the ir relevance of real wage rigidity in the new keynesian model with search frictions we explore the role of real wage dynamics in a new keynesian business cycle model with search and matching frictions in the labor market both job creation and destruction are endogenous we show that the model generates counterfactual inflation and labor market dynamics in particular it fails to generate a beveridge curve vacancies and unemployment are positively correlated introducing real wage rigidity leads to a negative correlation and increases the magnitude of labor market flows to more realistic values however inflation dynamics are only weakly affected by real wage rigidity this is because of the presence of labor market frictions which generate long run employment relationships the measure of real marginal cost that is relevant for inflation dynamics via the phillips curve contains a dynamic component that does not necessarily move with real wages

vacancies unemployment and the phillips curve abstract the canonical new keynesian phillips curve has become a standard component of models designed for monetary policy analysis however in the basic new keynesian model there is no unemployment all variation in labor input occurs along the intensive hours margin and the driving variable for inflation depends on workers marginal rates of substitution between leisure and consumption in this paper we incorporate a theory of unemployment into the new keynesian theory of inflation and empirically test its implications for inflation dynamics we show how a traditional phillips curve linking inflation and unemployment can be derived and how the elasticity of inflation with respect to unemployment depends on structural characteristics of the labor market such as the matching technology that pairs vacancies with unemployed workers we estimate on us data the phillips curve generated by the model while we can reject the baseline new keynesian phillips curve in favor of the search frictions specification we show it is still too stylized to fully describe the dynamics of firms marginal costs

identification and stochastic specification in rosen s hedonic price model abstract the use of an explicitly specified utility function to derive the inverse demand functions in s rosen s hedonic price model provides considerable insight into the correct stochastic specification of the model it turns out that except in special cases the inverse demand equations are nonlinear in parameters and cannot be formulated conveniently as regression models moreover the inverse demand functions and the hedonic price function must be estimated simultaneously to obtain consistent estimates of the parameters of these functions a tractable estimation technique is described it is desirable to derive the inverse demand functions from a utility specification that is not a strongly separable function of houses attributes since strong separability implies the existence of deterministic relations among incomes prices and observed housing attributes that may fail to hold in applications finally it is shown that the use of an explicitly specified utility function does not guarantee identification of the parameters of rosen s model

the value of squatter dwellings in developing countries the value of squatter dwellings for a sample in the philippines is estimated and the statistical relationship between value and housing characteristics is described the results of a survey approach indicate that while the discrepancies in the estimates are quite large for individual properties they are offset by using sufficiently large samples in addition when two estimates are highly correlated with one another they yield similar results when they are used as dependent variables in a hedonic price equation methodological considerations aside the determinants of the value of squatter dwellings tend to be similar to those of conventional formal sector dwellings the external appearance and quality of materials used in construction are among the most important variables water and sanitary facilities may not be valued as much as expected age may be positively correlated with value because housing services are improved more gradually in squatter communities and because longevity in a particular area is a sign of reduced risk overall squatter housing markets appear to behave as economically rational entities that valuate dwelling units similarly to conventional markets

consistent estimation of the urban land value function abstract previous studies have found that the urban land value function became flatter during the 19th century apparently due to declining transportation costs and increasing income estimates from these studies imply that housing demand became less elastic over the same period from elastic to unit elastic this paper demonstrates that the latter conclusion is rejected when the area of the city is defined correctly and consistent estimation procedures are used by combining urban and non urban data previous studies underestimated the degree to which the slope of the land value function declined over time when only urban data are used the decline is even greater and the price elasticity of demand for housing is uniformly unit elastic in addition the commonly used box cox transformation is found to be an imprecise method of generalizing functional form and subject to substantial small sample bias which if ignored leads to an underestimate of standard errors

land tenure security and home maintenance evidence from japan land tenure security law in japan gives leaseholders a dual right either they can renew the lease at the market rent or they can make a claim on the landowner to purchase the premises at the market price there is however a market imperfection because of the fact that leaseholders must incur a transaction cost in exercising the right of claim therefore leaseholders are not full residual claimants even under land tenure security under this condition we find theoretically and empirically that compared with freeholders leaseholders are equally likely to remain in the premises but they spend less on maintenance

