A Systematic Framework for Analyzing the Dynamic Effects of Permanent and Transitory Shocks.

This paper proposes a systematic framework for analyzing the dynamic effects of permanent and transitory shocks on a system of \"n\" economic variables.

Rank Regressions, Wage Distributions and the Gender Gap.

In this paper, we model the interactions between the distribution of male and female wages under the assumption that any change in the wage distribution of women must be offset by an opposite change in the wage distribution of men.

Investment Under Demand Uncertainty: the Newsboy Problem Revisited.

In this article we study the effect of uncertainty on an entrepreneur who must choose the capacity of his business before knowing the demand for his product. The unit profit of operation is known with certainty but there is no flexibility in our one-period framework. We show how the introduction of global uncertainty reduces the investment of the risk neutral entrepreneur and, even more, that the risk averse one. We also show how marginal increases in risk reduce the optimal capacity of both the risk neutral and the risk averse entrepreneur, without any restriction on the concave utility function and with limited restrictions on the definition of a mean preserving spread. These general results are explained by the fact that the newsboy has a piecewise-linear, and concave, monetary payoff witha kink endogenously determined at the level of optimal capacity. Our results are compared with those in the two literatures on price uncertainty and demand uncertainty, and particularly, with the recent contributions of Eeckhoudt, Gollier and Schlesinger (1991, 1995).

The Transformation Problem : an Aleternative Solution with an Identical Aggregate Profit Rate in the Labor value and the Monetary Space.

The aim of this paper is to demonstrate that, even if Marx's solution to the transformation problem can be modified, his basic conclusions remain valid. the proposed alternative solution which is presented hare is based on the constraint of a common general profit rate in both spaces and a money wage level which will be determined simultaneously with prices.

Termes de l'échange endogènes et cycles économiques réels : une application à la Côte-d'Ivoire

À l’aide d’un modèle de cycles réels, la présente étude vise à expliquer, de façon endogène, les fluctuations des termes de l’échange en Côte-d’Ivoire. Pour ce faire, nous cherchons principalement à répondre aux deux questions suivantes : les chocs d’offre et de demande sur le marché d’exportation suffisent-ils à expliquer les variations des termes de l’échange? Et quelle est leur importance relative dans la dynamique des termes de l’échange? Les résultats montrent que les deux chocs considérés expliquent bien la volatilité des termes de l’échange. Nous avons noté que ces deux sources d’impulsions ont un impact significatif sur les fluctuations économiques en Côte-d’Ivoire.

The Wage Rate and the Profit Rate in the Price of Production Equation: a New Solution to an Old Problem

The aim of this paper is to demonstrate that, even if Marx's solution to the transformation problem can be modified, his basic concusions remain valid.

Reported Job Satisfaction : What Does It Mean?

By reporting his satisfaction with his job or any other experience, an individual does not communicate the number of utils that he feels. Instead, he expresses his posterior preference over available alternatives conditional on acquired knowledge of the past. This new interpretation of reported job satisfaction restores the power of microeconomic theory without denying the essential role of discrepancies between one’s situation and available opportunities. Posterior human wealth discrepancies are found to be the best predictor of reported job satisfaction. Static models of relative utility and other subjective well-being assumptions are all unambiguously rejected by the data, as well as an \"economic\" model in which job satisfaction is a measure of posterior human wealth. The \"posterior choice\" model readily explains why so many people usually report themselves as happy or satisfied, why both younger and older age groups are insensitive to current earning discrepancies, and why the past weighs more heavily than the present and the future.

Étude de l'efficacité de la dévaluation du franc CFA au Bénin

This paper examines the effectiveness of CFA franc devaluation in Benin. Our results show that the nominal devaluation generate a real exchange depreciation, thanks to strict anti-inflation measures implemented.

