unionisation structures and innovation incentives this paper examines how dierent unionisation structures aect rms innovation incen tives and industry employment we distinguish three modes of unionisation with increasing degree of centralisation 1 decentralisation where wages are determined independently at the rm level 2 coordination where one industry union sets individual wages for all rms and 3 centralisation where an industry union sets a uniform wage rate for all rms while rms investment incentives are largest under centralisation investment in centives are non monotone in the degree of centralisation decentralisation carries higher investment incentives than coordination labour market policy can spur innovation by decentralising unionisation structures or through non discrimination rules

contractual solutions to the hold up problem this paper considers a general version of the hold up problem where n agents first make relation specific investments and then must agree on some collective action it is shown that first best solutions exist under a variety of different assumptions about the nature of information asymmetries

cheap children and the persistence of poverty this paper develops a theory of fertility that offers an explanation for the persistence of poverty within and across countries if educated individuals have a comparative advantage in raising educated children then parental fertility choice is shown to give rise to a poverty trap in which the poor choose high fertility rates with low investment in child quality moreover the impact of child quality choice on economic performance is amplified by the diluting effect of higher fertility on physical capital accumulation the theory proposes insights regarding the effects of inequality globalisation and life expectancy on economic growth and demographic transitions this paper develops a theory of fertility and child educational choice that offers an explanation for the persistence of poverty within and across countries the joint determination of the quality education and quantity of children in a household is studied under the key assumption that individuals productivity as teachers increases with their own human capital in contrast the minimum time cost associated with raising a child regardless of the child s quality the quantity cost is not affected by parental education as a result the price of child quantity relative to the price of child quality increases with individuals wages in particular for low wage individuals for whom the opportunity cost of time is low children of minimal quality are cheap this assumption therefore generates a comparative advantage for the poor in child quantity whereas high wage educated individuals have a comparative advantage in raising quality children consistent with the well known evidence poor households thus choose relatively high fertility rates with relatively low investment in their offspring s education and therefore their offspring are poor as well in contrast high income families choose low fertility rates with high investment in education and therefore high income persists in the dynasty evidence from the us provided by hanushek 1992 suggests that a trade off between quantity and quality of children does indeed exist hanushek argues that movements in family size could explain over half the variance in some test scores and that the elasticity of achievements with respect to the number of children in the family is 0 03 implying that the annual achievement growth of each child in a family will fall about 2 when a second child is added and about 0 5 when a sixth child is added 1

estimating the effect of the age distribution on cyclical output volatility across the united states abstract i exploit the variation in demographic change across the united states to estimate the relationship between the age distribution in the population and the magnitude of cyclical output volatility according to panel regression estimates the relative supply of young workers or youth share has a statistically significant effect on the volatility of state by state gdp moreover changes to the age distribution can account for up to 58 of the recent reduction in business cycle fluctuations indicating a critical link between the youth share and output volatility

incomplete contracts and strategic ambiguity why are observed contracts so often incomplete in the sense that they leave contracting parties obligations vague or unspecified traditional answers to this question invoke transaction costs or bounded rationality in contrast the authors argue that such incompleteness is often an essential feature of a well designed contract specifically once some aspects of performance are unverifiable it is often optimal to leave other verifiable aspects of performance unspecified the authors explore the conditions under which this occurs and investigate the structure of optimal contracts when these conditions are satisfied copyright 1998 by american economic association

optimal tariffs and the choice of technology discriminatory tariffs vs the most favored nation clause abstract we compare the effects of optimal tariffs on the technology choice of exporters under the discriminatory tariffs regime and the most favored nation mfn clause it is shown that a lower marginal cost mc technology will be chosen in equilibrium under the mfn clause as a result the importing country s long run welfare increases with the adoption of mfn while in most cases the exporting countries welfare decreases however ex post technology choice the importing country prefers discriminatory tariffs this result therefore highlights the role of mfn as a commitment mechanism to resolve a time inconsistency problem facing the importing country

intelligence social mobility and growth this study develops a model where the allocation of human resources intergenerational social mobility and technological growth are jointly determined high growth endogenously increases the equilibrium return to innate cognitive ability and makes the allocation of individuals depend more on innate ability and less on social background a social allocation based on innate ability and high growth will thus reinforce each other implying the possibility of multiple endogenous growth equilibria

