Knowledge that Transforms

This paper investigates empirically a model of aggregate consumption and leisure decisions in which utility from goods and leisure is nontime-separable. The nonseparability of preferences accommodates intertemporal substitution or complementarity of leisure and thereby affects the comovements in aggregate compensation and hours worked. These cross-relations are examined empirically using postwar monthly U. S. data on quantities, real wages, and the real return on the one-month Treasury bill. The estimated values of the parameters governing preferences differ significantly from the values assumed in several studies of real business models. Several possible explanations of these discrepancies are discussed.

Nils Gottfries, Torsten Persson; Empirical Examinations of the Information Sets of Economic Agents*, The Quarterly Journal of Economics, Volume 103, Issue 1, 1

Wilfrid W. Csaplar, Jr., Edward Tower; Trade and Industrial Policy Under Oligopoly: Comment, The Quarterly Journal of Economics, Volume 103, Issue 3, 1 August 1

There has been much recent discussion ahout the ultimate sources of macroeco-nomic variability. A number ofauthors attribute most of this variability to only B few sowces, sometimes only one. Although there may be only B few important sources, this is fsr from obvious, since economies seem compliested. The purpose of this paper is to provide qusntitstive estimates of various sowces of vsriability using B U.S. econometric model. Stochastic simulation is used to estimate how much the overall variances of real GNP and the GNP deflator are reduced when various shocks BIG suppressed in the model. I. Ii-4TR0000~10~ There has been much recent discussion about the ultimate sources of macroeconomic variability. Shiller [1987] surveys this work, where he points out that a number of authors attribute most of output or unemployment variability to only a few sources, sometimes only one. The sources vary from technology shocks for Kydland and Prescott [1982], to unanticipated changes in the money stock for Barre [1977], to “unusual structural shifts, ” such as changes in the demand for produced goods relative to services, for Lilien [1982], to oil price shocks for Hamilton [1983], to changes in desired consumption for Hall [1986]. (See Shiller [1987] for more references.) Although it may be that there are only a few important sowces of macroeconomic variability, this is far from obvious. Economies seem complicated, and it may be that there are many important sources. The purpose of this paper is to estimate the quantitative importance of various sources of variability using a macroeconometric model. Macroeconometric models provide an obvious vehicle for esti-mating the sources of variability of endogenous variables. There are two types of shocks that one needs to consider: shocks to the stochastic equations and shocks to the exogenous variables. Shocks to the stochastic equations are easy to handle. They ax simply draws from the postulated distribution (usually normal) of the structural error terms, the distribution upon which the estimation *This paper grew out of discussions with Robert Shiller, to whom I am indebted for many helpful suggestions and comments. Some of the results in this paper are

Journal Article Short-Run Models and Long-Run Forecasts: A Note on the Permanence of Output Fluctuations Get access Joseph E. Gagnon Joseph E. Gagnon Board of Governors of the Federal Reserve System Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 103, Issue 2, May 1988, Pages 415–424, https://doi.org/10.2307/1885122 Published: 01 May 1988

Journal Article Trade and Industrial Policy Under Oligopoly: Reply Get access Jonathan Eaton, Jonathan Eaton University of Virginia Search for other works by this author on: Oxford Academic Google Scholar Gene M. Grossman Gene M. Grossman Princeton University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 103, Issue 3, August 1988, Pages 603–607, https://doi.org/10.2307/1885548 Published: 01 August 1988

Journal Article Equilibrium Inflation as Determined by a Policy Committee Get access Richard Cothren Richard Cothren Virginia Polytechnic Institute and State University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 103, Issue 2, May 1988, Pages 429–434, https://doi.org/10.2307/1885124 Published: 01 May 1988

Journal Article The Influence of Attitudes Toward Risk on the Value of Forecasting Get access Roger D. Blair, Roger D. Blair Department of Economics, University of Florida Search for other works by this author on: Oxford Academic Google Scholar Richard E. Romano Richard E. Romano Department of Economics, University of Florida Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 103, Issue 2, May 1988, Pages 387–396, https://doi.org/10.2307/1885119 Published: 01 May 1988

In this paper we evaluate empirically the relative importance of two explanations of Yugoslav interindustry income differentials. One explanation, proposed initially by Vanek and Jovicic [1975], stresses capital market imperfections which permit capital rents to be appropriated as workers' incomes. The second explanation points to labor allocation problems under self-management. We first present a critique of the Vanek-Jovicic original formulation and then respecify the problem to permit simultaneous evaluation of the two schools of thought. Results based on two data sets suggest that labor allocation factors and monopoly power rather than capital rents are the main source of Yugoslav earnings dispersion.