Knowledge that Transforms

[Two stage least squares methods are used to estimate a postwar quarterly model of U.S. labor demand, supply, and wage adjustment. Analytical techniques are used to derive the long-run equilibrium properties of the estimated model. Short run properties are obtained by approximating the model in the form of two simultaneous difference equations. Simulation methods show the response of the model to an increase in the size of the armed forces.]

This article shows how to transform residuals from regression on an arbitrary set of k regressors to a set of values having the same joint distribution as the residuals from regression on a different set L of k regressors. Let d′ denote the value of the statistic <tex-math>$\Σ (z_t-z_t-1)^2/\Σ z_t^2$</tex-math> calculated from these values. It is shown that for a suitable choice of L the distribution of d′ is the same as that of <tex-math>d_U</tex-math>, the significance values of which are tabulated in [1].

[This paper begins by formulating a finite horizon linear programming model for economic development. The formulation allows for heterogeneous capital goods and for nonnegativity constraints upon investment in each sector. It is then proved that a certain set of conditions are sufficient to ensure that an optimal solution to this T period, finite horizon plan will also coincide with an optimal solution during the first T periods of an infinite horizon plan. Among the restrictive conditions imposed to prove this sufficiency theorem are the following: gradualist consumption paths, no primary factors that cannot themselves be produced within the economy, a Leontief technology, and a characterization of the optimal finite horizon solution as one in which the terminal investment and output levels are positive. An illustrative numerical example is provided.]

[This paper is concerned with the estimation of an econometric model for the Israeli economy as it existed through 1965. The model is disaggregated to seven sectors and contains substantial detail for import and export equations. Multiplier analysis suggests that the economy is stable for unemployment rates around eight percent but is unstable at full employment unless discretionary fiscal and monetary policies are applied. A new version of the IS-LM curve is developed to explain this result. The model is used to "forecast" the recession of 1966 and it is determined that the ex post record is more successful than official government predictions issued at that time.]

[A value share is defined as the ratio of the expenditure of the ith commodity to total expenditure. Some value shares go up and others go down in successive periods, and in this article the problem is raised whether one can define transitions from the ith share to the jth in an attractive way. The procedure is applied to Dutch data in the period 1921-1963.]

Computes a GLS matrix weighted estimator for a panel data set. meangroup.src does a similar estimator, but uses simple weighted average rather than a matrix-weighted average. Swamy(1970), Efficient Inference in a Random Coefficient Regression Model, Econometrica, vol 38, 311-323. (This abstract was borrowed from another version of this item.)

[This paper presents a general formalism for calculating the effect of taxes on income distribution, and the resultant effect on income inequality. We first derive a closed form expression for income inequality (defined from a Lorenz curve) in terms of the income density function. By way of illustration, we use this expression to calculate the effect of a proportional and a lump sum tax on income inequality in a simple exponential income distribution. The results show that the effect of a lump sum tax imposed after a proportional tax is a function of the proportional tax rate, even though the proportional tax itself does not change inequality.]