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Intro -- Contents -- Chapter 1: Introduction -- Reference -- Chapter 2: Methodology of the National Time Transfer Accounts -- 2.1 Introduction -- 2.1.1 The Generational and Gendered Economy -- 2.1.1.1 Including Unpaid Care Work in Economic Measurement with National Time Transfer Accounts (NTTA) -- 2.1.1.2 Why Measure the Gendered Economy? -- 2.2 Illustrative Results -- 2.3 Estimating NTA Age Profiles by Sex -- 2.3.1 Introduction -- 2.3.2 NTA Review and Notation -- 2.3.3 Sex-Specific Age Schedules -- 2.3.3.1 Age Schedules when Data Are Available by individual´s Age -- 2.3.3.2 Age Schedules when Data Are Available for Households -- 2.3.3.3 Age Schedules from Imputation -- 2.3.3.4 Smoothing -- 2.3.4 Adjustment for Consistency with One-Group NTA -- 2.3.5 Recommended Sensitivity Tests -- 2.4 NTTA by Sex: Satellite Accounts Based on Time Use Data -- 2.4.1 Introduction -- 2.4.2 Identify Available Time Use Surveys -- 2.4.3 Identify Time Spent on Productive Activities Not Included in National Income -- 2.4.4 Impute a Wage to Productive Activities Not Included in National Income -- 2.4.4.1 Valuing Inputs Versus Outputs -- 2.4.4.2 Valuing Time Inputs: Specialist Replacement Method -- 2.4.4.3 Taxes and Other Adjustments for Total Labor Costs -- 2.4.5 Estimating Age Schedules -- 2.4.5.1 Production -- 2.4.5.2 Consumption -- 2.4.5.3 Transfers -- 2.4.5.4 Other Profiles -- 2.4.6 Finalizing Age Profiles -- 2.4.6.1 Smoothing -- 2.4.6.2 Adjusting to the Aggregate Control -- 2.4.6.3 Documenting and Archiving Estimates -- 2.4.6.4 Summarizing and Comparing -- 2.4.7 Recommended Sensitivity Tests -- References -- Chapter 3: Time Use Differences and Similarities between Developed and Emerging Economies in the Americas -- 3.1 Introduction -- 3.2 The Road to the NTTA Profiles -- 3.3 The Importance of Unpaid Activities -- 3.4 Caring -- 3.4.1 Production -- 3.4.2 Consumption.

In this paper, we study Ramsey-optimal fiscal and monetary policy in a mediumscale model of the U.S. business cycle. The model features a rich array of real and nominal rigidities that have been identified in the recent empirical literature as salient in explaining observed aggregate fluctuations. The main result of the paper is that price stability appears to be a central goal of optimal monetary policy. The optimal rate of inflation under an income tax regime is half a percent per year with a volatility of 1.1 percent. This result is surprising given that the model features a number of frictions that in isolation would call for a volatile rate of inflation—particularly nonstate-contingent nominal public debt, no lump-sum taxes, and sticky wages. Under an income-tax regime, the optimal income tax rate is quite stable, with a mean of 30 percent and a standard deviation of 1.1 percent.

This paper attempts to paint a coherent picture of the effects of ageing on a small, open, economy with large pension funds in different institutional settings. Quantitative scenarios are projected with an applied computable general equilibrium model with institutional details. We find that ageing leads to a tighter labor market, increasing costs for both pension funds and the government, and leaving the economy vulnerable to financial and further demographic shocks. We show that defined benefit pension arrangements can be destabilizing, but less so if an average-wage variable-indexation contract is chosen. Government can help by adopting a policy of tax smoothing, but the single most important determinant of the net burden of ageing is the eventual size of the increase in labor market participation of older workers. The intergenerational welfare effects of demographic shocks and changes in international interest rates are sizable and should be an integral part of the assessment of different policy instruments.

"Studies of the consumption-smoothing benefits of unemployment insurance (UI) have found that the optimal benefit level is very small, perhaps even 0, for conventional levels of risk aversion. In this paper, I derive a formula for the optimal benefit rate in terms of income and price elasticities of unemployment durations, directly inferring risk aversion for the unemployed from their behavioral responses to UI benefits. The optimal rate of social insurance is shown to depend positively on the size of the income elasticity and negatively on the size of the substitution elasticity. I estimate these elasticities using semi-parametric hazard models and variation in UI laws across states and over time. The estimates indicate that income effects account for 70% of the effect of UI on unemployment durations, and yield an optimal replacement rate around 50% of pre-unemployment wages. These results challenge the prevailing view that social safety nets provide minimal welfare gains at a large efficiency cost"--National Bureau of Economic Research web site

