Aggregate Productivity

which will appear three times a year. The bulletin will highlight the results of in-house research done at the Czech National Bank. Given that maintaining exchange rate stability in the context of joining the EU is one of the key concerns of the Czech National Bank, this first issue of the Bulletin is devoted to (equilibrium) exchange rate determination in the Czech Republic. First, Aleš Bulíř looks into the scope of nominal exchange rate fluctuations in Central European countries to establish the causes of those fluctuations. Next, Tomáš Holub investigates the factors of equilibrium real exchange rate appreciation in the Czech Republic, again from an international perspective. In this context, the effects of price convergence to the level of EU countries are analysed in more detail. Finally, Vladislav Flek discusses the impact of real catching-up with EU productivity levels, within the framework of the Balassa-Samuelson Effect. Since this is the inaugural issue of the Bulletin , an...

This research was aimed at establishing the viability of the quarry business using comparative analysis between Afrimine Quarry and Jolex Construction sited Plateau State. The results revealed that the total production of aggregates in volume value is N 70,875,000 for 15,000 tons per month in Afrimine Quarry but the positive values of profit made in a month sums up to N36,484,859.375 while the total production of aggregates in volume value is 67,500,000 for 9,000 tons per month in Jolex Construction but the positive values of profit for Jolex Construction sums up to N 58,295,000. After the research on both quarries it was observed that the unit production cost of Afrimine quarry was N 2,291.61/ton and that of Jolex as N 1022.78/ton, and the total production cost of Afrimine quarry was N 34,389,140.63/month and that of Jolex was N 9,205,000/month. For every 15,000tons of aggregate, Afrimine quarry spends N 70,875,000 and gets a profit of N 36,485,859.38 whereas Jolex Construction quarry spends N 67, 500,000 to produce 9,000 tons of aggregates and get a profit of N 58,295,000. Therefore, one can conclude that Jolex construction quarry makes more profit than Afrimine quarry due to lower production cost on drilling and blasting.

In the following manuscript we describe the implementation of a method for calculating relative free energies for a general force eld (A simple, robust and ecient method for calculating relative free energies). The following is a description of how to transform a group of similar molecules (e.g phenol derivatives) according to the method decribed in the article. Similar groups (e.g benzene and phenol derivatives) can either be grouped together or linked later on (preferably the second option) and so on.

The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

This paper investigates the determinants of longevity at a macroeconomic level, emphasizing the important role played by education. To analyze the determinants of longevity, we build a model where households intentionally invest in health and education, and where education exerts external effects on longevity. Performing an empirical analysis using data across 71 countries, we find that society's tertiary education attainment rate is important for longevity, in addition to any role that basic education plays for life expectancy at the individual level. This finding uncovers a key externality of education, consistent with the theoretical hypothesis advanced in our macroeconomic model.

We argue that education exerts positive external effects on health, beyond the standard internal effects documented in the literature. We put forward a model that clarifies the links between education and longevity in the presence of such an externality. We then implement an innovative approach to control for endogeneity problems, and present evidence for the significant role played by higher education in explaining longevity across countries. Our findings provide empirical evidence in support of our hypothesis of educational externalities on health.

This paper investigates the nature of the aggregate production function of health services. We build a model to analyze the role of public policy in determining social health outcomes, taking into account households choices concerning education, health related expenditures and saving. In the model, education has a positive external effect on health outcomes. Next, we perform an empirical analysis using a data set covering 72 countries from 1961 to 1995. We find strong evidence for a dual role of education as a determinant of health outcomes. In particular, we find that society's tertiary education attainment levels contribute positively to how many years an individual should expect to live, in addition to the role that basic education plays for life expectancy at the individual household level. This finding uncovers a key externality of the educational sector on the ability of society to take advantage of best practices in the health service sector.

and two referees for helpful comments and suggestions, and to Jim Hirabayashi of the USPTO for useful information regarding some data sources. The second author wishes to acknowledge the financial support of the Australian Research Council and the

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

We present a general equilibrium dynamic model, which focuses on how the heterogeneity in sector productivity affects the macroeconomic equilibrium. In the model, individuals endogenously choose whether to invest in their education and work in the advanced sector or not, and firms endogenously choose in which sector to operate and to invest their capital. The resulting macroeconomic equilibrium exhibits a feedback between investment in education and investment of physical capital in the advanced sector, as one promotes the marginal productivity of the other. This feedback yields several results: (i) the skill premium rises over time; (ii) along the transitional dynamics both TFP and labor productivity increase; (iii) income inequality may increases over time, but may also display a Kuznets curve pattern.

