rational household labor supply traditionally household behavior is derived from the maximization of a unique utility function in this paper we propose an alternative approach in which the household is modeled as a two member collectivity taking pareto efficient decisions the consequences of this assumption are analyzed in a three good model in which only total consumption and each member s labor supply are observable if the agents are assumed egoistic i e they are only concerned with their own leisure and consumption it is possible to derive falsifiable conditions upon household labor supplies from both a parametric and nonparametric viewpoint if alternatively agents are altruistic restrictions obtain in the nonparametric context useful interpretation stems from the comparison with the characterization of aggregate demand for a private good economy

central bank design abstract starting with a blank slate how could one design the institutions of a central bank for the united states this paper explores the question of how to design a central bank drawing on the relevant economic literature and historical experiences while staying free from concerns about how the fed got to be what it is today or the short term political constraints it has faced at various times the goal is to provide an opinionated overview that puts forward the trade offs associated with different choices and identifies areas where there are clear messages about optimal central bank design

whom can we trust to run the fed theoretical support for the founders views abstract the federal reserve has been called a bizarre policymaking structure this paper documents and formalizes a historical argument that the fed s structure was a response to public conflict over inflation s redistributive powers the paper shows that in the face of conflict over redistributive inflation policy by majority can lead to policy that is worse even for the majority than obvious alternatives in balancing the interests for and against surprise inflation the fed s structure can lead to a better outcome

the social ecology of the post fordist global city economic restructuring and socio spatial polarisation in the toronto urban region numerous authors have asserted that globalisation and occupational changes associated with post fordist economic restructuring have led to a growth in intraurban social disparity and even polarisat

central bank independence economic behavior and optimal term lengths the authors parameterize central bank independence in terms of partisanship and term length focusing on the implications of alternative policy structures for real economic activity while long terms of office for the central banker can reduce the role of electoral surprises term lengths that are too long are costly if societal preferences are subject to permanent shifts the appointment of a conservative central banker increases the optimal term length and leads to lower average inflation but need not increase the volatility of output copyright 1996 by american economic association

macroeconomic policy in a two party system as a repeated game this paper considers the interaction of two parties with different objectives concerning inflation and unemployment and rational and forward looking wage setters if discretionary policies are followed an economic cycle related to the political cycle results in equilibrium this cycle is significantly different from the traditional political business cycle reputational mechanisms due to the repeated interaction of the two parties and the public or commitments to a common policy rule can improve upon the discretionary outcome by reducing or eliminating the magnitude of the economic fluctuations

central bankers in government appointed committees abstract i study the policy choices of members of a central bank committee who are appointed by the government central bankers balance their desire to protect the central bank s reputation against their interest to be reappointed committees can be more successful than single central bankers at reducing inflation and insulating policy from government pressures these gains are only achieved if the turnover rate of committee members is low and the committee is small the former is associated with a low risk of being replaced for not supporting the government s preferred policy the latter meanwhile implies high probability that a single vote affects policy making any individual member more weary of potentially affecting the central bank s reputation through his vote

economic development and the family structure from the pater familias to the nuclear family we provide a theory that is able to account for the observed comovement between the shift in intergenerational living arrangements from coresidence to non coresidence and economic development our theory is consistent with the diminution in the status of the elderly documented by some sociologists the results from our analysis show that when technical progress is fast enough the economy experiences a shift from stagnation to growth there is a transition from coresidence to non coresidence and the social status of the elderly tends to deteriorate

collective decisions and competitive markets in a general equilibrium model we allow for households with several typically heterogeneous members households that make efficient collective consumption decisions where different households may use different collective decision mechanisms yet households that operate within a competitive market environment the interaction of two allocation mechanisms collective decisions and competitive markets is investigated with a focus on the efficiency properties and decentralization possibilities of the dual allocation mechanism

reconsidering the labeling effect for child benefits evidence from a transition economy i consider expenditure on food alcohol and tobacco and clothing in households with children in slovenia at the start of its transition to a market economy i exploit the unique structure of its child benefit program in order to look for evidence that labeling a cash transfer a child benefit influences how that cash transfer is spent contrary to much of the recent literature on the non fungibility of income i do not find evidence supporting a labeling effect

money politics and the post war business cycle abstract the political economy literature has enshrined as stylized fact the view that lower inflation and temporarily lower growth follow the election of republican presidents and has emphasized political manipulation of monetary policy as an explanation support for the monetary explanation comes in econometric work that largely ignores identification issues that dominate the literature on measuring the effects of monetary policy we generalize a standard vector autoregression framework to accommodate discrete political party variables we find almost no support for the view that political effects on the macroeconomy operate through monetary policy and only weak evidence that political effects are significant at all

