corporate philanthropy ownership type and financial transparency drawing on stakeholder theory and the concept of enlightened self interest we argue that firms that actively engage in corporate philanthropic giving also tend to demonstrate greater concern for investors interests by providing more transparent financial information and avoiding corporate misconduct moreover the relationships between corporate giving financial information transparency and corporate misconduct vary significantly according to the firm s ownership type which affects the fundamental motivations for corporate philanthropy in a sample of chinese publicly listed firms from the 2003 2009 period we find a positive relationship between corporate giving and financial transparency and note that the relationship is stronger for non state owned enterprises non soes we also find a significantly negative association between corporate giving and corporate misconduct for non soes but not for soes taken together these findings suggest that responsibility to both stakeholders and shareholders is a vital part of building trust and reputations in china s non soe sector

corporate philanthropic disaster response and ownership type evidence from chinese firms response to the sichuan earthquake this article examines whether the charitable giving amount and likelihood of firm response to catastrophic events relate to firms ownership type using a unique dataset of listed firms in china where state ownership is still prevalent based on the data of chinese firms response to the 2008 sichuan earthquake we find that the extent of corporate contributions for state owned firms following this disaster is less than that for private firms state owned firms are also less likely to respond in this disaster compared to private firms the results also reveal that firm size profitability geography cash resource available and leverage affect firms philanthropic disaster response behavior in china

seasonal flutuations and equilibrium models of exchange rate most of the evidence on dynamic equilibrium exchange rate models is based on seasonally adjusted consumption data equilibrium models have not worked well in explaining the actual exchange rate however the use of seasonally adjusted data might be responsible for the spurious rejection of the model this article presents a new equilibrium model for the exchange rates that incorporates seasonal preferences the fit of the model to the data is evaluated for five industrialized countries using seasonally unadjusted data our findings indicate that a model with seasonal preferences can generate monthly time series of the exchange rate without seasonality even when the variables that theoretically determine the exchange rate show clear seasonal behaviours further the model can generate theoretical exchange rates with the same order of integration than actual exchange rates and in some cases with the same stochastic trend

the impact of the global food crisis on self assessed food security the paper provides the first large scale survey based evidence on the impact of the global food crisis of 2007 08 using an indicator of self assessed food security from the gallup world poll for the sampled countries as a whole this subjective indicator of food security remained the same or even improved seemingly owing to a combination of strong economic growth and limited food inflation in some of the most populous countries particularly india however these favorable global trends mask divergent trends at the national and regional levels with a number of countries reporting substantial deterioration in food security the impacts of the global crisis therefore appear to be highly context specific

a cross country comparison of rural income generating activities summary this paper uses a newly constructed cross country database composed of comparable income aggregates to examine the full range of income generating activities carried out by rural households the analysis paints a clear picture of multiple activities across rural space in countries on all four continents though less so in the included african countries for most countries the largest share of income stems from off farm activities and the largest share of households has diversified sources of income diversification not specialization is the norm nevertheless agricultural sources of income remain critically important for rural livelihoods in all countries

a time series analysis of representative agent models of consumption andleisure choice under uncertainty this paper investigates empirically a model of aggregate consumption and leisure decisions in which utility from goods and leisure is nontime separable the nonseparability of preferences accommodates intertemporal substitution or complementarity of leisure and thereby affects the comovements in aggregate compensation and hours worked these cross relations are examined empirically using postwar monthly u s data on quantities real wages and the real return on the one month treasury bill the estimated values of the parameters governing preferences differ significantly from the values assumed in several studies of real business models several possible explanations of these discrepancies are discussed

reducing child malnutrition how far does income growth take us how rapidly will child malnutrition respond to income growth this article explores that question using household survey data from 12 countries as well as data on malnutrition rates in a cross section of countries since the 1970s both forms of analysis yield similar results increases in income at the household and national levels imply similar rates of reduction in malnutrition using these estimates and better than historical income growth rates the article finds that the millennium development goal of halving the prevalence of underweight children by 2015 is unlikely to be met through income growth alone what is needed to accelerate reductions in malnutrition is a balanced strategy of income growth and investment in more direct interventions

habit formation in consumer preferences evidence from panel data this paper tests for the presence of habit formation using household data a simple model of habit formation implies a condition relating the strength of habits to the evolution of consumption over time when the condition is estimated with food consumption data from the panel study on income dynamics the results yield no evidence of habit formation at the annual frequency this finding is robust to a number of changes in the specification it also holds for several proxies for nondurables and services consumption created by combining psid variables with weights estimated from consumer expenditure survey data

