DEMOGRAPHICS, PRODUCTIVITY GROWTH AND THE MACROECONOMIC EQUILIBRIUM

This paper investigates the economic effects of demographics and productivity growth in an intertemporal optimizing model with age-based heterogeneity and induced retirement. Our analysis reveals that the projected "population aging" is likely to increase the growth rate of output and to improve the welfare of the economy, especially if there are no distortional policies which prevent retirement decisions from adjusting endogenously to the demographic changes. The economy also displays different patterns of dynamic adjustment in the quantity and price variables depending upon whether retirement is endogenous.     

CORPORATE PRODUCTIVITY GROWTH: CHAMPIONS, LEADERS, AND LAGGARDS

This paper examines the relative productivity growth performance of a sample of large UK firms between 1986 and 1995. We find that superior productivity growth, however measured, is not persistent—firms with high productivity growth rates relative to (say) the average in 1 yr are as likely as not to display below-average performance in the following year. Studying the determinants of the length of time for which firms outperform their peers, we find that innovative firms carrying low debt who are relatively free from financial distress are likely to display whatever persistently superior performance we observe in the data. ( JEL D24, O33, O4)     

THE DETERMINANTS AND STRUCTURE OF IMPORT SUBSTITUTION

In Latin America, import substitution is a synonym for industrialization. Influences having an effect on this process range from the capacity to import (a supply influence) to the output-induced demand for import substitutes in production. Relative prices, changed through the exchange rate, may also switch demand from imports to import substitutes. A time-series “test” using measures of these three variables showed that the sectoral capacity to import was the most important determinant of the pattern and variation in Argentine import substitution (1951–65). Left unanswered was the relative influence that world-market conditions, home consumption of exportables, or factor movements to industry may have had on import capacity. With a mean R² of only .42, it is clear that influences other than the three used have played a role in determining Argentine import substitution. Using measures of backward (demanding) and forward (supplying) linkages, we sought to identify “key” import-substitute sectors in the industrialization process. According to Hirschman, if these sectors expand rapidly and bottlenecks are created, greater than “normal” profit opportunities may occur. The result would be that more private savings may be mobilized and investment decisions made more obvious. Although no such key sectors could be identified, this result is partly dependent on the degree of input-output aggregation, which, for Argentine data, is substantial.     

FACTOR SUBSTITUTION, RATIONAL EXPECTATIONS, AND THE EFFECTS OF COMMODITY PRICE SHOCKS ON EMPLOYMENT AND INVESTMENT

Within an aggregate model with three inputs to production, the paper studies the effects of an increase in the price of one of the inputs, called commodities. No restrictions are placed on the production possibility constraint, and expectations are assumed to be formed rationally. After considering the effects on the demand for the two remaining inputs, labor and capital, the paper analyzes the effects on employment under a wage rigidity constraint. A dynamic formulation is used to analyze the effects on investment, which are found to depend weakly and sometimes perversely on partial substitution parameters.     

LABOR'S SHARE,THE FIRM'S MARKET POWER,AND TOTAL FACTOR PRODUCTIVITY

We investigate the relationship between labor's share, firm's market power, and the elasticity of output with respect to labor input using an approach based on an unobserved components model. The approach yields time‐varying estimates of market power and the elasticity. Evidence on the market power of firms (which we find to be rising since 2000) gives a deeper understanding of movements in labor's share and the labor wedge. The generated values of the elasticity yield revised estimates of total factor productivity growth which is informative about the extent of the downward bias inherent in traditional estimates which use labor's share as a proxy for the elasticity. (JEL O47, C32, E25)     

MEN, WOMEN, AND PUBLICATION PRODUCTIVITY: PATTERNS AMONG SOCIAL WORK ACADEMICS

This article analyzes how three sets of characteristics—(1) individual attitudes, practices, and academic position; (2) location and professional connections; and (3) marital/family statuses—operate in explaining the publication productivity of men and women in a national sample of social work academics.
We find that: (1) together, the variables explain more variance in women's than men's publication rate; (2) comparing female models to male models, the effect of at itudes and practices are more stable for women; and (3) professional connections and family statuses operate differently for women as compared to men.     

