anticipated monetary policy in canada some new evidence abstract in this note i examine the policy ineffectiveness proposition for canada using monthly income data due to milbourne et al 1988 i find that anticipated monetary policy altered the evolution of real output in canada recent work by ambler and phaneuf 1988 can be used to attribute this result to a purely new keynesian model of the business cycle although this inference is found to be fragile with respect to the choice of the level of significance used in the hypothesis tests

computer automation of general to specific model selection procedures abstract disputes about econometric methodology partly reflect a lack of evidence on alternative approaches we reconsider econometric model selection from a computer automation perspective focusing on general to specific reductions embodied in pcgets starting from a general congruent model standard testing procedures eliminate statistically insignificant variables with diagnostic tests checking the validity of reductions ensuring a congruent final selection since jointly selecting and diagnostic testing has eluded theoretical analysis we study modelling strategies by simulation the monte carlo experiments show that pcgets recovers the dgp specification from a general model with size and power close to commencing from the dgp itself

the impact of job security on job satisfaction in economic contractions versus expansions job security often measured using the perceived risk of job loss in the near future is a significant determinant of job satisfaction we posit that the impact job security has on job satisfaction is not only a function of how likely it is that a worker loses a job but also how likely it is that a worker could find another the effect this has on worker job satisfaction then is different depending on whether perceived job loss occurs or not when job openings are scarce or when job openings are plentiful we use difference in differences analysis of the 1997 and 2008 waves from the national study of the changing workforce to show that three measures of job security increase private sector worker job satisfaction and reduce worker incentives to quit more when job openings are relatively scarce during contractions than when job openings are relatively plentiful during expansions we find that our results are strongest among less educated workers

regional differences in job satisfaction job satisfaction is significantly higher in wales than in london and the south east the rest of england and scotland this is despite the fact that among these four regions earnings are lowest in wales using data from the british household panel survey bhps we investigate the determinants of job satisfaction and attempt to explain why workers in wales are happier in their work than workers in other parts of the uk we find that workers in wales appear to be less concerned about pay than workers in other regions we suggest that because lower earnings tend to be associated with higher levels of unemployment and inactivity being in work may be regarded more favourably in more economically depressed regions we also suggest the climate of industrial relations as perceived by workers is better in wales than elsewhere

anticipation free rider problems and adaptation to trade unions re examining the curious case of dissatisfied union members this paper documents evidence that rejects the paradox of dissatisfied union members using eleven waves of the bhps it studies the past contemporaneous and future effects of union membership on job satisfaction by separating union free riders from other nonmembers in the fixed effects equations i find significant anticipation effects to unionism for prospective members and covered nonmembers of both genders workers go on to report on average a significant net increase in overall job satisfaction at the year unionization occurs nonetheless adaptation to unionism is complete within the first few years of joining a unionized firm one hypothesis for this is that workers adapt their reported satisfaction over time to support their union bargaining efforts which would be consistent with the explanation given by freeman and medoff 1984 of union s role in fanning the flame of discontent to the management during contract negotiations

job satisfaction trade unions and exit voice revisited many studies have found that unionized workers express less job satisfaction than nonunion workers the exit voice explanation of this phenomenon is that dissatisfied nonunion workers tend to qui

new ways of looking at old issues inequality and growth abstract the paper uses new cross country data on income and asset land distribution to show that i there is a strong negative relationship between initial inequality in the asset distribution and long term growth ii inequality reduces income growth for the poor but not for the rich and iii available longitudinal data provide little support for the kuznets hypothesis policies that increase aggregate investment and facilitate acquisition of assets by the poor might thus be doubly beneficial for growth and poverty reduction

