How structure of production determines the demand for human capital

On the issue of women's status, the objectives of this paper are twofold. First, it attempts to make precise some of the claims and allegations regarding the existence of bias against females in the allocation of resources within the household. The idea is to formulate these questions explicitly, so that it is possible to identify whether and to what degree there is evidence of this bias. Second, it identifies causes of this bias with the objective of isolating key factors that can be used for policy. In contrast to earlier studies that attemptto account for male-female differences in human capital, the authors do not assume any discrimination against females either at home (in the parent's utility function) or in the market (in the returns to human capital). It is assumed, however, that women have a comparative advantage in working in some sectors of the economy. Thus, increases in the shares of these sectors will increase the demand for female human capital. This explicit attention to factors that can be used as policy instruments -- and the relative neglect of factors reflecting gender bias in tastes -- is the point of departure from earlier literature. This paper develops the theory, tests the hypotheses, and concludes with a discussion of the policy implications.Health Monitoring&Evaluation,Economic Theory&Research,Agricultural Knowledge&Information Systems,Housing&Human Habitats,Environmental Economics&Policies

On the Power and Weakness of Rational Expectations: Logical Fallacies, Periodic Bubbles and Business Cycles

A popular interpretation of the Rational Expectations/Efficient Markets hypothesis states that, if the hypothesis holds, then market valuations must follow a random walk. This postulate has frequently been criticized on the basis of empirical evidence. Yet the assertion itself incurs what we could call 'fallacy of probability diffusion symmetry': although market efficiency does indeed imply that the mean (i.e. expected) path must be a random walk, if the probability diffusion process is asymmetric then the observed path will most closely resemble not the mean but the median, which does not necessarily follow a random walk. To illustrate the implications, this paper develops an efficient markets model where the median path of Tobin's q ratio displays regular cycles of bubbles and crashes reflecting an agency problem between investors and producers. The model is tested against US market data, with results suggesting that such a regular cycle does indeed exist and is statistically significant. The aggregate production function in Gracia (Uncertainty and Capacity Constraints: Reconsidering the Aggregate Production Function, 2011) is then put forward to show how financial fluctuations can drive the business cycle by periodically impacting aggregate productivity and, as a consequence, GDP growth