Economic fluctuations and growth.

• Position: Bureau News - Brief Article

The NBER's Program on Economic Fluctuations and Growth held its fall research meeting at the Federal Reserve Bank of Chicago on October 19. Charles Jones and David H. Romer, both of the NBER and University of California at Berkeley, organized the meeting and chose these papers for discussion:

Michael Kremer, NBER and Harvard University, and Benjamin Olken, Harvard University, "A Biological Model of Union Politics"

Discussant: Kevin M. Murphy, NBER and University of Chicago

Paul Beaudry, NBER and University of British Columbia, and Fabrice Collard, CNRS-GREMAQ, "Why Has the Employment-Productivity Trade-off among Industrialized Countries Been so Strong?"

Discussant: Susanto Basu, NBER and University of Michigan

Oliver J. Blanchard, NBER and MIT, and Francesco Giavazzi, NBER and Bocconi University, "Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets" (NBER Working Paper No. 8120)

Discussant: John F. Kennan, NBER and University of Wisconsin

Daron Acemoglu, NBER and MIT, "Labor- and Capital-Augmenting Technical Change"

Discussant: Change-Tai Hsieh, Princeton University

Dirk Krueger, Stanford University, and Fabrizio Perri, New York University, "Does Income Inequality Lead to Consumption Inequality? Empirical Findings and a Theoretical Explanation"

Discussant: Pierre-Olivier Gourinchas, NBER and Princeton University

N. Gregory Mankiw, NBER and Harvard University, and Ricardo Reis, Harvard University, "Sticky Information Versus Sticky Prices: A Proposal to Replace the New Keynesian Phillips Curve"

Discussant: Martin S. Eichenbaum, NBER and Northwestern University

Kremer and Olken apply principles from evolutionary biology to the study of unions. They show that unions that maximize the present discounted wages of current members will be displaced in evolutionary competition by unions with more moderate wage policies that allow their firms to live longer. This suggests that unions with constitutional incumbency advantages allowing leaders to moderate members' wage demands may have a selective advantage. When incumbency advantages are reduced exogenously, the model predicts, unions should increase their wage demands. These predictions seem broadly consistent with the evidence.

Beaudry and Collard's paper is motivated by a set of cross-country observations on labor productivity growth among industrial countries over the period 1960-97. In particular, the authors show that the speed of convergence among industrialized...