What drives urban consumption in mainland china? The role of property price dynamics

This paper adds to the literature on wealth effects on consumption by disentangling house price effects on consumption for mainland China. In a stochastic modelling framework, the riskiness, rate of increase and persistence of house price movements have different implications for the consumption/housing ratio. We exploit the geographical variation in property prices by using a quarterly city-level panel dataset for the period 1998Q1 – 2009Q4 and rely on a panel error correction model. Overall, the results suggest a significant long run impact of property prices on consumption. They also broadly confirm the predictions from the theoretical model.

Time Variation in the Dynamics of Worker Flows: Evidence from the US and Canada

VAR methods have been used to model the inter-relationships between inflows and outfl ows into unemployment and vacancies using tools such as impulse response analysis. In order to investigate whether such impulse responses change over the course of the business cycle or or over time, this paper uses TVP-VARs for US and Canadian data. For the US, we find interesting differences between the most recent recession and earlier recessions and expansions. In particular, we find the immediate effect of a negative shock on both in ow and out flow hazards to be larger in 2008 than in earlier times. Furthermore, the effect of this shock takes longer to decay. For Canada, we fi nd less evidence of time-variation in impulse responses.

Dynamics in Thompson's group F

We describe an explicit relationship between strand diagrams and piecewise-linear functions for elements of Thompson’s group F. Using this correspondence, we investigate the dynamics of elements of F, and we show that conjugacy of one-bump functions can be described by a Mather-type invariant.

The Distribution Dynamics of Output Multipliers in Scotland 1998–2007

In an input-output context the impact of any particular industrial sector is commonly measured in terms of the output multiplier for that industry. Although such measures are routinely calculated and often used to guide regional industrial policy the behaviour of such measures over time is an area that has attracted little academic study. The output multipliers derived from any one table will have a distribution; for some industries the multiplier will be relatively high, for some it will be relatively low. The recentpublication of consistent input-output tables for the Scottish economy makes it possible to examine trends in this mdistribution over the ten year period 1998-2007. This is done by comparing the means and other summary measures of the distributions, the histograms and the cumulative densities. The results indicate a tendency for the multipliers to increase over the period. A Markov chain modelling approach suggests that this drift is a slow but long term phenomenon which appears not to tend to an equilibrium state. The prime reason for the increase in the output multipliers is traced to a decline in the relative importance of imported (both from the rest of the UK and the rest of the world) intermediate inputs used by Scottish industries. This suggests that models calibrated on the set of tables might have to be interpreted with caution.

Rational Expectations Dynamics: A Methodological Critique

This paper analyses RE macromodels from the methodological perspective. It proposes a particular property, robustness, which should be considered a necessary feature of scienti cally valid models in economics, but which is absent from many RE macromodels. To restore this property many macroeconomists resort to detailed and implausible assumptions, which take their models a long way from simple Rational Expectations. The paper draws attention to the problems inherent in the technique of local linearisation and concludes by proposing the use of nonlinear models, analysed globally.

Non-Cooperative Asymptotic Oligopoly in Economies with Infinitely Many Commodities

In this paper, we extend the non-cooperative analysis of oligopoly to exchange economics with infinitely many commodities by using strategic market games. This setting can be interpreted as a model of oligopoly with differentiated commodities by using the Hotelling line. We prove the existence of an "active" Cournot-Nash equilibrium and show that, when traders are replicated, the price vector and the allocation converge to the Walras equilibrium. We examine how the notion of oligopoly extends to our setting with a countable infinity of commodities by distinguishing between asymptotic oligopolists and asymptotic price-takes. We illustrate these notions via a number of examples.

On a size-structured two-phase population model with infinite states-at-birth

In this work we introduce and analyze a linear size-structured population model with infinite states-at-birth. We model the dynamics of a population in which individuals have two distinct life-stages: an “active” phase when individuals grow, reproduce and die and a second “resting” phase when individuals only grow. Transition between these two phases depends on individuals’ size. First we show that the problem is governed by a positive quasicontractive semigroup on the biologically relevant state space. Then we investigate, in the framework of the spectral theory of linear operators, the asymptotic behavior of solutions of the model. We prove that the associated semigroup has, under biologically plausible assumptions, the property of asynchronous exponential growth.

Asynchronous growth and competition in a two-sex age-structured population model

Asynchronous exponential growth has been extensively studied in population dynamics. In this paper we find out the asymptotic behaviour in a non-linear age-dependent model which takes into account sexual reproduction interactions. The main feature of our model is that the non-linear process converges to a linear one as the solution becomes large, so that the population undergoes asynchronous growth. The steady states analysis and the corresponding stability analysis are completely made and are summarized in a bifurcation diagram according to the parameter R0. Furthermore the effect of intraspecific competition is taken into account, leading to complex dynamics around steady states.

