RBC Models of Small Open Economies
|
|
- Sophia Dean
- 6 years ago
- Views:
Transcription
1 RBC Models of Small Open Economies Enrique G. Mendoza University of Pennsylvania, NBER & PIER Based on: The Terms of Trade, the Real Exchange Rate, and Economic Fluctuations, International Economic Review, 36(1), Feb. 1995,
2 General motivation Use this paper as an example of a canonical RBC-SOE model with incomplete markets Discuss issues specific to the topic of the paper (the role of TOT in driving business cycles) but also focus on methodological issues: Second approach to study determination of wealth dynamics (Uzawa-Epstein preferences) Solution & calibration of multisector SOE model Role of wealth effects introduced by incomplete markets
3 Layout of the lecture 1. Review goals and related literature 2. Document cross country business cycle facts 3. Propose multi-sector RBC-SOE model 4. Characterize recursive social planner s problem 5. Describe solution method 6. Calibrate the model to IC and DC data 7. Examine quantitative implications
4 1. GOALS AND LITERATURE PERSPECTIVE
5 Literature on the relationship between the Terms of Trade and Trade balance 1950s papers by HLM Corr(TB,TOT)>0 because of propensity to import < s papers by OSR Deterministic intertemporal models. Positive relationship if TOT shock is transitory and lower as persistence rises 1990s Backus JIE, BKK IRBC papers Complete markets, DSGE Modeling Persistence of TOT does not matter 2010s SGU (2016), Zeev et al. (2016) Role of TOT in business cycles: news v. unexpected
6 Complete Markets-BKK models Country-specific TOT shocks are fully insurable with state-contingent assets, and thus persistence of TOT shocks is irrelevant Wealth and its cross-country distribution are timeand state-invariant Differences in preferences and underlying shocks determine eq. dynamics of both TOT and TB. 1. TOT does not fluctuate nearly enough in the models. 2. ρ(c,c*) << ρ(y,y*) in the data! Several stylized facts at odds w. these models Excessive consumption corrs., TOT, RER variability
7 Incomplete Markets Approach Wealth effects because of state-contingent wealth Countries with longer spells of high TOT are wealthier Self insurance against TOT shocks Persistence of TOT shocks matters, but at equilibrium it can be offset by differences in other properties of shocks or the structure of preferences and technology.
8 What is the paper about? Analysis of cross-country business cycle facts, particularly the relationship between TB & TOT Corr(TOT,TB) favors Harberger-Laursen-Metzler (correlations are generally positive, but low). Does not seem to favor Obstfeld-Svensson-Razin: corr(tb,tot) unrelated to ρ(tot) DCs are more volatile than ICs, but high degree of uniformity in persistence and co-movement Analysis of cyclical implications of TOT & TFP shocks in an RBC-SOE model Model can explain cyclical dynamics of TB & TOT TOT shocks are important drivers of business cycles
9 2. CROSS COUNTRY STYLIZED FACTS OF BUSINESS CYCLES AND TERMS-OF-TRADE FLUCTUATIONS
10 The HLM Effect in Data
11 The HLM Effect in Data (Caputo, Irarrazabal & Romero, 2013)
12
13
14
15
16
17
18
19
20
21
22
23
24 3. MULTISECTOR RBC-SOE MODEL WITH INCOMPLETE MARKETS
25 Preferences Model-based approach to obtain well-defined stationary NFA distribution by adopting Uzawa- Epstein Stationary Cardinal Utility Infinitely-lived representative household consumes fours goods: Nontradables, n Exportables, x Importables, f Leisure, l
26 Stationary Cardinal Utility Endogenous rate of time preference introduces impatience effect, i.e. (rate of time preference is increasing in past consumption) Epstein JET 1983 provides axiomatic theory behind SCU and existence theorem for SCU as only expected utility function consistent with axioms. Also proves conditions for existence of unique, invariant distribution of wealth for linear and neoclassical storage technologies
27 Functional Forms for Preferences is implied by Epstein s SCU analysis. elasticity of substitution between & share of consumption of in (unitary elasticity) Frisch elasticity of labor supply semi-elasticity of rate of time preference w.r.t. [.]
28 Technology and Asset Markets
29 mean terms of trade stationary terms of trade shock stationary productivity shock to exportables capital stock allocated to exportables inelastic labor allocated to exportables share of labor income in exportables stationary productivity shock to importables capital stock allocated to importables inelastic labor allocated to importables share of labor income in importables aggregate, homogeneous capital in tradables depreciation rate
30 adjustment cost curvature NFA in non-contingent, one period debt world interest rate stationary TFP shock to nontradables industry inelastic capital stock in nontradables industry labor supply allocated to nontradables industry share of labor income in nontradables industry Model allows consumption & production of all goods Whether x is exported and f imported is an equilibrium outcome Note assumptions about factor mobility
31 Methodology 1. Characterize competitive eq. as planner s problem 2. Represent equilibrium in recursive form as solution to 3-dimesional stochastic DP problem 3. Simplify uncertainty with first-order Markov chains, assuming also symmetry and Simple Persistence 4. Design solution algorithm based on VFI 5. Calibrate model to SS representative of industrialized (developing) countries 6. Solve giving as input observed TOT processes and TFP shocks that match basic business cycle facts 7. Examine equilibrium co-movements (benchmark simulations, sensitivity analysis, impulse responses).