who are the world s food insecure new evidence from the food and agriculture organization s food insecurity experience scale summary until recently there was lacking a common food security measure and the necessary data to study the individual level determinants of food insecurity around the world in 2014 the food and agriculture organization s voices of the hungry project developed an experiential measure of food insecurity the food insecurity experience scale fies translated it into 200 languages and contracted gallup inc for collection of data through the gallup world poll this is the first paper that identifies and examines the common determinants of food insecurity in 134 countries using this cross country comparable experiential measure of food insecurity we also investigate whether and to what extent the common determinants of food insecurity identified in a global model differ across rankings of economic development using a series of multilevel linear probability models we find that the five characteristics associated with the largest increase in the likelihood of experiencing food insecurity around the world are having low levels of education weak social networks less social capital low household income and being unemployed we also find significant heterogeneity in the determinants of food insecurity over development rankings this study is an important first step in utilizing the new fies to document risk factors of food insecurity around the globe

tax disturbances and real economic activity in the postwar united states abstract this paper investigates the macroeconomic effects of cyclical fluctuations in marginal tax rates it finds that systematically including tax variables in a standard real business cycle model substantially improves the model s ability to reproduce basic facts about postwar u s business cycle fluctuations in particular modeling fluctuations in personal and corporate income tax rates increases the model s predicted relative variability of hours and decreases its predicted correlation between hours and average productivity fluctuations in tax rates produce large substitution effects that alter the leisure labor supply decision

shareholder value stakeholder management and social issues what s the bottom line we test the relationship between shareholder value stakeholder management and social issue participation building better relations with primary stakeholders like employees customers suppliers and communities could lead to increased shareholder wealth by helping firms develop intangible valuable assets which can be sources of competitive advantage on the other hand using corporate resources for social issues not related to primary stakeholders may not create value for shareholders we test these propositions with data from s p 500 firms and find evidence that stakeholder management leads to improved shareholder value while social issue participation is negatively associated with shareholder value copyright 2001 john wiley sons ltd

corporate social responsibility ownership structure and political interference evidence from china prior research suggests that ownership structure is associated to corporate social responsibility csr in developed countries this article examines whether and how ownership structure affects csr in emerging markets using chinese firms social responsibility ranking our empirical evidences show that for non state owned firms corporate ownership dispersion is positively associated to csr however for state owned firms whose controlling shareholder is the state this relation is reversed we attribute the reversed relationship to political interferences and further test this hypothesis by demonstrating that regional economic development is negatively related to csr for state owned firms due to decreased political interference in more developed areas this study is the first to directly examine the relationship between the dispersion of corporate ownership and csr in emerging markets and our results depict that it is important to consider ownership type in assessing csr in emerging market where state ownership is still prevalent such as china the results also reveal that firm size profitability employee power leverage and growth opportunity affect csr in china

the intertemporal substitution model of labour market fluctuations an empirical analysis the paper uses two approaches to study whether aggregate fluctuations in employment and unemployment may be explained within a market clearing framework as intertemporal substitution in labour supply first log linear equations for labour supply and unemployment are estimated using a forecasting model to measure wage and price expectations second a utility function is used to derive and estimate an equation for labour supply as a function of the current real wage and consumption the influence of expected future real wages and interest rates is captured by the consumption variable the empirical results do not support the intertemporal substitution model

food insecurity gender and international migration in low and middle income countries abstract the determinants of migration have been widely studied but research has rarely addressed the roles of food insecurity and gender in the migration decision process to address these gaps we examine these relationships for 135 078 individuals across 94 low and middle income countries we use a series of binary choice models with sample selection and data from the 2014 2015 waves of the gallup world poll survey which includes the first global measure of individual level food insecurity results which are robust indicate that food insecurity is an important determinant of both migration intentions and preparations and the probability of migration intentions increase monotonically with the severity of food insecurity and the probability of migration preparations decrease these relationships also differ significantly by gender and level of gross national income evidence suggests a need for increased coordination between the international food security and migration policy agendas

