THE IMPACT OF HIGH-TECH CAPITAL ON PRODUCTIVITY: EVIDENCE FROM AUSTRALIA

This article examines the relationship between high-tech capital use and productivity. Using Australian data, some evidence is found of a positive relationship between high-tech capital use and productivity in the market sector, but there is much less evidence of excess returns. These results are robust to the use of a variety of different measures of high-tech capital. At the industry level however, the relationship is significant and positive for only some industries. This suggests that the benefits of investment in high-tech capital are not spread evenly across the economy. (JEL O3 )     

GEOGRAPHIC DIFFERENCES IN U.S. UNEMPLOYMENT RATES: A VARIANCE DECOMPOSITION APPROACH

This paper analyzes the determinants of the geographic dispersion of unemployment rates. The model presented here recognizes that structural labor market relationships differ across areas and that area unemployment rates and some of the explanatory variables are determined simultaneously. Most importantly, the methodology introduced here provides an estimate of the impact of each of the explanatory variables on the overall dispersion of unemployment rates, allowing comparison of several competing hypotheses that purport to explain why areas differ so widely in terms of their unemployment rates. The empirical results indicate that inter-area differences in product market demand and in sensitivity to changes in conditions in the product market are the most important factors accounting for geographic differences in unemployment rates. More generally, the results indicate that unemployment rates differ widely across areas not so much because areas differ in terms of the underlying characteristics that determine unemployment rates but because areas are so heterogeneous with respect to labor market structure.     

EXCHANGE RATE VOLATILITY: THE ROLE OF REAL SHOCKS AND THE VELOCITY OF MONEY

The effects of stochastic output shocks on the behavior of ex-change rates and nominal price levels is studied within the context of a two-country, cash-in-advance model. The analysis of this model, in contrast to the existing cash-in-advance literature, demonstrates that exchange rates can be more volatile than price levels even though agents' elasticity of substitution between foreign and domestic goods is greater than one-half. This possibility arises when output shocks are autocorrelated and are due to revisions in expectations that affect the terms of trade and/or the velocity of money.     

Simmel on Acceleration, Boredom, and Extreme Aesthesia

By focusing on the unique velocity and over‐stimulation of metropolitan life, Georg Simmel pioneered an interpretation of cultural boredom that has had a significant impact on contemporary social theory by viewing it through the modern experience of time‐pressure and social acceleration. This paper explores Simmel's account of boredom by showing how—in the frenzy of modern life—it has become increasingly difficult to qualitatively distinguish which choices and commitments actually matter to us. Furthermore, this emotional indifference invariably pushes us towards more excessive and risky behavior, towards, what I call, “extreme aeshesia.” Insofar as novel experiences quickly become routine in the technological age, it appears that only extreme sensations and experiences can break the spell of boredom, allowing us to momentarily feel strongly for something.     

SPATIAL COMPETITION AND STRATEGIC FIRM RELOCATION

Firms compete spatially for customers who have some degree of brand loyalty. The number and attractiveness of the alternatives available to these customers dictates the level of competition facing firms. In this study, data on ticket pricing in four professional sports leagues are used to empirically examine the existence of spatial competition in sports, and the impact of space on team relocations. Results, allowing for structural breaks over time while using spatial autoregressive techniques, suggest that sports franchises spatially compete when pricing their tickets, and that spatial characteristics, including the level of spatial competition, have influenced the relocation of teams. (JEL D40, L11, R30, L83)     

Falling behind: The income of lone-mother families, 1970–1985

Cette communication analyse la situation économique des familles monoparentales dont le chef est une femme à partir de données des recensements canadiens de 1971, 1981 et 1986 disponibles sur microfiches à accès public. L'analyse révèle qu'en dépit d'une augmentation sensible du revenu réel des familles à mère sans coqjoint, l'écart entre le revenu de celles-ci et le revenu des familles biparentales s'est creusé de manière importante au cow de la période étudiée de 15 ans. Bien que l'augmentation des salaires aient été lente autant pour hommes mariée que pour les mères sans conjoint, une forte hausse du taux de participation des femmes mariées à la population active a permis aux familles biparentales d'augmenter de façon appréciable leur revenu familial total. Du cté des familles à mère sans conjoint, par contre, divers changements démographiques ont limité l'augmentation des gains totaux et ralentit l'accroissement du revenu familial.
This paper examines the economic fortunes of lone-mother families using the public use microfiles of the 1971 and 1986 Canadian censuses. The analysis shows that despite a 16 per cent increase in the real income of lone-mother families, the income gap between lone-mother and two-parent families widened appreciably over the 15-year period. Although real wages for both husbands and lone mothers rose slowly, a sharp increase in the labour force participation rate of married women allowed two-parent families to increase their total family income significantly. By contrast, demographic changes among lone-mother families served to limit the increase in total family earnings and slowed the rise of family income.     

HABIT PERSISTENCE AND THE NOMINAL TERM PREMIUM PUZZLE: A PARTIAL RESOLUTION

The assumption of habit formation in preferences induces two effects on time series of agents' marginal utility of consumption: greater volatility relative to standard time-separable preferences and negative serial correlation. This paper examines whether the second property can help explain the behavior of the nominal term premium. A cash-in-advance model of interest rates is appended with a model of habit persistence and calibrated to U.S. data. Using yields on three- and six-month U.S. Treasury Bills for comparison, we find the model can indeed duplicate the observed average term premium, but cannot account for the term premium's volatility.