National Bureau of Economic Research

About: National Bureau of Economic Research is a nonprofit organization based out in Cambridge, Massachusetts, United States. It is known for research contribution in the topics: Monetary policy & Population. The organization has 2626 authors who have published 34177 publications receiving 2818124 citations. The organization is also known as: NBER & The National Bureau of Economic Research.

Trade, FDI, and the Organization of Firms

Abstract: New developments in the world economy have triggered research designed to better understand the changes in trade and investment patterns, and the reorganization of production across national borders. Although traditional trade theory has much to offer in explaining parts of this puzzle, other parts required new approaches. Particularly acute has been the need to model alternative forms of involvement of business firms in foreign activities, because organizational change has been central in the transformation of the world economy. This paper reviews the literature that has emerged from these efforts. The theoretical refinements have focused on the individual firm, studying its choices in response to its own characteristics, the nature of the industry in which it operates, and the opportunities afforded by foreign trade and investment. Important among these choices are organizational features, such as sourcing strategies. But the theory has gone beyond the individual firm, studying the implications of firm behavior for the structure of industries. It provides new explanations for trade structure and patterns of FDI, both within and across industries, and has identified new sources of comparative advantage.

Can Sticky Price Models Generate Volatile and Persistent Real Exchange Rates

Abstract: The central puzzle in international business cycles is that real exchange rates are volatile and persistent. The most popular story for real exchange rate fluctuations is that they are generated by monetary shocks interacting with sticky goods prices. We quantify this story and find that it can account for some of the observed properties of real exchange rates. When prices are held fixed for at least one year, risk aversion is high and preferences are separable in leisure, the model generates real exchange rates that are as volatile as in the data. The model also generates real exchange rates that are persistent, but less so than in the data. If monetary shocks are correlated across countries, then the comovements in aggregates across countries are broadly consistent with those in the data. Making asset markets incomplete or introducing sticky wages does not measurably change the results.

The Elasticity of Taxable Income with Respect to Marginal Tax Rates: A Critical Review

Abstract: This paper critically surveys the large and growing literature estimating the elasticity of taxable income with respect to marginal tax rates (ETI) using tax return data First, we provide a theoretical framework showing under what assumptions this elasticity can be used as a sufficient statistic for efficiency and optimal tax analysis We discuss what other parameters should be estimated when the elasticity is not a sufficient statistic Second, we discuss conceptually the key issues that arise in the empirical estimation of the elasticity of taxable income using the example of the 1993 top individual income tax rate increase in the United States to illustrate those issues Third, we provide a critical discussion of most of the taxable income elasticities studies to date, both in the United States and abroad, in light of the theoretical and empirical framework we laid out Finally, we discuss avenues for future research

Chapter 1 Labor supply of men: A survey

Abstract: Publisher Summary This chapter presents a survey on the labor supply of men. This survey of male labor supply covers the determinants of whether men work for pay in the labor market and, if so, the determinants of their hours of work. The chapter also discusses the work behavior of men prior to their retirement from the labor force. Moreover, even though there are noteworthy investigations into the labor supply of men in many different countries, this survey is restricted almost entirely to the Anglo-American literature. The chapter identifies the major time-series and cross-section empirical regularities in male labor supply behavior. It is these that any economic theory should be designed to address. The chapter presents the canonical static model of labor supply and then immediately proceeds to deal with the problems in applying this model at the aggregative level. The static model is amended to handle the situation of nonlinear budget constraints. The chapter concludes with an outline of the most popular life-cycle model of labor supply. The chapter also addresses the issues in and results from the estimation of the static model. Problems in specifying the model are first considered and then the results are presented from the U.S. nonexperimental literature, the British literature, and the U.S. experimental literature. The chapter also discusses the estimates from the applications of the life-cycle model.

Employer Learning and Statistical Discrimination

Abstract: We provide a test for statistical discrimination or rational stereotyping in in environments in which agents learn over time. Our application is to the labor market. If profit maximizing firms have limited information about the general productivity of new workers, they may choose to use easily observable characteristics such as years of education to 'statistically discriminate' among workers. As firms acquire more information about a worker, pay will become more dependent on actual productivity and less dependent on easily observable characteristics or credentials that predict productivity. Consider a wage equation that contains both the interaction between experience and a hard to observe variable that is positively related to productivity and the interaction between experience and a variable that firms can easily observe, such as years of education. We show that the wage coefficient on the unobservable productivity variable should rise with time in the labor market and the wage coefficient on education should fall. We investigate this proposition using panel data on education, the AFQT test, father's education, and wages for young men and their siblings from NLSY. We also examine the empirical implications of statistical discrimination on the basis of race. Our results support the hypothesis of statistical discrimination, although they are inconsistent with the hypothesis that firms fully utilize the information in race. Our analysis has wide implications for the analysis of the determinants of wage growth and productivity and the analysis of statistical discrimination in the labor market and elsewhere.(This abstract was borrowed from another version of this item.)