Precautionary Saving in the Small and in the Large

The theory of precautionary saving is shown in this paper to be isomorphic to the Arrow-Pratt theory of risk aversion, making possible the application of a large body of knowledge about risk aversion to precautionary saving, and more generally, to the theory of optimal choice under risk. In particular, a measure of the strength of precautionary saving motive analogous to the Arrow-Pratt measure of risk aversion is used to establish a number of new propositions about precautionary saving, and to give a new interpretation of the Oreze-Modigliani substitution effect.

Labor Market Dynamics When Unemployment Is A Worker Discipline Device

Efficiency wage models of the effort elicitation type have important implications for labor market dynamics. These models have a wide array of discontinuous sunspot equilibria driven by extraneous variables, in addition to well-behaved equilibria characterized by continuous, slowly adjusting patterns of employment. Many aspects of actual labor markets can be replicated by these models. For example, the longer-run movements they predict in employment allow macroeconomic evidence for a large labor supply elasticity to be reconciled with panel data evidence for a small labor supply elasticity. Many testable, but as yet untested predictions about labor market dynamics can also be generated.

Incidence of Auroras and Their North-South Motions in the Northern Auroral Zone

Studies of the incidence of auroral forms and their north and south motions are made by using a close-spaced array of all-sky cameras located in the northern auroral zone at the approximate geomagnetic longitude 250°E. It is found that during the observing season 1957-58 the peak of the average auroral zone occurred at 66-67° geomagnetic latitude. Although the southern extent of auroras retreats northward after local magnetic midnight, the southward motion of the individual forms, observed at the southern edge of the auroral zone, predominates over the northward motion throughout most of the night. The data indicate the existence on any given night of a latitude position near which many auroral forms occur. The first motion of auroras incident north of this position tends to be northward, and the first motion of auroras incident south of this position tends to be southward. A curve showing the occurrence of auroral forms peaks at, and is nearly symmetrical about, local geographic midnight, but the intensity of auroral emissions measured over the celestial hemisphere remains at a high level after midnight.NSP Grant No. Y/22.6/327Ye

Liquidity Constraints and Precautionary Saving

Economists working with numerical solutions to the optimal consumption/saving problem under uncertainty have long known that there are quantitatively important interactions between liquidity constraints and precautionary saving behavior. This paper provides the analytical basis for those interactions. First, we explain why the introduction of a liquidity constraint increases the precautionary saving motive around levels of wealth where the constraint becomes binding. Second, we provide a rigorous basis for the oft-noted similarity between the effects of introducing uncertainty and introducing constraints, by showing that in both cases the effects spring from the concavity in the consumption function which either uncertainty or constraints can induce. We further show that consumption function concavity, once created, propagates back to consumption functions in prior periods. Finally, our most surprising result is that the introduction of additional constraints beyond the first one, or the introduction of additional risks beyond a first risk, can actually reduce the precautionary saving motive, because the new constraint or risk can hide' the effects of the preexisting constraints or risks.

Presence of negative entropies in Casimir interactions

Negative entropy in connection with the Casimir effect at uniform temperature is a phenomenon rooted in the circumstance that one is describing a nonclosed system, or only part of a closed system. In this paper we show that the phenomenon is not necessarily restricted to electromagnetic theory, but can be derived from the quantum theory of interacting harmonic oscillators, most typically two oscillators interacting not directly but indirectly via a third one. There are two such models, actually analogous to the transverse magnetic (TM) and transverse electric (TE) modes in electrodynamics. These mechanical models in their simplest version were presented some years ago, by J. S. H{\o}ye et al., Physical Review E {\bf 67}, 056116 (2003). In the present paper we re-emphasize the physical significance of the mechanical picture, and extend the theory so as to include the case where there are several mediating oscillators, instead of only one. The TE oscillator exhibits negative entropy. Finally, we show explicitly how the interactions via the electromagnetic field contain the two oscillator models.Comment: 12 pages, no figure

The dynamics of the aurora. Part VII - Equatorward motions and the multiplicity of auroral arcs

Dynamic motions of Aurora 7 towards equato