Many workers with low levels of educational attainment immigrated to the United States in recent decades. Large inflows of less educated immigrants would reduce wages paid to comparably-educated native-born workers if the two groups are perfectly substitutable in production. In a simple model...

When looked at individually there is little reason to think that economists lack integrity and are dishonest. Yet, when we look at academic papers written by economists we can see biases. This paper tries to reconcile these two observations by arguing that the constraints the profession sets on...

This essay discusses some, but by no means all the important problems that arise in econometric testing of econometric models. Specifically, it disusses the reliabilty of the underlying data and their processing, the problem of relating theories and data, ceteris paribus conditions and...

In this paper we propose a variance estimator for the OLS estimator as well as for nonlinear estimators such as logit, probit and GMM. This variance estimator enables cluster-robust inference when there is two-way or multi-way clustering that is non-nested. The variance estimator extends the...

This paper develops and compares specification tests for parametric duration models estimated with censored data. The tests are based on generalized residuals (the integrated hazard), which is exponentially distributed if the model is correctly specified. I present several conditional moment...

In the economic literature on market competition, firms are often modelled as single decision makers and the internal organization of the firm is neglected (unitary player assumption). However, as the literature on strategic delegation suggests, one can not generally expect that the behavior of...

This paper reviews and appraises the debate about whether the central bank should pursue counter-cyclical policy or generate a stable monetary growth rate. It focuses on whether the participants have followed the rules of "good conversation," and concludes that they have not. Monetarist have...

This paper raises the problem of how to define revealed probabilistic beliefs in the context of the capacity/Choquet Expected Utility model. At the center of the analysis is a decision-theoretically axiomatized definition of ""revealed unambiguous events."" The definition is shown to impose...

With the coefficient matrices of the polynomial matrices replacing the scalar coefficients in the standard Sylvester matrix, common factors exist if and only if this (generalized) Sylvester matrix is singular and the coefficient matrices commute. If the coefficient matrices do not commute, a...

Did adoption of the gold standard exacerbate or diminish macroeconomic volatility? Supporters thought so, critics thought not, and theory offers ambiguous messages. A hard exchange-rate regime such as the gold standard might limit monetary shocks if it ties the hands of policy makers. But any...