making and breaking rules in applied econometrics the lead article in volume 1 issue 1 journal of economic surveys 1987 was adrian pagan s three econometric methodologies a critical appraisal reprinted in oxley et al 1995 surveys in econometrics and updated in the same volume as three econometric methodologies an update the journal quickly established an interest in papers that addressed the important issue of econometric methodology michael mcaleer s 1994 journal paper entitled sherlock holmes and the search for truth a diagnostic tale also reprinted in oxley et al 1995 and dharma dharmapala s on the history and methodology of econometrics published in 1993 added to the journal s growing portfolio of excellent papers published in this general area it is fitting therefore that the current debate sparked by peter kennedy s sinning in the basement paper be published in the journal it is illuminating to re read pagan 1987 1995 and see how far we have progressed adrian pagan reminds us that although methodological debate in economics is almost as long standing as the discipline itself quoting john stuart mill 1967 it was not until the fifth world congress of the econometric society in 1985 that a session was devoted to methodological issues p 3 it is also interesting to note adrian s highlighting of several of j s mill s views on methodology in particular at the same time he mill emphasized that in many instances it was easier to practice a science than to describe how one was doing it he finally concluded that a better understanding of scope and method would facilitate the progress of economics as a science but that sound methodology was not a necessary condition for the practice of sound methods get on with the job seems the appropriate message p 3 this issue of the journal contains contributions to the methodology of applied econometrics and are presented in the occasional contributions section the

atheoretical macroeconometrics a critique abstract the spurious nature of the restrictions used to identify many macroeconometric models has led some researchers to advocate a style of econometric inquiry that is less dependent on prior theoretical restrictions of the sort that were central to the approach of the cowles commission this development which we call atheoretical macroeconometrics is summarized and evaluated in the current paper it is contrasted with an updated version of the cowles commission approach we conclude that while some of the exercises of atheoretical macroeconometrics are valid those that have attracted the most attention and appear the most innovative exogeneity testing impulse response analysis and policy analysis using estimated vector autoregressions are based on incorrect analysis

job dissatisfaction of the self employed in indonesia in developed countries the self employed have been found to be more satisfied with their jobs than paid employees we found the exact opposite for a developing country after analyzing 8732 respondents in the indonesian family life survey the job dissatisfaction of the self employed was not fully explained by earnings personal traits job characteristics anticipation or adaptation but mostly by segregation into a small number of industries with few job benefits this finding is consistent with the dual labor market theory we also found that among the self employed those with the highest probability of being paid employees were the least satisfied paid employment was highly sought after in developing countries and these were presumably self employed workers with high abilities this finding cannot be explained by the dual labor market theory alone to explain this inconsistency we enriched this theory with relative deprivation our results suggest that the existence of the dual labor market and relative deprivation are important determinants of the job satisfaction of the self employed in developing countries

the short run demand for transactions balances in australia a characteristic of much research in monetary economics in the last few years has been a preoccupation with the stability of the demand for money function as failure of stability undermines some of the central features of monetarism a recent summing up of this research has been that authors in various countries report that money demand equations estimated in the conventional way have broken down in recent times jonson 1978 p 29 with the evidence cited being adams and porter 1976 for australia artis and lewis 1979 for the united kingdom and goldfeld 1976 and enzler et al 1976 for the united states doubt must now exist about the validity of such a conclusion for the united kingdom as a result of studies by hendry 1980 and hendry and mizon 1978 and the proposition for the united states still seems an open question see laidler 1980 for a survey for australia however the above quotation seems to be the conventional wisdom with laidler citing australian experience as an example of instability in conventionally estimated demand functions and davis and lewis 1978 in their survey of australian monetary economics stating

development and inequality evidence from an endogenous switching regression without regime separation abstract an endogenous switching regression without regime separation is fitted to examine the relationship between development and inequality results suggest evidences for the kuznets hypothesis and that the turning point may depend on population size and openness of the economy

a new data set measuring income inequality this article presents a new data set on inequality in the distribution of income the authors explain the criteria they applied in selecting data on gini coefficients and on individual quintile groups income shares comparison of the new data set with existing compilations reveals that the data assembled here represent an improvement in quality and a significant expansion in coverage although differences in the definition of the underlying data might still affect inter temporal and international comparability based on this new data set the authors do not find a systematic link between growth and changes in aggregate inequality they do find a strong positive relationship between growth and reduction of poverty

inflation tax rules and investment some econometric evidence this paper presents econometric evidence on the effect of tax incentives on business investment in the united states in the period from 1953 through1978 the analysis emphasizes that the interaction of inflation and existing tax rules has contributed substantially to the decline of business investment since the late 1960 s because the investment process is far too complex for any simple econometric model to be convincing i have estimated three quite different models of investment behavior the strength of the empirical evidence rests on the fact that all three specifications support the same conclusion more generally the analysis and evidence show that theoretical models of macroeconomic equilibrium should specify explicitly the role of distortionary taxes especially taxes on capital income the failure to include such tax rules can have dramatic and misleading effects on the qualitative as well as the quantitative properties of macroeconomic theories this paper was presented as the fisher shultz lecture at the fourth world congress of the econometric society 29 august 1980 in aix en province this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this abstract was borrowed from another version of this item

