Jeremy Greenwood
Research
Emin Dinlersoz and Jeremy
Greenwood (2012), "The Rise and Fall of Unions in
the U.S. University
of Pennsylvania
Union
membership displayed an ∩-shaped pattern over the 20th century, while the
distribution of income sketched a U. A model of unions is developed to analyze
these phenomena. There is a distribution of firms in economy. Firms hire
capital, plus skilled and unskilled labor. Unionization is a costly process. A
union decides how many firms to organize and its members' wage rate. Simulation
of the developed model establishes that skilled-biased technological change,
which affects the productivity of skilled labor relative to unskilled labor,
can potentially explain the above facts. Statistical analysis suggests that
skill-biased technological change is an important factor in de-unionization.
Keywords: Computers; De-unionization; Distribution of Income; Flexible Manufacturing; Mass Production; Numerically Controlled Machines; Panel-Data Regression Analysis; Relative Price of New Equipment; Skill-Biased Technological Change; Simulation Analysis; Union Coverage; Union Membership
Harold L. Cole, Jeremy Greenwood and Juan M. Sanchez
(2012), "Why Doesn't Technology Flow from Rich to Poor Countries?"
Work in Progress, University
of Pennsylvania
What
determines the choice of technology within a country? While there could be many
factors, the efficiency of the country's financial system may play a
significant role. To address this question, a dynamic contract model is embedded
into a general equilibrium setting with competitive intermediation. The ability
of an intermediary to monitor and control the cash flows of a firm plays an
important role in the decision to underwrite technology adoption. Can such a
theory help to explain the differences in TFP and establishment-size
distributions between India ,
Mexico and the U.S.
Keywords: Costly control; costly state verification; dynamic contract theory; economic development; establishment-size distributions; financial intermediation; India, Mexico and the U.S.; monitoring; productivity; technology adoption; underwriting; ventures
Jeremy Greenwood, Nezih Guner,
Georgi Kocharkov and Cezar Santos (2012), "Technology and the Changing
Family: A Unified Model of Marriage, Divorce, Educational Attainment and
Married Female Labor-Force Participation," University of Pennsylvania
Marriage has declined since 1960, with the drop being bigger for non-college educated individuals versus college educated ones. Divorce has increased, more so for the non-college educated vis-ŕ-vis the college educated. Additionally, assortative mating has risen; i.e., people are more likely to marry someone of the same educational level today than in the past. A unified model of marriage, divorce, educational attainment and female labor-force participation is developed and estimated to fit the postwar U.S. data. The role of technological progress in the household sector and shifts in the wage structure for explaining these facts is gauged.
Keywords: Assortative mating, education, female labor supply, household production, marriage and divorce, minimum distance estimation
Jeremy Greenwood, Juan M. Sanchez and Cheng Wang (2011), "Quantifying
the Impact of
Financial Development on Economic Development," Economie
d’avant garde, Research
Report No. 17, University of Pennsylvania
Keywords: Costly-state verification, economic development, financial intermediation, firm-size distribution, interest-rate spreads, cross-country output differences, cross-country TFP differences
Jesús Fernández-Villaverde, Jeremy Greenwood, and Nezih Guner (2011, revised), "From Shame to Game in One Hundred Years: An Economic Model of the Rise in Premarital Sex and its De-Stigmatization," Economie d’avant garde, Research Report No. 16, University of Pennsylvania.
Discussion
in Freakonomics Blog,The New York Times
Keywords: Add Health, contraception, culture, peer group effects, premarital sex, shame, socialization, stigma, technological progress
Jeremy Greenwood and Karen A. Kopecky (2011, revised), "Measuring the Welfare Gain from Personal Computers," Economic Inquiry, forthcoming.
Discussion in the Wall Street Journal's Real Time Economics Blog
Keywords: Compensating variation, computers, electricity, equivalent variation, Fisher ideal price index, new goods, technological progress, Tornqvist price index, welfare gain
Jeremy Greenwood, Juan M. Sanchez and Cheng Wang (September 2010), "Financing Development: The Role of Information Costs," American Economic Review, v. 100, no. 4: 1875-1891.
Abstract and Paper (with appendix)
Keywords: Financial intermediation, economic development, costly-state verification, firm-size distribution.
Jeremy Greenwood and Nezih Guner (November 2010), "Social Change: The Sexual Revolution," International Economic Review, v. 51, no. 4: 893-923.
Keywords: Social change; the sexual revolution; technological progress in contraceptives, bilateral search.
Jeremy Greenwood and Nezih Guner (2009), "Marriage and Divorce since World War II: Analyzing the Role of Technological Progress on the Formation of Households," NBER Macroeconomics Annual 2008, v. 23, edited by Daron Acemoglu, Kenneth Rogoff and Michael Woodford (Chicago: University of Chicago Press), 231-276.
Data; Midwest Macro Meetings--Plenary Address; Research Report--Extended Version
Discussion in BusinessWeek Online
Keywords: Marriage, divorce, hours worked, household production, household size, technological progress.
Erratum: Eq. 9 – Lefthand side should read d(um-us)/dp.
Jeremy Greenwood and Guillaume Vandenbroucke
(2008), "Hours Worked (Long-Run Trends)." The New Palgrave
Dictionary of Economics, v. 4, 2nd edition, edited by Lawrence New York N.Y.
Keywords: Hours worked, leisure, housework, household production, Edgeworth-Pareto complementarity/substitutability, technological progress.
