interpreting economic time series this paper explores some of the implications for econometric practice of the principle that people s observed behavior will change when their constraints change in dynamic contexts a proper definition of people s constraints includes among them laws of motion that describe the evolution of the taxes they must pay and the prices of the goods that they buy and sell changes in agents perceptions of these laws of motion or constraints will in general produce changes in the schedules that describe the choices they make as a function of the information that they possess until very recently received dynamic econometric practice ignored this principle the practice of dynamic econometrics should be changed so that it is consistent with the principle that people s rules of choice are influenced by their constraints this is a substantial undertaking and involves major adjustments in the ways that we formulate estimate and simulate econometric models

total factor productivity and the environmental kuznets curve a comment and some intuition abstract chimeli and braden chimeli ariaster b braden john b 2005 total factor productivity and the environmental kuznets curve journal of environmental economics and management 49 366 380 derive a necessary and sufficient condition under which inter country differences in total factor productivity can yield an environmental kuznets curve they argue that their results emphasize the importance of differences in total factor productivity across countries as well as the need for decreasing returns to scale in pollution abating technologies for the existence of an environmental kuznets curve we show that their proposition 1 is equivalent to proposition 2 in lieb lieb christoph m 2002 the environmental kuznets curve and satiation a simple static model environment and development economics 7 429 448 this implies that even in chimeli and braden s model contemporaneous changes in the marginal rate of substitution between environmental quality and consumption on the demand side and the marginal rate of transformation between these goods on the supply side drive the pollution income relationship this is a very general condition that does not rely on either differences in total factor productivity or decreasing returns to scale in abatement and which is widely applicable

the empirical analysis of the determinants for environmental technological change a research agenda abstract technological change is usually considered a necessary albeit not sufficient condition for a transition to sustainability however the empirical analysis of the determinants to environmental technological change has not received too much attention in the environmental ecological economics literature and many open questions remain in this context based on a careful review of the literature this paper argues that further analysis should address several issues at different levels i e regarding the conceptual framework the thematic scope of the studies some methodological issues and other aspects related to the environmental policy variable first an integrated conceptual framework which takes into account the interplay between relevant variables influencing environmental technological change i e factors internal and external to the firm and characteristics of the environmental technologies and all the stages of this process with a greater emphasis on the invention stage should be developed other aspects should then be tackled including a focus on several themes i e a greater attention to cross sectoral technologies the barriers to different types of environmental technologies the international dimension of environmental technological change and environmental technological change in small and medium size enterprises methodological issues combination of case studies and econometric modelling and several issues related to the environmental policy variable

productivity effects in brazilian wage determination abstract the article investigates the characteristics of industrial wage determination in brazil using time series data for 22 manufacturing sectors for 1985 1993 the idea is to verify whether changes in sectoral productivity are relevant to explain changes in sectoral nominal wages first we present in a descriptive way the results of a statistical investigation of the data a second more encompassing purpose of the article is an attempt to interpret the results by means of a more elaborate econometric analysis the evidence suggests that rent sharing is indeed a pervasive feature of the brazilian industrial labor market

the environmental kuznets curve and flow versus stock pollution the neglect of future damages in this paper we offer a possible explanation for the empirical finding that the pollution income relationship pir for flow pollutants is an environmental kuznets curve ekc i e inverted u shaped but that the pir for stock pollutants is monotonically rising we analyse an overlapping generations model with two pollutants the flow pollutant causes immediate damages but the stock pollutant harms the environment only in the future hence a succession of myopic governments lets stock pollution grow with income in contrast the flow pollutant follows an ekc whose downturn might be caused by the neglect of future damages and by ever rising stock pollution without the stock pollutant the pir for the flow pollutant can increase monotonically we also show that the turning point of the ekc for the flow pollutant lies at lower levels of income and of flow pollution if stock pollution is high and harmful this casts doubts on most empirical ekc studies because they assume that the turning point occurs at the same income level in all countries however it is consistent with recent empirical findings that the income level at the turning point of the ekc varies across countries

