skills and skill growth have focused on the effects of factor prices and capital intensity on indices of schooling attainment the results of these tests have been interpreted to provide strong support for the standard factor substitution model and the capital skill complementarity hypothesis hammermesh 1986 but these studies rarely considered the effects of technical change and other structural characteristics on the demand for skills in another strand of the

the gender gap fertility subsidies and growth abstract we examine how subsidy policies to support child rearing affect fertility the effect of the policy depends on two factors time spent by males on child rearing and the tax rate we show that fertility may be lower with a subsidy policy

the great diversification and its undoing we investigate the hypothesis that macroeconomic fluctuations are primitively the results of many microeconomic shocks we define fundamental volatility as the volatility that would arise from an economy made entirely of idiosyncratic sectoral or firm level shocks fundamental volatility accounts for the swings in macroeconomic volatility in the major world economies in the past half century it accounts for the great moderation and its undoing the initial great moderation is due to a decreasing share of manufacturing between 1975 and 1985 the recent rise of macroeconomic volatility is chiefly due to the growth of the financial sector jel e23 e32 e44 this article explores the hypothesis that changes in the microeconomic composition of the economy during the postwar period can account for the great moderation and its unraveling both in the united states and in the other major world economies we call fundamental volatility the volatility that would be derived only from microeconomic shocks if aggregate shocks come in large part from microeconomic shocks augmented by amplification mechanisms then aggregate volatility should track fundamental volatility to operationalize this idea the key quantity we consider which constitutes one departure from other studies is the following definition of fundamental volatility

the solow productivity paradox what do computers do to productivity 1 you don t see computers everywhere in a meaningful economic sense computers and information processing equipment are a relatively small share of gdp and of the capital stock 2 you only thinkyou see computers everywhere government hedonic price indexes for computers fall too fast according to this position and therefore measured real computer output growth is also too fast 3 you may not see computers everywhere but in the industrial sectors where you most see them output is poorly measured examples are finance and insurance which are heavy users of information technology and where even the concept of output is poorly specified 4 whether or not you see computers everywhere some of what they do is not counted in economic statistics examples are consumption on the job convenience better user interface and so forth 5 you don t see computers in the productivity statistics yet but wait a bit and you will this is the analogy with the diffusion of electricity the idea that the productivity implications of a new technology are only visible witlh a long lag 6 you see computers everywhere but in the productivity statistics because computers are not as productive as you think here there are many anecdotes such as failed computer system design projects but there are also assertions from computer science that computer and software design has taken a wrong turn 7 there is no paradox some economists are counting innovations and new products on an arithmetic scale when they should count on a logarithmic scale

on the heterogeneity of sectoral growth and structural dynamics evidence from austrian manufacturing industries this article studies the factors driving structural dynamics across austrian manufacturing industries using a structural vector autoregressive model svar framework we identify sectoral labour productivity and demand shocks that are orthogonal to aggregate shocks we analyse the sectoral impulse response patterns and find that the effect of industry labour productivity shocks on industry output growth is quite heterogeneous we devise a taxonomy that allows us to classify industries according to the effect productivity and demand shocks have on output growth we also show that productivity shocks are quite heterogeneous not just across industries but also over time whereas shocks to sectoral demand growth are more systematic we test the taxonomy in a panel regression and are able to confirm our sector specific findings industry demand shocks and aggregate productivity and demand shocks lead always to an increase in industry output and industry employment

sectoral patterns of technical change towards a taxonomy and a theory abstract the purpose of the paper is to describe and explain sectoral patterns of technical change as revealed by data on about 2000 significant innovations in britain since 1945 most technological knowledge turns out not to be information that is generally applicable and easily reproducible but specific to firms and applications cumulative in development and varied amongst sectors in source and direction innovating firms principally in electronics and chemicals are relatively big and they develop innovations over a wide range of specific product groups within their principal sector but relatively few outside firms principally in mechanical and instrument engineering are relatively small and specialised and they exist in symbiosis with large firms in scale intensive sectors like metal manufacture and vehicles who make a significant contribution to their own process technology in textile firms on the other hand most process innovations come from suppliers these characteristics and variations can be classified in a three part taxonomy based on firms 1 supplier dominated 2 production intensive 3 science based they can be explained by sources of technology requirements of users and possibilities for appropriation this explanation has implications for our understanding of the sources and directions of technical change firms diversification behaviour the dynamic relationship between technology and industrial structure and the formation of technological skills and advantages at the level of the firm the region and the country

