Alan G. Isaac

Firm heterogeneity and worker turnover

Previous empirical analyses of job mobility focus on worker rather than firm characteristics. This paper exploits a unique data set on enterprise employment. We describe sectoral differences in turnover rates and in the persistence of turnover. We also present evidence of persistent turnover differences at the level of the individual firms—a result that is expected if firms have managers with differing ability to screen workers. When we consider the consequences to the firm of such turnover, we discover that high turnover firms are less likely to survive.

HIV and concurrent sexual partnerships: modelling the role of coital dilution

BackgroundThe concurrency hypothesis asserts that high prevalence of overlapping sexual partnerships explains extraordinarily high HIV levels in sub-Saharan Africa. Earlier simulation models show that the network effect of concurrency can increase HIV incidence, but those models do not account for the coital dilution effect (non-primary partnerships have lower coital frequency than primary partnerships).MethodsWe modify the model of Eaton et al (AIDS and Behavior, September 2010) to incorporate coital dilution by assigning lower coital frequencies to non-primary partnerships. We parameterize coital dilution based on the empirical work of Morris et al (PLoS ONE, December 2010) and others. Following Eaton et al, we simulate the daily transmission of HIV over 250 years for 10 levels of concurrency.ResultsAt every level of concurrency, our focal coital-dilution simulation produces epidemic extinction. Our sensitivity analysis shows that this result is quite robust; even modestly lower coital frequencies in non-primary partnerships lead to epidemic extinction.ConclusionsIn order to contribute usefully to the investigation of HIV prevalence, simulation models of concurrent partnering and HIV epidemics must incorporate realistic degrees of coital dilution. Doing so dramatically reduces the role that concurrency can play in accelerating the spread of HIV and suggests that concurrency cannot be an important driver of HIV epidemics in sub-Saharan Africa. Alternative explanations for HIV epidemics in sub-Saharan Africa are needed.

The behavioral life-cycle theory of consumer behavior: survey evidence

We find that survey evidence on faculty pay-cycle choice strongly contradicts the neoclassical theory of consumer behavior. It is more favorable to the behavioral life-cycle theory of Shefrin and Thaler (1988).

Monetary Shocks and Relative Farm Prices: A Re-examination

The effect of monetary policy on the farm sector remains controversial. Studies of the effects of monetary disturbances on relative farm prices report conflicting results: some find that positive monetary shocks increase relative farm prices in the short run, and others detect no such effect. We offer a resolution of these conflicting findings by reestimating existing models on a common data set. When sample periods corresponding to the original studies are used, the conflicting results are confirmed. In contrast, when samples are updated through 1993, all models supply the same result: monetary shocks do not affect relative farm prices. Copyright 1997, Oxford University Press.

Consumer and Corporate Debt: A Neo-Kaleckian Synthesis

Models of the macrodynamic impact of private debt tend to emphasize the role of corporate debt. Corporate leverage affects macroeconomic outcomes and can contribute to financial fragility. We show that consumer debt is also important. We include consumer as well as corporate debt in a stock-flow consistent neo-Kaleckian growth model and explore the macrodynamic ramifications. We find that consumer credit conditions influence effective demand, the profit rate, and economic growth. The inclusion of consumer debt as well as corporate debt in our model substantially alters the models dynamics. We compare our short-run, transition, and long-run results to models containing a single type of debt. Some of our results confirm the results of simpler models. For example, we find that a surge in animal spirits is good for steady-state growth. We show that consumer borrowing can also help to sustain aggregate demand, that looser consumer credit conditions have a steady-state growth effect, and that demand augmenting changes can enhance system stability. In this sense, looser consumer credit conditions are good for macroeconomic stability.

Morality, Maximization, and Economic Behavior

Morality influences economic behavior. It has been invoked to explain worker solidarity, statesmanship, voting patterns, cooperative behavior, bargaining outcomes, the production of public goods and externalities, worker performance, and the degree of competition in labor markets [1; 10; 14; 19; 21; 26]. So economists ought to consider the economic consequences of prevailing moral norms. In some areas such considerations will be distinctly secondary (e.g., the study of arbitrage pricing relationships). But in many areas that economists traditionally consider to be in their purview-including the study of labor markets, organizational design, income distribution, long run growth, and the provision of public goods-economic models can be improved by the accommodation of moral behavior.1

Monetary And Fiscal Interactions: Short-Run And Long-Run Implications

We model policy interactions in a growing economy. Unemployment can persist and matters for the real wage; conflicting claims underpin inflation outcomes; and aggregate demand determines capacity utilization and unemployment. Monetary policy is characterized by a Taylor rule. Fiscal policy is characterized by a marginal tendency to run deficits or surpluses. We address three questions: can monetary policy ensure macroeconomic stability in the absence of coordinated fiscal policy, can fiscal policy ensure macroeconomic stability when the monetary authority pegs the interest rate, and can policy authorities trade-off some sustained inflation for a long-run improvement in unemployment rates?

The real-interest-differential model after 20 years

Abstract Two decades ago, Frankel reported empirical results favoring the Dornbusch overshooting model. Despite an important theoretical and empirical critique by Driskill and Sheffrin, Frankels classic empirical results spawned a huge literature. We attempt to replicate the Frankel and the Driskill and Sheffrin results. We also offer an update and an extended critique of their work. While specialists in international finance generally accept that the initial promise of Frankels real-interest-differential model has not been realized, we believe that many will be surprised nevertheless by our bleak findings.

Inheriting inequality: institutional influences on the distribution of wealth

This paper presents simulation results for the distribution of wealth. The object is to illustrate the importance of institutions for understanding intergenerational wealth dynamics and the asymptotic tendency of wealth inequality. The focal institutions are the family and the state. Familial institutions, particularly marriage, prove to be core determinants of wealth inequality. State tax and transfer policies also have important effects on wealth inequality. The result that reductions in the estate tax exclusion can substantially increase wealth inequality provides a context for current public policy debates.

On Intellectual Property Rights: Patents versus Free and Open Development

55 pages. A revision of this working paper was published in 2004 as chapter 18, pp.693--747, of The Elgar Companion to the Economics of Property Rights, edited by Enrico Colombatto. Please cite the published paper.