a model of housing in the presence of adjustment costs a structural interpretation of habit persistence building on the model of sanford j grossman and guy laroque 1990 this paper provides a model of household consumption and portfolio allocation which incorporates the role of housing as both a consumption good and as a component of wealth the model captures the following features of the household s problem a utility depends probably nonseparably on two distinct goods nondurable consumption and housing b nondurable consumption can be adjusted cost lessly but housing is subject to an adjustment cost c households face housing price risk in the sense that the relative price of housing varies over time and d in addition to the house the household can invest in a wide variety of financial assets this single reasonably tractable model generates testable implications for portfolio allocation risk aversion asset pricing and the dynamics of nondurable consumption because the original grossman and laroque model considers a utility function in which the durable good is the sole argument and thus abstracts completely from nondurable consump tion their analysis cannot address either the potential spillover effects of the adjustment costs of the durable good on the dynamics of nondurable consumption or the implications for portfolio allocation of housing risk arising from variation in the relative price of housing in addition to generating implications for issues on which the original grossman and laroque model was silent the housing model delivers a strikingly different message concerning asset pricing that is in contrast to the grossman and laroque result that the consumption based capital asset pricing model consumption capm fails the housing model implies that the consumptioncapm holds we assume that the household incurs an adjustment cost when altering the holding of the dura ble good or house although financial assets can be bought and sold costlessly consumption of the nondurable good can also be adjusted costlessly when choosing a new house the consumer takes into account the fact that the consumption of housing services will be constant at the new level until the subsequent stopping time when it is again worthwhile to incur the adjustment cost thus the home purchase decision is endogenous and fully rational but because of the adjustment cost infrequent in this continuous time setting the household s decision process has a recursive structure at each instant the household first decides whether it is optimal to sell the house immediately on those rare occasions that it is optimal to incur the adjustment cost the household sells the old house and buys a new one instantaneously if the household decides that it is not optimal to sell the house immediately it then determines its optimal holdings of financial assets and optimal level of nondurable consumption conditional on the current housing stock in essence because of the adjustment costs associated with the durable good the current

informing food security decisions in africa empirical analysis and policy dialogue discussions of economic and agricultural development in africa have focused heavily in recent years on structural adjustment i e basic policy changes aimed at allowing international and domestic markets to play a greater role in coordinating national economic activities often these structural adjustments and accompanying policies aimed at improving economic performance have been based on several implicit assumptions about how african food systems operate yet for many countries little empirical information has been available to test these assumptions hence designing policies too often becomes an exercise in planning without facts this paper argues that not only is there a need to base food security and structural adjustment policies more firmly on empirical information but that the process by which the information is obtained is as important as the information itself agricultural economists and other social scientists can and increasingly should design policy research in africa in ways that simultaneously increase effective demand for empirical information as an input into the ongoing policy process and augment african capacity continually to inform policy deliberations we illustrate the payoffs to such an approach by drawing on selected experience in several african countries weber

the food stamp program and food insufficiency food stamp participants have higher food insufficiency rates than eligible nonparticipants even after controlling for other factors given the food stamp program s prominent role in the alleviation of hunger this is a counterintuitive result we conjecture that these higher rates are due to adverse selection insofar as households more likely to be food insufficient are also more likely to receive food stamps we establish a theoretical framework to address this adverse selection using a simultaneous equation model with two probits we show that once one controls for this adverse selection food stamp recipients have the same probability of food insufficiency as nonrecipients copyright 2001 oxford university press

