wage shocks and consumption variability in mexico during the 1990s this paper presents evidence on the relationship between shocks to relative male wages and changes in household consumption in mexico during the 1990s decade which is a period characterized by high volatility apart from performing analysis of this type for mexico for the first time the paper has mainly two contributions the first is the use of alternative data sources to construct instrumental variables for wages the second is to examine differences across four consumption categories nondurable goods durable goods education and health our results for nondurable goods consumption reject the hypothesis that mexican households are able to ensure idiosyncratic risk for the comparisons across consumption categories the conclusion is that households in mexico tend to react to temporary shocks by contracting the consumption of goods that represents longer run investment in human capital which makes them more vulnerable in the future

money growth output gaps and inflation at low and high frequency spectral estimates for switzerland abstract while central banks generally have abandoned monetary targeting many continue to attach weight to monetary aggregates in setting policy this raises the issue of how money can be combined with other variables when analysing inflation we decompose inflation in switzerland into two frequency bands and show that inflation is granger caused by monetary factors at low frequencies defined as those corresponding to periodicities of more than 4 years but is granger caused by the output gap at high frequencies we also estimate phillips curve models that are augmented by the low frequency components of the monetary factors

some empirical evidence on the effects of shocks to monetary policy on exchange rates this paper investigates the effects of shocks to u s monetary policy on exchange rates we consider three measures of these shocks orthogonalized shocks to the federal funds rate orthogonalized shocks to the ratio of nonborrowed to total reserves and changes in the romer and romer index of monetary policy in sharp contrast to the literature we find substantial evidence of a link between monetary policy and exchange rates specifically according to our results a contractionary shock to u s monetary policy leads to i persistent significant appreciations in u s nominal and real exchange rates and ii significant persistent deviations from uncovered interest rate parity in favor of u s interest rates

gender sorting and the glass ceiling in high tech firms with few exceptions studies have conceived of the glass ceiling as reflecting internal promotion biases in this article the authors argue that glass ceiling patterns can also be the result of external recruitment and hiring processes using data on people applying by means of the internet for jobs at 441 small and medium sized high tech firms they find evidence that the glass ceiling is produced by both internal and external hiring processes on the supply side females are sorted into lower level job queues than males on the demand side screening biases against women also are evident but a series of what if simulations suggest that demand side screening processes play a comparatively minor role in producing the glass ceiling pattern these results suggest that bias remediation policies designed to equalize gender differences in hiring chances are likely to be less effective than recruitment and outreach policies designed to improve gender disparities in candidate pools

risk sharing by households within and across regions and industries abstract cochrane 1991 journal of political economy 99 957 976 and mace 1991 journal of political economy 99 928 956 test if risk sharing across households is complete in the sense that household consumption moves one for one with aggregate consumption in their studies the source of income risk is idiosyncratic and agents can share risk across the entire economy using a sample of households from the panel study on income dynamics psid we explore whether households share the risk associated with their industries and regions across households in other regions and industries we find that a large fraction of risk faced by households is not shared across regions and industries

cyclical and causal relations between real wages and employment in the eu this paper analyses and compares the joint behaviour of real wages and employment over the business cycle in the european union eu economies using both annual and quarterly data since 1960 further investigation of the cointegrating properties and the existence of causal effects in the real wage employment relation is undertaken by employing appropriate var models the evidence suggests weak procyclical or acyclic behaviour of real wages relative to cyclical employment in the quarterly data and stronger procyclicality in the annual data thus confirming the dunlop tarshis result for the majority of the eu economies with a few exceptions no cointegrating relations were detected while the granger causality tests suggest either weak or lack of unidirectional causality finally the sensitivity analysis showed that the filtering method has not much influence on the results but the choice of deflator may overturn them in certain cases

the cyclical behaviour of prices g 7 versus non g7 countries the cyclical behaviour of prices and inflation is investigated for g 7 and seven non g7 countries for the postwar period the quarterly prices are shown to be clearly countercyclical in the g 7 countries while they are much less so in the non g7 countries inflation is shown to move procyclically and this is more clearly pronounced in the g 7 than non g7 countries this discrepancy in results may result from the demand management policies that these non g7 countries have adopted in the past and this cautions the students of business cycles to pay attention to the peculiarities of each economy when modelling the business cycle

income dynamics and life cycle inequality mechanisms and controversies this study focuses on the transmission of inequality over the working life a model of constrained intertemporal choice is used to provide structure to the distributional dynamics of wages earnings income and consumption the mechanisms used to insure labour market shocks are examined in a partial insurance setting where the manner and scope for insurance depends on the access to credit the information available to consumers and the durability of income shocks drawing on recent research family labour supply the credit market and the tax system are all shown to play a key role these mechanisms vary in importance across different points of the life cycle and the business cycle 2014 the author s the economic journal published by john wiley sons ltd on behalf of royal economic society

is inflation always and everywhere a monetary phenomenon using a sample of about 160 countries over the last 30 years we test for the quantity theory relationship between money and inflation when analysing the full sample of countries we find a strong positive relation between long run inflation and the money growth rate the relation is not proportional however the strong link between inflation and money growth is almost wholly due to the presence of high or hyper inflation countries in the sample the relationship between inflation and money growth for low inflation countries on average less than 10 per annum over the last 30 years is weak

tax reform and automatic stabilization an income tax provides implicit insurance by dampening the variability of disposable income and consumption using an empirical framework derived from the consumption insurance literature and data from the panel study of income dynamics we examine the effect of federal income tax reforms of the 1980 s on automatic stabilization of consumption overall erta and tra86 reduced consumption stability by about 50 percent recently increased eitc generosity restored or enhanced consumption insurance the welfare cost of moving to the post tra86 system is sizable for relatively risk averse households facing large income risk but is much more modest for the typical household jel h21

