Research meeting of economic fluctuations and growth program.

PositionNational Bureau of Economic Research conference

Nearly 70 members and guests of the NBER's Program on Economic Fluctuations and Growth met in Chicago on October 24 to discuss their recent research. Charles Jones, NBER and Stanford University, and James H. Stock, NBER and Harvard University, organized this program:

Francis X. Diebold, NBER and University of Pennsylvania; Lee E. Ohanian, Federal Reserve Bank of Minneapolis; and Jeremy Berkowitz, Federal Reserve Board, "Dynamic Equilibrium Economies: A Framework for Comparing Models and Data"

Discussant: Lars P. Hansen, NBER and University of Chicago

Daron Acemoglu, NBER and MIT, "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality"

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

Jerome Adda, INRA, and Russell Cooper, NBER and Boston University, "Balladurette and Juppette: A Discrete Analysis of Scrapping Subsidies" (NBER Working Paper No. 6048)

Discussant: Janice Eberly, NBER and Northwestern University

David H. Romer, NBER and University of California, Berkeley, "Misconceptions and Political Outcomes" (NBER Working Paper No. 6117)

Discussant: Roberto Perotti, Columbia University

Wouter Den Haan, NBER and University of California, San Diego (UCSD); and Garey Ramey and Joel Watson, UCSD, "Job Destruction and Propagation of Shocks"

Discussant: Steven J. Davis, NBER and University of Chicago

Robert E. Hall, NBER and Stanford University, "The Temporal Concentration of Job Destruction and Inventory Liquidation: A Theory of Recession: A Theory of Recessions"

Discussant: John H. Cochrane, NBER and University of Chicago

Diebold, Ohanian, and Berkowitz propose a framework for assessing whether dynamic equilibrium models and data agree. They evaluate the significance of deviations between the models and the data, and use goodness-of-fit criteria to produce estimators that optimize economically-relevant loss functions. They provide a detailed illustrative application to modeling the U.S. cattle cycle.

In an economy where skilled and unskilled workers use different technologies, the rate of improvement of each technology is determined by a profit-maximizing R and D sector. When there is a high proportion of skilled workers in the labor force, the market for skill-complementary technologies is larger, and more effort will be spent in upgrading the productivity of skilled workers. One implication of this theory is that when the relative supply of skilled workers increases, the skill premium decreases in...

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