household production and environmental kuznets curves examining the desirability and feasibility of substitution this paper provides a theoretical explanation for the widely debatedempirical finding of environmental kuznets curves i e u shaped relationships between per capita income and indicators of environmentalquality we present a household production model in which the degradationof environmental quality is a by product of household activities householdscan not directly purchase environmental quality but can reduce degradation by substituting more expensive cleaner inputs to production for less costlydirty inputs if environmental quality is a normal good one expectssubstitution towards the less polluting inputs so that increases in incomewill increase the quality of the environment it is shown that this onlyholds for middle income households poorer households spend all income on dirty inputs when they buy more as income rises the pollution also rises they do not want to substitute as this would reduce consumption ofnon environmental services for environmental amenities that are alreadyabundant thus as income rises from low to middle levels a u shape can result yet an n shape might eventually result as richer households spend all income on clean inputs further substitution possibilities are exhausted thus as income rises again pollution rises and environmental quality falls

does s kuznets s belief question the environmental kuznets curves this paper examines the link between pollution and income the main purpose is to assess whether the introduction of income inequality in a environmental kuznets curve ekc analysis can give new insights into the relationship between pollution and economic growth the ekc hypothesis proposes that there is an inverted u shape relation between environmental degradation and income per capita we question this common result in a simple model where the income inequality evolution is exogenous and where the planner could use only one instrument for a set of parameter values we find for example a two hump curve jel classification d3 h4 q2 est ce que le postulat de s kuznets remet en question les courbes environnementales a la kuznets cet article analyse la relation entre pollution et revenu l objectif de cet article est de montrer comment la prise en compte de l inegalite des revenus dans une analyse de la courbe environnementale de kuznets peut modifier la relation entre pollution et croissance l hypothese de la courbe environnementale de kuznets revient a supposer l existence d une forme en u inverse entre la degradation de l environnement et le revenu par tete cet article remet en cause ce resultat a l aide d un modele simple dans lequel l inegalite du revenu evolue de maniere exogene et ou le planificateur ne peut utiliser qu un seul instrument pour certaines valeurs des parametres du modele nous trouvons que la relation entre la pollution et le revenu suit une courbe a deux bosses

local pay determination theoretical models of local pay are reviewed ranging from neoclassical perspectives unemployment wage trade off models and segmented labor market approaches the empirical work on u s north south differentials is discussed for the u k studies of the extent of and trends in geographical pay differentials are considered as well as behavioral explanations focusing on the role of excess demand the issue of adjustment processes is then discussed both in theory and in relation to empirical work for the u s and u k this discussion focuses largely on geographical spillover effects in terms of origins evidence and issues of identification finally the impact of certain impediments in the adjustment process are considered specifically in relation to the u k these concern the role and influence of national wage bargaining as well as factors inhibiting labor migration stemming from the housing market and the climate of the national labor market copyright 1992 by blackwell publishers ltd

the economics of worldwide stagflation the last fifteen years have witnessed dramatic changes in economics not only in the manner in which the economics profession views economics but also in the manner in which the general public views economics and economists by the late 1960 s there had emerged more or less a consensus macroeconomic framework that is an agreed upon structure to be used to study economic problems at the aggregate level robert solow stated as quoted in leijonhufvud 1968

productivity gains from geographic concentration of human capital evidence from the cities abstract based on recent theoretical developments the argument is made that the average level of human capital is a local public good cities with higher average levels of human capital should therefore have higher wages and higher land rents after conditioning on the characteristics of individual workers and dwellings this prediction is supported by data for standard metropolitan statistical areas smsas in the united states where the smsa average levels of formal education and work experience are used as proxies for the average level of human capital the alternative explanations of omitted smsa variables and self selection are evaluated an estimate of the effect of an additional year of average education on total factor productivity is computed

centralisation employment and wage dispersion this paper is about bargaining institutions and their influence on wage dispersion and employment using novel statistical measures it compares labor market performance in seventeen oecd countries since 1973 it concludes that countries with highly centralized wage bargaining have generally achieved the best performance combining high employment with low wage dispersion thereby avoiding certain major inequalities prevalent elsewhere the paper also presents a formal model of bargaining based on the work of l calmfors and j driffill 1988 simulations are used to illustrate how this model generates the kind of outcomes described in the empirical part of the paper copyright 1992 by royal economic society

