#99-001 -- David Andolfatto and Eric Smith
Technological change and income distribution dynamics (PDF not available)
Abstract
This paper explores the link between technological change and the dynamics of the earnings distribution and production. Technological change not only advances society's collective capability but also changes the relative productivities of its members. This latter effect establishes the likely winners and losers from advances in productive capabilities, provides a mechanism that can generate cyclical fluctuations in output as well as employment, and determines the evolution of the earnings distribution.
#99-002 -- David Andolfatto and Paul Gomme
Unemployment and economic welfare (PDF not available)
Abstract
Statistics that measure labor market activity, such as employment and unemployment, are often interpreted in the press and by politicians as measures of economic performance and social well-being. Discussions that focus on cross-country comparisons of unemployment, for example, seem to be based without exception on the premise that unemployment represents a social and economic ill, so that less of it is generally to be preferred. The purpose of this note is to demonstrate that some care should be exercised when constructing a map between labor market behavior and economic welfare and that, generally speaking, such interpretations are not justified in the absence of information concerning the economic circumstances that determine individual labor market choices.
#99-003 -- Peter Kim, Lingxue Pan and Tony Wirjanto
Bootstrapping and jackknifing neural networks for noisy financial time series (PDF not available)
Abstract
In this paper we introduce resampling techniques to a multi-layer feed-forward neural network model for noisy financial time series in order to obtain more reliable interval forecasts of the time series along with a large amount of statistical information associated with the observed data. In particular, we develop two new grouped jackknife learning algorithms from cross-validation back-propagation learning as well as two new bootstrap cross-validation learning algorithms inspired by the parametric and nonparametric modelling strategy to be used on the neural network model selected from pre-tests. Our applicationis in forecasting the spot Canada/US foreign exchange rate, using the daily data from January 2, 1984 to October 1, 1996 and exploiting the existence of a stable transmission link between the spot rate and the short-term interest rate spread.
(This paper was published with a new title: "Resampling in neural network with application to exchange-rate data".)
#99-004 -- David Andolfatto
A theory of inalienable property rights (PDF not available)
Abstract
Why do societies impose legal restrictions that limit the disposable property rights of some individuals? The explanation proposed here is that these constraints arise as an institutional response against financial markets that, in a sense, work 'too well'. That is, we demonstrate how a well-functioning financial market can potentially work against a social policy designed to ensure a basic minimum standard of living for all types of individuals. Inalienable property rights emerge as a natural institutional response to the relatively improvident tendencies of some members of society when a majority of individuals share a common distaste for neighborhood squalor.