AbstractWe leverage the sharp drop in unemployment insurance (UI) benefits following the expiration of the Federal Pandemic Unemployment Compensation program to estimate the consumption smoothing effect of UI. The $600/week decline in supplemental UI benefits is estimated to reduce total food spending by 9.7% and the odds of having food sufficiency by 6.0%. The estimate for food spending translates to a marginal propensity to spend on food out of UI benefits of 0.06, or a 1.2% reduction in food spending for every 10 percentage point decline in UI replacement rate (calculated as the ratio of UI benefits to pre‐unemployment wages). We find that the consumption effect of UI is countercyclical, greater when economic conditions are weak. The UI effect is also heterogeneous over respondents differentiated by race and ethnicity, income, homeownership, presence of children, state unemployment rates, and state UI generosity. The estimated effect of UI on self‐assessed food sufficiency and confidence about future food sufficiency is largely consistent with the food spending results.

AbstractIndia and China have the largest farm‐household populations in the world—populations that are also among the poorest. Among the many factors that affect farm livelihoods, access to credit has been identified as a significant barrier preventing the escape from poverty. While there has been significant research on credit constraints in developing countries, there is surprisingly little information pertaining to the actual impacts of credit constraints on household well‐being. The objective of this paper is to investigate the impacts of credit constraints on various factors affecting farm households, such as physical and human capital formation, agricultural inputs applications, consumption smoothing, and wage‐seeking behavior using direct elicitation. This paper contributes to the literature and policy debates by comparing the effects of credit constraints in China and India as surveyed in 2008–2009. The analytical results and data demonstrate that binding credit constraints adversely affect a broad range of production and livelihood choices. We empirically show that credit constraints negatively affect food consumption, farm input applications, and health and educational attainments.

Cover -- Half Title -- Title -- Copyright -- Contents -- List of figures -- List of tables -- List of in focus boxes -- Acknowledgment -- 1 Introduction to the study of comparative political economy -- How governments affect markets -- Market failures -- Distributional equity -- Smoothing out business cycles -- Government failures -- Economic manipulation -- How the economy impacts the government -- State capacity -- Economic voting -- Rent-seeking and capture -- Doing comparative political economy -- Varieties of capitalism -- The plan of this book -- Key concepts -- Discussion questions -- Further reading -- Part I The effects of institutions and democratic politics on economic outcomes -- 2 Economic institutions -- Why is the market for labor different from other markets? -- Institutional features of labor and employers -- Union density and coverage -- Why is union density higher in some countries? -- The decline of unions -- Centralization -- Changes in wage-setting since the 1980s -- Concentration -- Employers' associations -- Macroeconomic performance and economic institutions -- Wage determination institutions -- Labor market policies -- Institutional interaction -- Corporate governance and labor market coordination -- Conclusion -- Key concepts -- Discussion questions -- Further reading -- 3 Political institutions -- Studying the effects of political institutions -- Forms of government: presidential and parliamentary systems -- Electoral rules: plurality-majority and proportional representation -- Empirical evidence of institutional effects -- Configurations of political institutions -- Varieties of dual institutions -- Consensus and majoritarian democracies -- Veto points -- Conclusion -- Key terms -- Discussion questions -- Further reading -- 4 Political cycles in economic policies and outcomes -- Models of electoral cycles.

AbstractThis article provides a novel framework within which to evaluate real household incomes of predominantly rural working families of various sizes and structures in England in the years 1260–1850. We reject ahistorical assumptions about complete reliance on men's wages and male breadwinning, moving closer to reality by including women and children's contributions to family incomes. Our empirical strategy benefits from recent estimates of men's annual earnings, so avoiding the need to gross up day rates using problematic assumptions about days worked, and from new data on women and children's wages and labour inputs. A family life‐cycle approach which accommodates consumption smoothing through saving adds further breadth and realism. Moreover, the analysis embraces two historically common but often overlooked family types alternative to the traditional male‐breadwinner model: one where the husband is missing having died or deserted, and one where the husband is present but unwilling or unable to find work. Our framework suggests living standards varied widely by family structure and dependency ratio. Incorporating detailed demographic data available for 1560 onward suggests that small and intact families enjoyed high and rising living standards after 1700, while large or disrupted families depended on child labour and poor relief untilc. 1830. A broader perspective on family structures informs understanding of the chronology and nature of poverty and coping strategies.