educational opportunity and income inequality affordable higher education is and has been a key element of social policy in the united states with broad bipartisan support financial aid has substantially increased the number of people who complete university generally thought to be a good thing we show however that making education more affordable can increase income inequality the mechanism that drives our results is a combination of credit constraints and the signaling role of education first explored by spence 1973 when borrowing for education is difficult lack of a college education could mean that one is either of low ability or of high ability but with low financial resources when government programs make borrowing easier or tuition more affordable high ability persons become educated and leave the uneducated pool driving down the wage for unskilled workers and raising the skill premium

second sourcing as a commitment monopoly incentives to attract competition we show that a new product monopolist may benefit from delayed competition if consumers incur setup costs setup costs create a dynamic consistency problem the monopolist cannot guarantee low future prices once customers have incurred those costs we show that if customers anticipate this problem the monopolist s profits can be improved through ex ante commitment to competition in the post adoption market if setup costs are large if setup costs are small the monopolist can typically achieve the same level of profits without price commitment as with

the age distribution and business cycle volatility international evidence abstract we estimate the age distribution s effect on business cycle fluctuations across a large number of countries a 10 percentage point increase in the middle aged share of the population decreases output volatility by 15 percent for the average country

income distribution and macroeconomics this paper analyzes the role of wealth distribution in macroeconomics through investment in human capital it is shown that in the presence of credit markets imperfections and indivisibilities in investment in human capital the initial distribution of wealth affects aggregate output and investment both in the short and in the long run as there are multiple steady states this paper therefore provides an additional explanation for the persistent differences in per capita output across countries furthermore the paper shows that cross country differences in macroeconomic adjustment to aggregate shocks can be attributed among other factors to differences in wealth and income distribution across countries

project cost comparison under the clean development mechanism to inform investment selection by industrialized countries this is the first study that comprehensively evaluates and compares the average costs of six types of 4061 registered clean development mechanism cdm projects the projects were conducted from 2005 to 2014 by industrialized countries investing in host countries that had various technology and income levels specifically this study compares the average costs of emission reduction for each type of project projects were used by industrialized countries to achieve specific emission reductions commitments the lowest average cost per ton of reduced emissions found in renewable energy projects fuel switch projects supply side energy efficiency improvements and demand side energy efficiency improvements all of which were effectively reduced emissions by less than 1 million tons in host countries with high technology levels and upper medium income levels the average cost for the other two project types methane reduction and methane avoidance showed that these projects were more effective at reducing emissions by more than 50 million tons in host countries with upper middle technology levels and upper medium income levels these lowest average costs for different project types can guide project selection by industrialized countries seeking the lowest total emission reduction costs selection of cdm project investments by industrialized countries should account not only for the technology and income levels of host countries but also for the amounts by which industrialized countries have committed to reducing their emissions

cooperative investments and the value of contracting recent articles have shown that contracts can support the efficient outcome for bilateral trade even in the face of specific investments and incomplete contracting these studies typically considered selfish investments that benefit the investor e g the seller s investment reduces her production costs the authors find very different results for cooperative investments that directly benefit the investor s partner e g the seller s investment improves the buyer s value of the good most importantly if committing not to renegotiate the contract is impossible then contracting has no value i e the parties cannot do better than to abandon contracting altogether in favor of ex post negotiation

information and the hold up problem we examine situations in which a party must make a sunk investment prior to contracting with a second party to purchase an essential complementary input we study how the resulting hold up problem is affected by the seller s information about the investing party s likely returns from its investment our principal focus is on the effects of the investment s being observable by the non investing party contrary to popular intuition we find that an improvement in the seller s information e g the investment s being observable rather than not can benefit the buyer and harm the seller we also find that other popular intuitions about this problem are either false incomplete or require strong assumptions to be valid

reexamining the effect of the most favored nation provision in input prices on r and d incentives abstract we examine the effect of the most favored nation provision in input prices on downstream firms r and d incentives contrary to the previous literature we show that the effect depends on the extent of substitutability between downstream firms if they compete in two part tariffs when a downstream firm lowers its marginal cost it entails two conflicting effects on the upstream firm s pricing for inputs the standard elasticity effect of penalizing the low cost firm and the market share effect of rewarding it if substitutability between downstream products is high enough the latter dominates the former and thus downstream firms will choose a higher marginal cost technology under the mfn provision