where do property rights matter more explaining the variation in demand for property titles across cities in mexico this paper examines the variation in the value of property rights to housing in mexico focusing specifically on differences between urban housing markets roughly 30 of owner occupied houses in mexico do not have a proper deed houses with no deed are estimated to be five percent less valuable than otherwise similar houses with a full deed yet this premium varies widely across cities i match data from the 2012 and 2014 national survey of household incomes and expenditures to different sources of city level data in order to examine hypotheses explaining this variation in a multilevel regression framework i find that deeds are valued more in cities with more highly educated residents more political competition and more voting measures of local economic activity degree of informality and the regulatory bureaucracy are not associated with higher value to full property rights additionally i find that more educated households value deeds more and having a deed is more valuable for larger houses in neighborhoods with less vacancy and higher infrastructure quality based on these results i suggest funds to subsidize titling should be redirected to places where titles are worth more more broadly i suggest policymakers reconsider framing property titling programs as poverty alleviation low income households would benefit more from subsidies for improvements to housing and residential infrastructure at the same time the federal government should further push to reduce the costs of transferring property

inter generational effects of titling programmes physical vs human capital abstractprogrammes aimed at giving legal ownership titles to the occupants of land titling programmes are associated with an income or wealth effect that induce higher expenditure on normal goods like education and health services there is also a substitution effect the elimination of expropriation risk makes home investment more attractive and increases the opportunity cost of other forms of spending the net effect on human capital is ambiguous using data from a natural experiment in uruguay we find that titling favours home investment to the detriment of some dimensions of human capital investment for children of 16 and under

squatting as rent seeking and pressure group competition a south african case study a new squatting phenomenon in south africa is analysed from a rent seeking pressure group perspective while such squatting may play an expanded role in privatising publicly and even privately held land and in redistributing wealth over the near future in the longer term its expansion will tend to be limited by rent protecting and counter innovation as long as this rent seeking competition stays within the bounds set by constitutional government

on the job search sticky prices and persistence abstract models of the monetary transmission mechanism often generate empirically implausible business fluctuations this paper analyzes the role of on the job search in the propagation of monetary shocks in a sticky price model with labor market search frictions such frictions induce long term employment relationships such that the real marginal cost is determined by real wages and the cost of an employment relationship on the job search opens up an extra channel of employment growth that dampens the response of these two components because real marginal cost rigidity induces small price adjustments on the job search gives rise to a strong propagation of monetary shocks that increases output persistence

a hedonic index model the housing market of jos nigeria this paper demonstrates the usefulness of the hedonic index approach to the study of housing markets in developing countries the study broadens the geographical scope of the various economic studi

the contribution of environmental amenities to low income housing a comparative study of bangkok and jakarta central and local governments and their creditors are increasingly interested in cost recovery for public services these strategies have two aims increasing revenues and making a better connection between benefits received and consumer bills this paper estimates a hedonic model for household level data in a rare contrast of slums in two asian mega cities to provide comparative information about how the poor value environmental amenities and basic infrastructure access the results suggest that slum housing prices do reflect differentials in public service access and that rough estimates of the value of access can be cheaply and usefully obtained for planning purposes

urban land and housing markets in the punjab pakistan well functioning urban land and housing markets are critical success factors for achieving robust economic growth this paper provides an overview of urban land and housing market performance in punjab province of pakistan it describes the characteristics of well functioning markets and argues that the punjab s present markets are not performing adequately in fact there exists a range of impediments to efficient urban land and housing market performance excessive public land ownership inadequate infrastructure services weak property rights pervasive public and private sector rent seeking counter productive urban planning policies and regulations costly sub division and construction regulations limited financing for property development and acquisition rent controls and inadequate property tax based revenue generating mechanisms the paper concludes by suggesting that a prioritised comprehensive reform agenda is needed to improve urban land and housing market performance in punjab province the

estimating british workers demand for safety this paper estimates workers demand function for job safety using the british general household survey data the estimation employs rosen s two stage procedure the main difference between our study and those done in the past is that we estimate hedonic price equations with data sets from two labour markets our approach overcomes the usual identification problems associated with the application of rosen s method the estimation shows that there is a significant wage compensation for job risk in the uk the willingness to pay for a 1 100 000 decrease of annual job fatal accident rate from our estimated workers demand function is about 6 in 1973 prices the estimation of a demand function for safety also enables the derivation of workers willingness to pay for non marginal change of job risk and this can be used for cost benefit analysis on projects involving such non marginal changes