Through their influence on the cross-sectional distribution of productivity across firms and workers, job creation and destruction likely have an impact on the rate at which aggregate productivity changes over time. However, the nature of this effect is not, a priori, clear. Although a broad consensus has emerged suggesting that job destruction enhances productivity by eliminating inefficient production units, theories disagree with regard to the effect of job creation. If job flows represent the reallocation of labor from low- to high-productivity positions, job creation would boost productivity growth. If, instead, they represent changes in employment along a primarily low-skill dimension, the effect would be negative. This paper estimates the influence of job creation and destruction on total factor productivity (TFP) growth using annual data on four-digit U.S. manufacturing. As expected, the results reveal a positive association between job destruction and changes in TFP. Yet, t...

The global silk industry, with a rich historical legacy, continues to evolve amidst changing dynamics. This study examines the international sericulture trade, focusing on major producers like China, India, and Italy. It analyzes production trends, export-import scenarios, trade dynamics, and the role of tariffs. China emerges as the dominant player, while India exhibits potential for silk waste, fabrics, and garments. The study identi ies challenges, including luctuating demand, pests, and quality control issues, and highlights prospects driven by sustainability, technological advancements, and luxury market growth. The review underscores silk's versatility and emphasizes the need for innovation, adaptation, and sustainable practices to ensure the industry's continued prosperity.

In present study seven RAPD primers were used to access the diversity within and among twelve populations of three mushroom species Ganoderma lucidum, leucoagaricus sp. and Lentinus sp. Total of 111 bands were scored by 7 RAPD primers in 30 accessions of three mushroom species collected from different sampling sites of central India. Total 111 bands were generated using seven primers which were F-1, OPG-06, OPC-07, OPD-08, OPA-02, OPD-02, OPB-10. All 111 bands were polymorphic in nature (100%). Therefore, it revealed that the used primers had sufficient potency for population studies and 30 accessions had higher genetic differences among each other. In best of the knowledge, this is the first report, which accesses the genetic diversity between three mushroom species (Gd Ganoderma lucidum, Lg Leucoagaricus sp., Ls Lentinus). The polymorphic percentage ranged from 3.60 to 23% within twelve populations, while polymorphic percentage among group was 40.56, among population within groups was 41.12 and within population was 18.32. This indicated that the genetic diversity within the population was very low, but slightly higher in the populations of three species. Among three groups representing Gd., Lg and Ls, Among populations within groups shown highest percentage of variation (Pv = 41.12) while within populations, the lowest percentage of variation (18.32) was observed. This result also support that the highest genetic variation was present among groups in comparison to among the population within a species and lowest genetic variation was observed within the population.

Data on businesses collected by statistical agencies are challenging to protect. Many businesses have unique characteristics, and distributions of employment, sales, and profits are highly skewed. Attackers wishing to conduct identification attacks often have access to much more information than for any individual. As a consequence, most disclosure avoidance mechanisms fail to strike an acceptable balance between usefulness and confidentiality protection. Detailed aggregate statistics by geography or detailed industry classes are rare, public-use microdata on businesses are virtually inexistant, and access to confidential microdata can be burdensome. Synthetic microdata have been proposed as a secure mechanism to publish microdata, as part of a broader discussion of how to provide broader access to such data sets to researchers. In this article, we document an experiment to create analytically valid synthetic data, using the exact same model and methods previously employed for the U...

The literature has established two robust stylized facts: (i) the existence of a firm size-wage premium and (ii) a positive relationship between firm size and productivity. However, the existing evidence is mainly based on manufacturing, which nowadays accounts for a small share of the economy. Using a unique micro-aggregated dataset covering 17 countries over 1994-2012, this paper compares these relationships across sectors. While the size-wage and size-productivity premia are significantly weaker in market services compared to manufacturing, the link between wages and productivity is stronger. In a service economy the stylized fact is a “productivity-wage premium” rather than a “size-wage premium.”

