Dynamic General Equilibrium Models with Imperfectly Competitive Product Markets

This paper discusses the consequences of introducing imperfectly competitive product markets into an otherwise standard neoclassical growth model. We pay particular attention to the consequences of imperfect competition for the explanation of fluctuations in aggregate economic activity. Market structures considered include monopolistic competition, the 'customer market' model of Phelps and Winter, and the implicit collusion model of Rotemberg and Saloner. Empirical evidence relevant to the numerical calibration of imperfectly competitive models is reviewed. The paper then analyzes the effects of imperfect competition upon the economy's response to several kinds of real shocks, including technology shocks, shocks to the level of government purchases, and shocks that change individual producers' degree of market power. It also discusses the role of imperfect competition in allowing for fluctuations due solely to self-fulfilling expectations.

Imperfect Competition and the Effects of Energy Price Increases on Economic Activity

We show that modifying the standard neoclassical growth model by assuming that competition is imperfect makes it easier to explain the size of the declines in output and real wages that follow increases in the price of oil. Plausibly parameterized models of this type are able to mimic the response of output and real wages in the United States. The responses are particularly consistent with a model of implicit collusion where markups depend positively on the ratio of the expected present value of future profits to the current level of output.

Is the Business Cycles a Necessary Consequence of Stochastic Growth?

We compute the forecastable changes in output, consumption, and hours implied by a VAR that includes the growth rate of private value added, the share of output that is consumed, and the detrended level of private hours. We show that the size of the forecastable changes in output greatly exceeds that predicted by a standard stochastic growth model, of the kind studied by real business cycle theorists. Contrary to the model's implications, forecastable movements in labor productivity are small and only weakly related to forecasted changes in output. Also, forecasted movements in investment and hours are positively correlated with forecasted movements in output. Finally, and again in contrast to what the growth model implies, forecasted output movements are positively related to the current level of the consumption share and negatively related to the level of hours. We also show that these contrasts between the model and the observations are robust to allowance for measurement error and a variety of other types of transitory disturbances.

Cyclical Markups: Theories and Evidence

If changes in aggregate demand were an important source of macroeconomic fluctuations, real wages would be countercyclical unless markups of price over marginal cost were themselves countercyclical. We thus examine three theories of markup variation at cyclical frequencies. The first assumes only that the elasticity of demand is a function of the level of output. In the second, firma face a tradeoff between exploiting their existing customers and attracting new customers. Markups then depend also on rates of return and future sales expectations; a high rate of return or expectations of low sales growth lead firms to assign a lower value to future revenues from new customers. Firma thus raise prices and markups. In the third theory, markups are chosen to ensure that no one deviates from an (implicitly) collusive understanding. Increases in rates of return or pessimistic expectations then lead firms to be less concerned with future punishments so that markups fall. Aggregate post-war data from the U.S. are moat consistent with the predictions of the implicit collusion model.

Energy Taxes and Aggregate Economic Activity

This paper shows that the output losses from energy taxes are significantly larger than usually computed when due account is taken of imperfect competition among energy using firms. Even with perfect competition among these firms, the loss in GNP is of the same order of magnitude as the revenue raised by these taxes. However, in the presence of imperfect competition the output losses are much higher. There are particularly large transitory losses in the immediate aftermath of energy price increases when firms act as implicitly colluding oligopolists. These losses become considerably smaller if energy taxes are phased-in. We also show that taxes that affect only household consumption of energy have much smaller effects. In particular, for the empirically plausible parameter values we consider, such taxes have no effect on employment or output in the non-energy sector.

Compact Binary Waveform Center-of-Mass Corrections

We present a detailed study of the center-of-mass (c.m.) motion seen in simulations produced by the Simulating eXtreme Spacetimes (SXS) collaboration. We investigate potential physical sources for the large c.m. motion in binary black hole simulations and find that a significant fraction of the c.m. motion cannot be explained physically, thus concluding that it is largely a gauge effect. These large c.m. displacements cause mode mixing in the gravitational waveform, most easily recognized as amplitude oscillations caused by the dominant (2,$\pm$2) modes mixing into subdominant modes. This mixing does not diminish with increasing distance from the source; it is present even in asymptotic waveforms, regardless of the method of data extraction. We describe the current c.m.-correction method used by the SXS collaboration, which is based on counteracting the motion of the c.m. as measured by the trajectories of the apparent horizons in the simulations, and investigate potential methods to improve that correction to the waveform. We also present a complementary method for computing an optimal c.m. correction or evaluating any other c.m. transformation based solely on the asymptotic waveform data.Comment: 20 pages, 15 figure

Effects of introduced trout predation on non-diadromous galaxiid fish populations across invaded riverscapes

Abstract We assessed the landscape-scale effect of predation pressure from trout on the population integrity and distributions of non-diadromous galaxiids in high-country streams of the South Island, New Zealand. The effects of trout (brown trout, Salmo trutta, and rainbow trout, Oncorhynchus mykiss) on two widespread species, the Canterbury galaxias (Galaxias vulgaris Stokell) and the alpine galaxias (G. paucispondylus Stokell) were assessed. Experiments confirmed that both species were vulnerable to trout predation and that habitat (size and disturbance regime) may be a factor in local co-occurrence. Quantitative electrofishing surveys indicated that G. paucispondylus distributions were less affected by trout than G. vulgaris distributions and that the species’ range was limited by temperature. Trout created demographic sinks for G. vulgaris across most invaded reaches, while refuge populations in streams above barriers to trout acted as demographic sources for this species. G. vulgaris was consistently absent from small, stable stream reaches far from sources, indicating that trout predation pressure and propagule pressure (driven by immigration from sources) interact to drive local G. vulgaris persistence in trout-invaded reaches. Predation pressure is likely to be highest in areas where infrequent flooding allows high densities of large trout (> 150 mm FL) to occur and where there are few refugia for galaxiids. A spatial model was developed to predict exclusion of galaxiids by trout across invaded networks. If used appropriately, the model could be used to find new refuge populations of non-diadromous galaxiids and to aid planning of active rehabilitation of trout-invaded river networks