interest rate bounds and fiscal policy when the monetary authority controls the short term interest rate we find that under a regime of permanent and even persistent but temporary deficits that a strict upper bound on the feasible interest rate sequence is present more generally the satisfaction of the fiscal authority s present value budget constraint in the presence of a deficit sequence means that monetary and fiscal decisions cannot be independent this is an important caveat to the results in mccallum j political econ 92 1984 123

sectoral shifts and cyclical unemployment a substantial fraction of cyclical unemployment is better characterized as fluctuations of the frictional or natural rate than as deviations from some relatively stable natural rate shifts of employment demand between sectors of the economy necessitate continuous labor reallocation since it takes time for workers to find new jobs some unemployment is unavoidable this paper presents evidence that most of the unemployment fluctuations of the seventies unlike those in the sixties were induced by unusual structural shifts within the u s economy simple time series models of layoffs and unemployment are constructed that include a measure of structural shifts within the labor market these models are estimated and a derived natural rate series is constructed

money debt and prices in the united kingdom 1705 1996 this paper constructs a consistent series for the market value of uk government debt over almost 300 years analysing how monetary and fiscal policy affect the path of the uk price level specifically it examines the interactions between debts deficits the monetary base and the price level overall the price level has been closely related to the evolution of the base money supply across different sample periods there is little econometric evidence that fiscal policy has affected the course of the price level or of the exchange rate under the gold standard government debt has not significantly affected the base money stock either

urban squatting and community organization in developing countries abstract it is estimated that up to 30 35 percent of the total urban population of the third world about 185 million people live in squatter settlements this paper presents from an economic perspective of tenure choice under uncertainty a unified and consistent theoretical framework of this phenomenon which has heretofore been studied mainly by other social scientists the model is able to explain why land invasions occur furthermore it provides some insights as to why the number of squatters in an urban area depends on a squatter community s ability to form coalitions to fully protect its members rights it is shown in the paper that if a community is successful in controlling its size government efforts which are meant to reduce the number of squatters may lead to the opposite results in particular the imposition of heavier fines or the increase of government expenditures on eviction activity threat campaigns eviction in other jurisdictions etc will likely lead to an increase in the optimal number of squatters unless the decline in expected utility caused by these efforts is so great that squatting no longer becomes viable at any community size

squatters rights and urban development an economic perspective up to 35 per cent of urban dwellers in third world cities are squatters the characteristics of the squatting phenomenon are both varied and puzzling of particular interest are the observations that 1 landowners often do not collect rent from squatters for use of the land and 2 costly evictions are sometimes used without subsequent development of the land which in many cases is resettled by squatters we present an economic model of landowner squatter interaction which is consistent with these observations this model is then used to enlighten certain aspects of socially optimal land management policy for squatter areas the phenomenon of squatting in third world cities is widespread and growing recent studies have shown that up to 35 per cent of the total urban population of developing countries lives in squatter settlements the current and mostly non economic literature has mixed views regarding whether squatting is a problem or a solution to efficient urbanization attitudes concerning squatter settlements range from disgust concerning living conditions in such illegal or quasi illegal spontaneous settlements to admiration for the resourcefulness of the inhabitants as they provide themselves with at least some shelter using the minimal inputs available the literature has consequently not provided a useful conceptual framework to guide government policy in this paper we develop a formal economic model to understand the various forms of squatting in third world cities we then use the model to address some vexing policy questions do private landowners evict squatters too frequently or too infrequently should any or all squatters be evicted should they be provided with basic infrastructure services should they be given unambiguous property rights to the land they occupy applying the coase theorem to the squatting problem we might conclude that the observed rate of evictions was just right evictions occur only if the value of land use to squatters is less than the sum of the alternative development value to the landowner plus the cost of evictions this economic logic follows since squatters would outbid any competing use of the land if indeed they valued it more thus any policy that gave more property rights to squatters would be a pure transfer from landowners to squatters social welfare would be unaffected however transaction and bargaining costs associated with the transfer of ownership of land to squatters which are likely to be important in the squatting problem can invalidate this simple intuition 2 landowners incur costs when they try to enforce property rights either by collecting rent or evicting collect ing rent formalizes the relationship between renter and landowner the land owner would then have to incur the costs of providing basic services water

