Showing papers by "Robert E. Lucas published in 2007"
TL;DR: This article developed a model of a monetary economy in which individual firms are subject to idiosyncratic productivity shocks as well as general inflation, and calibrated this cost and the variance and autocorrelation of the idiosyncratic shock using a new U.S. data set of individual prices due to Klenow and Kryvtsov.
Abstract: This paper develops a model of a monetary economy in which individual firms are subject to idiosyncratic productivity shocks as well as general inflation. Sellers can change price only by incurring a real “menu cost.” We calibrate this cost and the variance and autocorrelation of the idiosyncratic shock using a new U.S. data set of individual prices due to Klenow and Kryvtsov. The prediction of the calibrated model for the effects of high inflation on the frequency of price changes accords well with international evidence from various studies. The model is also used to conduct numerical experiments on the economy’s response to various shocks. In none of the simulations we conducted did monetary shocks induce large or persistent real responses.
528 citations
TL;DR: In this article, the authors study a variation of the Eaton-Kortum model, a competitive, constant-returns-to-scale multicountry Ricardian model of trade.
289 citations
TL;DR: In this paper, the authors analyzed trends in intergenerational economic mobility in Finland using panel data from 1950 through 1999 on more than 250,000 sons and daughters born between 1930 and 1970, and found that most of the early decline in transmission reflected a drop in the influence of parental income on the children's earnings that operated through investments in the child's schooling.
Abstract: Trends in intergenerational economic mobility in Finland are analyzed using panel data from 1950 through 1999 on more than 250,000 sons and daughters born between 1930 and 1970. A significant decline is estimated in the intergenerational transmission elasticity from the 1930 birth cohort until the baby boom cohorts of the early 1950s. After that we observed no increase in the extent of mobility for 1950s and 1960s birth cohorts, but rather the reverse. The result holds both for sons and daughters. A decomposition of the intergenerational transmission elasticities across cohorts shows that most of the early decline in transmission reflected a drop in the influence of parental income on the children's earnings that operated through investments in the child's schooling. This early pattern is postulated to reflect the phases of secondary educational expansion at the time. Throughout, a rise is estimated in the intergenerational transmission elasticity with age at which sons and daughters are observed. This has also been noted in prior U.S. studies and, at least in this Finnish context, this seems to result almost entirely from rising estimated returns to education with age.
66 citations
01 Jan 2007
TL;DR: In this paper, the authors summarized the key routes through which internal and international migration impact rural development and some of the evidence pertaining to these effects in low income countries, concluding that although the study of migration impacts on rural economies has come a long way from the early dual theories of development, some of potentially more important aspects remain to be investigated systematically.
Abstract: The paper summarizes the key routes through which internal and international migration impact rural development and some of the evidence pertaining to these effects in low income countries. It concludes that, although the study of migration impacts on rural economies has come a long way from the early dual theories of development, some of the potentially more important aspects remain to be investigated systematically.
47 citations
Posted Content•
TL;DR: In this article, a model is proposed to describe the evolution of real GDPs in the world economy that is intended to apply to all open economies, and five parameters of the model are calibrated using the Sachs-Warner definition of openness and time-series and cross-section data on incomes and other variables from the 19th and 20th centuries.
Abstract: A model is proposed to describe the evolution of real GDPs in the world economy that is intended to apply to all open economies. The five parameters of the model are calibrated using the Sachs-Warner definition of openness and time-series and cross-section data on incomes and other variables from the 19th and 20th centuries. The model predicts convergence of income levels and growth rates and has strong but reasonable implications for transition dynamics.
21 citations
TL;DR: In this article, the authors provide an introduction to this volume in honor of Edward C. Prescott, who was a great influence on the way we conceive and carry out our research.
Abstract: I was very pleased to be asked to provide an introduction to this volume in honor of Edward C. Prescott. There is a sense in which all of us working in macroeconomics today honor Ed Prescott in every paper we write, so great has been his influence on the way we conceive and carry out our research. This was the theme of some comments I gave at a 1993 conference in Louvain honoring Kenneth Arrow, Gerard Debreu, and Lionel McKenzie for their work 25 years earlier on the general theory of competitive equilibrium. I will begin by reproducing these remarks, and then conclude with some additional thoughts.
12 citations
Posted Content•
TL;DR: In this article, a model is proposed to describe the evolution of real GDPs in the world economy that is intended to apply to all open economies, and five parameters of the model are calibrated using the Sachs-Warner definition of openness and time-series and cross-section data on incomes and other variables from the 19th and 20th centuries.
Abstract: A model is proposed to describe the evolution of real GDPs in the world economy that is intended to apply to all open economies. The five parameters of the model are calibrated using the Sachs-Warner definition of openness and time-series and cross-section data on incomes and other variables from the 19th and 20th centuries. The model predicts convergence of income levels and growth rates and has strong but reasonable implications for transition dynamics.
1 citations