limit cycles in intertemporal adjustment models theory and applications this paper starts from well behaved i e concave one state variable optimal control models the crucial feature is that indigenous growth is present the replacement of the control by an adjustment process and presumably penalizing these adjustments may convert stable and only stable fixed point equilibria into limit cycles indeed given positive growth and proper externalities such that discounting exceeds growth one can generate stable limit cycles with ease e g for a separable framework examples from such diverse fields as renewable resources optimal saving and public choice highlight the economic applicability

interpreting the great moderation changes in the volatility of economic activity at the macro and micro levels most advanced economies have experienced a striking decline in the volatility of aggregate economic activity since the early 1980s volatility reductions are evident for output and employment at the aggregate level and across most industrial sectors and expenditure categories inflation and inflation volatility have also declined dramatically previous studies offer several potential explanations for this great moderation we review evidence on the great moderation in conjunction with evidence about volatility trends at the micro level we combine the two types of evidence to develop a tentative story for important components of the aggregate volatility decline and its consequences the key ingredients are declines in firm level volatility and aggregate volatility most dramatically in the durable goods sector surprisingly this has occurred without a decline in household consumption volatility and individual earnings uncertainty our explanation for the aggregate volatility decline stresses improved supply chain management particularly in the durable goods sector and less important a shift in production and employment from goods to services we provide evidence that better inventory control made a substantial contribution to declines in firm level and aggregate volatility consistent with this view if we look past the turbulent 1970s and early 1980s much of the moderation reflects a decline in high frequency short term fluctuations while these developments represent efficiency gains they do not imply nor is there evidence for a reduction in economic uncertainty faced by individuals and households

union experience and worker policy legislative behavior in california 1999 2012 unions influence the u s political process in numerous ways although scholarship has examined labor s effects on political office holding less research is available on the relationship between unions and legislator policy choice in this article i use theories of social identification civic engagement and intergenerational transfer of political values to explore the relationship between various definitions of a legislator s prior union experience and his or her roll call voting once in office i employ multilevel mixed effects regressions to analyze 2 427 federal and statewide worker related votes cast by california s legislators from 1999 to 2012 results indicate that higher probabilities of having worked in a unionized occupation or having a family member who belonged to a union are positively associated with voting for union supported issues the relationship is not cumulative however and is moderated by factors both endogenous and exogenous to the legislator

distribution and redistribution in postindustrial democracies this paper analyzes the processes of distribution and redistribution in post industrial democracies we combine a pooled time series data base on welfare state effort and its determinants assembled by huber ragin and stephens 1997 with data on income distribution assembled in the luxembourg income survey lis archive in the case of the lis data we re calculate the micro data in order to remove the distorting influence of pensioners on pre tax pre transfer income distribution we examine the determinants of three dependent variables pre tax pre transfer income inequality post tax post transfer income inequality and the proportional reduction in inequality from pre to post tax and transfer inequality we hypothesized that pre tax pre transfer income inequality would be determined by labor market institutions union density bargaining centralization labor market conditions unemployment and economic structures post industrialism third world imports we hypothesized that the reduction in inequality would be determined by political configurations directly by left government and indirectly via their effect on welfare state generosity by left government and christian democratic government post tax and transfer income inequality was hypothesized to be a product of the combination of labor market variables and political variables the results broadly confirms our hypotheses and the overall fit is very good

real and monetary cycles in models of keynes wicksell type abstract we formulate a descriptive dynamic macroeconomic model of the keynes wicksell type which incorporates goods labour and financial markets the model has well specified budget constraints with respect to the economic agents households firms and government within it we introduce some standard nonlinearities into the goods and labour markets the dynamics of the general model consist of five differential equations we analyse two and three dimensional subcases to show the existence of real and monetary cycles whose interaction will determine the full dynamics we use numerical simulation to study the dynamics of the full model and the impact of various government fiscal and monetary policies

a minsky crisis a model is developed to illustrate hyman minsky s financial crisis theories a key assumption is that the level of wealth in the economy is determined mac roeconomically with the value of firms assets responding to the state of confidence as reflected by discounted quasi rents on capital the second assumption is that there is high substitutability between liabilities of firms and money in the public s portfolio a downward shift in anticipated profits leads wealth to contract and the public to shift portfolio preferences toward money interest rates rise leading to further dampening of expected profits and a debt deflation crisis can occur

heterogeneous beliefs and adaptive behaviour in a continuous time asset price model abstract this paper extends the analysis of the seminal work of brock and hommes 1997 brock and hommes 1998 on heterogeneous beliefs and rational routes to randomness in discrete time models to a continuous time model of asset pricing the resulting model characterised mathematically by a system of stochastic delay differential equations provides a unified approach to deal with adaptive behaviour of heterogeneous agents and market stability impact of lagged price used by chartists to form their expectations for the underlying deterministic model we show not only that the result of brock and hommes on rational routes to market instability in discrete time holds in continuous time but also a double edged effect of an increase in lagged price used by the chartists on market stability for the stochastic model we demonstrate that the interaction and boundedly rational behaviour of heterogeneous agents can generate various market phenomena such as bubbles and crashes and replicate stylised facts including volatility clustering and long range dependence in volatility

the rise of the super rich power resources taxes financial markets and the dynamics of the top 1 percent 1949 to 2008 the income share of the super rich in the united states has grown rapidly since the early 1980s after a period of postwar stability what factors drove this change in this study we investigate the institutional policy and economic shifts that may explain rising income concentration we use single equation error correction models to estimate the long and short run effects of politics policy and economic factors on pretax top income shares between 1949 and 2008 we find that the rise of the super rich is the result of rightward shifts in congress the decline of labor unions lower tax rates on high incomes increased trade openness and asset bubbles in stock and real estate markets