the demand for youth explaining age differences in the volatility of hours over the business cycle young workers experience much greater volatility of hours worked than prime aged workers this can arise from age differences in labor supply or labor demand characteristics to distinguish between these we document that for young workers both the cyclical volatilities of hours and wages are greater than those of the prime aged we argue that a general class of models featuring only age specific labor supply differences cannot reconcile these facts we then show that a simple model featuring labor demand differences can

understanding the evolution of the us wage distribution a theoretical analysis in this paper we propose an analytically tractable overlapping generations model of human capital accumulation and study its implications for the evolution of the us wage distribution from 1970 to 2000 the key feature of the model and the only source of heterogeneity is that individuals differ in theirabilitytoaccumulatehumancapital therefore wageinequalityresultsonlyfromdifferencesin human capital accumulation we examine the response of this model to skill biased technical change sbtc theoretically we show that in response to sbtc the model generates behavior consistent with some prominent trends observed in the us data including i a rise in overall wage inequality both in the short run and long run ii an initial fall in the education premium followed by a strong recovery leading to a higher premium in the long run iii the fact that most of this fall and rise takes place among younger workers iv a rise in within group inequality v stagnation in median wage growth and a slowdown in aggregate labor productivity and vi a rise in consumption inequality that is much smaller than the rise in wage inequality these results suggest that the heterogeneity in the ability to accumulate human capital is an important feature for understanding the effects of sbtc and interpreting the transformation of the us labor markets since the 1970s jel e21 e24 j24 j31

information design in the holdup problem we analyze a bilateral trade model where the buyer chooses the distribution of her valuation for the good the seller after observing the buyer s distribution but not the realized valuation makes a take it or leave it offer if distributions are costless the price and the payoffs of both the buyer and the seller are shown to be 1 e in the unique equilibrium outcome the buyer s equilibrium distribution generates a unit elastic demand and trade is ex post efficient these properties are shown to be preserved even when different distributions are differentially costly as long as the cost is monotone in the dispersion of the distribution

incomplete contracts the hold up problem and asymmetric information abstract given symmetric information in a standard hold up problem a buyer s investment incentives are always increasing in his bargaining power while this result is robust under one sided private information it can be overturned under two sided private information

procurement and renegotiation parties bound by an incomplete contract have an incentive to renegotiate after acquiring new information the issue of the parties investment in the relationship before renegotiation is analyzed in a simple two period procurement model the firm invests in the first period it then learns its production cost and the sponsor learns its value for the project williamson s underinvestment presumption is shown to hold under very general assumptions about bargaining and about the ex post asymmetry of information as long as the firm s investment is not observable by the sponsor the introduction of a cancellation fee may well lead to even less investment contrary to what is sometimes argued the role of ex ante price fixing as an alternative way to reintroduce some form of commitment and the problem of cost overruns are discussed last it is shown that if investment is observable by the sponsor andthus may become a joint decision variable the two parties may choose to under or overinvest

public schooling college subsidies and growth abstract how does the mix of public education expenditures across primary and secondary k 12 education and post secondary college education influence economic growth to address this i build an overlapping generations endogenous growth model human capital is accumulated through compulsory k 12 education and through optional college education government uses tax revenue to provide quality in k 12 schooling and to subsidize college tuition when total expenditures are small all funds should provide k 12 quality when expenditures are above a critical value a positive share should subsidize tuition the share should increase with total expenditures and with the degree of complementarity of human capital accumulated through the two types of education also increased education spending is more likely to increase growth when a larger share subsidizes tuition

finance inequality nexus the long and the short of it financial development affects income inequality differently in the short and in the long term investigating oecd countries from 1870 2011 we find in the short run an improvement in financial development tends to reduce inequality while in the long run more finance contributes to more inequality the short run effect concurs with theories advocating financial development increases the availability of financial services primarily for the poor however this effect becomes nil within a few years results thus imply that policies aimed at reducing inequality through improving access of the poor to finance need to be carefully designed to ensure longevity of impact

