Risultati della ricerca
Creator: Mercenier, Jean and Schmitt, Nicolas Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 188 Abstract:
We argue that the rationalization gains often predicted by static applied general equilibrium models with imperfect competition and scale economies are artificially boosted by an unrealistic treatment of fixed costs. We introduce sunk costs into one such model calibrated with real-world data. We show how this changes the oligopoly game in a way significant enough to affect, both qualitatively and quantitatively, the outcome of a trade liberalization exercise.
Parola chiave: Market structure, Applied general equilibrium, Sunk costs, and Trade liberalization Soggetto: D58 - Computable and Other Applied General Equilibrium Models, C68 - Computable General Equilibrium Models, F17 - Trade: Forecasting and Simulation, and F12 - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
Creator: Fogli, Alessandra and Veldkamp, Laura Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 572 Abstract:
Does the pattern of social connections between individuals matter for macroeconomic outcomes? If so, where do these differences come from and how large are their effects? Using network analysis tools, we explore how different social network structures affect technology diffusion and thereby a country's rate of growth. The correlation between high-diffusion networks and income is strongly positive. But when we use a model to isolate the effect of a change in social networks, the effect can be positive, negative, or zero. The reason is that networks diffuse ideas and disease. Low-diffusion networks have evolved in countries where disease is prevalent because limited connectivity protects residents from epidemics. But a low-diffusion network in a low-disease environment needlessly compromises the diffusion of good ideas. In general, social networks have evolved to fit their economic and epidemiological environment. Trying to change networks in one country to mimic those in a higher-income country may well be counterproductive.
Parola chiave: Social networks, Economic networks, Disease , Development, Growth, Technology diffusion, and Pathogens Soggetto: I10 - Health: General, O10 - Economic Development: General, E02 - Institutions and the Macroeconomy, and O33 - Technological Change: Choices and Consequences; Diffusion Processes
Creator: Mercenier, Jean Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 183 Abstract:
Applied general equilibrium models with imperfect competition and economies of scale have been extensively used for analyzing international trade and development policy issues. They offer a natural framework for testing the empirical relevance of propositions from the industrial organization and new trade theoretical literature. This paper warns model builders and users that considerable caution is needed in interpreting the results and deriving strong policy conclusions from these models: in this generation of applied general equilibrium models, nonuniqueness of equilibria is not a theoretical curiosum, but a potentially serious problem. Disregarding this may lead to dramatically wrong policy appraisals.
Parola chiave: Trade agreement, International trade , Free trade, Scale economy , and Policy analysis
Creator: Mercenier, Jean and Yeldan, Erinç Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 207 Abstract:
We highlight an example of considerable bias in officially published input-output data (factor-income shares) by an LDC (Turkey), which many researchers use without question. We make use of an intertemporal general equilibrium model of trade and production to evaluate the dynamic gains for Turkey from currently debated trade policy options and compare the predictions using conservatively adjusted, rather than official, data on factor shares. We show that the predicted welfare gains are not only of a different order of magnitude, but in some cases, of a different sign, hence, suggesting contradictory policy recommendations.
Creator: Boldrin, Michele and Levine, David K. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 279 Abstract:
Market booms are often followed by dramatic falls. To explain this requires an asymmetry in the underlying shocks. A straightforward model of technological progress generates asymmetries that are also the source of growth cycles. Assuming a representative consumer, we show that the stock market generally rises, punctuated by occasional dramatic falls. With high risk aversion, bad news causes dramatic increases in prices. Bad news does not correspond to a contraction of existing production possibilities, but to a slowdown in their rate of expansion. This economy provides a model of endogenous growth cycles in which recoveries and recessions are dictated by the adoption of innovations.
Parola chiave: Growth Cycles, Stock Market Value, and Technological Revolutions Soggetto: O30 - Innovation; Research and Development; Technological Change; Intellectual Property Rights: General, O40 - Economic Growth and Aggregate Productivity: General, G12 - Asset Pricing; Trading Volume; Bond Interest Rates, and O41 - One, Two, and Multisector Growth Models
Creator: Cole, Harold Linh, 1957- and Ohanian, Lee E. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 295 Abstract:
Between 1913 and 1929, real GDP per person in the UK fell 1 percent, while this same measure of economic activity rose about 25 percent in the rest of the world. Why was Britain so depressed in a decade of strong economic activity around the world? This paper argues that the standard explanations of contractionary monetary shocks and an overvalued nominal exchange rate are not the prime suspects for killing the British economy. Rather, we argue that large, negative sectoral shocks, coupled with generous unemployment benefits and housing subsidies, are the primary causes of this long and deep depression.