measuring the welfare effects of slum improvement programs the case of mumbai this paper evaluates the welfare effects of in situ slum upgrading and relocation programs using data for 5000 households in mumbai india we estimate a model of residential location choice in which households value the ethnic composition of neighborhoods and employment accessibility in addition to housing characteristics the importance of neighborhood composition and employment access implies that relocation programs must be designed carefully if they are to be welfare enhancing the value of our model is that it allows us to determine the magnitude of these effects it also allows us to determine the value households place on in situ improvements which policymakers need to know if they are to design housing programs that permit cost recovery

new estimates of climate demand evidence from location choice abstract we develop and apply to census data a new method for estimating climate demand the method is useful for ranking quality of life based upon a willingness to pay criterion our two major findings are that the willingness to pay quality of life index is correlated with the hedonic approach s ranking but that the migration approach generates much larger estimates of willingness to pay for a more moderate climate this finding is relevant for evaluating the economic impact of global warming

constant increasing and decreasing risk aversion with many commodities the arrow 1971 pratt 1964 theory of risk aversion has achieved important successes in the study of economic responses to risk this theory applies to a special class of cases in which the von neumann morgenstern expected utility hypothesis is used to explain these responses under this hypothesis individuals who maximize the expected utility of different utility functions will in general make different choices in the face of uncertainty for the purpose of predicting which of two different utility functions will lead to locally more risk averse economic behaviour the essential feature of these functions is their associated arrow pratt absolute risk aversion measures in fact the local comparisons can be extended to global comparisons if the arrow pratt absolute measures are uniformly comparable the arrow pratt measure of absolute risk aversion and a closely related measure of relative risk aversion also play crucial roles in the investigation of changes induced by wealth increases in the risk taking behaviour of a single expected utility maximizing individual this study has resulted in a satisfactory theory of increasing decreasing and constant absolute and relative risk aversion the special cases to which the arrow pratt theory is directly applicable are those in which the utility functions in question are functions of a single variable e g wealth unfortunately the models required to explain many economic decisions employ a version of the expected utility hypothesis in which the argument of the utility function is a multidimensional vector one example arises in the study of the consumption savings decision another occurs in the analysis of the combined consumption savings portfolio decision a final example is obtained in the investigation of demand for goods of uncertain quality the papers of kihlstrom mirman 1974 and diamond stiglitz 1974 have suggested a partial generalization of the arrow pratt theory of absolute risk aversion this

review of de soto s the mystery of capital in the mystery of capital hernando de soto promotes his explanation of why formal capital markets function poorly in developing countries de soto argues that much of the population of developing countries lacks access to credit not because they lack assets but because ownership of their property is secured informally which prevents the use of property as collateral the inability to convert assets into capital keeps the developing world from benefiting from capitalism

flood insurance wealth redistribution and urban property values abstract this paper examines the economics of the wealth transfer created by the national flood insurance program nfip by its very nature nfip is unique in that it subsidizes existing homeowners but not new construction thus for comparable properties the gain captured by existing homeowners is the difference between selling prices of equivalent qualified and nonqualified properties using standard hedonic pricing models we empirically test the impact of subsidized and nonsubsidized flood insurance on property values

functional form sample selection and housing demand abstract this paper addresses issues of functional form and sample selection in estimating housing demand urban economic theory suggests that income and price elasticities be allowed to vary with reference incomes and housing prices a generalized box cox estimator rejects linear and log log forms semi log forms are accepted in some cases sample truncation leads to downward biases in permanent income regressions but to slightly upward biased income elasticities price elasticities are generally unchanged

untitled a study of formal and informal property rights in urban ecuador we explore the substitutability of formal and informal property rights using new survey data from ecuador where households have both formal and informal claims to urban residential property we develop a model of property transactions that distinguishes between transferable and non transferable claims and show how this distinction affects the interpretation of hedonic price regressions the unconditional effect of title is to raise properties value by 23 5 however we also find that informal property rights can substitute effectively for formal property rights and suggest that titling programmes should be targeted at young disorganised communities if they are to benefit the recipients

