[This paper develops a model of labor supply for married women which takes into account both the joint decision on participation and hours, and the nonlinear shape of the budget constraint due to taxation. The model can explain the absence of observations of the tax kink by assuming the existence of optimization errors in addition to errors capturing taste variation. The estimates of the model, which are obtained with British micro data, suggest that the overall wage elasticity is about 2 and that participation is more responsive to wages than hours of work.]
MODELS OF ECONOMIES with land used by urban economists often employ assumptions that are inappropriate for the commodity known as land (see Berliant [3]). It is therefore natural to attempt to formulate a model that does not suffer from this drawback. In particular, a framework with a finite number of consumers trading in measurable subsets of land (rather than densities or points) is constructed below. The purpose of the present study is to examine the preference relations and utilities used in this type of framework. Problems arise in generating utility representations of preference relations because the separability property of a oX-algebra (on a set of possibly infinite measure) endowed with the L' topology on indicator functions of elements of the a-algebra is not obvious. Let (L, A, m) be a nonatomic measure space with L a separable metric space, A its Borel v-algebra, and m regular and positive. Generally, script letters will represent subsets of $ while capital letters will represent elements of $. If A Be , define A/B=xc L xc A, xiB. For example, L could be a measurable subset of R2, $ the c-algebra of all measurable subsets of L, and m Lebesgue measure restricted to L. The set L is then a representation of land in that anything immobile can be embedded in L, and consumers have complete preorderings over these immobile objects along with land through preference relations over subsets of L. There is no linear structure imposed on A. There are two reasons to consider all sets in A rather than only those with finite measure. First, it is natural to include L the totality of land, in the choice set of each agent of the example. Second, it is convenient to embed indicator functions of elements of $ in L' (see Bewley [6]), and completeness of the space requires that sets of infinite measure be included. Berliant [4] uses utility functions on L' to prove existence of an equilibrium in an economy with land. Next, a topology is imposed on A. Let the basis for the topology be given by T=$2cAi j9=BcX 3jAcBccC m(B\A)>O wm(C\B)>O for A, Cc X, Ac C, m(C\A)>O, m(A) O for Cc$A openu$c9X |2 =Bc$91| A'B. m(B\A)> O for A c $ compact, m(A) <oo. Thus, basis elements consist of subsets of $ that can be trapped (in a set containment sense) between various
On considere des equations autoregressives a variables exogenes et un terme de bruit blanc normal, ce qui generalise les modeles dynamiques etudies precedemment
[This paper studies the pricing of common stocks in the context of a monetary, rational expectations equilibrium. Special attention is given to the relationship between inflation and asset returns.]
in this paper we specify and estimate a structural limited dependent variable model with which we study both the health and retirement status of the elderly.Standard linear estimators, which assume that these variables are continuous, are not appropriate and categorical estimation techniques are preferred.Our model differs from previous work in that we have longitudinal data and random effects that are correlated over time for different individuals.The problem is made more complicated because there is sample truncation, which could potentially bias coefficient estimates, since approximately twenty percent of the individuals in our sample die.We outline the full information maximum likelihood estimator for such a model and implement it in our empirical analysis.With our structural estimates we analyze, among other things, the degree to which endogeneously determined health status affects the probability of retirement and how changes in social security benefits and eligibility for transfer payments modify both healthiness and the demand for leisure.
This paper considers multistage games with communication mechanisms that can be implemented by a central mediator. In a communication equilibrium, no player expects ex ante to gain by manipulating his reports or actions. A sequential communication equilibrium is a communication equilibrium with a conditional probability system under which no player could ever expect to gain by manipulation, even after zero-probability events. Codominated actions are defined. It is shown that a communication equilibrium is a sequential communication equilibrium if and only if it never uses codominated actions. Predominant communication equilibria are defined by iterative elimination of codominated actions and are shown to exist.
This paper develops a positive theory of credibility, ambiguity, and inflation under discretion and asymmetric information. The monetary policymaker maximizes his own (politically motivated) objective function that is positively related to economic stimulation through monetary surprises and negatively related to monetary growth. The relative importance he assigns to each target shifts stochastically through time. His current preference trade-off is known to him but not to the public. When choosing the (state contingent) path of money growth for the present and the future, the policymaker compares the benefits from current stimulation with the costs associated with higher future inflation expectations. Current monetary growth conveys information to the public about future money growth because there is persistence in the policymaker's objectives. Although expectations are rational, information is imperfect because monetary control procedures are imprecise. As a result the public cannot correctly distinguish persistent changes of emphasis on different policy objectives from transitory monetary control errors. The public becomes aware of changes gradually by.observing past monetary growth. Credibility is defined in terms of the speed with which the public recognizes changes in the objectives of the policymaker. Credibility is lower the noisier monetary control and the more stable the objectives of the policymaker. Looser monetary control and a higher degree of time preference on the part of the policymaker induce him to produce higher and more variable monetary growth. When the policymaker is free to determine the accuracy of monetary control he does not always choose the most effective control available in spite of the fact that monetary surprises always have an expected value of zero. The reason is that ambiguous control procedures enable the policymaker to generate positive surprises when he cares more than on average about economic stimulation. He leaves the inevitable negative surprises for periods in which he cares more about inflation prevention. This result provides an explanation for the Fed's preference for ambiguity, recently documented by Goodfriend (1986). The policymaker is more likely to pick more ambiguous control procedures the more uncertain his objectives and the higher his time preference. The paper also provides a theoretical underpinning for the well documented crosscountry positive correlation between the level and the variability of inflation.
[We consider a revenue maximizing server who has the opportunity to suppress information on actual queue length, leaving demanders to decide on joining the queue on the basis of the known distribution of waiting times. We address the following second best problem: If suppression, but not pricing, can be socially controlled, is it socially optimal to prevent suppression? We show that it may be, but is not always, socially optimal to prevent suppression and that it is never optimal to encourage suppression when the revenue maximizer prefers to reveal the queue length.]