Overall, there is now considerable evidence that financial constraints are at
the root of the lack of consumption smoothing during the Great Recession. We
push this evidence forward and show that in the presence of credit
constraints, a job loss leads to larger drops in households? consumption. We
build a set of testable hypotheses from our theoretical model and employ
microdata taken from the second round of the Life in Transition Survey (LiTS
II) (European Bank for Reconstruction and Development 2010). We specifically
assess the role of financial constraints in explaining households?
consumption coping strategies after the crisis shocks. Economic hardship is
more likely to be observed if households experience difficulties in meeting
outstanding debt obligations or in obtaining new credit lines because of
financial constraints. The impact of job and wage shocks on households?
consumption is much attenuated, by around a half, when we control for sample
selection bias in accessing the formal credit markets. In the context of
increasing impoverishment across Europe, the paper shows that a careful
analysis of the main determinants of households? economic and financial
hardship is crucial to formulate targeted measures at the regional and local
level.

In this paper we adopt a Bayesian approach towards the estimation of the monetary policy preference parameters in a general equilibrium framework. We start from the model presented by Smets and Wouters (2003) for the euro area where, in the original set up, monetary policy behaviour is described by an empirical Taylor rule. We abandon this way of representing monetary policy behaviour and assume, instead, that monetary policy authorities optimize an intertemporal quadratic loss function under commitment. We consider two alternative specifications for the loss function. The first specification includes inflation, output gap and difference in the interest rate as target variables. The second loss function includes an additional wage inflation target. The weights assigned to the target variables in the loss functions, i.e. the preferences of monetary policy, are estimated jointly with the structural parameters in the model. The results imply that inflation variability remains the main concern of optimal monetary policy. In addition, interest rate smoothing and the output gap appear to be, to a lesser extent, important target variables as well. Comparing the marginal likelihood of the original Smets and Wouters (2003) model to our specification with optimal monetary policy indicates that the latter performs only slightly worse. Since we are faced with the time-inconsistency problem under commitment, we initialize our estimates by considering a presample period of 40 quarters. This allows us to approach, empirically, the timeless perspective framework.

This paper uses a large national household panel from 1999/2000 and 2007/08 to analyze the short-term effects of India's Mahatma Gandhi National Rural Employment Guarantee Scheme on wages, labor supply, agricultural labor use, and productivity. The scheme prompted a 10-point wage increase and higher labor supply to nonagricultural casual work and agricultural self-employment. Program-induced drops in hired labor demand were more than outweighed by more intensive use of family labor, machinery, fertilizer, and diversification to crops with higher risk-return profiles, especially by small farmers. Although the aggregate productivity effects were modest, total employment generated by the program (but not employment in irrigation-related activities) significantly increased productivity, suggesting alleviation of liquidity constraints and implicit insurance provision rather than quality of works undertaken as a main channel for program-induced productivity effects.

Early college high schools (ECHS) are small schools of choice which provide students with the opportunity to earn, at no financial cost to them, two years of transferable college credit or an associate's degree while simultaneously satisfying high school graduation requirements. This promising intervention is aimed at smoothing the transition from high school to college for under-represented minorities and students from economically disadvantaged backgrounds. There are about 80 ECHS in North Carolina, although the model is implemented in many other states as well.
While much is known from prior research about the impacts of the intervention on educational attainment, nothing is known about longer term outcomes such as employment, wages, criminal involvement, and voting behavior. The present study will briefly describe the data collection process, research methods, and preliminary findings on the effects of the intervention on voting and criminal conviction in North Carolina. We will also present results on whether impacts on long term civic outcomes are mediated by educational attainment. Quasi-experimental impacts have been validated against impacts generated from a randomized controlled trial of the same intervention in a subset of the sites during the same time period.
The team assembled personally-identified population level statewide administrative data on all NC high school students (including ECHS) and linked it to records housed at community colleges, universities, the Department of Public Safety (incarceration), and Board of Elections (voting). Together this effort comprises one of the more comprehensive administrative data collection efforts linking student level K-12, postsecondary, and longer-term outcomes.

PurposeThe purpose of this paper is to study the short‐term macroeconomic effects of the fiscal policy in Colombia for the 1980‐2007 period using a structural vector autoregression (SVAR) model.Design/methodology/approachThe authors' benchmark is a five‐variable SVAR model which includes government spending, output, tax revenues, inflation and short‐term interest rates. In addition, the authors specified six‐variable VAR models, adding in turn private consumption, private investment, the unemployment rate and the real minimum wage to the last set of variables. Two alternative identification techniques are used in the VARs to check the robustness of the results.FindingsThe following effects of a positive government spending shock are found. First, the GDP responds positively and significantly during the first six quarters. The cumulative output multiplier fluctuates between 1.12 and 1.19. Second, both inflation and nominal interest rates respond positively and significantly. Third, the authors find a significant positive response by both private consumption and private investment. Finally, the unemployment rate reacts negatively and significantly.Research limitations/implicationsThe most surprising result comes from the response of output to a positive shock in taxes. Nonetheless, the positive respond of the GDP is short lived and has little significance.Practical implicationsThe authors' results support the smoothing role of fiscal policy on output fluctuations, which implies its capacity to restore real activity effectively in critical times like the ones currently being forecast.Originality/valueThe negligible results found previously for Colombia could be related to the fiscal data used, which are not keep coherence with national accounting. To solve these obstacles, a quarterly fiscal database is assembled on an approximately accrual basis for the general government.

