Search

Begin New Search Topic Science and Technology Publication Year within 25 Years

1961. Precautionary Savings and the Wealth Distribution with Illiquid Durables

Author:
Joseph W. Gruber and Robert F. Martin
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
We study the role an illiquid durable consumption good plays in determining the level of precautionary savings and the distribution of wealth in a standard Aiyagari model (i.e. a model with heterogeneous agents, idiosyncratic uncertainty, and borrowing constraints). Transactions costs induce an inaction region over which the durable stock and the associated user cost are not adjusted in response to changes in income, increasing, on average, the volatility of non-durable consumption. The volatility of total consumption is then a function of the share of the durable good in the utility function and the width of the inaction region. We are particularly interested in parameterizations which increase the precautionary motive for saving through an increase in "committed expenditure risk." We find, for an empirically relevant share of durable consumption and for all transaction costs below an upper threshold, that the level of precautionary savings is increasing in the transaction costs. Transaction costs have only a modest impact on the degree of wealth dispersion, as measured by the Gini index, as the associated increase in savings is close to linear in wealth. While we are unable to match the dispersion of wealth in the data, we increase the dispersion over a single asset model (Gini index of .71 for financial assets and .37 for total wealth) and we are able to match the relative dispersion of financial to durable assets, i.e. we find financial assets much more unequal than durable assets. We also match the ratio of housing wealth to total wealth for the median agent. We calibrate the model to data from the PSID, the CES, and the SCF.
Topic:
Economics, Emerging Markets, International Trade and Finance, and Science and Technology

1962. The Effect of Exchange Rates on Prices, Wages, and Profits: A Case Study of the United Kingdom in the 1990s

Author:
Joseph E. Gagon
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
During the 1990s the United Kingdom experienced large and sudden exchange rate movements that had no apparent impact on overall consumer prices. This paper shows that the stability of U.K. consumer prices was made possible in part by offsetting movements in the price-cost margins of foreign exporters and in part by offsetting price-cost margins in the U.K. distribution sector. At the same time, U.K. manufacturers experienced margin swings in the opposite direction, largely due to their role as exporters. Thus, sterling depreciation boosted the profits of U.K. manufacturers and squeezed the profits of U.K. distributors, while sterling appreciation had the opposite effects.
Topic:
Economics, International Trade and Finance, and Science and Technology
Political Geography:
United Nations

1963. Report of the Defense Science Board Task Force on Sea Basing

Publication Date:
08-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Sea basing is a critical capability for the United States in a world where flexible, quick-response military action will be required in areas far from fixed bases available or suitable for American military use. The seabase replaces or augments the fixed, in-theater airports and seaports, on which past military operations have focused and depended, with a maneuverability facility at sea - a mobile base of operations, command center, logistics node and transportation hub. A commander can place a seabase where and when he chooses to exploit enemy weaknesses and employ the element of surprise, confusing enemy defensive preparations. A seabase can be a center for reconstitution and redeployment of forces in succeeding stages of complex operations.
Topic:
Defense Policy, Development, and Science and Technology
Political Geography:
United States

1964. Report of the Defense Science Board Task Force on Enabliing Joint Force Capabilities

Publication Date:
08-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
U.S. national security leaders face a complex, dynamic set of demands in protecting the interests of the United States and its allies. Three key trends shape the nature and capability of the military forces required to meet these demands: 1. The limited ability to predict when, where, and under what conditions we will need to commit U.S. military forces, particularly for smaller-scale contingencies; 2. The need for forces that enjoy dominant superiority over potential adversaries, not simply an incremental advantage over an aggregate set of threats; and 3. The rapid development and global availability of information technology (IT). Taken together, these trends underscore the need for enhanced joint capabilities.
Topic:
Defense Policy, Development, and Science and Technology
Political Geography:
United States

