Two sources of asymmetry in the Phillips curve are considered: the “capacity constraint hypothesis” and downward rigidity on wages and/or prices. The short run trade-off between inflation changes and the unemployment gap is modeled in a state-space framework that allows for time variation in both the NAIRU and the trade-off parameter. Empirical evidence for the US using the Kalman filter favors...

Firm-Level Monopsony and the Gender Pay Gap Using a dynamic labor supply model and linked employer-employee data, I find evidence of substantial search frictions, with females facing a higher level of frictions than males. However, the majority of the gender gap in labor supply elasticities is driven by across firm sorting rather than within firm differences, a feature predicted in the search t...

We study dynamic bargaining with asymmetric information and interdependent values. We base our analysis on the equilibria characterized by Deneckere and Liang (2006) for the gap case. We show that as the gap between the cost and value of the weakest type shrinks to zero, the continuous time limit of equilibria changes dramatically from rare bursts of trade with long periods of inactivity to smo...

Revisiting Inter-Industry Wage Differentials and the Gender Wage Gap: An Identification Problem We propose a measure of the industrial gender wage gap which is free from an identification problem by using inter-industry wage differentials, or industrial wage premia. We draw on a recent literature showing that a normalized regression equation can be used to resolve the identification problem in ...

This paper argues that inflation-targeting central banks should announce explicit loss function with numerical relative weights on output-gap stabilization and use and announce optimal time-varying instrument-rate paths and corresponding inflation and output-gap forecasts. Simple voting procedures for forming the Monetary Policy Committee’s aggregate loss function and time-varying instrument-ra...

Using data from 15 EU countries for 1974-2004, with various specifications and estimation methods this paper gives strong support to the idea that the aggregate inflation-output gap or inflation-unemployment rate relationship is not linear because inflation is relatively more sensitive to markets and regions that are close to a capacity constraint. Accordingly, inflation is not only related to ...

This paper studies the adverse price effects of convergence trading. I assume two assets with identical cash flows traded in segmented markets. Initially, there is gap between the prices of the assets, because local traders face asymmetric temporary shocks. In the absence of arbitrageurs, the gap remains constant until a random time when the difference across local markets disappears. While arb...

Using firm level data from eight Sub-Saharan Africa countries we examine credit constraint differentials between male and female manufacturing entrepreneurs. Enterprises owned by female entrepreneurs are less likely to be credit constrained compared to their male counterparts. The magnitude of this credit constraint gap varies with constraint and ownership definitions but the direction of the g...

The Gender Wage Gap in Four Countries In a series of studies written during the 1980s Bob Gregory and his co-authors compared the gender wage gap in Australia with that found in other countries. They found it was not the difference in human capital endowments that explained different gender wage gaps but rather the rewards for these endowments. They concluded that country-specific factors, espe...