Time-Separable Preference and Intertemporal-Substitution Models of Business Cycles

Time-separability of utility means that past work and consumption do not influence current and future tastes. This form of preferences does not restrict the size of intertemporal-substitution effects--notably, we can still have a strong response of labor supply to temporary changes in wages. However, there are important constraints on the relative responses of leisure and consumption to changes in relative-price and in permanent income. When the usual aggregation is permissible, time-separability has some important implications for equilibrium theories of the business cycle. Neglecting investment, we, find that changes in perceptions about the future -- which night appear currently as income effects -- have no influence on current equilibrium output. With investment included, no combination of income effects and shifts to the perceived profitability of investment will yield positive co-movements of output, employment, investment and consumption. Therefore, misperceived monetary disturbances or other sources of changed beliefs about the future cannot be used to generate empirically recognizable business cycles. Some richer specifications of intertemporal production opportunities may eventually yield more satisfactory answers. Because of the positive correlation between cyclical movements of consumption and work, equilibrium theories with time-separable preferences inevitably predict a procyclical behavior for the real wage rate, arising from shifts to labor's marginal product. Empirically, we regard the cyclical behavior of real wages as an open question. Aside from analyzing autonomous real shocks to productivity, we suggest that such shifts may occur as firms vary their capital utilization in response to intertemporal relative prices. However, we still lack some parts of a complete theory.

The Output Cost of Disinflation in Traditional and Vector Autoregressive Models

macroeconomics, vector autoregressive model, disinflation

High-extinction-ratio resonant cavity polarizer for quantum-optics measurements

The use of a high-finesse Fabry-Perot ring cavity with an odd number of reflections as a high-extinction-ratio resonant polarizer is shown. Experimental results from quantum-noise measurements using resonant cavities as spatial and spectral filters and precision polarizers are presented

Importance Tempering

Simulated tempering (ST) is an established Markov chain Monte Carlo (MCMC) method for sampling from a multimodal density $\pi(\theta)$. Typically, ST involves introducing an auxiliary variable $k$ taking values in a finite subset of $[0,1]$ and indexing a set of tempered distributions, say $\pi_k(\theta) \propto \pi(\theta)^k$. In this case, small values of $k$ encourage better mixing, but samples from $\pi$ are only obtained when the joint chain for $(\theta,k)$ reaches $k=1$. However, the entire chain can be used to estimate expectations under $\pi$ of functions of interest, provided that importance sampling (IS) weights are calculated. Unfortunately this method, which we call importance tempering (IT), can disappoint. This is partly because the most immediately obvious implementation is na\"ive and can lead to high variance estimators. We derive a new optimal method for combining multiple IS estimators and prove that the resulting estimator has a highly desirable property related to the notion of effective sample size. We briefly report on the success of the optimal combination in two modelling scenarios requiring reversible-jump MCMC, where the na\"ive approach fails.Comment: 16 pages, 2 tables, significantly shortened from version 4 in response to referee comments, to appear in Statistics and Computin

Baby got back: some brief observations on obesity in ancient female figurines: limited support for waist to hip ratio constant as a signal of fertility

Venus figurines such as the famous Willendorf Venus--provide a possible window into the reproductive preferences of ancestral humans. These figurines cover a period of about 20,000 years of human history and have been found across ice-age Europe. There are a number of unknowns about such figurines. For example, they may be votive offerings, idealisations, or have some as-yet, unguessed-at function. Ancient figurines typically display body types typically considered obese by modern standards of medicine and aesthetics. While some have averred that such figurines show a marked change in human body preferences over thousands of years it is possible that this has been an artifact of particular approaches to measuring such figurines. Measuring a fuller extent of the markers of fat deposition seems to support a case for arguing that male preferences have broadly tracked fertility markers over ancestral time. The waist-to-hip ratio is arguably a more important fertility marker than obesity per se and a 0.7 ratio has been found cross-culturally and in this sample. It is likely that such preferences have been further calibrated by local ecological variations for example as regards food supply but these calibrations would not have a great impact on proportionality preferences. Great caution must be taken in reading too much into such a limited sample

THE AGRICULTURAL RISK MANAGEMENT SIMULATOR MICROCOMPUTER PROGRAM

The Agricultural Risk Management Simulator (ARMS) is a microcomputer program designed to help users evaluate strategies for managing yield and price risk in crop farming operations. Risk management strategies are defined by choices regarding crop mix, the purchase of multiple peril crop insurance, and the use of forward contracting. Probabilistic budgeting is used to determine the net cash flow probability distribution for each strategy considered. Flexibility with regard to both sources of probabilistic information and the form of yield and price probability distributions is a noteworthy feature of the program.Risk and Uncertainty,

THE SUPERMARKET INDUSTRY AT THE START OF THE 21st CENTURY: KEY FINDINGS FROM THE 2000 SUPERMARKET PANEL

The 2000 Supermarket Panel gathered data on store characteristics, management practices, and operating performance from a representative, nation-wide sample of supermarkets. The Panel is unique because the unit of analysis is the individual store, and the same stores will be surveyed over time. Linking information on management practices and store and market characteristics with measures for key performance measures provides useful information for both strategic and tactical decisions. Descriptive findings are presented for stores groups by ownership group size and format. Results from a multivariate analysis of relationships between store performance and key performance drivers also are presented.Agribusiness,