Heterodox Inflation Stabilization in Argentina, Brazil, and Israel. A Historical Review and Some Stylized Facts

This article presents a review of the stabilization attempts in Argentina, Brazil, and Israel during the 1980’s. Earlier research is summarized and complemented with additional sources of contemporaneous information and a detailed analysis of institutional features. The examination of these episodes underscores the strong economic and empirical relationship between the governments’ fiscal policy and the rate of inflation.

Rigidité normale, dévaluation et équilibre général intertemporel

La présente étude analyse les effets dynamiques de la dévaluation du franc CFA, à l’aide d’un modèle monétaire d’équilibre général, intertemporel et multisectoriel. L’accent est particulièrement mis sur les interactions entre dévaluation et accumulation du capital. Dans le modèle, les effets du changement de parité passent par le marché du travail qui se caractérise par l’inertie du salaire nominal. Les résultats montrent que la dévaluation relance l’investissement, avec des effets expansionnistes sur l’activité économique. Le choc monétaire n’a eu qu’un impact limité sur les soldes budgétaire et commercial. Une mesure d’accompagnement telle que la réduction des salaires de la fonction publique améliore ces deux soldes mais déclenche un processus récessif.

Explaining the Persistence of Commodity Prices

This paper extends the Competitive Storage Model by incorporating prominent features of the production process and financial markets. A major limitation of this basic model is that it cannot successfully explain the degree of serial correlation observed in actual data. The proposed extensions build on the observation that in order to generate a high degree of price persistence, a model must incorporate features such that agents are willing to hold stocks more often than predicted by the basic model. We therefore allow unique characteristics of the production and trading mechanisms to provide the required incentives. Specifically, the proposed models introduce (i) gestation lags in production with heteroskedastic supply shocks, (ii) multiperiod forward contracts, and (iii) a convenience return to inventory holding. The rational expectations solutions for twelve commodities are numerically solved. Simulations are then employed to assess the effects of the above extensions on the time series properties of commodity prices. Results indicate that each of the features above partially account for the persistence and occasional spikes observed in actual data. Evidence is presented that the precautionary demand for stocks might play a substantial role in the dynamics of commodity prices.

Credibility and Signaling in Disinflation- a Cross Country Examination

This paper develops a model of money demand where the opportunity cost of holding money is subject to regime changes. The regimes are fully characterized by the mean and variance of inflation and are assumed to be the result of alternative government policies. Agents are unable to directly observe whether government actions are indeed consistent with the inflation rate targeted as part of a stabilization program but can construct probability inferences on the basis of available observations of inflation and money growth. Government announcements are assumed to provide agents with additional, possibly truthful information regarding the regime. This specification is estimated and tested using data from the Israeli and Argentine high inflation periods. Results indicate the successful stabilization program implemented in Israel in July 1985 was more credible than either the earlier Israeli attempt in November 1984 or the Argentine programs. Government’s signaling might substantially simplify the inference problem and increase the speed of learning on the part of the agents. However, under certain conditions, it might increase the volatility of inflation. After the introduction of an inflation stabilization plan, the welfare gains from a temporary increase in real balances might be high enough to induce agents to raise their real balances in the short-term, even if they are uncertain about the nature of government policy and the eventual outcome of the stabilization attempt. Statistically, the model restrictions cannot be rejected at the 1% significance level.

Statistical Inference for Computable General Equilibrium Models with Application to a Model of the Moroccan Economy

We study the problem of measuring the uncertainty of CGE (or RBC)-type model simulations associated with parameter uncertainty. We describe two approaches for building confidence sets on model endogenous variables. The first one uses a standard Wald-type statistic. The second approach assumes that a confidence set (sampling or Bayesian) is available for the free parameters, from which confidence sets are derived by a projection technique. The latter has two advantages: first, confidence set validity is not affected by model nonlinearities; second, we can easily build simultaneous confidence intervals for an unlimited number of variables. We study conditions under which these confidence sets take the form of intervals and show they can be implemented using standard methods for solving CGE models. We present an application to a CGE model of the Moroccan economy to study the effects of policy-induced increases of transfers from Moroccan expatriates.