what will take the con out of econometrics the paper begins with the question of whether leamer s extreme bounds analysis eba really does take the con out of econometrics by analytically demonstrating that the extreme bounds are simply functions of the f statistic for the deletion of variables from a regression we conclude that the information provided by eba represents no advance over that available from traditional methods furthermore there is a degree of arbitrariness in eba which exactly parallels the selective reporting of regressions it was designed to supplant the last part of the paper attempts a positive response to its title by following a well defined series of modelling steps we maintain that cooley and le roy s eba derived conclusions concerning the interest elasticity of money demand owe more to a faulty methodology than to the data this abstract was borrowed from another version of this item

income inequality and economic development evidence from the threshold regression model abstract using panel data we investigate the relationship between income inequality and economic development we employ a threshold regression model that allows for endogenous income thresholds and find strong evidence of a two regime split in our sample

applied econometrics without sinning one must offer a cautious welcome to any paper kennedy 2001 discussing the problems confronting the implementation of econometrics to empirical data especially from someone who has written an elementary econometrics textbook see kennedy 1985 and later editions there is a considerable gulf between the elementary and inappropriate methodology inherent in many such textbooks and what applied econometricians need to do in practice to model economic data there is some good advice in his paper but also some which is bad kennedy fails to formalize the issues is unclear at key points and neither draws essential distinctions nor defines central terms consequently although some of his recommendations should help to narrow the theory applications gap others could exacerbate the difficulties the remainder of this note amplifies these comments first the topic is in fact addressed in some textbooks albeit none of which are cited by kennedy see inter alia hendry and doornik 2001 and earlier editions especially chs 11 and 15 hendry 1995a provides extensive analyses of the problems of matching theory and evidence empirical modelling and data measurement issues as well as de emphasizing estimation and highlighting the role of graphs spanos 1986 analyzes the difficulties inherent in the conventional paradigm and clearly explains an alternative approach now exposited in his introductory textbook spanos 1999 and charemza and deadman 1997 describe the practice of modelling non stationary time series also see hendry and wallis 1984 ch 1 for an earlier general discussion there are too many relevant papers on methodology to list additional to those kennedy mentions but mizon 1995 and hendry 1997 clarify some of his difficulties second the theory and practice of model building has advanced spectacularly in the last few years see e g hoover and perez 1999 2000 krolzig and hendry 2001 hendry and krolzig 2001b many of the so called sins turn out to be false accusations while others formulating and checking the ingredients of the basic specification remain essential if anything useful is to result from empirical modelling thus considerable revision of the ten econometric commandments

job satisfaction in britain individual and job related factors recently there has been a resurgence of interest in the analysis of job satisfaction variables job satisfaction is correlated with labour market behaviour such as productivity quits and absenteeism in this paper four different measures of job satisfaction are related to a variety of personal and job characteristics the data used are from the 28 240 british employees in the workplace employee relations survey 1997 this data set is larger and more recent than in any previous studies four measures of job satisfaction that have not previously been used are considered satisfaction with influence over job satisfaction with amount of pay satisfaction with sense of achievement and satisfaction with respect from supervisors the paper contributes to the literature by analysing job satisfaction with respect to industrial composition and occupations one of the striking findings is that those in the education and health sectors are less satisfied with their pay but more satisfied with their sense of achie

the effects of merit pay on teacher job satisfaction the purpose of this study is to determine if the existence of a district level merit pay system has any effects on teacher job satisfaction using a large sample of public school teachers from the year 2007 the results of this study suggest that teachers who work in districts that use a merit pay system are no less satisfied with their jobs than are other teachers these results are consistent for both an ordered probit model and a two stage analysis although the effect of merit pay on overall job satisfaction was insignificant teachers in merit pay districts were less enthusiastic did not think teaching was important and were more likely to leave for better pay however in examining a sample of teachers who worked only in merit pay districts it was found that teachers who received merit pay were more satisfied overall with their jobs than were teachers who did not receive merit pay