the impact of landownership security theory and evidence from thailand this article develops a model of farmers land acquisition and investment decisions the model clarifies the relation between land values landownership security and credit markets the risk of eviction of untitled lands and the advantages in access to credit associated with titled land are shown to account for the higher price of titled land furthermore observed land prices are distorted when credit is priced below the opportunity cost of capital and the risk of eviction is positive therefore social benefit analysis of land titling cannot utilize land prices without correcting for these distortions the article offers formulas for performing such corrections econometric estimates of the value of legal ownership in three provinces of thailand using cross section land price data show a statistically significant effect of ownership security on land price the econometric estimates of ownership security are combined with the formulas generated by the model to yield estimates of the social benefit of land titling in the three provinces the analysis implies that granting full legal ownership to squatters can be a socially beneficial policy in many provinces

implications of alternate policies on welfare of slum dwellers evidence from pune india abstract in this paper we examine how slum dwellers value location based amenities in most developing country cities residents living in slums have poor quality dwellings and limited access to basic public services and amenities using data from pune india we estimate the residential location choices of slum dwellers which are conditional on housing quality neighborhood amenities and community structure we use these estimates to simulate the impact of alternate interventions on household welfare we find that households derive benefits from housing quality and neighborhood amenities while relocating households to the periphery has adverse consequences for household welfare we show that households could be adequately compensated out of the increased tax revenue accruing from alternative uses of the vacated central land

monetary and fiscal policy switching a growing body of evidence finds that policy reaction functions vary substantially over different periods in the united states this paper explores how moving to an environment in which monetary and fiscal regimes evolve according to a markov process can change the impacts of policy shocks in one regime monetary policy follows the taylor principle and taxes rise strongly with debt in another regime the taylor principle fails to hold and taxes are exogenous an example shows that a unique bounded non ricardian equilibrium exists in this environment a computational model illustrates that because agents decision rules embed the probability that policies will change in the future monetary and tax shocks always produce wealth effects when it is possible that fiscal policy will be unresponsive to debt at times active monetary policy like a taylor rule in one regime is not sufficient to insulate the economy against tax shocks in that regime and it can have the unintended consequence of amplifying and propagating the aggregate demand effects of tax shocks the paper also considers the implications of policy switching for two empirical issues

the demand for housing characteristics in developing countries this paper develops and estimates an econometric model of the household demand for housing characteristics the model is estimated using data from five cities and three developing countries overall the procedures employed work well in a wide variety of circumstances more specifically it is found that 1 household willingness to pay for living space increases with income but at a less than proportionate rate 2 willlingness to pay for living space declines as household size increases 3 willingness to pay for several quality measures structural quality wall roof and floor quality is quite responsive to income

on the determinants of slum formation we construct a simple model of a city with heterogeneous agents and housing choice to explain the determinants of slums home to about one third of the urban population in developing countries the model supports the main empirical evidence regarding slum formation and is able quantitatively to assess the role of each determinant of slum growth we show that urban poverty inequality and rural urban migration explain much of the variation in slum growth in brazil from 1980 to 2000 ex ante evaluation of the impacts of policy interventions shows that removing barriers to formalisation has a strong impact on slum reduction

entitled to work urban property rights and labor supply in peru this brief summarizes the results of a gender impact evaluation study entitled entitled to work urban property rights and labor supply in peru new legal rights were issued in 1996 project teams providing titling service through 2003 in peru the study observed that between 1996 and 2003 the peruvian government issued property titles to over 1 2 million urban households the largest titling program targeted at urban squatters in the developing world this paper examines the labor market effects of increases in tenure security resulting from the program pre program squatters in program neighborhoods were significantly more likely to report improved tenure security by 60 percent similarly program participants were 18 8 percentage points less likely to report a high likelihood of eviction or invasion and 18 8 percentage points more likely to report that their dwelling was currently very secure from eviction or invasion the likelihood of working inside the home significantly falls by 11 6 percentage points for the average squatter family with two program periods

housing consumption and permanent income in developing countries estimates from panel data in el salvador the estimation of the parameters of housing demand equations occupies a prominent place in the urban economics literature of developed countries see de leeuw 4 and mayo 20 for thorough reviews of the state of the empirical art most research has focused on income and price elasticities of housing demand using both aggregated and micro level data the main conclusions of those studies which do not suffer from aggregation or other biases seem to be that a on average for a large segment of the population including both renters and owners permanent income elasticities are well below one b permanent income elasticities for owners ranging mostly from 0 5 to 0 7 in mayo s review are slightly higher than estimates for renters which ranged mostly from 0 3 to 0 5 c as predicted by the theory the permanent income demand elasticity generally exceeds that of current