targeting nominal income in a dynamic model the author analyzes the choice of monetary policy rule in a perfect foresight planning model maximizing agents plan their lifetime consumption decisions in the face of two rigidities first households hold money to aid trade second today s price level is inherited from past contracting decisions so that changes in nominal aggregate demand fall on output in the short run given these rigidities the central bank can set real balances in the short run and the author compares two mu percent rules his theoretical results suggest that the choice between fixed money growth and fixed nominal income growth rules is an empirical assessment that depends on the distribution of shocks to the economy copyright 1990 by ohio state university press

capital formation in japan introduction this chapter analyses the relationship between the input of capital and economic growth in japan during the past century the assigned task of exploring the role of investment in japan necessarily imposes a certain sectoral as well as temporal emphasis only relatively little attention will have to be devoted to agriculture since this sector never became an important recipient of either public or private capital in japan at least an understanding of the advances created by a rising level of investment deals largely with the growth of modern nonagricultural industry this also means that unlike taira and yamamura we must concentrate especially on the history of the twentieth century when factories machines and new social overhead implements reached sizeable dimensions for the first time of course no attempt will be made to slight the crucial transitional years of the meiji era or even the preceding years of tokugawa rule but one should always keep at the forefront the sharp distinction between the hesitant beginnings of economic modernization in the late nineteenth century and its full flowering during the past sixty odd years one further limiting item should be mentioned at the outset we are concerned with the input of capital i e with the investment rather than the saving side of the equation how the necessary funds were raised by individuals banks the state or foreigners will be treated only as a side issue but to a considerable extent this matter has been studied by other authors

do women choose different jobs from men mechanisms of application segregation in the market for managerial workers this paper examines differences in the jobs for which men and women apply in order to better understand gender segregation in managerial jobs we develop and test an integrative theory of why women might apply to different jobs than men we note that constraints based on gender role socialization may affect three determinants of job applications how individuals evaluate the rewards provided by different jobs whether they identify with those jobs and whether they believe that their applications will be successful we then develop hypotheses about the role of each of these decision factors in mediating gender differences in job applications we test these hypotheses using the first direct comparison of how similarly qualified men and women apply to jobs based on data on the job searches of mba students our findings indicate that women are less likely than men to apply to finance and consulting jobs and are more likely to apply to general management positions these differences are partly explained by women s preference for jobs with better anticipated work life balance their lower identification with stereotypically masculine jobs and their lower expectations of job offer success in such stereotypically masculine jobs we find no evidence that women are less likely to receive job offers in any of the fields studied these results point to some of the ways in which gender differences can become entrenched through the long term expectations and assumptions that job candidates carry with them into the application process

unemployment insurance and precautionary saving abstract models of precautionary saving imply that households will hold more assets when faced with greater income uncertainty however previous empirical studies of income uncertainty have produced somewhat mixed support for the precautionary saving hypothesis in this paper we note that differences in the state contingent income stream available to workers through the unemployment insurance ui program provides an excellent source of variation for testing the presence of a precautionary savings motive simulations of a stochastic life cycle model suggest that a ui system similar to the type currently in place in the u s can lead to a significant reduction in the assets accumulated by a median worker moreover there is considerable variation in the ui benefit schedules for workers living in different states in the u s which provides an exogenous source of variation for empirically testing the precautionary saving hypothesis we carry out this test using data on expected ui benefit replacement rates and financial assets held by households in the survey of income and program participation our empirical results are consistent with the predictions of the model and suggest that reducing the ui benefit replacement rate by 50 percent would increase gross financial asset holdings by 14 percent or 241 for the average worker we also find empirical evidence that this crowd out effect of ui on household saving is stronger for those facing higher unemployment risk and weaker for older workers both of which are implications from our precautionary saving model

idiosyncratic risk and the equity premium evidence from the consumer expenditure survey abstract this paper investigates whether uninsured idiosyncratic risk accounts for the equity premium following mankiw j financial econ 17 1986 211 the paper develops an equilibrium factor model in which risk premia depend on the covariance between an asset s return and certain moments of the cross sectional distribution for consumption growth cross sectional consumption factors are constructed using data from the consumer expenditure survey but they do not appear to be promising candidates for explaining the equity premium the cross sectional factors are weakly correlated with stock returns and generate equity premia of 2 percent or less for preference specifications with low degrees of risk aversion

hierarchical rank and women s organizational mobility glass ceilings in corporate law firms this article revives the debate over whether women s upward mobility prospects decline as they climb organizational hierarchies although this proposition is a core element of the glass ceiling metaphor it has failed to gain strong support in previous research the article establishes a firm theoretical foundation for expecting an increasing female disadvantage with an eye toward defining the scope conditions and extending the model to upper level external hires the approach is illustrated in an empirical setting that meets the proposed scope conditions corporate law firms in the united states results confirm that in this setting the female mobility disadvantage is greater at higher organizational levels in the case of internal promotions but not in the case of external hires

does the labor income process contain a unit root evidence from individual specific time series employing econometric methods for univariate time series this paper investigates the empirical validity of assuming a unit root in indiv iduals labor income processes using a swedish register based longitudinal dataset which a llows us to follow a cohort of workers from 1968 to 2005 we are able to obtain distributi ons of median unbiased estimates of localto unity parameters the results indicate that earn ings for the representative worker are governed by a process where shocks to earnings have fairly high persistence but are both economically and statistically significantly differ ent from having permanent effects that is the largest autoregressive root is less than unity these results add to the studies that question the heavy use of unit root processes for earnings i n calibrations of life cycle models