the relationship between unions and job satisfaction this paper examines the assoication between canadian unions and their member attitudes data on job satisfaction indicate that unionized workers in canada are less happy with the quality of their jobs than non union workers the former however are more satisfied with their financial compensation and job security than non members

money real interest rates and output a reinterpretation of postwar u s data this paper reexamines both monthly and quarterly u s postwar data to investigate if the observed comovements between money real interestrates prices and output are compatible with the money real interest output link suggested by existing monetary theories of output which include both keynesian and equilibrium models the major empirical findings are these 1 in both monthly and quarterly data we cannot reject the hypothesis that the ex ante real rate is exogenous or granger causally prior in the context of a four variable system which contains money prices nominal interest rates and industrial production 2 in quarterly data there is significantly more information con tained in either the levels of expected inflation or the innovationof this variable for predicting future output given current and lagged output than in any other variable examined money actualinflation nominal interest rates or ex ante real rates the effect of an inflation innovation on future output is unambiguously negative the first result casts strong doubt on the empirical importance of existing monetary theories of output which imply that money should have a causal role on the ex ante real rates the second result would appear incompatible with most demand driven models of output in light of these results we propose an alternative structural model which can account for the major dynamic interactions among the variables this model has two central features i output is unaffected by money supply and ii the money supply process is motivated by short run price stability this abstract was borrowed from another version of this item

the kuznets hypothesis an indirect test abstract the quandt log likelihood ratio test used on cross country data shows that there is a break in the relationship between per capita gnp and income inequality the breakpoint occurs at a per capita between 696 and 773

i m too clever for this job a bivariate probit analysis on overeducation and job satisfaction in australia using data from the first wave of the household income and labour dynamics in australia data set this article establishes an empirical relationship between overeducation and workplace satisfaction for australian adult males in the labour force in a departure from much of the existing literature both univariate and bivariate probit models are used to account for potential unobserved heterogeneity we find that estimates in the univariate probit models are positively biased for three of the six measures of workplace satisfaction studied this suggests that consideration should be given to the use of bivariate models when studying the determinants of workplace satisfaction and overeducation results show although levels of satisfaction remain high that across all measures of workplace satisfaction overeducated workers are less satisfied compared to their nonovereducated counterparts this intimates that satisfaction levels should be viewed from a relative rather than an absolute perspective pleasure in the job puts perfection in the work aristotle 384bc 322bc

job satisfaction in the low wage service sector the stylized facts associated with workers satisfaction are tested using a distinctive data set using principal components analysis five distinct measures of workers satisfaction and the factors that determine each one are examined the data set covering three low wage service sectors enables control for workplace characteristics to be made it is shown that characteristics previously identified as important by the job satisfaction literature in fact have differing effects according to the type of satisfaction being considered then is examined which of the satisfaction components has the greatest impact on overall satisfaction satisfaction with short term rewards and long term prospects are found to be far more influential in determining overall satisfaction than contentment with social relationships or work intensity

sinning in the basement what are the rules the ten commandments of applied econometrics unpleasant realities of real world data force applied econometricians to violate the prescriptions of econometric theory as taught by our textbooks leamer 1978 vividly describes this behavior as wanton sinning in the basement with sinners metamorphizing into high priests as they ascend to the third floor to teach econometric theory but this sinning is not completely wanton applied econometricians do or should follow some unwritten rules of behavior in effect bounding the sinning and promoting a brand of honor among sinners this paper exposits these rules and culls from them an unauthorized list of the ten commandments of applied econometrics