the influence of household composition on household expenditure patterns theory and spanish evidence a concept of demographic separability is proposed that formalizes the notion that there are groups of goods adult goods that have little or no relationship to specific classes of household demographics the numbers or ages of children that there exist adult goods demographically separable from children is a necessary but not sufficient condition for the validity of rothbarth s method for measuring child costs we propose two different methods for testing demographic separability and present results from a 1981 survey of spain the econometric evidence is in fair agreement with the theoretical presuppositions

time allocation within the family welfare implications of life in a couple a collective model of leisure demand generalised to the production of a household public good is estimated on the british household panel survey the sharing rule is identified by using an original parametric framework based on the change of family status from single living to couple or from couple to single living womens ratios of private household expenditures are 40 on average the level of intra household inequality appears highly dependent on the intra household wage gap omitting household production in the model would overestimate the ratio by 7 percentage points on average

intergenerational succession in small family businesses borrowing constraints and optimal timing of succession small family businesses differ from non family businesses in that their functioning is not independent of the life cycle of the owner operator and in that other family considerations sometimes lead to sub optimal managerial decisions from the point of view of the business this is why a smooth intergenerational succession is essential to the profitability of the business and to the welfare of the family as a whole succession within the family involves first of all the choice of a successor the choice is affected by birth order age differentials and qualifications of potential successors choosing a successor means reaching an agreement about the timing of succession and income distribution before and after succession this paper focuses on the decision of the business operating family when to bring in the designated successor a utility maximizing time is shown to differ from the income maximizing time only in the presence of binding borrowing constraints such constraints are likely to enhance an earlier succession in order to use the successor s accumulated off business assets to ease the constraints and to increase future business income due to earlier accumulation of business specific human capital by the successor an additional model shows that the successor will not be willing to wait indefinitely for the formal ownership transfer of the business because of the risk of being disinherited in some future period the consequences of possible strategic behaviors of both the owner and potential successors on the results of these models is discussed informally

social polarisation the labour market and economic restructuring in europe an urban perspective it is frequently argued that changes in the occupational structure and labour markets of european cities have the potential to undermine social cohesion the term social polarisation has been wid

a theory of ambiguity credibility and inflation under discretion and asymmetric information this paper develops a positive theory of credibility ambiguity and inflation under discretion and asymmetric information the monetary policymaker maximizes his own politically motivated objective function that is positively related to economic stimulation through monetary surprises and negatively related to monetary growth the relative importance he assigns to each target shifts stochastically through time his current preference trade off is known to him but not to the public when choosing the state contingent path of money growth for the present and the future the policymaker compares the benefits from current stimulation with the costs associated with higher future inflation expectations current monetary growth conveys information to the public about future money growth because there is persistence in the policymaker s objectives although expectations are rational information is imperfect because monetary control procedures are imprecise as a result the public cannot correctly distinguish persistent changes of emphasis on different policy objectives from transitory monetary control errors the public becomes aware of changes gradually by observing past monetary growth credibility is defined in terms of the speed with which the public recognizes changes in the objectives of the policymaker credibility is lower the noisier monetary control and the more stable the objectives of the policymaker looser monetary control and a higher degree of time preference on the part of the policymaker induce him to produce higher and more variable monetary growth when the policymaker is free to determine the accuracy of monetary control he does not always choose the most effective control available in spite of the fact that monetary surprises always have an expected value of zero the reason is that ambiguous control procedures enable the policymaker to generate positive surprises when he cares more than on average about economic stimulation he leaves the inevitable negative surprises for periods in which he cares more about inflation prevention this result provides an explanation for the fed s preference for ambiguity recently documented by goodfriend 1986 the policymaker is more likely to pick more ambiguous control procedures the more uncertain his objectives and the higher his time preference the paper also provides a theoretical underpinning for the well documented crosscountry positive correlation between the level and the variability of inflation

nash bargained household decisions reply pierre andre chiappori s 1988 claim that the nash bargaining model is of weak empirical relevance and neither convenient nor really restrictive is incorrect nash bargained household behavior implies a rich set of empirical implications extending well beyond the pareto efficiency of intrafamily distributions by systematically accounting for the impact of opportunities outside the family on resource distribution within the family nash bargained demand theory considerably expands the scope of neoclassical demand theory such expansion can elucidate issues ranging from the impact of alimony and child support laws in developed societies to the intrafamily distribution of nutrition in less developed countries copyright 1990 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

intergenerational household formation female labor supply and informal caregiving a bargaining approach children s provision of in kind services to their elderly parents informal caregiving represents an important form of economic transfers to the elderly in this paper we develop and estimate a joint model of informal caregiving and labor force participation decisions of adult daughters who have a frail elderly parent in a broader framework of intergenerational household formation parent and daughter agree to a nash bargaining rule as the solution to the household formation and intrahousehold decision making process however rather than severed relationships the threat point is given by a noncooperative equilibrium defined in terms of voluntary contributions toward a public good the parental well being maximum likelihood parameter estimates derived from the simultaneous multiequation endogenous switching model are generally consistent with expectations our results indicate that competing demands on daughters time reduce both coresidence and informal caregiving we also find that intergenerational coresidence is an important mode of assistance to elderly persons a simulation based on the estimated parameters suggests that public programs designed to meet the long term care needs of elderly persons by subsidizing formal home care services may have substantial effects on intergenerational living and care arrangement decisions

