Stock-Returns and Inflation in a Principal-Agent Economy

We study a monetary in which final goods sell on spot markets, while labor and dividends sell through contracts. Firms and workers confuse absolute and relative price changes: A positive price-level shock makes sellers think they are producing better goods than they really are. They split this apparent windfall with workers who get a higher real wage. Hence, unexpected inflation shifts real income from firms (the principals) to workers (the agents) and thereby lowers stock-returns.MONEY SUPPLY ; PRICES ; STOCKS

Vintage Capital and Equality

If machines are indivisible, a vintage capital model nust give rise to income inequality. If new machines are always better than old ones and if society cannot provide everyone with a new machine all of the time, inequality will result. I explore this mechanism in detail.CAPITAL ; MACHINES

Maximum likelihood estimation of cloud height from multi-angle satellite imagery

We develop a new estimation technique for recovering depth-of-field from multiple stereo images. Depth-of-field is estimated by determining the shift in image location resulting from different camera viewpoints. When this shift is not divisible by pixel width, the multiple stereo images can be combined to form a super-resolution image. By modeling this super-resolution image as a realization of a random field, one can view the recovery of depth as a likelihood estimation problem. We apply these modeling techniques to the recovery of cloud height from multiple viewing angles provided by the MISR instrument on the Terra Satellite. Our efforts are focused on a two layer cloud ensemble where both layers are relatively planar, the bottom layer is optically thick and textured, and the top layer is optically thin. Our results demonstrate that with relative ease, we get comparable estimates to the M2 stereo matcher which is the same algorithm used in the current MISR standard product (details can be found in [IEEE Transactions on Geoscience and Remote Sensing 40 (2002) 1547--1559]). Moreover, our techniques provide the possibility of modeling all of the MISR data in a unified way for cloud height estimation. Research is underway to extend this framework for fast, quality global estimates of cloud height.Comment: Published in at http://dx.doi.org/10.1214/09-AOAS243 the Annals of Applied Statistics (http://www.imstat.org/aoas/) by the Institute of Mathematical Statistics (http://www.imstat.org

Occupational choice, number of entrepreneurs and output: theory and empirical evidence with Spanish data

This paper extends the (Lucas, Bell J Econ 9:508–523,1978) model of occupational choices by individuals with different skills, beyond the simple options of self-employment or wage-employment, by including a second choice for the self-employed. That is, an option to hire employees and so become self-employed with employees (SEWEs), or to be self-employed without employees (SEWNEs). We solve for the market equilibrium and examine the sensitivity of relative sizes of occupational groups, and of the level of productivity, to changes in the exogenous parameters. The results show that the positive (negative) association between number of SEWEs (SEWNEs) and productivity, observed in the Spanish data, can be explained, under certain conditions, as the result of cross-region and time differences in average skills. These findings point to the importance of distinguishing between SEWEs and SEWNEs in drawing valid conclusions concerning any link between entrepreneurship and economic development