rational household labor supply traditionally household behavior is derived from the maximization of a unique utility function in this paper we propose an alternative approach in which the household is modeled as a two member collectivity taking pareto efficient decisions the consequences of this assumption are analyzed in a three good model in which only total consumption and each member s labor supply are observable if the agents are assumed egoistic i e they are only concerned with their own leisure and consumption it is possible to derive falsifiable conditions upon household labor supplies from both a parametric and nonparametric viewpoint if alternatively agents are altruistic restrictions obtain in the nonparametric context useful interpretation stems from the comparison with the characterization of aggregate demand for a private good economy

children as collective goods and divorce settlements the failure of many divorced fathers to comply with court mandated child support awards has been identified as a major reason why a growing number of children live in poverty in female headed households this paper presents a model that seeks to explain why so many divorced fathers allow their children s welfare to suffer as a consequence of divorce the point of departure is the recognition that children are collective consumption goods from the point of view of the father and mother within marriage proximity and altruism serve to overcome the free rider problem associated with the provision of public goods however on divorce the noncustodial parent suffers a loss of control over the allocative decisions of the custodial parent and it is not feasible for the couple to achieve a pareto optimal allocation of their joint resources a model of optimal marriage contracts is constructed in which a couple decides on the allocation of resources within marriage and on the terms of a settlement in the event

spousal conflict and divorce the optimal balance between keeping marriages intact despite spousal conflict and allowing for divorce is a subject of policy debate in the united states to explore the trade offs i construct a structural model with information asymmetries which may generate inefficient outcomes parameters are estimated using data from the national survey of families and households i find that eliminating separation periods decreases the conflict rate by 9 2 of its baseline level and increases the divorce rate by 4 0 perfect child support enforcement decreases the frequency of conflict and divorce by 2 7 and 21 2 respectively and reduces the incidence of inefficient divorces

monetary policy regimes expected inflation and the response of interest rates to money announcements this paper examines the response of the term structure of interest rates to weekly money announcements estimated responses for both the pre and post october 1979 periods are first presented then two competing hypotheses involving the policy anticipations and expected inflation effects are formally specified and compared with the estimated responses both hypotheses are found to be consistent with the responses but they have sharply different implications about the federal reserve s short run monetary policy by exploiting these different implications additional empirical results focusing directly on the money stock process support the policy anticipations hypothesis

domestic violence a nonrandom affair in this paper we develop and estimate a model of domestic violence we extend a noncooperative model of the family to include violence as a source of gratification and an instrument for controlling behavior we estimate the model by robust methods since the violence process appears to have a heavy tailed nonnormal error distribution we find that the properties of the equilibria depend on family income for low middle income families our results indicate an equilibrium in which one person s reservation utility constraint is binding whereas for higher income families both individuals may gain from the relationship

marriage divorce and asymmetric information we use data on people s valuations of options outside marriage and beliefs about spouses options the data demonstrate that in some couples one spouse would be happier and the other spouse unhappier outside of some marriages suggesting that bargaining takes place and that spouses have private information we estimate a bargaining model with interdependent utility that quantifies the resulting inefficiencies our results show that people forgo some utility in order to make their spouses better off and in doing so offset much of the inefficiency generated by their imperfect knowledge thus we find evidence of asymmetric information and interdependent utility in marriage

the reaction of interest rates to unanticipated federal reserve actions and statements implications for the money announcement controversy this paper examines the reaction of long and short term interest rates to monetary policy surprises that influenced market expectations of the future behavior of the federal funds rate in the period after october 1979 we find that the relative reaction of long and short term rates to policy surprises is similar to the relative reaction of these rates to money announcements consequently we conclude that the large reaction of long term interest rates to money announcements in the period after october 1979 is consistent with the policy anticipations hypothesis which views this reaction as a movement in real interest rates

until death do you part the effects of unilateral divorce on spousal homicides this study examines how the widespread adoption of unilateral divorce influenced the prevalence of lethal spousal violence in the united states these evaluations are based on fixed effects specifications for spousal homicide counts from an annual panel of u s states from 1968 to 1978 the results indicate that unrestricted unilateral divorce laws had small and statistically insignificant effects on the amount of lethal spousal violence directed against wives however the easy access to divorce created by such laws increased spousal homicides of husbands by approximately 21 these increases were concentrated in states where the division of marital property favored husbands

why interest rates rise when an unexpectedly large money stock is announced ment of an unexpectedly large growth in the money supply will lead to an immediate increase in interest rates this announcement effect is often taken as confirmation of the monetarist view that the way to bring down interest rates even in the short run is to reduce the rate of money growth in this paper we provide an alternative explanation of the announcement effect that is consistent with the keynesian view that in the short run the way to bring down interest rates is to expand the money supply we do not address the issue of inflationary expectations in a formal way though in the long run we would expect the well known fisher effect to hold looking closely at the announcement effect it is clear that whatever may be the true short run relationship between money growth and interest rates it cannot be inferred from a simple correlation of announcements of changes in the money stock with the resulting changes in interest rates this is because of several properties of the announcement phenomenon that we capture in the model

