Thesis (Ph. D.)--University of California, Riverside, 2009. / Includes abstract. Title from first page of PDF file (viewed February 9, 2009). Includes bibliographical references (p. 85-88). Issued in print and online. Available via ProQuest Digital Dissertations.

Thesis (Ph. D.)--Florida State University, 2004. / Advisor: Dr. Stefan C. Norrbin, Florida State University, College of Social Sciences, Department of Economics. Title and description from dissertation home page (viewed June 16, 2004). Includes bibliographical references.

Thesis (Ph. D.)--University of California, San Diego, 2004. / Vita. Includes bibliographical references (leaves 121-125).

Thesis (Ph. D.)--University of Oregon, 2003. / Typescript. Includes vita and abstract. Includes bibliographical references (leaves 139-142). Also available for download via the World Wide Web; free to University of Oregon users.

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This dissertation consists of three essays in labor economics and contract theory. The first essay examines whether one’s wage is based on information about the performance of one’s personal contacts. I study wage determination under two assumptions about belief formation: individual learning, under which employers observe only one’s own characteristics, and social learning, under which employers also observe those of one’s personal contacts. Using data on siblings in the NLSY79, I test whether a sibling’s characteristics are priced into one’s wage. If learning is social, then an older sibling’s test score should typically have a larger adjusted impact on a younger sibling’s log wage than vice versa. The empirical findings support this prediction. Furthermore, I perform several exercises to rule out other potential factors, such as asymmetric skill formation, human capital transfers, and role model effects. The second essay analyzes the influence of macroeconomic conditions during childhood on the labor market performance of adults. Based on Census data, I document the relationship of unemployment rates in childhood to schooling, employment, and income as an adult. In addition, a sample from the PSID is used to study how the background attributes of parents raising children vary over the business cycle. Finally, information from the NLSY79-CH is examined in order to characterize the impact of economic fluctuations on parental caregiving. Overall, the evidence is consistent with a negative effect of the average unemployment rate in childhood on parental investments in children and the stock of human capital in adulthood. The third essay studies the bilateral trade of divisible goods in the presence of stochastic transaction costs. The first-best solution requires each agent to transfer all of her good to the other agent when the transaction cost reaches a certain threshold value. However, in the absence of court-enforceable contracts, such a policy is not incentive compatible. We solve for the unique maximal symmetric subgame-perfect equilibrium, in which agents can realize some gains from trade by transferring their goods sequentially. Several comparative statics are derived. In some cases, the first-best outcome can be approximated as the agents become infinitely patient. / Economics

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There are two key observations in international macroeconomics which pertain to output and real exchange rate dynamics. First, fluctuations in national output around its long-run growth path are very persistent. Second, fluctuations in real exchange rates are very persistent. The sticky price framework offers an explanation for both phenomena. The first and second essay of this thesis take an empirical approach to test the predictions of this framework. In the first essay I test the prediction of the sticky price model for output dynamics using annual IFS data on 51 countries over the period 1950 -1996. The model predicts that price stickiness should be less important in high inflation countries and therefore output fluctuations less persistent. I find that, this inverse relationship is statistically insignificant in the international data. A similar result holds for OECD countries. In the empirical implementation I explicitly control for the within-country time variation in inflation by first characterizing the inflationary environment using the long-run movements in inflation (trend inflation), and secondly, by excluding episodes of hyperinflation. The analysis shows that when the within-country time variation in inflation is ignored, there is support for the prediction. For instance, the inverse relationship between persistence in deviations of output from its long-run growth path and average inflation is statistically significant in the full sample. However, the exclusion of a few episodes of hyperinflation renders this relationship statistically insignificant. In the second essay I investigate the prediction of the sticky price model for real exchange rate dynamics using annual IFS data on 49 countries over the period 1972-1996. The model predicts that deviations of real exchange rates from purchasing power parity should be less persistent, in high inflation countries. The empirical analysis reveals that the support for such an inverse relationship is extremely fragile. In particular, eliminating episodes of hyperinflation renders this relationship statistically insignificant. The lack of evidence in favour of the two predictions of the sticky price model is problematic since this model is extensively used as a microfoundation for understanding output and real exchange rate fluctuations. In the third essay I take a structural approach to qualitatively explore the role of slow diffusion of new products in propagating the effect of technology shocks on output. I present a multi-sector dynamic general equilibrium model in which the creation of new products requires real resources. These products are beneficial for the economy but only upon complete diffusion. However, this diffusion is not instantaneous. I find that relative to a model in which there is instantaneous diffusion of new products, the qualitative output dynamics are similar to what is observed in the U.S. data. This warrants further quantitative investigation.

This paper examines the synchronization of business cycles across the G7 countries during US recessions since the 1870s. Using a dynamic measure of correlations, results depend on the globalization period under consideration. During the 2007-2009 recession, business cycles co-movements increased to unprecedented levels. (author's abstract)