land property rights and resource allocation abstractin this paper we review the most significant empirical literature on the causal effects of land property rights the literature indicates that secure property rights boost investment in both rural and urban areas these effects however do not appear to be the result of improved credit conditions in rural areas clear land rights also lead to increases in productivity and farm earnings in contrast for urban areas the evidence for an effect on earnings is mixed we find little empirical evidence to suggest that land titling programs enhance the development of land markets finally some evidence suggests that land titling induces changes in household structure that foster human capital accumulation and may help to increase the incomes of future generations

unemployment and vacancies with sectoral shifts recent analyses of unemployment vacancy series suggest that aggregate shocks rather than sectoral shocks are the primary factors responsible for unemployment fluctuations this inference follows from two widely held beliefs sectoral shocks induce only positive unemployment vacancy comovements while negative comovements are necessarily the result of aggregate demand shocks this paper describes an equilibrium matching model that identifies plausible circumstances in which neither assumption is correct thus suggesting that unemployment vacancy data are inconclusive interestingly this model s novel results are due to standard features in the contracting literature firms experience relative price shocks and negotiate contracts that prescribe temporary layoffs copyright 1994 by american economic association

labor market search the taylor principle and indeterminacy abstract in a sticky price model with labor market search and matching frictions forecast based interest rate policy almost always induces indeterminacy when it is strictly inflation targeting and satisfies the taylor principle indeterminacy is due to a vacancy channel of monetary policy that makes inflation expectations self fulfilling the effect of this channel strengthens as the sluggishness of the adjustment of employment relative to that of consumption increases when this relative sluggishness is high the taylor principle fails to ensure determinacy regardless of whether the policy is forecast based or outcome based whether it is strictly or flexibly inflation targeting or contains policy rate smoothing

user cost and housing tenure in developing countries abstract this paper reports on research conducted at the world bank to increase understanding of developing country housing markets in particular of housing demand behavior the objectives of the paper are 1 to briefly review recent evidence on housing demand parameters in developing countries including new estimates for colombia egypt el salvador ghana india jamaica korea and the philippines and 2 to examine similarities and differences among cities in housing demand the analysis emphasizes differences in housing demand by tenure particularly for renters and owners but also for squatters and non squatters and paralleling the literature in developed countries stresses the importance of accounting for the impact of income and relative prices on housing demand

the demand for tenure security in developing countries abstract we use survey data for manila the philippines to estimate hedonic functions for formal and squatter housing values we show that on average a rented squatter unit in manila would rent for 15 percent more if it were a formal sector unit an owned squatter unit would sell for 25 percent more if it were a formal sector unit these percentages are interpreted as eviction risk discount for squatter dwellings we conclude that assistance projects that provide secure tenure over a wide area will bestow comparatively greater benefits on lower income households and to those in newer less established settlements since the risks that they bear initially are greater

thanks but no thanks a new policy to reduce land conflict abstract land conflicts in developing countries are costly both directly and through increased land degradation an important policy goal is to create respect for borders this often involves mandatory expensive interventions we propose a new policy design which in theory promotes neighborly relations at low cost a salient feature is the option to by pass regulation through consensus the key idea combines the insight that social preferences transform social dilemmas into coordination problems with the logic of forward induction as a first low cost pass at empirical evaluation we conduct an experiment among farmers in the ethiopian highlands a region exhibiting features typical of countries where borders are often disputed

property rights for the poor effects of land titling secure property rights are considered a key determinant of economic development the evaluation of the causal effects of property rights however is a difficult task as their allocation is typically endogenous to overcome this identification problem we exploit a natural experiment in the allocation of land titles in 1981 squatters occupied a piece of land in a poor suburban area of buenos aires in 1984 a law was passed expropriating the former owners land to entitle the occupants some original owners accepted the government compensation while others disputed the compensation payment in the slow argentine courts these different decisions by the former owners generated an exogenous allocation of property rights across squatters using data from two surveys performed in 2003 and 2007 we find that entitled families substantially increased housing investment reduced household size and enhanced the education of their children relative to the control group these effects however did not take place through improvements in access to credit our results suggest that land titling can be an important tool for poverty reduction albeit not through the shortcut of credit access but through the slow channel of increased physical and human capital investment which should help to reduce poverty in future generations