taxing family size and subsidizing child specific commodities abstract the effects and optimal choice of policy instruments directly affecting the welfare of parents and children are examined within the context of a household economics model if fertility were exogenous and households differed in number of children only a first best could be implement through a grant conditional on family size outside this very special case public intervention is either not justifiable on distributional grounds or involves taxing child specific commodities less than adult specific commodities if fertility is endogenous family size must be taxed or subsidized according to whether household expenditure on children is decreasing or increasing in the mother s wage rate

identification of random resource shares in collective households without preference similarity restrictions abstractresource shares defined as the fraction of total household spending going to each person in a household are important for assessing individual material well being inequality and poverty

equilibrium inflation as determined by a policy committee building upon the work of kydland and prescott 1977 barro and gordon 1983b developed a model explaining excess socially suboptimal inflation as the result of a policy game between the monetary authority and wage setters in an economy in a follow up paper barro and gordon 1983a modified their original model to achieve a lower inflation rate by allowing the monetary authority to acquire a reputation for good behavior in essence this extension models monetary policy as the outcome of an infinitely repeated game between a monetary authority and wage setters in this game wage setters adopt punishment rules for bad monetary authority behavior where bad behavior is an inflation rate higher than expected this extended model of barro and gordon and hence the conclusions derived from it is open to several criticisms see for example canzoneri 1985 and rogoff 1987 first the results hinge on the theory of infinitely repeated games and thus would appear to be of questionable relevance in any economy with finitely lived policy makers second and more fundamentally it is difficult to accept the description of policy as a game between the monetary authority and wage setters one can accept that under certain circumstances an individual wage setter would adopt punishment rules of the type barro and gordon discussed if the individual thought all wage setters were doing so what is left unexplained in the barro and gordon analysis is how or why each individual wage setter when left alone would think and act in such a manner it would seem that some formal coordination among wage setters would be needed to establish punishment rules which suggests a limited applicability of the model to countries with a dominant union or with an aggregate wage setting authority of course this criticism is relevant to other papers in this literature for example backus and driffill 1985 and aspects of canzoneri 1985 the purpose of this paper is to demonstrate how these criticisms can be voided and how the barro and gordon 1983a results can be rehabilitated by modeling monetary policy more realistically

downsizing and worker separations modelling the regional economic impacts of alternative department of energy workforce adjustment policies lewis d frisch m and greenberg m 2004 downsizing and worker separations modelling the regional economic impacts of alternative department of energy workforce adjustment policies reg studies 38 67 83 fifty years of huge investments by the us department of energy doe in some regions has resulted in the doe being the de facto steward of their regional economic health with the end of the cold war job reductions of doe contractor workforce have severely impacted these regions doe worker separation policies may cushion or intensify these impacts using an economic simulation model we examined the impacts of three different worker separation policies the painful response no severance packages the current response the current average of doe separation packages and the supportive response more lucrative severance and continued medical coverage the analysis is split on two regional axes 1 more rural doe regions as in the area surrounding the savannah river site srs near august

optimal timing of farm transferal from parent to child when farm income is first increasing and then decreasing in the operator s age the timing of farm transferal from parent to child is optimally determined by families who seek to maximize joint income or utility using a sample of israeli farms in which the operation of the farm changed from parent to child between 1971 and 1981 equations of transfer time and child s education are derived a simultaneous equation censored regression model is estimated using a two stage method results support the theoretical predictions that transfer time is decreasing with parent s age and with child s schooling and increasing with parent s experience

committees as substitutes for commitment in this article policies are negotiated in a committee by playing a dynamic voting game with an endogenous default or status quo policy i show that joining a committee by maintaining a strong agenda setting power is a way for a decision maker to commit to a policy that in absence of committees is not time consistent the disciplinary role of the endogenous status quo and the heterogeneity of preferences within the committee are two crucial ingredients to obtain this result as a motivating example this article focuses on the time consistency of monetary policy

labour supply and wages among nuclear and extended households the surinamese experiment this article explores labour market behaviour of members of extended and nuclear households in suriname previous analyses have found that co operative childcare opportunities within the extended household increase female labour force participation such coordination implies correlated participation decisions which invalidates standard assumptions made in estimating participation with probits and wages with regressions we employ a gmm estimation which allows correlation among household members we find that extended and nuclear household members are not significantly different in participation propensities but do differ significantly in wages we argue that greater home production opportunities in extended households dilute labour market effort and hours reducing earnings

