We consider whether the introduction of the psychological concept of loss aversion into agents' preferences could generate a macroeconomic model in which changes in the money supply can have real, persistent effects. It is demonstrated that the macroeconomic implications of loss aversion depend...

Evidence of macroeconomic conditions impacting the earnings of men in Canada in a manner consistent with an implicit contracting framework is found using data from eleven cross-sectional surveys spanning the years 1981-1992. The estimates are similar to those found by Beaudry and DiNardo (1991)...

This paper develops a model of individual adjustment subject to mistakes. In this case when mistakes are assumed i.i.d., this process produces a probability distribution of agents decision whose evolution is determined by Fokker-Planck equation. This distribution converges to the unique,...

Research by Ghali (1999) tested for the existence of causality between wages and prices in United States' aggregate data using a multivariate cointegration framework. We show that Ghali's model is misspecified and that the correct specification leads to a different interpretation of the long-run...

The good health of an individual is a combination of uncontrollable factors that includes genetics and random events and controllable factors through the regulation of activities such as smoking, drinking, eating, exercise and other informed choices. Since the work of Grossman (1972) a...

This paper examines the role played in the labour market by norms of need and focuses, in particular, on the relationship between social norms and the regulation of minimum wge rates. It develops a theoretical model to describe the possible nature of this relationship and utilises the results of...

In this paper, we use data from a survey of taxi drivers in Singapore to test two competing labor supply hypotheses: the standard intertemporal model and the income targeting model, where workers set an earnings target over some short time horizon. The former predicts positive wage elasticities...

Wage functions provide much useful descriptive information about those characteristics of individuals which are associated with relatively high or low wage rates. In any cross-sectional survey there are many individuals who are not working at the time the survey is carried out. Such people may...

In this paper, panel data from 15 OECD countries (1971-1990) are used to test the hypothesis that differences in monetary and labour market institutions explain a significant portion of the surprisingly diverse inflation and unemployment experiences among similarly developed economies. As an...