the decision to work by married immigrant women using 1980 census data the authors analyze the labor force participation of married immigrant asian women in the united states by country of origin compared with that of married immigrant women from europe and canada the results suggest the existence of a family investment strategy evidence from both across groups and within groups indicates that a womans decision to work is affected by whether she has a husband who invests in skills specific to the u s labor market and also by the extent of that investment such a family response may help offset the low earnings of immigrant men who initially lack skills for which there is a demand in the american labor market excerpt

structure behavior and voter turnout in the united states electoral participation in the united states is examined to provide a clearer account of the effect of the registration requirement on individual voting behavior pooling nes data from 1980 1984 and 1988 i first model with traditional and selection bias techniques the full electorate to distinguish among three groups nonregistrants registered nonvoters and voters analyses limited to recent movers then reported to understand more fully the forces associated with the actual decision calculi of registering and voting the influences of many factors commonly accepted as important determinants of voting are disentangled and their effect at each stage is ascertained factors yielding inconsistent effects in previ research or believed to be unimportant such as race gender attitudes toward the candidates and trust government are shown to deserve closer scrutiny by electoral scholars

the impact of children on married women s labor supply black white differentials revisited previous studies have documented that the depressing effect of children on labor supply is greater for white wives than for their black counterparts the present paper examines the hypothesis that this difference by race is less pronounced in the highly educated segments of the population multinomial logit estimates of a labor supply model using data from the 1982 national survey of family growth are consistent with the hypothesis

the role of the family in immigrants labor market activity an evaluation of alternative explanations comment most research on the labor market outcomes of immigrants has studied the behavior of individuals focusing primarily on the wage assimilation process or the excess returns to experience which immigrants obtain in their destination country s labor market e g barry r chiswick 1978 george j borjas 1985 recently however attention has been directed to analyzing immigrant labor market outcomes in a family context an approach which combines information about an individual s own labor market opportunities and the family context in which labor market decisions take place in a previously published paper in this review michael baker and dwayne benjamin 1997 evaluate alternative explanations for the observed labor supply patterns of canadian immigrants in the 1986 1991 period specifically when immigrant husbands arrive in canada they typically work less than comparable natives however immigrant wives work more than natives other things equal with assimilation the labor supply of immigrant husbands eventually catches up to that of natives while immigrant wives labor supply falls relative to comparable natives and is ultimately overtaken by that of natives the authors take these patterns to be most consistent with a family investment model in this scenario upon arrival husbands invest in their human capital while wives work to provide the family with liquidity during this investment period with increased time in canada husbands labor supply increases rapidly due to their growing skills in the canadian labor market while wives labor supply falls off in part because they originally took dead end jobs upon arrival in order to finance their husbands investments in human capital interestingly while most of the findings reported by baker and benjamin are consistent with the family investment model their estimated wage equations are not although they do not comment on this in discussing the appropriateness of the family investment model specifically they find similar rates of wage assimilation for husbands and wives this finding suggests roughly equal propensities to invest in one s own human capital for both groups this is contrary to the family investment hypothesis and does not match their story of dead end jobs for wives and large human capital investments of their husbands an alternative possible explanation for the patterns observed by baker and benjamin involves a simple price model in which the observed labor supply patterns reflect laborsupply responses to each spouse s wages for example the initially high but eventually falling level of wives labor supply relative to comparable natives could be a response to their husbands initially low but rising wages while this reasoning like the family investment model is broadly consistent with the data the authors conclude that the simple price model cannot be the entire explanation since in order to explain the full labor supply patterns of immigrants it would require unrealistically high labor supply elasticities and further that the assimilation patterns noted above remain even when wages of husband and wife are controlled blau school of industrial and labor relations cornell university 265 ives hall ithaca ny 14853 and nber and cesifo kahn school of industrial and labor relations cornell university 264 ives hall ithaca ny 14853 and cesifo moriarty school of industrial and labor relations cornell university ilr graduate student mailboxes ives hall ithaca ny 14853 souza faculdade de economia administracao e contabilidade university of sao paulo avenida professor luciano gualberto 908 cidade universitaria predio fea 1 sao paulo sp 05508 brazil the authors thank three anonymous referees for helpful comments and suggestions portions of this paper were written while blau and kahn were visiting scholars at the russell sage foundation to which they are grateful for research support

a uniqueness proof for monetary steady state abstract the framework in lagos and wright 2005 20 combining decentralized and centralized markets is used extensively in monetary economics much is known about that model but there is a loose end only under special assumptions about bargaining power or decentralized market preferences has it been shown that the monetary steady state is unique for general decentralized market utility and bargaining i prove uniqueness for generic parameters with fiat money and for all parameters with commodity money as a corollary i get monotone comparative statics

money and credit in a keynesian model of income determination this paper integrates the theory of money and credit derived ultimately from wicksell into the keynesian theory of income determination with assets allocated according to tobinesque principles the model deployed has much in common with the modern endogenous money school initiated by kaldor which emphasises the essential role played by credit in any real life economy since production takes time and the future is always uncertain new ground is broken methodologically because all the propositions are justified by simulations of a rigorous 60 equation model making it possible to pin down exactly why the results come out as they do one conclusion of the paper is that there is no such thing as a supply of money distinct from the money which agents wish to hold or find themselves holding this finding is inimical possibly in the end lethal to the way macroeconomics is currently taught as well as to the neoclassical paradigm itself

unemployment hysteresis in canada an approach based on long memory time series models long memory univariate time series models known as arfima are applied to measure shock persistence for canada and the usa both output and unemployment exhibit higher persistence in canada than in the usa the finding that the rate of unemployment in canada exhibits high shock persistence supports the notion of hysteresis in unemployment the analysis of disaggregated canadian unemployment rates indicates that hysteresis is most pronounced for adult male workers the same class of models is used to obtain a generalization of the beveridge nelson decomposition of time series into a permanent and a cyclical component the permanent component of the canadian unemployment rate exhibits a kink in the early 1970s

