Investment and Uncertainty: A Theory-Based Empirical Approach

This paper provides empirical evidence on the dynamic effects of uncertainty on firm-level capital accumulation. A novelty in this paper is that the firm-level uncertainty indicator is motivated and derived from a theoretical model, the neoclassical investment model with time to build. This model also serves as the base for the empirical work, where an error-correction approach is employed. I find a negative effect of uncertainty on capital accumulation, both in the short and the long run. This outcome cannot be explained by the model alone. Instead, the results suggest that the predominant mechanism at work stems from irreversibility constraints.Investment; Uncertainty; Dynamic Panel Data Models

Measures of Technology and the Business Cycle: Evidence from Sweden and the U.S.

Empirical evidence on the cyclical behavior of technology shocks, or the relative importance of technology shocks versus other structural shocks as sources of fluctuations, hinges crucially on the identification of technological changes. In this paper, we study different measures of technology in order to find out (i) to what extent they capture the same underlying phenomenon and (ii) whether the implications for macroeconomic theory vary between approaches. Several variations of the production function approach and structural VAR models are investigated: the classic Solow residual, the refined Solow residuals of Burnside et al (1995) and Basu and Kimball (1997), large cointegrated VAR models as in King et al (1991) and a small VAR in first differences à la Galí (1999). It turns out that the different measures of technological change are reasonably coherent when applied to US data. However, they are often insignificantly related in the case of Sweden. Furthermore, our results do not support the hypothesis that business cycle fluctuations are primarily drive by changes in technology.Technology shocks; Production function approach; Structural VAR models

Evaluating microfoundations for aggregate price regidities: evidence from matched firm-level data on product prices and unit labor cost

Using data on product-level prices matched to the producing �rm�s unit labor cost, we reject the hypothesis of a full and immediate pass-through of marginal cost. Since we focus on idiosyncratic variation, this does not �t the predictions of the Ma´ckowiak and Wiederholt (2009) version of the Rational Inattention Model. Neither do we �nd that �rms react strongly to predictable marginal cost changes, as expected from the Mankiw and Reis (2002) Sticky Information Model. We �nd that, in line with Staggered Contracts models, �rms consider both the current and future expected marginal cost when setting prices with a sum of coe¢ cients not signi�cantly di¤erent from unity. JEL Classification: D8, E3, L1business cycles, Information, Micro Data, price setting

A sensory map of the odour world in the moth brain

The functional organisation of the moth antennal lobe was studied using two species, Manduca sexta and Spodoptera littoralis, as model organisms. Glomerular activity was investigated at the population level by means of optical imaging techniques. In the male-specific macroglomerular complex (MGC), responses to pheromone compounds corroborated earlier results obtained from single cell recordings, i.e. different compartments of the MGC responded specifically to one component of the pheromone. Among the sexually isomorphic glomeruli the responses to plant-associated compounds were more distributed but odour-specific and similar across individuals of both sexes. Several glomeruli were activated by a single compound and each glomerulus was activated by several different compounds. Thus, broad tuning and overlapping responses suggest an across-glomerular coding mechanism for non-pheromones. Using series of homologous aliphatic compounds revealed that the highest correlation between activity patterns was always found for compounds with the same functional group and with minimal difference in carbon chain length. A concentration-dependence of glomerular activity was found. Increased concentration resulted in a recruitment of activated glomeruli. The single most activated glomerulus was often not the same across concentrations. The movement, however, was generally restricted to neighbouring glomeruli. Furthermore, activity patterns elicited by different odorants were more similar at high than at low stimulus doses. A method to selectively stain a large population of projection neurons with a Ca2+ sensitive dye was applied to S. littoralis. Also at the output level glomeruli were broadly tuned and activity patterns evoked by different odours overlapped each other. Temporal differences were found both between stimuli and between glomeruli. Glomerular activity patterns evoked by different odours became less similar as a function of time

Fuzzy linear programs with optimal tolerance levels

It is usually supposed that tolerance levels are determined by the decision maker a priori in a fuzzy linear program (FLP). In this paper we shall suppose that the decision maker does not care about the particular values of tolerance levels, but he wishes to minimize their weighted sum. This is a new statement of FLP, because here the tolerance levels are also treated as variables

Testing Theories of Job Creation: Does Supply Create Its Own Demand?

Although search-matching theory has come to dominate labor economics in recent years, few attempts have been made to compare the empirical relevance of search-matching theory to efficiency wage and bargaining theories, where employment is determined by labor demand. In this paper we formulate an empirical equation for net job creation, which encompasses search-matching theory and a standard labor demand model. Estimation on firm-level data yields support for the labor demand model, wages and product demand affect job creation, but we find no evidence that unemployed workers contribute to job creation, as predicted by search-matching theory.job creation, involuntary unemployment, search-matching, labor demand, competitiveness

Wage adjustment and productivity shocks

We study how workers’ wages respond to TFP-driven innovations in firms’labor productivity. Using unique data with highly reliable firm-level output prices and quantities in the manufacturing sector in Sweden, we are able to derive measures of physical (as opposed to revenue) TFP to instrument labor productivity in the wage equations. We find that the reaction of wages to sectoral labor productivity is almost three times larger than the response to pure idiosyncratic (firm-level) shocks, a result which crucially hinges on the use of physical TFP as an instrument. These results are all robust to a number of empirical specifications, including models accounting for selection on both the demand and supply side through worker-firm (match) fixed effects. Further results suggest that technological progress at the firm level has negligible effects on the firm-level composition of employees.Matched employer-employee data; sorting; wage; labor productivity; TFP

Nehari's theorem for convex domain Hankel and Toeplitz operators in several variables

We prove Nehari's theorem for integral Hankel and Toeplitz operators on simple convex polytopes in several variables. A special case of the theorem, generalizing the boundedness criterion of the Hankel and Toeplitz operators on the Paley--Wiener space, reads as follows. Let Ξ = (0, 1)d be a d-dimensional cube, and for a distribution f on 2Ξ, consider the Hankel operator Γf (g)(x) = ʃΞ f(x + y)g(y)dy, x ∈ Ξ Then Γf extends to a bounded operator on L2(Ξ) if and only if there is a bounded function b on Rd whose Fourier transform coincides with f on 2Ξ. This special case has an immediate application in matrix extension theory: every finite multi-level block Toeplitz matrix can be boundedly extended to an infinite multi-level block Toeplitz matrix. In particular, block Toeplitz operators with blocks which are themselves Toeplitz, can be extended to bounded infinite block Toeplitz operators with Toeplitz blocks