current real business cycle theories and aggregate labor market fluctuations hours worked and the return to working are weakly correlated traditionally the ability to account for this fact has been a litmus test for macroeconomic models existing real business cycle models fail this test dramatically we modify prototypical real business cycle models by allowing government consumption shocks to influence labor market dynamics this modification can in principle bring the models into closer conformity with the data our empirical results indicate that it does

testing long run neutrality using intra year data previous tests of the long run neutrality hypothesis have generally relied on annual time series data this paper analyses the long run neutrality of money in australia using different sources of intra year data which permits an examination of the effects of seasonality and the robustness of previous empirical results a reduced form arima model is used with both quarterly seasonally unadjusted and adjusted australian real gdp and nominal money supply to test the neutrality hypothesis using two measures of money stock namely m1 and m3 it is shown that the hypothesis is supported using m1 as the measure of money supply while it is rejected using m3 recent trends and developments in the money and credit markets in australia provide a possible explanation of the sensitivity of the outcome to the measure of money stock employed in the analysis

on low frequency estimates of long run relationships in macroeconomics abstract a number of recent studies have attempted to test propositions concerning long run economic relationships by means of frequency domain time series techniques that concentrate attention on low frequency comovements of variables the present paper emphasizes that many of these propositions involve expectational relationships that are not inherently related to specific frequencies or periodicities thus the association of low frequency time series test statistics with long run economic propositions is not generally warranted that such an association can be misleading is demonstrated by analysis of examples taken from notable papers by geweke lucas and summers

optimal production of transplant care services most organ transplants are from dead donors national transplant organizations exhibit considerable differences in terms of their donor population rates spain s organization is by far the most efficient in this respect we argue that much of the productivity advantage of spain s transplant organization proceeds from an efficient organization of the production chain from organ procurement to transplantation transplants from dead donors are analogous to a common resource for the transplant community their circulation through the national transplant organization creates public good externalities between the care units in charge of organ retrieval and those in charge of transplantation a socially efficient production of transplant care services obtains through an optimal control by the national transplant agency of both the circulation and the production of transplants in particular transplant shortage makes the rotten kid theorem fail in this context the analysis also produces a natural measure of public good externalities evaluated from the standpoint of care units

money output and the expected real interest rate this paper tests the exclusion of lagged growth rates of money and output from regression equations with serially correlated disturbances for the expected real interest rate the authors empirical approach is an extension of the empirical strategies of eugene f fama 1975 and frederic s mishkin 1981 which invoke the orthogonality of the inflation forecast error to predetermined regressors under the maintained hypothesis of rational expectations they discuss the implications of their tests for simple real business cycle models copyright 1991 by mit press

on the superneutrality of money in a stochastic dynamic macroeconomic model abstract this paper explores the robustness of the superneutrality of money result to the introduction of uncertainty while qualitatively superneutrality fails to obtain in our model quantitatively the observed tobin effect is insignificant the equilibrium time paths of real variables are nearly unaffected by changes in the money growth rule we argue that our conclusions reinforce the theoretical case for superneutrality

aggregate implications of heterogeneous households in a sticky price model this paper analyzes the role of heterogeneous households in propagating shocks over the business cycle by generalizing a basic sticky price model to allow for imperfect risk sharing between households that dier in labor incomes i show that imperfectly insured household consumption distorts household incentive to supply labor hours through an idiosyncratic income eect which in turn generates strategic complementarities in price setting and thus ampli es business cycle uctuations this mechanism diminishes the role of nominal rigidities and makes sticky price models more consistent with microeco

international evidence on the historical properties of business cycles we contrast properties of real quantities with those of price levels and stocks of money for ten countries over the last century although the magnitude of output fluctuations has varied across countries and periods relations among real quantities have been remarkably uniform properties of price levels however exhibit striking differences between periods inflation rates are more persistent after world war ii than before and price level fluctuations are typically procyclical before world war ii and countercyclical afterward fluctuations in money are less highly correlated with output in the postwar period but are no more persistent than in earlier periods jel e32 e31

relative wage movements and the distribution of consumption we analyze how relative wage movements among birth cohorts and education groups affected the distribution of household consumption and economic welfare our empirical work draws on the best available cross sectional data sets to construct synthetic panel data on u s consumption labor supply and wages during the 1980s we find that low frequency movements in the cohort education structure of pretax hourly wages among men drove large changes in the distribution of household consumption the results constitute a spectacular failure of between group consumption insurance a failure not explained by existing theories of informationally constrained optimal consumption behavior a welfare analysis indicates that the cost of between group consumption variability is larger than the cost of aggregate consumption variability by two orders of magnitude

estimating the effects of earnings uncertainty on families saving and insurance decisions this paper investigates whether families save partially to self insure against uncertain future earnings and estimates the extent to which pooled insurance substitutes for saving as a precaution against earnings risk an econometric model is estimated using unique household survey data from the nineteenth century to examine families joint saving and insurance decisions the historical microdata are of interest because they predate widespread social insurance programs which may stunt self insurance through private saving among contemporary families the econometric results imply that two independent measures of idiosyncratic earnings risk matter for families saving decisions additionally families whose primary wage earners belong to labor unions significantly save less frequently than others all else being equal but this tendency is not apparent among members of private benevolent societies