Labor market prospects are better for skill-based immigrants than for other immigrants. However, skill-based admission is not a remedy for all the economic outcome problems of immigration, including weak economic integration. Designing skill-based selection policies is complicated; policies need to reflect labor market characteristics and the applicant pool. To maximize benefits, governments should complement immigrant selection policies with economic integration policies to ease the transfer of foreign human capital. There is increasing global competition for high-skilled immigrants, as countries intensify efforts to attract a larger share of the world's talent pool. In this environment, high-skill immigrants are becoming increasingly selective in their choices between alternative destinations. Studies for major immigrant-receiving countries that provide evidence on the comparative economic performance of immigrant classes (skill-, kinship-, and humanitarianbased) show that skill-based immigrants perform better in the labor market. However, there are serious challenges to their economic integration, which highlights a need for complementary immigration and integration policies. The design of selection systems for skill-based admissions is complicated and requires frequent updating as the economic environment changes. Skill-based immigrants face formidable economic integration challenges due to skill and credential transferability problems and underutilization of their human capital. Identifying short-term skill shortages as a basis for admissions is difficult and may not be in line with long-term needs of the economy. Allocating a higher share of immigrant admissions based on skills usually comes at the expense of kinship-and humanitarian-based admissions. Skill-based selection of immigrants responds to the needs of the economy. High-skilled immigrants have better labor market prospects in general than immigrants admitted based on kinship ties or for humanitarian reasons. High-skilled immigrants boost innovation, a key to long-term economic growth. High-skilled immigrants in the labor market can raise wages for low-skilled native workers struggling with declining labor market prospects. Highly paid skill-based immigrants widen the tax base and help offset growing fiscal challenges.

A common interest in gene expression data analysis is to identify from a large pool of candidate genes the genes that present significant changes in expression levels between a treatment and a control biological condition. Usually, it is done using a statistic value and a cutoff value that are used to separate the genes differentially and nondifferentially expressed. In this paper, we propose a Bayesian approach to identify genes differentially expressed calculating sequentially credibility intervals from predictive densities which are constructed using the sampled mean treatment effect from all genes in study excluding the treatment effect of genes previously identified with statistical evidence for difference. We compare our Bayesian approach with the standard ones based on the use of thet-test and modifiedt-tests via a simulation study, using small sample sizes which are common in gene expression data analysis. Results obtained report evidence that the proposed approach performs ...

In most countries, statistical agencies do not release establishment-level business microdata because doing so represents too large a risk to establishments' confidentiality. One potential approach for overcoming these risks is to release synthetic data. The US Census Bureau Center for Economic Studies in collaboration with Duke University, the National Institute of Statistical Sciencies, and Cornell University made available a synthetic public use file for the Longitudinal Business Database (LBD), an annual economic census of establishments in the United States comprising more than 20 million records dating back to 1976. The resulting product, dubbed the SynLBD, was released in 2010 and is the first-ever comprehensive business microdata set publicly released in the United States including data on establishments, employment and payroll, birth and death years, and industrial classification. This paper describes how to extend this approach in a cost-effective way to other countries, allowing to expand general access to business microdata, and permitting novel ways of cross-country analysis of business dynamics.

This paper contributes to the literature by computing the contribution of labor reallocation to productivity growth for the United States and Canada, using several different decomposition specifications, and applying a consistent approach to data from both countries. We compute the Baily, , ), and Baldwin & Gu (2006) decompositions, for both three-year and five-year time frames. We focus on the manufacturing sector for both countries, and assess the robustness of the conclusions to alternate specifications that the data from one or the other country allow us to do.

Rice genotypes tolerant to germination stage oxygen deficiency (GSOD) can reduce weed infestation and can help in maintaining optimum plant stand in direct-seeded rice. Out of 43 rainfed lowland rice genotypes, AC41620A with greater establishment ability and vigor index was found to be the best under submergence at the germination stage. Further, genetic diversity was studied with 47 polymorphic simple sequence repeats (SSR) markers. Allele numbers varied between 2 and 4 and all together 11 unique alleles were identified in 10 genotypes with six SSR markers such as RM339, RM1187, RM10695, RM6840, RM1183 and RM7180. Polymorphic information content value was more than 0.7 in RM235, RM219 and RM11 indicating the usefulness of these markers for genetic studies associated with GSOD sensitivity. The results from the study are useful for marker-assisted selection as well as QTL discovery for GSOD tolerance.