us money announcements and covered interest parity the case of japan abstract this paper examines the effects of us money announcements on dollar and yen denominated securities in their respective onshore markets the effects are consdered over several periods corresponding to possible us and japanese policy regimes the consistency of the responses is further examined by testing whether the responses of dollar denominated securities yen denominated securities the spot yen dollar exchange rate and the forward yen dollar exchange rate violate covered interest parity given the results of previous studies the evidence suggests that restrictions on capital mobility in japan have not allowed complete international integration of japanese financial markets

bargaining piecemeal or all at once perfect information rubinstein style bargaining models are used to explore questions about multiple issue bargaining is it ever sensible to offer on only a subset of the issues being bargained what is the effect of limiting offers so that they must cover all issues we conclude that in realistic settings the answer to the first question is yes and that restricting offers to those covering all issues may be harmful to one or both parties

the impact of divorce laws on marriage specific capital this article considers how divorce law alters the incentives for couples to invest in their marriage focusing on the impact of unilateral divorce laws on investments in new marriages differences across states between 1970 and 1980 provide useful quasi experimental variation with which to consider incentives to invest in several types of marriagespecific capital spouse s education children household specialization and home ownership i find that adoption of unilateral divorce regardless of the prevailing property division laws reduces investment in all types of marriage specific capital considered except home ownership in contrast results for home ownership depend on the underlying property division laws

cleaning in the shadow of the law bargaining marital investment and the impact of divorce law on husbands intrahousehold work abstractprevious literature has established that unilateral divorce laws may reduce women s household work and overall marital investment if unilateral divorce has differential costs by gender it may impact household work by gender through bargaining channels however little research has examined how divorce laws affect men s levels and share of household production to examine this i use data on matched couples from the panel study of income dynamics and exploit time variation in state divorce laws i find that unilateral divorce laws lead to a decrease in marital investment as measured by mens and women s household work the evidence also supports a bargaining response to divorce laws as fathers in states without joint custody laws engage in a significantly higher share of household work under unilateral divorce than those in states with joint custody laws consistent with a higher cost of marital dissolution among fathers who stand to lose custody of their children

bargaining in the shadow of the law divorce laws and family distress this paper exploits the variation occurring from the different timing of divorce law reforms across the united states to evaluate how unilateral divorce changed family violence and whether the option provided by unilateral divorce reduced suicide and spousal homicide unilateral divorce both potentially increases the likelihood that a domestic violence relationship ends and acts to transfer bargaining power toward the abused thereby potentially stopping the abuse in extant relationships in states that introduced unilateral divorce we find a 8 16 percent decline in female suicide roughly a 30 percent decline in domestic violence for both men and women and a 10 percent decline in females murdered by their partners

are announcement effects time dependent abstract the constancy assumption for the announcement response coefficient is relaxed and is modelled through a time varying kalman filter we find that the announcement effect is not time dependent for the post 1979 non borrowed reserves regime

the term structure spread and future changes in long and short rates in the g7 countries abstract according to the expectations hypothesis when the spread between long and short rates widens next quarter s long rate should rise in the united states however long rates decline instead of rising this anomaly is also present in canada the uk germany and japan four of the additional six g7 countries nevertheless in contrast to the us where long rates appear to overreact to expected future developments the anomalous short run movement of long rates in these other g7 countries is caused by an additive white noise error on long rates that does not materially affect the information in their term structure

the effect of changes in the federal funds rate target on market interest rates in the 1970s abstract this paper examines the influence of monetary policy on interest rates by estimating the effect of changes in the federal funds rate target the federal reserve s policy instrument on market interest rates in the 1970s we find that changes in the target caused large movements in short term rates and smaller but significant movements in intermediate and long term rates we hypothesize that the similarity of the reactions of three six and twelve month rates to changes in the target offers a possible explanation for the lack of support for the expectations theory from studies that have tested the theory using these rates

canadian weekly money supply announcements and financial market reactions in the first years of targeting a view of market perceptions of bank of canada policy this paper demonstrates using weekly data between 1976 and 1979 that unanticipated changes in the canadian money supply exerted a significant impact on the foreign exchange and bond markets during the first years of the bank of canada s policy of targeting m1 growth this finding which is perhaps surprising in light of the apparent volatility of weekly changes in the canadian money supply is consistent with the efficient markets paradigm after the empirical regularities are established an interpretation is offered that focuses on market perceptions of the reaction function of the bank of canada