a sociological perspective on gender and career outcomes both economists and sociologists have documented the association between gender and career outcomes men are more likely than women to participate in the labor force and men average more hours of paid labor per week and more weeks per year women and men tend to hold different occupations and to work in different industries firms and jobs furthermore men outearn women hold more complex jobs and are more likely to supervise workers of the other sex and to dominate the top positions in their organization the challenge for both disciplines lies not in showing that gender is linked to employment outcomes but in explaining the associations economists have sought explanations in the characteristics and preferences of individual workers or employers some have attributed the associations between workers sex and their career outcomes to sex differences in training and experience career commitment or competing demands on time and energy others focus on employers preferences for workers of one sex over the other taste discrimination or on employers beliefs that workers of one sex or the other are more costly or less profitable to employ statistical discrimination the sociological approach differs from that of economists in recognizing sex segregation as a causal mechanism that gives rise to other differences between women s and men s careers this emphasis on segregation reflects sociologists interest in the ramifications of societal level systems of differentiation and stratification it stems also from the discipline s concern with the impact of people s location in social structures on a variety of life outcomes by concentrating men and women in different jobs segregation exposes them to more or less similar employment

heterogeneity and tests of risk sharing how well do people share risk standard risk sharing regressions assume that any variation in households risk preferences is uncorrelated with variation in the cyclicality of income i combine administrative and survey data to show that this assumption is questionable risk tolerant workers hold jobs in which earnings carry more aggregate risk the correlation makes risk sharing regressions in the previous literature too pessimistic i derive techniques that eliminate the bias apply them to u s data and find that the effect of idiosyncratic income shocks on consumption is practically small and statistically difficult to distinguish from zero

multiple output child health production functions the impact of time varying and time invariant inputs author affiliation mark d agee department of economics pennsylvania state university altoona pa 16601 usa mda4 psu edu corresponding authorscott e atkinson department of economics university of georgia athens ga 30602 usa atknsn uga eduthomas d crocker department of economics and finance university of wyoming laramie wy 82071 usa tcrocker uwyo edu acknowledgment comments and suggestions from two anonymous referees are gratefully acknowledged the u s environmental protection agency financially supported this research effort through grant number r82871601 however the research has not been subjected to the agency s required peer and policy review and therefore does not necessarily reflect the views of the agency 1 introductionin this paper we attempt to broaden and to redirect the standard theoretical and empirical approach in economics to the household production of human health especially child health the last decade has witnessed increased concern with the impact of public policies and private investments on child health perhaps motivated by an increased concern for equity and an enhanced recognition that human capital formation in children contributes significantly to society s future well being children live in households with parents or adults who combine their skills with good as well as bad inputs that produce good as well as bad child health outcomes physical behavioral and cognitive a good input could be the time spent reading to a child while a bad input could be parental smoking near a child a good outcome could be higher reading skills while a bad outcome could be a child s ill health three features distinguish our modeling approach to the household production of child outcomes first we argue that multiple good and bad inputs can affect multiple measures of good and bad outcomes for children ignoring this by estimating single equation relationships produces omitted variable bias and fails to model the tradeoffs among inputs and outcomes to examine jointness among several good and bad outcomes as well as inputs and allow for heterogeneity among households in the productivity of observed child inputs we specify and estimate an output based directional distance function chambers chung and fare 1998 for a balanced panel of households with coresident children this function allows us to estimate the maximum expansion of goods and the contraction of bads subject to a given level of observed inputs for a household using the underlying joint technology second we argue that households will produce child health with varying degrees of effectiveness the best practice household is defined as that household that cannot make further increases in all good dimensions of child health and reductions in all bad dimensions by some additive amount using a given level of observed inputs this household practices its child care on the production frontier households within this frontier make less efficient use of personal and marketed child care inputs thus we estimate the technical efficiency for household units in producing multiple outputs from multiple inputs finally although we have panel data and compute a fixed effects estimator we recover the effects of time invariant variables such as sex race and parent attributes on goods and bads in a second stage regression we adjust their estimated standard errors and correct for the bias caused by weak instruments in the first stage using a jackknife technique the next section presents background for our hypotheses of i jointness in the household production of child health outcomes and ii the presence of technical inefficiency among households in the production process in section 3 we discuss properties of the directional distance function and the calculation of partial effects results are presented in section 4 and conclusions follow in section 5

business cycles in international historical perspective business cycle models seek to answer the question of why economies go through cycles of recession and recovery or boom and bust any theory of the business cycle makes two sorts of claims what shocks are most important in disturbing the economy and what economic structure is necessary for propagating these shocks for example one common explanation of business cycles begins with monetary shocks and then seeks to explain why monetary shocks are not purely neutral as neoclassical theory would have it and instead have real effects at least in the short term early models in this vein were often implicitly or explicitly based on the proposition that markets do not clear continuously early equilibrium real business cycle theories instead emphasized the importance of real shocks especially to technology which may cause socially efficient fluctuations even when markets are always in equilibrium more recent models have attempted to marry the equilibrium approach to macroeconomics with the substantive keynesian ideas that money is not neutral and that economic fluctuations are costly new keynesian theories of the business cycle admit the possibility of a number of economic shocks including monetary and technology shocks but then focus on explaining how nominal price rigidities within the economy can turn these shocks into recessions or booms other models show that business cycles driven by keynesian animal spirits are consistent with rigorous microfoundations and rational expectations seeking empirical evidence for and against these various approaches we turn business cycle theories loose on perhaps the greatest macroeconomic laboratory

risk sharing between and within families this paper uses the panel study of income dynamics to test whether risk sharing is complete between or within american families the tests accommodate a wide variety in the configuration and availability of family data the test results reject inter as well as intra family full risk sharing even assuming that leisure is endogenous or that leisure and consumption are nonseparable

