95-01. Bhattacharya, J., Guzman, M.G., Huybens, E., y Smith B.D., "Monetary, Fiscal, and Bank Regulatory Policy in a Simple Monetary Growth Model"
Resumen: Most monetary growth models have a relatively simple structure. There are two assets, money and capital, and money is held either because it earns the same real return as capital, or because it is ascribed an advantage in transacting that is not explicitly modelled. Financial market institutions are not present, nor are the financial market frictions that presumably motivate monetary exchange. These are important omissions since, for example, they preclude any discussion of how financial market regulations impact on capital accumulation or the rate of inflation. This is an issue of great importance in development economics.
95-02. Renero, J.M., "Welfare of Alternative Equilibrium Paths in the Kiyotaki-Wright Model"
Resumen: I provide new existence and welfare results for the Kiyotaki-Wright model (JPE, 1989). Previous work on the model has focused almost exclusively on steady-states and has established the existence of multiple steady-states. Moreover, welfare comparisons among steady-states are of dubious significance because transitions are ignored.
For mixed strategies that restrict agents to play a unique strategy for each opportunity set (which as shown in Kehoe-Kiyotaki-Wright (ET, 1993) implies that the number of steady-state is generically finite). I prove that there exists an equilibrium in which the most costly to-store good has the highest acceptance rate. Furthermore, this equilibrium Pareto dominates equilibria in which less costly to- store goods are universally accepted. I also display multiple equilibria in which only pure strategies are played. Among these is one in which the universally accepted good is the least costly to-store and another in which the universally accepted good is the second least costly to-store. For some initial conditions both exist and the latter is better according to a representative-agent-type welfare criterion. Thus, my results show (1) that there often exist equilibria in which objects with poor storage properties are widely accepted and (2) that these equilibria have good welfare properties in relation to those in which better objects are widely accepted.
95-03. Ladrón de Guevara, A., Ortigueira, S., y Santos, M., "A Two-Sector Model of Endogenous Growth with Leisure"
Resumen: This paper analyzes the equilibrium dynamics of an endogenous growth model with physical and human capital in which leisure considerations have a direct effect on the utility function. Even in the absence of technological externalities our model may contain multiple balanced paths. These multiple steady-state configurations are directly related to the modelization of leisure, and may provide an explanation on certain patterns of behavior found in economic growth and labor markets concerning human capital accumulation and worked hours.
95-04. Santos, M., y Vigo, J., "Error Bounds for a Numerical Solution for Dynamic Economic Models"
Resumen: In this paper we analyze a discretized version of the dynamic programming algorithm for a parameterized family of infinite-horizon economic models, and derive error bounds for the approximate value and policy functions. If h is the mesh size of the discretization, then the approximation error for the value function is bounded by Mh^2, and the approximation error for the policy function is bounded by $Nh,$ where the constants $M$ and $N$ can be estimated from primitive data of the model.
95-05. Cragg, M.I., y Epelbaum, M., "The Premium for Skills in LDCs: Evidence from Mexico"
Resumen: During the 1987-1993 period, all education-experience skill classes in Mexico have experienced significant employment and real wage growth. This growth was accompanied by a large increase in wage dispersion within and across skill classes. While shifts in labor supply are unlikely to explain the changing wage and employment patterns, in this growing economy supply and demand elasticities appear to be an important factor. Still we find that it is difficult to rationalize the relative wage changes without considering a disproportionate increase in the demand for skilled labor. We develop a test of whether the observed data by industry is consistent with a production function based upon a labor aggregator. We reject this hypothesis and thus argue that some labor is more complementary with capital and that the wage changes may be a function of cheaper or more productive capital (skill biased technological change). The rising relative demand for skilled workers in Mexico during a period of increased trade with the U.S. is evidence of the weakness of the Heckscher-Olin-Samuelson predictions.
95-06. Cragg, M.I., y Epelbaum, M., "Why is Wage Dispersion Growing in Mexico? Is it the Incidence of Reforms or the Growing Demands for Skills"
Resumen: In the mid 1980s, Mexico undertook major trade reform, privatization and deregulation. This coincided with a rapid expansion in wages and employment that led to a rise in wage dispersion. This paper examines the role of industry and occupation-specific effects in explaining the growing dispersion. We find that despite the magnitude and pace of the reforms, industry-specific effects explain little of the rising wage dispersion. In contrast occupation-specific effects can explain almost half of the growing wage dispersion. Finally, we find that the economy became more skill-intensive and that this effect was larger for the traded sector because this sector experienced much smaller low-skilled employment growth. We therefore suggest that competition from imports had an important role in the fall of the relative demand for less-skilled workers.
95-07. Guerrero, V.M., y Peña, D., "Linear Combination of Information in Time Series Analysis"
Resumen: An important tool in time series analysis is that of combining information in an optimal manner. Here we establish a basic combining rule of linear estimators and exemplify its use with several different problems faced by a time series analyst. A compatibility test statistic is also provided as a companion of the combining rule. This statistic plays a fundamental role for obtaining sensible results from the combination and for pointing out some possibly new directions of analysis.