In this article, a production-theory-based model of firms' markup behavior is constructed. The theoretical structure is based on variants of generalized Leontief cost and expenditure functions. This ...framework yields a specification of behavior from which the impacts of both supply and demand shocks on firms' markup behavior can be assessed through elasticities. Adjustment costs on both labor and capital and economies of scale are incorporated. Estimation is carried out using manufacturing data for the United States and Japan from 1960 through 1981. The empirical results suggest that markups for manufacturing firms in both the United States and Japan have increased over time but have somewhat different cyclical characteristics stemming primarily from differential investment behavior. In addition, capacity utilization and especially returns to scale tend to counteract the short-run profit potential from markup behavior so that markups measured assuming constant returns are typically biased downward. Finally, both supply and demand shocks appear to have significant systematic impacts on markups.
The demand for money aggregates (M1, M2) and their components (currency, demand deposits, and time deposits) are estimated using a sample of 103 countries at two time periods. Money demand is found ...to be affected by age, literacy, industrial development, and political structure, as well as income and inflation. This expanded demand function helps to explain the considerable changes in money demand that have occurred over long periods and the large variation in money demand found across countries. The knowledge thus gained is useful for understanding differences in monetary and taxation policies across countries.
Using plant-level data from the U.S. steel industry, the paper tests and finds support for the hypothesis that firms in a contradicting industry first disinvest from, and then close, their high-cost ...plants. An investment decision model is estimated using a panel data set composed of the major replacement investments made in 43 steel plants during the years 1960-1981. The results indicate that the firms disinvested from those plants least likely to remain profitable in an environment of strong competition from imports and minimills, and stagnating domestic demand.
This article proposes an alternative methodology for modeling and forecasting seasonal series. The approach is in the Bayesian autoregression tradition pioneered by Doan, Litterman, and Sims and ...builds seasonality directly into the prior of the coefficients of the model by means of a set of uncertain linear restrictions. As an illustration, the method is applied to 10 U.S. quarterly macroeconomic series. For each series, I compare the forecasting performance of a univariate time-varying autoregressive model with seasonality built in the prior of the coefficients with five other widely used models.
Dans les modèles traditionnels de croissance, il est supposé que les ressources étrangères contribuent au développement économique en finançant des investissements dans les pays récepteurs de ...capitaux. Notre objectif, dans ce travail, est de mettre en évidence que cette fonction est loin d'avoir été remplie au cours des 20 dernières années dans les pays en voie de développement. Nous montrerons, en développant un simple modèle de portefeuille, que le financement externe semble avoir surtout financé l'épargne financière et les fuites de capitaux au détriment des investissements et de la consommation. In the economic literature, foreign capital inflows have mainly been justified with the argument that these funds could be used to increase investment and/or consumption. We argue in this paper that foreign resources have been used to increase financial savings and capital flights rather than investment and consumption in less developed countries. To illustrate this point we develop a simple portfolio model that is then estimated for Argentina over the 1960-81 period.
Using smallest space analysis we derive levels, paths, and rates of industrialization from the labor force distributions of 59 nations. Two smallest space dimensions are necessary to represent ...patterns of labor force change. The first reflects the overall level of industrialization; the second reveals a trade-off between the size of the manufacturing versus service sectors for nations at comparable levels of industrialization. After controlling for level of industrialization, we find that nations that emphasize manufacturing have more rapid rates of industrialization and higher status in the world system than nations that emphasize service industries.
"This paper is addressed to intraregional income inequalities in the Netherlands. Various concepts are used to measure the degree of regional poverty. In addition, dissimilarity between intraregional ...income distributions is studied. At the provincial level, relatively small and decreasing dissimilarities are observed. However, at lower spatial levels (especially within metropolitan areas) much larger dissimilarities in mean income and income distribution occur. In the Netherlands, urban poverty has become a more intense and widespread phenomenon than rural poverty."
An information-uncertainty form of the Hicks strike model is used to test earlier work on the role of forecasts and uncertainty in determining strike activity. The expected zero coefficients for ...economic forecasts appear in preferred equations, but the expected positive coefficient for inflation uncertainty often appears as significantly negative. Alternative formulations and reasoning make the results appear somewhat more plausible. The performance of the Hicks model is contrasted with an updated version of the Ashenfelter-Johnson (1969) model, which performs and predicts well without any untidy coefficients. Both models predict better than naive forecasting. Certain data and concept refinements are added to the testing of both analyses to bring them closer to the spirit of their models and to established research in wage determination and macroeconomics.
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