education technologies wages and technological progress abstract we analyze the worker s incentives to acquire skills under technological progress when the costs of education are endogenous and depend on the wage distribution we show that the agent s intergenerational elasticity of substitution plays then a relevant role in determining how incentives and the long run wage distribution react to technological progress moreover whenever poverty traps of unskilled workers exist higher rates of technological progress can even decrease the incentives of low skill workers to acquire skills we also analyze the effects of educational subsidies in contrast with previous analytical findings we obtain that subsidies always decrease the long run skill premium finally we study the efficiency of the resulting competitive equilibria

trends in quality adjusted skill premia in the united states 1960 2000 this paper presents new evidence that increases in college enrollment lead to a decline in the average quality of college graduates between 1960 and 2000 resulting in a decrease of 8 percentage points in the college premium the standard demand and supply framework katz and murphy 1992 card and lemieux 2001 can qualitatively account for the trend in the college and age premia over this period but the quantitative adjustments that need to be made to account for changes in quality are substantial furthermore the standard interpretation of the supply effect can be misleading if the quality of college workers is not controlled for to illustrate the importance of these adjustments we reanalyze the problem studied in card and lemieux 2001 who observe that the rise in the college premium in the 1980s occurred mainly for young workers and attribute this to the differential behavior of the supply of skill between the young and the old our results show that changes in quality are as important as changes in prices to explain the phenomenon they document

information control in the hold up problem we study the use of information control to mitigate hold up risks we identify a distinction between asymmetric information that creates an ex ante investment incentive and asymmetric information that causes ex post inefficiency which then allows ex post inefficiency to be eliminated without compromising the ex ante investment incentive we characterize the properties of the optimal information structure and the payoffs and welfare achievable with information control in the presence of hold up risks

the race between man and machine implications of technology for growth factor shares and employment we examine the concerns that new technologies will render labor redundant in a framework in which tasks previously performed by labor can be automated and new versions of existing tasks in which labor has a comparative advantage can be created in a static version where capital is fixed and technology is exogenous automation reduces employment and the labor share and may even reduce wages while the creation of new tasks has the opposite effects our full model endogenizes capital accumulation and the direction of research towards automation and the creation of new tasks if the long run rental rate of capital relative to the wage is sufficiently low the long run equilibrium involves automation of all tasks otherwise there exists a stable balanced growth path in which the two types of innovations go hand in hand stability is a consequence of the fact that automation reduces the cost of producing using labor and thus discourages further automation and encourages the creation of new tasks in an extension with heterogeneous skills we show that inequality increases during transitions driven both by faster automation and introduction of new tasks and characterize the conditions under which inequality is increasing or stable in the long run

unobservable investment and the hold up problem we study a two person bargaining problem in which the buyer may invest and increase his valuation of the object before bargaining we show that if all offers are made by the seller and the time between offers is small then the buyer invests efficiently and the seller extracts all of the surplus hence bargaining with frequently repeated offers remedies the hold up problem even when the agent who makes the relation specific investment has no bargaining power and contracting is not possible we consider alternative formulations with uncertain gains from trade or two sided investment

costs of certified emission reductions under the clean development mechanism of the kyoto protocol abstract this paper examines the cost structure of certified emission reductions cers through various types of projects under the clean development mechanism cdm of the kyoto protocol using the cdm project data the costs of cers and their variation across technology and over time and space are estimated by applying alternative functional forms and specifications results show that the average cost of cers decreases with the project scale and duration scale and duration effects significantly vary across project types and there is an upward trend in costs the results also show that the distribution of the projects in the cdm portfolio or a given location does not strictly follow the relative cost structure nor does the distribution of the cdm projects in different host countries follow the principle of comparative advantage more than 84 of the cdm portfolio consists of various energy projects with substantially higher costs of cers than afforestation and reforestation industrial and landfill gas reduction and methane avoidance projects which are only 12 of all projects while per unit cost of abatement plays an important role in the bottom up and top down models to evaluate emission reduction potential and analyze policy alternatives the findings contradict the presumption of such models that project investors seek out low cost opportunities at the aggregate level the cost of cer by the projects in asia and europe is similar but higher than those hosted in africa americas and oceania yet more than 83 of the projects in the cdm portfolio are located in asia more than 69 of the projects are in china and india alone china appears to have a comparative advantage i e lowest opportunity cost in energy efficiency projects while india has a comparative advantage in hydro power projects and brazil has a comparative advantage in wind power projects in contrast energy efficiency category accounts for only 8 of the cdm projects in china hydro power accounts for 12 of the projects in india and wind power accounts for 18 of the projects in brazil the results provide a basis for evaluating the incentives that the mechanism offers as a cost effective policy instrument that balances greenhouse gas mitigation across sectors and regions while fulfilling the objective of the convention