the long horizon regression approach to monetary neutrality how should the evidence be interpreted abstract fisher and seater american economic review 83 1993 402 develop a long horizon regression test of long run monetary neutrality and reject it in a long annual u s sample this test often fails to be rejected elsewhere we can resolve the conflicting results

historical energy price shocks and their changing effects on the economy abstract the purpose of this paper is to identify the changes in the impact of energy shocks on economic activity with an interest in assessing if an economy s vulnerability and resilience to shocks improved with economic development using data on the united kingdom over the last three hundred years the paper identifies supply aggregate demand and residual shocks to energy prices and estimates their changing influence on energy prices and gdp the results suggest that the impacts of supply shocks rose with its increasing dependence on coal and declined with its partial transition to oil however the transition from exporting coal to importing oil increased the negative impacts of demand shocks more generally the results indicate that improvements in vulnerability and resilience to shocks did not progress systematically as the economy developed instead the changes in impacts depended greatly on the circumstances related to the demand for and supply of energy sources if these experiences are transferable to future markets a transition to a diversified mix of renewable energy is likely to reduce vulnerability and increase resilience to energy price shocks

on testing for full insurance using consumer expenditure survey data in a recent issue of this journal mace 1991 presented empirical evidence in support of the hypothesis that u s households engage in full risk sharing the data used were taken from the u s consumer expenditure survey cex for the years 1980 84 full insurance implies that household level consumption should be perfectly correlated with aggregate consumption but uncorrelated with householdlevel changes in income mace s surprising result was that at least for one functional specification household level income changes whether measured directly by changes in reported income or proxied by employment change dummies seemed to have no statistically significant effect on consumption this comment demonstrates that this result was due to measurement error in key variables

searching for a break in gnp it has been suggested that existing estimates of the long run impact of a surprise move in income may have a substantial upward bias due to the presence of a trend break in postwar u s gross national product data this article shows that the statistical evidence does not warrant abandoning the no trend break null hypothesis a key part of the argument is that conventionally computed p values overstate the likelihood of the trend break alternative hypothesis this is because they do not take into account that in practice the date is chosen based on pretest examination of the data

mobility and modality trends in us state personal income we examine the mobility and modality trends in us state per capita personal income and its components during the 1929 1999 period we find strong evidence of convergence for states but that the tendency towards convergence and the associated mobility within the distribution varies during the period and especially for the 1980s our analysis of convergence by income component suggests that transfer income contributes more to the observed convergence than does asset income we also note that distributional mobility need not be accompanied by high rank mobility and find that trends toward convergence in the us have tended to preserve rank ordering cet article cherche a examiner les tendances de mobilite et de modalitequant aux revenus personnels par tete et a ses composants aux etats unis pendant la periode qui va de 1929 a1999 il s avere de fortes preuves d une convergence entre etats qui varie au cours de la periode etudiee et qui va de pair avec une variation de la mobilite associee au sein de

once in the door gender tryouts and the initial salaries of managers although women pursue managerial credentials at nearly the same rate as men gender disparities in wages exist because of the shortfall in wages women sustain relative to men at the onset of their careers this article develops a tryout approach to test for the presence of demand side contributions to initial wage inequality while also developing and testing theory on why it may be lessened through internships using detailed data on graduates from an elite management program from 2009 2010 our analyses reveal that internships are associated with the gap in men s and women s initial salaries for men there is no difference in salary offers from employers where an internship occurs versus one where an internship does not occur however women receive higher salaries from employers where an internship first takes place this paper was accepted by olav sorenson organizations

testing the long run neutrality of money in a developing economy the case of india abstract seasonal integration and cointegration techniques are used to test the hypothesis of long run money neutrality using indian data on the basis of money real output and price level quarterly data empirical evidence is presented showing that money is cointegrated with prices but not with output at the zero frequency this evidence is interpreted to imply that money affects nominal but not real variables in the long run it is concluded that money is neutral in the long run

asymmetric effects of money supply shocks and trend inflation in recent years a number of empirical studies have presented evidence that money supply shocks have asymmetric effects that is unexpected negative changes in the money supply slow the economy more than unexpected positive changes accelerate the economy evidence of asymmetry was documented by cover 1992 for the postwar u s economy and his finding was confirmed by de long and summers 1988 morgan 1993 rhee and rich 1995 and karras 1996a b stimulated by these empirical works several attempts have been made to provide microeconomic foundations for the asymmetric effects of money supply shocks 1 among those theories this paper examines the one that focuses on asymmetric price adjustment and let us call it a sticky price theory money supply shocks will have asymmetric effects on real output if prices are less flexible downward than upward this sticky price theory was proposed by tsiddon 1993 ball and mankiw 1994 and caballero and engel 1992 by employing a menu cost model the above researchers show that positive trend inflation can produce the asymmetric effects of money supply shocks the logic of their theory is the following along with price adjustment costs positive trend infla

the neutrality properties of competing relative price models tests using linear feedback this article uses a variant of geweke s 1982 linear feedback measure to test common characterizations of monetary neutrality implicit in classes of relative price models the neutrality properties are defined in terms of relative price changes response to monetary policy shocks in a system including average price changes an interest rate and industrial production growth the magnitude and patterns of monetary feedback found in u s relative price data provide no support for any of the structurally neutral models

methodological and empirical issues in real business cycle theory abstract in this paper we argue that the major impact of the rbc literature has been to propose a new methodology for macroeconomics this methodology is distinguished first by the importance it attributes to the empirical description of the phenomena to be explained and second by the use of this description in conjunction with quantitative theorizing i e the construction of computable general equilibrium models whose characteristic statistics match those of the data in accordance with this approach we first report on the current state of knowledge concerning business cycle regularities and conclude that additional empirical effort is called for in order to arrive at the appropriate basis for theorizing we then examine the performance of existing models and evaluate the case for integrating monetary factors and demand shocks into them lastly we review the recent efforts to explain the employment variability puzzle and argue that the search for a solution naturally leads to the incorporation of significant non walrasian features into the rbc framework