We estimate constant returns or slightly decreasing returns at the industry level in the private U.S. economy over the past 30 years, using two separate industry datasets. An intuitive identity linking returns to scale, the markup, and the profit rate, gives an implied markup of approximately 12 percent, smaller than the estimates in the recent literature ranging from 15–40 percent. Put differently, given our estimated profit rate, large markups imply strongly increasing returns, which are not evident in the aggregate data.These findings suggest that approximately constant returns to scale in the U.S. economy are consistent with a relatively small aggregate markup in the post-1990 period.

This paper develops a theory which investigates how firms' choice of corporate organization is affecting firm performance and the nature of competition in international markets. We develop a model in which firms' organisational choices determine heterogeneity across firms in size and productivity in the same industry. We then incorporate these organisational choices in a Krugman cum Melitz and Ottaviano model of international trade. We show that the toughness of competition in a market depends on who -headquarters or middle managers -have power in firms. Furthermore, we propose two new margins of trade adjustments: the monitoring margin and the organizational margin. International trade may or may not lead to an increase in aggregate productivity of an industry depending on which of these margins dominate. Trade may trigger firms to opt for organizations which encourage the creation of new ideas and which are less well adapt to price and cost competition.

The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

What Is a Register-based Census? • A register-based Census uses data from the administrative records to "fill the forms" • Most census frames are already maintained through a combination of enumeration and administrative records -Population and Housing frames (Session 2) -Business and establishment frames (Session 3)

In this paper, we use the econometric frontier approach to estimate efficiency measures of the transformation of human capital into earned income in the Chilean labor market for the period 1957-1998. We find that the mean efficiency is 75%, and that it has been improving over ...

The importance of investment to the individual, a nation and the world economy cannot be over emphasized. Investment involves the sacrifice of immediate consumption to achieve greater consumption in the future. The Nigerian banking sector has made tremendous success in the recent past. All the banks that approached the capital market through public offers and right issues to raise their capital base recorded huge success. Investors in bank stocks have enjoyed high returns on investment, despite the slow growth in the nation's economy. However, the recent financial crisis that started in America, which has caused economy meltdown in many nations of the world and sudden fall in share prices, has brought about a higher risk than envisaged on investors, particularly those investing in bank stocks. This study underlines the importance of different criteria, factors and alternatives that are essential to successful investment decisions by applying the Analytic Hierarchy Process (AHP) in the selection of investment in bank stocks in the circumstances of financial crisis. The study provides recommendation on strategic investment decision options.

Abstract-Commencing with incandescent light bulb, every load today creates harmonics. Unfortunately, these loads vary with respect to their amount of harmonic content and response to problems caused by harmonics. The issue of harmonics is of great concern to engineers, building designers and also in industrial applications because they do not just distort voltage waveforms, but they can also overheat the building wiring, cause nuisance tripping, overheat transformer units, and cause random end-user equipment failures. Thus, power quality has become more and more serious with each passing day. As a result active power filters (APF) gain attention due to their excellent harmonic compensation. But still the performance of the active filter seems to be in contradiction with different control techniques. The main objective of this paper is to analyze shunt active filters employing fuzzy and PI controllers. The active and reactive power method (p-q) is used for the analysis. Extensive sim...

U.S. labor and total-factor productivity growth slowed prior to the Great Recession. The timing rules out explanations that focus on disruptions during or since the recession, and industry and state data rule out "bubble economy" stories related to housing or finance. The slowdown is located in industries that produce information technology (IT) or that use IT intensively, consistent with a return to normal productivity growth after nearly a decade of exceptional IT-fueled gains. A calibrated growth model suggests trend productivity growth has returned close to its 1973-1995 pace. Slower underlying productivity growth implies less economic slack than recently estimated by the Congressional Budget Office. As of 2013, about ¾ of the shortfall of actual output from (overly optimistic) pre-recession trends reflects a reduction in the level of potential.

We identify a family of discounted dynamic optimization problems in which the immediate return function depends on current consumption, capital input and a taste parameter. The usual monotonicity and concavity assumptions on the return functions and the aggregative production function are verified. It is shown that the optimal transition functions are represented by the "quadratic family", well-studied in the literature on chaotic dynamical systems. Hence, Jakobson's theorem can be used to throw light on the issues of robustness of ergodic chaos and sensitive dependence on initial conditions.

