A quality-adjusted measure of labour is developed, where labour efficiency depends on firm training. This specification is integrated into a flexible neoclassical cost function, representing the firm's production technology. Unlike traditional production functions, the cost function does not...

This paper examines the null hypothesis that output series contain a unit root against the alternative of a segmented trend in a representative sample of 31 developing countries. Nearly two-thirds of the countries reject the unit root hypothesis at least once in favour of a segmented trend...

The long-run tendency for government expenditure to grow relative to GNP, Wagner's law, is tested for six European countries using data from around the mid-19th century to 1913. With few exceptions the results suggest that: nominal and real GNP, nominal and real government expenditure, and...

The letter explores how transaction costs affect the efficiency and rationality of Coasian bargaining. Efficiency remained relatively robust with low transaction costs, but was significantly reduced with high transaction costs. A cheap talk protocol increased efficiency. Rationality was...

This paper estimates Becker's rational addiction model using a demand for cinema equation. The results do not seem to be strongly supportive of the rational addiction model. As in Becker, Murphy, Grossman we find a significant coefficient on the lead consumption term and a quite plausible...

Estimation of the probit model with autocorrelated errors often involves the calculation of a multiple integral which is usually intractable. A stochastic version of the EM algorithm is proposed to solve the problem. The approach implements the E-step by retrieving the latent values via a Monte...

This paper shows that the findings of Chan, Christie and Schultz (Journal of Business, 68, 1995) of no intraday variation in the average bid-ask spread is not general to all competitive markets, and in particular does not apply to the London Stock Exchange during the mandatory quote period. This...

Most recent empirical analyses of aggregate economic fluctuations rely on the implicit assumption that business cycles are all alike. This paper investigates this assumption for the long-run international data set of Backus and Kehoe and presents the results of statistical tests of the...

The Box-Cox transformation is suitable for stabilizing variance of the response variable and for inducing functional form flexibility in single-equation regression models. However, it becomes incapacitated if the data contain zero or negative values. This paper, using profitability data for US...

The Malmquist index has gained acceptability in empirical analyses of productivity in recent years. Some question has been raised concerning the index's ability to accurately portray productivity change in the presence of nonconstant returns to scale. This letter demonstrates that the index does...