intermarriage and the economic assimilation of immigrants this article investigates the assimilation role of intermarriage between immigrants and natives intermarried immigrants earn significantly higher incomes than endogamously married immigrants even after we take account of human capital endowments and endogeneity of intermarriage the premium does not appear to be a reward for unobservable individual characteristics natives who intermarry do not receive this premium nor do immigrants who intermarry into another ethnic group the premium is mainly attributable to a faster speed of assimilation rather than any difference in labor market quality between intermarried and nonintermarried immigrants at the point of arrival

gender and ethnicity married immigrants in britain in this paper we investigate the economic activity of married or cohabiting female immigrants in britain we distinguish between two immigrant groups foreign born females who belong to an ethnic minority group and their husbands and foreign born white females and their husbands we compare these to native born white women and their husbands our analysis deviates from the usual mean analysis and investigates employment hours worked and earnings for males and females as well as their combined family earnings along the distribution of husbands economic potential we analyse the extent to which economic disadvantage may be reinforced at the household level and investigate the extent to which it can be explained by differences in observable characteristics we find that white female immigrants and their husbands have an overall advantage in earnings over white native born both individually and at the household level minority immigrants do less well in particular at the lower end of the husbands economic potential distribution this is mainly due to the low employment of both genders which leads to a disadvantage in earnings intensified at the household level only part of this differential can be explained by observable characteristics

social security eligibility and the labor supply of older immigrants the employment rate of native born men falls at a much faster rate than that of immigrants as the two groups approach the age of retirement the author draws on u s census data from 1960 2000 to examine how the eligibility requirements for social security benefits affect immigrants decisions to leave the labor market as they near retirement age because a person needs to have worked in the united states for at least ten years to qualify for benefits newly arrived immigrants may not yet have accumulated the requisite employment credits to do this and thus have greater employment rates than other comparably aged persons the probability that an older immigrant is employed falls once the ten year work rule is satisfied the implication of this finding is that immigration may affect the increase in retirement benefits that will inevitably occur as the baby boom generation retires

a monetary minsky model of the great moderation and the great recession abstract steve keen s model of minsky s financial instability hypothesis keen 1995 displayed qualitative characteristics that matched the real macroeconomic and income distributional outcomes of the preceding and subsequent fifteen years a period of economic volatility followed by a period of moderation leading to a rise of instability once more and a serious economic crisis this paper extends that model to build a strictly monetary macroeconomic model which can generate the monetary as well as the real phenomena manifested by both the great recession and the great moderation

a keynes goodwin model of the business cycle abstract the paper puts forward a dynamic is lm model in four state variables representing real balances inflation income distribution and a so called state of confidence local in stability is characterized by high low interest elasticities of money demand also a hopf bifurcation can be shown to exist freezing inflation and distribution makes a mathematical analysis of the main stability mechanisms in the outer regions possible the global dynamics of the full system is studied by means of numerical simulations it gives rise to unique and stable limit cycles lastly a sensitivity analysis inquires into the impact of parameter changes on the main cycle features

unemployment income distribution and debt financed investment in a growth cycle model abstract as recent experience suggests the most significant economic fluctuations are those that combine real and financial factors this paper works out a simple model that couples a version of goodwin s 1967 growth cycle model of real fluctuations with insights drawn from a model of financial fluctuations based on minsky s financial instability hypothesis vercelli 2000 sordi and vercelli 2006 sordi and vercelli 2012 the model suggested substantially modifies that of keen 1995 who combined insights from goodwin and minsky within a model of fluctuating growth in the real part of the model we introduce the possibility of disequilibrium in the goods market and formalize a mechanism of output adjustment based on the conventional dynamic multiplier the model so obtained may exhibit persistent dynamics and provide insights to enable better understanding of the nature of real world fluctuations

interregional migration and post move employment in two earner families evidence from finland nivalainen s 2005 interregional migration and post move employment in two earner families evidence from finland regional studies 39 891 907 this paper investigates the post move employment of men and women in finnish two earner families taking account of selection bias and heteroskedasticity a unique data set consisting of actual couples is used heteroskedasticity does not seem to be a great problem but the results demonstrate the importance of the selectivity correction unobservable characteristics exist that both increase migrants employment potential and make them more mobile migration itself generally exerts a negative effect i e migrants have a lower tendency to be employed than stayers however average inspections may mask a wide variation extended analysis shows that migration in fact leaves the majority of husbands unaffected and that some husbands actually benefit from moving instead migration has a negative impact on wives in all cases hence the results suggest that the h

differential economic opportunity transferability of skills and immigration to the united states and canada studies concerned with u s and canadian immigration after world war ii have been based on cross sectional data or on limited time series data and have stressed the importance of differential economic opportunity as a cause of migration in this study four vectors of variables are used to explain annual immigration to both the united states and canada 1962 1984 from a number of specific source countries economic opportunities transferability of skills level of economic development and political conditions and institutional controls that reflect the immigration policies of the two nations wage differentials several measures of skill transferability political conditions in source countries and the policy variables prove to be important determinants of u s and canadian immigration excerpt

var analysis and the great moderation post world war ii us macroeconomic history is usually divided into two distinct subperiods the former period which extends up to the end of the volcker disinflation is characterized by a significant extent of macroeconomic turbulence with highly volatile inflation and output growth the latter period from the end of the volcker disinflation up to the present day is marked in contrast by significantly smaller volatilities for both inflation and output growth these dramatic changes in the reduced form properties of the us economy over the last several decades char acterize a phenomenon known as the great moderation see in particular chang jin kim and charles nelson 1999 margaret mcconnell and gabriel perez quiros 2000 a vast empirical literature has investigated the source s of the great moderation in an attempt to disentangle the relative contributions of two main explanations good policy and good luck based on time varying or markov switching structural var methods the good luck hypoth esis has been advocated by a number of authors including james h stock and mark w watson 2003 giorgio e primiceri 2005 christopher sims and tao zha 2006 and luca gambetti evi pappa and fabio canova 2008