testing for full insurance using exogenous information we strongly reject the full insurance hypothesis using testing variables that are not decision variables for the households under investigation we find that households are not insured against changes in the unemployment rate associated with the household head s occupational category using this exogenous information we also investigate the appropriateness of exogeneity assumptions on idiosyncratic variables that have been used as testing variables in the full insurance literature it is shown that several exogeneity assumptions made in the existing literature are potentially problematic

do quotas help women to climb the career ladder a laboratory experiment abstract women are less likely to enroll in selective or scientific courses applying for promotions and are particularly underrepresented in both middle and top positions in the stem field quota are often advocated as an instrument to reduce this gender gap but it remains unclear at what step of the career ladder they more effectively foster women s reaching the top many factors may affect quota s success or failure such as how they would in turn affect teamwork and trust between members within organizations or coordination in applying for promotions in this paper by means of a laboratory experiment implementing a two stage tournament we evaluate the impact of three different interventions in affecting individual decision to climb the career ladder abstracting away from other possible confounding factors we find that compared with no intervention a gender quota introduced in the initial stage of competition was ineffective in encouraging women to compete for the top quotas introduced in the final stage of competition or at both stages increased women s willingness to compete for the top without distorting the performance of the winners

money output and inflation in the longer term major industrial countries 1880 2001 i introduction the empirical role of money growth in the macroeconomy has been studied by many researchers using different data and methods the most prominent studies focusing on the quantity theory of money are those of friedman and schwartz 1963 1982 using data averaged over the phases of the business cycle in order to capture longer run movements with u s and u k data back to 1867 the study by mccandless and weber 2001 is a representative example for a different approach for 110 countries in the post wwii period longer run growth rates are approximated by growth of a variable over a 30 year period average growth rates 1 the problem with phase averaging is that it does not deal with possible nonstationarity of the data 2 the problem with growth averages over long periods while informative to a degree is that they have limitations too it is impossible to assess the timing of movements in these variables 3 in the frequency domain the long run is associated with frequency zero which in our terminology is the long run trend previous studies in the frequency domain on the long run neutrality of money at zero frequency include the studies of lucas 1980 and geweke 1986 the theory of spectral analysis provides a rigorous framework for extracting specific frequency bands from the data instead of considering only frequency zero stock and watson 1998 applied the band pass filter of baxter and king 1999 to extract cycles frequency bands for u s data and focused on the business cycle and on mostly the post wwii period christiano and fitzgerald 2003 proposed an improved band pass filter and provided an application to the longer run relation of money and inflation for bands of 8 20 years and 20 40 years in the united states from 1900 to 1997 4 the usefulness of monetary aggregates for conducting monetary policy has been seriously called into question because of the instability of money demand a prominent empirical study is that of estrella and mishkin 1997 recent mainstream new keynesian models have no explicit role for money woodford 2008 a contrasting view is that the longer term role of money is still of relevance for monetary policy the european central bank explicitly emphasizes a supporting role that monetary aggregates should play in order to provide an anchor for inflation expectations hafer haslag and jones 2007 issing 2006 king 2002 nelson 2003 christiano motto and rostagno 2007 provided a theoretical new keynesian model where inflation expectations lose their anchor unless money is monitored and reacted to also beck and wieland 2008 presented a new keynesian model where cross checking with money growth movements improves inflation control similarly assenmacher wesche and gerlach 2006 2007 found a significant role for a low frequency low pass filtered component of money in the empirical new keynesian phillips curve equation 5 in the spirit of friedman 1961 we use long time spans so that our results are unlikely to be because of a specific policy rule in place in a given period we have 122 years of annual data from 1880 to 2001 before the introduction of the euro in 2002 we have real gross domestic product gdp money and consumer price indices cpis with no gaps for 11 industrialized countries 6 the countries included in our study differ in such terms as their institutions fiscal and monetary policies and economic growth rates nonetheless at least in peace time they were similar in generally having comparatively free markets in which prices and interest rates were determined our aim is to apply analytic methods that are free from economic and statistical models as much as possible in order to explore empirical regularities or stylized facts in the data also the focus of our research is the longer run we employ band pass filters to pick out cycles from each time series that last 8 40 years that is the longer term component

measuring consumption smoothing in cex data this paper proposes and implements a new method of measuring the degree of consumption smoothing using data from the consumer expenditure survey the structure of this survey is such that estimators previously used in the literature are inconsistent simply because income is measured annually and consumption is measured quarterly we impose an ar 1 structure on the income process to obtain a proxy for quarterly income through a projection on annual income by construction this proxy gives rise to a measurement error which is orthogonal to the proxy itself as opposed to the unobserved regressor leading to a consistent estimator we contrast our estimates with the output of two estimators used in the literature we show that while the flrst ols estimator tends to overstate the degree of risk sharing the second iv estimator grossly understates it

government activities and tests of the long run implications of the neoclassical growth model for canada this paper shows that the conclusions of time series analyses of the long run properties of the one factor neoclassical stochastic growth model under uncertainty are robust with regard to alternative ways of handling government expenditures in particular when annual canadian data from 1946 to 1993 are used the hypothesis that the log ratios of consumption to output and investment to output are stationary is rejected even when government expenditures are treated as perfect substitutes for private ones and aggregated with the corresponding private variables