on a clear day you might see an environmental kuznets curve we shed some new light on the environmental kuznets curve ekc and show how it can be viewed as a particular form of equilibrium relationship where technology and preference parameters determine the shape of the curve in contrast to most of the literature on the ekc we estimate a theoretically consistent model on long run data swedish sulfur emission covering the period 1900 2002 furthermore we test and date structural change the model suggests four regimes 1900 1918 1919 1933 1934 1967 and 1968 2002 generating four rather different patterns for pollution over time the policy conclusions are consonant with pearce s general view about the ekc there is no theoretical presumption that it has an inverted u shape nor should any country try to grow out of the environmental problems without analyzing the benefits and costs of so doing

a reexamination of the role of income for the trade and environment debate recent work on the relationship between international trade and the environment has found small but negative effects of increased openness on measures of pollution for the average country on a panel of 128 countries it is shown that like previous studies the trade intensity effect is negative and significant for the average country for emissions of four localized pollutants so2 nox co and vocs however trade intensity effects are not uniform across countries of different income levels in fact a strong non monotonicity exists in trade intensity elasticities it is found that countries with relative world incomes less than 0 5 or greater than 2 5 tend to have positive trade intensity elasticities while countries with relative world incomes between 0 5 and 2 5 tend to have negative trade intensity elasticities the results imply that both factor abundance and pollution haven effects may be at work but that the dominance of one effect over the other depends on a country s level of development

urban wages and labor market agglomeration abstract using the 5 public use micro sample of the 1990 u s census we find that observationally equivalent workers in the manufacturing sector earn higher wages when they are in urban labor markets that have a larger share of national or metropolitan employment in their same occupation and industry groups quantitatively the effect is large with an elasticity measured at the means of between 1 2 and 3 6 for these effects we interpret the willingness of firms to pay more for equivalent workers in dense markets as evidence of an agglomeration economy in urban labor

trade openness and environmental quality international evidence we examine the relationship between trade openness and the environment in a cross country panel using the emission of particulate matter pm10 as the basic indicator of environmental quality the panel cointegration test results show a long run relationship between particulate matter emissions trade openness and economic growth we find that increased trade openness leads to environmental degradation for the global sample however the results differ according to the income of countries trade openness has a benign effect on the environment in high income countries but a harmful effect in middle and low income countries these results are generally robust to different measures of trade openness and environmental quality interestingly and significantly the results are consistent with the popular notion that rich countries dump their pollution on poor countries finally we find evidence of a feedback effect between trade openness and particulate matter emissions for the global sample as well as different income groups of countries

nonhomothetic growth models for the environmental kuznets curve we show the role of the elasticity of substitution between general consumption and the environment in environmental degradation specifically our numerical experiments demonstrate for a wide range of models exponential utility generates the environmental kuznets curve without adding any special assumptions with exponential utility the elasticity of substitution and hence the substitution effect between consumption and the environment are both decreasing in income hence when income is low society the government readily gives up environmental quality in return for more consumption but it does not want to substitute consumption for the environment anymore once it becomes wealthy enough

rules of thumb versus dynamic programming this paper studies decision making with rules of thumb in the context of dynamic decision problems and compares it to dynamic programming a rule is a fixed mapping from a subset of states into actions rules are compared by averaging over past experiences this can lead to favoring rules which are only applicable in good states correcting this good state bias requires solving the dynamic program we provide a generalframework and characterize the asymptotic properties we apply it to provide a candidate explanation for the sensitivity of consumption to transitory income jel eoo c63 c61 e21

four types of ignorance discussion this is a comment on hansen and sargent 2015 using a generalized one period setup i provide some intuition and perspective

a consumption based theory of the environmental kuznets curve abstract most theories about the inverted u relationship between pollution and income termed the environmental kuznets curve ekc are production side theories emphasizing pollution and abatement technologies production side theories are implicitly based on the assumption of low factor mobility and the absence of pollution as a variable in the utility function both assumptions are called into question by the empirical evidence of ekcs for i pollutants that are long lived and not easily shiftable and ii regional cross sections with free labor mobility hazardous waste sites are a prime example this paper develops a stylized model of the ekc based on perfect mobility of households and labor it represents the first attempt at developing a consumption side model of the ekc

