Knowledge that Transforms

[This paper addresses the problem of estimating unknown regression coefficients when erroneous data and other violations of the standard assumptions are possible. An estimator which has a limited sensitivity to these departures from the assumptions is presented, and some of its properties are derived. This estimator is shown to have a certain efficiency property relative to other estimators with the same sensitivity to erroneous data.]

Recursive equilibrium theory is extended and generalized. Optimality of equilibria and supportability of optima are established in a direct way. Four economic applications are reformulated as recursive competitive equilibria and analyzed.

[This paper provides a general proof of the existence of a proportional price with the interest rate strictly greater than the growth rate associated with any efficient proportional program in the polyhedral technology. Proofs for similar theorems are also given for the programs satisfying the regularity condition in other technologies.]

ordinal approach to welfare comparisons. Given a poverty line, a priori, this index has several appealing properties: (i) it can be computed using readily available information, (ii) it is sensitive to the percentage of the population that is below the line (the head-count ratio), (iii) it depends on the income of the average poor person, and (iv) it depends on the amount of inequality among the poor themselves. In this note, we offer an alternative interpretation and a generalization of Sen's index as an index. These are indices, usually of inequality, that are exact for social evaluation functions. Each index is thus implied by and implies at least one social evaluation function. Essential to the construction of these ethical indices is the notion of the

[We consider the intertemporal problem of optimally consuming a natural resource and exploring for new sources of supply of that resource. Resource consumption yields social utility while the exploration effort controls the uncertainty in the timings of discoveries as well as their magnitudes. The objective is to choose an optimal consumption and exploration policy so as to maximize the expected discounted utility of consumption net of the exploration cost over an infinite planning horizon. We present a controlled storage process model of the problem and under reasonable conditions we characterize the existence and the properties of optimal policies and prices.]

[Using duality theory I show that the Tobin-Houthakker conjecture that a reduction in the ration of one good will increase the consumption of unrationed substitutes and diminish the demand for unrationed complements may not hold in disequilibrium situations.]

[The fine structure of earnings is defined by a theoretically meaningful decomposition of the covariance matrix of earnings (or log earnings) time series. A three-element variance components model is proposed for analyzing earnings of young workers. These components are interpreted as the effects of differential on-the-job training (OJT) and differential economic ability. Several properties of these components and relationships between them are deduced from the OJT model. Background noise generated by a nonstationary first-order autoregressive process, with heteroscedastic innovations and time-varying AR parameters is also assumed present in observed earnings. ML estimates are obtained for all parameters of the model for a sample of Swedish males. The results are consistent with the view that the OJT mechanism is an empirically significant phenomenon in determining individual earnings profiles.]