a microeconometric comparison of household behavior between countries this article reviews the methodological issues associated with estimating and testing competitive markets with panel data and applies it to an important new arena international economics we investigate differences in housing consumption and male labor supply across households in germany and the united states with data from the german socio economic panel and the panel study of income dynamics observations are treated as equilibrium outcomes generated by a set of competitive markets that accommodate varying degrees of integration after controlling for differences in the sample populations and aggregate shocks we find that the estimated structural parameters are surprisingly similar across these two countries

orchestrating impartiality the impact of blind auditions on female musicians a change in the audition procedures of symphony orchestras adoption of blind auditions with a screen to conceal the candidate s identity from the jury provides a test for sex biased hiring using data from actual auditions in an individual fixed effects framework we find that the screen increases the probability a woman will be advanced and hired although some of our estimates have large standard errors and there is one persistent effect in the opposite direction the weight of the evidence suggests that the blind audition procedure fostered impartiality in hiring and increased the proportion women in symphony orchestras

she works hard for the money household responsibilities and the allocation of work effort recent developments in human capital theory suggest that men and women differ in how they allocate effort to work activities this paper uses the 1973 and 1977 quality of employment surveys to test the assumtion that women allocate less effort to work because of their family and household responsibilities regression and ordered probit analyses show that on average women allocate more effort to work than do men further the sex difference is substantial when men and women with comparable family situations and market human capital are compared the paper discusses how experiments on sex differences in standards of personal entitlement and research on sex segregated workplaces provide an alternative to the economists perspective finally the paper argues for an integration of human capital models research on social equity and structural theories of work organization in order to provide a more complete explanation of men s and women s orientations toward work and family

bending the pipeline executive search and gender inequality in hiring for top management jobs we study the sources of women s underrepresentation in hiring for top management jobs by focusing on the context of executive search using data that include proprietary information on 10 970 individuals considered by a search firm we examine the sources of the low proportion of women placed in senior roles contrary to received wisdom we find limited evidence that demand side screeners strongly contribute to gender disadvantage in this setting what gender differences exist tend to play out at the start of the hiring process and are driven both by supply side and demand side actors once considered for a position women are no less likely than men to be hired though they are slightly less likely to be interviewed by the search firm our findings highlight the theoretical importance of disentangling candidates self steering behavior from the pipeline bending of hiring agents we discuss the implications of our results for understanding gender inequality at upper echelons of the labor market this p

sorting through affirmative action three field experiments in colombia the use of affirmative action policies to promote female employment remains debated do affirmative action policies attract female applicants and does that come at the expense of deterring highly

empirical evidence on the long run neutrality hypothesis using low frequency international data abstract we use the backus and kehoe american economic review 1992 82 864 888 long low frequency data on real gnp gdp prices and money for australia canada denmark germany italy japan norway sweden the united kingdom and the united states to examine the long run neutrality proposition in doing so we apply the fisher and seater american economic review 1993 83 402 415 non structural methodology paying explicit attention to the univariate time series properties of the variables we conclude that the data are generally supportive of the quantity theoretic proposition that money is long run neutral

intertemporal choice and consumption mobility the theory of intertemporal consumption choice makes sharp predictions about the evolution of the entire distribution of household consumption not just about its conditional mean in the paper we study the empirical transition matrix of consumption using a panel drawn from the bank of italy survey of household income and wealth we estimate the parameters that minimize the distance between the empirical and the theoretical transition matrix of the consumption distribution the transition matrix generated by our estimates matches remarkably well the empirical matrix both in the aggregate and in samples stratified by education our estimates strongly reject the consumption insurance model and suggest that households smooth income shocks to a lesser extent than implied by the permanent income hypothesis jel d52 d91 i30

the labour market and economic risk friend or foe this paper examines the twofold role of the labour market in household economic risk management as a source of household consumption risk and as an instrument for insuring consumption against contingencies it outlines a framework for analysing this twofold role of the labour market and uses data from the british household panel survey 1991 1996 to explore this empirically it identifies the relative importance of the labour market and other factors in producing changes in the financial situation of individuals it also implements full insurance tests of whether unemployment and other external shocks to the household are correlated with consumption growth it concludes that labour market factors are a dominant source of change in individuals financial situation with a predominantly positive effect on the financial situation of the better off and a predominantly negative impact on the financial situation of the less well off it also finds that households are unable to fully insure their consumpti

the efficient allocation of consumption under moral hazard and hidden access to the credit market in this paper we describe the properties of the optimal allocation of consumption in a world with moral hazard and hidden borrowing and lending we discuss how and under what conditions the efficient allocation can be distinguished from that of the permanent income self insurance model we also compare our allocation with the complete markets full information case and with the standard moral hazard model with monitorable and fully contractible asset holdings jel d82 e21 jel d82 e21 jel d82 e21 jel d82 e21

a systematic framework for analyzing the dynamic effects of permanent and transitory shocks this paper proposes a systematic framework for analyzing the dynamic e ects of permanent and transitory shocks on a system of n economic variables we consider a two step orthogonolization on the residuals of a vecm with r cointegrating vectors the rst step separates the permanent from the transitory shocks and the second step isolates n r mutually uncorrelated permanent shocks and r transitory shocks the decomposition is computationally straightforward and entails only a minor modi cation to the choleski decomposition commonly used in the literature we then show how impulse response functions can be constructed to trace out the propagating mechanism of shocks distinguished by their degree of persistence in an empirical example the dynamic responses to the identi ed permanent shocks have properties similar to shocks to productivity the real interest rate and money growth even though no economic