agents as empirical macroeconomists thomas j sargent s contribution to economics thomas j sargent has fundamentally changed and in the words of art rolnick who interviewed him in 2010 irrevocably transformed the field of macroeconomics whether as sole author as co author with collaborators as an author influenced by others or as a teacher of the profession influencing others this paper is about his contribution to our field the nobel memorial prize to thomas j sargent and christopher a sims has been awarded for the empirical research on cause and effect in the macroeconomy or more broadly for macroeconometrics one often likes to distinguish between theorists on the one hand and empiricists and econometricians on the other thomas j sargent holds a unique position in between a key theme in a large part of his work has been to put the agents in his model on equal footing with the econometrician who is observing data from the model i e to assume that agents are themselves empirical macroeconomists or macroeconometricians in this paper i use this theme to examine his work and his contributions to the study of economics

the environmental kuznets curve ekc theory part a concept causes and the co2 emissions case abstract the main purpose of this study is to capture the main features of the environmental kuznets curve ekc concept according to the ekc theory the process of economic growth is expected eventually to limit the environmental degradation created in the early stages of development the ekc concept leads many researchers from the early 1990s to assume that each economy should focus on its growth and any environmental problems will be eventually eliminated by the process of economic growth several studies attempt to test empirically the ekc hypothesis using data on many countries and examining various types of environmental degradation while other studies examine the underlying factors that may drive such a relationship this article reviews the evolution of the ekc concept and the possible causes of an ekc pattern like the distribution of income the international trade pollution haven hypothesis structural changes technical progress and improvements in energy efficiency institutions and governance and consumer preferences as co2 emissions are a pollutant with global effects several studies deal with the possible ekc pattern for co2 emissions and these studies are discussed separately the various critiques on the ekc concept are reviewed in the second article of this work

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

robust control of forward looking models abstract this paper shows how to formulate and compute robust ramsey aka stackelberg plans for linear models with forward looking private agents the leader and the followers share a common approximating model and both have preferences for robust decision rules because both doubt the model since their preferences differ the leader s and followers decision rules are fragile to different misspecifications of the approximating model we define a stackelberg equilibrium with robust decision makers in which the leader and follower have different worst case models despite sharing a common approximating model to compute a stackelberg equilibrium we formulate a bellman equation that is associated with an artificial single agent robust control problem the artificial bellman equation contains a description of implementability constraints that include euler equations that describe the worst case analysis of the followers as an example the paper analyzes a model of a monopoly facing a competitive fringe

wage differentials in brazil theory and evidence the investigation of wage determination and wage differentials in developing countries has concentrated on the effects of human capital and different sources of segmentation associated with institutional arrangements and structural characteristics on earnings in this article we use micro data for brazil for the 1980s and 1990s to test several competitive theories and models with segmentation explained by efficiency wages we find that unmeasured abilities and efficiency wage models seem to play a role in wage determination while compensating differentials and transitory difference theories were found to be irrelevant to wages formation

the real bills doctrine versus the quantity theory a reconsideration two competing monetary policy prescriptions are analyzed within the context of overlapping generations models the real bills prescription is for unfettered private intermediation or central bank operations designed to produce the effects of such intermediation the quantity theory prescription in contrast is for restrictions on private intermediation designed to separate money from credit although our models are consistent with quantity theory predictions about money supply and price level behavior under these two policy prescriptions the models imply that the quantity theory prescription is not pareto optimal and the real bills prescription is

money as a medium of exchange in an economy with artificially intelligent agents abstract we study the exchange economies of kiyotaki and wright 1989 in which agents must use a commodity or fiat money as a medium of exchange if trade is to occur our agents are artificially intelligent and are modeled as using classifier systems to make decisions in the assignment of credit within the classifier systems we introduce some innovations designed to study sequential decision problems in a multi agent environment for most economies that we have simulated trading and consumption patterns converge to a stationary nash equilibrium even if agents start with random rules in economies with multiple equilibria the only equilibrium that emerges in our simulations is the one in which goods with low storage costs play the role of medium of exchange i e the fundamental equilibrium of kiyotaki and wright

interest on reserves abstract in a general equilibrium setting we study versions of the proposal to pay interest on reserves at the market rate we argue that the proposal makes the demand for total reserves indeterminate whether interest is paid on total reserves or on required reserves only one consequence is that tax financing of the proposal gives rise to a continuum of equilibria equilibria which differ in real returns and consumption allocations another consequence is that financing through earnings on the central bank s portfolio either gives rise to an equilibrium with a zero nominal interest rate or to no equilibrium