reallocation shocks persistence and nominal rigidities abstract we reconsider the role of reallocation shocks in a simple new keynesian model with search and matching frictions the sign of the conditional correlation between unemployment and vacancies depends on the degree of price rigidity and on the persistence of the shock therefore a non negligible role for reallocation shocks in driving business cycle fluctuations cannot be ruled out on theoretical grounds

land tenure security and investment incentives puzzling evidence from burkina faso abstract the commonsense logic associating higher land security and higher incentives to invest has been recently called into question in the case of african agriculture to be meaningful empirical tests have to be carefully designed so as to take account of the possible endogeneity of the land rights variable this is done in this paper by applying suitable econometric methods to the original data collected in burkina faso the results obtained cast doubt on the existence of a systematic influence of land tenure security on investment by reviewing the justifications for scepticism in the recent literature we are able to conclude that the traditional village order where it exists provides the basic land rights required to stimulate small scale investment

the optimal distribution of population across cities abstract we develop an urban model that incorporates 1 heterogeneous sites 2 fiscal and urban externalities and 3 an endogenous number of cities i e the extensive margin of urban development within and across city decreasing returns to scale cause agents to perceive their city as being too large in the socially optimal allocation as a consequence in equilibrium the largest cities on the most amenable sites are undersized whereas the smaller cities on less amenable sites are oversized we propose a test for optimal city size with heterogeneous sites extending the henry george theorem

an empirical analysis of the demand for housing attributes in a third world city this paper presents estimates of the demand for a set of housing attributes using data drawn from the renter and owner occupier housing submarkets for ibadan nigeria the empirical analysis based on an adaptation of rosen s two step model reveals that the most important determinants of the demand for housing attributes are income price of the attribute in question household size and the occupational status of the head of household the paper further indicates that the demand for housing attributes is inelastic since all estimated coefficients are below unity

simultaneity in the market for housing characteristics abstract the nature of simultaneity in the markets for housing characteristics is examined simultaneity is found to arise in the implicit markets for individual characteristics because of the presence of nonlinearity in the market hedonic price function for housing however this simultaneity is not the kind discussed by s rosen j political econ 82 34 55 1974 between firm supplies and household demands as a result the rosen suggestion of identifying demand with firm supply shifters is inappropriate among the alternative approaches to identification the most desirable involve use of data over two or more markets in which residence for a given household is exogenous to the choice of housing

the short run and long run benefits of environmental improvement abstract the social value of a nonmarginal improvement to amentities is not related to hedonic prices in a simple way furthermore hedonic price data do not completely reveal preferences in order to evaluate short run benefits of an improvement the rate of change of the hedonic price function must be normalized by a ratio of population densities to calculate long run benefits of the improvement one must calculate the responsiveness of population densities to the nonmarginal improvement a technique to do so is suggested

some notes on how land title affects child labor secure property rights are considered a key determinant of economic development however evaluation of the causal effects of land titling is a difficult task since 2004 a program called papel passado has issued titles to more than over 85 000 families and has the goal to reach 750 000 this paper examines the direct impact of securing a property title on child labor force participation this study uses a comparison between two close and similar communities in the city of osasco case the key point of this case is that some units participate in the program and others do not estimates generated using difference in difference econometric technique suggest that titling results in a substantial decrease in child labor force participation for the families that received the title compared with the others this findings are relevant for future policy tools for dealing with informality and how it affects economic growth

nonlinear budget constraints and consumer demand an application to public programs for residential housing abstract this study presents a methodology for exploiting the nonlinear hedonic nature of housing prices to estimate the compensated demands of households for particular housing attributes the methodology is employed to provide hicksian benefit measures of a particular housing subsidy program typical of those undertaken recently in developing countries

