<p> This dissertation consists of four chapters on topics in labor and development economics. </p><p> Chapter 1 discusses innovation fluctuations in an aging economy. A three-stage overlapping generations model is constructed to simulate population trends and their consequent impact on innovation and economic development. Both the theoretical analysis and empirical verification show that countries with a low fertility rate have a higher innovation rate in a short period but a lower one in the long run. This chapter discusses the negative impact of an aging economy and yields the strong policy implication of providing a subsidy to boost the fertility rate, particularly for those developed European countries suffering from aging problems. </p><p> Chapter 2 focuses on the relationship between the unemployment rate, working efficiency, and working overtime. It is motivated by the widely observed phenomenon of working overtime in some East Asian countries as well as the consulting and investment banking sectors. Does working overtime indeed produce extra efficiency? I use data from the Panel Study of Income Dynamics (PSID) to answer this question. The answer is NO, and it has little impact on the unemployment rate. This chapter contributes to existing literature with a new empirical approach. It could also guide corporate management professionals in the enactment of proper overtime work policies. </p><p> Chapter 3 discusses the relationship between institutions and economic outcomes. The renowned MIT and Chicago political economists Daron Acemoglu and James Robinson argue that only inclusive political and economic institutions could lead to economic prosperity. Others dispute that their theory captures the whole picture. Bill Gates notably said that the theory of Acemoglu and Robinson must take into account other important factors. Chapter 3 contributes to this controversy. I find that economic prosperity could be harvested even by extractive institutions with immigrant-friendly policies. For example, countries like the United Arab Emirates, Qatar, and Singapore could enjoy a long-term economic boom due to a good immigration policy that attracts high-skilled and low-skilled immigrants from their neighbors. </p><p> Chapter 4 intends to determine the empirical relationship between income inequality and consumption inequality in China. Existing empirical literature shows that consumption inequality exceeds income inequality in China, which contradicts basic economic theory as well as evidence from the US, Canada, and Europe. I use the inverse relationship between necessity good consumption and income to derive the true income level of each individual. High-income communist party members and employees of government-related agencies tend to hide their grey income, and income inequality is thus underestimated. The relationship I uncover between income and consumption inequality is consistent with the empirical evidence on other countries.</p><p>

<p> This dissertation is comprised of three essays. In the first essay we develop a price-setting model that explains the gap between the effect of nominal shock in real activity and the frequency of price change through the interplay of menu costs and uncertainty about productivity. Uncertainty arises from firms' inability to distinguish between permanent and transitory changes in their idiosyncratic productivity. Upon the arrival of a productivity shock, a firm's uncertainty spikes up and then fades with learning until the arrival of the next shock. These uncertainty cycles, when paired with menu costs, generate recurrent episodes of high frequency of price adjustment followed by episodes of low frequency of adjustment at the firm level. This time variation in the individual adjustment frequency is consistent with empirical patterns, in particular a decreasing hazard rate of adjustment, and it is key to understand the sluggish propagation of nominal shocks. </p><p> The second essays studies a model where the relevant asset that affects a firm's financial conditions is her workers. To achieve this, we extend a standard labor market model as in Pissarides (1985) to incorporate default risk. Because it is costly to engage new workers in production, firms attach a value to be matched with a worker and, consequently, their decision to default and leave the economy is affected by this value. We show that fluctuations in the value of a worker generate and significantly propagate fluctuations in financial markets. We find that, absent any fluctuation in the labor market, credit spreads and default rates would be 68% and 80% less volatile, respectively. Finally, we argue that this two sided interaction between labor and financial markets can be an important propagation mechanism of business cycle fluctuations. </p><p> In the third essay I study the optimal inflation target in a menu cost model with an occasionally binding zero lower bound on interest rates. I find that the optimal inflation target is 5%, much larger than the rates currently targeted by the Fed and the ECB, and also larger than in other time- and state-dependent pricing models. In my model resource misallocation does not increase greatly with inflation, unlike in previous sticky price models. The critical additions for this result are firms' idiosyncratic shocks. Higher inflation does indeed increase the gap between old and new prices, but it also increases firms' responsiveness to idiosyncratic shocks. These two effects are balanced using idiosyncratic shocks consistent with micro-price statistics. By increasing the inflation target, policymakers can reduce the probability of hitting the zero lower bound, avoiding costly recessionary episodes.</p>

Thesis (PH.D.) -- Syracuse University, 2007. / "Publication number AAT 3281732"

Thesis (Ph.D.)--Indiana University, Dept. of Economics, 2009. / Title from PDF t.p. (viewed on Jul 12, 2010). Source: Dissertation Abstracts International, Volume: 70-12, Section: A, page: 4798. Adviser: Michael Kaganovich.

Thesis (PH.D.)--Syracuse University, 2003. / "Publication number AAT 3113258."

Thesis (Ph. D.)--Syracuse University, 2005. / "Publication number AAT 3194014."

Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 2006. / Source: Dissertation Abstracts International, Volume: 67-11, Section: A, page: 4289. Adviser: Roger Koenker. Includes bibliographical references (leaves 134-138) Available on microfilm from Pro Quest Information and Learning.

Thesis (PH.D.) -- Syracuse University, 2006 / "Publication number AAT 3251763."

Thesis (PH.D.) -- Syracuse University, 2006 / "Publication number AAT 3251816."

Household food budgets offer a window on consumers' demand for convenience. During the 1980s and 1990s, three shifts likely promoted an increase in the share of the food budget devoted to convenient meal options, namely meals out and prepared foods: the growing number of hours that women spent in paid work, the growing opportunity cost of women's time spent doing housework, and the drop in the price of food relative to all other goods. I test whether the impact of these economic trends (on food budget allocation) was mediated by a change in the impact of children on household meal allocation. I find support for this hypothesis in a model of food away expenditures, which likely reflects two unmeasured shifts. First, (own) child care and household production of meals apparently became substitutes rather than complements. Second, a range of both prepared foods and family-friendly restaurants became available. The growing demand for time-saving meal options, including frozen food and meals out, has important implications for a core determinant of living standards: the ability to harness scale economies from home production of meals. I test whether greater reliance on convenient meals reduced household-level economies of scale. Other factors could mediate against, or even offset such a loss, including technological advances in the production and distribution of food. Using Engel curve analyses, I find that scale economies fell from 1980 to 2000, thereby reducing living standards; my lower- and upper-bound estimates of the drop are 44 percent and 110 percent respectively. Economies of scale are not simply a function of household size and composition, as standard equivalence scaling techniques suggest; they are affected by the ways that households trade non-market work and market substitutes. This dissertation contributes to the small literature that challenges the validity of fixed-parameter equivalence scales, such as the per capita scale, which ignore household production. I first attach plausible values to scale parameters and then compare equivalent-income trajectories of parents and non-parents across (standard) fixed parameter and (non-standard) time-varying equivalence scales. I present plausible lower- and upper-bound estimates of the rise in income inequality between parents and non-parents.