scholarly journals Agency business cycles

2020 ◽  
Vol 15 (1) ◽  
pp. 123-158
Author(s):  
Mikhail Golosov ◽  
Guido Menzio
Keyword(s):  
Stochastic Process ◽  
Business Cycles ◽  
Economic Activity ◽  
Aggregate Fluctuations ◽  
Aggregate Shocks ◽  
The Past ◽  
Stochastic Fluctuations ◽  
Ex Ante ◽  
Randomization Process

We develop a theory of endogenous and stochastic fluctuations in economic activity. Individual firms choose to randomize over firing or keeping workers who performed poorly in the past to give them an ex ante incentive to exert effort. Different firms choose to correlate the outcome of their randomization to reduce the probability with which they fire nonperforming workers. Correlated randomization leads to aggregate fluctuations. Aggregate fluctuations are endogenous—they emerge because firms choose to randomize and they choose to randomize in a correlated fashion—and they are stochastic—they are the manifestation of a randomization process. The hallmark of a theory of endogenous and stochastic fluctuations is that the stochastic process for aggregate “shocks” is an equilibrium object.

The Cyclical Job Ladder

2018 ◽  
Vol 10 (1) ◽  
pp. 165-188 ◽  
Author(s):  
Giuseppe Moscarini ◽  
Fabien Postel-Vinay
Keyword(s):  
Labor Market ◽  
Business Cycles ◽  
Empirical Evidence ◽  
Economic Activity ◽  
Critical Role ◽  
Search Frictions ◽  
Aggregate Shocks ◽  
Earnings Growth ◽  
Wage Premiums ◽  
Main Engine

Many theories of labor market turnover generate a job ladder. Due to search frictions, workers earn rents from employment. All workers agree on which jobs are, in this sense, more desirable and slowly climb the job ladder through job-to-job quits. Occasionally, negative shocks throw them off the ladder and back into unemployment. We review a recent body of theory and empirical evidence on labor market turnover through the lens of the job ladder. We focus on the critical role that the job ladder plays in transmitting aggregate shocks, through the pace and direction of employment reallocation, to economic activity and wages and in shaping business cycles more generally. The main evidence concerns worker transitions, both through nonemployment and from job to job, between firms of different sizes, ages, productivity levels, and wage premiums, as well as the resulting earnings growth. Poaching by firms up the ladder is the main engine of reallocation, which shuts down in recessions.

Crime and Punishment

2017 ◽  
Author(s):  
Richard Adelstein
Keyword(s):  
Criminal Liability ◽  
Court Case ◽  
Efficient Allocation ◽  
Two Stage ◽  
Crime And Punishment ◽  
The Past ◽  
Ex Post ◽  
Ex Ante ◽  
Supreme Court Case

This chapter elaborates the operation of criminal liability by closely considering efficient crimes and the law’s stance toward them, shows how its commitment to proportional punishment prevents the probability scaling that systemically efficient allocation requires, and discusses the procedures that determine the actual liability prices imposed on offenders. Efficient crimes are effectively encouraged by proportional punishment, and their nature and implications are examined. But proportional punishment precludes probability scaling, and induces far more than the systemically efficient number of crimes. Liability prices that match the specific costs imposed by the offender at bar are sought through a two-stage procedure of legislative determination of punishment ranges ex ante and judicial determination of exact prices ex post, which creates a dilemma: whether to price crimes accurately in the past or deter them accurately in the future. An illustrative Supreme Court case bringing all these themes together is discussed in conclusion.

scholarly journals Self-exciting multifractional processes

2021 ◽  
Vol 58 (1) ◽  
pp. 22-41
Author(s):  
Fabian A. Harang ◽  
Marc Lagunas-Merino ◽  
Salvador Ortiz-Latorre
Keyword(s):  
Stochastic Process ◽  
Brownian Motion ◽  
Rate Of Convergence ◽  
Existence And Uniqueness ◽  
Volterra Equation ◽  
The Self ◽  
The Past ◽  
Stochastic Volterra Equation ◽  
Multifractional Brownian Motion ◽  
Self Organizing

AbstractWe propose a new multifractional stochastic process which allows for self-exciting behavior, similar to what can be seen for example in earthquakes and other self-organizing phenomena. The process can be seen as an extension of a multifractional Brownian motion, where the Hurst function is dependent on the past of the process. We define this by means of a stochastic Volterra equation, and we prove existence and uniqueness of this equation, as well as giving bounds on the p-order moments, for all $p\geq1$. We show convergence of an Euler–Maruyama scheme for the process, and also give the rate of convergence, which is dependent on the self-exciting dynamics of the process. Moreover, we discuss various applications of this process, and give examples of different functions to model self-exciting behavior.

scholarly journals News-Driven Business Cycles: Insights and Challenges

2014 ◽  
Vol 52 (4) ◽  
pp. 993-1074 ◽  
Author(s):  
Paul Beaudry ◽  
Franck Portier
Keyword(s):  
Business Cycles ◽  
Business Cycle ◽  
Empirical Evidence ◽  
Economic Fluctuations ◽  
Aggregate Fluctuations ◽  
Business Cycle Fluctuations ◽  
Widespread Belief ◽  
Way Of Thinking ◽  
The Many