1965. Report of the Defense Science Board Task Force on Discriminate Use of Force

Publication Date:
07-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
In the terms of reference, the Under Secretary of Defense for Acquisition, Technology, and Logistics directed the task force “to conduct a comprehensive study of the ends and means of precision compellence, or the nuanced use of force, in concert with coalition partners, to achieve political, economic and moral change in countries affecting US interests.” Real-world events have since underscored the need for such a study; indeed, the U.S. military applied key elements of a measured, nuanced approach in both the Afghanistan and Iraq campaigns. We are pleased to note this evolution in operations and a parallel evolution in the thinking of the combatant commands and Services. Because of this evolution, it is no longer as necessary as it once was to sell the fundamental objectives of what we term here the discriminate use of force (DUF).
Topic:
International Relations, Defense Policy, and Science and Technology
Political Geography:
United States

1966. JSF International Industrial Participation: A Study of Country Approaches and Financial Impacts on Foreign Suppliers

Publication Date:
06-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
The Joint Strike Fighter (JSF) program was conceived as an international acquisition program in order to attract financial investment and technological innovation from partner countries, as well as to partner early with governments whose military Services were likely users of this state-of-the-art coalition forces platform.
Topic:
Defense Policy, Economics, Industrial Policy, and Science and Technology

1967. Training for Future Conflicts

Publication Date:
06-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This is the second 21st century Defense Science Board report on military training. The report itself has a training goal: instruct and convince the acquisition and personnel communities to recognize instinctively that (1) military proficiency is as dependent on the warriors who operate weapon systems as it is on the weapon system technology, and (2) a superb way to waste personnel or system acquisition money is to ignore training, or to tacitly allow training to pay the bills for acquisition or personnel system flaws in those more measurable arenas.
Topic:
Defense Policy, Development, and Science and Technology
Political Geography:
United States

1968. IT Investment and Hicks' Composite-Good Theorem: The U.S. Experience

Author:
Jaime Marquez and Shing-Yi B. Wang
Publication Date:
06-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
We study whether aggregation residuals in U.S. private investment in information technology (IT) exhibit a predictable pattern that is consistent with Hicks' composite-good theorem and that may be used for forecasting. To determine whether one can extract such a pattern, we apply the general-to-specific strategy developed by Krolzig and Hendry (2001). This strategy combines ordinary least squares with a computer-automated algorithm that selects a specification based on coefficients' statistical significance, residual properties, and parameter constancy. Then, we derive the testable implications from Hicks' theorem and evaluate them with econometric formulations; we find qualified support for these implications. Having obtained these formulations, we evaluate their ex-post predictive accuracy and compare it to that of an autoregressive model. The key finding is that ignoring movement in relative prices results in a loss of information for predicting aggregation residuals.
Topic:
Economics, International Trade and Finance, and Science and Technology
Political Geography:
United States

1969. Distance, Time, and Specialization

Author:
Carolyn Evans and James Harrigan
Publication Date:
05-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Time is money, and distance matters. We model the interaction of these truisms, and show the implications for global specialization and trade: products where timely delivery is important will be produced near the source of final demand, where wages will be higher as a result. In the model, timely delivery is important because it allows retailers to respond to fluctuating final demand without holding costly inventories, and timely delivery is only possible from nearby locations. Using a unique dataset that allows us to measure the retail demand for timely delivery, we show that the sources of US apparel imports have shifted in the way predicted by the model, with products where timeliness matters increasingly imported from nearby countries.
Topic:
Economics, International Trade and Finance, and Science and Technology
Political Geography:
United States

1970. Transforming the Defense Industrial Base: A Roadmap

Publication Date:
02-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
For this study, we built upon Secretary Rumsfeld's six operational goals for transformation, requirements from Joint Vision 2020, lessons learned from Operation Enduring Freedom, and previous industrial base studies. We drew on recommendations from experts in the Department of Defense, industry, and the investment community to create a compendium of representative emerging defense suppliers with transformational technologies and products. We identified 24 companies' key technologies, products, and best business practices in case studies. We also surveyed legacy defense suppliers and the Defense Advanced Research Projects Agency (DARPA) to capture key characteristics associated with programs and products judged to be among the organizations' most successful, most important and innovative, and fastest to field. Finally, we spoke with five prominent companies who have substantially exited the defense business.
Topic:
Defense Policy, Economics, Industrial Policy, and Science and Technology