ict capital and services complementarities the italian evidence this article investigates whether information and communication technologies icts hardware and services play a complementary role in boosting economic growth the main argument is that investments in ict fixed capital are a necessary but not sufficient condition leading to productivity gains above all in late adopter countries their effective implementation indeed requires on the one hand a changing economic structure characterized by a growing weight of service sectors and on the other hand complementary investments in ict services directed to ease the integration of the new technologies within firms boundaries the analysis is conducted on a late industrialized country like italy and shows that in lagging countries the weak impact of ict adoption is the result of three converging forces relatively high share of manufacturing sectors low adoption levels of icts in traditional manufacturing sectors inadequate investments in ict services

increasing returns and externalities in uk manufacturing myth or reality i apply the method of caballero and lyons to industry level data for uk manufacturing i find evidence for a positive external effect arising from the expansion of manufacturing as a whole but expansion at the sectoral level was found not to generate external effects nor was any evidence found for increasing returns which are internal to the industry here returns appear to be constant i argue that external effects at the level of aggregate manufacturing cannot be explained away as due to measurement error or cyclical effects however alternative explanations such as economy wide shocks cannot be totally excluded

fertility taxation and family policy historically there is clear evidence of an inverse relationship between female labour supply and fertility however the relationship across countries is now positive countries like germany and italy with the lowest fertility also have the lowest female participation rates this paper analyses the extent to which this can be explained by public policy in particular taxation and the system of child support the results suggest that countries which have individual rather than joint taxation and which support families through child care facilities rather than child payments are likely to have both higher female labour supply and higher fertility

the effect of joint custody on family outcomes since the 1970s almost all us states have introduced a form of joint custody after divorce i analyze the causal effect of these custody law reforms on different family outcomes my identification strategy exploits the different timing of reforms across the us states estimations based on state panel data suggest that the introduction of joint custody led to an increase in marriage rates an increase in overall fertility including a shift from nonmarital to marital fertility and an increase in divorce rates for older couples accordingly female labor market participation decreased further male suicide rates and domestic violence fell in treated states the empirical evidence is consistent with the hypothesis that joint custody increased the relative bargaining power of men within marriage

paradox lost firm level evidence on the returns to information systems spending the productivity paradox of information systems is is that despite enormous improvements in the underlying technology the benefits of is spending have not been found in aggregate output statistics one explanation is that is spending may lead to increases in product quality or variety which tend to be overlooked in the aggregate statistics even if they increase output at the firm level furthermore the restructuring and cost cutting that are often necessary to realize the potential benefits of is have only recently been undertaken in many firms our study uses new firm level data on several components of is spending for 1987 1991 the dataset includes 367 large firms which generated approximately 1 8 trillion dollars in output in 1991 we supplemented the is data with data on other inputs output and price deflators from other sources as a result we could assess several econometric models of the contribution of is to firm level productivity our results indicate that is spending has made a substantial and statistically significant contribution to firm output we find that the gross marginal product mp for computer capital averaged 81 for the firms in our sample we find that the mp for computer capital is at least as large as the marginal product of other types of capital investment and that dollar for dollar is labor spending generates at least as much output as spending on non is labor and expenses because the models we applied were similar to those that have been previously used to assess the contribution of is and other factors of production we attribute the different results to the fact that our data set is more current and larger than others explored we conclude that the productivity paradox disappeared by 1991 at least in our sample of firms

e commerce trends and impacts across europe abstract this study investigates patterns in electronic commerce e commerce activities and their impact on labour productivity growth for a group of 14 european countries at hand for the exercise is a unique panel of micro aggregated firm level data spanning the years 2002 2010 the empirical approach involves two main elements a static specification and a dynamic panel data model the former is a difference specification estimated by ols and the latter model uses the system gmm estimator to account for endogeneity of e commerce activities for the impact analysis e commerce is defined specifically as e sales that is orders firms receive electronically through edi or websites descriptive statistics reveal that the proportion of firms engaging in e sales activities after starting from a low level is slowly growing over time the ols estimates which control for industry time and country effects show that the changes in e sales activities and labour productivity growth are significantly positively related specifically an increase in e sales by one percentage point raises labour productivity growth by 0 3 percentage points over a two year period service industries experience a larger impact than does manufacturing similar results are produced by the dynamic panel data estimations which show that the increase in e sales activities during the period studied accounts for 18 per cent of the total growth in labour productivity in addition the results demonstrate that smaller firms gain the most from increases in e sales overall the magnitude of the estimates differs less across methods than it does between industries or over time

population and neoclassical economic growth a new child policy perspective abstract using the basic olg model of neoclassical growth with endogenous fertility we show that a child tax can be used as a single instrument to actually raise population growth in the long run while also raising per capita income