did unilateral divorce raise divorce rates evidence from panel data since early 1996 at least eight states have begun to consider rolling back unilateral and no fault divorce a major reversal of the liberalizing trend in divorce laws which began around 1970 the proponents of tightening the divorce regime often argue that making divorce more difficult will strengthen families however both theoretical and empirical evidence is decidedly mixed over whether the no fault revolution actually contributed to the sharp increase in divorce rates in the united states observed over the last 30 years in this paper i address the dispute by using a panel of state level divorce rates including state specific trends allows unobserved state divorce propensities to trend linearly and even quadratically over time and reveals that unilateral divorce raised divorce rates significantly and strongly excerpt

biculturalism and attributional complexity cross cultural leadership effectiveness although biculturals represent a growing demographic the nascent literature on biculturals has not addressed their cross cultural leadership capabilities or effectiveness attributional patterns and variations across cultures are crucial and call for higher attributional complexity ac and attributional knowledge to reduce cultural distance this study provides a systematic theoretical connection between biculturals and their higher levels of ac and attributional knowledge which account for their cross cultural competence this connection is then linked to attributional processes drawing from recent literature on attributional models of leadership the proposed theoretical model posits that biculturals have higher levels of ac and attributional knowledge which helps them make more accurate attributions which are also less culturally biased managerial behaviors resulting from these attributions lead to cross cultural leadership effectiveness because they absorb uncertainty on the part of subordinates the proposed model addresses both cognitive and emotional competency elements of cross cultural leadership we contribute to the international business literature by providing a theoretical model for examining factors critical to the cross cultural leadership effectiveness of leaders who have more than one cultural profile managerial implications for selection and training of international executives are discussed in the context of culture specific and culture general capabilities contributions limitations and boundary conditions are also discussed

the game of negotiations ordering issues and implementing agreements abstract we use a two issue bargaining model with asymmetric information to study agent choice of how to structure bargaining we uncover the settings in which different agenda structures are chosen in equilibrium how the order in which issues are bargained over matters and what impact the rules for implementing agreements have if agreements are implemented as they are reached easy issues are negotiated first and hard issues later if agreements are implemented only after all issues are settled then it is size that matters with large issues settled first all parties prefer the former rules of implementation to the latter

evidence on the random behavior of weekly m1 data abstract this paper provides empirical evidence showing that the weekly m1 series follows a stochastic trend the implications of this finding for economic research are discussed

monetary shocks and the nominal interest rate this paper reconsiders the effects of monetary shocks on the nominal interest rate in a standard macroeconomic model it is determined that when the policy objective is controlling the money stock money supply shocks generate a situation of excess demand for money the positive relationship between nominal interest rates and monetary innovations in the united states following the 1979 change in regime is thus not puzzling but perfectly consistent with standard theory nominal interest rate decreases are possible only when fine tuning rules are adopted copyright 1992 by the london school of economics and political science

money supply announcements and the ex ante volatility of asset prices previous empirical studies have documented more volatile money grow th and money surprises more volatile asset price changes and increased responsiveness of asset prices to money surprises since the october 1 979 change in fed policy this paper studies the associations between money announcements and the ex ante volatility of asset prices in th e recent past results indicate that revisions of ex ante asset price volatility as measured from prices of stock index government debt gold and foreign currency options are significantly correlated with the surprise component of the weekly m1 release there is also evidence that money releases reduce volatility by resolving uncertainty copyright 1988 by ohio state university press

gender agricultural production and the theory of the household virtually all models of the household assume that the allocation of resources is pareto efficient within many african households agricultural production occurs on many plots controlled by different members of the household pareto efficiency implies that factors should be allocated efficiently across these plots i find in contrast that plots controlled by women are farmed much less intensively than similar plots within the household controlled by men the estimates imply that about 6 percent of output is lost because of inefficient factor allocation within the household the paper suggests a new approach to modeling intrahousehold allocation consistent with the empirical results

the short run volatility of money stock targeting abstract the altered allocations of money market volatility obtained by alternative monetary policy procedures are illustrated by stochastic simulations of a staff monthly model the results indicate the nature of the tradeoff between short run volatility in the money stock and in the funds rate that is available to money stock targeting procedures

the impact of monetary announcements on forward interest rates movements in term premia or expected future rates abstract evidence is presented on how the response of forward interest rates to money supply and monetary base announcements is decomposed into movements in term premia and expected future interest rates a significant movement of each component is found for at least one sample period

