This paper investigates the UK wage curve using longitudinal micro data drawn from the first eight waves of the British Household Panel Survey (BHPS). We estimate a fixed-effects model that controls for observed and unobserved individual-specific heterogeneity. Our results suggest that there is evidence of a negative relationship in wage-unemployment space. The estimated unemployment elasticity...

Using a research design that traces siblings’ preferences for postmaterialistic values in Germany over two decades, this paper provides new evidence on the origins of value preferences. Focusing on Inglehart’s thesis of value change, we test the combined socialization and scarcity hypothesis against the social learning hypothesis, a prominent rival account of preadult value preference formation...

This paper uses a gravity model to assess ex-post regional trade agreements. The model includes 130 countries and is estimated with panel data over the period 1962–1996. The introduction of the correct number of dummy variables allows for identification of Vinerian trade creation and trade diversion effects, while the estimation method takes into account the unobservable characteristics of each...

Most econometric methods for testing the proposition of long-run monetary neutrality rely on the assumption that money and real output do not cointegrate. This paper argues that these results can be attributed in part to the low power of univariate tests, and that a violation of the noncointegration assumption is likely to result in a nonrejection of the neutrality proposition. To alleviate thi...

We develop a hierarchical Bayesian approach for inference in random coefficient dynamic panel data models. Our approach allows for the initial values of each unit’s process to be correlated with the unit-specific coefficients. We impose a stationarity assumption for each unit’s process by assuming that the unit-specific autoregressive coefficient is drawn from a logitnormal distribution. Our me...

Estimation of the dynamic error components model is considered using two alternative linear estimators that are designed to improve the properties of the standard firstdifferenced GMM estimator. Both estimators require restrictions on the initial conditions process. Asymptotic efficiency comparisons and Monte Carlo simulations for the simple AR(1) model demonstrate the dramatic improvement in p...

The consensus of the aid effectiveness literature is that foreign aid is effective at spurring economic growth in recipient countries. However, economic growth is heterogeneous in nature, driven by a number of different activities within an economy. This paper contributes to the literature by disaggregating the Gross Domestic Product of recipients in order to investigate the type of economic gr...

This paper investigates the determinants of Spanish vertical intra-industry trade with a large sample of countries. We empirically test the comparative advantage explanation. To this aim, we build physical, human and technological capital stocks. On average, that is using OLS techniques, differences in endowments are a limitation for vertical intra-industry trade. Using quantile regressions tec...

This paper considers the estimation of average autoregressive roots-near-unity in panels where the time-series have heterogenous local-to-unity parameters. The pooled estimator is shown to have a potentially severe bias and a robust median based procedure is proposed instead. This median estimator has a small asymptotic bias that can be eliminated almost completely by a bias correction procedur...

In this paper a new method to estimate the equivalence scale elasticity using individual panel data on income satisfaction will be developed. In contrast to other subjective approaches, the present one benefits from the fact that no direct cardinal individual welfare function has to be specified. In addition, panel data enables different scale use by the respondents to be controlled. The approa...