In the United States, the residential housing market went through important changes over the period from the 1970s to the mid-1990s. Although the aggregate homeownership rate was relatively stable during that period, the distribution of homeownership rates by age changed in remarkable ways. While younger households saw substantial declines in homeownership rates, the opposite happened for older households. In this paper, we argue that the skill-biased technological change (SBTC) that began during the 1970s has been an important factor behind the observed change in the distribution of homeownership rates by age. We build a life cycle model in which skills are accumulated on-the-job through experience: learning by doing. Early in life, households have lower levels of skills and therefore lower earnings. SBTC increases the returns to skill, widening the wage gap between young and old ages. As a consequence, it takes more time for young households to become homeowners given frictions in financial markets (e.g. downpayment requirements) and housing markets (e.g. large and indivisible houses), in line with consumption smoothing behavior. On the other hand, older households that could not afford a house before may now become homeowners, given higher returns to skill. Our analysis confirms this conjecture, namely, that SBTC shifts the distribution of homeownership from the young to the old.

is one of thepoorest economies in Africa that relies heavily on foreign direct investment (FDI) inflow for growth. This study examines the impact of FDI on economic growth in Sierra Leone between 1990 and 2020 using time series data from the World Development Indicators (WDI). The analysis uses cointegration and error, correction models. The findings from the result showed that FDI has a significant positive effect on the economic growth of Sierra Leone in both the short and long run. The findings recommend, among other things, that policies aimed at increasing the productivity and growth be implemented. Furthermore, since FDI of the economy is also significant, government should make further efforts to strengthen the implementation of it reform agenda which has the potential to attract more FDI into Sierra Leone. This is true because, the inflow of FDI has been on the increase because of the increase in exportation since the introduction of certain reform measures by the government which have further encouraged and boost foreign investment in various sectors of the economy.

The availability of rich firm-level data set has recently led researchers to uncover an interesting set of empirical findings on the effects of trade liberalization. Trade openness forces the least productive firms to exit the market and induces surviving firms to increase their innovation efforts. Together with the selection and the innovation effect, trade liberalization seems to have positive effects on the degree of product market competition. This paper presents a theoretical model aimed at providing a coherent interpretation of these empirical findings. We introduce firm heterogeneity into an innovation-driven growth model. Incumbent firms operating in an oligopolistic environment perform cost-reducing innovation in order to increase their future productivity. In equilibrium more productive firms show higher investment in innovation. The oligopolistic structure implies that markups are endogenously determined by the number of firms competing in same product line. Trade liberalization leads to a higher number of firms and lower markups. This pro-competitive effect of trade forces less efficient firms out of the market and reallocates resources towards more efficient, more innovative, firms; thereby raising aggregate innovation and, consequently, aggregate productivity growth. This dynamic selection effect of trade is decreasing in the level of product market competition and, as a consequence, trade liberalization has negligible effects on innovation in highly competitive economies.

The capital income tax cuts that were part of the Jobs and Growth Tax Relief Reconciliation Act of 2003 are expiring this year and the administration has to decide whether to extend them or not. This paper assesses the effects of these tax cuts in a calibrated dynamic general equilibrium framework with uninsurable labor income risk. In particular, it looks at the effects of dividend and capital gains taxes on investment and welfare in a framework where firms are the owners of capital and make investment decisions to maximize their market value. While the effects of capital gains taxes are qualitatively similar to those found when households own the capital, we find that the effects of dividend taxes are different. Surprisingly, a dividend tax cut leads to a reduction in investment. The reason is that it raises the market valuation of the existing capital stock and households require a lower capital stock to maintain the same level of wealth. As a consequence, dividend tax cuts are welfare reducing in the long run, not only because of the traditional reasons of redistribution from the poor to rich, but also because of a fall in aggregate production and consumption. Taking into account the transition mitigates the losses. Still, with our benchmark calibration, a reduction of dividend and capital gains taxes from 31% and 24% to 19% leads to a reduction of more than 0.5% in aggregate welfare in consumption equivalent terms.