policy boards and policy smoothing partisan politics and random election outcomes generate policy uncertainty and partisan business cycles to reduce policy uncertainty society must design the policy making environment to overcome electoral uncertainty and partisanship i show that delegating policy to an independent policy board with discretionary powers will produce substantial policy smoothing and lower policy uncertainty relative to a simple model in which elected officials set policy board members are chosen in a partisan noncooperative environment yet in the benchmark model policy variability is eliminated and the cooperative bargaining solution is replicated

a cournot nash model of family decision making this paper models a two person family each family member is utility maximising yet family members are interdependent because of caring and public goods within the family the two family members interdependent utility maximisation problems are first solved using a non cooperative or cournot nash game theoretic framework the cournot nash equilibrium is then used as a threat point in a bargaining game the paper provides a rigorous derivation of the properties of household demands a full analysis of the determinants of intra household resource allocation including the effect of varying household bargaining power and consideration of policy implications

designing monetary policy committees we integrate monetary policy making by committee into a new keynesian model to assess the consequences of the committee s institutional characteristics for inflation output and welfare our analysis delivers the following results first we demonstrate that transparency about the committee s future composition is typically harmful second we show that short terms for central bankers lead to effective inflation stabilization at the expense of comparably high output variability third larger committees generally allow for more efficient stabilization of inflation but possibly for less efficient output stabilization fourth large committees and short terms are therefore socially desirable if the weight on output stabilization in the social loss function is low fifth we show that a central banker with random preferences may be preferable to a central banker who shares the preferences of society

social polarisation economic restructuring and welfare state regimes the central argument of this paper is that it is misconceived to view social polarisation of occupational structure and incomes in global cities as either inevitable or as a direct product of econo

nash bargained household decisions a rejoinder this note is a rejoinder to marjorie b mcelroy and mary jean horney s 1990 reply it discusses the scope of mcelroy and horney s previous results and the possibility of estimating a nash bargained model from independent observation of threat points copyright 1991 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

household decisions and equilibrium efficiency a general equilibrium model is introduced where a household may consist of several members each with individual preferences and or resources when households obey collective rationality certain intrahousehold externalities can be fully internalized by the respective households so that competitive exchange among households is efficient as a rule however such intrahousehold externalities are not fully internalized by individual household members acting in their personal interest so that competitive exchange among such individuals is only efficient in exceptional cases

differential human capital investments and the choice of successor in family farms economic development typically is characterized by occupational migration away from agriculture migrants commonly are more educated than average on the other hand the remaining farmers are expected to master more sophisticated production techniques hence the pace of development depends on human capital accumulation of the population as a whole and of farmers in particular for this reason it is important to understand the way human capital investment decisions are made in the rural sector human capital levels are determined to a large extent within the family i e through investments of parents in their children becker chap 6 investments in children are motivated by altruism becker pp 362 79 by concern about family succession chu and by expectations of receiving benefits from descendants in the future bernheim schleifer and summers parents care for migrating children as well as for succeeding children they can also influence the decisions of succession versus migration both directly through their authority and indirectly through differential investments in sector specific human capital intergenerational succession is common in the farm sector as the value of the farm within the family is higher than its market value kimhi 1994b farms in developed economies generally are not large enough to permit division among several successors hence this discussion will focus on the case of a single successor one of the difficult decisions facing the farm family is the choice of a suitable successor birth order and age differentials of children affect this decision since the choice is not independent of the timing of farm transfer kimhi 1994a the emphasis in this paper is on differential ability if one child has an absolute advantage in farming and the other in off farm jobs the choice is easy it is more difficult when one child is more able to run the farm and can also do better off the farm on the one

in quest of the good urban life socio spatial dynamics and residential building stock transformation in zurich this paper discusses socio spatial dynamics and the transformation of the residential building stock in the global city of zurich it deals with five questions does zurich exhibit the type of social polarisation outlined by the global city hypothesis if so how does social polarisation become visible in the context of a european city which actors in the real estate market are catering to the special tastes of the new urban middle class with whom does the new middle class compete for space in the city the paper argues that real estate developers customise the residential building stock and produce residential units for a targeted market the new urban middle class furthermore a new socio spatial phenomenon ennoblement has evolved as the new urban middle class takes residence in traditional upper class neighbourhoods by investing its own economic capital this new middle class is hoping to profit from upper class social and cultural capital