unemployment in britain male unemployment in britain has risen from around 2 per cent in the 1950s to around 17 per cent in 1985 see figure 1 the figures are for male unemployment because there is no consistent series for women 1 even more remarkably unemployment has fallen in only three years out of the last twenty 1973 1978 and 1979 to account for this we need a model that explains both changes in the natural or non accelerating inflation rate of unemployment nairu and deviations from it we use a three equation supply side model centred on the labour market this has two main features the first concerns the determination of employment in the short run the labour demand function that we use cuts through the fruitless debate now raging especially in europe as to whether current unemployment is classical or keynesian according to the classical view employment is too high because real wages are too high according to the keynesian view real wages are not binding and unemployment is high because the product market does not clear with prices too high relative to nominal demand the whole debate is set in the framework of perfect competition yet in perfect competition prices are set by impersonal forces and it is not clear what could possibly stop prices clearing the market it is much more reasonable to think of prices as being set by imperfectly competitive firms existing prices being the best they can think of given the demand they face in this context firms demand for labour will depend on both the real product wage and the level of real aggregate demand this is the demand function we estimate and it conforms both to common sense and to the data however this does not imply that employment can be made to grow without limit by pumping up real demand for in the medium term when price surprises are eliminated our model determines three variables employment real wages and real demand on the basis of three equations an employment equation a price equation and a wage equation thus in the medium term there is a natural level of employment and corresponding to this a natural level of real aggregate demand the second key feature of our model concerns the medium term determination of unemployment in the medium term the planned mark up of wages over prices in wage settlements must be consistent with the mark up of prices over wage costs in employers pricing behaviour for if wage setters try to set real product wages higher than is consistent with employers pricing behaviour this generates ever increasing inflation thus the key to understanding unemployment in the medium term is the behaviour of wage setters if events occur that push them towards too high real wages then unemployment has to rise to offset these influences we shall call these influences wage pressure variables or push factors and they are clearly crucial in understanding unemployment the variables here include the social security system employment protection

debt cycles instability and fiscal rules a godley minsky synthesis wynne godley and hyman minsky were two macroeconomists who saw the crisis coming this paper develops a simple macrodynamic model that synthesises some key perspectives of their analytical frameworks the model incorporates godley s financial balances approach and postulates that private sector s propensity to spend is driven by a stock flow norm the target net private debt to income ratio that changes endogenously via a minsky mechanism it also includes two fiscal rules a maastricht type fiscal rule according to which the fiscal authorities adjust the government expenditures based on a target net government debt ratio and a godley minsky fiscal rule which links government expenditures with private indebtedness following a counter cyclical logic the analysis shows that i the interaction between the propensity to spend and net private indebtedness can generate cycles and instability ii instability is more likely when the propensity to spend responds strongly to deviations from the stock flow norm and when the expectations that determine the stock flow norm are highly sensitive to the economic cycle iii the maastricht type fiscal rule is destabilising while the godley minsky fiscal rule is stabilising iv the paradox of debt can apply both to the private sector and the government sector

can remittances compensate for manpower outflows the case of philippine physicians abstract this paper addresses questions about the desirability of skilled migration which generates remittance flows focusing on filipino physicians the paper explores under what conditions remittances from filipino doctors practicing overseas might be sizeable enough to compensate the nation for the losses associated with doctor emigration while data limitations and questions about the correct social welfare function preclude definitive empirical results the analysis does indicate in the philippine case that it may pay to train doctors for export

hyteresis in import prices the beachhead effect this paper shows that temporary real exchange rate fluctuations can have persistent hysteretic effects on trade specifically when market entry costs are sunk sufficiently large exchange rate shocks alter domestic market structure and thereby induce hysteresis this simple result has strong implications for exchange rate theory t rade policy and estimation of trade equations empirical evidence su ggests that the recent dollar overvaluation induced hysteresis in u s import prices namely the aggregate pass through equation of exchange rates to import prices shifted in the 1980s the shift s nature and timing is broadly consistent with the hysteresis hypothesis copyright 1988 by american economic association

hysteresis and the earnings function hysteresis in wages is modelled and a tractable earnings function is derived estimation using a recent cross section of uk data provides support for this function which also outperforms rival specifications on the basis of goodness of fit

dynamic analysis of policy lag in a keynes goodwin model stability instability cycles and chaos abstract in this paper we investigate the impact of government s stabilization policy on the dynamic behavior of the economic system in an analytical framework of a keynes goodwin model of the growth cycle in particular we study the effects of the policy lag on macroeconomic stability analytically and numerically it is shown that the increase of the policy lag contributes to destabilize the system and cyclical behavior and chaotic motion emerge in some ranges of the parameter values