OFFSHORING PRODUCTION: A SIMPLE MODEL OF WAGES,PRODUCTIVITY, AND GROWTH

We examine the relationship between offshoring and the labor market in an occupational choice model of trade and endogenous growth where workers are employed on the basis of their individual skill levels. Trade liberalization leads to offshoring and reduces employment in the manufacturing sector. Displaced workers move into traditional and innovation sectors according to their skill levels, shaping real wages and aggregate productivity in the manufacturing sector. The paper aims to show how inter‐sectoral labor market adjustments, highlighted by skill heterogeneity, could be a possible explanation for the simultaneous rise in productivity and reduction in real wages that have coincided with the sharp escalation of offshoring activities in the U.S. manufacturing sector since 2004. (JEL F16, F23, J24)     

FISHES, PONDS, AND PRODUCTIVITY: STUDENT-ADVISOR MATCHING AND EARLY CAREER PUBLISHING SUCCESS FOR ECONOMICS PHDS

We examine a unique data set containing information on a PhD recipient's dissertation advisor, graduate program, and early career publishing success. Regressions controlling for the ranking of both the student's graduate program and dissertation advisor confirm that, all else equal, students working with prominent advisors are significantly more likely to publish in their early careers, especially in top 36 journals, than students working with less prominent advisors. Moreover, predicted publication values suggest that students attending lower ranked programs but working with superstar faculty publish both more total and top 36 articles and more quality-adjusted pages than students attending top-ranked programs but working with less prominent advisors . ( JEL J24, A11, A23)     

INDETERMINACY AND VOLATILITY OF EXCHANGE RATES UNDER IMPERFECT CURRENCY SUBSTITUTION

We know that when currencies are perfect substitutes, exchange rates could become indeterminate. We show that even when currencies are less than perfect substitutes exchange rates could display volatility unrelated to economic fundamentals. With increases in currency substitution: (1) the exchange rate becomes more sensitive to changes in economic fundamentals, increasing its volatility; (2) the exchange rate could become indeterminate, and it is more likely to become so if governments pursue similar monetary policies; (3) currencies with high nominal interest rates would decline significantly and the exchange rate becomes more sensitive to changes in the supply of those currencies.     

INPUT TRADE LIBERALIZATION AND MARKUP DISTRIBUTION: EVIDENCE FROM CHINA

We utilize an unprecedented liberalization episode in China, namely its World Trade Organization accession, to estimate the impact of trade liberalization on firm markup and markup distribution. Using a panel data quantile regression, we show that the impact of tariff reduction on markup can be heterogeneous to different firms, resulting in an unevenly distributed markup change across firms. In particular, reduction in output tariff reduces markup and markup dispersion, while reduction in input tariff increases markup and markup dispersion. (JEL F12, F13)     

INTERNATIONAL CURRENCY SUBSTITUTION AND SEIGNIORAGE IN A SIMPLE MODEL OF MONEY

This paper investigates the economic signcance of currency substitution using a small, open economy model of money. The main result is that in a low-inflation economy the seigniorage-maximizing inflation rate can be quite large despite a very high elasticity of currency substitution when the share of foreign real balances in producing domestic liquidity services is small (as some recent econometric estimates indicate in the case of Canada). This suggests that currency substitution is likely to be of second-order importance to policymakers in a low-inflation economy where foreign real balances provide economically small domestic liquidity services.     

WORKFORCE COMPOSITION AND FIRM PRODUCTIVITY: EVIDENCE FROM TAIWAN

We study the relationship between workforce composition and firm productivity based on a new employee‐employer‐matched data set, using an array of workforce characteristics and three alternative measures of firm productivity. While firm age is not essential for the performance of firms, those of smaller size and those in the steel and transportation industries outperform others. Moreover, labor quality, particularly the middle‐aged with higher education, contributes significantly to firms' productivity. Furthermore, economic incentives and market competition both play important roles in the performance of firms. Finally, there is an employer‐size premium with larger firms paying higher wages and nonwage benefits. (JEL C33, D20, J30)     

TRADE LIBERALIZATION AND FIRM PRODUCTIVITY: ESTIMATION METHODS MATTER

In this paper, we show that the relationship between trade liberalization and firm productivity is sensitive to the method used to estimate the production function. We estimate the productivity of Colombian manufacturing plants using the methods of Levinsohn and Petrin, Ackerberg et al., and Gandhi et al. and at times come to surprisingly different conclusions about firm productivity growth after the liberalization. Results from a growth decomposition exercise and from a quantile regression model reinforce the dissimilarity of results across methods. (JEL F13, 14, D24, C14)     

PRODUCTIVITY GROWTH AND TECHNOLOGICAL DIFFUSION THROUGH FOREIGN DIRECT INVESTMENT

Foreign direct investment (FDI) has dramatically increased worldwide and is the most important form of all private capital flows to developing countries. Yet, it is an important empirical question whether FDI affects total factor productivity (TFP) positively. We investigate the effect of FDI on TFP growth in a large sample of countries in 1970–2000. Our econometric results indicate that FDI has a positive and direct effect on TFP growth. However, we do not find any evidence that the impact of FDI on TFP growth is only conditional on the recipient country's capability to absorb foreign technology. We carefully address the robustness of the empirical results . ( JEL O11, O40, O47, F21)