food aid and adult nutrition in rural ethiopia insight into the role of safety nets that contribute to adult nutrition is an important component to understanding the dynamics of poverty in developing countries this article uses panel data from rural ethiopia on individual nutritional status to test for an effect of public transfers on adult body mass index bmi results show that among adult household members male members are the primary beneficiaries of food aid as male and female aid recipients tend to invest aid receipts in male household members these results are consistent with a theory in which additional resources are allocated to members of the household whose market returns are higher or those who engage in activities that expend higher levels of energy for high asset households female household members benefit if the aid recipient is a female women in low asset households appear to be adversely affected by aid receipts and evidence suggests that women with little bargaining power suffer the most the results suggest that aid receipts are useful in mitigating fluctuations in adult bmi over a short time period

oil vulnerability in the australian city assessing socioeconomic risks from higher urban fuel prices global oil prices have risen markedly over the past 18 months generating considerable speculation regarding their economic and social impacts cities that are highly dependent on petroleum for urban transport are likely to be most adversely affected by rising oil prices yet there has been little recent scholarly engagement with the socioeconomic implications of increasing oil prices this paper develops a basic framework and methodology for assessing the socioeconomic oil vulnerability of australian cities the paper demonstrates that there is wide spatial variability in the vulnerability of australia s urban populations to rising fuel costs which may compound existing socio spatial divisions and speculates on some underlying causal factors the paper calls for better data and new methods to understand the issue

a theory of divided government this paper extends the spatial theory of voting to an institutional structure in which policy choices depend upon not only the executive but also the composition of the legislature voters have incentives to be strategic since policy reflects the outcome of a simultaneous election of the legislature and the executive and since the legislature s impact on policy depends upon relative plurality to analyze equilibrium in this game between voters we apply coalition proof type refinements the model has several testable implications which are consistent with voting behavior in the united states for instance the model predicts a split tickets where some voters vote for one party for president and the other for congress b for some parameter values a divided government with different parties controlling the executive and the majority of the legislature and c the midterm electoral cycle with the party holding the presidency always losing votes in midterm congressional elections

the dynamic in efficiency of monetary policy by committee this paper develops a model where the value of the monetary policy instrument is selected by a heterogenous committee engaged in a dynamic voting game committee members differ in their institutional power and in certain states of nature they also differ in their preferred instrument value preference heterogeneity and concern for the future interact to generate decisions that are dynamically inefficient and inertial around the previously agreed instrument value this model endogenously generates autocorrelation in the policy variable and helps explain the empirical observation that the distribution of actual interest rate changes has a mode of zero

how serious is the neglect of intrahousehold inequality in this report the authors develop a framework for assessing the consequences of ignoring intrahousehold inequality in the measurement and analysis of poverty and inequality they apply this framework to data for the philippines and conclude that 1 the result of neglecting intrahousehold inequality will probably be considerable understatement of the levels of poverty and inequality with the philippine data measured levels of inequality and poverty were off 30 percent as a result of ignoring intrahousehold variation and 2 patterns of inequality revealed by household level data are somewhat different from patterns revealed by individual level data but the differences seem not to be dramatic to confirm these results the exercise should be repeated with data from other countries

a non parametric revealed preference test of optimal intra firm resource allocation the collective rationality hypothesis initiated by chiappori 1988a and applied by seaton 1997 2001 for a two person household is used to distinguish the organizational behaviour of firms firms produce satisfaction to groups as traditional managerial and early behavioural theories of the firm of williamson baumol and marris suggest as well as more modern principle agent models under certain conditions intra firm bargaining leads to a pareto optimal outcome what makes this work an important contribution is that it identifies a set of nonvacuous testable restrictions to empirically detect if firm level data satisfy pareto optimal behaviour for the main decision makers in the organization

dynamic female labor supply the increase in female employment and participation rates is one of the most dramatic changes to have taken place in the economy during the last century however while the employment rate of married women more than doubled during the last 50 years that of unmarried women remained almost constant to empirically analyze these trends we estimate a female dynamic labor supply model using an extended version of eckstein and wolpin 1989 to compare the various explanations in the literature for the observed trends this dynamic model provides a much better fit to the life cycle employment pattern than a static version of the model and a standard static reduced form model heckman 1979 the main finding using the dynamic model is that the rise in education levels accounts for about 33 percent of the increase in female employment and the rise in wages and narrowing of the gender wage gap account for another 20 percent while about 40 percent remains unexplained by observed household characteristics we show that this unexplained portion can be empirically attributed to cohort specific changes in preferences or the costs of child rearing and household maintenance finally the decline in fertility and the increase in divorce rates account for only a small share of the increase in female employment rates

succession financing in family firms business succession is one of the primary management challenges for family firms however many family firms fail at this task because of financial issues although a vast number of studies have investigated the succession process research thus far has failed to determine how and why family firms select particular forms of financing for succession related expenditures accordingly this study conceptually and empirically investigates succession financing we introduce a conceptual framework that investigates the reasons behind an owner manager s intent to use debt for succession financing specifically our model accounts for general and succession related personal factors however we also include a set of firm specific financing behavioral controls in our research the empirical results are derived from a sample of 187 german family firms and the results highlight financial knowledge attitudes succession experience and succession planning as significant determinants of the owner managers debt usage intentions the implications and avenues for future research are discussed

