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Full-Text Articles in Economics
Take A Break!...Or More., Maria Saez Marti
Take A Break!...Or More., Maria Saez Marti
Cowles Foundation Discussion Papers
I investigate the optimal timing and length of breaks in a model with fatigue. A break’s length determines the worker’s productivity once work is resumed. I show that all breaks should be identical, equally spaced and long enough to fully recover productivity. When taking breaks is costless, the higher the number of breaks the better. Otherwise, the optimal number is finite and those workers whose productivity falls more at the beginning of the day should take more breaks. Workaholics take their breaks too early and make them too short, from the employers’ viewpoint. The opposite is true for leisure-oriented workers.
From Imitation To Innovation: Where Is All That Chinese R&D Going?, König D. König, Kjetil Storesletten, Zheng Song, Fabrizio Zilibotti
From Imitation To Innovation: Where Is All That Chinese R&D Going?, König D. König, Kjetil Storesletten, Zheng Song, Fabrizio Zilibotti
Cowles Foundation Discussion Papers
We construct a model of rm dynamics with heterogenous productivity and distortions. The productivity distribution evolves endogenously as the result of the decisions of firms seeking to upgrade their productivity over time. Firms can adopt two strategies toward that end: imitation and innovation. The theory bears predictions about the evolution of the productivity distribution. We structurally estimate the stationary state of the dynamic model targeting moments of the empirical distribution of R&D and TFP growth in China during the period 2007-2012. The estimated model ts the Chinese data well. We compare the estimates with those obtained using data for Taiwan …
Explaining The Slow U.S.Recovery: 2010–2017, Ray C. Fair
Explaining The Slow U.S.Recovery: 2010–2017, Ray C. Fair
Cowles Foundation Discussion Papers
This paper argues that the slow U.S. recovery after the 2008–2009 recession was due to sluggish government spending. The analysis uses a structural macroeconometric model. Conditional on government policy, the errors in predicting output for the 2009.4–2017.4 period are within what one would expect historically. Productivity and labor force participation are endogenous variables in the model, and so their behavior in this period is a consequence of the slow growth rather than a cause.
Energy Prices, Pass-Through, And Incidence In U.S. Manufacturing, Sharat Ganapati, Joseph S. Shapiro, Reed Walker
Energy Prices, Pass-Through, And Incidence In U.S. Manufacturing, Sharat Ganapati, Joseph S. Shapiro, Reed Walker
Cowles Foundation Discussion Papers
This paper studies how increases in energy input costs for production are split between consumers and producers via changes in product prices (i.e., pass-through). We show that in markets characterized by imperfect competition, marginal cost pass-through, a demand elasticity, and a price-cost markup are sucient to characterize the relative change in welfare between producers and consumers due to a change in input costs. We find that increases in energy prices lead to higher plant-level marginal costs and output prices but lower markups. This suggests that marginal cost pass-through is incomplete, with estimates centered around 0.7. Our confidence intervals reject both …
The Incidence Of Carbon Taxes In U.S. Manufacturing: Lessons From Energy Cost Pass-Through, Sharat Ganapati, Joseph S. Shapiro, Reed Walker
The Incidence Of Carbon Taxes In U.S. Manufacturing: Lessons From Energy Cost Pass-Through, Sharat Ganapati, Joseph S. Shapiro, Reed Walker
Cowles Foundation Discussion Papers
This paper estimates how increases in production costs due to energy inputs affect consumer versus producer surplus (i.e., incidence). In doing so, we develop a general methodology to measure the incidence of changes in input costs that can account for three first-order issues: factor substitution amongst inputs used for production, incomplete pass-through of input costs, and industry competitiveness. We apply this methodology to a set of U.S. manufacturing industries for which we observe plant-level output prices and input costs. We find that about 70 percent of energy price-driven changes in input costs are passed through to consumers. This implies that …
The Incidence Of Carbon Taxes In U.S. Manufacturing: Lessons From Energy Cost Pass-Through, Sharat Ganapati, Joseph S. Shapiro, Reed Walker
The Incidence Of Carbon Taxes In U.S. Manufacturing: Lessons From Energy Cost Pass-Through, Sharat Ganapati, Joseph S. Shapiro, Reed Walker
Cowles Foundation Discussion Papers
This paper studies how changes in energy input costs for U.S. manufacturers affect the relative welfare of manufacturing producers and consumers (i.e. incidence). In doing so, we develop a partial equilibrium methodology to estimate the incidence of input taxes that can simultaneously account for three determinants of incidence that are typically studied in isolation: incomplete pass-through of input costs, differences in industry competitiveness, and factor substitution amongst inputs used for production. We apply this methodology to a set of U.S. manufacturing industries for which we observe plant-level unit prices and input choices. We find that about 70 percent of energy …
The Incidence Of Carbon Taxes In U.S. Manufacturing: Lessons From Energy Cost Pass-Through, Sharat Ganapati, Joseph S. Shapiro, Reed Walker
The Incidence Of Carbon Taxes In U.S. Manufacturing: Lessons From Energy Cost Pass-Through, Sharat Ganapati, Joseph S. Shapiro, Reed Walker
Cowles Foundation Discussion Papers