information and bargaining in the hold up problem this article incorporates an information structure with partial information into the canonical hold up problem the optimal information structure balances the tradeoff between ex ante efficiency the information rent effect and ex post efficiency the bargaining disagreement effect with one shot bargaining it occurs at an intermediate level of information asymmetry when there is repeated bargaining it is attained with perfect asymmetry asymmetric information the parameter that is frequently ignored in the literature turns out to be an important welfare instrument for the hold up problem our results therefore provide a basis for institutional design regarding the optimal control of information flow

differences and changes in wage structures preface introduction and summary richard b freeman lawrence f katz 1 a comparison of changes in the structure of wages in four oecd countries lawrence f katz gary w loveman david g blanchflower 2 international differences in executive and managerial compensation john m abowd michael l bognanno 3 the gender earnings gap some international evidence francine d blau lawrence m kahn 4 international wage curves david g blanchflower andrew j oswald 5 the changing structure of male earnings in britain 1974 1988 john schmitt 6 real wages employment and wage dispersion in u s and australian labor markets robert g gregory francis vella 7 labor markets and economic growth lessons from korea s industrialization 1970 1990 dae il kim robert h topel 8 wage differentials in italy market forces institutions and inflation christopher l erickson andrea c ichino 9 the swedish wage structure the rise and fall of solidarity wage policy per anders edin bertil holmlund 10 getting together and breaking apart the decline of centralized collective bargaining richard b freeman robert s gibbons 11 earnings inequality in germany katharine g abraham susan n houseman 12 a comparative analysis of east and west german labor markets before and after unification alan b krueger jorn steffen pischke contributors author index subject index

the brain drain and the world distribution of income abstract skilled emigration or brain drain from developing to developed countries is becoming the dominant pattern of international migration today such migration is likely to affect the world distribution of income both directly through the mobility of people and indirectly as the prospect of migration affects the rate of return to education in both the sending and receiving economies this migration pattern will therefore affect human capital accumulation and fertility decisions in both the sending and receiving economies this paper analyzes these effects in a dynamic two country model of the world economy where agents in both countries make optimal fertility and human capital decisions the implications of the analysis for the world distribution of income are derived in the light of recent empirical findings of the brain drain literature the analysis shows that the current trend towards predominantly skilled emigration from poor to rich countries may in the long run increase inequality in the world distribution of income as relatively poor countries grow large in terms of population in the short run however it is possible for world inequality to fall due to rises in gdp per capita in large developing economies with sufficiently low skilled emigration rates

price discrimination in input markets we analyze the short and long run implications of third degree price discrimination in input markets in contrast to the extant literature which typically assumes that the supplier is an unconstrained monopolist in our model input prices are constrained by the threat of demand side substitution in our model the more efficient buyer receives a discount a ban on price discrimination thus benefits smaller but hurts more efficient larger firms it also stifles incentives to invest and innovate with linear demand a ban on price discrimination benefits consumers in the short run but reduces consumer surplus in the long run which is once again the opposite of what is found without the threat of demand side substitution

occupational mobility and wage inequality in this article we argue that wage inequality and occupational mobility are intimately related we are motivated by our empirical findings that human capital is occupation specific and that the fraction of workers switching occupations in the u s was as high as 16 a year in the early 1970 s and had increased to 21 by the mid 1990 s we develop a general equilibrium model with occupation specific human capital and heterogeneous experience levels within occupations we find that the model calibrated to match the level of occupational mobility in the 1970 s accounts quite well for the level of within group wage inequality in that period next we find that the model calibrated to match the increase in occupational mobility accounts for over 90 of the increase in wage inequality between the 1970 s and the 1990 s the theory is also quantitatively consistent with the level and increase in the short term variability of earnings copyright wiley blackwell

