Comparing Income Distributions Between Economies That Reward Innovation And Those That Reward Knowledge

In this paper, we develop an optimal control model of labor allocation in two types of economy - one economy is for innovative workers and the other one for knowledge workers. In both economies, workers allocate time between learning and discovering new knowledge. Both markets consist of a continuum of heterogeneous agents that are distinguished by their learning ability. Workers are rewarded for the knowledge they possess in the knowledge economy, and only for the new knowledge they create in the innovative economy. We show that, at steady state, while human capital accumulation is higher in the knowledge economy, the rate of knowledge creation is not necessarily higher in the innovative economy. Secondly, we prove that when the cost of learning is sufficiently high, the distribution of net wage income in the knowledge economy dominates that in the innovative economy in the first degree.

Bayesian Model Averaging in Vector Autoregressive Processes with an Investigation of Stability of the US Great Ratios and Risk of a Liquidity Trap in the USA, UK and Japan.

A Bayesian model averaging procedure is presented within the class of vector autoregressive (VAR) processes and applied to two empirical issues. First, stability of the Great Ratios in U.S. macro-economic time series is investigated, together with the presence and effects of permanent shocks. Measures on manifolds are employed in order to elicit uniform priors on subspaces defined by particular structural features of linear VARs. Second, the VAR model is extended to include a smooth transition function in a (monetary) equation and stochastic volatility in the disturbances. The risk of a liquidity trap in the USA, UK and Japan is evaluated, together with the expected cost of a policy adjustment of central banks. Posterior probabilities of different models are evaluated usingMarkov chainMonte Carlo techniques.

DO MISSING INSTITUTIONAL ARRANGEMENTS BLOCK ENLARGEMENT OF WATER MARKETS?

As we consider the potential for expanding water markets as a means to help prevent water shortages, it is clear that there is resistance to such an expansion. This resistance should not be surprising given that there are likely to be both gainers and losers from expanded water markets. This papers shows that there are a number of potential market failures when water markets are expanded and that these failures are important to different stakeholder groups. These failures result from both technical and pecuniary externalities. If markets are to expand beyond the local level, new institutional arrangements will be needed that help reduce the negative impacts of the different market failures. In the past a number of institutional arrangements have been used by different stakeholder groups to block trading. We review some of these arrangements as well as institutional arrangements that can work to promote market expansion by mitigating market failures or by compensating damaged parties.Resource /Energy Economics and Policy,

Evidence on a DSGE Business Cycle model subject to Neutral and Investment-Specific Technology Shocks using Bayesian Model Averaging

The empirical support for a DSGE type of real business cycle model with two technology shocks is evaluated using a Bayesian model averaging procedure that makes use of a finite mixture of many models within the class of vector autoregressive (VAR) processes. The linear VAR model is extended to permit equilibrium restrictions and restrictions on long-run responses to technology shocks apart from having a range of lag structures and deterministic processes. These model features are weighted as posterior probabilites and computed using MCMC and analytical methods. Uncertainty exists as to the most appropriate model for our data, with five models receiving significant support. The model set used has substantial implications for the results obtained. We do find support for a number of features implied by the real business cycle model. Business cycle volatility seems more due to investment specific technology shocks than neutral technology shocks and this result is robust to model specification. These techonolgy schocks appear to account for all stochastic trends in our system after 1984. we provide evidence on the uncertainty bands associated with these results.

Model Uncertainty and Bayesian Model Averaging in Vector Autoregressive Processes

Economic forecasts and policy decisions are often informed by empirical analysis based on econometric models. However, inference based upon a single model, when several viable models exist, limits its usefulness. Taking account of model uncertainty, a Bayesian model averaging procedure is presented which allows for unconditional inference within the class of vector autoregressive (VAR) processes. Several features of VAR process are investigated. Measures on manifolds are employed in order to elicit uniform priors on subspaces defined by particular structural features of VARs. The features considered are the number and form of the equilibrium economic relations and deterministic processes. Posterior probabilities of these features are used in a model averaging approach for forecasting and impulse response analysis. The methods are applied to investigate stability of the "Great Ratios" in U.S. consumption, investment and income, and the presence and effects of permanent shocks in these series. The results obtained indicate the feasibility of the proposed method.Posterior probability; Grassman manifold; Orthogonal group; Cointegration; Model averaging; Stochastic trend; Impulse response; Vector autoregressive model.

Improper priors with well defined Bayes Factors

While some improper priors have attractive properties, it is generally claimed that Bartlett’s paradox implies that using improper priors for the parameters in alternative models results in Bayes factors that are not well defined, thus preventing model comparison in this case. In this paper we demonstrate, using well understood principles underlying what is already common practice, that this latter result is not generally true and so expand the class of priors that may be used for computing posterior odds to two classes of improper priors: the shrink age prior; and a prior based upon a nesting argument. Using a new representation of the issue of undefined Bayes factors, we develop classes of improper priors from which well defined Bayes factors result. However, as the use of such priors is not free of problems, we include discussion on the issues with using such priors for model comparison.Improper prior; Bayes factor; marginal likelihood; shrinkage prior; measure

Remote administration and user experience evaluation of the iLab Heat Transfer Project site

Thesis (M. Eng.)--Massachusetts Institute of Technology, Dept. of Electrical Engineering and Computer Science, 2006.Includes bibliographical references.The iLab Heat Transfer Project provides a means for students to remotely execute, via a web interface, experiments related to the topic of heat transfer. The website associated with this project provides instructors with the ability to remotely manage the performance of experiments by their students. This thesis describes improvements made to this website that are intended to grant more control to instructors. Specifically, the website has been augmented to provide remote instructors with complete control over experiment scheduling, user registration, document uploading, and other relevant administrative tasks. The interfaces by which users perform experiments have been modified to incorporate an audio and video feed of the laboratory equipment used in these experiments. In addition, the website has been extended with a feature that facilitates the viewing and analysis of questionnaire responses collected from students. The questionnaire responses provided by students have been examined to gain more knowledge about the effectiveness of various aspects of the website and experiment interfaces.by Rodney K. Graham.M.Eng

Tribute to the Honorable Rex E. Lee Solicitor General of the United States 1981-85

Rex Lee lived a life of faith. He had faith in the legal profession, faith in the United States Constitution, faith in education, faith in family, and faith in God