scale effects time varying markups and the cyclical behaviour of primal and dual productivity this paper presents estimates of the degree of returns to scale using nonparametric measures of primal and dual productivity for 2 digit us manufacturing industries as part of the analysis the cyclical behaviour of primal and dual productivity measures are considered time varying markups are allowed for and the small sample properties of the instrumental variables estimator used to derive the estimates from the primal and dual relations examined both the primal and dual estimates indicate the existence of increasing returns to scale for the durable goods industries the simulation results indicate there is a slight tendency for the dual equation estimates to overestimate the degree of returns to scale however small sample bias appears to be most severe for the non durable goods industries

ict and productivity growth in the united kingdom this paper develops new estimates of investment in and output of information and communication technology ict these new estimates imply that gdp growth has been significantly understated particularly since 1994 a growth accounting approach is employed to measure the contribution of ict to the growth of both aggregate output and aggregate input on both counts the contribution of ict has been rising over time from 1989 to 1998 ict output contributed a fifth of overall gdp growth since 1989 55 per cent of capital deepening the growth of capital per hour worked has been contributed by ict capital since 1994 this proportion has risen to 90 per cent ict capital deepening accounts for 25 per cent of the growth of labour productivity over 1989 98 and 48 per cent over 1994 8 but even when output growth is adjusted for the new ict estimates both labour productivity and tfp growth are still found to slow down after 1994

the dynamo and the computer an historical perspective on the modern productivity paradox the dynamo and the computer an historical perspective on the modern productivity paradox author s paul a david source the american economic review vol 80 no 2 papers and proceedings of the hundred and second annual meeting of the american economic association may 1990 pp 355 361 published by american economic association stable url http www jstor org stable 2006600 accessed 08 12 2010 01 40

investment specific technological change and growth accounting greenwood et al 1997 long run implications of investment specific technological change american economic review 87 3 342 362 and 2000 the role of investment specific technological change in the business cycle european economic review 44 91 115 and hercowitz 1998 the embodiment controversy a review essay journal of monetary economics 41 217 224 have claimed that the jorgenson form of growth accounting is conceptually flawed and severely understates the importance of technological progress embodied in new capital goods for explaining growth to the contrary this paper shows that in its technology aspects their model is a special case of the jorgensonian growth accounting model what they call investment specific technological change is shown to be closely related to the more familiar concept of total factor productivity tfp growth statements about the one can be translated into statements about the other empirically differences between their conclusions and those of growth accounting studies about the extent to which embodiment explains us economic growth are found to relate more to data than to methodology

productivity growth and the structure of the business cycle abstract over the recent years opportunity cost oc models of growth have argued that recessions are times when firms engage in productivity improving activities because of intertemporal substitu tion this paper tests whether this approach is correct the technique used to disentangle the trend from the cycle is semi structural vector autoregression the results are mildly supportive of the oc theory there tends to be a negative impact of demand shocks on productivity both in the short run and in the long run and the short run impact is stronger in those countries where fluctuations are more transitory however there is no significant response of r d to demand shocks

factor hoarding and the propagation of business cycles shocks this paper analyzes the role of variable capital utilization rates in propagating shocks over the business cycle to this end we formulate and estimate an equilibrium business cycle model in which cyclical capital utilization rates are viewed as a form of factor hoarding we find that variable capital utilization rates substantially magnify and propagate the impact of shocks to agents environments the strength of these propagation effects is evident in the dynamic response functions of various economy wide aggregates to shocks in agents environments in the statistics that we construct to summarize the strength of the propagation mechanisms in the model and in the volatility of exogenous technology shocks needed to explain the observed variability in aggregate u s output other authors have argued that standard real business cycle rbc models fail to account for certain features of the data because they do not embody quantitatively important propagation mechanisms these features include the observed positive serial correlation in the growth rate of output the shape of the spectrum of the growth rate of real output and the correlation between the forecastable component of real output and various other economic aggregates allowing for variable capital utilization rates substantially improves the ability of the model to account for these features of the data

internal versus external economies in european countries in this paper sectoral production functions are estimated with a two digit disaggregation for eight european countries corresponding to the period 1978 1992 distinguishing between internal economies of scale and intersectoral external effects in order to avoid the possibility that the regressions carried out by way of panel data techniques are spurious the integration order of each variable has been identified using unit root similarly the hausman procedure has been applied to test the exogeneity of the variables and determine whether the most appropriate estimations should be sur or three stage least squares

projecting the economic impact of the internet in this paper we analyze the impact of the internet on the performance of the economy and the standard of living of average americans our analyses illustrate that even though the stock market s speculative bubble has burst the internet will continue to have a significant impact on old economy industries and as a result generate real benefits for the overall economy this abstract was borrowed from another version of this item