ability biased technological transition wage inequality and economic growth thispaper develops a growthmodel characterizedbyability biasedtechnological transition in which the evolution of technology education attainment and wage inequality is consistent with the observed pattern in the united states and other advanced countries over the past several decades it argues that an increase in the rate of technological progress raises the return to ability and simultaneously generates an increase in wage inequality between and within groups of skilled and unskilled workers an increase in average wages of skilled workers a temporary decline in average wages of unskilled workers an increase in education and a productivity transitory slowdown

international competition downsizing and wage inequality a country with cournot competition and free entry experiences an increase of its market size either due to economic growth or international integration of its goods markets this implied increase in competition leads to shrinking mark ups and forces firms to reduce overhead costs relative to output this implies a reallocation at the aggregate level from administrative to productive activities relative factor rewards change and wage inequality increases the factor which loses in relative terms can even lose in real terms from a quantitative perspective international competition is demonstrated to be the more plausible cause of rising wage inequality c 2007 published by elsevier b v

the applicability of marginal abatement cost approach a comprehensive review abstract the marginal abatement cost mac methodology is widely used in climate change policies policy makers rely on mac to assess feasible strategies and related costs to achieve emission reduction goals this paper introduces a variety of mac methodologies aiming at solving diverse problems which utilizes various calculable logic thus producing different results and implications this study applies a mind mapping method to capture differentiation of mac methods and systematically classify mac methodologies the applicability path analysis was proposed based on principles such as stakeholder type decision making objectives cost concept strategy mode and information scope our goal is to assess the applicability of different methodologies to reduce misuse by policy makers and to serve as a guide for subsequent research which might prompt and lead to the derivation of more consequential results in future studies the results of this study suggest that the complex method is not always better than the simplified method because policy makers are required to select the appropriate method according to the type of information needed it may even be suggested that mac could be reliable by ranking relative value of options compared with baseline rather than focusing on the absolute value of individual measures

optimal information transmission in a holdup problem this article examines the optimal contract in a bilateral trade model with unobservable relationship specific investment and renegotiation in such a setting a contract plays an additional role that it does not have in the standard holdup model namely that of transmitting information between the parties the article shows that a partial disclosure contract may be optimal and describes the optimal contract if the investment is cooperative and the information between the trading parties is asymmetric the optimal contract generally cannot result in the first best but dispensing with either of these assumptions makes the first best achievable

firm heterogeneity in capital labour ratios and wage inequality author s leonardi marco abstract this paper documents the increasing dispersion of capital labor ratios across firms in the us and provides some empirical evidence of a positive correlation at the two digit industry level between the dispersion of capital labor ratios across firms and residual wage inequality to explain this empirical fact the paper adopts a search model where firms differ in their optimal capital investment the exogenous decline in the relative price of equipment capital makes the distributions of capital labor ratios more dispersed in a frictional labor market this force generates wage dispersion among identical workers ols estimates of the relationship between capital dispersion and the relative price of equipment capital support the main hypothesis of the model

demographics and business cycle volatility a spurious relationship summary this paper replicates the estimation results of three studies on the impact of the age composition of the labor force on business cycle volatility and investigates whether they signal a meaningful long run relationship we show that both the volatile age labor force share variable and the business cycle volatility measure exhibit non stationary behavior but find no robust evidence of cointegration hence the estimation results reported in the literature may be spurious this conclusion is further supported by the finding that the strong relationship i disappears when cross sectional dependence is accounted for using the ccep estimator and ii is highly sensitive to small changes in the composition of the sample to data revisions and to the exact definition of the volatile age labor share copyright 2016 john wiley sons ltd

investing in a relationship a principal can make an investment anticipating a repeated relationship with an agent but the agent may appropriate the returns through ex post bargaining i study how this holdup problem and efficiency depend on the contracting environment when investment returns are observable informal contracts ex post can be more efficient than formal contracts as they induce higher investment ex ante the principal invests not only to generate direct returns but also to improve relational incentives unobservability of returns increases the principal s ability to appropriate the returns but reduces her ability to improve incentives the optimal information structure depends on bargaining power

