Knowledge that Transforms

This paper examines the relationship among U.S. imports from the NICs, imports from developed countries, capital, and labor in the production of goods for final demand. Import demand and substitution elasticities are estimated for the period 1960-80. U.S. imports from the NICs are found to be complements with both labor and imports from industrialized countries. This indicates that the substitution effect resulting from a reduction in the price of imports from the NICs would lead to a net increase in employment. Multilateral tariff cuts by the United States would increase the demand for NIC goods despite a reduction in their preferential tariff margins.

The paper measures the rate of growth of average labor cost and the real wage for the twenty U.S. two digit manufacturing industries 1948-76. It is argued that these rates of growth give interesting information which other studies on the real wage ignore. The results suggest that the gains from technical advance are shared equally across all labor markets, consistent with the competitive paradigm. A simple and appealing rationale for the observation that high growth industries show the slowest relative rate of growth of prices is also given. T HE General Theory (Keynes, 1936) unleashed many controversies. One of the earliest and still topical controversy is the cyclical behavior of the real wage. Essentially the real wage-employment debate has focussed on whether or not the demand schedule slopes downwards and there have been many studies on this topic, producing a variety of conflicting findings.' A common feature of the real wage-employment studies is to abstract away from the growth in the real wage that is bound to occur in a growing economy. These studies are primarily concerned with deviations from trend or innovations in the real wage and the theme of this paper is that to ignore the growth in the real wage is to throw away valuable and interesting information. This information on real wage growth tells us a great deal about competition in the labor market. This study should be seen as being complementary, rather than conflicting, with the real wage-employment studies. The existence of a downward sloping demand curve for labor is, after all, not sufficient (and probably not necessary) for the functioning of competitive labor markets. Over the span of years 1948-76, I find that individual U.S. manufacturing industries record widely varying rates of productivity growth. However, these same industries tend to show a common rate of growth of the real wage. This feature of productivity growth was emphasized by the late Salter (1960) in his pathbreaking analysis of technical change. He writes, There is no tendency for above-average increases in labour productivity to be accompanied by above-average increases in earnings.

The informational efficiency of econometric model forecasts made by Data Resources, Incorporated and Chase Econometrics is evaluated. The criterion tested is an implication of the rational expectations hypothesis. Statistically significant serial correlations are found for several series of one-period forecast revisions, indicating rejection of the efficiency hypothesis. The use of these one-period revisions avoids some problems that have plagued previous tests that employed different efficiency criteria. Alternative explanations of the empirical results are suggested and analyzed.

The present study examines the determinants of two aspects of occupation which have been found to have important influences on female wages: the skill level associated with the occupation and the sex composition of the occupation (typically female versus male or integrated). Using a log-linear probability technique and data from the National Longitudinal Surveys, Young Women Cohort, hypotheses drawn from the economic and sociological literature are tested.

Abstrac t-This note empirically examines the issue of real interest rate equalization across countries. The equality of real interest rates is implied by two frequently employed concepts of equilibrium in international asset (capital) and commodity markets and imposes certain time series restrictions on ex post real interest rates. Statistical tests of these restrictions strongly reject the hypothesis that real interest rates have been equal across countries.

This paper presents a theoretically consistent and tractable two-stage decision-making model that does not rely on the restrictive assumption that group aggregator functions are homothetic. By assuming that within-group cost functions satisfy the almost ideal demand system form, the model incorporates flexible expenditure effects, yet allows within-group prices to be aggregated into two indices that fully capture movements in those prices that are relevant for determining group demands. Thus, the model provides a more flexible alternative to the standard two-stage budgeting models. An empirical application to U.S. manufacturing demands, including an energy aggregate, is provided.

This paper presents a partial equilibrium model of the labor market that allows the real wage, the expected real wage, and the level of employment to be expressed as functions of unexpected inflation, inflation uncertainty, and supply shocks. Regression equation estimation using U.S. data from 1948 to 1980 suggests that inflationary surprises and uncertainty cause countercycical movement in real wages. Various supply shock variables are introduced. The findings suggest the importance of oil shocks as compared with measures based on food or imports, but only after 1973.

William R. Schriver, Roger L. Bowlby, Changes in Productivity and Composition of Output in Building Construction, 1972-1982, The Review of Economics and Statistics, Vol. 67, No. 2 (May, 1985), pp. 318-322