business cycles and labor market search the quantitative implications of labor market search for economic fluctuations are evaluated in the context of a real business cycle model incorporating labor market search into the model is found to improve its empirical performance along several dimensions in particular hours now fluctuate substantially more than wages and the contemporaneous correlation between hours and productivity falls in addition the model replicates the observation that output growth displays positive autocorrelation at short horizons overall the empirical results suggest that the labor market search environment embodies a quantitatively important propagation mechanism copyright 1996 by american economic association

the mckenna rule and uk world war i finance abstract this paper argues that uk wwi scal policy followed the english method identi ed by sprague 1917 and his discussants and revived by the us to nance the korean war see ohanian 1997 during wwi uk scal policyadopted the mckenna rule named for reginald mckenna chancellor ofthe exchequer 1915 16 mckenna presented his scal rule to parliamentin june 1915 the mckenna rule guided uk scal policy for the rest ofwwi and the interwar period we draw on narrative evidence to show thatmotivation for the mckenna rule came from a desire to treat labour and cap ital fairly and equitably not pass wwi costs onto future generations andcommit to a debt retirement path and higher taxes however a permanentincome model suggests the mckenna rule adversely a ected the uk becausea higher debt retirement rate produces a lower consumption output ratio data from 1916 37 supports this prediction the views in this paper represent those of the authors and are not necessarily those ofthe federal reserve bank of atlanta the federal reserve system the reserve bankof new zealand norges bank or their respective sta s we thank ellis tallman formany useful comments and kateryna rakowsky for research assistance a version ofthis paper is forthcoming in the papers and proceedings of the american economicreview

theory and estimation in the economics of housing demand the main purpose of this paper is to review recent theoretical and empirical developments in the economics of housing demand in particular we ask what is known concerning the permanent income elasticity of housing demand vis a vis the current or measured income elasticity what is known concerning price elasticities what is the appropriate functional form for housing demand equations what is the role of demographic variables what is known concerning dynamic aspects of housing demand what appear to be the major sources of bias in existing estimates of demand equations

economics of multihabitation housing conditions household occupancy and household structure under rent control inflation and nonmarketability of ownership rights abstract multihabitation in terms of sharing facilities in a dwelling or extended family occupancy is common in parts of the third world this paper uses the ghanaian housing market to assess the impact of multihabitation on house condition and on household occupancy rates per room as distinct from the influence of other factors on these variables multivariate statistical techniques form the method of analysis and the models have a high predictive accuracy the impacts of current government policies such as rent control on house condition and occupancy rates is also discussed along with cultural attitudes to ownership and obligations to the extended family

sectoral versus aggregate shocks a structural factor analysis of industrial production using factor methods we decompose industrial production ip into components arising from aggregate and sector specific shocks an approximate factor model finds that nearly all of ip variability is associated with common factors we then use a multisector growth model to adjust for the effects of input output linkages in the factor analysis thus a structural factor analysis indicates that the great moderation was characterized by a fall in the importance of aggregate shocks while the volatility of sectoral shocks was essentially unchanged consequently the role of idiosyncratic shocks increased considerably after the mid 1980s explaining half of the quarterly variation in ip

mismatch shocks and unemployment during the great recession summary we investigate the macroeconomic consequences of fluctuations in the effectiveness of the labor market matching process with a focus on the great recession we conduct our analysis in the context of an estimated medium scale dynamic stochastic general equilibrium model with sticky prices and equilibrium search unemployment that features a shock to the matching efficiency or mismatch shock we find that this shock is not important for unemployment fluctuations in normal times however it plays a somewhat larger role during the great recession when it contributes to raise the actual unemployment rate by around 1 3 percentage points and the natural rate by around 2 percentage points the mismatch shock is the dominant driver of the natural rate of unemployment and explains part of the recent shift of the beveridge curve copyright 2016 john wiley sons ltd

tenure security and urban squatting while recent studies have shown that up to 35 of the total urban population of the third world live in squatter settlements there is a dearth of economic analysis on the phenomenon of squatting this paper attempts to fill this gap the equilibrium model argues that the difference in unit housing prices between the non squatting formal sector of a city and its squatting informal sector reflects the premium associated with a secure tenure status the empirical portion of this paper uses hedonic price techniques to derive the average premium on tenure security in a medium sized philippine city davao results show that formal sector unit dwelling prices are about 18 renters to 58 owners more than in the informal sector these equilibrium price differentials were found to be greater for lower income groups larger household sizes and households with older heads for renters and younger heads for