the changing influence of money and monetary policy on exchange rates foreign exchange dealers said the american currency got an additional boost after the federal reserve reported that the nation s money supply rose 700 million in the latest week a development that is likely to put upward pressure on interest rates most economists had been expecting a decline in the money supply figures the wall street journal 25 january 1982 14 i introduction the importance of the linkage between money and asset prices such as interest rates and exchange rates is now well understood friedman 1990 12 writes given the familiar dependence of imports and exports on real exchange rates together with the dollar s evident relationship to interest rates the combination of a larger foreign sector in the u s economy and flexible exchange rates has clearly opened new avenues for monetary policy to affect economic activity however the precise nature of the relationship between money and exchange rates has long been a topic for research in international economics with the adoption of a system of floating exchange rates by most of the industrialized countries in march 1973 and the development of the rational expectations efficient markets hypotheses attempts to model observed fluctuations in exchange rates have focused on incorporating the important role of expectations of particular interest to the research in this paper is the dornbusch 1976 overshooting model which provided the structural foundation for the work of engel and frankel 1984 in the money announcements literature in the money announcements literature researchers employed unanticipated money announcements defined as the difference between announced and expected m1 to examine the linkage between money and asset prices as hakkio and pearce 1985 point out the research on foreign exchange rates in this laboratory was motivated by mussa s 1979 empirical findings in support of the efficient markets theory i e changes in exchange rates are unpredictable and are largely the result of the impact of new information on expectations in this literature researchers commonly regressed changes in the exchange rate on unanticipated money over sample periods which coincided with different policy regimes at the federal reserve to determine if the coefficient on unanticipated money say b sub 1 varied from one policy regime to another overall their findings uncover a significant link between unanticipated money and exchange rates and the size sign and significance of b sub 1 varies from one sample period to another 1 while suggestive the apparent link between changes in b sub 1 and changes in fed policy regimes is difficult to evaluate absent a model which formally incorporates such a link 2 thus my objective in this paper is to develop a basic theoretical empirical link between fluctuations in b sub 1 and changes in fed policy regimes i begin by extending the important work of engel and frankel 1984 in section ii to incorporate a policy feedback parameter g sub 1 in the money supply process which will represent the rational expectation of the type of monetary control regime in place at the federal reserve at the time of a money announcement it is shown that the magnitude of the response of exchange rates to an unanticipated announcement is mainly driven by agents expectations of the federal reserve s response to the deviation of the actual money supply from a pre specified target in section iii the time varying response of the dollar german mark exchange rate to weekly unanticipated money announcements b sub 1t and the time varying policy feedback parameter g sub 1t which reflects the adjustment of the federal funds rate to money away from target are estimated on a weekly basis using these estimates the variation of the coefficient b sub 1t vis a vis the changes in g sub 1t is examined over the january 1978 to december 1982 sample period the results provide considerable support for the hypothesized link between parameters b

marriage and divorce informational constraints and private contracting the relationship between divorce rates in the united states and laws regulating divorce are analyzed using data from a special current population survey undertaken in 1979 with particular reference to the adoption by many states of no fault divorce laws the author utilizes a contract theoretic framework to examine the impact of both legal and informational constraints on several aspects of the marriage relationship 1 the probability of divorce 2 compensation at divorce i e the terms of the divorce settlement 3 the probability of entering marriage and 4 incentives for investment in marriage specific capital two different models are developed the first assumes that ex post information about the value of each spouses opportunites at divorce is symmetric and that since divorce would only occur if the joint benefits outweigh the joint costs the law has no effect on the divorce rate the second model asserts that the existence of asymmetric information results in a fixed wage marriage contract and that divorce would be higher in states that allow unilateral divorce the evidence supports the first of these hypotheses excerpt

the empirical content of nash bargained household behavior in households whose allocation decisions can be represented as nash bargained household decisions extrahousehold environmental parameters eeps serve as pure shifters of the threat points the comparative statics of changes in demands due to changes in these eeps are given these are incorporated into a comprehensive statement of the empirical content of nash bargained household behavior including a nash generalization of barten s 1966 fundamental matrix equation of the theory of consumer demand estimation and data requirements are discussed along with nested testing of the following structure the neoclassical model is nested in the nash bargained model which in turn is nested in an unrestricted model of household demands emphasized throughout is the enriched menu of explanatory variables for demand analysis provided by the nash model as well as the model s ability to jointly analyze i household formation and ii intrahousehold allocation decisions

the information content of weekly money supply announcements this paper analyzes the information content of weekly money supply announcements and the use of this information in the market determination of interest rates a short term rational expectations model of the financial market is constructed which incorporates the reaction of the federal reserve to deviations from target money supply and provides a context for analyzing the impact of announcements in the model the federal reserve attempts to maintain target growth rates in the money supply by compensating for past deviations from target announcements which contain an unanticipated movement in the money supply lead the public to expect that the federal reserve will change the rate of growth in the short run to compensate the revision of expectations about future short term money supply leads the public to revise their expectations about short term interest rates the implications of the model are empirically tested using data from a survey of expected changes in the money supply and u s treasury bill data the results support the implications of the model that is weekly money supply announcements do contain new information for the market determination of interest rates and it is only the unanticipated component of the announcement which is important