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

immigrants and human capital investment why do immigrants invest more in human capital than the native born and how do investment patterns vary by type of immigrant summarizing our previous research we approach this question theoretically and empirically excerpt

the top 1 percent in international and historical perspective world top incomes database at http topincomes parisschoolofeconomics eu and has represented a challenge to the economics profession stories based on the and has represented a challenge to the economics profession stories based on the supply and demand for skills are not enough to explain the extreme top tail of supply and demand for skills are not enough to explain the extreme top tail of the earnings distribution nor is it enough to look only at earned incomes different the earnings distribution nor is it enough to look only at earned incomes different approaches are necessary to explain what has happened in the united states over approaches are necessary to explain what has happened in the united states over the past century and also to explain the differing experience in other high income the past century and also to explain the differing experience in other high income countries over recent decades we begin with the international comparison in the countries over recent decades we begin with the international comparison in the fi rst section and then turn to the causes and implications of the evolution of top fi rst section and then turn to the causes and implications of the evolution of top income shares income shares

reviving kalecki s business cycle model in a growth context abstract in 1935 kalecki formulated the first fully specified model of a macroeconomic dynamics in which he studied an endogenous and most elementary business cycle mechanism to revive his insights the present paper adapts his stationary economy to a growth context introducing a reasonable nonlinearity into the investment function it then takes care that the model exhibits persistent cyclical behaviour that is characterized by a unique globally attracting limit cycle this feature is a robust property a calibration of the numerical parameters achieves desired values for the cycle period as well as the amplitudes of the output capital ratio and the capital growth rate it is moreover demonstrated that a one time shock to the dynamics can easily have long lasting effects on the amplitudes despite common misgivings about delay differential equations which here result from kalecki s implementation lag the analysis can be conducted with a limited mathematical effort

effective demand class struggle and cyclical growth the paper presents an analytical model of endogenous cyclical growth in a pure capitalist economy the model integrates keynesian ideas on effective demand with a marxian emphasis on class struggle and the reserve army of labor for reasonable parameter values the model has a unique nontrivial balanced growth equilibrium the equilibrium is unstable and using the poincare bendixson theorem it is shown that the economy will exhibit perpetual fluctuations around the balanced growth path copyright 1989 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

inflation output and money this paper uses money demand theory and a rational expectations version of the quantity theory of money to study inflation in the united states during the post korean war period the major results are as follows 1 the theory and tests explain the phenomenon of stagflation that is the negative relation between inflation and real activity observed during the post 1953 period the analysis calls into question the many variants of the phillips curve which presume that inflation real activity relations are positive 2 consistent with the models of patinkin 1961 and fama 1980 monthly quarterly and annual data indicate that the base currency plus reserves held against deposits is the relevant monetary variable in the inflation process and that demand deposits are irrelevant the direct policy implication is that the base is the key monetary variable in the control of inflation 3 the most convincing evidence for the simple quantity theory view of inflation proposed here comes from the comparison of the conditional exmoney demand theory and the quantity theory of money are used to study the inflation process as predicted by the model monthly quarterly and annual data indicate that inflation is positively related to money growth rates and negatively related to growth rates of real activity the theoretical and empirical origins of stagflation are explained and changes in monetary arrangements to simplify the control of inflation are prescribed

seniority political experience and support for government spending in the us house a culture of spending payne 1991a postulates that there is a culture of spending in the us congress whereby members of congress are socialized to increase their roll call support for more spending as a function of length of service and exposure to the washington culture in this article we develop and test an expanded model of roll call voting on spending matters focusing on two potential sources of socialization effects 1 exposure to the washington culture of spending primarily through seniority and proximity to washington dc and 2 previous political experiences developed before members are elected to congress using data for us house members from the 93rd through the 107th congresses we estimate a series of models in which we explain national taxpayer union scores as a function of seniority previous political experience personal attributes and a range of constituency variables we find strong and consistent seniority and political experience effects with senior members and those with extensive political experience more likely to support greater spending than other members these findings withstand a range of robustness tests

public attitudes toward government spending this study examines the nature sources and consequences of citizens attitudes toward government spending data from the 1984 cps national election study are used to perform a scaling analysis of mass spending preferences across a set of 10 public policies the empirical results indicate that there is a coherent structure underlying citizens attitudes toward social welfare spending in contrast spending preferences for nonwelfare programs are separate and largely unrelated concerns i argue that this distinction is essential for understanding public opinion on government spending and further analyses incorporating the difference between welfare and nonwelfare spending preferences provide important theoretically relevant insights about the relationship between citizens in the mass public and stimuli in the political world

a stagnationist model of economic growth in an economy subject to persistent excess capacity demand related factors will play a key role in determining patterns of secular change this thesis has a long history in econ omics sometimes in the underworld and occasionally at the height of fashion as recounted by rowthorn 1982 recent manifestations in the first world are the theories of monopoly capitalism of baran and sweezy 1966 and steindl 1952 who in turn follow kalecki 1971 hobson 1902 luxemburg 1951 and the marx of realisation crises and reproduction schemes in volume ii of capital other radicals such as boddy and crotty 1975 add a profit squeeze explanation of the cycle which underlays the dynamics of the growth model specified here in developing countries difficulties in both realisation and sectoral proportions are emphasised as obstacles to growth witness lustig s 1980 review of latin american structuralist theory and dutt s 1984 model which formalises an ongoing controversy in india about how income redistribution might affect prospects for industrialisation all these authors are stagnationist in assuming that both the growth rate and the level of capacity utilisation can be different under different conditions of income distribution and or macroeconomic policy their preferred policies will presumably lead to greater equality increase utilisation or step up growth they typically ask two analytical ques tions how does output respond in the short run to shifts in the income distribution how do output adjustments feed back into distributional dynamics especially under conditions when price and wage inflation rates may be influenced by employment levels productivity changes and conflicting income claims in what follows we set out a simple model to address these questions and explore the implications for macroeconomic policy of the answers that arise since the approach is not familiar to economists with a standard training a verbal description of the growth model is given first those who wish to jump directly into a formal presentation can proceed to section 1 output x is assumed to meet demand in an instantaneous short run we measure activity as the ratio of firms net cash inflow to the value of capital stock i e the rate of profit r during the short run the price level p is fixed by a mark up rule p 1 x wb where r is the mark up rate w the money wage and b the labor output ratio with this rule the share of profits or mark up income in the value of output is r l t let u stand for the output capital ratio or capacity utilization xik by simple identity

