The consumption-tightness puzzle

This paper introduces a labor force participation choice into a labor market matching model embedded in a dynamic stochastic general equilibrium set-up with production and savings. The participation choice is modelled as a tradeoff between forgoing the expected benefits of being search active and engaging in costly labor market search. The model induces a symmetry in firms’ and workers’ search decision since both sides of the labor market vary search effort at the extensive margins. We show that this set-up is of considerable analytical convenience and that it gives rise to a linear relationship between labor market tightness and the marginal utility of consumption. We refer to the latter as the “consumption - tightness puzzle” because (a) it gives rise to a number of counterfactual implications, and (b) it is a robust implication of theory. Amongst the counterfactual implications are very low volatility of tightness, procyclical unemployment, and a positively sloped Beveridge curve. These implications all derive from procyclical variations in participation rates that follow from allowing for the extensive search margin

Prediction of cereal feed value by near infrared spectroscopy

Feed value in form of FEsv (Feed unit / kg dry matter, for piglets) and FEso (Feed unit / kg dry matter, for sows), EDOM (Enzyme Degradable Organic Matter) and EDOMi (Enzyme Degradable Organic Matter, Ileum) is used in the feed evaluation system for pigs. Analysis of feed value have highlighted that there is a significant variation between varieties as well as due to an environmental variation between regions and the harvest year. The chemical analysis is, however, time-consuming and costly, and it is therefore desirable to have a rapid and less expensive method, which makes it possible to carry out more analyses in-situ

Marketing in Online Businesses:The Case of Migrant Entrepreneurial Businesses in the UK

The study presents an empirical investigation of the marketing activities undertaken by online businesses owned by migrant entrepreneurs and is framed by the theoretical lens of entrepreneurial marketing. Key informant interviews are undertaken with 22 entrepreneurs operating online businesses in the UK and augmented by other sources of data. The study finds that the resources available to the entrepreneurs are shaped by their migrant heritage and that they draw on these resources to market their online businesses. The study also finds that, consistent with notions from entrepreneurial marketing, the online nature of their businesses allow the entrepreneurs to meet their own needs and preferences, which are also shaped by their migrant heritage. The study is important since it provides empirical evidence and a theoretically grounded understanding of how online businesses offer migrant entrepreneurs the opportunity to break out of the low growth, low margin, vacancy chain openings and enter high growth, high margin, post-industrial sectors

The Stock Concept Applicability for the Economic Evaluation of Marine Ecosystem Exploitation

Stock models, in which production is interpreted as if it were the population growth of a stock, have been the preferred tool for fishery economics since Clark and Munro (1975) introduced capital theory in these models. Ravn-Jonsen (2009c) applied capital theory to a model in which the production in the ecosystem is a consequence of predator–prey interaction and the somatic growth of the predator as a result of this interaction. By deducing the results of Clark and Munro anew, the assumptions of the stock model are clarified. Four different biomass measures are introduced in the ecosystem model as stocks. The optimum point found with the stock model approach is compared with the optimum point found in the ecosystem model with the capital value calculations of the occurring rent flow. A comparison shows that the stock model fails to generate the correct optimal point. The assumptions behind the use of stock models for species population models are discussed. The population stock model corresponds to a holistic community view, which has in fact failed to explain various phenomena. The production of the marine ecosystem cannot be reduced to a model as if the production were a consequence of the growth of a stock. The concept of a stock is rather an illusion, as is the concept of an optimal stock level. It is essential to liberate fishery economics from a simplified view of population and communities.