When markets are incomplete, shareholders typically disagree on the …rm's optimal investment level. This paper studies the shareholders' preferences with respect to the …rm's investment level in a model with aggregate risk, incomplete markets and heterogeneous households who trade in …rms'shares instead of directly accumulating physical capital. If the production function exhibits constant returns to scale and borrowing limits are not binding, a …rm's shareholders unanimously agree on its optimal level of investment. In contrast, with binding borrowing constraints, constrained shareholders prefer a higher level of investment than unconstrained ones.

This paper studies policy in a class of economies in which information about commonlyrelevant fundamentals-such as aggregate productivity and demand conditions-is dispersed and can not be centralized by the government. In these economies, the decentralized use of information can fail to be efficient either because of discrepancies between private and social payoffs, or because of informational externalities. In the first case, inefficiency manifests itself in excessive non-fundamental volatility (overreaction to common noise) or excessive cross-sectional dispersion (overreaction to idiosyncratic noise). In the second case, inefficiency manifests itself in suboptimal social learning (low quality of information contained in macroeconomic data, financial prices, and other indicators of economic activity). In either case, a novel role for policy is identified: the government can improve welfare by manipulating the incentives agents face when deciding how to use their available sources of information. Our key result is that this can be achieved by appropriately designing the contingency of marginal taxes on aggregate activity. This contingency permits the government to control the reaction of equilibrium to different types of noise, to improve the quality of information in prices and macro data, and, in overall, to restore efficiency in the decentralized use of information.

This paper studies policy in a class of economies in which information about commonly-relevant fundamentals --such as aggregate productivity and demand conditions --is dispersed and can not be centralized by the government. In these economies, the decentralized use of information can fail to be efficient either because of discrepancies between private and social payoffs, or because of informational externalities. In the first case, inefficiency manifests itself in excessive non-fundamental volatility (overreaction to common noise) or excessive cross-sectional dispersion (overreaction to idiosyncratic noise). In the second case, inefficiency manifests itself in suboptimal social learning (low quality of information contained in macroeconomic data, financial prices, and other indicators of economic activity). In either case, a novel role for policy is identified: the government can improve welfare by manipulating the incentives agents face when deciding how to use their available sources of information. Our key result is that this can be achieved by appropriately designing the contingency of marginal taxes on aggregate activity. This contingency permits the government to control the reaction of equilibrium to different types of noise, to improve the quality of information in prices and macro data, and, in overall, to restore efficiency in the decentralized use of information.

This paper studies policy in a class of economies in which information about commonly-relevant fundamentals --such as aggregate productivity and demand conditions --is dispersed and can not be centralized by the government. In these economies, the decentralized use of information can fail to be efficient either because of discrepancies between private and social payoffs, or because of informational externalities. In the first case, inefficiency manifests itself in excessive non-fundamental volatility (overreaction to common noise) or excessive cross-sectional dispersion (overreaction to idiosyncratic noise). In the second case, inefficiency manifests itself in suboptimal social learning (low quality of information contained in macroeconomic data, financial prices, and other indicators of economic activity). In either case, a novel role for policy is identified: the government can improve welfare by manipulating the incentives agents face when deciding how to use their available sources of information. Our key result is that this can be achieved by appropriately designing the contingency of marginal taxes on aggregate activity. This contingency permits the government to control the reaction of equilibrium to different types of noise, to improve the quality of information in prices and macro data, and, in overall, to restore efficiency in the decentralized use of information.

After some decades of relative oblivion, the interest in the optimality properties of monopolistic competition has recently re-emerged due to the availability of an appropriate and parsimonious framework to deal with firm heterogeneity. Within this framework we show that non-separable utility, variable demand elasticity and endogenous firm heterogeneity cause the market equilibrium to err in many ways, concerning the number of products, the size and the choice of producers, the overall size of the monopolistically competitive sector. More crucially with respect to the existing literature, we also show that the extent of the errors depends on the degree of firm heterogeneity. In particular, the inefficiency of the market equilibrium seems to be largest when selection among heterogeneous firms is needed most, that is, when there are relatively many firms with low productivity and relatively few firms with high productivity.

After some decades of relative oblivion, the interest in the optimality properties of monopolistic competition has recently re-emerged due to the availability of an appropriate and parsimonious framework to deal with firm heterogeneity. Within this framework we show that non-separable utility, variable demand elasticity and endogenous firm heterogeneity cause the market equilibrium to err in many ways, concerning the number of products, the size and the choice of producers, the overall size of the monopolistically competitive sector. More crucially with respect to the existing literature, we also show that the extent of the errors depends on the degree of firm heterogeneity. In particular, the inefficiency of the market equilibrium seems to be largest when selection among heterogeneous firms is needed most, that is, when there are relatively many firms with low productivity and relatively few firms with high productivity.