the immigrant and native born wage distributions evidence from united states censuses recent studies document a large widening of the immigrant native born mean wage gap since about 1970 a trend that some observers ascribe to post 1965 changes in u s immigration policy these studies are limited however by their exclusive focus on men which ignores important gender differences in the wage gap and by the inadequacy of the mean wage for characterizing the gap when as in recent decades the wage distribution dramatically changes this study of recent immigrants examines changes across the entire wage distribution for both genders the authors find evidence based partly on gender differences that minimum wages strongly influenced the gap a counterfactual analysis also indicates that if recent immigrants in 1970 had faced the 1990 wage structure their wage distribution would have closely resembled that of recent immigrants in 1990 these and other results suggest that the increasing wage gap is linked to changes in the wage structure

residential mobility and voter turnout we examine the characteristics of a largely ignored low turnout group people who have recently moved we find that neither demographic nor attitudinal attributes explain their lower turnout instead the requirement that citizens must register anew after each change in residence constitutes the key stumbling block in the trip to the polls since nearly one third of the nation moves every two years moving has a large impact on national turnout rates we offer a proposal to reduce the effect of residential mobility on turnout and estimate that turnout would increase by nine percentage points if the impact of moving could be removed the partisan consequences of such a change would be marginal

assimilation changes in cohort quality and the earnings of immigrants this paper reexamines the empirical basis for two facts that seem to be found in most cross section studies of immigrant earnings 1 the earnings of immigrants grow rapidly as they assimilate into the united states and 2 this rapid growth leads to many immigrants overtaking the earnings of the natives within 10 15 years after immigration using the 1970 and 1980 u s censuses this paper studies the earnings growth experienced by specific immigrant cohorts during the period 1970 80 it is found that within cohort growth is significantly smaller than the growth predicted by cross section regressions for most immigrant groups this differential is consistent with the hypothesis that there has been a secular decline in the quality of immigrants admitted to the united states

the legacy of immigration labour market performance and education in the second generation previous research finds that the children of immigrants or the second generation earn at least as much as other native born but that there are persistent ethnic differences in the intergenerational transmission of education and wages we explain why these results are not incompatible and extend the empirical evidence in several directions using the canadian survey of labour and income dynamics first we estimate a model of wages earnings and hours worked using modern econometric techniques to corroborate earlier us results of complete integration by the second generation in the labour market we find that ethnic differences in labour market performance are significant but that these difference do not alter conclusions about the relative performance of the second generation second we find a source of superior labour market performance for the second generation in higher educational attainment which constitutes an important legacy of immigration that should not be ignored third we find that the de

the economic incorporation of immigrants in 18 western societies origin destination and community effects this article examines differences in labor market participation and unemployment between immigrant groups in different countries the authors argue that two macro designs must be combined to provide a more comprehensive perspective on the economic integration of immigrant groups instead of reliance on observations of multiple origin groups in a single destination or a single origin group in multiple destinations multiple origins in multiple destinations are compared suggesting that the economic status of immigrants may be affected by the country from which they come origin effect the country to which they migrate destination effect and the specific relations between origins and destinations community effect from the human capital theory compositional hypotheses are derived which predict that these macro effects can be attributed to the selection of human capital from discrimination theories contextual hypotheses are deduced which maintain that macro effects can be ascribed to in gro

immigrant and emigrant earnings a longitudinal study this paper analyzes the relationship between earnings and the extent of assimilation cohort quality change and return migration experienced by the foreign born population the study uses the longitudinal data available in the survey of natural and social scientists and engineers the analysis reveals that there was a sizable decline in the skills of this population over the last two decades in addition the study shows that return migration is more likely among immigrants who did not perform well in the u s labor market

the public private sector cleavage in north america the political behavior and attitudes of public sector employees this article explores the private public sector cleavage in voting and political attitudes in canada and the united states the authors use public choice theory to hypothesize that the interest of

self selection and the earnings of immigrants this paper analyzes the way in which the earnings of the immigrant population may be expected to differ from the earnings of the native population because of the endogeneity of the decision to migrate the empirical study shows that differences in the u s earnings of immigrants with the same measured skills but from different home countries are attributable to variations in political and economic conditions in the countries of origin at the time of migration excerpt

labor market assimilation of immigrant women using 1970 1980 and 1990 u s census data the author examines the life cycle patterns of immigrant women s labor force participation he finds that the cross sectional approach that has been used in all previous studies leads to a substantial over estimate of the degree to which immigrant women s assimilation increases their labor force participation the effect of assimilation found by using the cohort approach however which acknowledges the possibility that patterns of labor force participation partly reflect the year of immigration is still sizable the effect is concentrated within the first 10 years after arrival there are substantial differences in participation and assimilation by country of birth immigrants from japan korea and china are found to have experienced the greatest degree of assimilation with an effect that raises the probability of working by 20 percentage points during the first 10 years after arriving in the united states

the cyclical behavior of marginal cost and price the author examines the cyclical behavior of price marginal cost margins for u s manufac turing after 1956 short run marginal cost is markedly procyclical this is primarily due to procyclical overtime payments incurred beca use employment is not perfectly flexible in most industries output price fails to respond to the cyclical movement in marginal cost so price marginal cost margins are markedly countercyclical the res ults contradict business cycle theories that explain low production i n a recession by a high real cost of producing they support theories that explain low production in a recession by the inability of firms to sell their output copyright 1987 by american economic association

book reniewstabilizing an unstable economy hyman p minsky a twentieth century fund report yale university press new haven and london pp xiv 353 35 00 cloth 14 95 paper