32 4. SOCIAL PLANNER S PROBLEM
33 Planner s problem in standard form is the multiplier on ( 4 ) is the multiplier on ( 5 ) is the multiplier on ( 6a ) is the multiplier on ( 6b )
34 First-order condition for exportables consumption X
35 First-order conditions for importables, nontradables and leisure
36 First-order conditions for factor allocations and Euler equations
37 Simplifying First-Order Conditions Define Lifetime marginal utilities as of date t Impatience effect Note that because of constant-elasticity functional forms, impatience effects cancel from marginal rates of substitution across x, f, n, l
38 Simplified optimality conditions
39 Simplified optimality conditions
40 Recursive Representation Express endogenous variables as recursive functions of states, where, and f as control variable 1. Use period utility (2), time preference function (3) and MRS between x and f (8) to obtain 2. Use nontradables market clearing (5), MRS between l and n (10) and (13) to get as solution to:
41 Recursive Representation 3. Use nontradables market clearing (5), MRS between n and f (9), and (13) and (14) to obtain and 4. Use equalization of marginal products of sectoral capital (11) and to get capital allocations
42 Recursive Planner s Problem Using (8)-(11) we obtain:
43 5. NUMERICAL SOLUTION METHOD
44 Simplifying Uncertainty Two-point, first-order, symmetric Markov processes and perfectly correlated TFP shocks Markov processes under Simple Persistence: is long run probability of ( )
45 Simple Persistence Rule Long run probability of state j Simple persistence parameter Transition prob between states i and j
46 Simple Persistence Rule Vector of realizations: Transition probability matrix
47 Unconditional Moments of Shocks Symmetry conditions: Expected values are zero:
48 Unconditional Moments of Shocks Variances and std. devs.: AR(1) s are common and equal to :
49 Unconditional moments of shocks Contemporaneous correlation: Given from the data we can check if SP is reasonable and we can calibrate the Markov chain
50 Discrete Recursive Planner s Problem Recover recursive planner s problem: Use discrete grids for to define the state space of dimensions JxHX4 Capital, NFA grids can be centered at det. steady state
51 Value Function Iteration Algorithm Standard VFI: Make initial guess of the value function and iterate on the Bellman equation: s.t. within the set is o.k.) Tips: Decision rules converge faster Faster if combined with policy function iteration
52 Standard VFI Solution Method
53 Computing stochastic steady state The stochastic steady state is the unique, invariant stationary distribution of capital, NFA and shocks Solved by converging on the law of motion of conditional probabilities
54 Computing stochastic steady state Moments of all of the model s variables can be computed using the limiting distribution of states Impulse response functions can be computed by calculating the OLS coefficients of the system:
55 6. CALIBRATION
56 Calibration for Industrial (Developing) Country Baselines TFP and TOT shocks: Preferences: Technology
57 Using Deterministic Steady State for Calibration Parameters: these G7 averages: plus 1. from KHS, 1975 point estimate 2. IMF data, UNCTAD Endogenous: Solve for the endogenous variables using det. SS simultaneous equation system
58 Steady State Equation System Capital allocations solve a three-equation block recursive system: The rest of the variables are obtained from a 9- equation nonlinear simultaneous eq. system
59 Steady State Equation System
60 Steady State Equation System
61 7. RESULTS OF THE QUANTITATIVE ANALYSIS
62 Can the model explain the HLM Effect? is low and positive in the model, although a bit lower than in the data v in G7 data v in DC data Structural parameter differences explain lack of co-movement between and AR(1) of TOT. Even though AR(1) of > AR(1) of, is slightly higher
63 Matching the cross section of the HLM effect Take IC and DC benchmarks Solve the model 30 times using actual AR(1) s of TOT for each of 30 countries in Table 1 Regress simulated on AR(1) coefficients and plot simulated line in Figure 2 Low and positive independent of TOT autocorrelations are consistent with DSGE model of SOE with incomplete markets
64 HLM correlations in data and model
65 What determines the TB-TOT correlation Sensitivity analysis varying IC benchmark parameters to DC benchmark one at a time Higher AR(1) of TOT, caeteris paribus, implies lower, as in OSR models but also changes with the other parameters, and it is particularly sensitive to changes in variance-covariance structure of the shocks.