En este trabajo se evalúan los efectos ex-post del MAC 1994-1999 en Andalucía (España), los efectos directos e indirectos de las inversiones dentro de la región y los efectos fuga producidos hacia el resto del país (cross-border leakage). Utilizando un modelo ...

This study seeks to determine the effects of an economic sector’s political power on the policies faced by its plants, its market survival probabilities, and finally, aggregate productivity. Data from the Colombian manufacturing sector at the plant level for the period 19901998 is used to estimate several empirical models. Additionally, several political power variables are constructed. First, we find that sector’s political power has a significant positive effect on the tariffs faced by its plants. In the second place, we find that a plant belonging to a more politically influential sector may survive in spite of lower productivity levels. Finally we calculate that, since the political power effect allows less productive plants to survive, aggregate productivity is decreased by an average of 9.86% per year.

This study seeks to determine the effects of an economic sector’s political power on the policies faced by its plants, its market survival probabilities, and finally, aggregate productivity. Data from the Colombian manufacturing sector at the plant level for the period 19901998 is used to estimate several empirical models. Additionally, several political power variables are constructed. First, we find that sector’s political power has a significant positive effect on the tariffs faced by its plants. In the second place, we find that a plant belonging to a more politically influential sector may survive in spite of lower productivity levels. Finally we calculate that, since the political power effect allows less productive plants to survive, aggregate productivity is decreased by an average of 9.86% per year.

The rational expectations equilibrium of a small open economy can be subject to indeterminacy if foreign monetary policy does not satisfy the Taylor principle. We study the implications of foreign-induced indeterminacy for the conduct of monetary policy in a small open economy. In the canonical sticky-price small open economy model, we find that indeterminacy arising in the large economy can increase the volatility of the small economy. Our main finding, however, is that 'smallness' is a property of the unique rational expectations equilibrium of the large economy, and not a general property of the small open economy model. If the large economy fails to anchor expectations, shocks to the small economy can affect the large one. This form of indeterminacy gives rise to a 'butterfly effect'. Additional assumptions are required to preserve the 'smallness' of the small economy.

In this paper we analyze technological change in the Spanish economy by constructing adjusted Solow residuals, where the adjustment attempts to correct for the bias associated with the potential presence of imperfect competition, increasing returns, variable input utilization and, especially, sectoral reallocation of inputs across sectors. We refer to this modified Solow residual as a technology index. Sectoral reallocations and variable input utilization are key determinants of the differences between the aggregate Solow residual and the technology index resulting from the aggregation of estimated sectoral technological growth. In particular, we show that technological growth has been in the last two decades more intense than what suggests the standard aggregate Solow residual indices. However, starting in the mid nineties, there has been a deceleration in the aggregate growth rate of technology which is basically due to the behaviour of the manufacturing sectors.

The present study examines cross-national and sectoral differences in multifactor productivity growth in sixteen European countries from 1995 to 2005. The main aim is to ascertain the role of flexible employment contracts and collective labour relationships in explaining the ample differentials recorded in the European economy. We use the EU KLEMS database for growth accounting and a broad set of indicators of labour regulations, covering two distinct 'areas' of labour regulation: employment laws and collective relations laws. This comprehensive approach allow us to consider arrangements that regulate allocation of labour inputs (fixed-term, part-time contracts, hours worked) and of payoff and decision rights of employees. We find that, since 1995, European countries have not followed similar patterns of growth. A large number of variations between European economies are caused by deep differentials in multifactor productivity and part of this heterogeneity is caused by sectoral diversities. We show that, in labourintensive sectors such as services, fixed-term contracts, which imply shorterterm jobs and lower employment tenures, may discourage investment in skills and have detrimental effects on multifactor productivity increases. We also find that some forms of labour regulation and arrangements that give a 'voice' to employees mitigate these perverse effects on efficiency patterns. Employment protection reforms which slacken the rules of fixed-term contracts cause potential drawbacks in terms of low productivity gains. More stringent regulation of these practices, as well as a climate of collective relations, sustain long-term relationships and mitigate these negative effects.