Knowledge that Transforms

Journal Article Introduction Get access Robert J. Babro, Robert J. Babro Search for other works by this author on: Oxford Academic Google Scholar Paul M. Romer Paul M. Romer Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 106, Issue 2, May 1991, Page i, https://doi.org/10.1093/qje/106.2.i Published: 01 May 1991

Journal Article Consistent Wage Offer and Reservation Wage Distributions Get access Michael Sattinger Michael Sattinger State University of New York at Albany Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 106, Issue 1, February 1991, Pages 277–288, https://doi.org/10.2307/2937916 Published: 01 February 1991

Journal Article The Euclidean Distance Approach to Continuous Utility Functions Get access Ghanshyam Mehta Ghanshyam Mehta University of Queensland, Australia Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 106, Issue 3, August 1991, Pages 975–977, https://doi.org/10.2307/2937938 Published: 01 August 1991

I test for the importance of wage rigidities from long-term contracts by observing how employment responds when firms and workers recontract. If rigidities are important, then employment should adjust after recontracting to partially undo its movements during the past contract. I examine twelve manufacturing industries that display a strong bargaining pattern. I find employment does rebound after recontracting, particularly in motor vehicles. This implies that contract rigidities are important. I also find responses in wage growth at the beginning of new contracts; but these responses are not related to the pattern of employment responses across industries.

I derive necessary and sufficient conditions for the intertemporal equalization of optimal tax rates. The conditions in the case of wage taxes include constant-elasticity labor supply and constant relative risk aversion. Wage taxes should be low in times of relatively elastic labor supply, or low risk aversion. The conditions in the case of capital taxes include perfect-foresight expectations and constant relative risk aversion. If foresight is imperfect, intertemporal equality will be impeded by a covariance term; if relative risk aversion is time-varying, next period's capital tax should have the same sign as this period's change in relative risk aversion.

A reconsideration of the Pigovian theory of regulating externalities via taxation is undertaken for environments with private information. The presence of private information may have no effect on the social optimum; but when it has an impact, it is to cause a group of different agents to share the same production or consumption levels. The model developed provides an appealing characterization of when such situations transpire: they occur when the individuals who desire most to engage in some activity are the ones who society least wants to participate. Since such instances could potentially be regulated by the imposition of quantity controls, this may explain authorities' apparent predilection for quantity limits rather than tax-cum-subsidy schemes to manage many externalities.

Journal Article Spatial Competition and the Core Get access Jonathan H. Hamilton, Jonathan H. Hamilton University of Florida Search for other works by this author on: Oxford Academic Google Scholar W. Bentley MacLeod, W. Bentley MacLeod Universite de Montreal Search for other works by this author on: Oxford Academic Google Scholar Jacques-François Thisse Jacques-François Thisse CORE and Virginia Polytechnic Institute Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 106, Issue 3, August 1991, Pages 925–937, https://doi.org/10.2307/2937934 Published: 01 August 1991

This paper sets forth some key aggregate stochastic implications of the Modigliani-Brumberg [19801 life cycle hypothesis and explores the extent to which a properly aggregated life cycle model can help to explain the first and second moment properties of changes in per capita consumption. The principal finding of the paper, which to my knowledge is new, is that smooth per capita consumption in the presence of permanent shocks to per capital labor income is exactly the outcome one should expect from a properly aggregated life cycle model in which saving for retirement, as well as for consumption smoothing, is a motive for asset accumulation. I.

Around the turn of the century, Southern blacks lost the right to vote, and discrimination against them by local government officials intensified. This paper argues that, in the case of the de jure segregated public schools attended by black children, the ability of Southern blacks to "vote with their feet" placed limits on local government discrimination.

The paper presents empirical tests of the (S, s) model of inventory behavior using aggregate retail trade data. Estimation and testing are based on the probability distributions of inventories derived by Caplin [1985]. The excess volatility of retailers' demand over their consumers' demand, and the "forgetfulness" of inventories under (S, s) are emphasized. Test results indicate that the time series properties of deliveries and sales are consistent with (S, s) and not a quadratic cost model. Finally, when autoregressions of inventories are given an (S, s) rather than a stock adjustment interpretation, traditional empirical problems such as low speeds of adjustment are explained.