clean development mechanism cdm after the first commitment period assessment of the world s portfolio and the role of latin america abstract the clean development mechanism cdm represents the main effort to help developing countries develop sustainably and developed countries to reach their emission reductions targets set under the kyoto protocol with the ending of the first commitment period there is an opportunity to assess the state of the cdm portfolio 2008 2012 this article is the first effort to evaluate the cdm portfolio throughout the first commitment period as well as the first paper focused on latin america s cdm portfolio as a whole concentrating on renewable energy projects moreover a special analysis is performed for chile latin america s third most important cdm country after brazil and mexico 6th worldwide after china india korea brazil and mexico and first in cers registered among the small countries an ideal host because of its high political stability government effectiveness access to capital and regulatory quality in addition a study was performed on 180 renewable energy projects in latin america revealing that the additionality assessments performed under the cdm are too subjective hindering the validation of the projects and their transparency the main policy implication of this research is to expose the need for a radical change to the succeeding document to the kyoto protocol in order to reduce the inequality amongst host countries and ensure that cdm fulfills its sustainable development claim some of the proposed measures include establishing uniform benchmarks to be used against similar projects a thorough validation for declared barriers simplifying the registering process and providing international aid for the least developed countries that have historically lacked the ability to participate in the cdm

costs and potentials of energy conservation in china s coal fired power industry a bottom up approach considering price uncertainties abstract energy conservation technologies in the coal fired power sector are important solutions for the environmental pollution and climate change issues however a unified framework for estimating their costs and potentials is still needed due to the wide technology choices especially considering their economic feasibility under fuel and carbon price uncertainties therefore this study has employed a bottom up approach to analyze the costs and potentials of 32 key technologies new promotions during the 13th five year plan period 2016 2020 which combines the conservation supply curve csc approach and break even analysis findings show that 1 these 32 technologies have a total coal conservation potential of 275 77 mt with a cost of 238 82 billion yuan and their break even coal price is 866 yuan ton 2 steam water circulation system has the largest energy conservation potential in the coal fired power industry 3 considering the co benefits will facilitate these technologies promotions because their break even coal prices will decrease by 2 35 yuan ton when the carbon prices increase by 1 yuan ton 4 discount rates have the largest impacts on the technologies cost effectiveness while the future generation level affect their energy conservation potentials most

the diffusion of computers and the distribution of wages abstract when the costs are decreasing workers adopt technology at the point where the costs equal the increased productivity output per worker increases immediately while productivity benefits increase only gradually if costs continue to fall as a result workers in computer adopting labor market groups experience an immediate fall in wages due to increased supply on the other hand adopting workers experience wage increases with some delay this model explains why increased computer use does not immediately lead to higher wage inequality more specifically the results of the model are shown to be consistent with the question why within group wage inequality among skilled workers as a result of computer technology adoption in the united states increased in the 1970s while between group wage inequality and within group wage inequality among the unskilled did not start to increase until the 1980s the model also predicts that the more compressed german wage structure leads to a lagged diffusion of computer technology along with smaller changes in wage inequality our empirical analysis suggests that this is consistent with the actual developments in germany since the 1980s finally the theoretical predictions seem to be of the right magnitude to explain the empirical quantities observed in the data

college entry by blacks since 1970 the role of college costs family background and the returns to education college enrollment of black 18 19 year old high school graduates declined from 1980 through 1984 and then rebounded after 1984 this paper presents data from a time series of cross sections of 18 19 year old youths from 1973 through 1988 to test the role of family background direct college costs local economic conditions and returns to college in driving these trends the evidence suggests that on the one hand increases in direct college costs were driving enrollment rates downward throughout the eighties on the other hand dramatic increases in average parental education for black youths exerted upward pressure on college enrollment by blacks particularly in the latter half of the decade the net effect of these two factors contributed to the pattern of decline and recovery observed during the eighties

technical progress and early retirement this paper claims that technical progress induces early retirement of older workers it presents a model where human capital is technology specific so that technical progress erodes some existing human capital this affects mostly older workers who have a smaller incentive to learn the new technology since their career horizon is shorter hence they tend to work less we find support to this erosion effect in hrs data which shows that retirement and unemployment of older workers are positively related to technical progress in their sectors unlike the effect across sectors the model is ambiguous about the aggregate effect of technical progress on labor supply of older workers while in sectors with many innovations it falls due to the erosion effect in other sectors it increases due to higher wages to examine which effect dominates we run a time series test using us data and find that the rate of average technical progress reduces aggregate labor force participation by the old namely the erosion effect dominates