a model of commodity money abstract commodity money is modeled as one or two of the capital goods in a one consumption good and one or two capital good overlapping generations model among the topics addressed using versions of the model are i the nature of the inefficiency of commodity money ii the validity of quantity theory predictions for commodity money systems iii the circumstances under which one commodity emerges naturally as the commodity money iv the role of inside money money backed by private debt in commodity money systems and v the circumstances under which a government can choose the commodity to serve as the commodity money

escaping nash inflation an ordinary differential equation ode gives the mean dynamics that govern the convergence to self confirming equilibria of self referential systems under discounted least squares learning another ode governs escape dynamics that recurrently propel away from a self confirming equilibrium in a model with a unique self confirming equilibrium the escape dynamics make the government discover too strong a version of the natural rate hypothesis the escape route dynamics cause recurrent outcomes close to the ramsey commitment inflation rate in a model with an adaptive government

interindustry wage differentials in brazil why workers who have seemingly identical characteristics receive different wages has been a recurrent problem in labor economics and has received much attention lately in the debate on the efficiency wage models ewms in this article we extend this line of research to a less developed economy by testing the existence of interindustry wage differentials in brazilian industries the empirical analysis is based on cross sectional data on individuals working in the manufacturing industry in sao paulo one of the greater industrial areas in brazil the brazilian case shows a number of similarities to previous studies as there is a significant and stable pattern of interindustry wage differentials however it also raises additional issues namely a relationship between technology and wages that extends beyond the size effect as well as the similarities of the wage structure across countries even when workers characteristics are controlled the results have also proven to be quite robust to methodological estimation issues that is changes in the control variables and full correction for the least squares sampling error

convergence of least squares learning in environments with hidden state variables and private information we study the convergence of recursive least squares learning schemes in economic environments in which there is private information the presence of private information leads to the presence of hidden state variables from the viewpoint of particular agents by applying theorems of ljung we extend some of our earlier results to characterize conditions under which a system governed by leastsquares learning will eventually converge to a rational expectations equilibrium we apply insights from the learning results to formulate and compute the equilibrium of a version of townsend s model

are there limits to growth a simple theoretical model of pollution is developed that generates an inverted u shape relationship between per capita income and environmental quality this model is then used to study long run growth the same inverted u shape is shown to appear in time series and the prospects for sustained growth are shown to hinge on whether increasingly strict environmental regulation is compatible with a constant rate of return on capital implementation is also studied tax and voucher schemes are shown to have an advantage over direct regulation because they provide the correct incentives for capital accumulation copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

differences in wage levels among metropolitan areas less educated workers in the united states easton t and king m c 2000 differences in wage levels among metropolitan areas less educated workers in the united states reg studies 34 21 27 this work investigates the causes of low wages for workers with a high school education or less in the us using a sample of 241 metropolitan areas drawn from the 1990 census it examines the influence of five labour market characteristics on between metropolitan area wage differences labour demand the minimum wage unionization industry mix and the race gender composition of the labour force the first four factors seem to affect both men s and women s wages but the relative importance differs for example the evidence suggests that unionization is the most important influence on men s wages while for women industry mix matters most easton t et king m c 2000 des ecarts de salaire dans les zones metropolitaines les salaries moins instruits aux etats unis reg studies 34 21 27 a partir d un echantillon de 241 zones metropolitaines tirees du

unions and interindustry wage differentials abstract we investigate the importance of trade unions in collective bargaining in the context of a developing country manufacturing labor market the methodology we adopt to estimate wage differentials follows the method proposed by haisken denew j p and schmidt c m 1997 review of economics and statistics 79 516 521 since it improves on the standard procedure popularized by krueger a b and summers l h 1988 econometrica 56 193 259 our findings indicate that wage dispersion is far greater in the unionized sector of brazilian manufacturing in contrast to evidence from other countries