66
67 Business Cycle Moments Moments for IC/DC benchmarks in Tables 7, 8 Valued at import prices and at aggregate prices CPI: Given CES, there is an expenditure function PC = E where Used to compute RER and domestic interest rate, which is risk-free return in units of C:
68 Lessons from Business Cycle Moments TOT shocks explain 49% of G7 and 56% of DC output fluctuations Model explains 40-50% of the variability of RER and is consistent with procyclical RER Model produces large interest rate differentials (3.6% for ICs, 4.6% for DCs), with low and positive correlations with RER Uniformity of business cycles across DCs and ICs is replicated for the most part (except TB/Y) Model matches several qualitative features, but quantitatively it is not a perfect match
69 Impulse response functions: Aggregates (measured at import prices) Terms of trade Productivity
70 Impulse response functions: Sectoral Terms of trade Productivity
Technical Appendix. Resolution of the canonical RBC Model. Master EPP, 2010
Technical Appendix Resolution of the canonical RBC Model Master EPP, 2010 Questions What are the causes of macroeconomic fluctuations? To what extent optimal intertemporal behavior of households in a walrasssian
More informationHyperbolic Discounting and Consumer Patience During Financial Crises in Korea *
Hyperbolic Discounting and Consumer Patience During Financial Crises in Korea * Yoonseok Choi ** Suffolk University Sunghyun Kim *** Sungkyunkwan University and Suffolk University January 2014 * This work
More informationEndogenous Business Cycles and the Dynamics of Output, Hours, and Consumption
Endogenous Business Cycles and the Dynamics of Output, Hours, and Consumption By STEPHANIE SCHMITT-GROHÉ* This paper studies the business-cycle fluctuations predicted by a two-sector endogenous-business-cycle
More informationTrends and Cycles in Small Open Economies: Making The Case For A General Equilibrium Approach *
Federal Reserve Bank of Dallas Globalization and Monetary Policy Institute Working Paper No. 279 http://www.dallasfed.org/assets/documents/institute/wpapers/2016/0279.pdf Trends and Cycles in Small Open
More informationMonopolistic competition, endogenous markups, and growth
ELSEVIER European Economic Review 38 (1994) 748-756 EUROPEAN ECONOMIC REVIEW Monopolistic competition, endogenous markups, and growth Jordi Gali Gruduute School of Business, Columbia University, 607 Uris
More informationEnergy-Saving Technological Change and the Great Moderation
; ISSN 1916-971X E-ISSN 1916-9728 Published by Canadian Center of Science and Education Energy-Saving Technological Change and the Great Moderation Takeshi Niizeki 1 1 Economic and Social Research Institute,
More informationThe Harrod-Balassa-Samuelson Effect: Reconciling the Evidence
The Harrod-Balassa-Samuelson Effect: Reconciling the Evidence ECB - BoC Workshop : Exchange Rates and Macroeconomic Adjustment 15-16 June 2011 Christiane Baumeister Ehsan U. Choudhri Lawrence Schembri
More informationCapital-Skill Complementarity and Inequality. Over the Business Cycle
Capital-Skill Complementarity and Inequality Over the Business Cycle Matthew J. Lindquist July 16, 22 Abstract This study investigates the implications of capital-skill complementarity for the cyclical
More informationNBER WORKING PAPER SERIES LUMPY INVESTMENT, LUMPY INVENTORIES. Rüdiger Bachmann Lin Ma. Working Paper
NBER WORKING PAPER SERIES LUMPY INVESTMENT, LUMPY INVENTORIES Rüdiger Bachmann Lin Ma Working Paper 17924 http://www.nber.org/papers/w17924 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue
More informationInnovation, Firm Dynamics, and International Trade
Federal Reserve Bank of Minneapolis Research Department Staff Report 444 April 2010 Innovation, Firm Dynamics, and International Trade Andrew Atkeson University of California, Los Angeles, Federal Reserve
More informationWRITTEN PRELIMINARY Ph.D. EXAMINATION. Department of Applied Economics. University of Minnesota. June 16, 2014 MANAGERIAL, FINANCIAL, MARKETING
WRITTEN PRELIMINARY Ph.D. EXAMINATION Department of Applied Economics University of Minnesota June 16, 2014 MANAGERIAL, FINANCIAL, MARKETING AND PRODUCTION ECONOMICS FIELD Instructions: Write your code
More informationLecture 1 : The Diamond- Mortensen- Pissarides framework
Lecture 1 : The Diamond- Mortensen- Pissarides framework ARNAUD CHÉRON (GAINS-TEPP, UNIVERSITY OF LE MANS) Attribution Non commercial - No Derivative Work : http://creativecommons.org/licenses/by-nc-nd/2.0/fr/
More informationThe relationship between innovation and economic growth in emerging economies
Mladen Vuckovic The relationship between innovation and economic growth in emerging economies 130 - Organizational Response To Globally Driven Institutional Changes Abstract This paper will investigate
More informationDistribution capital and the short- and long-run import demand elasticity
Distribution capital and the short- and long-run import demand elasticity Mario J. Crucini and J. Scott Davis August 2013 Abstract The elasticity of substitution between home and foreign goods is one of
More informationEstimation of a DSGE Model Lawrence J. Christiano