Asymptotic moments of autoregressive estimators with a near unit root and minimax risk / Bruce E. Hansen -- Fixed-smoothing asymptotics and asymptotic F and t tests in the presence of strong autocorrelation / Yixiao Sun -- Moment approximation for least-squares estimator in first-order regression models with unit root and nonnormal errors / Yong Bao, Aman Ullah, Ru Zhang -- On the size distortion from linearly interpolating low-frequency series for cointegration tests / Eric Ghysels, J. Isaac Miller -- Testing for cointegration in Markov switching error correction models / Liang Hu, Yongcheol Shin -- Specification testing in parametric trending models with unknown errors / Jiti Gao, Maxwell King -- Panel macroeconometric modeling / Cheng Hsiao -- Mean average estimation of dynamic panel models with nonstationary initial condition / John Chao, Myungsup Kim, Donggyu Sul -- Efficient estimation and inference for difference-in-difference regressions with persistent errors / Ryan Greenaway-McGrevy, Chirok Han, Donggyu Sul -- A CUSUM test for common trends in large heterogeneous panels / Javier Hidalgo, Jungyoon Lee -- Test of hypotheses in a time trend panel data model with serially correlated error component disturbances / Badi H. Baltagi, Chihwa Kao, Long Liu -- Limit theory and inference about conditional distributions / Purevdorj Tuvaandorj, Victoria Zinde-Walsh -- On the limiting and empirical distributions of IV estimators when some of the instruments are actually endogenous / Jan F. Kiviet, Jerzy Niemczyk -- Testing the equality of two positive-definite matrices with application to information matrix testing / Jin Seo Cho, Halbert White -- Minimax estimation of nonregular parameters and discontinuity in minimax risk / Kyungchul Song -- The gap between the conditional wage distributions of incumbents and the newly hired employees : decomposition and uniform ordering / Esfandiar Maasoumi, Melinda Pitts, Ke Wu -- Deviance information criterion for comparing VAR Models / Tao Zeng, Yong Li, Jun Yu -- Stable limit theory for the variance targeting estimator / Igor Vaynman, Brendan K. Beare -- Assessing the power of long-horizon predictive tests in models of bull and bear markets / Alex Maynard, Dongmeng Ren -- Idiosyncratic volatility, expected windfall, and the cross-section of stock returns / Chi Wan, Zhijie Xiao.

This dissertation consists of three self-contained chapters contributing to the analysis in monetary macroeconomics. In these chapters concerning with research questions on inflation in emerging markets and developing countries, I aim to better understand the redistributive effects of anticipated inflation on individual behaviours together with welfare consequences; proximate, socio-economical and political drivers of inflation; and the best response of monetary policy makers with respect to monetary targets in foreign aid-recipient countries. Chapter 2 shows that anticipated inflation rate has long-run real impacts, disproportionately affects heterogeneous households by redistributing from lenders to borrowers; and whether the inflation rate can be used as an instrument to improve utilitarian welfare relies on the presence of money demand in the form of money-in-utility model, the concern with pro-lender/borrower bias, the relationship between intertemporal elasticity of substitutions and the heterogeneous productivity levels. In other words, the policy planner should be concerned about these features when targeting an inflation rate to account for the welfare effects of that policy implication. Chapter 3 incorporates different theories which refer to the proximate determinants; and socio-economical and political determinants to improve the knowledge on inflation dynamics. Inflation is stressed to be mainly driven by money growth and inflation persistence. From the political perspective, greater democratization is found to lead to inflation as the inequality gap rises. The insignificance of the impact from de juro central bank independence on inflation is supported. Inflation inertia with its greatest magnitude and significance suggest that the inflationary expectations and indexations schemes in price and wage are the most critical determinants of inflation in emerging and developing economies. Chapter 4 optimizes the policy parameters of the Taylor rule, namely interest rate smoothing, inflation targeting and output growth targeting in order to maximize unconditional welfare under three cases: only cost-push shock (CP), only foreign aid shock (FA); and cost-push and foreign aid shocks (CP+FA). The findings demonstrate that aid recipient developing countries also face a trade-off between stabilizing the inflation rate and output growth in the presence of cost push shock while the foreign aid shock is found to resolve this trade-off, leading to the conclusion that foreign aid recipient developing countries should act in favor of the inflation targeting as in industrialized countries.