Parola chiave: Unemployment benefits, Workweek restriction, and Sectoral shocks Soggetto: E30 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) and E24 - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Creator: McGrattan, Ellen R. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 454 Abstract:
Empirical studies quantifying the economic effects of increased foreign direct investment (FDI) have not provided conclusive evidence that they are positive, as theory predicts. This paper shows that the lack of empirical evidence is consistent with theory if countries are in transition to FDI openness. Anticipated welfare gains lead to temporary declines in domestic investment and employment. Also, growth measures miss some intangible FDI, which is expensed from company profits. The reconciliation of theory and evidence is accomplished with a multicountry dynamic general equilibrium model parameterized with data from a sample of 104 countries during 1980–2005. Although no systematic benefits of FDI openness are found, the model demonstrates that the eventual gains in growth and welfare can be huge, especially for small countries.
Parola chiave: Development, Technology capital, and Foreign direct investment Soggetto: F21 - International Investment; Long-term Capital Movements, F23 - Multinational Firms; International Business, and O32 - Management of Technological Innovation and R&D
Creator: Weber, Warren E. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 344 Abstract:
This study examines the pricing of U.S. state banknotes before 1860 using discount data from New York, Philadelphia, Cincinnati, and Cleveland. The study determines whether these banknotes were priced consistent with their expected net redemption value as securities are. The evidence is mixed. Prices for a bank’s notes were higher when the bank was redeeming its notes for specie than when it was not, and banknote prices generally reflected the costs of note redemption. However, the relationship between prices and redemption costs was not tight, and there were cases in which the notes of distant banks went at par.
Parola chiave: State Banks, Currency, and Bank Notes Soggetto: E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems and N21 - Economic History: Financial Markets and Institutions: U.S.; Canada: Pre-1913
Creator: Doepke, Matthias and Zilibotti, Fabrizio Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 354 Abstract:
We develop a positive theory of the adoption of child labor laws. Workers who compete with children in the labor market support the introduction of a child labor ban, unless their own working children provide a large fraction of family income. Since child labor income depends on family size, fertility decisions lock agents into specific political preferences, and multiple steady states can arise. The introduction of child labor laws can be triggered by skill-biased technological change that induces parents to choose smaller families. The model replicates features of the history of the U.K. in the nineteenth century, when regulations were introduced after a period of rising wage inequality, and coincided with rapidly declining fertility rates.
Parola chiave: Child Labor, Inequality, Fertility, and Voting Soggetto: J24 - Human Capital; Skills; Occupational Choice; Labor Productivity, J13 - Fertility; Family Planning; Child Care; Children; Youth, and J82 - Labor Standards: Labor Force Composition
Creator: Fernandez, Raquel, 1959- and Fogli, Alessandra Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 361 Abstract:
We study the effect of culture on important economic outcomes by using the 1970 census to examine the work and fertility behavior of women born in the U.S. but whose parents were born elsewhere. We use past female labor force participation and total fertility rates from the country of ancestry as our cultural proxies. These variables should capture, in addition to past economic and institutional conditions, the beliefs commonly held about the role of women in society (i.e., culture). Given the different time and place, only the beliefs embodied in the cultural proxies should be potentially relevant. We show that these cultural proxies have positive and significant explanatory power for individual work and fertility outcomes, even after controlling for possible indirect effects of culture. We examine alternative hypotheses for these positive correlations and show that neither unobserved human capital nor networks are likely to be responsible.
Parola chiave: Female labor force participation, Immigrants, Networks, Neighborhoods, Fertility, Cultural transmission, and Family Soggetto: J24 - Human Capital; Skills; Occupational Choice; Labor Productivity, J13 - Fertility; Family Planning; Child Care; Children; Youth, J22 - Time Allocation and Labor Supply, J16 - Economics of Gender; Non-labor Discrimination, and Z13 - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification