Brownian motion.

Thesis (M.A.)--Boston Universit

By How Much Does GDP Rise If the Government Buys More Output?

macroeconomics, GDP, U.S. Government, output, multipliers

The Process of Inflation in the Labor Market

macroeconomics, inflation, labor market

NTF: Soldering Technology Development for Cryogenics

The advent of the National Transonic Facility (NTF) brought about a new application for an old joining method, soldering. Soldering for use at cryogenic temperatures requires that solders remain ductile and free from tin-pest (grey tin), have toughness to withstand aerodynamic loads associated with flight research, and maintain their surface finishes. Solders are used to attach 347 Stainless-Steel tubing in surface grooves of models. The solder must fill up the gap and metallurgically bound to the tubing and model. Cryogenic temperatures require that only specific materials for models can be used, including: Vasco Max 200 CVM, lescalloy A-286 Vac Arc, pH 13-8 Mo. Solders identified for testing at this time are: 50% Sn - 49.5% Pb - 0.5% Sb, 95% Sn - 5% Sb, 50% In 50% Pb, and 37.5% Sn - 37.5% Pb - 25% In. With these materials and solders, it is necessary to determine their solderability. After solderability is determined, tube/groove specimens are fabricated and stressed under cryogenic temperatures. Compatible solders are then used for acutual models

Investment Under Uncertainty: Theory and Tests with Industry Data

Under the assumption of constant returns to scale, there is a very simple, easily testable condition for optimal investment under uncertainty. Application of the test requires no parametric assumptions about technology and no assumptions about the competitiveness of the output market. The condition is that the expected marginal revenue product of labor equal the expected rental price of capital. The condition implies a certain invariance property for a modified version of Solow's productivity residual. Tests of the invariance property for U.S. industry data give very strong rejection in quite a few industries. The interpretation of rejection is either that the technology has increasing returns (possibly because of fixed costs) or that fins systematically over-invest.

Fluctuation in Equilibrium Unemployment

Fluctuations in the equilibrium rate of unemployment can only be understood within a theory of the natural or equilibrium rate. It is not enough to say that unemployment is the difference between supply and demand in the labor market, though of course it always will be. In equilibrium, no participants in the market can have an unexploited opportunity to make themselves better off. At the equilibrium unemployment rate, employers cannot obtain labor at lower cost by offering work at below the market wage to the unemployed. Unemployed workers cannot raise their effective real incomes by taking lower wages in exchange for immediate employment. The task of the theory is to explain why any unemployment remains at all when these conditions are satisfied. Part of this problem has been studied in detail in the "search theory" of unemployment -- once a worker becomes unemployed, it is reasonably well understood why the worker does not become employed again immediately. The theory of why people become unemployed in the first place is less well developed and is the main concern of this paper. Most of the unemployed are looking for new work because their previous jobs ran out. Consequently, the main ingredient of a theory of the flow of workers into unemployment is a theory of the duration of employment. Such a theory is developed here, along reasonably standard lines.

Wage Determination and Employment Fluctuations

Following a recession, the aggregate labor market is slack employment remains below normal and recruiting efforts of employers, as measured by vacancies, are low. A model of matching frictions explains the qualitative responses of the labor market to adverse shocks, but requires implausibly large shocks to account for the magnitude of observed fluctuations. The incorporation of wage-setting frictions vastly increases the sensitivity of the model to driving forces. I develop a new model of wage friction. The friction arises in an economic equilibrium and satisfies the condition that no worker-employer pair has an unexploited opportunity for mutual improvement. The wage friction neither interferes with the efficient formation of employment matches nor causes inefficient job loss. Thus it provides an answer to the fundamental criticism previously directed at sticky-wage models of fluctuations.

Employment Efficiency and Sticky Wages: Evidence from Flows in the Labor Market

I consider three views of the labor market. In the first, wages are flexible and employment follows the principle of bilateral efficiency. Workers never lose their jobs because of sticky wages. In the second view, wages are sticky and inefficient layoffs do occur. In the third, wages are also sticky, but employment governance is efficient. I show that the behavior of flows in the labor market strongly favors the third view. In the modern U.S. economy, recessions do not begin with a burst of layoffs. Unemployment rises because jobs are hard to find, not because an unusual number of people are thrown into unemployment.