computers obsolescence and productivity this paper develops a new technique for measuring the effect of computer usage on u s productivity growth standard national income and product accounts nipa measures of the computer capital stock which are constructed by weighting past investments according to a schedule for economic depreciation the rate at which capital loses value as it ages are shown to be inappropriate for growth accounting because they do not capture the effect of a unit of computer capital on productivity this is due to technological obsolescence machines that are still productive are retired because they are no longer near the technological frontier and anticipation of retirement affects economic depreciation using a model that incorporates obsolescence alternative stocks are developed that imply a larger computer usage effect this effect together with the direct effect of increased productivity in the computer producing sector accounted for the improvement in u s productivity growth over 1996 1998 relative to the

computers productivity and input substitution i introduction the last two decades has been a puzzling time for many productivity analysts while computer prices fell at extraordinary rates and firms invested hundreds of billions of dollars in new computer equipment aggregate productivity growth remained sluggish this computer productivity paradox has generated a large literature that examines the economic impact of the computer revolution 1 this paper offers a simple solution to the computer productivity paradox by making careful distinction between computers as an output from one sector and an input to other sectors data for 35 manufacturing and service sectors for 1947 1991 show that sectoral differences are crucial in understanding the impact of computers aggregate analysis is inappropriate since it obscures basic distinctions between a shifting production function in the computer producing sector multi factor productivity growth and movements along production functions in the computer using sectors substitution and capital accumulation once these differences are isolated the growth impact of computers is readily observable the computer producing sector experienced fundamental technological progress and now produces cheaper better computers the sectoral data show this as rapid multi factor productivity mfp growth for 1973 1991 although aggregate mfp growth remains below historic averages the computer producing sector has clearly done its part mfp growth in this sector is many times the economy average and has contributed over one third of aggregate mfp growth for 19811991 the sectoral detail shows that the slowdown in aggregate productivity would have been much more severe were it not for such large mfp gains in the computer producing sector for the other sectors of the economy computers affect growth in a more traditional although less glamorous way when the price of real computing power fell so dramatically in the 1970s and 1980s firms responded by substituting away from relatively expensive labor and non computer capital and investing heavily in cheap computers for these sectors the computer revolution affects output growth not by raising mfp but by inducing firms to accumulate computers at extraordinary rates real computer services for example grew in excess of 20 per year in 14 out of 35 sectors for 1973 1991 although virtually all sectors are rapidly accumulating computer equipment computers remain small in levels in 1991 for example computer investment was only 10 of private fixed investment so the growth contribution of computers remains small relative to sectoral aggregates of labor and non computer capital the rapid rates of accumulation however are clearly making computers a more important source of growth across sectors with this heavy investment also came the wide spread expectation that computers would fundamentally alter the way firms operate and lead to higher mfp the reality has been very different as the most computer intensive sectors show steep declines in mfp growth after 1973 with three quarters of all computers concentrated in three service sectors trade fire and other services however this finding must be interpreted with caution as griliches 1994 notes output in these sectors is largely unmeasurable and thus mfp growth will be understated nonetheless it is quite reasonable that even computer using sectors where output is easier to measure show no mfp gains computer investment creates a capital input that enters the production function like any other purchased input since constant quality deflators embody productivity improvements in investment the direct impact is seen through the rapid capital accumulation only if the adoption of computers leads to production externalities or spillovers would computer investment also increase mfp growth the data however show no evidence of this ii computers and growth the national statistics most clearly show the computer revolution in the investment data

quantifying the impact of ict capital on output growth a heterogeneous dynamic panel approach using industry data for the united states and the united kingdom we provide new evidence on the impact of information and communications technology ict capital on real output growth the traditional industry panel data analysis fails to find a positive contribution we argue that this is due to heterogeneity across industries particularly in the time dimension pooling the data for the two countries and using a dynamic panel data estimation method yield a positive and significant effect of ict on output growth individual country estimates suggest a strong impact in the united states while results are less conclusive in the united kingdom

modelling a regional economic system the case of lombardy baussola m 2007 modelling a regional economic system the case of lombardy regional studies 41 19 38 during recent years the demand for quantitative economic investigation to be used for policy analysis has grown rapidly in addition the european economic and monetary integration process has increased the economic impact of regional economies thus calling for analytical instruments aimed at supporting the decision making process a regional econometric model of lombardy s labour market was set up in which both labour demand and supply are endogenously determined and thus unemployment is determined by their interaction therefore labour demand in both the industrial sector and in private services is modelled while labour supply is split into two components that define respectively the participation rate and self employment the model simulations evaluate the response of the regional labour market in comparison with the national one to exogenous shocks depending on shocks in either demand or