This paper studies how changes in energy input costs for U.S. manufacturers affect the relative welfare of manufacturing producers and consumers (i.e., incidence). In doing so, we develop a novel partial equilibrium methodology designed to estimate the incidence of input taxes. This method simultaneously accounts for three determinants of incidence that are typically studied in isolation: incomplete pass-through of input costs, differences in industry competitiveness, and substitution amongst inputs used for production. We apply this methodology to a set of U.S. manufacturing industries for which we observe plant-level unit prices and input choices. We find that about 70 percent of …
The ‘Peter Pan Syndrome’ In Emerging Markets: The Productivity-Transparency Tradeoff In It Adoption, K. Sudhir, Debabrata Talukdar
The ‘Peter Pan Syndrome’ In Emerging Markets: The Productivity-Transparency Tradeoff In It Adoption, K. Sudhir, Debabrata Talukdar
Cowles Foundation Discussion Papers
Firms make investments in technology to increase productivity. But in emerging markets, where a culture of informality is widespread, information technology (IT) investments leading to greater transparency can impose a cost through higher taxes and need for regulatory compliance. This tendency of firms to avoid productivity-enhancing technologies and remain small to avoid transparency has been dubbed the “Peter Pan Syndrome.” We examine whether firms make the tradeoff between productivity and transparency by examining IT adoption in the Indian retail sector. We find that computer technology adoption is lower when firms have motivations to avoid transparency. Specifically, technology adoption is lower …
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Trade, Regulation, Productivity, And Preferences, Joseph S. Shapiro, Reed Walker
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Trade, Regulation, Productivity, And Preferences, Joseph S. Shapiro, Reed Walker
Cowles Foundation Discussion Papers
Between 1990 and 2008, air pollution emissions from U.S. manufacturing fell by 60 percent despite a substantial increase in manufacturing output. We show that these emissions reductions are primarily driven by within-product changes in emissions intensity rather than changes in output or in the composition of products produced. We then develop and estimate a quantitative model linking trade with the environment to better understand the economic forces driving these changes. Our estimates suggest that the implicit pollution tax that manufacturers face doubled between 1990 and 2008. These changes in environmental regulation, rather than changes in productivity and trade, account for …
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Trade, Regulation, Productivity, And Preferences, Joseph S. Shapiro, Reed Walker
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Trade, Regulation, Productivity, And Preferences, Joseph S. Shapiro, Reed Walker
Cowles Foundation Discussion Papers
Between 1990 and 2008, emissions of the most common air pollutants from U.S. manufacturing fell by 60 percent, even as real U.S. manufacturing output grew substantially. This paper develops a quantitative model to explain how changes in trade, environmental regulation, productivity, and consumer preferences have contributed to these reductions in pollution emissions. We estimate the model’s key parameters using administrative data on plant-level production and pollution decisions. We then combine these estimates with detailed historical data to provide a model-driven decomposition of the causes of the observed pollution changes. Finally, we compare the model-driven decomposition to a statistical decomposition. The …
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Environmental Regulation, Productivity, And Trade, Joseph S. Shapiro, Reed Walker
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Environmental Regulation, Productivity, And Trade, Joseph S. Shapiro, Reed Walker
Cowles Foundation Discussion Papers
Between 1990 and 2008, air pollution emissions from U.S. manufacturing fell by 60 percent despite a substantial increase in manufacturing output. We show that these emissions reductions are primarily driven by within-product changes in emissions intensity rather than changes in output or in the composition of products produced. We then develop and estimate a quantitative model linking trade with the environment to better understand the economic forces driving these changes. Our estimates suggest that the implicit pollution tax that manufacturers face doubled between 1990 and 2008. These changes in environmental regulation, rather than changes in productivity and trade, account for …
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Environmental Regulation, Productivity, And Trade, Joseph S. Shapiro, Reed Walker
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Environmental Regulation, Productivity, And Trade, Joseph S. Shapiro, Reed Walker
Cowles Foundation Discussion Papers
Between 1990 and 2008, air pollution emissions from U.S. manufacturing fell by 60 percent despite a substantial increase in manufacturing output. We show that these emissions reductions are primarily driven by within-product changes in emissions intensity rather than changes in output or in the composition of products produced. We then develop and estimate a quantitative model linking trade with the environment to better understand the economic forces driving these changes. Our estimates suggest that the implicit pollution tax that manufacturers face doubled between 1990 and 2008. These changes in environmental regulation, rather than changes in productivity and trade, account for …
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Environmental Regulation, Productivity, And Trade, Joseph S. Shapiro, Reed Walker
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Environmental Regulation, Productivity, And Trade, Joseph S. Shapiro, Reed Walker
Cowles Foundation Discussion Papers
