An Incentive-Compatibility Approach to the Problem of Monitoring a Bureau

An incentive-compatibility framework for regulating a monopolist with unknown costs is applied to the sponsor’s problem of monitoring a bureau. Following Mueller (1989), the bureau does not make take-it-or-leave-it budget proposals to the sponsor. Rather, the bureau must announce a marginal cost per unit of output to the sponsor. Given that report, the sponsor chooses a price that it will pay to the bureau for each unit of output, and the sponsor chooses the level of output as well. The analysis reveals the price per unit of output that the sponsor must pay to the bureau to maximize social welfare.Bureaucracy; Administrative Processes in Public Organizations; Corruption; Asymmetric and Private Information; Incentive Compatibility; Monitoring

Is the NAIRU More Useful in Forecasting Inflation than the Natural Rate of Unemployment?

Recent studies have indicated that the terms 'NAIRU' (non-accelerating inflation rate of unemployment) and 'natural rate of unemployment' are not interchangeable. While NAIRU is an empirical macroeconomic relationship estimated via a Phillips curve, the natural rate is an equilibrium condition in the labour market, reflecting the market's microeconomic features. This study evaluates comparatively the inflation-forecasting power of alternative time-varying estimates of the natural rate of unemployment relative to the NAIRU. The natural rate of unemployment in the USA since the Second World War is estimated. Three alternative methods are utilized: the Kalman filter, a structural determinants approach, and the Hodrick-Prescott filter. The section that follows assesses how each estimator of the natural rate compares with the others - as well as with the NAIRU derived from a Phillips curve - in forecasting inflationary changes in the USA in the second half of the twentieth century. The analysis reveals that the overall inflation-forecasting utility of the natural rate of unemployment relative to the NAIRU is not very different. Moreover, the conclusion appears to be quite robust to various estimators of the natural rate.Employment, Unemployment, Wages, Intergenerational Income Distribution; Price Level, Inflation, Deflation; U.S.; Northern America; Inflation; Macroeconomics; NAIRU; Natural Rate; Phillips Curve; Unemployment

Spreading Academic Pay over Nine or Twelve Months: Economists Are Supposed to Know Better, but Do They Act Better?

Our paper empirically considers two general hypotheses related to the literature of behavioral economics. First, we test the null hypothesis that individuals behave, on average, in a manner more consistent with the rational expectations hypothesis than with the idea of self-control in the face of hyperbolic discounting in their saving decisions. Second, along a variety of dimensions, we examine whether individuals exhibit Herbert Simon’s notion that the goal formation of individuals will differ depending upon their relative levels of experience and knowledge. Perhaps there are significant differences among groups in their saving decisions that depend upon their apparent levels of intelligence, education, and knowledge. Finally, using a variety of individual-specific control variables, we test for robustness of the results.Consumer Economics, Empirical Analysis, Life Cycle Models and Saving

Spreading Academic Pay over Nine or Twelve Months: Economists Are Supposed to Know Better, but Do They Act Better?

Our paper empirically considers two general hypotheses related to the literature of behavioral economics. First, we test the null hypothesis that individuals behave, on average, in a manner more consistent with the rational expectations hypothesis than with the idea of self-control in the face of hyperbolic discounting in their saving decisions. Second, along a variety of dimensions, we examine whether individuals exhibit Herbert Simon’s notion that the goal formation of individuals will differ depending upon their relative levels of experience and knowledge. Perhaps there are significant differences among groups in their saving decisions that depend upon their apparent levels of intelligence, education, and knowledge. Finally, using a variety of individual-specific control variables, we test for robustness of the results.Consumer Economics, Empirical Analysis, Life Cycle Models and Saving

Entrepreneurial Attitudes Of MBA Students In The United States Relative To The CIS: The Case Of Armenia

This paper compares the entrepreneurial attributes of MBA students in Armenia to those in the United States.  If entrepreneurial attributes are more learned cultural behaviors and not only inherent personality factors, business students in a recently-privatized economy such as Armenia would not score as high on an entrepreneurial personality index as would business students in the U.S. where both models of entrepreneurship and expectations of certain proactive characteristics in individuals entering the business world are widespread

Is the NAIRU More Useful in Forecasting Inflation than the Natural Rate of Unemployment?