what determines productivity performance of telecommunications services industry a cross country analysis this article investigates the key factors that determine the productivity performance of telecommunications services industry a simple theoretical model is used to illustrate that the total factor productivity tfp growth is attributable to the effects of scale economies market competition and technical change we then examine empirically the effect of various factors on the tfp growth in the industry using panel data in 12 organization for economic co operation and development oecd countries for the period 1983 through 2003 the empirical results are consistent with the theoretical prediction a new finding in this article is that higher machinery and equipment m e capital intensity and human capital contribute to higher tfp growth in the telecommunications services industry the decomposition analysis also suggests that technical change induced by changes in m e capital intensity and human capital are important sources of productivity performance in the industry across the oecd countries contrib

productivity growth of east asia economies manufacturing a decomposition analysis abstract applying a stochastic production frontier to sector level data within manufacturing this paper examines total factor productivity tfp growth for seven east asian economies during 1963 98 using both single country and cross country regressions the analysis focuses on the trend in technological progress tp and technical efficiency change tec and the role of productivity change in economic growth the empirical results reveal that although input factor accumulation is still the main source for east asian economies growth tfp growth is accounting for an increasing and important proportion of output growth among which the improved tec plays a crucial role in productivity growth

estimates of the costs of kyoto marrakesh versus the mckibbin wilcoxen blueprint in this paper we update our earlier estimates of the cost of the kyoto protocol using the g cubed model taking into account the new sink allowances from recent negotiations as well as allowing for multiple gases and new land clearing estimates we then compare the protocol to an alternative policy outlined in mckibbin et al brookings policy brief no 17 june the brookings institution washington 1997 climate change policy after kyoto a blueprint for a realistic approach the brookings institution washington 2002a j econom perspect 16 2 2002b 107 that does not impose rigid emissions targets we focus particular attention on the sensitivity of compliance costs under each policy to unexpected changes in future economic conditions to illustrate the issue we evaluate the policies under two plausible alternative assumptions about a single aspect of the future world economy the rate of productivity growth in russia we find that moderate growth in russia would raise the cost of the kyoto protocol by as much as 50 percent but would have little effect on the cost of the alternative policy we conclude that the kyoto protocol is inherently unstable because unexpected future events could raise compliance costs substantially and place enormous pressure on governments to abrogate the agreement the alternative policy would be far more stable because it does not subject future governments to adverse shocks in compliance costs

does the new economy measure up to the great inventions of the past abstract during the four years 1995 99 u s productivity growth experienced a strong revival and achieved growth rates exceeding that of the golden age of 1913 72 accordingly many observers have declared the new economy to be an industrial revolution even more important than the second industrial revolution of 1860 1900 which made the golden age of productivity growth possible this paper dissects the recent productivity revival subtracts out a cyclical component and concludes that there is no revival of the productivity growth trend in the 88 percent of the private economy lying outside of the durables manufacturing sector the paper explains this surprising finding by pointing to limitations in computers and the internet in comparison with the great inventions of the past

a note on endogenous fertility child allowances and poverty traps abstract this study analyses how capital accumulation and fertility react to a child allowance policy in an overlapping generations model of growth with endogenous fertility multiple equilibria are shown to exist depending on the size of the child allowance

modeling inter sectoral growth linkages an application to u s agriculture abstract general equilibrium and open economy trade theory are used along with time series data on the u s agricultural sector to provide insights into the structure of agricultural supply factor returns and linkages to the rest of the economy output expansion and factor returns are found to vary depending on relative factor intensities which we refer to as rybczynski and stolper samuelson like effects the effect of the rest of the economy particularly the increase in price of services is found to have relatively large negative impacts on agriculture the short run effects of prices and factor endowments on growth in agricultural supply and factor returns are dominated by the long run effects of technological change

productivity shocks and real business cycles abstract productivity shocks play a central role in real business cycles as an exogenous impulse to macroeconomic activity however measured solow prescott residuals do not behave as an exogenous impulse rather econometric evidence provided in this paper indicates that 1 money interest rates and government spending granger cause these impulses and 2 a substantial component of the variance of these impulses between one quarter and one half is attributable to variations in aggregate demand these results are robust to a number of econometric issues including measurement errors specification of the production function and certain forms of omitted real variables

excess labour and the business cycle a comparative study of japan germany the united kingdom and the united states against the background of firm specific human capital theory this paper investigates empirically the relative propensity of manufacturing industries in japan germany the united kingdom and the united states to hold excess labour over the business cycle both stock and utilization dimensions of the labour input are integrated into the study throughout discussion is linked to earlier research that has analysed the relative international performance of the japanese labour market