does buffer stock saving explain the smoothness and excess sensitivity of consumption one of the lasting contributions to modernday consumer theory is the idea that consumption is determined by the expected value of lifetime resources or permanent income the modern day specification of this concept is typically presented as a special case of intertemporalchoice theory where felicity functions are quadratic labor income is stochastic there are no restrictions on borrowing consumers have infinite horizons and expectations are formed rationally we refer to this model as the permanentincome hypothesis pih although the pih has considerable intuitive appeal a series of influential papers published after its inception revealed two notable discrepancies between the model s predictions and aggregate data first the model predicts that consumption growth should be more volatile than income growth if aggregate income growth has positive serial correlation as the quarterly data suggest it does yet aggregate consumption growth is in fact much smoother than aggregate income growth angus deaton 1987 john y campbell and deaton 1989 jordi gali 1991 second the pih predicts that consumption changes should be orthogonal to predictable or lagged income changes yet the coffelation between consumption growth and lagged income growth has been found to be one of the most robust features of aggregate data for example marjorie a flavin 1981 alan s blinder and deaton 1985 campbell and n gregory mankiw 1989 orazio p attanasio and guglielmo weber 1993 thus aggregate consumption growth has been described as exhibiting two puzzles it is both excessively smooth relative to current labor income growth and excessively sensitive to lagged labor income growth 2 in response to these and other empirical anomalies researchers have recently sought out modifications of the pih framework chief ludvigson federal reserve bank of new york 33 liberty street new york ny 10045 michaelides university of cyprus p o box 20537 1678 nicosia cyprus a previous version of this paper appeared under the title can we explain the consumption excesses yet aggregate consumption implications of buffer stock saving behavior for many helpful comments we thank orazio attanasio dave backus ben bernanke john y campbell christopher carroll todd clark angus deaton pierreolivier gourinchas bo honore james kahn martin lettau costas meghir christina paxson steve pischke andrew samwick christopher sims mark watson guglielmo weber michael woodford steve zeldes and two anonymous referees conference participants at the national bureau of economic research summer workshop on the aggregate implications of microeconomic consumption behavior july 1998 the tmr workshop on saving and pensions center tilburg university march 1999 and the new york area macroeconomics workshop october 1998 seminar participants at columbia university insead the new york federal reserve university college london london business school city university business school university of cyprus tel aviv university and jeffrey brown for excellent research assistance the views expressed are those of the authors and do not necessarily reflect those of the federal reserve bank of new york or the federal reserve system any errors or omissions are the responsibility of the authors 1 note that the important insight of danny quah 1990 that individuals may be better able than econometricians to distinguish short run from long run innovations to their income cannot resolve the excess smoothness puzzle laid out in campbell and deaton 1989 these authors show that in the context of the pih excess sensitivity and excess smoothness are the same phenomena in addition campbell 1987 demonstrates that superior information of the type emphasized by quah will show up in households saving behavior and using this information allows the econometrician to control for the agent s private information when predicting income since excess sensitivity is well established and controlling for saving does not eliminate it see campbell and deaton 1989 the observed smoothness of consumption cannot be explained by superior information on the part of permanent income consumers see deaton 1992 for further discussion 2 philippe bacchetta and stefan gerlach 1997 and ludvigson 1999 document another kind of excess sensitivity the correlation between consumption growth and predictable changes in consumer credit although we do not explore these findings here ludvigson finds that a bufferstock model with time varying liquidity constraints can replicate such a correlation

corporate reputation and philanthropy an empirical analysis this paper analyzes the determinants of corporate reputation within a sample of large uk companies drawn from a diverse range of industries we pay particular attention to the role that philanthropic expenditures and policies may play in shaping the perceptions of companies among their stakeholders our findings highlight that companies which make higher levels of philanthropic expenditures have better reputations and that this effect varies significantly across industries given that reputational indices tend to reflect the financial performance of organizations above other factors fryxell g e and j wang 1994 journal of management 20 1 14 and that elements of the literature emphasise that discretionary aspects of social responsibility including corporate donations may not be in the financial interests of organizations e g friedman m 1970 the social responsibility of business is to increase its profits new york times magazine september 13 this is a significant finding it suggests that philanthropic expenditures may play a significant role in stakeholder management and may in particular lead to stakeholders holding more positive impressions of philanthropic corporations

an econometric analysis of fluctuations in aggregate labor supply and demand the paper contains a simple equilibrium model of the labor market the supply function allows for intertemporal substitution in response to real wage fluctuations and the demand function allows for adjustment costs on employment the supply and demand functions both solve quadratic partial adjustment problems driven by rational expectations about future real wages the market equilibrium also solves a partial adjustment problem driven by rational expectations about future preference and technology shocks two related issues are emphasized the identification of dynamic labor supply and demand functions and the theoretical interpretation of serial correlation in employment and real wages when the supply and demand shocks are assumed to be ar 1 processes which are not causally related the model delivers a simple structure for the equilibrium process for employment and real wages which is a restricted var 2 this simple structure facilitates the interpretation of summary statistics on the time series properties of observed employment and real wage series the supply and demand functions can both be locally identified using only employment and real wage data an illustrative application is presented using u s manufacturing data for the period 1948 1971

