Knowledge that Transforms

Accepted Manuscripts Get access The Quarterly Journal of Economics, Volume 102, Issue 1, February 1987, Pages 173–177, https://doi.org/10.1093/qje/102.1.173 Published: 01 February 1987

Journal Article Incentives for Information Production and Disclosure: Comment Get access Daniel J. Seidmann Daniel J. Seidmann Trinity College, Dublin Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 102, Issue 2, May 1987, Pages 445–452, https://doi.org/10.2307/1885073 Published: 01 May 1987

Francois Melese, William Transue; Unscrambling Chaos through Thick and Thin: An Explanation, The Quarterly Journal of Economics, Volume 102, Issue 1, 1 Feb

This paper concerns the classification of biases in the set of produced varieties in a monopolistically competitive equilibrium in the natural oligopoly setting. That is, we analyze the relationship between the set of produced goods in equilibrium when fixed costs are small and the set of produced goods by a social planner when fixed costs equal zero. It is shown that if all of the goods are substitutes, there are never too few varieties, and there may be too many. Conversely, if the goods are all complementary, there are never too many, and there may be too few.

This paper uses a dynamic general equilibrium model of the product cycle in North-South trade to analyze the short-run and long-run effects of import quotas imposed in the North on manufactured goods from the South. The short-run effects are predictable: real wages in the North may rise as a result of the protection, though even this is not certain if the South captures the quota rents. The long-run effect of the protection is to unambiguously reduce real wages in the North because the quotas artificially increase production costs in the North relative to the South, accelerating the transfer of technology and capital from North to South.

This paper analyzes the implications for turnover of costly job-specific training. The presence of such costs in a search model implies that turnover decisions reduce the value of potential trades that are available to other market participants. There is too much turnover because of this external effect, and, therefore, too much retraining. When the investment in job training is endogenous, inefficient turnover again occurs, and the investment in specific skills is inefficiently high. The interactions between skill acquisition and turnover imply that it is essentially impossible for a brokerage institution to achieve efficiency.

This paper examines the impact of workers' ability to quit on the performance of labor contracts between workers and privately informed firms. While the need to induce workers to remain with the firm necessarily lowers total welfare, the effect on employment levels is to reduce the magnitude of the inefficiency due to asymmetric information, whether this inefficiency is under- or overemployment. The model predicts that employment distortions increase with the strength of lock-in effects on workers, a prediction which contrasts with the results of efficiency wage models and which may help in empirical testing of labor contract theory.

This paper presents some evidence on expenditure patterns over the lifecycle that has a direct bearing on the question of whether households are significantly credit constrained. Our particular test looks at the consumption of food, alcoholic beverages, and tobacco to see whether the consumption of the latter two “goods” falls as couples have children. The latter usually involves a decrease in household current income and an increase in needs. If households are not credit constrained, they should maintain their consumption of alcoholic beverages and tobacco. We find no significant decrease in the consumption of these goods.

This paper examines the effect of unions on efficiency by estimating cost function systems over three different sets of construction projects. The results show that union contractors have greater economies of scale. This gives them a cost advantage in large commercial office buildings, but in school and hospital construction, nonunion contractors have lower costs at all output levels. Despite the cost differences, profits for nonunion contractors in school and hospital construction are no higher than those for union contractors because the burden of higher union costs is shifted to buyers.

This paper examines the dynamics of capital accumulation in a small open economy where home capital is risky and consumers are risk-averse. It is assumed that the economy participates in perfect international bond markets but that risky home capital is held by domestic residents only. Under these assumptions the rate of investment is no longer independent of the saving rate, and they are positively related. As a result, a rise in savings does not increase foreign investment by the same amount but by less, and in some situations the quantity of foreign assets may even decrease.