econometrics and business cycle empirics business cycle empirics have long been a central arena for the debate about the roles of economic theory and econometrics in modelling economic time series data some famous historical examples are moore i9i4 keynes i939 and koopmans i947 sources for potential disagreements include that the entire economic system is involved and unobservable stochastic forces seem more than usually prominent in determining the outcome not only do these constitute two aspects about which it is hard to theorise they are equally difficult to model empirically there are both positive arguments for and negative arguments against according a dominant role to either theory or evidence not least because it is unclear what constitutes admissible instances of either in the absence of the other we first review what precludes a purely theoretical approach what prevents a purely empirical approach and hence why an interactive approach is imperative even so both the relative importance of the two ingredients and their substantive contents are likely to remain at issue first concerning the economy considerable empirical evidence suggests that it is a dynamic non linear high dimensional and evolving entity so studying it is difficult society and social systems alter over time laws change and technological innovations occur so establishing any invariants of an economic system is not easy such difficulties adversely afflict both theory and empirical modelling secondly concerning the observations time series data in economics are heterogeneous non stationary time dependent and interdependent so it is difficult to acquire knowledge from the available empirical information again such factors also make it hard to theorise about the properties of the underlying system a more direct critique of the empirical enterprise is that samples are short and highly aggregated economic magnitudes are inaccurately measured are subject to considerable revision and important variables are not measured or are unobservable so inferences are both imprecise and tentative combined with the simultaneity non constancy and high dimensionality of economic data a purely empirical approach seems to many to be precluded other criticisms of econometric approaches include worries about data mining pretest biases a lack of genuine identifiability and collinearity sometimes combined with a belief that theory can compensate an overemphasis on a

how well do theories of job matching explain variations in job satisfaction across education levels evidence for uk graduates using ordered probit estimation technique this paper examines the job satisfaction of recent uk graduates focussing primarily on explaining job satisfaction in terms of individuals matching to jobs with the match depending on reservation returns information sets and job offer rates only limited support can be found for the argument that job matching explains higher job satisfaction in addition stylizing graduates as a peer group who form satisfaction levels based on their rankings relative to each other we examine whether or not education quality which raises peer group status and increases the job offer rate is systematically related to job satisfaction the results broadly support the hypothesis that job satisfaction is neutral across graduates of different education qualities however our specification tests indicate that ordered probit estimation may not be fully appropriate for identifying the characteristics of those with high job satisfaction

identification and estimation of money demand in most natural sciences physics chemistry biology theories are validated by controlled experiment however in other natural sciences astronomy meteorology and in most social sciences including economics the data are characteristically generated not by experiment but by measurement of uncontrolled systems in economics theories take the form of restrictions on the models assumed to generate the data and statistical methods replace experimental controls in testing these restrictions and here is the difficulty in economics particularly macroeconomics the theory used to derive tests ordinarily does not generate a complete specification of which variables are to be held constant when statistical tests are performed on the relation between the dependent variable and the independent variables of primary interest accordingly in such cases there will be a set of often very different candidate regression based tests each of which has equal status with the others since each is based on a different projection of the same underlying multivariate model except in the unlikely event that the explanatory variables are mutually orthogonal the conditional regression coefficients which generally form the basis for the test statistic will depend on the conditioning set we conclude from this that if a theory which does not generate a complete specification of the regression test is nonetheless to have testable implications these implications must be robust over the permissible alternative specifications if the restrictions indicated by the theory are satisfied in some projections but not in others that have an equal claim to represent implications of the theory one cannot conclude that the theory has been confirmed the fact that the observable implications of valid theories must obtain over a broad but usually incompletely specified set of regressions rather than for a single regression introduces a large and unavoidable element of imprecision into hypothesis testing in macroeconomics generally it appears to be appropriate to weaken the statistical criterion for rejecting theories consider for example the theory of money demand which will engage our attention in this paper the tobin baumol square root formula implies that the elasticity of money demand with respect to the interest rate is exactly one half but which interest rate should wealth be held constant inflation in view of such uncertainties it would be inappropriate to insist in a literal minded fashion on rejecting the tobin baumol model if in some regression the measured interest elasticity differed from one half by more than two standard deviations and only then obviously a more flexible approach is called for the practice has been to conclude that the statistical evidence is consistent with the tobin baumol model as long as the interest rate coefficient is negative if it is negative and significant or negative and insignificantly different from minus one half that would provide somewhat stronger confirmation but a positive coefficient particularly a significantly positive coefficient would be viewed as raising questions about the validity of the theory in macroeconomics generally as in the money demand application the typical response to specification uncertainty has been to regard a theory as supported if the signs of the estimated coefficients agree with those expected from theory and as disconfirmed otherwise there is no theoretical justification for this procedure but it seems to be a reasonable course to follow the point that economic theory ordinarily generates incompletely specified statistical university of california santa barbara we have received helpful comments from andrew abel robert clower michael darby robert engle stephen goldfeld david laidler edward leamer robert lucas frederic mishkin and edward prescott thomas hall provided able research assistance