precautionary saving and consumption fluctuations this paper uses the consumption euler equation to derive a decomposition of consumption growth into four sources these four sources are new information and three sources of predictable consumption growth intertemporal substitution changes in the preferences for consumption and incomplete markets for consumption insurance using household level data we implement this decomposition for the average growth rate of consumption expenditures on nondurable goods in the united states from 1982 to 1997 the economic importance of precautionary saving rivals that of the real interest rate but the relative importance of each source of movement in the volatility of consumption is not precisely measured

life cycle economies and aggregate fluctuations do the implications for business cycle issues change when we switch from studying infinitely lived representative agent models to more sophisticated demographic structures with finitely lived agents this article addresses that question by using a large overlapping generations model that is calibrated to u s demographic properties microeconomic evidence and national income and product accounts the finding is that the answers obtained are basically the same for the two kinds of models the article also explores the relative volatility of hours across age groups an issue that cannot be addressed by using the infinitely lived representative agent abstraction

a simple time series test of endogenous vs exogenous growth models an application to the united states this paper presents evidence supporting endogenous growth models that emphasize public structural capital the authors apply a simple test of endogenous vs exogenous growth models in exogenous growth economies temporary innovations to policy variables lead only to temporary changes in gnp levels while in endogenous growth economies the innovations can lead to permanent changes in gnp levels of the seven u s policy variables they examine only non military equipment capital and non military structural capital have a statistically and economically significant effect upon long run gnp levels further estimation suggests that the non military equipment capital result is not robust and that several disaggregate components of structural capital contribute significantly copyright 1996 by mit press

do stockholders share risk more effectively than nonstockholders abstract this paper analyzes the extent of risk sharing among stockholders and nonstockholders to evaluate the empirical importance of market incompleteness it is essential to determine whether idiosyncratic shocks are important for the wealthy who have access to better insurance opportunities but also face different risks than the average household we study a model where each period households decide whether to participate in the stock market by paying a fixed cost due to this endogenous entry decision the testable implications of perfect risk sharing take the form of a sample selection model which we estimate using a semiparametric gmm estimator proposed by kyriazidou 2001 using data from psid we strongly reject perfect risk sharing among stockholders but perhaps surprisingly do not find evidence against it among nonstockholders this result appears to be robust to several extensions this finding suggests further focus on risk factors that primarily affect the wealthy such as entrepreneu

money inflation and output under fiat and commodity standards we examine the behavior of money inflation and output under fiat and commodity standards to better understand how changes in monetary policy affect economic activity using long term historical data for 15 countries we find that under fiat standards the growth rates of various monetary aggregates are more highly correlated with inflation and with each other than under commodity standards money growth inflation and output growth are also higher in contrast we do not find that money growth is more highly correlated with output growth under one standard than under the other

the effect of individual retirement accounts on household consumption and national saving a major debate exists on whether expanding tax favoured savings accounts such as individual retirement accounts iras will increase national savings much of the empirical debate has centred on whether ira contributions before the tax reform act of 1986 represented new savings or merely reshuffled assets we find no evidence that households financed their ira contributions from reductions in consumption at least initially we find evidence that households financed their ira contributions from existing savings or from saving that would have been done anyway our results indicate that at most 9 of ira contributions represented net additions to national saving

a partisanship theory of fiscal and monetary regimes this paper indicates that income redistribution motivated by the distributive ideals of liberal political p arties create unanticipated disincentives for productive effort thi s suggests that newly elected liberal parties are likely to engage in monetary surprises in order to compensate for the adverse effects of these disincentives on real income estimated reaction from function s support these predictions a measure of income redistribution the change in the ratio of the social expenditures of government to gnp has a positive significant effect on money growth in addition when the presidency changes from conservative to liberal there is a posit ive and significant increase on money growth copyright 1987 by ohio state university press

interpreting long run equilibrium solutions in conventional macro models a comment c m kelly 1985 claims that long run solutions from econometric models may be seriously misleading when expectations variables are erroneou sly replaced by observed outcomes it is shown that his results deriv e uniquely from an invalid exogeneity assumption all inferences are therefore potentially invalid illustrated by a case where the long r un is correct while the short run is biased using an encompassing fr amework error variance rankings and related tests distinguishing exp ectational from conditional models are derived for stationary cases for nonstationary integrated series the long run will be correctly e stimated when the data are cointegrated whereas the short run remain s biased copyright 1988 by royal economic society

stereotypes and tournament self selection a theoretical and experimental approach abstract we present a theoretical model in which agents have imperfect self knowledge about their abilities and have to self select into either a high paying or a low paying tournament the model shows that negative positive stereotypes generate underrepresentation overrepresentation of stereotyped agents in the high paying tournament even when the stereotype is false this is because stereotypes affect self assessment and consequently subsequent behavior we call this mechanism self stereotyping we run a lab experiment in which we use subjects beliefs about the gender bias of a real effort task to test the predictions of the theoretical model the results of the experiment are in line with the predictions of the model for men but not for women which partially validates the model and the self stereotyping mechanism

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

two illustrations of the quantity theory of money of two central implications of the quantity theory of money that a given change in the rate of change in the quantity of money induces i an equal change in the rate of price inflation and ii an equal change in nominal rates of interest the illustrations were obtained by comparing moving averages of the three variables in question using quarterly u s time series for the period 1953 77 readers may find the results of interest as additional confirmation of the quantity theory as an example of one way in which the quantity theoretic relationships can be uncovered via atheoretical methods from time series which are subject to a variety of other forces or as a measure of the extent to which the inflation and interest rate experience of the postwar period can be understood in terms of purely classical monetary forces the theoretical background of the study is reviewed very briefly as it is familiar material in the next section the data processing methods are described and rationalized in section ii the illustrations