Estimation of a DSGE Model Lawrence J. Christiano Based on: Christiano, Eichenbaum, Evans, `Nominal Rigidities and the Dynamic Effects of a Shocks to Monetary Policy, JPE, 2005 Altig, Christiano, Eichenbaum
More information4. Unemployment (July 15, 2013)
Prof. Dr. Thomas Steger Advanced Macroeconomics II Lecture SS 2013 4. Unemployment (July 15, 2013) Introduction Neoclassical model Basic efficiency wage model Shapiro-Stiglitz model Search and matching
More informationMACROECONOMICS OF SUBSISTENCE POINTS
Macroeconomic Dynamics, 12 (Supplement 1), 28, 136 147. Printed in the United States of America. DOI: 1.117/S1365157795 MACROECONOMICS OF SUBSISTENCE POINTS MORTEN O. RAVN European University Institute
More informationGACE Economics Assessment Test at a Glance
GACE Economics Assessment Test at a Glance Updated June 2017 See the GACE Economics Assessment Study Companion for practice questions and preparation resources. Assessment Name Economics Grade Level 6
More informationContents in Brief. Preface
Contents in Brief Preface Page v PART 1 INTRODUCTION 1 Chapter 1 Nature and Scope of Managerial Economics and Finance 3 Chapter 2 Equations, Graphs and Optimisation Techniques 21 Chapter 3 Demand, Supply
More informationEconometría 2: Análisis de series de Tiempo
Econometría 2: Análisis de series de Tiempo Karoll GOMEZ kgomezp@unal.edu.co http://karollgomez.wordpress.com Primer semestre 2016 I. Introduction Content: 1. General overview 2. Times-Series vs Cross-section
More informationTime varying effects of oil price shocks on euro area exports
Time varying effects of oil price shocks on euro area exports F. Venditti (Banca d Italia) and M. Riggi (Banca d Italia) Pavia, March 25-26 2014 Pavia, March Motivation The changing effect of oil price
More informationEconomics. In an economy, the production units are called (a) Firm (b) Household (c) Government (d) External Sector
Economics The author of the book "The General Theory of Employment Interest and Money" is (a) Adam Smith (b) John Maynard Keynes (c) Alfred Marshall (d) Amartya Sen In an economy, the production units
More informationIntroduction to computable general equilibrium (CGE) Modelling
Introduction to computable general equilibrium (CGE) Modelling Organized by Economics and Social Commission for Western Asia (September 29, 2017) Beirut Presented by: Yves Surry: Professor at the Swedish
More informationLecture 3: Utility Functions
Lecture 3: Utility Functions Fatih Guvenen October 12, 2015 Fatih Guvenen Utility Functions October 12, 2015 1 / 22 Individual Preferences over (c,`) 1 Separable power utility (POW): U(c,`)= c1 1 2 Cobb-Douglas
More informationImperfect Competition in CGE Models: Theory, Techniques, Applications
Imperfect Competition in CGE Models: Theory, Techniques, Applications EAERE-FEEM-VIU Summer School 2006 Roberto Roson Ca'Foscari University of Venice Fondazione Eni Enrico Mattei Outline and relevant questions
More informationFirm Innovation and Financial Analysis: How Do They Interact?
: How Do They Interact? Jim Goldman University of Toronto Joel Peress INSEAD, CEPR 1 An example: Barr Laboratories 90 25 80 70 UNTIL 1997 Pure generic drugs manufacturer FROM 1997 Starts to develop own
More informationTrade Liberalization and Inequality: a Dynamic Model with Firm and Worker Heterogeneity
Trade Liberalization and Inequality: a Dynamic Model with Firm and Worker Heterogeneity Matthieu Bellon IMF November 30, 2016 Matthieu Bellon (IMF) Trade Liberalization and Inequality 1 / 22 Motivation
More informationRemarks on Central banker s modeling toolbox: one-for-all or all-for-one
Remarks on Central banker s modeling toolbox: one-for-all or all-for-one Raf Wouters (NBB) Workshop on Central Bank Models: The Next Generation, Bank of Canada, November 17, 2016 National Bank of Belgium
More informationLecture 9. Income disparity among countries Endogenous growth: a model of human capital accumulation
Lecture 9 Income disparity among countries Endogenous growth: a model of human capital accumulation We ve said that the Solow growth model was a good model to explain growth as it was able to replicate
More informationChapter 11 Market-Clearing Models of the Business Cycle 108
Problems 1. The response to a temporary change in government spending in the real business cycle model is the same as the response to such a disturbance in the monetary intertemporal model, as the two
More informationSample Paper-05 ( ) Economics Class XII. Time allowed: 3 hours Maximum Marks: 100
Sample Paper-05 (2016-17) Economics Class XII Time allowed: 3 hours Maximum Marks: 100 Answers 1. (b) How to produce. 2. (c) tea and coffee 3. (c) Contraction of demand. 4. PPC shift when (i) resources
More informationEIEF Working Paper 09/10 April Oil and the Macroeconomy: A Quantitative Structural Analysis
EIEF WORKING PAPER series IEF Einaudi Institute for Economics and Finance EIEF Working Paper 9/ April Oil and the Macroeconomy: A Quantitative Structural Analysis by Francesco Lippi (University of Sassari
More informationSpecific Learning Goals/Benchmarks and Student Assessment. AP Macroeconomics
Unit Bartram Trail HS Specific Learning Goals/Benchmarks and Student Assessment AP Macroeconomics # Benchmark Assessment 1 1 1 2 1 3 1 4 2 5 2 6 3 7 3 8 3 9 3 10 3 11 4 12 4 13 4 14 4 15 4 16 4 17 Define