Recent studies have indicated that the terms 'NAIRU' (non-accelerating inflation rate of unemployment) and 'natural rate of unemployment' are not interchangeable. While NAIRU is an empirical macroeconomic relationship estimated via a Phillips curve, the natural rate is an equilibrium condition in the labour market, reflecting the market's microeconomic features. This study evaluates comparatively the inflation-forecasting power of alternative time-varying estimates of the natural rate of unemployment relative to the NAIRU. The natural rate of unemployment in the USA since the Second World War is estimated. Three alternative methods are utilized: the Kalman filter, a structural determinants approach, and the Hodrick-Prescott filter. The section that follows assesses how each estimator of the natural rate compares with the others - as well as with the NAIRU derived from a Phillips curve - in forecasting inflationary changes in the USA in the second half of the twentieth century. The analysis reveals that the overall inflation-forecasting utility of the natural rate of unemployment relative to the NAIRU is not very different. Moreover, the conclusion appears to be quite robust to various estimators of the natural rate

Procjena prirodne stope nezaposlenosti uz Kalman-filter pristup

The terms “NAIRU” and “natural rate of unemployment” are not interchangeable. Further, while there is a consensus that the NAIRU represents an empirical macroeconomic relationship, little agreement exists regarding what is meant by the “natural rate of unemployment.” This paper estimates the natural rate of unemployment, defined here as the unemployment rate corresponding to equilibrium in the labor market. Rather than employ a Phillips curve, the model utilizes a macroeconomic-principles-level decomposition of the unemployment rate into its cyclical and noncyclical components. We then evaluate the estimated natural rate series by examining its relationship to structural variables from the labor marketTermini "NAIRU" i "prirodna stopa nezaposlenosti" ( natural rate of unemployment), nisu istoznačnice. Dok postoji konsenzus da NAIRU predstavlja empirijski makroekonomski odnos, dotle postoje razilaženja o značenju termina "prirodna stopa nezaposlenosti". U ovome radu procjena prirodne stope nezaposlenosti određuje se odnosom stope nezaposlenosti i ravnoteže na tržištu rada. Umjesto primjene Phillipsove krivulje, primjenjuje se model makroekonomskih načela u razlaganju stope nezaposlenosti na njezine cikličke i ne-cikličke sastavnice. Nakon toga, vrednuje se procjena niza prirodnih stopa nezaposlenosti na temelju ispitivanja odnosa prema strukturalnim varijablama na tržištu rada

An Incentive-Compatibility Approach to the Problem of Monitoring a Bureau

An incentive-compatibility framework for regulating a monopolist with unknown costs is applied to the sponsor’s problem of monitoring a bureau. Following Mueller (1989), the bureau does not make take-it-or-leave-it budget proposals to the sponsor. Rather, the bureau must announce a marginal cost per unit of output to the sponsor. Given that report, the sponsor chooses a price that it will pay to the bureau for each unit of output, and the sponsor chooses the level of output as well. The analysis reveals the price per unit of output that the sponsor must pay to the bureau to maximize social welfare

An Incentive-Compatibility Approach to the Problem of Monitoring a Bureau

An incentive-compatibility framework for regulating a monopolist with unknown costs is applied to the sponsor’s problem of monitoring a bureau. Following Mueller (1989), the bureau does not make take-it-or-leave-it budget proposals to the sponsor. Rather, the bureau must announce a marginal cost per unit of output to the sponsor. Given that report, the sponsor chooses a price that it will pay to the bureau for each unit of output, and the sponsor chooses the level of output as well. The analysis reveals the price per unit of output that the sponsor must pay to the bureau to maximize social welfare

Is the NAIRU More Useful in Forecasting Inflation than the Natural Rate of Unemployment?

Recent studies have indicated that the terms 'NAIRU' (non-accelerating inflation rate of unemployment) and 'natural rate of unemployment' are not interchangeable. While NAIRU is an empirical macroeconomic relationship estimated via a Phillips curve, the natural rate is an equilibrium condition in the labour market, reflecting the market's microeconomic features. This study evaluates comparatively the inflation-forecasting power of alternative time-varying estimates of the natural rate of unemployment relative to the NAIRU. The natural rate of unemployment in the USA since the Second World War is estimated. Three alternative methods are utilized: the Kalman filter, a structural determinants approach, and the Hodrick-Prescott filter. The section that follows assesses how each estimator of the natural rate compares with the others - as well as with the NAIRU derived from a Phillips curve - in forecasting inflationary changes in the USA in the second half of the twentieth century. The analysis reveals that the overall inflation-forecasting utility of the natural rate of unemployment relative to the NAIRU is not very different. Moreover, the conclusion appears to be quite robust to various estimators of the natural rate