wage inequality and the new economy many economists have argued that the observed increase in wage inequality in developed economies over the past 30 years is due to skill biased technical progress in this paper we put forward a somewhat different technology based argument namely that the increased inequality was caused by technical change linked to the pervasive innovation wave associated with the new economy this technical change was not skill biased in the usual sense but rather raised the reward to adaptability this alternative approach based on the notion of general purpose technology can shed light on a number of outstanding puzzles on the evolution of wage inequality both between and within educational groups

input market price discrimination and the choice of technology recent concerns over the effects of the robinson patman act and so called priceprotection policies such as most favoredcustomer clauses mfc s 2 on market performance have given economists new reasons to examine the welfare effects of third degree price discrimination in order to assess these effects correctly it is imperative that one understand how price discrimination influences market behavior joan robinson s 1933 work launched the formal inquiry into the welfare effects of third degree price discrimination building on the intuition presented by arthur pigou 1932 she showed that if a monopolist faces two independent linear demand curves the use of price discrimination will not affect industry output but will reduce welfare richard schmalensee 1981 extends these results to nonlinear demand curves and shows that an increase in total industry output is a necessary condition for price discrimination to be welfare improving hal varian 1985 broadens these results by deriving upper and lower bounds on the welfare change due to the use of price discrimination he shows that these results can be applied to markets in which there are nonzero cross price effects all of this work examines how the ability of a monopolist to price discriminate will affect the market outcome when all other characteristics of the market are treated as exogenous recently two lines of research have extended this inquiry beyond the case of a monopolist in a market with exogenously fixed parameters the first line considers the case of oligopoly the work of charles holt and david scheffman 1985 and thomas cooper 1986 has shown that restrictions on price discrimination imposed by the use of mfc s can facilitate collusion between oligopolists attempting to restrict output this implies that third degree price discrimination can be welfare improving the second line of research shows that price discrimination by a firm can affect nonprice decisions made by other market participants thus affecting the market outcome michael katz 1987 presents a model in which a large firm s ability to vertically integrate backward into the production of an input allows it to obtain a lower per unit price from the supplier of the input than can be obtained by smaller firms without this ability he shows that third degree price discrimination reduces welfare unless it prevents inefficient backward integration degraba 1987 shows that the use or nonuse of price discrimination by a national firm can affect nonprice decisions made by local firms that compete with the national firm in this situation third degree price discrimination is welfare reducing because it induces local firms to produce a product that is overly differentiated from the product of the national firm in all of the work cited above price discrimination is important when sellers set prices in separate markets or charge different prices to different customers in the same market the following analysis which can be considered a contribution to the second line of research suggests that price discrimination can be important even when a seller faces a single market in which all customers are identical the intuition behind this result is that nonprice decisions made by downstream producers such as the choice of technology can be affected by the use or johnson graduate school of management cornell university ithaca ny 14853 i thank robert frank robert smiley richard thaler and the participants of the jgsm applied microeconomics workshop for their helpful comments see william baldwin 1987 pp 438 40 for a good summary of the debate 2see john kwoka and lawrence white 1989 pp 196 7

government spending composition technical change and wage inequality in this paper we argue that government spending played a significant role in stimulating the wave of innovation that hit the u s economy in the late 1970s and in the 1980s as well as the simultaneous increase in inequality and in education attainments since the late 1970s u s policymakers began targeting commercial innovations more directly and explicitly we focus on the shift in the composition of public demand toward high tech goods which by increasing the market size of innovative firms functions as a de facto innovation policy tool we build a quality ladders non scale growth model with heterogeneous industries and endogenous supply of skills and show that an increase in the technological content of public spending stimulates r d raises the wage of skilled workers and at the same time stimulates human capital accumulation a calibrated version of the model suggests that government policy explains between 12 and 15 of the observed increase in wage inequality in the period 1976 1991 jel e62 j31 o33 o41

the overvaluation of purchasing power parity abstract recent panel studies of purchasing power parity have reported strong evidence of mean reversion in real exchange rates however these studies fail to control for cross sectional dependence in the data this failure has dramatic consequences raising the significance level of tests with a nominal size of 5 percent to as much as 50 percent it is shown in this paper that controlling for cross sectional dependence no evidence against the random walk null can be found in panels of up to 64 real exchange rates this finding cannot be attributed to low power as there is ample power in panels of this size to reject the unit root null