More informationUNIVERSITY OF WISCONSIN DEPARTMENT OF ECONOMICS. MACROECONOMICS THEORY Preliminary Exam. August 10, :00 am - 2:00 pm
UNIVERSITY OF WISCONSIN DEPARTMENT OF ECONOMICS MACROECONOMICS THEORY Preliminary Exam 9:00 am - 2:00 pm INSTRUCTIONS Please place a completed label (from the label sheet provided) on the top right corner
More informationMANAGERIAL ECONOMICS WILEY A JOHN WILEY & SONS, INC., PUBLICATION. A Mathematical Approach
MANAGERIAL ECONOMICS A Mathematical Approach M. J. ALHABEEB L. JOE MOFFITT Isenberg School of Management University of Massachusetts Amherst, MA, USA WILEY A JOHN WILEY & SONS, INC., PUBLICATION PREFACE
More informationNEW KEYNESIAN THEORY: MONOPOLY PRICING MARCH 29, 2010 RELEVANT MARKET STRUCTURE(S)? Introduction
NEW KEYNESIAN THEORY: MONOPOLY PRICING MARCH 29, 200 Introduction RELEVANT MARKET STRUCTURE(S)? Real business cycle (RBC)/neoclassical theory All (goods) prices are determined in perfect competition In
More informationThe Effect of CO2 Emissions Reduction on the U.S. Electricity Sector
The Effect of CO2 Emissions Reduction on the U.S. Electricity Sector Jeffrey Anspacher, Stefan Osborne, Julian Richards 1 Office of Competition and Economic Analysis International Trade Administration
More informationAdvanced Macroeconomics I
Advanced Macroeconomics I Professors: Luisa Fuster and Felix Wellschmied UC3M September 1, 2015 Dates. Monday and Thursday 15:00 to 17:15. Final Exam: TBA. Objective. The objective of the course is to
More informationThree Essays on the Economics of Carbon Sequestration, Timber Production and Land Use DISSERTATION
Three Essays on the Economics of Carbon Sequestration, Timber Production and Land Use DISSERTATION Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate
More informationPRINCIPLES OF ECONOMICS PAPER 3 RD
PRINCIPLES OF ECONOMICS PAPER 3 RD Question 1 Objectives. Select appropriate alternative. (A) The meaning of the world Economic is most closely associated with the word. (a) Free (b) Scarce (c) Unlimited
More informationEcon 792. Labor Economics. Lecture 6
Econ 792 Labor Economics Lecture 6 1 "Although it is obvious that people acquire useful skills and knowledge, it is not obvious that these skills and knowledge are a form of capital, that this capital
More informationMANAGERIAL ECONOMICS THEORY, APPLICATIONS, AND CASES EIGHTH EDITION. W.Bruce Allen The Wharton School University of Pennsylvania
MANAGERIAL ECONOMICS THEORY, APPLICATIONS, AND CASES EIGHTH EDITION W.Bruce Allen The Wharton School University of Pennsylvania Neil A. Doherty The Wharton School University of Pennsylvania Keith Weigelt
More informationResponse of Inequality to a Growth Rate Slowdown in Japanese Economy during the Lost Decades
Response of Inequality to a Growth Rate Slowdown in Japanese Economy during the Lost Decades N. Sudo, M. Suzuki, T. Yamada May 27, 2014@CIGS Response of Inequality to a Growth Rate Slowdown N. Sudo, M.
More informationTHE PERMANENT INCOME HYPOthesis: REGARDING THE HOUSING BOOM
Clemson University TigerPrints All Theses Theses 8-2013 THE PERMANENT INCOME HYPOthesis: REGARDING THE HOUSING BOOM Nick Havers Clemson University, nhavers@g.clemson.edu Follow this and additional works
More informationSyllabus and Reading list Graduate Macro 3 - (Macro Finance) Xavier Ragot
Syllabus and Reading list Graduate Macro 3 - (Macro Finance) Xavier Ragot xavier.ragot@sciencespo.fr Teaching Assistant: Thomas Bourany thomas.bourany@sciencespo.fr This course aims at introducing the
More informationDynamics of Consumer Demand for New Durable Goods
Dynamics of Consumer Demand for New Durable Goods Gautam Gowrisankaran Marc Rysman University of Arizona, HEC Montreal, and NBER Boston University December 15, 2012 Introduction If you don t need a new
More informationAgricultural Business on Price & Quantity of Hog and Economics Perspective on Tendency in Future
Agricultural Business on Price & Quantity of Hog and Economics Perspective on Tendency in Future Suppanunta Romprasert Assumption University ABAC (Suvarnabhumi Campus) SM326 88 Moo 8 Bang Na-Trad 26 Km.
More informationOil Price Movements and the Global Economy: A Model-Based Assessment
IMF Staff Papers Vol. 55, No. & 8 International Monetary Fund Oil Price Movements and the Global Economy: A Model-Based Assessment SELIM ELEKDAG, RENÉ LALONDE, DOUGLAS LAXTON, DIRK MUIR, and PAOLO PESENTI
More informationThe Weak Job Recovery in a Macro Model of Search and Recruiting Intensity
FEDERAL RESERVE BANK OF SAN FRANCISCO WORKING PAPER SERIES The Weak Job Recovery in a Macro Model of Search and Recruiting Intensity Sylvain Leduc Bank of Canada Zheng Liu Federal Reserve Bank of San Francisco
More informationStatistics and Data Analysis. Paper
Paper 245-27 Neural Networks and Genetic Algorithms as Tools for Forecasting Demand in Consumer Durables (Automobiles) Paul D. McNelis, Georgetown University, Washington D.C. Jerry Nickelsburg, Economic
More informationTechnology shocks around the world
Technology shocks around the world Martial Dupaigne Patrick Fève April 7, 25 Abstract This article studies the effects on employment of permanent technology shocks in the major seven developed countries.
