An International Comparison of Small Business Employment

Contrary to popular perceptions, the United States has a much smaller small-business sector (as a share of total employment) than other countries at a comparable level of economic development, according to this new CEPR report. The authors observe that the undersized U.S. small business sector is consistent with the view that high health care costs discourage small business formation, since start-ups in other countries can tap into government-funded health care systems

A Simple Model of the Transformational Recession Under a Limited Mobility Constraint

This paper considers the impact on sectoral outputs and employments of rapid and large changes in relative prices, such as those which occurred in transition economies during the 1990s. A simple general equilibrium model is developed in which price changes are induced by a tax reform and resource mobility is restricted. The reform is designed to improve the quality of the price system, but is shown to cause a recession the size of which is proportional to the initial tax distortion. It is also demonstrated that a wage flexibility would moderate the magnitude of the recession, but this gain would be obtained at a cost in longer term efficiency, and would be, in any case, unsustainable.Output falls, Central Europe, Former Soviet Union, contractionary impact, relative prices, transition economies

An International Comparison of Small Business Employment

Contrary to popular perceptions, the United States has a much smaller small-business sector (as a share of total employment) than other countries at a comparable level of economic development, according to this new CEPR report. The authors observe that the undersized U.S. small business sector is consistent with the view that high health care costs discourage small business formation, since start-ups in other countries can tap into government-funded health care systems.small business, employment, health care

Estimation of Apollo lunar dust transport using optical extinction measurements

A technique to estimate mass erosion rate of surface soil during landing of the Apollo Lunar Module (LM) and total mass ejected due to the rocket plume interaction is proposed and tested. The erosion rate is proportional to the product of the second moment of the lofted particle size distribution N(D), and third moment of the normalized soil size distribution S(D), divided by the integral of S(D)D^2/v(D), where D is particle diameter and v(D) is the vertical component of particle velocity. The second moment of N(D) is estimated by optical extinction analysis of the Apollo cockpit video. Because of the similarity between mass erosion rate of soil as measured by optical extinction and rainfall rate as measured by radar reflectivity, traditional NWS radar/rainfall correlation methodology can be applied to the lunar soil case where various S(D) models are assumed corresponding to specific lunar sites.Comment: Acta Geophysica 201

Monetary Policy and Regional Interest Rates in the United States, 1880-2002

The long running debate among economic historians over how long it took regional financial markets in the United States to become fully integrated should be of considerable interest to students of monetary unions. This paper reviews the debate, discusses the implications of various hypotheses for the optimality of the US monetary union, and presents some new findings on the origin and diffusion of monetary shocks. It appears that financial markets were integrated in the late nineteenth and early twentieth centuries in the sense that monetary shocks were routinely transmitted from one part of the United States to another. In particular, shocks to interest rates in the eastern financial centers were routinely transmitted to the periphery. However, it also appears that during this period significant shocks to bank lending rates in the periphery often arose on the periphery itself. This suggests that a nineteenth century monetary authority that relied on operations confined to eastern financial centers would have had a difficult time managing the U.S. monetary union. After World War II the problem of eruptions on the periphery declined.

Can government policies increase national long-run growth rates?

We obtain time series estimates of the long run growth rates of 17 OECD countries, and test the hypothesis that these are the same across countries. We find that we cannot reject this hypothesis for the first and last three decades of the 20th century. We conclude that: (i) there are few, if any, feasible policies available that have a significant effect on long run growth rates, and; (ii) any policies that can raise national growth rates must be international in scope. The results therefore have bleak implications for the ability of countries to affect their long run growth rates.economic policy, technological change, convergence, economic growth

Wages, Productivity, and the Dynamic Interaction of Businesses and Workers

This paper exploits a new matched universal and longitudinal employer-employee database at the US Census Bureau to empirically investigate the link between firms' choice of worker mix and the implied relationships between productivity and wages. We particularly focus on the decision making process of new firms and examine the role of both learning and selection. Our key empirical results are: (i) We find substantial and persistent differences in earnings per worker, output per worker, and worker mix across businesses within narrowly defined industries, which remain even after controlling for other observable characteristics. (ii) We find that new businesses exhibit even greater heterogeneity in earnings and productivity than do mature businesses, but that they adjust to the mature business pattern as they age. The adjustment process, while different for earnings and productivity, is consistent both with firms learning as they age and with the exit of mistake' prone firms. (iii) The dynamics of the reduction in productivity heterogeneity of new firms as they age is both complex and very different from the dynamic reduction of earnings heterogeneity.

WWII and Long Run Convergence in the OECD

Existing evidence for unconditional convergence in the OECD is mixed, and depends largely on whether time series or cross sectional methods are used. In this paper we reconsider the evidence for unconditional convergence by dividing the long run data into several subperiods. We use a two stage approach in this work. We first model the growth rate of output directly and use this model to estimate the long-run growth rate for the countries in our sample. We then use the estimates of long-run growth in output to test for unconditional convergence and to test for equality of long-run growth across countries. GLS is used to explicitly take into account the sampling uncertainty inherent in our estimates of the long-run growth rate we found in the first stage of the process. The results show strong evidence for unconditional convergence in the post WWII period 1951-1974, but no evidence of convergence in the periods preceding or following this period. Moreover, it is di±cult to reject the hypothesis that most of the countries in our sample had the same growth rate outside of this period. Thus find little evidence to suggest that absolute convergence has been a continuous long run process, and some evidence for the view that national policies mainly affect income levels rather than growth rateGrowth, Convergence, Technological Change