This paper extends a standard model of consumption to test for the existence of “myopic” consumers. The extended model includes “rule-of-thumb” consumers as well as consumers who are assumed to solve a dynamic programming problem. The model allows this second set of consumers, however,...

This paper reexamines the effectiveness of devaluation in trade-balance adjustment. The question is addressed in a framework that improves the previous empirical literature in several respects. The evidence indicates that devaluations have been a successful tool in inducing trade-balance...

The U.S. wage growth slowdown since 1982 has generated a large controversy over its causes. A hypothesis that has received extensive attention is based on international-competitivene ss effects. The evidence is mixed.and several authors have proposed alternative hypotheses based on economic or...

The authors find strongly non-Ricardian results when they reestimate Paul Evans's (1988) model using a better approximation of the market value of wealth. The authors also examine the long-run properties of the data and find results consistent with their regression evidence when they allow for...