Edited by David Cass and Lionel W. McKenzie. / Includes 1 article in French. / Includes bibliographies.

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The focus of my research is dynamic macroeconomics and how the economy responds to changes in government policy. During the last 30 years, the sovereign bond market in emerging economies has grown considerably and many large scale defaults were observed. Existing models of sovereign debt are unable to jointly explain the debt to output ratios and the default frequency in these countries. In the first chapter, to address this puzzle, I propose a standard small open economy model with the addition that the government transits through different political states and these transitions cannot be directly observed by lenders. Moreover, after a default, the government chooses when to renegotiate and it bargains with the lenders over the recovery rate. I show that government reputation and endogenous periods of exclusion and recovery rates play a crucial role in explaining this phenomenon. In the second chapter, I use a dynamic political economy model to evaluate whether the observed rise in wage inequality and decrease in median to mean wages can explain the increase in transfers to low earnings quintiles and increase in effective tax rates for high earnings quintiles in the U.S. over the past several decades. I conduct a welfare analysis by contrasting the solution from the political mechanism with those from a sequential utilitarian mechanism, as well as mechanisms with commitment. Finally, the third chapter focuses on explaining the dynamics of firms. I ask whether an entry/exit model like that pioneered by Hopenhayn (1992, Econometrica) with a capital accumulation decision and non-convex costs of adjustment can generate size and age dependence like that found in the data. In particular, conditional on age, growth, employment creation and destruction and volatility are decreasing in size. Moreover, conditional on size, growth, employment creation and destruction and volatility are decreasing in age. The main point of this chapter is to demonstrate that a model with no financial frictions parameterized to match the investment regularities of U.S. establishments is able to account for the simultaneous dependence of industry dynamics on size (once we condition on age) and on age (once we condition on size). To explain how the economy responds and conduct welfare analysis either one has to find natural experiments or one has to build computational models and run counterfactual experiments. My research follows the latter strategy. / text

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Bernard Lonergan's economic writings have not been fully evaluated by economists although two recent papers by Burley (1989a, 1989b) show that work has begun. The purpose of this dissertation, therefore, is to situate Lonergan's (1944) economics essay, Circulation Analysis, in the history of economic thought of the period as well as to present a Lonerganian cycle model. / Circulation Analysis examines fundamental macrodynamic processes to explain fluctuations. It was written in the early 1940s following a period of controversy and debate that led to the current paradigms of economic dynamics. The two sides of the debate are exemplified by Harrod (1936) and Hayek (1933 (1928), 1939), in particular. The controversy ended with World War II and the emerging hegemony of the Anglo-American approach, which separated macrodynamics into growth theory (long-run supply problems), and stabilization theory (short-run demand problems). / This dissertation argues that this dichotomy is unsatisfactory and proposes Lonergan's pure cycle as an alternative paradigm. Lonergan's pure cycle restores the importance of supply-side dynamics in the short-run, without denying the primacy of demand issues in the analysis of deviations. A Lonerganian approach views demand shocks as essentially monetary, but also contends that the distribution of nominal income can cause shocks, if it is not synchronized with changes in real variables. / In this thesis a Lonerganian model is presented that uses a Kydland-Prescott (1982) type of "time-to-build" technology. The model is subjected to permanent productivity shocks to investment, which explain, with a lag, equilibrium output. The monetary and distributional shocks to demand, which are temporary, can then explain the deviation of actual output from its equilibrium value. The model uses a Beveridge and Nelson (1981) approach, which specifies changes in growth rates of variables as a function of permanent and temporary shocks. The shocks are identified because the model is recursive: first, the productivity shock determines investment and equilibrium output; then, the monetary shock determines prices and sales of consumer goods. Simulation results are presented.

Thesis. 1976. M.S.--Massachusetts Institute of Technology. Dept. of Electrical Engineering and Computer Science. / Microfiche copy available in Archives and Engineering. / Includes bibliographical references. / by Jorge F. Baca. / M.S.