More informationETSG 2015 PARIS 17th Annual Conference, September 2015 Université Paris 1 Panthéon Sorbonne
ETSG 2015 PARIS 17th Annual Conference, 10 12 September 2015 Université Paris 1 Panthéon Sorbonne Institutional quality and contract complexity: the effects on the intensive and extensive margins of trade
More informationChapter 9: Static Games and Cournot Competition
Chapter 9: Static Games and Cournot Competition Learning Objectives: Students should learn to:. The student will understand the ideas of strategic interdependence and reasoning strategically and be able
More informationMERIT. Short Overview Document. Prepared for: NZTA. Date: June 2016 Status: Draft Final
MERIT Short Overview Document Prepared for: NZTA Date: June 2016 Status: Draft Final MERIT A Short Overview Document Prepared for New Zealand Transport Agency Authors: Nicola Smith and Garry McDonald Market
More informationECN 3103 INDUSTRIAL ORGANISATION
ECN 3103 INDUSTRIAL ORGANISATION 5. Game Theory Mr. Sydney Armstrong Lecturer 1 The University of Guyana 1 Semester 1, 2016 OUR PLAN Analyze Strategic price and Quantity Competition (Noncooperative Oligopolies)
More informationQuantitative Subject. Quantitative Methods. Calculus in Economics. AGEC485 January 23 nd, 2008
Quantitative Subect AGEC485 January 3 nd, 008 Yanhong Jin Quantitative Analysis of Agribusiness and Agricultural Economics Yanhong Jin at TAMU 51 1 Quantitative Methods Calculus Statistics Regression analysis
More informationEconomics. Synopsis. 1. Economic Concepts, Issues and Tools. 2. An Overview of Economics. Sections. Learning Summary. Sections
Synopsis Economics 1. Economic Concepts, Issues and Tools 1.1 Introduction 1.2 Scarcity and Choice 1.3 Preferences, Resources and Economic Efficiency 1.4 Marginal Analysis and Opportunity Cost 1.5 Different
More informationSubstitutability and Competition in the Dixit-Stiglitz Model
DISCUSSION PAPER SERIES IZA DP No. 1007 Substitutability and Competition in the Dixit-Stiglitz Model Winfried Koeniger Omar Licandro February 2004 Forschungsinstitut zur Zukunft der Arbeit Institute for
More informationPh.D. Defense: Resource Allocation Optimization in the Smart Grid and High-performance Computing Tim Hansen
Ph.D. Defense: Resource Allocation Optimization in the Smart Grid and High-performance Computing Tim Hansen Department of Electrical and Computer Engineering Colorado State University Fort Collins, Colorado,
More informationThe Role of Education for the Economic Growth of Bulgaria
MPRA Munich Personal RePEc Archive The Role of Education for the Economic Growth of Bulgaria Mariya Neycheva Burgas Free University April 2014 Online at http://mpra.ub.uni-muenchen.de/55633/ MPRA Paper
More informationLECTURE 13 THE NEOCLASSICAL OR WALRASIAN EQUILIBRIUM INTRODUCTION
LECTURE 13 THE NEOCLASSICAL OR WALRASIAN EQUILIBRIUM INTRODUCTION JACOB T. SCHWARTZ EDITED BY KENNETH R. DRIESSEL Abstract. Our model is like that of Arrow and Debreu, but with linear Leontief-like features,
More informationUNIT 4 PRACTICE EXAM
UNIT 4 PRACTICE EXAM 1. The prices paid for resources affect A. the money incomes of households in the economy B. the allocation of resources among different firms and industries in the economy C. the
More informationOPTIMAL LABOR CONTRACTS, IMPERFECT COMPETITION AND UNDREMPLOYMENT EQUILIBRIA: A FRAMEWORK FOR ANALYSIS. Working Paper No. 2060
NBER WORKING PAPER SERIES OPTIMAL LABOR CONTRACTS, IMPERFECT COMPETITION AND UNDREMPLOYMENT EQUILIBRIA: A FRAMEWORK FOR ANALYSIS Russell Cooper Working Paper No. 2060 NATIONAL BUREAU OF ECONOMIC RESEARCH
More informationMarket integration and competition
Market integration and competition Jan De Loecker Princeton University and KU Leuven NBER and CEPR World Bank Poverty Summer University July 21, 2017 Talking points Short overview on nexus competition-trade-firm
More informationGerard F. Carvalho, Ohio University ABSTRACT
THEORETICAL DERIVATION OF A MARKET DEMAND FUNCTION FOR BUSINESS SIMULATORS Gerard F. Carvalho, Ohio University ABSTRACT A theoretical derivation of a market demand function is presented. The derivation
More informationNBER WORKING PAPER SERIES
NBER WORKING AER SERIES TE RESONSIVENESS O CONSUMER RICES TO EXCANGE RATES AND TE IMLICATIONS OR EXCANGE-RATE OLICY: A SURVEY O A EW RECENT NEW OEN-ECONOMY MACRO MODELS Charles Engel Working aper 875 http://www.nber.org/papers/w875
More informationVertical Integration and Distance to Frontier
Vertical Integration and Distance to Frontier The Harvard community has made this article openly available. Please share how this access benefits you. Your story matters. Citation Published Version Accessed
More informationR&D in WorldScan. Paul Veenendaal. CPB Netherlands Bureau for Economic Policy Analysis. R&D in WorldScan
Paul Veenendaal CPB Netherlands Bureau for Economic Policy Analysis WorldScan General equilibrium (micro foundations) Interaction: markets, countries and sectors (GTAP-7 classifications) Recursively dynamic
More informationShould Private Storage Be Subsidized to Stabilize Agricultural Markets after Price Support Schemes Are Removed?