intertemporal preferences and labor supply in this paper the authors examine whether nonseparable preference structures ar e important in characterizing life cycle labor supply using longitud inal data on prime age males from the panel study of income dynamics they estimate a model of life cycle leisure and consumption under un certainty in which intertemporal preferences are allowed to be nonsep arable in leisure the model tests several alternative specifications considered in the literature they investigate the robustness of the ir findings to certain forms of population heterogeneity and types of model misspecification across alternative specifications the autho rs find that the standard assumption of intertemporally separable pre ferences for leisure is not consistent with the data copyright 1988 by the econometric society

corporate sponsored foundations and earnings management abstract this study examines the strategic use of corporate philanthropy programs to achieve financial reporting objectives corporate sponsored foundations allow managers to maintain stable levels of giving to charitable causes while providing substantial discretion as to the amount of contribution expense recorded on the income statement in any given period i find that firms reporting small earnings increases make income increasing discretionary foundation funding choices this result is associated with firms that have strong equity market incentives to manage earnings the evidence presented in this paper is consistent with firms using their charitable foundations as off balance sheet reserves

do lenders favor politically connected firms rent provision in an emerging financial market corruption by the politically connected is often blamed for economic ills particularly in less developed economies using a loan level data set of more than 90 000 rms that represents the universe of corporate lending in pakistan between 1996 and 2002 we investigate rents to politically connected rms in banking classifying a rm as political if its director participates in an election we examine the extent nature and economic costs of political rent provision we nd that political rms borrow 45 percent more and have 50 percent higher default rates such preferential treatment occurs exclusively in government banks private banks provide no

sensitivity of consumption to income and to government purchases some specification and estimation issues the paper derives a nonlinear error correction model ecm for consumption and shows that existing models that are based on quadratic utility combine permanent income and current income consumption and nest or could nest the hypothesis of substitutability between private consumption and government purchases are special cases of the ecm the importance of some econometric issues that have not received proper attention in the literature is demonstrated by estimating the models using us aggregate quarterly data 1953 1 1992 4 the evidence suggests that the ecm produces more reliable estimates than do the existing restrictive models

women s empowerment in agriculture what role for food security in bangladesh summary using a nationally representative survey from bangladesh we examine the relationship between women s empowerment in agriculture measured using the women s empowerment in agriculture index and per capita calorie availability dietary diversity and adult body mass index bmi accounting for potential endogeneity of empowerment we find that increases in women s empowerment are positively associated with calorie availability and dietary diversity at the household level overall household wealth education and occupation are more important than women s empowerment as determinants of adult nutritional status although negative impacts of group membership and credit on male bmi suggest that intrahousehold trade offs may exist

household choices in equilibrium this paper is an empirical investigation of equilibrium restrictions on household consumption and male labor supply it exploits a simple factor structure rationalized by two assumptions that household allocations are pareto optimal and that the labor market is competitive the paper estimates household preferences and tests how well this parsimonious factor structure represents panel data on married couples and time series data on asset returns most of the estimates are roughly comparable to those found in previous work no evidence against the simple factor representation is found and the intertemporal capital asset pricing model is not rejected copyright 1990 by the econometric society

does competition destroy ethical behavior explanations of unethical behavior often neglect the role of competition as opposed to greed in assuring its spread using the examples of child labor corruption excessive executive pay corporate earnings manipulation and commercial activities by universities this paper clarifies the role of competition in promoting censured conduct when unethical behavior cuts costs competition drives down prices and entrepreneurs incomes and thereby reduces their willingness to pay for ethical conduct nonetheless i suggest that competition might be good for ethical behavior in the long run because it promotes growth and raises incomes higher incomes raise the willingness to pay for ethical behavior but may also change what people believe to be ethical for the better this abstract was borrowed from another version of this item

does giving lead to getting evidence from chinese private enterprises enterprise philanthropy is practiced in a very unique and rudimentary form in china based on a unique random survey data on 3837 chinese private enterprises conducted in 31 provinces of china in 2006 i find the significant positive relationship between enterprise philanthropy donation and enterprise profitability and the result supports the political and institutional power view of enterprise philanthropy in the latest development of china simply put chinese private enterprises carried out philanthropy activities to better protect property rights and nurture political connections which in turn leads to better enterprise profitability the result is even stronger in institutions weaker provinces

on the construction of marginal federal personal and social security tax rates in the u s abstract in this article i correct and extend my earlier series on marginal federal personal income tax rates i also construct a measure of the marginal social security tax rate and add this to the income tax rate to obtain a measure of the effective marginal tax rate on income due to federal taxes finally i compare my series on marginal income tax rates and its method of construction with those of barro and sahasakul