Between 1990 and 2008, air pollution emissions from U.S. manufacturing fell by 60 percent despite a substantial increase in manufacturing output. We show that these emissions reductions are primarily driven by within-product changes in emissions intensity rather than changes in output or in the composition of products produced. We then develop and estimate a quantitative model linking trade with the environment to better understand the economic forces driving these changes. Our estimates suggest that the implicit pollution tax that manufacturers face doubled between 1990 and 2008. These changes in environmental regulation, rather than changes in productivity and trade, account for …
Retrospective On The Postwar Productivity Slowdown, William D. Nordhaus
Retrospective On The Postwar Productivity Slowdown, William D. Nordhaus
Cowles Foundation Discussion Papers
The present study reviews the “productivity slowdown” of the 1970s and 1980s. The study also develops a new data set — industrial data available back to 1948 — as well as a new set of tools for decomposing changes in productivity growth. The major result of this study is that the productivity slowdown of the 1970s has survived three decades of scrutiny, conceptual refinements, and data revisions. The slowdown was primarily centered in those sectors that were most energy-intensive, were hardest hit by the energy shocks of the 1970s, and therefore had large output declines. In a sense, the energy …
The Progress Of Computing, William D. Nordhaus
The Progress Of Computing, William D. Nordhaus
Cowles Foundation Discussion Papers
The present study analyzes computer performance over the last century and a half. Three results stand out. First, there has been a phenomenal increase in computer power over the twentieth century. Performance in constant dollars or in terms of labor units has improved since 1900 by a factor in the order of 1 trillion to 5 trillion, which represent compound growth rates of over 30 percent per year for a century. Second, there were relatively small improvements in efficiency (perhaps a factor of ten) in the century before World War II. Around World War II, however, there was a substantial …
Productivity Growth And The New Economy, William D. Nordhaus
Productivity Growth And The New Economy, William D. Nordhaus
Cowles Foundation Discussion Papers
The present study is the third in a series of three papers devoted to issues in the measurement of productivity and productivity growth. The major findings are as follows. First, this study shows that the new data set used here, which develops data on total output, business sector output, and “well-measured” output, and relying on income-side data, provides a useful supplement to existing data sets. Second, there has clearly been a rebound in labor-productivity growth in recent years. All three sectoral definitions show a major acceleration in labor productivity in the last three years of the period (1996-98) relative to …
New Data And Output Concepts For Understanding Productivity Trends, William D. Nordhaus
New Data And Output Concepts For Understanding Productivity Trends, William D. Nordhaus
Cowles Foundation Discussion Papers
The present study is the second is a series of three papers devoted to issues in the measurement of productivity and productivity growth. The contributions of the present paper are three. First, it introduces a new approach to measuring industrial productivity based on income-side data that are published by the Bureau of Economic Analysis (BEA). The data are internally consistent in that both inputs and outputs are income-side measures of value added, whereas the usual productivity measures combine expenditure-side output measures with income-side input measures. Second, because of interest in the “new economy,” we have also constructed a set of …
Alternative Methods For Measuring Productivity Growth, William D. Nordhaus
Alternative Methods For Measuring Productivity Growth, William D. Nordhaus
Cowles Foundation Discussion Papers
The present study is a contribution to the theory of the measurement of productivity growth. First, it examines the welfare-theoretic basis for measuring productivity growth and shows that the ideal welfare-theoretic measure is a chain index of productivity growth rates of different sectors which uses current output weights. Second, it lays out a technique for decomposing productivity growth which separates aggregate productivity growth into three factors — the pure productivity effect, the effect of changing shares, and the effect of different productivity levels. Finally, it shows how to apply the theoretically correct measure of productivity growth and indicates which of …
Trending Time Series And Macroeconomic Activity: Some Present And Future Challenges, Peter C.B. Phillips
Trending Time Series And Macroeconomic Activity: Some Present And Future Challenges, Peter C.B. Phillips
Cowles Foundation Discussion Papers
Some challenges for econometric research on trending time series are discussed in relation to some perceived needs of macroeconomics and macroeconomic policy making.
Are Cyclical Fluctuations In Productivity Due More To Supply Shocks Or Demand Shocks?, Matthew D. Shapiro
Are Cyclical Fluctuations In Productivity Due More To Supply Shocks Or Demand Shocks?, Matthew D. Shapiro
Cowles Foundation Discussion Papers
Measured productivity is strongly procyclical. Real business cycle theories suggest that actual fluctuations in productivity are the source of fluctuations in aggregate output. Keynesian theories maintain that fluctuations in aggregate output come from shocks to aggregate demand. Keynesian theories appeal to labor hoarding or off the production function behavior to explain the procyclicality of productivity. If observed productivity shocks are true productivity shocks, a function of factor prices should covary exactly with productivity. In annual data for United States industries, that function of factor prices and conventionally-measured productivity move together very closely. Moreover, their difference is uncorrelated with aggregate output.