Essays on Macroeconomic Trends and Cycles

This dissertation describes two studies on macroeconomic trends and cycles. The first chapter studies the impact of Information Technology (IT) on the U.S. labor market. Over the past 30 years, employment and income shares of routine-intensive occupations have declined significantly relative to nonroutine occupations, and the overall U.S. labor income share has declined relative to capital. Furthermore, the decline of routine employment has been largely concentrated during recessions and ensuing recoveries. I build a model of unbalanced growth to assess the role of computerization and IT in driving these labor market trends and cycles. I augment a neoclassical growth model with exogenous IT progress as a form of Routine-Biased Technological Change (RBTC). I show analytically that RBTC causes the overall labor income share to follow a U-shaped time path, as the monotonic decline of routine labor share is increasingly offset by the monotonic rise of nonroutine labor share and the elasticity of substitution between the overall labor and capital declines under IT progress. Quantitatively, the model explains nearly all the divergence between routine and nonroutine labor in the period 1986-2014, as well as the mild decline of the overall labor share between 1986 and the early 2000s. However, the model with IT progress alone cannot explain the accelerated decline of labor income share after the early 2000s, suggesting that other factors, such as globalization, may have played a larger role in this period. Lastly, when nonconvex labor adjustment costs are present, the model generates a stepwise decline in routine labor hours, qualitatively consistent with the data. The timing of these trend adjustments can be significantly affected by aggregate productivity shocks and concentrated in recessions. The second chapter studies the implications of loss aversion on the business cycle dynamics of aggregate consumption and labor hours. Loss aversion refers to the fact that people are distinctively more sensitive to losses than to gains. Loss averse agents are very risk averse around the reference point and exhibit asymmetric responses to positive and negative income shocks. In an otherwise standard Real Business Cycle (RBC) model, I study loss aversion in both consumption alone and consumption-and-leisure together. My results indicate that how loss aversion affects business cycle dynamics depends critically on the nature of the reference point. If, for example, the reference point is status quo, loss aversion dramatically lowers the effective inter-temporal rate of substitution and induces excessive consumption smoothing. In contrast, if the reference point is fixed at a constant level, loss aversion generates a flat region in the decision rules and asymmetric impulse responses to technology shocks. Under a reasonable parametrization, loss aversion has the potential to generate asymmetric business cycles with deeper and more prolonged recessions.

The Effect of Wood Burial and Submersion on Decomposition: Implications for Reducing Carbon Emissions

Gemstone Team Carbon Sinks

Continuity and Change on an Urban Houselot: Archaeological Excavation at the 22 West Street Backlot (18AP51) of the Annapolis National Historic District, Anne Arundel County, Maryland

Intensive archaeological investigation was undertaken on an urban backlot in Annapolis, Maryland. Fieldwork was conducted on behalf of Historic Annapolis Foundation for the property's owners, King and Cornwall, Inc. Supplemental documentary research, an evaluation of existing conditions on the property, and below-ground excavation of a 35 X 70 ft. urban backlot were conducted. While the project was not a Section 106 compliance effort, the field methods and rationale for the site's investigation are comparable to those of standard Phase II site evaluations. Historical documentation attested to the fact that the 22 West Street Backlot, located along the western most edge of the Historic District of Annapolis, Maryland, had seen development and occupation since the first quarter of the eighteenth century. A substantial brick structure was known to have occupied the property in a series of altered forms for much of that period. This structure served a variety of purposes over time: a private residence in the eighteenth century, a boarding house in the nineteenth century (known as the National Hotel), a duplex in the early twentieth century, half of which remained in use until the structure was entirely razed in the 1970s after destruction by fire. Recovery and analysis of site formation processes (i.e., both cultural and natural transformations of the buried remains) indicated that sections of the site were disturbed to a depth of six feet. In contrast to what initially seemed a poor prognosis for site integrity, other areas of the backlot revealed numerous intact historical features and deposits. Structural remains from the dwelling and its associated outbuildings, additions, and attendant trash deposits were recovered. What was initiated as a program of limited testing evolved into a larger-scale undertaking that made use of largely hand-excavated units in conjunction with machine-assisted stripping of areas demonstrated to contain from four to six-foot deep sterile layers of fill. The current investigations provided a window into a portion of the city and period in its history not documented archaeologically. Moreover, this project provided valuable insight into the archaeology of the homelot within a lightly industrialized, urban context. Evidence was recovered of shifts in the layout and arrangement of the houselot as well as changing relations between individuals and the workplace--all within an urban context--an issue defined elsewhere in the archaeological literature as a significant one. No further investigations are recommended for the site, however, further analysis and interpretation of materials recovered are ongoing. In the event that the site were to undergo development, monitoring of any construction activity is recommended.