total factor productivity and the environmental kuznets curve abstract empirical studies support the environmental kuznets curve hypothesis ekc for some pollutants as income increases pollution increases reaches a peak and eventually decreases while relying mostly on cross sectional data the interpretations assert that the ekc is a by product of economic growth over time in doing so and in neglecting the role of important country specific characteristics these studies overlook potential econometric problems and introduce policy misconceptions differences in total factor productivity tfps account for much of the variation in income across countries with important implications for environmental quality we develop a theoretical model where different tfps produce a cross sectional ekc even if the dynamic path of environmental quality to its steady state in individual countries suggest otherwise the cross sectional ekc depends on diminishing returns to scale in environmental protection on the curvatures of the utility function with respect to consumption and of the environmental protection function and the elasticities of steady state consumption and environmental expenditures with respect to variation in tfps

what is different about urbanization in rich and poor countries cities in brazil china india and the united states abstract are the well known facts about urbanization in the united states also true for the developing world we compare american metropolitan areas with analogous geographic units in brazil china and india both gibrat s law and zipf s law seem to hold as well in brazil as in the u s but china and india look quite different in brazil and china the implications of the spatial equilibrium hypothesis the central organizing idea of urban economics are not rejected the india data however repeatedly rejects tests inspired by the spatial equilibrium assumption one hypothesis is that spatial equilibrium only emerges with economic development as markets replace social relationships and as human capital spreads more widely in all four countries there is strong evidence of agglomeration economies and human capital externalities the correlation between density and earnings is stronger in both china and india than in the u s strongest in china in india the gap between urban and rural wages is huge but the correlation between city size and earnings is more modest the cross sectional relationship between area level skills and both earnings and area level growth are also stronger in the developing world than in the u s the forces that drive urban success seem similar in the rich and poor world even if limited migration and difficult housing markets make it harder for a spatial equilibrium to develop

public sector employment rent seeking and economic growth surplus labor in the public sector a characteristic of many developing countries is viewed in this paper as the consequence of rent seeking behavior a theory is presented of a segmented labor market with endogenous government hiring in response to unemployment a simple computable general equilibrium model is used to illustrate how this can give rise to dynamic social costs and to quantify them fiscal resources are diverted to support the unproductive sink the effect of surplus labor on economic growth is shown to be substantial while the government s attempt to reduce unemployment is shown to be futile copyright 1991 by royal economic society

benefits from u s monetary policy experimentation in the days of samuelson and solow and lucas a policy maker knows two models of ination unemplo yment dynamics one implies an exploitable trade o the other does not the policy maker s prior probability over the two models is part of his state vector bayes law converts the prior probability into a posterior probability at each date and gives the policy maker an incentive to experiment for two models calibrated to u s data through the early 1960s we isolate the component of government policy that is due to experimentation by comparing the outcomes from two bellman equations the rst of which experiments and learns the second of which learns but doesn t experiment we interpret the second as an anticipated utility model and study how well its outcomes approximate those from the experiment and learn bellman equation the approximation is good for our calibrations the benets from purposeful experimentation are small

insider effects in wage determination abstract the paper attempts to shed new light on the determinants of industry wages by a cross country comparison of wage setting relationships making use of comprehensive and consistent panel data on industries from the early 1960s to the mid 1980s the empirical analysis involves estimations of identically specified industry wage equations for each of five countries sweden norway finland germany and the united states a key finding is that industry wages in the u s are the most responsive to sectoral price and productivity changes by contrast industry wages in the nordic countries are largely unaffected by sectoral conditions the results cast doubt on the competitive model as an accurate characterization of wage setting under decentralization

urban attributes and wage disparities in brazil a multilevel hierarchical model fontes g g simoes r f and hermeto camilo de oliveira a m urban attributes and wage disparities in brazil a multilevel hierarchical model regional studies this paper examines the effects of urban scale and productive structure on individual wage levels in brazilian cities and metropolitan areas in 1990 and 2000 the estimation through hierarchical linear models enabled the inclusion of variables in different levels individual and urban and the decomposition of total wage variance the results showed significant and huge wage disparities among workers who share similar personal attributes but live in different regions of the country in addition the disparities persisted from 1990 to 2000 finally the results provided evidence that local economic and labour market factors played an important role in wage determination

urbanization in a developing country city size and population composition abstract in developing countries typically there is a very high correlation between city size and educational attainment of the local population which is less pronounced or even absent in developed countries such as canada the u s a or the u k two explanations are examined first the types of goods produced in larger cities require relatively high skill labor inputs second public and perhaps private services demanded by higher skill people are only offered in larger cities the paper econometrically tests these hypotheses for brazil estimating the elasticities of substitution or typically complementarity between high and low skill labor and the bright lights effect for high versus low skill labor

