Creator: Crone, Theodore M. and Mills, Leonard O. (Leonard Orion), 1960- Series: System committee on agriculture and rural development Abstract:
Cointegration tests are used to examine the basic long-term relation between population and the housing stock. There is some weak evidence of a long-run relation between the constant-cost value of the housing stock and population-driven demand. Much stronger evidence exists for a long-term relation between owner-occupied housing units and the adult population. We generally cannot reject that the number of housing units intended for owner-occupancy has adjusted in proportion to the population 25 years of age and older. Using these results and current population projections, we produce trend forecasts through the year 2010 for the owner-occupied housing stock and single-family housing starts in the U.S.
Keyword: Population, Demographics, and Housing Subject (JEL): J11 - Demographic Trends, Macroeconomic Effects, and Forecasts ; General Migration and R31: Housing Supply and Markets
Creator: Kiyotaki, Nobuhiro and Wright, Randall D. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 464 Abstract:
The classical and early neoclassical economists knew that the essential function of money was its role as a medium of exchange. Recently, this idea has been formalized using search-theoretic noncooperative equilibrium models of the exchange process. The goal of this paper is to use a simple model of this class to analyze four substantive issues in monetary economics: the interaction between specialization and exchange, dual fiat currency regimes, the welfare improving role of money, and the susceptibility of monetary economies to extrinsic uncertainty.
Keyword: Fiat currency, Exchange, Monetary economics, Fiat money, and Money Subject (JEL): D83 - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness and E00 - Macroeconomics and Monetary Economics: General
Creator: Smith, Bruce D. (Bruce David), 1954-2002 and Stutzer, Michael J. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 410 Keyword: Farm Credit System, Assets, Dividends, Adverse selection, Risk, FCS, and Mutuals Subject (JEL): H81 - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
Creator: Goodfriend, Marvin and McDermott, John H. Series: Economic growth and development Abstract:
We explain how a long period of slow pre-industrial development triggers an Industrial Revolution that leads to modern balanced growth. Development in the preindustrial period is driven by increasing returns to specialization made possible by a growing population. Increasing access to specialized intermediate goods eventually makes fundamental technological innovation possible. Innovation initiates the Industrial Revolution, after which productivity grows endogenously regardless of population growth. Industrialization reconciles the crucial role of population early on with its weak relation to per capita product in developed economies. Faster population growth speeds early development, though if it results from a highly productive primitive technology, the consequences for development are ambiguous.
Keyword: Growth and Industrial Revolution Subject (JEL): O11 - Economic development - Macroeconomic analyses of economic development and N10 - Macroeconomics and monetary economics ; Growth and fluctuations - General, international, or comparative
Creator: Greenwood, Jeremy, 1953- and Jovanovic, Boyan, 1951- Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 446 Abstract:
A paradigm is presented where both the extent of financial intermediation and the rate of economic growth are endogenously determined. Financial intermediation promotes growth because it allows a higher rate of return to be earned on capital, and growth in turn provides the means to implement costly financial structures. Thus, financial intermediation and economic growth are inextricably linked in accord with the Goldsmith-McKinnon-Shaw view on economic development. The model also generates a development cycle reminiscent of the Kuznets hypothesis. In particular, in the transition from a primitive slow-growing economy to a developed fast-growing one, a nation passes through a stage where the distribution of wealth across the rich and poor widens.
Keyword: Kuznets curve, Rate of return, Income gap, Income distribution, Growth rate, and Financial intermediation Subject (JEL): G00 - Financial Economics: General and O11 - Macroeconomic Analyses of Economic Development
Creator: Chari, V. V. and Hopenhayn, Hugo Andres Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 375 Abstract:
This paper develops a model of vintage human capital in which each technology requires vintage specific skills. We examine the properties of a stationary equilibrium for our economy. The stationary equilibrium is characterized by an endogenous distribution of skilled workers across vintages. The distribution is shown to be single peaked and, under general conditions, there is a lag between the time when a technology appears and the peak of it's usage, a phenomenon known as diffusion. An increase in the rate of exogenous technological change shifts the distribution of human capital to more recent vintages thereby increasing the diffusion rate.
Keyword: Technology, Skills, Innovation, and Workers Subject (JEL): O41 - One, Two, and Multisector Growth Models, O31 - Innovation and Invention: Processes and Incentives, and J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
Creator: Chari, V. V. and Kehoe, Patrick J. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 125 Abstract:
This paper presents a simple general equilibrium model of optimal taxation similar to that of Lucas and Stokey (1983), except that we let the government default on its debt. As a benchmark, we consider Ramsey equilibria in which the government can precommit its policies at the beginning of time. We then consider sustainable equilibria in which both government and private agent decision rules are required to be sequentially rational. We concentrate on trigger mechanisms which specify reversion to the finite horizon equilibrium after deviations by the government. The main result is that no Ramsey equilibrium with positive debt can be supported by such trigger mechanisms.
Subject (JEL): E62 - Fiscal Policy and E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination