This paper analyzes the market for syndicated loans, a hybrid of private and public debt, which has grown at well over a 20% rate annually over the past decade and which totaled over $1 trillion in 1997. We identify empirically the factors that influence a bank or nonbank's decision to syndicate a loan and the determinants of the proportion of the loan sold in the event of syndication. The evidence reveals a loan is more likely to be syndicated as information about the borrower becomes more transparent, as the syndicate's managing agent becomes more “reputable”, and as the loan's maturity increases. The lead manager holds larger proportions of information-problematic loans in its own portfolio. Loan syndications, like loan sales, appear to be motivated, in part, by capital regulations, and the liquidity position of the agent bank influences the likelihood of syndication, but not the extent. Our results confirm that information and agency problems affect the salability of debt claims and the extent to which a loan is “transaction oriented” rather than “relationship oriented” in the sense of A. Boot and A. Thakor (2000, J. Finance54, 679–713). Journal of Economic Literature Classification Numbers: D82, G20, G21, G24.

The egalitarian wage policies of labor unions in the United States have been attributed to low-skilled majorities pursuing their self-interest in a majority rule environment. For this hypothesis to be more than a formalization of stylized facts requires evidence that unions are not egalitarian when the work place is not characterized.by a low-skilled majority. The author considers the impact of high-skilled majorities on (1) voting behavior in certification elections and (2) rent distribution policies in existing unions. Neither analysis supports the belief that union rent distribution policies are driven by skill-group coalitions pursuing their self-interests.

An employed worker's search strategies include (1) employed-not searching, (2) employed-searching, and (3) unemployed-searching. The last requires that the worker quit to search. Under plausible assumptions on search costs, the optimal algorithm involves a dual reservation wage strategy (Burdett, 1978). The probability of on-the-job search increases as the current wage decreases relative to the distribution of alternative wages. If the wage is sufficiently low, the searcher quits to search, substituting time for financial outlays. Estimates based on the National Longitudinal Survey of Youth indicate that these calculations characterize the search strategies of young workers.

OTTO ECKSTEIN and I founded Data Resources, Inc. in 1968 after working together on Wall Street for several years. We came to know each other during the mid-1960s while I was attempting to build up the institutional stock brokerage business of Mitchell Hutchins and Co. The firm's business was mainly retail in nature, and we needed to distinguish ourselves from the competition in some fundamental way if we were quickly to establish an institutional franchise. I hit upon the idea of developing a consisting of nationally recognized authorities who would give portfolio managers expert insight into both the state of the economy and the larger political and diplomatic environment shaping economic conditions. I therefore put the following question to a number of my colleagues on Wall Street: Who is the best young economist you can think of to fill this role? The most frequent reply was Eckstein, who had just stepped down from the Council of Economic Advisers. I gave Otto a call and laid out my plans. He liked the proposal, and soon we were travelling around the country, meeting with clients and presenting our view of economic conditions. Bright and charismatic, Otto was very popular with clients. The consulting program was a great success and was later expanded with Otto's help to include Henry Kissinger and Bill Moyers. While Otto and I were on the road, we taught each other. He taught me a great deal about economics, and I introduced him to the world of commerce. Otto quickly learned that money managers were intelligent, interesting, and well-informed peoplesomething of a revelation to a long-time denizen of Washington, D. C. and Cambridge, Massachusetts. This was the first of many steps in Otto's business education, an on-the-job MBA that would eventually turn him into an accomplished businessman as well as a respected economist. Travelling was a tedious and time consuming way to impart information to our clients, and some time in 1967 Otto suggested to me that perhaps we could use a computer instead. If we set up a model that clients could access by timesharing they would be able not only to get Otto's most recent forecast when they needed it, but could shift the inputs in the model to reflect their own economic assumptions. If, for example, they thought mortgage rates would be 6% rather than 5% and that consumer spending would slow in the second half of the year rather than hold steady, they could plug these assumptions into the model and see how other variables changed. It struck me as an ambitious but promising project. Otto had formulated his basic view of how the economy worked from his early input-output research in graduate school, and then his extensive studies of the U.S. economy for Congress. Also he had produced a steady flow of micro-macro economic analyses at the Council of Economic Advisers. So, he was well along in his thinking about computer modeling of the economy. We discussed the project at great length, and I asked Otto to write a paper laying out his ideas more fully. The product concept developed by Otto had four basic elements-the model itself, a large data base, a computer, and the software-and each of them posed formidable obstacles for a fledgling enterprise like ours. Rather than use any of the econometric models then available Otto decided to build a new model of his own design-an admirable decision but an onerous task that challenged, I believe, even his formidable knowledge of economics and statistics. In building this model Otto worked with Gary Fromm of the Brookings Institution, who had developed a model of his own and was familiar with the latest advances in econometrics. He also consulted with other leading econometricians, including Martin Feldstein, Lester Thurow, and Dale Jorgenson. Even more important to our efforts was the Brookings database, which consisted not only of a large number of time series, but of subroutines for managing the data. Clearly the prior work of Fromm and his associates enabled Otto to begin much further up on the learning curve than he otherwise could have. Two members of the Brookings staff, James Craig and John Ahlstrom, joined our company and made herculean efforts to build *Paine Webber Group Inc.

T HERE is no professional consensus about the process of aggregate wage inflation. A spectrum of opinion exists between the following extreme poles: (1) That wages are determined instantaneously in markets where participants have rational expectations and can anticipate in their behavior the long-run consequences of any consistent pattern of macro policy making;' and (2) that wages are determined largely by institutional forces including considerations of equity, normal historical wage patterns, union strength, and current bargaining conditions.2 Adherents of these polar positions have little respect for wage adjustment equations of the Phillips (1958) or Phelps (1967)-Friedman (1968) variety in which wages are related structurally to aggregate unemployment rates. These adjustment equations occupy a middle ground in the spectrum and are currently used in large scale econometric models to explain how the effects of a change in demand are distributed into real and price components. Between the poles are several alternative justifications of wage-unemployment relationships. Among these are the following views: That wages are determined as in (1) above except for the existence of long-run contracts;3 that the determination of expectations about future prices can be fairly approximated by a distributed lag on past prices;4 that it is past prices rather than expectations of future prices that are important;5 and that economic conditions are but one of a set of factors to be included in the current bargaining conditions that determine wages.6 Which of these views best describes the process of wage determination is an empirical question, but the question is quite complicated and does not appear to be capable of resolution through a single, conclusive test. Many issues are involved simultaneously and no one has been able to find a set of workable assumptions that can be agreed upon by all as being a sensible way to proceed. The question of wage determination continues to divide macroeconomic opinion more than any other single issue. This paper reports results of empirical work on wage equations in which a strategy of disaggregation has been followed. It is part of a larger project to estimate the dependence of the natural rate of unemployment on the distributions of the supply and demand for labor according to location and occupation. As an estimation strategy, disaggregation can avoid problems of identification and could, in principle, provide a way to distinguish among the many competing hypotheses in this area. In practice, the disagreements are so fundamental and the possible tests so limited that the results can be offered as no more than an extension of the wage equation literature rather than as a resolution of the issue of whether wage equations should be treated as structural relations or, of even greater ambition, what those relations might be. The extension provided follows the direction of Baily and Tobin (1977, 1978) who hypothesized that the rate of wage change in a single labor force group should depend on the unemployment rate of that group and its wage relative to the wages of other groups. The results are interesting for several reasons. First, the wage data that are used in these tests come from a survey not previously used in the estimation of aggregate wage equations. The data are from the National Survey of Professional Administrative, Technical and Clerical Pay (PATC).7 This survey is conducted annually by the Bureau Received for publication September 18. 1981. Revision accepted for publication May 4, 1982. * The University of Wisconsin. The author wishes to thank Gregory Krohn and Bruce Chapman for their excellent research assistance. Helpful comments were received from Paul Gertler and the participants at a seminar at the National Commission for Employment Policy. This research was supported by Grant Number 99-0-2289-50-11 from the National Commission for Employment Policy, and Contract Number 20-06-08-11 from the Employment and Training Administration, U.S. Department of Labor. ' See, for example, Lucas (1973) and Sargent and Wallace (1975). 2See Dunlop (1977). 3See Phelps and Taylor (1977) and Fischer (1977). 4McNees (1979) provides a way to distinguish this position from the one in the subsequent phrase. 5 See Okun (1978) for a summary of studies of this kind. 6See Hicks (1955) and (1974, pp. 59-85). Bureau of Labor Statistics (1980).

Implicit here is the argument that the owners of the corporation and hence the economy as a whole gain from allowing management to reinvest past profits on their behalf. This must be, true if it is assumed that managers always act in the interest of the owners. If, however, managers act in their own interest, their retention and reinvestment of past profits can be a source of inefficiency. Mueller (1969) has observed that, although the investment opportunities of the stockholders may be better than those which management can internalize,

Donald W. Green, Capital Formation in the USSR, 1959-1974: An Econometric Investigation of Bureaucratic Intervention in the Process of Capital Construction, The Review of Economics and Statistics, Vol. 60, No. 1 (Feb., 1978), pp. 39-46

T HERE has been much theoretical work done on models of information and search beginning with the work of Stigler (1961, 1962) but there has been little empirical investigation of the implications of these models. With the importance these models have attained in describing macroeconomic phenomena such as the Phillips curve, this empirical work is necessary to guide any potential methods designed to reduce the unemployment rate. This paper examines the time path of wage demands of the unemployed as a test of some of the implications of the search models. Most of the theoretical work has been devoted to analyzing the optimal behavior of individuals who must make choices on the basis of incomplete information and of the equilibrium behavior of markets whose participants behave according to particular search rules. For labor markets it follows that it is not necessarily optimal for an individual to accept the first job offered to him, and thus, the equilibrium position will be characterized by positive unemployment. The search strategy of an unemployed individual usually takes the following form. Search until a wage offer is received that is above some reservation wage, this reservation wage being determined by maximizing expected returns. Since search is a sequential process, the sequence of reservation wages completely describes the behavior of the agents.1 Furthermore, it is derived in most of the theoretical work that this sequence of reservation wages is either constant or monotonically declining. People who remain in the market are willing to accept successively lower wages as time passes.2 This seems to be a paradoxical result about learning, i.e., time always makes one pessimistic. The models in which this monotonicity property is generally derived, do not consider learning as part of the mechanism generating behavior, but for any consistent model of both search and turnover (implicit in the search theories of the Phillips curve) it is required that individuals revise upward their expectations of the wage distribution with the state of the economy. In an economy that is constantly changing, learning should be an important determinant of search. It is hypothesized that when one is permitted or required to learn about the wage distribution through sampling, it seems reasonable to expect that initially pessimistic individuals will revise their wage demands upward before sampling terminates. This paper will argue that the above hypothesis is correct and that the sequence of reservation wages is not monotonically declining. The first part of the paper will present a heuristic formulation of a search and learning model where it can be seen that the sequence of reservation wages depends on the initial expectations of an individual and on the particular sequence of information (including wage offers) that an individual obtains. Although the particular search rule analyzed is not derived from optimization, it should help develop the intuition necessary for believing that reservation wages can and do rise in the course of search. The formulation could be considered as the study of behavior characterized by bounded rationality, but it is mainly presented to motivate the empirical work. The empirical evidence presented supports the hypothesis that a monotonically declining sequence of reservation wages is not an accurate description of actual search behavior of unemployed individuals looking for jobs. The sequence of reservation wages depends heavily on the perceived and actual wage distribution.