ranking unemployment duration and wages it explores the implication of one central assumption when firms receive multiple acceptable applications they hire the worker who has been unemployed for the least amount of time this assumption ranking is contrasted with the assumption of random hiring no ranking by embodying this assumption in a model of the labour market with job creation destruction and matching the joint behaviour of unemployment the distribution of unemployment durations and wages are characterized the implication that the re employment prospects of employed workers were they to become unemployed are better than those of the currently unemployed appears to have been an important feature of european unemployment experience in the 1980 s this paper examines the effects of the composition of unemployment on wage determination it explores one central assumption when firms receive multiple acceptable applications they hire the worker who has been unemployed for the least amount of time we refer to this assumption as ranking and contrast it throughout to the assumption of random hiring or no ranking by embodying this assumption in a model of the labour market with job creation destruction and matching we characterize the joint behaviour of unemployment the distribution of unemployment durations and wages ranking has a number of important implications first in addition to the obvious result that the exit rate from unemployment is a decreasing function of duration we show that the effect of duration is stronger the higher the rate of unemployment second with the wage depending on the distributions of prospective unemployment durations the presence of long term unemployed per se has little effect on wages third looking at the relation between the wage and the aggregate level of unemployment and comparing ranking to the case of no ranking the wage moves less with the level of unemployment but more with the change in unemployment put simply ranking and no ranking models show exactly the same aggregate unemployment slightly different long run responses of wages to unemployment and sharply different wage dynamics the paper is organized as follows section i characterizes the matching process and derives a matching function based on an urn ball process with vacancies as urns and applications by unemployed workers as balls thus the distribution of applications per vacancy depends on aggregate unemployment and vacancies vacancies with at least one acceptable application are filled when a vacancy receives more than one acceptable application firms use a rule to choose among applicants thus the rule determines who is hired but does not affect the number of hires section ii uses this matching function in a model of the labour market with continual job creation and destruction and characterizes the equilibrium values of unemployment vacancies and hires

economic growth and environmental degradation when preferences are non homothetic we study the dynamics of pollution in an economic growth model with non homothetic preferences we characterize the forces that may drive the evolution of the income pollution relationship along the development process in particular we disentangle the standard accumulation mechanism which determines the intertemporal allocation of pollution from a mechanism based on the non homotheticity of preferences which leads the intratemporal allocation of expenditure between consumption and pollution abatement to depend on income as the economy develops and aggregate income grows up the fraction of income devoted to abatement increases if the income elasticity of abatement is larger than unity in this case the pollution may decrease with income even when the elasticity of pollution with respect to abatement is smaller than the elasticity of pollution with respect to emissions we numerically illustrate how this demand based mechanism determines the dynamic relationship between pollution and aggregate income

robust permanent income and pricing i suppose there exists an extremely powerful and if i may so speak malignant being whose whole endeavours are directed toward deceiving me rene descartes meditations ii 1

on impatience economic growth and the environmental kuznets curve a dynamic analysis of resource management the paper presents a dynamic analysis of natural resource management and investigates some key factors that affect optimal management and resource conservation using a recursive specification of time preferences we show how endogenous discounting and impatience can affect the motivation for both capital investments and environmental preservation we examine the relationships between economic growth and environmental quality endogenous discounting provides new insights in the economic dynamics underlying the environmental kuznets curve by treating growth as endogenous we examine how externalities and economic growth interact with each other we investigate how economic development can contribute to an increased demand for environmental preservation as an important new result we also show how poverty can contribute to environmental degradation

preferences technology and the environment understanding the environmental kuznets curve hypothesis we derive a simple expression for the income pollution path using the standard static model of the environmental kuznets curve ekc this expression makes it straightforward to identify the general characteristics of utility and pollution functions that lead to such a curve we show that suitable preferences can always lead to an ekc while there is no technology that yields an ekc for all types of preferences and we derive a sufficient condition for technology that leads to an ekc for almost all types of preferences our results hold for a model with multiple goods with different pollution intensities and for a production economy with nonconstant relative price of consumption and environmental effort we derive our results without assuming specific functional forms and we encompass several other models as special cases