This dissertation presents a theoretical framework to analyze and evaluate aggregation biases. These biases measure the information lost when macro relations evaluated in terms of aggregates do not capture all of the distributional properties of micro relations. The framework is developed in the context of producer theory, but it may be used to determine the biasedness of any representative agent model and to study general relationships between exact-aggregation macro parameters and their microfoundations. The model is based on a stochastic interpretation of the production characteristics which encompasses that of previous stochastic aggregation models (Houthakker, 1955; Hildenbrand, 1981; Stoker, 1984; Lewbel, 1986a). It admits the construction of "true" aggregate relations which can be compared to pre-specifed macro relations. Many of Theil's (1954, 1971) statistical results concerning the relations between micro and macro parameters then can be formalized at the population level and generalized to non-linear functions. A moments decomposition of the "true" aggregate relation makes it possible to identify the sources and causes of potential aggregation biases. Thus, the functional-form restrictions of exact-aggregation models (Gorman, 1968a; Blackorby and Schworm, 1984, 1988) are found to be neither necessary nor sufficient conditions for consistent aggregation, if the aggregates are taken to be the usual totals or averages. Traditionally, similarity among firms, either as a maintained hypothesis or as the long-run outcome of perfect competition, has proved to ensure exact aggregation. Here, economic diversification may also provide an alternative set of circumstances under which the aggregation biases may be minimized. In the case of an average-representative firm, the output aggregation bias is explicitly derived. Empirical analyses confirm that the magnitude of the bias increases as higher moment terms in the production characteristics increase in importance. Conditions under which exact-aggregation macro parameters possess stable microdefinitions are obtained; they explain Fisher's (1971) simulation results. Empirical results show that such macro parameters are relatively stable (within the estimated confidence intervals) when based on periods of relative economic stability. Finally, theoretical implications for macroeconometric modeling and policy evaluation are explored. / Arts, Faculty of / Vancouver School of Economics / Graduate

Frances Cheung. / Thesis (M.Phil.)--Chinese University of Hong Kong, 1999. / Includes bibliographical references (leaves 65-69). / Abstracts in English and Chinese. / Abstract --- p.i / Acknowledgement --- p.iii / Table of Contents --- p.iv / List of Tables --- p.vi / List of Appendices --- p.vii / Chapter Chapter 1. --- Introduction --- p.1 / Chapter Chapter 2. --- Two-Sector Endogenous Growth Model with International Borrowing --- p.5 / Chapter 2.1 --- Introduction --- p.5 / Chapter 2.2 --- Basic Model --- p.8 / Chapter 2.2.1 --- Existence of the Balanced Growth Path --- p.12 / Chapter 2.2.2 --- "Determination of Steady State Values (u*,k*c*,θ*1)" --- p.13 / Chapter 2.2.3 --- Stability --- p.15 / Chapter 2.3 --- Model with Fixed Asset in Goods Production --- p.16 / Chapter 2.3.1 --- Existence of the Balanoed Growth Path --- p.20 / Chapter 2.3.2 --- "Determination of Steady States Values (u*, k*, c*, θ*2)" --- p.22 / Chapter 2.3.3 --- Stability --- p.25 / Chapter 2.3.4 --- Comparative Statics --- p.27 / Chapter 2.3.5 --- Transitional Dynamics --- p.30 / Chapter 2.3.6 --- Numerical Examples --- p.31 / Chapter 2.4 --- Conlusion --- p.33 / Chapter Chapter 3. --- Modification to Benhabib-Farmer Model --- p.34 / Chapter 3.1 --- Introduction --- p.34 / Chapter 3.2 --- The Model --- p.37 / Chapter 3.3 --- Steady States --- p.43 / Chapter 3.4 --- Condition for Indeterminacy --- p.45 / Chapter 3.4.1 --- A Necessary Condition --- p.45 / Chapter 3.4.2 --- Necessary and Sufficient Condition --- p.46 / Chapter 3.5 --- Numerical Examples --- p.47 / Chapter 3.6 --- Conclusion --- p.49 / Appendices --- p.54 / References --- p.65

Thesis. 1979. M.S.--Massachusetts Institute of Technology. Dept. of Ocean Engineering. / MICROFICHE COPY AVAILABLE IN ARCHIVES AND ENGINEERING. / Bibliography: leaves 265-266. / M.S.

Thesis. 1976. Ph.D.--Massachusetts Institute of Technology. Dept. of Electrical Engineering and Computer Science. / Microfiche copy available in Archives and Engineering. / Includes bibliographical references. / Ph.D.