immigrants in the american labor market quality assimilation and distributional effects this paper provides evidence on immigrants performance and impact in the u s labor market we document that new immigrants do bring fewer marketable skills to the united states than did earlier cohorts and that changes in the source countries of recent immigrants account for all of this decline in immigrant quality we find no important evidence that quality has declined within immigrant ethnic groups we also show that immigrants assimilate rapidly in the u s market 10 years of u s experience offsets most of the earnings disadvantage of new immigrants and that assimilation is more rapid for groups who start with lower initial wages excerpt

earnings convergence does it matter where immigrants come from or why recent immigrants to the us are starting their economic lives at substantially lower earnings than previous cohorts of immigrants this decline attributed to high family admissions and changes in the country of origin composition of us immigrants has fostered concerns about the quality of recent immigrants and motivated changes in us immigration law as well as calls for further change the importance of these concerns depends upon whether immigrants starting with low earnings remain at a disadvantage throughout their working lives this paper summarizes the research concerning the relationship between immigrant entry earnings and earnings growth and the effect on immigrant earnings growth of kinship admission and country of origin for cohorts from the same country of origin education group and age group the authors find strong evidence of a systematic inverse relationship between initial earnings and subsequent earnings growth with regard to the effect of greater admissions on the basis kinship the authors find that declines in admissions on the basis of occupational skills and corresponding increases in admissions on the basis of family are associated with both a decrease in initial earnings and an increase in earnings growth finally they find that the importance of country of origin as a determinant of immigrant earnings diminishes with time in the us the earnings of demographically comparable immigrants regardless of origin converge with time in the us authors

how powerful are public bureaucrats as voters empirical evidence is collected and discussed regarding the influence of public bureaucrats on government sector outcome in their capacity as consumer voters it is necessary to isolate the specific effect of working in the public sector compared to other occupations on voting participation and on the probability to support an increase in the public budget for a balanced evaluation of public bureaucrats power other forms of their influencing the government sector outcome need to be taken into account

the voting behavior of bureaucrats some empirical evidence this paper has examined the voting behavior of bureaucrats and the consequences for elections the economic theory of the rational voter predicts that bureaucrats would have more to gain by voting than the general public the cost of voting is lower for public employees than for those who work in the private sector as a consequence theory predicts that bureaucrats would participate in elections at a greater rate than other individuals as a test of the validity of the economic theory of voting an empirical analysis of national elections from 1964 to 1978 was presented the evidence is drawn from household survey data published by the u s bureau of the census the data permit a direct observation of voting participation rates of public and private employees the empirical results indicate that bureaucrats consistently participate in elections at significantly greater rates than non bureaucrats as the public sector expands and voter participation rates remain low bureaucrats will exert disproportionate influence on election outcomes

the impact of phasing out fossil fuel subsidies on the low carbon transition abstract there is growing consensus on the fact that fossil fuel subsidies provided by governments in high income countries represent a misalignment on emissions reduction with the global climate agenda in addition a discussion emerged on the negative socio economic and environmental externalities associated with fossil fuel subsidies nevertheless pathways for phasing out fossil fuel subsidies in high income countries and their implications on the low carbon transition have not yet been assessed with the aim to narrow this knowledge gap we extend the eirin stock flow consistent behavioral model to study the implications on sustainable development of the gradual phasing out of fossil fuels subsidies whose revenues could be used by the government to subsidize energy investments in green capital e g solar panels either via fiscal policies or green bonds we assess the effects on green growth employment credit and bonds market as well as the distributive effects across heterogeneous households and sectors a smooth phasing out of fossil fuels subsidies contributes to improve macroeconomic performance to decrease inequality and helps the government to find fiscal space to support stable renewable energy policies renewable energy subsidies contribute to foster the low carbon transition but could imply distributive effects depending on the way in which they are implemented

the effects of income distribution and fiscal policy on aggregate demand investment and the budget balance the case of europe this paper develops a multi country post kaleckian model that incorporates the role of the government one key novelty of the model is that it integrates cross country effects of both changes in income distribution and fiscal policy the model is used to estimate econometrically the effects of income distribution and fiscal policy on the components of aggregate demand and the budget balance in eu15 countries the results show that a simultaneous increase in the wage share in all eu15 countries would increase demand and the primary budget balance in all countries a simultaneous increase in government spending turns out to boost economic activity in all the eu15 countries indicating the positive economic effects of expansionary fiscal policy moreover a progressive tax policy that would be implemented simultaneously at the eu level would lead to an increase in output in all countries

taxation income redistribution and debt dynamics in a seven equation model of the business cycle abstract in this paper we investigate the economic dynamics of a seven equation model of the business cycle the main distinctive features of the model are related to a the role played by the public sector in redeploying income between workers and capitalists since it is assumed that the bargaining power of the two classes affects tax rates and transfers levied upon them b the influence that past events have on the agents current behavior with particular regard to consumption patterns c the specification of firms investment function which incorporate keynesian and harrodian elements by assuming that investments are a function of both the difference between interest and profit rate and the discrepancy between actual and desired capital to output ratio since all these assumptions imply possible balance sheets disequilibrium particular regard is dedicated to the analysis of macroagents debt dynamics special emphasis is placed on the analysis of the destabilization of equilibria via hopf bifurcations which leads to the emergence of an interesting and rich cyclical dynamics

immigrants in the u s labor market 1940 80 this paper explores the extent and causes of the decline in immigrant skills in the united states during the postwar period prior to 1965 immigration to the united states was guided by the national origins quota system this visa allocation system awarded visas to countries based on the representation of the national origin group in the u s population as of 1920 the 1965 amendments abolished the national origins formula thus redistributing visas across source countries and established a system where visas are mainly given to relatives of u s citizens or residents the empirical analysis shows that a single factor the changing national origin mix of the immigrant flow is mainly responsible for the decline in immigrant skills excerpt