IFPRI Discussion Paper 01205 August 2012 Should Private Storage Be Subsidized to Stabilize Agricultural Markets after Price Support Schemes Are Removed? A General Equilibrium Analysis Applied to European
More informationUS climate change impacts from the PAGE2002 integrated assessment model used in the Stern report
Page 1 of 54 16 November 27 US climate change impacts from the PAGE22 integrated assessment model used in the Stern report Chris Hope & Stephan Alberth Judge Business School, University of Cambridge, UK
More informationDiscount Rates, Learning by Doing and Employment Fluctuations
Discount Rates, Learning by Doing and Employment Fluctuations Patrick Kehoe Virgiliu Midrigan Elena Pastorino October 2015 Abstract We revisit the Shimer (2005) puzzle in a search and matching model with
More informationDYNAMICS OF ELECTRICITY DEMAND IN LESOTHO: A KALMAN FILTER APPROACH
DYNAMICS OF ELECTRICITY DEMAND IN LESOTHO: A KALMAN FILTER APPROACH THAMAE Retselisitsoe Isaiah National University of Lesotho THAMAE Leboli Zachia National University of Lesotho THAMAE Thimothy Molefi
More informationEFFECTS OF UNILATERAL TRADE LIBERALIZATION IN SOUTH ASIAN COUNTRIES: Applications of CGE Models of Bangladesh, India, Nepal, Pakistan and Sri Lanka
ESCAP SOUTH AND SOUTH-WEST ASIA OFFICE EFFECTS OF UNILATERAL TRADE LIBERALIZATION IN SOUTH ASIAN COUNTRIES: Applications of CGE Models of Bangladesh, India, Nepal, Pakistan and Sri Lanka Selim Raihan DEVELOPMENT
More informationNBER WORKING PAPER SERIES SHOULD WE GIVE UP AFTER SOLYNDRA? OPTIMAL TECHNOLOGY R&D PORTFOLIOS UNDER UNCERTAINTY
NBER WORKING PAPER SERIES SHOULD WE GIVE UP AFTER SOLYNDRA? OPTIMAL TECHNOLOGY R&D PORTFOLIOS UNDER UNCERTAINTY Mort Webster Karen Fisher-Vanden David Popp Nidhi Santen Working Paper 21396 http://www.nber.org/papers/w21396
More informationStagnant Smallholder Agriculture? Rice Yield Dynamics in the. Jean Claude Randrianarisoa Christopher B. Barrett
Stagnant Smallholder Agriculture? Rice Yield Dynamics in the Highlands of Madagascar Jean Claude Randrianarisoa i Christopher B. Barrett March 2007 Motivation Aggregate time series show stagnation in rice
More informationChapter 33: Terms of Trade
Chapter 33: Terms of Trade 1 The Terms of Trade The division of the gains from trade depends on the terms of trade. The terms of trade are measured by the ratio of the price of exports to the price of
More informationCh. 7 outline. 5 principles that underlie consumer behavior
Ch. 7 outline The Fundamentals of Consumer Choice The focus of this chapter is on how consumers allocate (distribute) their income. Prices of goods, relative to one another, have an important role in how
More informationDemand for red meat, poultry, and fish in Morocco: an almost ideal demand system
Agricultural Economics, 9 (1993) 155-163 Elsevier Science Publishers B.V., Amsterdam 155 Demand for red meat, poultry, and fish in Morocco: an almost ideal demand system Abdellah Mdafri Department of Agricultural
More informationUnit 8: Imperfect Competition II oligopoly and monopolistic competition
Unit 8: Imperfect Competition II oligopoly and monopolistic competition Prof. Antonio Rangel 1 Oligopoly Oligopoly: more than one firm, but not enough for perfect competition Firms have some market power
More informationModels of Creative Destruction (Quality Ladders)
Models of Creative Destruction (Quality Ladders) Prof. Lutz Hendricks November 6, 2017 1 / 46 Motivation We study models of process innovation ( quality ladders ). New issues: 1. Innovations replace existing
More informationNumerical Methods-Lecture XII: CGE Modelling
Numerical Methods-Lecture XII: CGE Modelling (See Harberger 1962, Shoven & Whalley 1984, Gallen & Mulligan 2014) Trevor Gallen Fall, 2015 1 / 56 First, an aside from last class Aren t hours inflexible?
