Efficient Labor Force Participation with Search and Bargaining

A fixed wage is inefficient in a standard search model when workers endogenously separate from employment. We derive an efficient employment contract that involves agents paying a hiring fee (or bond) upon the formation of a match. We estimate the fixed wage and efficient contract assuming the hiring fee is unobservable, and find evidence to reject the efficient contract in favor of the fixed wage rule. A counterfactual experiment reveals the current level of labor force participation to be 9% below the efficient level, and a structural shift to the efficient contract improves welfare by nearly 4%.labor supply, unemployment, matching, efficiency wages

Expandable Factor Analysis

Bayesian sparse factor models have proven useful for characterizing dependence in multivariate data, but scaling computation to large numbers of samples and dimensions is problematic. We propose expandable factor analysis for scalable inference in factor models when the number of factors is unknown. The method relies on a continuous shrinkage prior for efficient maximum a posteriori estimation of a low-rank and sparse loadings matrix. The structure of the prior leads to an estimation algorithm that accommodates uncertainty in the number of factors. We propose an information criterion to select the hyperparameters of the prior. Expandable factor analysis has better false discovery rates and true positive rates than its competitors across diverse simulations. We apply the proposed approach to a gene expression study of aging in mice, illustrating superior results relative to four competing methods.Comment: 28 pages, 4 figure

Monopoly Power with a Short Selling Constraint

We show if a speculator can benefit from reducing a monopoly’s rents through short selling, then a speculator may take a short position in a monopoly, overcome the barriers to entry, and compete with the monopoly. The competition drives down the monopoly’s rents, and as a result, the short position becomes profitable and covers the cost of entry. If entry is impossible, then the speculator may coordinate and pay the firm’s counter-parties to stop trading with the monopoly rather than entering. Either way, increasing a speculator’s ability to short a firm’s rents results in a constraint on the monopoly and forces it to act more like a price taker. The mechanism is a market based approach to antitrust

The great leap towards African mass demand, diversification and sustainable economic growth?

VR Chinas Afrika-Engagement, von dem hauptsächlich ressourcenreiche Küstenländer betroffen sind, wartet mit stark anwachsenden Handelsvolumina, erhöhten Investitionen und beeindruckenden Infrastrukturprojekten auf. Das Chinesische Handelsministerium und China EXIM koordinieren Kapital und bestimmen über Abläufe derbeschlossenen Projekte. Auf diese Weise entwickelt China sein eigenes fiskal- und geldpolitisches Subsystem innerhalb afrikanischer Staaten. Gerade ein solches ist auf nationaler Ebene vonnöten, um in den Afrikanischen Partnerländern der Volksrepublik nachhaltiges Wirtschaftswachstum voranzutreiben. Geleitet von Paradigmen, die sich der Ideenwelten des Neoliberalismus, Monetarismus und der NCE bedienten, implementierten Weltbank und Internationaler Währungsfond über die letzten Dekaden hinweg in Entwicklungsländern Strukturanpassungsprogramme, die genau diese nationale wirtschaftspolitische Rahmensetzung verminderten. Chinas überaus beeindruckendes, durch den Staat koordiniertes Wirtschaftswachstum untergräbt nun die Westliche Vorstellung einer zurückhaltenden Fiskal- und Geldpolitik. Das, als überwunden erachtete Phänomen des Rent-Seeking nimmt mit Chinas Präsenz in Afrika wieder zu, was als Reinkarnation der Elsenhansschen Staatsklassen gedeutet werden muss. Eben diese sollten sich jene Renten zunutze machen, um per Binnenkonsum einen Diversifizierungsprozess einzuleiten, welcher auf Grundlage diverser, durch Keynes identifizierter, Multiplikatoren zu nachhaltigem Wirtschaftswachstum führt. Eine pro-aktive Fiskal- und Geldpolitik, basierend auf einer nationalen Wirtschaftsstrategie eigenen sich dazu am besten.China’s engagement in mainly coastal, resource-rich African countries features tremendous trade volumes, increasing FDI flows and massive infrastructure projects. As the PRC’s Ministry of Commerce and China EXIM coordinate capital flows, money supply and the respective projects that are bargained with the beneficiary African government, they, to some extent, created a fiscal-monetary political subsystem on African ground. Pro-active fiscal and monetary policy is needed to actively respond to the economy’s needs in favor of domestic consumption that spurs diversification and sustainable economic growth. Based on the theoretical findings of Neoliberalism, Monetarism and New Classical Economics, IMF and World Bank instructed developing economies to implement structural adjustment programs that led to fiscal and monetary policy constraints. China’s tremendous state-led economic growth empirically refutes the Western Neoliberal paradigm of passive fiscal and monetary policy. Rent seeking phenomena reappear, which indicate the reincarnation of the Elsenhansian state class. Fiscal and monetary policy should use these rents to spur domestic consumption that initiates diversification and sustainable economic growth, based on the Keynesian multipliers. Own national fiscal and monetary strategies are needed

Labor force participation and pair-wise efficient contracts with search and bargaining

A “constant” wage is pair-wise inefficient in a standard search model when workers endogenously separate from employment. We derive a pair-wiseefficient employment contract that involves workers paying a hiring fee (or bond) upon the formation of a match. We estimate the constant wage and pair-wiseefficientcontract assuming the hiring fee is unobservable, and find evidence to reject the pair-wiseefficientcontract in favor of the constant wage rule. A counterfactual experiment reveals the current level of laborforceparticipation to be 9.6% below the efficient level, and a structural shift to the pair-wiseefficientcontract improves welfare by roughly 3.5%

Different patterns of white matter degeneration using multiple diffusion indices and volumetric data in mild cognitive impairment and Alzheimer patients

Alzheimeŕs disease (AD) represents the most prevalent neurodegenerative disorder that causes cognitive decline in old age. In its early stages, AD is associated with microstructural abnormalities in white matter (WM). In the current study, multiple indices of diffusion tensor imaging (DTI) and brain volumetric measurements were employed to comprehensively investigate the landscape of AD pathology. The sample comprised 58 individuals including cognitively normal subjects (controls), amnestic mild cognitive impairment (MCI) and AD patients. Relative to controls, both MCI and AD subjects showed widespread changes of anisotropic fraction (FA) in the corpus callosum, cingulate and uncinate fasciculus. Mean diffusivity and radial changes were also observed in AD patients in comparison with controls. After controlling for the gray matter atrophy the number of regions of significantly lower FA in AD patients relative to controls was decreased; nonetheless, unique areas of microstructural damage remained, e.g., the corpus callosum and uncinate fasciculus. Despite sample size limitations, the current results suggest that a combination of secondary and primary degeneration occurrs in MCI and AD, although the secondary degeneration appears to have a more critical role during the stages of disease involving dementia

Noncommutative probability, matrix models, and quantum orbifold geometry

Inspired by the intimate relationship between Voiculescu's noncommutative probability theory (of type A) and large-N matrix models in physics, we look for physical models related to noncommutative probability theory of type B. These turn out to be fermionic matrix-vector models at the double large-N limit. In the context of string theory, they describe different orbifolded string worldsheets with boundaries. Their critical exponents coincide with that of ordinary string worldsheets, but their renormalised tree-level one-boundary amplitudes differ.Comment: 22 pages, 8 eps figures, LaTeX2.09; title changed, mistakes correcte