tools or toys the impact of high technology on scholarly productivity i introduction and motivation in the past several decades investment that makes communication easier has increased rapidly in the united states and other developed economies since the mid 1980s a combination of technical change and deregulation has also reduced long distance telephone rates in the united states by 50 reported by allen 1995 pitney bowes 1997 reported that fax usage increased by 20 between 1996 and 1997 alone and electronic mail e mail unknown before 1985 is ubiquitous today popular discussion of a wide range of additional examples of rapidly declining prices and explosive growth of the use of telecommunications is provided by cairncross 1997 attempts to measure the impact on aggregate total factor and labor productivity of these supposedly productivity enhancing investments in broad reaching technical improvements such as computing machinery and communications equipment have not met with great success as in morrison 1997 but see greenan and mairesse 1996 1 an alternative to measuring effects on the broader economy is to measure the impact of generalized technical change on productivity in specific activities observed at the micro level an earlier literature including griliches 1958 and trajtenberg 1989 has clearly traced the effect of specific innovations in raising productivity in specific sectors of the economy this article expands on that tradition by trying to identify the effect of the recent broad revolution in communications on one activity scholarly publishing we propose studying scholarly publishing before and after technical change greatly lowered communication costs we examine in particular whether increasing ease of communication has altered scholars choices about their methods of production and whether those methods yielded changes in the productivity of scholarly activity that are consistent with increasing access to new communications technologies 2 in section ii we discuss a model of the production process in scholarly writing in relation to the cost of communications in section iii we describe the unique data set we assembled to examine the relation between technical change and scholarly productivity section iv presents the results of using these data to test the hypotheses that we develop and section v compares coauthored to solo authored studies and provides a suggestion for the increased prevalence of the former section vi offers a consistent explanation for most of the results ii a model of scholarly production the example that we use in this study of the impact of technology is the nature and outcomes of the choices of co workers by authors of scholarly publications in economics the importance of team research has been stressed by a number of authors studying the economics of innovation including dasgupta 1988 who also presents a research summary so that our specific example has broader implications for the study of technical change has the decline in the cost of communication altered scholars choices in a way consistent with these technologies increasing scholarly productivity in examining scholarly productivity we focus on research output in particular we view scholars as having three production choices 1 work solo s 2 work with close by coauthor s c or 3 work with distant coauthor s d in the model in this section the scholar is assumed to choose a production technology that maximizes his or her scholarly productivity measured as the quality of the article produced in section vi we a dopt an alternative characterization of a scholar s choices we assume that the scholar has a wide range of potential research activities to choose among and has perfect knowledge of the productivity p valued in dollars of all potential matches s c sub i member of c and d sub i member of d 3 each match generates one solo equivalent article per period

the russian oil industry restructuration towards the emergence of western type enterprises abstract the russian oil industry has undergone fundamental changes since the collapse of the soviet empire and its bureaucratic administrative structure dominated by its various branch ministries the monopoly in the soviet oil industry has now been replaced by a number of oil companies some of which are very powerful the best known of them being lukoil these joint stock companies are the product of a reform aimed essentially at implanting out of all the numerous organisational arrangements developed in the west the model of the vertically integrated private firm beyond the legal reforms in the russian oil industry sector however the nature of the organisational model that has actually emerged in russia begs several questions many entities which are complex and highly diversified are involved in this industry there are of course the many privatised structures in which the banks sometimes carry a considerable amount of weight there are also some vertically integrated organisations but the degree of integration is variable and their method of centralisation is based on a specific form of economic logic it should not be considered however that these actors are similar to capitalist type private enterprises whose behaviour is regulated by the demands of international competition reform of property rights has not been sufficient to create true private enterprise in russia this assertion is borne out by several elements including the russian economic situation itself financial industrial groups in the oil industry have first and foremost to organise and adapt themselves to deal with the essentially non monetary relationships such as barter interentreprise credit and non payment which are becoming more and more dominant in the russian economy today as the recent financial crisis shows thus beyond the change in formal organisation that the various methods of privatisation show the way in which the industry behaves is still regulated to a significant extent by planned economic relationships and not by efficiency and profitability strategies based on reducing costs on the other hand the survival strategies are based on the willingness to maximise exports this being based on a quantitative production development logic they are written into the particular kind of compromise arrived at between the state the banks the regions the workers and the oil joint stock companies which could be summarised in the following equation foreign currency in exchange for non payments and for preserving jobs in the oil industry s holding companies the financial crisis in russia has clearly shown how fragile this system is and has to some extent shattered the compromise already weakened by developments in international markets the decrease in foreign currency revenue brought about by the fall in international oil prices has clearly shown the structural weaknesses in an oil industry that is still conspicuously beset by heavy production costs costs that are proving a serious hindrance to its competitiveness the future of the industry must be in serious doubt if despite the reforms introduced it does not continue along the path of major restructuring