There is a widespread belief that changes in expectations may be an important independent driver of economic fluctuations. The news view of business cycles offers a formalization of this perspective. In this paper we discuss mechanisms by which changes in agents' information, due to the arrival of news, can cause business cycle fluctuations driven by expectational change, and we review the empirical evidence aimed at evaluating their relevance. In particular, we highlight how the literature on news and business cycles offers a coherent way of thinking about aggregate fluctuations, while at the same time we emphasize the many challenges that must be addressed before a proper assessment of the role of news in business cycles can be established. (JEL D83, D84, E13, E32, O33)

Real Bills, The Gold Standard, and Central Bank Policy

1976 ◽  
Vol 50 (4) ◽  
pp. 503-513 ◽  
Author(s):  
Robert Craig West
Keyword(s):  
Central Bank ◽  
Discount Rate ◽  
Real World ◽  
Federal Reserve ◽  
Economic Activity ◽  
Gold Standard ◽  
Government Regulation ◽  
International Exchange ◽  
The Real ◽  
The Past

Students of the origins and accomplishments of government regulation of economic activity have open suspected that the laws on which regulation is based were addressed to problems and conditions of the past that no longer prevailed, or — what is worse — assumptions about the “real world” that are highly unrealistic. This is Professor West's main conclusion about the Federal Reserve Act of 1913, especially as regards its discount rate and international exchange policies.

Moral economy: What’s in a name

2017 ◽  
Vol 18 (1) ◽  
pp. 18-35 ◽  
Author(s):  
James G Carrier
Keyword(s):  
Social Sciences ◽  
Economic Activity ◽  
Moral Economy ◽  
Moral Value ◽  
The Past ◽  
Empty Symbol ◽  
The Social ◽  
State Of Affairs ◽  
Definition Of ◽  
Moral Economic

The idea of moral economy has been increasingly popular in the social sciences over the past decade, given a confusing variety of meanings and sometimes invoked as an empty symbol. This paper begins by describing this state of affairs and some of its undesirable corollaries, which include unthinking invocations of the moral and simplistic views of some sorts of economic activity. Then, referring especially to the work of EP Thompson and James C Scott, this paper proposes a more precise definition of moral economy that roots moral economic activity in the mutual obligations that arise when people transact with each other over the course of time. It thus distinguishes between the moral values that are the context of economic activity and those that arise from the activity itself. The solution that the paper proposes to the confused state of ‘moral economy’ can, therefore, be seen as terminological, as the sub-title suggests, but it is intended to have the substantive benefits of a better approach to economic activity and circulation and a more explicit and thoughtful attention to moral value.

Economic complexity and embedding of regional economies’ structures

2021 ◽  
Vol 57 (3) ◽  
pp. 67
Author(s):  
Mikhail Afanasiev
Keyword(s):  
Economic Activity ◽  
Traditional Approach ◽  
Expert Assessment ◽  
Potential Contribution ◽  
Regional Economies ◽  
Economic Diversification ◽  
Economic Complexity ◽  
The Past ◽  
The Matrix ◽  
Strong Sector

 The research focuses on the development of localized specialization and economic diversification theories. Our task is forecasting of the emergence of new strong sectors in the region. On the basis of probabilistic and statistical modeling the model which allows estimating the probability of appearing a new strong sector in the region taking into account characteristics of economic structure is constructed. The possibility of building such a model is based on the assumption that the emergence and development of sectors is largely determined by the evolution of past economic activity. The model uses the indicators of embedding structures of the strong sectors in the regional economies is introduced by the authors. These indicators are based on the probabilistic interpretation and properties of the elements of the matrix, by which economic complexity is estimated following the traditional approach. The probability of originating a strong sector in the structure for each region is estimated. Based on sorting the sectors according to the value of these probabilities and assessments of their potential contribution to socio-economic development expert assessment of the feasibility of developing a new strong sector in the region can be made. The results show that sectors’ introduction and generation in the regional economy is largely due to the evolution of the past economic activity.    

scholarly journals FORECAST OF THE REFORMATION OF THE KRASNOYARSK RESERVOIR COASTAL ZONE IN THE KURTAK VILLAGE

2019 ◽  
Vol 29 (2) ◽  
pp. 267-278
Author(s):  
G.Yu. Yamskikh ◽  
A.V. Kozhukhovsky ◽  
K.V. Marusin ◽  
E.A. Fedorova
Keyword(s):  
Economic Activity ◽  
Similar Type ◽  
Coastal Processes ◽  
The Past ◽  
The Reformation ◽  
Long Term Monitoring ◽  
Verification Of Models ◽  
The Village ◽  
Term Monitoring

The article presents the analysis and prediction of coastal processes at the site of the Krasnoyarsk reservoir in the village of Kurtak where there are the most intensive processes of coastal reshaping. Over the past 50 years, the coast has receded here by an average of 350 m and continues to actively collapse at a speed of 3-5 m per year. Despite the fact that the intensity of coastal processes in this area has significantly decreased (mainly due to the general decrease in the level of the Krasnoyarsk reservoir), the rate of retreat of the shore is still high. However, it can be concluded that for the researched area the coastal reshaping does not pose a real threat to economic activity in the next 30 years. The article tested various methods of forecasting coastal processes, selected the most appropriate for the shores of a similar type. Verification of models was carried out on the basis of data of long-term monitoring of the site under consideration, which gave the chance to compare results of forecasts on different techniques to real retreat of the coast on this site.

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