collective labor supply and welfare the paper develops a general collective model of household labor supply in which agents are characterized by their own possibly altruistic preferences and household decisions are only assumed to be pareto efficient an alternative interpretation is that there are two stages in the internal decision process agents first share nonlabor income according to some given sharing rule then each one optimally chooses his or her own labor supply and consumption this setting is shown to generate testable restrictions on labor supplies moreover the observation of labor supply behavior is sufficient for recovering individual preferences and the sharing rule up to a constant finally the traditional tools of welfare analysis can be adapted to the new setting

capital structure decision making a model for family business abstract most theoretical and empirical studies of capital structure focus on public corporations only a limited number of studies on capital structure have been conducted on small to medium size enterprises smes and this deficiency is particularly evident in investigations into factors that influence funding decisions of family business owners theory indicates that there is a complex array of factors that influence sme owner managers financing decisions recent family business literature suggests that these processes are influenced by firm owners attitudes toward the utility of debt as a form of funding as moderated by external environmental conditions e g financial and market considerations a number of other factors have been shown to influence financing decisions including culture entrepreneurial characteristics entrepreneurs prior experiences in capital structure business goals business life cycle issues preferred ownership structures views regarding control debt equity ratios and short vs long term debt age and size of the firm sources of funding for growth attitudes toward debt financing issues relating to independence and control and perceived risk and attitudes toward personal risk although these factors have been identified until now there does not appear to have been any attempts to develop empirically based models that show relationships between these factors and family business owners financing decisions utilizing theories derived from divergent disciplines this study develops an empirically tested structural equation model of financing antecedents of family businesses participants of our study involved a random sample of 5000 business owners who were mailed a 250 item australian family and private business questionnaire developed specifically for this investigation notably our findings reveal that firm size family control business planning and business objectives are significantly associated with debt small family businesses and owners who do not have formal planning processes in place tend to rely on family loans as a source of finance however family businesses in the service industry e g retailers and wholesalers are less likely to use family loans as are those owners who are planning to achieve growth through new products or process development use of capital and retained profits is likely for family businesses planning to achieve growth through an increase in sales but less is likely for family businesses in the manufacturing sector and lifestyle firms in addition debt and family loans are negatively related to capital and retained profits equity is a consideration for owners of large businesses young firms and owners who plan to achieve growth through increasing profit margins however equity is less likely to be a consideration for older family business owners and owners who have a preference for retaining family control our findings suggest that the interplay between multiple social family and financial factors is complex in addition our findings indicate the importance of utilizing theories that also help to explain behavioral factors e g owners needs to be in control that affect financial structure decision making processes practitioners and researchers should consider the dynamic interplay among business characteristics e g size or industry behavioral aspects of business financing e g business objectives and financial factors e g gearing levels when working with and researching family enterprises

saving to overcome borrowing constraints implications for small business entry and exit this paper shows how a dynamic analysis of entrepreneurial choice in which inter temporal savings plans can be adjusted to build up capital allows agents to overcome borrowing constraints this casts fresh doubt on the notion that borrowing constraints deter entrepreneurial entry in the long run impatient agents are shown to voluntarily remain constrained indefinitely whereas patient agents become entrepreneurs the model also explains temporary and permanent closures of viable businesses the model s predictions are consistent with evidence of greater savings behaviour by entrepreneurs

the political economy of inflation labour market distortions and central bank independence using the citizen candidate model we study the government s choice of institutions for the labour market and the central bank and derive the implications for inflation and employment we derive conditions for the existence of equilibria in which the labour market is distorted and the central bank is dependent or independent under a range of conditions affecting central bank dependence the post election cycle in inflation and employment and inflation bias our results imply that average inflation and inflation variability are lower under an independent central bank whereas employment variability can be lower or higher consistent with evidence for oecd countries many democratic societies delegate key tasks to non elected and independent institutions a prominent example being independent central banks the belief in the advantage of central bank independence is nursed by the cross country evi

central bank design in general equilibrium we study the effects of alternative institutional arrangements for the determination of monetary policy in the context of a capital theoretic general equilibrium economy we consider three institutional arrangements for determining monetary policy the first unconditional majority voting always leads to a substantial inflation bias the second a simple form of bargaining which we interpret as a policy board generally improves on the unconditional majority voting outcome finally we consider a constitutional rule which always achieves the social optimum

institutional inequality and tax incidence abstract this paper analyses the effects of taxation when inequality is not innate a theory of institutional inequality is presented which employs a trade model with circular production and the theory of clubs inequality is introduced by constraints on entry into sectors and local groups within sectors individual time is treated as a fixed factor of production and work and leisure are re defined the analysis suggests that when inequality is institutional and government policy does not alter the mechanisms by which institutions translate the distribution of power into the distribution of income a redistribution of income by conventional tax transfer schemes may not always be feasible