endogenous labor leisure investment choice under time constraints we posit the opportunity cost of time required to manage risky investments including conducting research and performance monitoring as a potential explanation for the equity premium puzzle an economic agent who should allocate a limited amount of time to labor leisure and risky investment is subject to the opportunity time cost of investment activity which is foregone labor or leisure our model envisages its impact on equity premium and volatility in the presence of such a time constraint in particular with closed form solutions to the risky asset returns volatility and risk free rate in a simple equilibrium framework wherein agents have log utility the model is shown to yield excess return and volatility consistent with historical values observed in the u s stock market even with a small amount of time cost in addition the model enables us to sort out the impact of endogenous labor leisure choice on return dynamics by comparing it with the exogenous labor income case

what do economists know an empirical study of experts expectations for more than three decades economic columnist joseph a livingston has canvassed a panel of economists twice a year eliciting their six month and twelve month forecasts for more than a dozen key variables this study analyzes whether the experts predictions are unbiased and whether complete use was made of all relevant known information unbiasedness and completeness being necessary conditions for fully rational expectations little bias was found in either the half year or full year predictions but extensive underutilization of information particularly data on monetary growth occurred to prophecy is extremely difficult especially with respect to the future chinese proverb do economists expectations regarding key price and nonprice variables utilize all known relevant information in an unbiased efficient manner this is a worthy subject for research for several reasons properties of experts predictions likely form an upper bound for those of laymen further as john muth 14 has noted the character of dynamic processes is typically very sensitive to the way expectations are influenced by the actual course of events p 316 hence we need to know precisely how events do affect expectations finally the common practice of replacing a variable s generally unobserved expectation with a proxy based on its past values will be unbiased and will not cause bias in other

why do corporations give to charity this paper explores whether corporate contributions should be tax dedu ctible within the more general context of an examination of the profi t and utility maximization motives driving contributions the theoret ical section develops a formal structural model of the contributions process illustrates comparative statics and derives a set of empiri cally testable hypotheses using a new source of firm data the empir ical results indicate that profit maximization is an important motive driving contributions this finding supports the current tax deducti ble status of contributions up to a seldom encoun tered ceiling and favors a reform that allows firms to treat contributions as ordinary business expenses copyright 1988 by the university of chicago

protectionism versus risk in screening for invasive species abstract i examine the extent to which enforcement of a biosecurity import restriction us border inspections for foreign pests and diseases is used as a protectionist trade barrier the parameters of a structural model of border inspection are estimated using a detailed dataset documenting the outcome of us agricultural border inspections i find that inspections are conducted in a manner that places an implied welfare weight on domestic producers relative to consumers ranging from 1 to 1 63 i also find evidence that the inspection agency takes terms of trade into account when inspecting agricultural imports these results suggest that border inspections are used as a protectionist non tariff barrier

international real business cycles we ask whether a two country real business cycle model can account simultaneously for domestic and international aspects of business cycles with this question in mind we document a number of discrepancies between theory and data the most striking discrepancy concerns the correlations of consumption and output across countries in the data outputs are generally more highly correlated across countries than consumptions in the model we see the opposite

corporate environmental initiatives in the chinese context performance implications and contextual factors although a number of studies have been conducted on the relationship between environmental management and firm performance most of them are conducted in the western context due to the unique social and economic environments in china the performance implications of environmental management might be quite different in the chinese context we examine the impact of corporate environmental initiatives ceis on the market value of firms in china we find that in contrast to the findings in the western context chinese investors react negatively to cei announcements the negative reaction is more significant when the announcements are related to processes rather than products and for state owned enterprises rather than privately owned corporations however there is no difference whether the cei is self declared or third party endorsed overall our research indicates that chinese investors consider ceis to be in conflict with shareholder interest in particular ceis in state owned enterprises might be considered by investors as signals that firms need to sacrifice profits to shoulder more social responsibility

time series representations of economic variables and alternative models of the labour market accepting the hypothesis that the time series facts of the aggregate labour market may be summarized by the linear autoregressive and moving average representations of wages prices unemployment and interest rates implies that a useful theory ought to lead to predictions about these representations following this approach this paper first catalogues many of the time series facts about the aggregate labour market and then compares them against alternative models of the labour market based on the intertemporal substitution and staggered contract hypotheses