Labor-Supply Shifts and Economic Fluctuations

We investigate the role of labor-supply shifts in economic fluctuations. A new VAR identification scheme for labor supply shocks is proposed. According to our VAR analysis of post-war U.S. data, labor-supply shifts account for about half the variation in hours and one-fifth of variation in aggregate output. To assess the role of labor-supply shifts in a more structural framework, estimates from a dynamic stochastic general equilibrium (DSGE) model with stochastic variation in home production technology are compared to those from the VAR. To obtain a VAR identification scheme that is consistent with the DSGE model, we cannot solely rely on ``zero-restrictions''. Instead we indirectly specify a proper prior distribution for impulse responses and variance decompositions and update it through the sample information. Our method provides an alternative to recently proposed identification schemes that rely on inequality restrictions on the direction of impulse responses.Fluctuation of Hours, VAR Identification, Home Production, Bayesian Econometrics

Involvement of the cortico-basal ganglia-thalamocortical loop in developmental stuttering

Stuttering is a complex neurodevelopmental disorder that has to date eluded a clear explication of its pathophysiological bases. In this review, we utilize the Directions Into Velocities of Articulators (DIVA) neurocomputational modeling framework to mechanistically interpret relevant findings from the behavioral and neurological literatures on stuttering. Within this theoretical framework, we propose that the primary impairment underlying stuttering behavior is malfunction in the cortico-basal ganglia-thalamocortical (hereafter, cortico-BG) loop that is responsible for initiating speech motor programs. This theoretical perspective predicts three possible loci of impaired neural processing within the cortico-BG loop that could lead to stuttering behaviors: impairment within the basal ganglia proper; impairment of axonal projections between cerebral cortex, basal ganglia, and thalamus; and impairment in cortical processing. These theoretical perspectives are presented in detail, followed by a review of empirical data that make reference to these three possibilities. We also highlight any differences that are present in the literature based on examining adults versus children, which give important insights into potential core deficits associated with stuttering versus compensatory changes that occur in the brain as a result of having stuttered for many years in the case of adults who stutter. We conclude with outstanding questions in the field and promising areas for future studies that have the potential to further advance mechanistic understanding of neural deficits underlying persistent developmental stuttering.R01 DC007683 - NIDCD NIH HHS; R01 DC011277 - NIDCD NIH HHSPublished versio

Non-stationary hours in a DSGE model

The time series fit of dynamic stochastic general equilibrium (DSGE) models often suffers from restrictions on the long-run dynamics that are at odds with the data. Relaxing these restrictions can close the gap between DSGE models and vector autoregressions. This paper modifies a simple stochastic growth model by incorporating permanent labor supply shocks that can generate a unit root in hours worked. Using Bayesian methods we estimate two versions of the DSGE model: the standard specification in which hours worked are stationary and the modified version with permanent labor supply shocks. We find that the data support the latter specification.Labor supply ; Hours of labor

Learning by Doing as a Propagation Mechanism

This paper suggests that skill accumulation through past work experience, or ``learning-by-doing'' (LBD), can provide an important propagation mechanism in a dynamic stochastic general equilibrium model, as the current labor supply affects future productivity. Our econometric analysis uses a Bayesian approach to combine micro-level panel data with aggregate time series. Formal model evaluation shows that the introduction of the LBD mechanism improves the model's ability to fit the dynamics of aggregate output and hours.Learning by Doing, Propagation Mechanism, Business Cycles, Bayesian Analysis

Labor-Market Heterogeneity, Aggregation, and the Lucas Critique

This paper assesses biases in policy predictions due to the lack of invariance of "structural" parameters in representative-agent models. We simulate data under various fiscal policy regimes from a heterogeneous-agents economy with incomplete asset markets and indivisible labor supply. Imperfect aggregation manifests itself through preference shocks in the estimated representative-agent model. Preference and technology parameter estimates are not invariant with respect to policy changes. As a result, the bias in the representative-agent model's policy predictions is large compared to the length of predictive intervals that reflect parameter uncertainty.Aggregation; Fiscal Policy; Heterogeneous Agents Economy; Lucas Critique; Representative Agent Models.

Labor-Market Heterogeneity, Aggregation, and the Policy-(In)variance of DSGE Model Parameters

Data from a heterogeneous-agents economy with incomplete asset markets and indivisible labor supply are simulated under various fiscal policy regimes and an approximating representative-agent model is estimated. Preference and technology parameter estimates of the representative-agent model are not invariant to policy changes and the bias in the representative-agent model’s policy predictions is large compared to predictive intervals that reflect parameter uncertainty. Since it is not always feasible to account for heterogeneity explicitly, it is important to recognize the possibility that the parameters of a highly aggregated model may not be invariant with respect to policy changes.Aggregation, DSGE Models, Fiscal Policy, Heterogeneous-Agents Economy, Policy Predictions, Representative-Agent Models

Auditory-motor adaptation is reduced in adults who stutter but not in children who stutter

Previous studies have shown that adults who stutter produce smaller corrective motor responses to compensate for unexpected auditory perturbations in comparison to adults who do not stutter, suggesting that stuttering may be associated with deficits in integration of auditory feedback for online speech monitoring. In this study, we examined whether stuttering is also associated with deficiencies in integrating and using discrepancies between expect ed and received auditory feedback to adaptively update motor programs for accurate speech production. Using a sensorimotor adaptation paradigm, we measured adaptive speech responses to auditory formant frequency perturbations in adults and children who stutter and their matched nonstuttering controls. We found that the magnitude of the speech adaptive response for children who stutter did not differ from that of fluent children. However, the adaptation magnitude of adults who stutter in response to formant perturbation was significantly smaller than the adaptation magnitude of adults who do not stutter. Together these results indicate that stuttering is associated with deficits in integrating discrepancies between predicted and received auditory feedback to calibrate the speech production system in adults but not children. This auditory-motor integration deficit thus appears to be a compensatory effect that develops over years of stuttering