Showing 1 - 10 of 15
This paper shows that search in the labor market has important effects on accumulation decisions. In a labor market characterized by search, employment contracts are naturally incomplete and this creates a wedge between the rates of return and marginal products of both human and physical...
Persistent link: https://www.econbiz.de/10004967678
Why would an entrepreneur hire a manager? It could be because managers are particularly talented people. This paper suggests another reason. We consider a model with asymmetric information between financiers and entrepreneurs which gives rise to sizable inefficiencies. Under simple conditions,...
Persistent link: https://www.econbiz.de/10005016648
A competitive business cycle model is developed in which internal increasing returns translate a white noise random shock into temporarily agglomerated economic activity. Te qualitative nature of the economy varies over the cycle due to changes in the underlying economic structure, giving rise...
Persistent link: https://www.econbiz.de/10005016670
Most managers enjoy considerable discretion and protection from possible interventions which enables them to look after their own interests. This is often attributed to the dispersion of shareholders and regulations that deter effective outside interventions. This paper presents a model that has...
Persistent link: https://www.econbiz.de/10005016704
Consumer confidence is found to have predictive content for a wide range of macroeconomic variables including consumption growth, contrary to standard REPIH. We find that on UK data the REPIH is rejected due to the predictive content of consumer confidence, and not labour income. We explain this...
Persistent link: https://www.econbiz.de/10005016705
This paper considers a model in which the unemployed have to incur a cost to maintain their skills. If whether they have done so is not observable, the economy has multiple equilibrium supported by self-fulfilling beliefs on the part of the employers. There is a unique steady state equilibrium...
Persistent link: https://www.econbiz.de/10005016708
Why would two risk-average agents write a nominal contract? A possible answer is that for an agent who is subject to risks caused by price variability, a nominal contract that offers hedging against these risks may be optimal. This paper argues that nominal contracts may have a role in...
Persistent link: https://www.econbiz.de/10005016715
A General Equilibrium model of investment is constructed in which the pay-offs of firms depend on each other's actions. It is shown that when these actions are unobservable but aggregate output is in the information set of the agents; it acts as a signal. The implication is that output will lead...
Persistent link: https://www.econbiz.de/10005016796
Becker's theory of human capital predicts that minimum wages should reduce training investments for affected workers because they prevent these workers from taking wage cuts necessary to finance training. In contrast, in noncompetitive labor markets, minimum wages tend to increase training of...
Persistent link: https://www.econbiz.de/10005016812
Using a simple state-space approach, this paper documents widespread non-linearities in the UK labour market and shows that these non-linearities can be successfully modeled using the notion of cyclical asymmetries. The economy is shown to display qualitative differences and the impulse response...
Persistent link: https://www.econbiz.de/10005016945