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Journal Article
The tortoise revises the hare
Journal Article
Moonlighting
Working Paper
Feeding the national accounts
Modern market economies are probably the most complex institutions ever devised by human beings. In the United States, by far the most complex of these tracking systems is the National Income and Product Accounts (NIPA). This article's objective is to survey the main data sources currently used in the NIPA. It is not primarily an article about methodology, but focuses instead on the raw inputs to the process: Who is answering what kinds of questions? Closer acquaintance with the data sources behind the accounts highlights the considerable uncertainty about exact magnitudes of various ...
Conference Paper
Search-theoretic models of international currency - commentary
Journal Article
The FOMC in 1992: a monetary conundrum
Journal Article
Economic models of employee motivation
Workers present employers with a range of tricky problems. They can be crooked, subversive, surly, or indolent, even if they are paid on time. Joseph A. Ritter and Lowell J. Taylor explore economists' main theories of how compensation is used to address employee motivation and how these models help to explain puzzling features of labor market. Although these theories are often regarded as competitors, the authors treat them as complementary tools in understanding how employers deal with the complex problem of motivating workers.
Working Paper
Seniority-based layoffs as an incentive device
This paper provides a simple economic rationale for two elements that often appear - implicitly or explicitly - in firms' personnel policies. When firms reduce their labor input they often (i) lay off a few individuals rather than adjust work hours, and (ii) make retention decisions on the basis of seniority. We show that in a stochastic environment, a seniority-based layoff policy can have the effect of making the job valuable to a worker over most of her career. This provides work-life incentives using a mechanism similar to Lazear's well known model of upward-sloping wage profiles. Firms ...
Working Paper
Commitment as investment under uncertainty
Irreversible investment and the techniques associated with pricing real options have led to significant advances many areas. We broaden this range of applications, showing how the techniques can apply to many policy problems in finance, macroeconomics, and trade policy. With small changes, standard techniques can handle a broad range of strategic problems related to policy. The decision to commit is like the decision to make an irreversible investment. Explicitly considering and correctly valuing the option to wait makes discretion relatively more attractive, implies that increased ...
Journal Article
Search-theoretic models of international currency - commentary
Journal Article
An outsider's guide to real business cycle modeling