dynamics of moving average rules in a continuous time financial market model within a continuous time framework this paper proposes a stochastic heterogeneous agent model ham of flnancial markets with time delays to unify various moving average rules used in discrete time hams the time delay represents a memory length of a moving average rule in discrete time hams intuitive conditions for the stability of the fundamental price of the deterministic model in terms of agents behavior parameters and memory length are obtained it is found that an increase in memory length not only can destabilize the market price resulting in oscillatory market price characterized by a hopf bifurcation but also can stabilize an otherwise unstable market price leading to stability switching as the memory length increases numerical simulations show that the stochastic model is able to characterize long deviations of the market price from its fundamental price and excess volatility and generate most of the stylized facts observed in flnancial markets

the economics of immigration this literature review concerns the impact of immigration on the economy of the host country focusing on the experience of the united states the emphasis is on the period from the 1970s to the 1990s the author shows that research earlier in this period generally concluded that the economic effects of immigration were positive but that more recent research on later migrations have generally concluded that immigration may be having an adverse effect on the earnings of native unskilled workers and be placing an increased burden on welfare programs the importance of such economic analysis for the formulation of appropriate migration policies is stressed

the earnings of mexican immigrants in the united states abstract this paper documents the trends in the earnings of mexican immigrants during the 1970 1990 period the empirical evidence indicates that there has been a decline in the relative wage of successive mexican immigrant waves in the past three decades and that little wage convergence occurs between the typical mexican immigrant and the typical native worker the data also suggest that the increasing importance of mexican immigration is partly responsible for the deterioration in relative skills observed in the aggregate immigrant population but that there has also been a decline in relative skills even among non mexican immigrants

towards an accounting view on money banking and the macroeconomy history empirics theory in this paper three views are considered which are traditionally associated with money cranks and brave heretics the first is that the credit nature of money has macroeconomic significance the second is that financial development can be bad for economic growth the third is that macroeconomic models need to be explicitly monetary macroeconomic models it is argued that in each of these three areas there has been a recent shift in mainstream economic opinion this suggests new opportunities for meaningful debate between heterodox and orthodox schools on money and finance it is further argued following skaggs 2003 that a common meeting ground could be an accounting view of economics this is a mode of macroeconomic analysis which explicitly uses accounting definitions identities that credit is also debt or that flows of a variable affect the stock of that variable or accounting methods e g decomposing different kinds of liabilities or linking flows of liquidity to flows of transactions to structure and direct the analysis the accounting view is highly pluralist yet clearly defined i discuss its applications to each of the three views

job search and immigrant assimilation an earnings frontier approach this study examines labor market assimilation by measuring the information utilized by immigrants during job search assimilation is assumed to occur whenever such information increases with length of residence in the united states and repeated job searches the authors assert that information utilized during job search reduces differentials between actual and potential maximum attainable earnings coauthors are henry w herzog jr richard a hofler and alan m schlottmann copyright 1992 by mit press

labor supply and marital separation panel data are used to estimate the effect of marital separation on labor supply female labor supply increases substantially and male labor supply declines marginally lending support to the theory of specialization within the household the most interesting finding is that women began to increase their labor supply well before the actualsplit occurs suggesting either that shocks to labor supply change divorce probabilities or that women with a higher likelihood of divorcework more this argument is pursued by constructing and estimating a simultaneous model of labor supply and divorce risk copyright 1986 by american economic association

hysteresis and the earnings of immigrants in the united states labour market the paper analyses the role of hysteresis in explaining the slow wage convergence between certain immigrant groups and native workers using the 1990 integrated public use microdata samples ipums the analysis reveals that past earnings history in the country of origin has a relatively smaller effect on post migration earnings when compared to past earnings history in the us in addition the paper suggests that the earnings history in the country of origin is more productive in the us labour market for immigrants from advanced economies as compared to those from less developed countries in particular we find that us labour market does not value the past earnings history of mexican immigrants as high as that of other ethnic groups with similar socioeconomic characteristics across successive cohorts

why do mexican americans earn low wages using current population survey data from november 1979 and 1989 i find that mexican americans earn low wages primarily because they possess less human capital than other workers not because they

are government employees more likely to vote an analysis of turnout in the 1996 u s national election in this paper we develop and test a model of voter turnoutthat permits us to differentiate turnout rates for governmentemployees and other citizens controlling for the effects of awide range of other variables relating to turnout using 1996anes data we find that there is a significant difference inturnout rates for bureaucrats and nonbureaucrats both insimple bivariate analyses and in a full multivariate model the magnitude and significance of the coefficient forgovernment employment even in the face of controls suggeststhere is something about government employment per sethat has an effect on turnout

empirical regularities across cultures the effect of children on womans work not conditioning on previous employment we find large differences in the apparent effects of children on married womens labor supply among american born white women and three ethnically distinct groups of newly arrived immigrants to the united states when we account for labor supply in the previous year differences in current employment rates narrow dramatically and similar child status work relations emerge both for women who worked and for those who did not work in the previous year number of children is not associated with the propensity to start or to continue working and with the exception of a baby effect for women who worked previously the age of the youngest child has little effect on the propensity to start or to continue working information about work experience prior to the previous year yields additional valuable information for predicting current labor supply excerpt

the effect of marriage on education of immigrants evidence from a policy reform restricting marriage migration we investigate the effect of immigrants marriage behavior on dropout from education to identify the causal effect we exploit a recent danish policy reform that generated exogenous variation in marriage behavior by a complete abolishment of marriage migration for immigrants below 24 years the reform influenced immigrants from countries with a high historical rate of marriage migration more than immigrants from country groups with a low rate we find that the dropout rate for males increases by 25 percentage points as a consequence of marriage to a marriage migrant whereas the effect for females is small and mostly insignificant