Labor Market Dynamics and the Business Cycle: Structural Evidence for the United States

We use a 12-dimensional VAR to examine the dynamic e®ects on the labor market of four structural technology and policy shocks. For each shock, we examine the dynamic effects on the labor market, the importance of the shock for labor market volatility, and the comovement between labor market variables and other key aggregate variables in response to the shock. We document that labor market indicators display ”hump-shaped” responses to the identified shocks. Technology shocks and monetary policy shocks are important for labor market volatility but the ranking of their importance is sensitive to the VAR specification. The conditional correlations at business cycle frequencies are similar in response to the four shocks apart from the correlations between hours worked, labor productivity and real wages. To account for the unconditional correlations between these variables, a mixture of shocks are required.Structural VAR, labor market dynamics, the Beveridge curve

Asymmetric effects of monetary policy in the United States

This paper tests for the presence of asymmetric effects of monetary policy on output. The asymmetries that the authors examine are related to the size and sign of monetary policy shocks and are based on economic theory. Using M1 as the basis for measuring monetary policy shocks, they find evidence in line with previous evidence of larger real effects resulting from positive shocks than from negative shocks—although the authors cannot reject symmetry either. However, using the federal funds rate instead, a measure that is more closely related to the actual conduct of monetary policy, they find that only small negative shocks affect real aggregate activity. The results are interpreted in terms of menu-cost models.Monetary policy ; Macroeconomics

Crossing the Rio Grande: Migrations, business cycles and the welfare state

In this paper we study the macroeconomic effects of an inflow of low-skilled workers into an economy where there is capital accumulation and two types of agents. We find that there are substantial dynamic effects following unexpected migrations with adjustments that resemble those triggered by a sudden disruption of the capital stock. We look at the interrelations between these dynamic effects and three different fiscal systems for the redistribution of income and find that these schemes can change the dynamics and lead to prolonged periods of adjustments. The aggregate welfare implications are sensitive to the welfare system: while there are welfare gains without redistribution, these gains may be turned into costs when the state engages in redistribution.Migration, business cycles, heterogeneous agents, the welfare state

Incomplete cost pass-through under deep habits

A number of empirical studies document that marginal cost shocks are not fully passed through to prices at the firm level and that prices are substantially less volatile than costs. We show that in the relative-deep-habits model of Ravn, Schmitt-Grohe, and Uribe (2006), firm-specific marginal cost shocks are not fully passed through to product prices. That is, in response to a firm-specific increase in marginal costs, prices rise, but by less than marginal costs leading to a decline in the firm-specific markup of prices over marginal costs. Pass-through is predicted to be even lower when shocks to marginal costs are anticipated by firms. In our model, unanticipated firm-specific cost shocks lead to incomplete pass-through (or a decline in markups) of about 20 percent and anticipated cost shocks are associated with incomplete pass-through of about 50 percent. The model predicts that cost pass-through is increasing in the persistence of marginal cost shocks and U-shaped in the strength of habits. The relative-deep-habits model implies that conditional on marginal cost disturbances, prices are less volatile than marginal costs

Labor Market Dynamics and the Business Cycle: Structural Evidence for the United States

We use a 12-dimensional VAR to examine the dynamic effects on the labor market of four structural technology and policy shocks. For each shock, we examine the dynamic e®ects on the labor market, the importance of the shock for labor market volatility, and the comovement between labor market variables and other key aggregate variables in response to the shock. We document that labor market indicators display "hump-shaped" responses to the identified shocks. Technology shocks and monetary policy shocks are important for labor market volatility but the ranking of their importance is sensitive to the VAR specfication. The conditional correlations at business cycle frequencies are similar in response to the four shocks apart from the correlations between hours worked, labor productivity and real wages. To account for the unconditional correlations between these variables, a mixture of shocks are required.Structural VAR, labor market dynamics, the Beveridge curve

Empirical evidence on the aggregate effects of anticipated and unanticipated US tax policy shocks

The authors provide empirical evidence on the dynamic effects of tax liability changes in the United States. We distinguish between surprise and anticipated tax changes using a timing convention. We document that pre-announced but not yet implemented tax cuts give rise to contractions in output, investment and hours worked, while real wages increase. In contrast, there are no significant anticipation effects on aggregate consumption. Implemented tax cuts, regardless of their timing, have expansionary and persistent effects on output, consumption, investment, hours worked and real wages. The findings are shown to be very robust. We argue that tax shocks are empirically important impulses to the US business cycle and that anticipation effects have been significant over several business cycle episodesfiscal policy shocks, tax liabilities, anticipation effects, business cycles