A Century of Work and Leisure

Has leisure increased over the last century? Standard measures of hours worked suggest that it has. In this paper, we develop a comprehensive measure of non-leisure hours that includes market work, home production, commuting and schooling for the last 105 years. We also present empirical and theoretical arguments for a definition of %u201Cper capita%u201D that encompasses the entire population. The new measures reveal a number of interesting 20th Century trends. First, 70 percent of the decline in hours worked has been offset by an increase in hours spent in school. Second, contrary to conventional wisdom, average hours spent in home production are actually slightly higher now than they were in the early part of the 20th Century. Finally, leisure per capita is approximately the same now as it was in 1900.

Monetary policy in a Markov-switching VECM: implications for the cost of disinflation and the price puzzle

Monetary policy VARs typically presume stability of the long-run outcomes. We introduce the possibility of switches in the long-run equilibrium in a cointegrated VAR by allowing both the covariance matrix and weighting matrix in the error-correction term to switch. We find that monetary policy alternates between sustaining long-run growth and disinflationary regimes. Allowing state changes can also help explain the price puzzle and justify the use of commodity prices as a corrective measure. Finally, we show that regime-switching has implications for disinflationary monetary policy and can explain the variety of sacrifice ratio estimates that exist in the literature.Monetary policy ; Econometric models

Measures of Per Capita Hours and their Implications for the Technology-Hours Debate

Structural vector autoregressions give conflicting results on the effects of technology shocks on hours. The results depend crucially on the assumed data generating process for hours per capita. We show that the standard measure of hours per capita has significant low frequency movements that are the source of the conflicting results. HP filtered hours per capita produce results consistent with the those obtained when hours are assumed to have a unit root. We provide an alternative measure of hours per capita that adjusts for low frequency movements in government employment, schooling, and the aging of the population. When the new measure is used to determine the effect of technology shocks on hours using long-run restrictions, both the levels and the difference specifications give the same answer: hours decline in the short-run in response to a positive technology shock.

A Century of Work and Leisure

hours, long-run trends, schooling

The low-frequency impact of daily monetary policy shocks

With rare exception, studies of monetary policy tend to neglect the timing of the innovations to the monetary policy instrument. Models which do take timing seriously are often difficult to compare to standard VAR models of monetary policy because of the differences in the frequency that they use. We propose an alternative model using MIDAS regressions which nests both ideas: Accurate (daily) timing of innovations to the monetary policy instrument are embedded in a monthly frequency VAR to determine the macroeconomic effects of high frequency changes to policy. We find that taking into account the timing of the shocks is important and can alleviate some of the puzzles in standard monthly VARs [e.g., the price puzzle]. We find that policy shocks are most important to variables thought of as being heavily expectations-oriented and that, contrary to some VAR studies, the effects of FOMC shocks on real variables are small.>Monetary policy ; Econometric models ; Prices

The local effects of monetary policy

Previous studies have documented disparities in the regional responses to monetary policy shocks; this variation has been found to depend, in part, on differences in the industrial composition of the regional economies. However, because of computational issues, the literature has often neglected the richest level of disaggregation: the city. In this paper, we estimate the city-level responses to monetary policy shocks in a Bayesian VAR. The Bayesian VAR allows us to model the entire panel of metropolitan areas through the imposition of a shrinkage prior. We then seek the origin of the city-level asymmetric responses.Vector autoregression ; Econometric models

An Empirical Study Of The Factors Contributing To Microcomputer Usage

Information technology--computers, communication networks and the like--has assumed a role of growing importance in both private and public sector organizations during the 1980\u27s. This technology is no longer the private preserve of small groups of computer specialists; rather, the office automation and end user computing movements are placing information technology into the hands of workers at all levels, and in all areas. The emergence of the business microcomputer has played a central role in this trend.;The rapid growth of microcomputers in the workplace, however, has not been without problems. In some offices, even where having a microcomputer is viewed as a status symbol, the systems themselves are highly used.;Because information technology, and in particular the microcomputer, has come to play such an important role in modern organizations, it is crucial that we develop a better understanding of the various factors that affect managers\u27 decisions whether to adopt this technology. The purpose of this research is to develop and test a model of the relationships between a variety of external variables, and the managers\u27 usage of computers.;Fishbein\u27s \u27theory of reasoned action,\u27 a widely accepted model of human behaviour, lies at the core of this study. Fishbein\u27s model posits that one\u27s intention to act a certain way (e.g., begin to use a microcomputer) is derived from two general classes of factors: attitudes, and subjective norms. Furthermore, intention leads to action (barring the presence of external variables, e.g., unavailability of a microcomputer).;Data was collected from a cross-sectional survey of 519 managers, drawn from managers of 54 corporations in Ontario. The results provided support for 11 of the 16 propositions in the model. Using LISREL as the data analysis technique, it was found that positive attitudes towards computer usage, and subjective norms that supported usage led to higher levels of usage. In turn, attitudes were affected by computer anxiety, computer skills, the quality of the system and management support. Subjective norms were affected by management support, and usage by upper level managers and peer managers in the organization

The use of long-run restrictions for the identification of technology shocks

The authors survey the recent empirical literature using long-run restrictions to identify technology shocks and provide an illustrative walk-through of the long-run restricted vector autoregression (VAR) methodology in a bivariate framework. Additionally, they offer an alternative identification of technology shocks that can be imposed by restrictions on the long-run impulse responses to evaluate the robustness of the conclusions drawn by the structural VAR literature. Their results from this methodology compare favorably with the empirical literature that uses structural VARs to identify technology shocks.Business cycles ; Technology

What explains the varying monetary response to technology shocks in G-7 countries?

In a recent paper, Galí, López-Salido, and Vallés (2003) examined the Federal Reserve’s response to VAR-identified technology shocks. They found that during the Martin-Burns- Miller era, the Fed responded to technology shocks by overstabilizing output, while in the Volcker-Greenspan era, the Fed adopted an inflation-targeting rule. We extend their analysis to countries of the G-7; moreover, we consider the factors that may contribute to differing monetary responses across countries. Specifically, we find a relationship between the volatility of capital investment, type of monetary policy rule, the responsiveness of the rule to output and inflation fluctuations, and the response to technology shocks.Technology ; Monetary policy ; Taylor's rule

What Explains the Varying Monetary Response to Technology Shocks in G-7 Countries?

In a recent paper, Galí, López-Salido, and Vallées (2003) examined the Federal Reserve’s response to VAR-identified technology shocks. They found that during the Martin-Burns- Miller era, the Federal Reserve responded to technology shocks by overstabilizing output, while in the Volcker-Greenspan era, the Federal Reserve adopted an inflation-targeting rule. We extend their analysis to countries of the G-7; moreover, we consider the factors that may contribute to differing monetary responses across countries. Specifically, we find a relationship between the volatility of capital investment, the type of monetary policy rule, the responsiveness of the rule to output and inflation fluctuations, and the response to technology shocks.price setting; nominal rigidity; real rigidity; inflation persistence; survey data