Knowledge that Transforms

[Conventionally labor supply modeling has been dichotomized from consumption expenditure allocation. We estimate a model unifying both aspects of the consumer's decision problem, and we test for the two-stage decision implied by the conventional dichotomy. We investigate the gains from joint modeling. We use a version of the Rotterdam model recently shown by Barnett [6] to be derivable at the aggregate level under weaker assumptions than those needed to acquire empirically usable theoretical results at the aggregate level with other models; our results are not subject to the restrictiveness imputed to earlier uses of versions of the Rotterdam model.]

A. Holly, P. C. B. Phillips, A Saddlepoint Approximation to the Distribution of the k-Class Estimator of a Coefficient in a Simultaneous System, Econometrica, Vol. 47, No. 6 (Nov., 1979), pp. 1527-1547

Benjamin M. Friedman, V. Vance Roley, Investors' Portfolio Behavior under Alternative Models of Long-Term Interest Rate Expectations: Unitary, Rational, or Autoregressive, Econometrica, Vol. 47, No. 6 (Nov., 1979), pp. 1475-1497

[This paper investigates the degree to which a "leading" time series improves the prediction of coincident series. The theory of covariance-stationary processes is used as the theoretical framework and empirical tests dealing with the predictive ability of "leading" series are supplied.]

[The Arrow-Debreu model is extended to include a sequential market model with financial markets. This is done by dropping the contingent contracts from the Arrow-Debreu model, leaving only a sequence of spot markets for commodities. The resulting market structure is inefficient. Efficiency is restored with a sequence of stock markets and option markets. In addition, consumers are shown to be unanimous in wanting each firm to maximize the price of its common stock.]

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