a bargaining model of partisan appointments to the central bank abstract in this paper a bargaining model is developed to analyze the appointment of central bankers in a two party political system the major results of the paper are 1 the party in power will appoint partisans early on but later appointments will be increasingly moderate in their views concerning monetary policy 2 changing the timing of the appointment of the board chairman from the end of a president s term in office to the first period of the president s term will lead to more partisan monetary policy 3 in equilibrium nominations to the board are not rejected thus confirmation hearings appear to be nothing more than a rubber stamp process 4 lengthening the terms on the board relative to the electoral cycle will lead to more moderate appointments to the central bank and a reduction in partisan policymaking

a test of the unitary and collective models of household labour supply this paper tests the unitary and the collective household labour supply models within a structural framework a nonlinear unrestricted household labour supply system is postulated and the set of parametric restrictions imposed by each model is derived our results generally reject the income pooling restrictions embodied in the unitary model also the symmetry of cross wage effects is rejected however the collective model is not rejected for groups with no pre school children

unravelling the global city debate on social inequality a firm level analysis of wage inequality in amsterdam and rotterdam in this article an assessment is made of the consequences of globalisation for urban wage inequality using data on employers in the dutch cities of amsterdam and rotterdam it is shown that simpl

the changing social structure of global cities professionalisation proletarianisation or polarisation this paper addresses a simple but very important question how has the occupational class structure of major world or global cities changed in recent decades this has major social and theoretica

social segregation housing tenure and social change in dutch cities in the late 1980s contemporary debates about social polarisation and divided cities emphasise common influences on social and economic change in cities the development of a global economy and of global influences on both market systems and on public policy regimes encourages an expectation that there is a convergence in processes and policies affecting cities and a convergence in outcomes in terms of increasingly similar patterns of polarisation and division this paper considers data from britain and the netherlands relating to changes in the housing sector and to social segregation and indicates that emerging patterns are very different socio tenurial polarisation and social segregation are not as marked in the netherlands as in britain and are not changing as fast the discussion arising from these data suggests that concern with globalisation and common influences on change should be balanced with a recognition of the importance of other factors in determining the pattern and pace of change in cities within this it is important to recognise not just differences in housing finance and policy but the degree of social and income inequality and the wider functioning of the welfare state

expenditure on children a rothbarth type method consistent with scale economies and parents bargaining abstract we suggest a new methodology to estimate the share of household income accruing to children the household behavior is represented according to the collective approach that is each household member is characterized by specific preferences following the principle of the rothbarth approach the identification of the children s share requires the observation of adult specific goods our method differs from this traditional approach in that it is compatible with economies of scale as well as with parents bargaining we illustrate the method with an application to the french household budget survey

committees with supermajority voting yield commitment with flexibility abstract a fundamental problem for government is how to combine commitment to certain policies with the flexibility required to adjust them when needed rogoff 1985 rogoff k 1985 the optimal degree of commitment to an intermediate monetary target q j econ 100 4 1169 1189 showed that a way to strike the right balance is to appoint an optimally conservative policy maker in real life however policy makers also have power over decisions where optimal plans are time consistent so delegating to a conservative person could be undesirable a flexible delegation device can be found in a large committee of randomly appointed members voting over policy after observing a shock when facing dynamic inconsistency under a single crossing property there exists a supermajority rule that implements the population median s optimally conservative policy maker with certainty another single crossing property guarantees that if simple majority voting is used to select the voting rule that will govern policy choice the supermajority preferred by the median is chosen for problems where dynamic inconsistency vanishes the committee will choose to make decisions by simple majority implementing median outcomes an application to monetary policy is developed we show that the optimal supermajority is higher when dynamic inconsistency is more severe when preferences are more homogeneous and when the economy is less volatile

intra household resource allocation an inferential approach if household income is pooled and then allocated to maximize welfare then income under the control of mothers and fathers should have the same impact on demand with survey data on family health and nutrition in brazil the equality of parental income effects is rejected unearned income in the hands of a mother has a bigger effect on her family s health than income under the control of a father for child survival probabilities the effect is almost twenty times bigger the common preference or neoclassical model of the household is rejected if unearned income is measured with error and income is pooled then the ratio of maternal to paternal income effects should be the same equality of the ratios cannot be rejected there is also evidence for gender preference mothers prefer to devote resources to improving the nutritional status of their daughters fathers to sons

on the empirical implementation of some game theoretic models of household labor supply this paper discusses some issues in the empirical implementation of game theoretic models of household labor supply in particular we focus on the identification problems inherent in many of these models as an illustration we estimate a game theoretic model which uses data on preferred working hours as additional identifying information