Term Structure Dynamics, Macro-Finance Factors and Model Uncertainty

This paper extends the Nelson-Siegel linear factor model by developing a flexible macro-finance framework for modeling and forecasting the term structure of US interest rates. Our approach is robust to parameter uncertainty and structural change, as we consider instabilities in parameters and volatilities, and our model averaging method allows for investors' model uncertainty over time. Our time-varying parameter Nelson-Siegel Dynamic Model Averaging (NS-DMA) predicts yields better than standard benchmarks and successfully captures plausible time-varying term premia in real time. The proposed model has significant in-sample and out-of-sample predictability for excess bond returns, and the predictability is of economic value.

The Black Box of Business Dynamics

Research in business dynamics has been advancing rapidly in the last years but the translation of the new knowledge to industrial policy design is slow. One striking aspect in the policy area is that although research and analysis do not identify the existence of an specific optimal rate of business creation and business exit, governments everywhere have adopted business start-up support programs with the implicit principle that the more the better. The purpose of this article is to contribute to understand the implications of the available research for policy design. Economic analysis has identified firm heterogeneity as being the most salient characteristic of industrial dynamics, and so a better knowledge of the different types of entrepreneur, their behavior and their specific contribution to innovation and growth would enable us to see into the ‘black box’ of business dynamics and improve the design of appropriate public policies. The empirical analysis performed here shows that not all new business have the same impact on relevant economic variables, and that self-employment is of quite a different economic nature to that of firms with employees. It is argued that public programs should not promote indiscriminate entry but rather give priority to able entrants with survival capacities. Survival of entrants is positively related to their size at birth. Innovation and investment improve the likelihood of survival of new manufacturing start-ups. Investment in R&D increases the risk of failure in new firms, although it improves the competitiveness of incumbents.

Near-linear dynamics in KdV with periodic boundary conditions

Near linear evolution in Korteweg de Vries (KdV) equation with periodic boundary conditions is established under the assumption of high frequency initial data. This result is obtained by the method of normal form reduction.

Firm dynamics support the importance of the embodied question

This paper contributes to the literature on both embodied technical progress and firm dynamics, by formulating an endogenous growth model where selection and imitation play a fundamental role in helping capital good producers to learn about the productivity of technologies embodied in new plants. By calibrating the model to some key aggregates particularly relevant for the embodied capital literature, among them the growth rate of the relative investment price, the model quantitatively replicates the main facts associated to firm dynamics, such as the entry rate and the tail index of the establishment size distribution. In line with the previous literature, it also predicts a contribution to productivity growth of embodied technical progress and selection of around 60%

Heterogeneous dynamics, aggregation and the persistence of economic shocks

It has been recently emphasized that, if individuals have heterogeneous dynamics, estimates of shock persistence based on aggregate data are significatively higher than those derived from its disaggregate counterpart. However, a careful examination of the implications of this statement on the various tools routinely employed to measure persistence is missing in the literature. This paper formally examines this issue. We consider a disaggregate linear model with heterogeneous dynamics and compare the values of several measures of persistence across aggregation levels. Interestingly, we show that the average persistence of aggregate shocks, as measured by the impulse response function (IRF) of the aggregate model or by the average of the individual IRFs, is identical on all horizons. This result remains true even in situations where the units are (short-memory) stationary but the aggregate process is long-memory or even nonstationary. In contrast, other popular persistence measures, such as the sum of the autoregressive coefficients or the largest autoregressive root, tend to be higher the higher the aggregation level. We argue, however, that this should be seen more as an undesirable property of these measures than as evidence of different average persistence across aggregation levels. The results are illustrated in an application using U.S. inflation data.

Dynamics of fibrosis production and resorption in intestinal schistosomiasis of mice

A histological, morphometric and immunocytochemical study of schistosomal periovular granulomas in the liver and intestines of mice revealed that intestinal granulomas are smaller and contain less collagen than those in the liver. After curative treatment intestinal granulomas undergo a relatively more rapid resorption, although the general pattern of collagen degradation apparently does not differ from that observed in the liver. Tendency to form scattered, usually isolated granulomas that are only mildly fibrogenic, coupled with a well-balanced process of resorption appear as the explanation why intestinal fibrosis is not an outstanding feature of schistosomiasis as it is in the liver.