Knowledge that Transforms

A two-sector model is used to explore the role of the agricultural sector in the process of industrialization. Our hypothesis is that areas industrialize earlier where the wages for females and children relative to those for adult males are initially low. Furthermore, the lower this relative productivity of females and children in the pre-industrial economy, the proportionately more will their relative wages increase, and the higher will be the ratio of manufactured to agricultural goods. The model is used to interpret the conditions that fostered the rapid industrialization of the American Northeast, but not the South, from 1820 to 1850.

This paper examines the welfare effects of introducing storage into a market with stochastic supply in which all agents are competitive profit-maximizers with rational expectations. These welfare effects are the net result of the initial increase in demand for stock-building and the partial and asymmetric reduction in the dispersion of consumption brought about by storage. The distributional impacts depend crucially on the information available to producers before storage is introduced, the elasticity of supply, the specification of the consumption demand curve, and the cost of storage.

This paper examines the nature of the equilibrium solution to the duopoly prob-lem under various "incomplete " information structures and the incentives to produce and disclose information. Attention is focused on the duopolists ' cost functions. The results indicate that disclosure of such information is generally beneficial to the duopolists. I.

This paper demonstrates that, contrary to a widely held opinion, the determination of the goals of unions is fully amenable to empirical analysis. A characterization of the wage and employment-setting process in unionized markets is adopted, and its qualitative implications examined. The first-order condition for this model is fitted to time series data on the newspaper industry from ten cities. The International Typographical Union's objective function reveals very restricted opportunities for substituting wages for employment in response to a change in the slope of the employer's labor demand function. Larger union locals place greater emphasis on wages versus employment than smaller union locals.

We explain nontraded goods and labor shortages in the Gulf countries, the decline of the traded goods sector in oil producers (“Dutch Disease”), and the absence of employment benefits of higher oil revenues in Latin American oil producers using a disequilibrium model where real wages and the real exchange rate adjust slowly to clear the labor and nontraded goods market. Higher oil revenues can be likened to a transfer putting pressure on NT goods prices and drawing resources out of the T sector. The slope of the wage indexation line determines whether classical unemployment or repressed inflation results. Various policy measures are analyzed.

In the first part of this article, (hypothetical) contracts providing for all possible uncertain contingencies are considered. In the next part, contracts providing for only some contingencies are examined and are shown to be advantageous, due both to difficulties that could arise in making and enforcing contingent terms and to the presence of implicit substitutes for them. In the following, major part of the article, two of these substitutes for contingent terms are analyzed: remedies for breach, and the opportunity for renegotiation; the existence of both is demonstrated to induce parties to behave approximately as they would under detailed contracts.

The relationship between age-earnings profiles and worker incentives is examined by contrasting wage and salary workers with the self-employed. It is argued that the steepness of wage and salary workers' age-earnings profiles reflects the desire to provide work incentives to those workers. Since self-employed workers do not face this agency problem, they are used as a benchmark to gauge productivity. Empirical support of the proposition is provided, and the effects of human capital accumulation are separated empirically from incentive effects. The most important conclusion is that under some strong assumptions, most of the slope in age-earnings profiles is accounted for by the desire to provide incentives, rather than by on-the-job training.

Journal Article A Note on the Stability Limitations in “A Stable Price Adjustment Process” Get access Larry A. Chenault Larry A. Chenault Miami University, Ohio Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 99, Issue 2, May 1984, Pages 385–386, https://doi.org/10.2307/1885533 Published: 01 May 1984

Several recent papers have tested the permanent income-cum-rational expectations hypothesis using data on nondurable or semidurable consumption. We show how this approach can be extended to the case of durables. An application to panel data on automobile expenditures reveals no evidence against the permanent income hypothesis. This result is unchanged in subsamples segregated by family holdings of liquid assets.

The analysis focuses on the question of whether the payment of compensation for land taken by eminent domain is efficient. When the taking decision is independent of land use, zero compensation is efficient, but full compensation is not. When the project decision is no longer independent of land use, and can be affected by investor decisions, neither compensation rule is generally efficient because of the moral hazard problem. With risk-averse consumers and risk-neutral firms, the previous conclusions remain essentially unchanged. However, when the project decision rule involves a budgetary “fiscal illusion,” additional compensation may be necessary to correct the incentives facing the project decision-maker.