the spatial mismatch hypothesis what has the evidence shown this paper reviews 20 years worth of empirical evidence on the spatial mismatch hypothesis after briefly surveying the relevant models from urban and labour economics and recent trends in employment and population suburbanisation the empirical evidence on spatial effects is examined this literature includes evidence on the effects of residential segregation residential suburbanisation and employment suburbanisation and direct measures of access such as travel times the most recent evidence suggests that spatial mismatch is relevant for explaining black white employment differences though the magnitudes of these effects remain unclear

the empirical content of nash bargained household behavior in households whose allocation decisions can be represented as nash bargained household decisions extrahousehold environmental parameters eeps serve as pure shifters of the threat points the comparative statics of changes in demands due to changes in these eeps are given these are incorporated into a comprehensive statement of the empirical content of nash bargained household behavior including a nash generalization of barten s 1966 fundamental matrix equation of the theory of consumer demand estimation and data requirements are discussed along with nested testing of the following structure the neoclassical model is nested in the nash bargained model which in turn is nested in an unrestricted model of household demands emphasized throughout is the enriched menu of explanatory variables for demand analysis provided by the nash model as well as the model s ability to jointly analyze i household formation and ii intrahousehold allocation decisions

is the political business cycle for real abstract this paper constructs and examines a macroeconomic model which combines features from both real and political business cycle models we augment a standard real business cycle tax model by allowing for varying levels of government partisanship and competence in order to replicate two important empirical regularities first that on average the economy expands early under democratic presidents and contracts early under republican presidents second that presidents whose parties successfully retain the presidency have stronger than average growth in the second half of their terms the model generates both of these features that conform to u s post world war ii data

voting transparency in a monetary union we examine whether the monetary policy committee of a monetary union should publish its voting records when members are appointed by national politicians we show that the publication of voting records lowers overall welfare this finding also holds for arbitrary levels of private benefits from holding office and if governments incur costs when replacing committee members high private benefits of committee members always lower overall welfare as they induce nonpartisan members to care more about being reappointed than about beneficial policy outcomes nonrenewable but long terms for national committee members and delegating the appointment of all committee members to a union wide authority would be desirable

credibility and flexibility with independent monetary policy committees independent monetary policy committees are a simple way of attaining relatively low inflation without completely sacrificing an activist role for monetary policy if central bankers types are unknown then for a wide range of parameters an independent committee achieves higher social welfare than either a zero inflation rule or discretionary policy conducted by an opportunistic central banker a key reason for the committee s superior performance is that committee members are relatively likely to opt for low inflation and building a reputation when shocks are small when large shocks hit the economy the incentive to react outweighs the reputationbuilding benefit

monetary policy by committee consensus chairman dominance or simple majority this paper studies the theoretical and empirical implications of monetary policy making by committee under four different voting protocols the protocols are a consensus model where a supermajority is required for a policy change an agenda setting model where the chairman controls the agenda a dictator model where the chairman has absolute power over the committee and a simple majority model where policy is determined by the median member these protocols give preeminence to different aspects of the actual decision making process and capture the observed heterogeneity in formal procedures across central banks the models are estimated by maximum likelihood using interest rate decisions by the committees of five central banks namely the bank of canada the bank of england the european central bank the swedish riksbank and the u s federal reserve for all central banks results indicate that the consensus model fits actual policy decisions better than the alternative models this suggests that despite institutional differences committees share unwritten rules and informal procedures that deliver observationally equivalent policy decisions

growing unequal changes in the distribution of earnings across canadian cities this paper investigates changes in the distribution of earnings across 87 metropolitan areas in canada it does so using micro data taken from the 20 per cent long form sample of the census for the years 1996 2001 and 2006 results point to overall increases in urban inequality and to greater heterogeneity in inequality across the urban hierarchy with larger cities growing particularly unequal over time cross sectional and panel regression models suggest that city size unemployment deindustrialisation and the percentage of a city s population composed of visible minorities contribute to increased inequality in contrast a city s level of economic development has a mitigating effect on inequality although this effect appears to fade away over time the effects of changes in a city s age education and gender profiles on inequality are mixed

investments time preferences and public transfers paid to women abstract the literature suggests that men and women may have different preferences this paper exploits a social experiment in which women in treatment households were given a large public cash transfer progresa in an effort to disentangle the effect of additional income in the household from the effect of changing the distribution of income within the household the impact of progresa income on savings and investments decisions is compared with all other income sources after taking into account participation in the program additional money in the hands of women is spent on small livestock which are traditionally managed and cared for by women improved nutrition and child goods particularly clothing among single headed households progresa income is not treated differently from other income direct evidence on intertemporal preferences gathered in the mexican family life survey indicates that women are more patient than men when thinking about the future taken together the results suggest t