strategic policy and the logistics of crude oil transit in lithuania this paper examines the crude oil transit market in lithuania and the significant economic and political role played by russia beginning with an analysis of the strategic and political role played by crude oil in lithuania there follows a discussion of the policies followed by the lithuanian authorities following independence in 1992 from the former soviet union a content analysis approach is taken to establishing the main policy issues that dominate the sector this technique combines both quantitative and qualitative approaches to a review of published material on oil transit in lithuania and acts as a means of assessing expert opinion on the issues involved the results from this analysis will be used in developing policy initiatives for the sector the paper ends with some suggestions for further applications of the techniques used to oil transit policy issues in the region

increasing returns labour utilization and externalities procyclical productivity in the united states and japan this paper investigates procyclical productivity and attempts to discriminate among several competing explanations the study focuses on the united states and japan since the different industrial relations in these two economies serve to cast a sharper light on the procyclical productivity debate labour hoarding evaluated through the introduction of a labour utilization proxy proves to be an important influence the interpretation of the role of external economies remains an open issue

endogenous growth and the procyclical behaviour of productivity abstract in this paper a model with endogenous growth is used to explain the procyclical behaviour of productivity periods when the marginal return to goods production is high are associated with low levels of human capital formation and other investment like activities in particular the model successfully explains the surges in productivity exhibited in the uk during wartime and the apparently permanent effect of the level of defence spending on the growth of total factor productivity

an analysis of multiple structural breaks in us relative farm prices the movement of farm prices relative to other commodity prices is analysed for the period 1913 01 to 2003 12 investigating the number and time of structural breaks and discussing likely causes of structural breaks in the relative farm prices bai and perron s 1998 2003 multiple structural change test with a dynamic programming algorithm is used this test makes it possible to have an efficient computation of the estimates of the break points as global minimizers of the sum of squared residuals we find six structural breaks when we consider only the mean process and two breaks when we consider the mean and autoregressive processes possible causes for these breaks are discussed

does total factor productivity drive housing prices a growth accounting exercise for four countries abstract housing prices diverge from construction prices after 1997 in four major countries besides total factor productivity tfp differences between construction and the general economy account for the evolution of construction prices in the us and germany but not in the uk and spain

structural change in advanced nations a new set of stylised facts we provide new evidence on patterns of structural change in advanced economies reconsidering the stylised facts put forward by kaldor 1963 kuznets 1971 and maddison 1980 since 1980 the services sector has overwhelmingly predominated in the economic activity of the european union japan and the us but there is substantial heterogeneity among services personal finance and business services have low productivity growth and increasing shares in employment and gdp by contrast shares of distribution services are constant and productivity growth is rapid we find that the labour share in value added is declining while the use of ict capital and skilled labour is increasing in all sectors and regions

does growth vary over the business cycle some evidence from the g7 countries in this paper we analyse the dynamics of business cycles in the g7 countries our aim is to answer the question of whether growth varies in an absolute sense over the business cycle and hence to examine whether the simple two phase characterization downturn upturn is an appropriate description of the business cycle to study growth over the cycle we estimate single country equations and then a pooled regression that takes into account the important interactions of international business cycles the results confirm the steepness asymmetry of the growth cycles and show that growth varies systematically within upturns and downturns these are consistent with the notion of deepness asymmetry which implies that contractions are more pronounced in the later stages of a downturn whereas expansions are stronger immediately after troughs

training and retirement patterns life cycle theory predicts that employers enter into implicit contracts with newly hired employees to ensure rent sharing and to decrease turnover after firm specific training investments typically these implicit contracts would include both upward sloping earning profiles and mandatory retirement in this article we empirically test the prediction that workers with firm specific skills are restrained in their options to continue working therefore they are more likely to retire at common mandatory retirement dates than those with general skills using the us national longitudinal survey of older men we find that workers who participated in firm specific training in their early careers do indeed retire earlier than those with general skills the results show that compulsory retirement plans force these older workers to retire when they reach the common mandatory retirement age of 65 the results presented in this article are highly relevant for public policies in european and other industrialized cou

