Applications of numerical computation methods in microeconomic theory

The solution of mathematical problems by numerical analysis is a large, intricate subject in its own right, and the substance-of many Ph. D. theses in mathematics. The advancement of numerical analysis and computer technology are clearly not mutually exclusive. Moreover this combination through the growth in computer software facilities is' easily within reach of a researcher with no expertise in either numerical analysis or computer programming. In particular the Numerical Algorithms Group (NAG) based in Oxford provides a library of subroutines for incorporation into source programmes across a broad spectrum of mathematics. The relevance of this development for the economist lies with the considerable scope for providing quantitative evaluations of microeconomic models outside of traditional statistical methods. To justify such a claim the thesis develops a number of applications from microeconomic theory: imperfect information in a non-sequential search framework; optimum tax with endogenous wages; a two sector general equilibrium model of union and non-union wage rate determination; Chamberlin's welfare ideal; and a quantity setting duopoly analysis of the structure conduct performance paradigm. It is hoped that the insights gained from such diverse topics will convince the reader as to the appropriateness of applying numerical computing to microeconomic questions in general, and the usefulness of the NAG software in particular

Unemployment equilibria and input prices: theory and evidence from the United States

This paper develops an efficiency-wage model where input prices affect the equilibrium rate of unemployment. We show that a simple framework based on only two prices (the real price of oil and the real rate of interest) is able to explain the main post-war movements in the rate of U.S. joblessness. The equations do well in forecasting unemployment many years out-of-sample, and provide evidence that the oil-price spike associated with Iraq’s invasion of Kuwait appears to be a component of the “mystery” recession which followed

Review of the quarter's economic trends [January 1977]

There is now ample evidence that the pace of recovery in the major economies slackened during 1976. Published statistics, however, are as yet inadequate to document the full extent of the slowdown or to assert that it was a transient phenomenon. Available evidence would suggest that the growth in the major economies in 1977 may be somewhat slower than had earlier been forecast, and that in the short run further reductions in unemployment and inflation rates may be very difficult to achieve. Several threads may be drawn together in an attempt to justify this interpretation of likely future developments

Summary [January 1977]

The pace of recovery in the major economies of the world slackened in the course of 1976. The available evidence suggests that their growth in 1977 may be slower than had earlier been hoped for, and that further reductions in unemployment and in rates of inflation may be difficult to achieve in the short run

Rare single gene disorders:estimating baseline prevalence and outcomes worldwide

As child mortality rates overall are decreasing, non-communicable conditions, such as genetic disorders, constitute an increasing proportion of child mortality, morbidity and disability. To date, policy and public health programmes have focused on common genetic disorders. Rare single gene disorders are an important source of morbidity and premature mortality for affected families. When considered collectively, they account for an important public health burden, which is frequently under-recognised. To document the collective frequency and health burden of rare single gene disorders, it is necessary to aggregate them into large manageable groupings and take account of their family implications, effective interventions and service needs. Here, we present an approach to estimate the burden of these conditions up to 5 years of age in settings without empirical data. This approaches uses population-level demographic data, combined with assumptions based on empirical data from settings with data available, to provide population-level estimates which programmes and policy-makers when planning services can use

A meta-analysis of the investment-uncertainty relationship

In this article we use meta-analysis to investigate the investment-uncertainty relationship. We focus on the direction and statistical significance of empirical estimates. Specifically, we estimate an ordered probit model and transform the estimated coefficients into marginal effects to reflect the changes in the probability of finding a significantly negative estimate, an insignificant estimate, or a significantly positive estimate. Exploratory data analysis shows that there is little empirical evidence for a positive relationship. The regression results suggest that the source of uncertainty, the level of data aggregation, the underlying model specification, and differences between short- and long-run effects are important sources of variation in study outcomes. These findings are, by and large, robust to the introduction of a trend variable to capture publication trends in the literature. The probability of finding a significantly negative relationship is higher in more recently published studies. JEL Classification: D21, D80, E22 1

Computer based mapping techniques

In the construction of a series of data files at the Fraser of Allander Institute for use in the analysis of short-term movements in the Scottish economy, primary consideration is given to the time series data; for example, Scottish unemployment levels over the last ten years. However, there is a wealth of information available, chiefly from official sources, which, though not available over a period of time, can be a useful adjunct to a developing knowledge of the operation of the Scottish economy. Such data are frequently not strictly economic in character but may well interact with the economic system, sometimes as cause, sometimes as effect. Undoubtedly the richest source of such data is the Census of Population. In this synopsis of recent work at the Fraser of Allander Institute we consider the efficacy of using computer mapping techniques to analyse such data. The great advantage of census data is the extent to which it is spatially disaggregated. Data are available down to enumeration district (E.D.) level. The average population of E.D.'s is well under 1000 persons. For small area studies the E.D. is the most useful spatial unit with which to operate. However, when considering the whole of Scotland such a detailed disaggregation would be extremely difficult to deal with

Miners' Wages in Post-War Britain: An Application of a Model of Trade Union Behavior

The paper studies the determination of wages in the British coal industry. A utility¿maximising model of a trade union is used to represent the behaviour of the National Union of Mineworkers. A non- linear structural model is derived and is estimated by Full Information Maximum Likelihood. The results are quite encouraging: there is support for a neo-classical demand curve for miners¿ labour, and a significant estimate of workers` relative risk aversion

Review of the quarter's economic trends [October 1976]

The leading economies have now reached a stage where many economists and policy makers are questioning the staying power of the recovery. Following the first quarter surge of activity reported in our last Commentary, the second quarter of 1976 brought a marked slowing down in the growth of industrial production particularly in the US, and the latest indications are that this slowdown has continued into the third quarter. Much of the initial impetus out of recession stemmed from the turnaround in stockbuilding, but this adjustment of stocks would now seem to be largely completed