Nominal wage stickiness is an important component of recent medium-scale structural macroeconomic models, but to date there has been little microeconomic evidence supporting the as- sumption of sluggish nominal wage adjustment. We present evidence on the frequency of nominal wage adjustment...

Experimental evidence suggests that individuals who face an asymmetric distribution over the likelihood of a specific event might actually prefer not to know the exact value of this probability. We address these findings by studying a decision maker who has recursive, non-expected utility...

Since Becker (1971), a common argument against asymmetric norms that promote minority rights over those of the majority is that such policies reduce total welfare. While this may be the case, we show that there are simple environments where aggregate sum of individual utilities is actually...

By 1989 the Michigan Panel Study on Income Dynamics (PSID) had experienced approximately 50 percent sample loss from cumulative attrition from its initial 1968 membership. We study the effect of this attrition on the unconditional distributions of several socioeconomic variables and on the...

It is widely known that when there are negative moving average errors, a high order augmented autoregression is necessary for unit root tests to have good size, but that information criteria such as the AIC and BIC tend to select a truncation lag that is very small. Furthermore, size distortions...

Ever since the development of the Autoregressive Conditional Heteroskedasticity (ARCH) model (Engle [1982]), testing for the presence of ARCH has become a routine diagnostic. One popular method of testing for ARCH is T times the R^2 from a regression of squared residuals on p of its lags. This...

This paper establishes stochastic equicontinuity for classes of mixingales. Attention is restricted to Lipschitz-continuous parametric functions. Unlike some other empirical process theory for dependent data, our results do not require bounded functions, stationary processes, or restrictive...

This paper develops a new methodology that makes use of the factor structure of large dimensional panels to understand the nature of non-stationarity in the data. We refer to it as PANIC‹ a 'Panel Analysis of Non-stationarity in Idiosyncratic and Common components'. PANIC consists of...

Relative prices are nonstationary and standard root-T inference is invalid for demand systems. But demand systems are nonlinear functions of relative prices, and standard methods for dealing with nonstationarity in linear models cannot be used. Demand system residuals are also frequently found...

Some public policies aimed at integrating welfare recipients into the world of work are predicated on the premise that getting welfare recipients to work will change their beliefs about how they will be treated in the labor market. This paper explores the rationale for these policies and...