Report
Endogenous policy choice: the case of pollution and growth
Manuelli, Rodolfo E.; Jones, Larry E. (2000)
What determines the relationship between pollution and growth? Are the forces that explain the behavior over time of these quantities potentially useful to understand more generally the relationship between policies and growth? In this paper, we make a first attempt to analyze the equilibrium behavior of two quantities?the level of pollution and the level of income?in a setting in which societies choose, via voting, how much to regulate pollution. Our major finding is that, consistent with the evidence, the relationship between pollution and growth need not be monotone and that the precise ...
Staff Report , Paper 276

Report
Labor contracts in a model of imperfect competition
Chari, V. V.; Manuelli, Rodolfo E.; Jones, Larry E. (1989)
We propose a definition of involuntary unemployment which differs from that traditionally used in implicit labor contract theory. We say that a worker is involuntarily unemployed if the marginal wage implied by the optimal contract exceeds the marginal rate of substitution between leisure and consumption. We construct a model where risk-neutral firms have monopoly power and show that such monopoly power is necessary for involuntary unemployment to arise in the optimal contract. We numerically compute examples and show that such unemployment occurs for a wide range of parameter values.
Staff Report , Paper 117

Report
Technology (and policy) shocks in models of endogenous growth
Jones, Larry E.; Stacchetti, Ennio; Manuelli, Rodolfo E. (2000)
Our objective is to understand how fundamental uncertainty can affect the long-run growth rate and what factors determine the nature of the relationship. Qualitatively, we show that the relationship between volatility in fundamentals and policies and mean growth can be either positive or negative. We identify the curvature of the utility function as a key parameter that determines the sign of the relationship. Quantitatively, we find that when we move from a world of perfect certainty to one with uncertainty that resembles the average uncertainty in a large sample of countries, growth rates ...
Staff Report , Paper 281

Journal Article
Inflation, growth, and financial intermediation
Jones, Larry E.; Chari, V. V.; Manuelli, Rodolfo E. (1996-05)
Review , Volume 78 , Issue May , Pages 41-58

Journal Article
The growth effects of monetary policy
Jones, Larry E.; Chari, V. V.; Manuelli, Rodolfo E. (1995-10)
This article investigates the relationship between inflation and output, in the data and in standard models. The article reports that empirical cross-country studies generally find a nonlinear, negative relationship between inflation and output, a relationship that standard models cannot come close to reproducing. The article demonstrates that the models' problem may be due to their standard narrow assumption that all money is held by the public for making transactions. When the models are adjusted to also assume that banks are required to hold money, the models do a much better job. The ...
Quarterly Review , Volume 19 , Issue Fall , Pages 18-32

Working Paper
Efficiency with endogenous population growth
Golosov, Mikhail; Jones, Larry E.; Tertilt, Michele (2004)
In this paper, we generalize the notion of Pareto-efficiency to make it applicable to environments with endogenous populations. Two efficiency concepts are proposed, P-efficiency and A-efficiency. The two concepts differ in how they treat people who are not born. We show how these concepts relate to the notion of Pareto-efficiency when fertility is exogenous. We then prove versions of the first welfare theorem assuming that decision making is efficient within the dynasty. Finally, we give two sets of sufficient conditions for noncooperative equilibria of family decision problems to be ...
Working Papers , Paper 630

Conference Paper
Inflation, growth, and financial intermediation
Jones, Larry E.; Chari, V. V.; Manuelli, Rodolfo E. (1996-05)
Proceedings , Volume 78 , Issue May , Pages 41-58

Report
Fertility and Social Security
Boldrin, Michele; Jones, Larry E.; De Nardi, Mariacristina (2005)
The data show that an increase in government provided old-age pensions is strongly correlated with a reduction in fertility. What type of model is consistent with this finding? We explore this question using two models of fertility: one by Barro and Becker (1989), and one inspired by Caldwell (1978, 1982) and developed by Boldrin and Jones (2002). In Barro and Becker's model parents have children because they perceive their children's lives as a continuation of their own. In Boldrin and Jones' framework parents procreate because children care about their parents' utility, and thus provide ...
Staff Report , Paper 359

Working Paper
The economics of split-ticket voting in representative democracies
Jones, Larry E.; Chari, V. V.; Marimon, Ramon (1997)
In U.S. elections, voters often vote for candidates from different parties for president and Congress. Voters also express dissatisfaction with the performance of Congress as a whole and satisfaction with their own representative. We develop a model of split-ticket voting in which government spending is financed by uniform taxes but the benefits from this spending are concentrated. While the model generates split-ticket voting, overall spending is too high only if the president?s powers are limited. Overall spending is too high in a parliamentary system, and our model can be used as the basis ...
Working Papers , Paper 582

Report
Why are married women working so much?
Jones, Larry E.; Manuelli, Rodolfo E.; McGrattan, Ellen R. (2003)
We study the large observed changes in labor supply by married women in the United States over 1950-1990, a period when labor supply by single women has hardly changed at all. We investigate the effects of changes in the gender wage gap, technological improvements in the production of nonmarket goods and potential inferiority of these goods on understanding this change. We find that small decreases in the gender wage gap can explain simultaneously the significant increases in the average hours worked by married women and the relative constancy in the hours worked by single women, and single ...
Staff Report , Paper 317