More informationThis article presents an empirical model of U.S. consumer spending
The Wealth Effect in Empirical Life-Cycle Aggregate Consumption Equations Yash P. Mehra This article presents an empirical model of U.S. consumer spending that relates consumption to labor income and household
More informationCOORDINATING DEMAND FORECASTING AND OPERATIONAL DECISION-MAKING WITH ASYMMETRIC COSTS: THE TREND CASE
COORDINATING DEMAND FORECASTING AND OPERATIONAL DECISION-MAKING WITH ASYMMETRIC COSTS: THE TREND CASE ABSTRACT Robert M. Saltzman, San Francisco State University This article presents two methods for coordinating
More informationGetting Started with OptQuest
Getting Started with OptQuest What OptQuest does Futura Apartments model example Portfolio Allocation model example Defining decision variables in Crystal Ball Running OptQuest Specifying decision variable
More informationThe Limited Influence of Unemployment on the Wage Bargain
The Limited Influence of Unemployment on the Wage Bargain Robert E. Hall Hoover Institution and Department of Economics rehall@stanford.edu stanford.edu/ rehall Paul R. Milgrom Department of Economics
More informationEstimating Demand Elasticities of Meat Demand in Slovakia
Estimating Demand Elasticities of Meat Demand in Slovakia Daniela Hupkova (1) - Peter Bielik (2) (1) (2) Slovak University of Agriculture in Nitra, Faculty of Economics and Management, Department of Economics,
More informationFINALTERM EXAMINATION FALL 2006
FINALTERM EXAMINATION FALL 2006 QUESTION NO: 1 (MARKS: 1) - PLEASE CHOOSE ONE Compared to the equilibrium price and quantity sold in a competitive market, a monopolist Will charge a price and sell a quantity.
More informationPrice Setting in a Model with Production Chains: Evidence from Sectoral Data
WP/1/82 Price Setting in a Model with Production Chains: Evidence from Sectoral Data Maral Shamloo 21 International Monetary Fund WP/1/82 IMF Working Paper IMF Institute Price Setting in a Model with Production
More informationComment on A Macroeconomic Framework for Quantifying Systemic Risk by He and Krishnamurthy
Comment on A Macroeconomic Framework for Quantifying Systemic Risk by He and Krishnamurthy Chris Sims May 2, 2013 c 2013 by Christopher A. Sims. This document is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike
More informationLaw of Supply. General Economics
Law of Supply General Economics Supply Willing to Offer to the Market at Various Prices during Period of Time Able to Offer to the Market at Various Prices during Period of Time General Economics: Law
More informationChapter 3. Table of Contents. Introduction. Empirical Methods for Demand Analysis
Chapter 3 Empirical Methods for Demand Analysis Table of Contents 3.1 Elasticity 3.2 Regression Analysis 3.3 Properties & Significance of Coefficients 3.4 Regression Specification 3.5 Forecasting 3-2 Introduction
More informationChapter 3 Quantitative Demand Analysis
Chapter 3 Quantitative Demand Analysis EX1: Suppose a 10 percent price decrease causes consumers to increase their purchases by 30%. What s the price elasticity? EX2: Suppose the 10 percent decrease in
More informationBusiness Cycle Facts
Sectoral Employment and Aggregate Labor Market Business Cycle Facts Carol Cui Abstract This paper studies the slow job market recovery in the U.S. after each post-1990 recession from a sectoral perspective.
More informationProduct Market Regulation and Market Work: A Benchmark Analysis
ON THE CAUSES AND CONSEQUENCES OF STRUCTURAL REFORMS FEBRUARY 28 29, 2008 Product Market Regulation and Market Work: A Benchmark Analysis Lei Fang Arizona State University Richard Rogerson Arizona State
More informationUsing Elasticity to Predict Cost Incidence. A Definition & A Question. Who pays when payroll tax added to wage rate?
Using Elasticity to Predict Cost Incidence A Definition & A Question Definition of Incidence: the fact of falling upon; in this case, where costs fall A Question for you what does a statement like this
More informationFORECASTING THE GROWTH OF IMPORTS IN KENYA USING ECONOMETRIC MODELS
FORECASTING THE GROWTH OF IMPORTS IN KENYA USING ECONOMETRIC MODELS Eric Ondimu Monayo, Administrative Assistant, Kisii University, Kitale Campus Alex K. Matiy, Postgraduate Student, Moi University Edwin
More informationLeveraging Smart Meter Data & Expanding Services BY ELLEN FRANCONI, PH.D., BEMP, MEMBER ASHRAE; DAVID JUMP, PH.D., P.E.
ASHRAE www.ashrae.org. Used with permission from ASHRAE Journal. This article may not be copied nor distributed in either paper or digital form without ASHRAE s permission. For more information about ASHRAE,
More informationChapter 5: A Closed-Economy One-Period Macroeconomic Model
Chapter 5: A Closed-Economy One-Period Macroeconomic Model Introduce the government. Construct closed-economy one-period macroeconomic model, which has: (i) representative consumer; (ii) representative
More informationLiterature Review: Long-Run Economic Growth
Literature Review: Long-Run Economic Growth Effendy Juraimin California State University, Hayward Focusing on aggregate demand will only affect output level in the short run. When economy runs below capacity
More informationDIVERSE ORGANIZATIONS
DIVERSE ORGANIZATIONS AND THE COMPETITION FOR TALENT Jan Eeckhout 1,2 Roberto Pinheiro 1 1 University of Pennsylvania 2 UPF Barcelona Decentralization Conference Washington University Saint Louis April
More information