inventories layoffs and the short run demand for labor this paper presents a theoretical and empirical analysis of the short run employment layoff and inventory strategies of firms on average more than two thirds of all layoffs in american manufacturing end in a rehire by the employer of origin martin feldstein 1975 david lilien 1980 these temporary layoffs have recently accounted for about half of all ongoing employer initiated spells of unemployment in that sector see table 1 and have led to a revised interpretation both of the involuntary nature of these separations costas azariadis 1975 feldstein 1976 martin baily 1977 and of the durability of employment relationships evidently a significant proportion of unemployed workers know that the conditions that generated their separations are temporary and so they expect to be recalled within some reasonable time the point of departure for this paper is in interpreting these findings as evidence of a privately and socially efficient stock of excess capacity held against contingent future demands that is as an inventory of a productive input this view leads to empirically refutable hypotheses regarding both the role of temporary layoffs and the circumstances under which they will be important in particular both excess capacity idle resources and inventories are devices by which firms may economize on the costs of rapid adjustments when faced with unstable market conditions george stigler 1939 in such an environment the demands for layoffs and for other buffer stocks are jointly determined elements of long run technology the choice among alternative stocks will depend on relative profitabilities and firms may choose to hold stocks of inputs as a substitute for inventory accumulation especially if the costs of varying capacity or of storage are important this reasoning implies that i the structure of short run employment and layoff decisions will vary across firms and industries and ii differences in these structures will be systematically related to the role of inventories in firms dynamic strategies some perspective is warranted at least since charles holt et al 1960 economists have recognized the production smoothing role of inventories and the necessity of predicting future demand in making current decisions david belsley 1969 gerald childs 1967 michael ward 1978 similarly one of the contributions of recent work on implicit labor contracts is in viewing the exchange of labor services as a bilateral and durable commitment both these lines of analysis are concerned with the methods firms use to respond to fluctuating demand yet the underlying interrelated nature of employment and inventory decisions has rarely been recognized roger miller 1968 m ishaq nadiri and sherwin rosen 1973 r g crawford 1979 robert hall 1972 this paper aims to provide a framework for evaluating these decisions and in so doing to explain some interesting features of observed labor markets the notion of substitution between inventories of human and physical capital suggests a more disaggregated look at the data table 2 shows the importance of temporary layoffs in the distribution of unemployment among manufacturing industries it reports layoff and total unemployment rates for twelve representative industries over the period 197376 and average layoff rates and recall frequencies for 1958 76 among all 21 twodigit manufacturing industries the correlation between layoff and rehire rates is 6 and the table illustrates this evidently industries with larger than normal layoff rates also tend to have larger rehire frequencies from firm initiated spells of unemployment this university of chicago i am indebted to gary becker robert cotterman sherwin rosen jose scheinkman michael ward finis welch the managing editor and an anonymous referee for discussions and comments at various stages the usual disclaimer applies

the world price of coal a significant increase in the seaborne trade for coal over the past 20 years has unified formerly separate coal markets into a world market in which prices move in tandem by virtue of its large domestic market the usa has become the residual supplier and price setter in the world coal market changes in multifactor productivity have been the primary cause of the long term fluctuations in coal prices that have been observed in the usa since the end of the second world war and in the world coal market

measurement of labour quality growth caused by unobservable characteristics the standard economy wide indices of labour quality or human capital largely ignore the role of unobservable worker characteristics in this article we develop a methodology for identifying the contributions of both observable and unobservable worker characteristics in the presence of the incidental parameter problem based on data for switzerland over the period 1991 to 2006 we find that a large part of growth in labour quality is caused by shifts in the distribution of unobservable worker characteristics the overall index differs little from the standard indices but contributions to growth attributed to education and age are corrected downwards

dynamic linkages between diffusion of information communication technology and labour productivity in south asia at present diffusion of information communication technology ict is a significant area of concern for sustainable development and growth of a country regions with abundant labour such as south asia require significant improvements in the diffusion of ict to achieve higher productivity for their labour which in turn can increase the pace of economic growth in this context the objective of this study is to investigate whether ict could be used to improve labour productivity for countries in south asia this study first investigates the general status of diffusion of ict among south asian countries the initial results based on descriptive statistics indicate that there is a significant gap among the south asian countries with maldives having the highest ict facilities second using robust panel data methodologies this study concludes that south asia s drive for higher productivity of its abundant labour force can substantially be improved in the long run by increasing diffusion of ict in the prese

the nairu unemployment and monetary policy this paper examines the precision of conventional estimates of the nairu and the role of the nairu and unemployment in forecasting inflation the authors find that although there is a clear empirical phillips relation the nairu is imprecisely estimated forecasts of inflation are insensitive to the nairu and there are other leading indicators of inflation that are at least as good as unemployment this suggests deemphasizing the nairu in public discourse about monetary policy and instead drawing on a richer variety of leading indicators of inflation

productivity development in icelandic norwegian and swedish fisheries this article analyses the total factor productivity tfp performance of fisheries in iceland norway and sweden during the period 1973 to 2003 we measure tfp growth using real gross value added as output and capital input labour input and a stock input index based on the major fish stocks in developed neighbouring countries we expect rapid diffusion of fishing technology innovations contributing to productivity convergence in addition innovations in the public regulation and the industrial organization may also have influenced productivity growth during the period we find that iceland had the highest annual tfp growth accounting for stock changes it amounts to 3 while the corresponding figures for sweden and norway are 2 8 and 0 8 respectively despite best practice fishing technologies being widely available we find no evidence of productivity convergence among the three countries