Jeremy Greenwood and Per Krusell (May 2007), "Growth Accounting with Investment-Specific Technological Progress: A Discussion of Two Approaches," Journal of Monetary Economics, v. 54, n. 4: 1300-1310.
Keywords: Investment-specific technological progress, capital embodiment, growth accounting.
Jeremy Greenwood and Gokce Uysal (June 2005), "New Goods and the Transition to a New Economy," Journal of Economic Growth, v. 10, n. 2: 99-134.
Keywords: New goods, structural change, technological progress, welfare indices.
Jeremy Greenwood and Ananth Seshadri (2005), "Technological Progress and Economic Transformation," in the Handbook of Economic Growth, v. 1B, edited by Philippe Aghion and Steven N. Durlauf. Amsterdam: Elsevier North-Holland, 1225-1273.
Keywords: Child labor, economic growth, educational attainment, female labor-force participation, fertility, household production theory, technological progress.
Jeremy Greenwood, Ananth Seshadri and Guillaume Vandenbroucke (March 2005), "The Baby Boom and Baby Bust," American Economic Review, v. 95, n. 1: 183-207.
The Baby Boom and Baby Bust in OECD Countries: Data and Graphs; Lecture Notes
Discussion in Deutsche Bank Research
Measurement Without Theory: A Response to Bailey and Collins
Keywords: Baby boom, baby bust, household production, technological progress.
Jeremy Greenwood, Ananth Seshadri and Mehmet Yorukoglu (January 2005), "Engines of Liberation," Review of Economic Studies, v. 72, n. 1: 109-133.
Engines of Liberation: Additional Notes
Data--Basic Facilities and Appliances; Lecture Notes
Discussion in The Regional Economist
Discussion in The Wall Street Journal
Discussion in The Times of India
Keywords: female labor-force participation, household production theory, the second industrial revolution, technology adoption.
Jeremy Greenwood, Nezih Guner and John Knowles (August 2003), "More on Marriage, Fertility, and the Distribution of Income," International Economic Review, v. 44, n. 3: 827-862.
According to Pareto (1896), the distribution of income depends on ``the nature of the people comprising a society, on the organization of the latter, and, also, in part, on chance.'' In the model developed here the ``nature of the people'' is captured by attitudes toward marriage, divorce, fertility, and children. Singles search for mates in a marriage market. Married agents bargain about work, and the quantity and quality of children. They can divorce. Social policies, such as child support requirements, reflect the ``organization of the (society).'' Finally, ``chance'' is modelled by randomness in income, marriage opportunities, and marital bliss.
Keywords: Fertility; marriage and divorce; Nash bargaining; income distribution; public policy
Jeremy Greenwood and Ananth Seshadri (May 2002), "The U.S. Demographic Transition," American Economic Review (Papers and Proceedings) v. 92, n. 2: 153-159.
Between 1800 and 1940 the U.S. went through a dramatic demographic transition. In 1800 the average woman had 7 children, and 94 percent of the population lived in rural areas. By 1940 the average woman birthed just 2 kids, and only 43 percent of populace lived in the country. The question is: What accounted for this shift in the demographic landscape? The answer given here is that technological progress in agriculture and manufacturing explains these facts.
Keywords: Fertility, technological progress, agriculture, manufacturing.
JEL Classification Nos: E1, J1, O3.
S. Rao Aiyagari, Jeremy Greenwood, and Ananth Seshadri (February 2002), "Efficient Investment in Children," Journal of Economic Theory, v. 102, n. 2: 290-321.
Many would say that children are society's most precious resource. So, how
should we invest in them? To gain insight into this question, a dynamic general
equilibrium model is developed where children differ by ability. Parents invest
time and money in their offspring, depending on their altruism. This allows
their children to grow up as more productive adults. First, the efficient
allocation is characterized. Next, this is compared with the outcome that
arises when financial markets are incomplete. The situation where child-care
markets are also lacking is then examined. Additionally, the consequences of
impure altruism are analyzed.
Keywords: Investment in children; efficiency; imperfect financial markets; impure altruism; lack of child-care markets.
JEL Classifications: D1, D31, D58, I2
Erratum: Eq. 34 – Put a θ in front of the V.
Joao Gomes, Jeremy Greenwood, and Sergio Rebelo (August 2001), "Equilibrium Unemployment," Journal of Monetary Economics, v. 48, n. 1: 109-152.
A search-theoretic model of equilibrium unemployment is constructed and shown to be consistent with the key regularities of the labor market and business cycle. The two distinguishing features of the model are: (i) the decision to accept or reject jobs is modeled explicitly, and (ii) markets are incomplete. The model is well suited to address a number of interesting policy questions. Two such applications are provided: the impact of unemployment insurance, and the welfare costs of business cycles.
Keywords: Search; incomplete markets; business cycles; unemployment insurance; welfare costs of business cycles.
JEL Classifications: E24, E32
Jeremy Greenwood and Boyan Jovanovic (2001), "Accounting for Growth," in New Developments in Productivity Analysis, edited by Charles R. Hulten, Edwin R. Dean and Michael J. Harper. Chicago: University of Chicago Press (for NBER), 179-222.
A satisfactory account of the postwar growth experience of the United States should be able to come to terms with the following three facts:
- Since the early 1970's there has been a slump in the advance of productivity.
- The price of new equipment has fallen steadily over the postwar period.
- Since the mid-1970's the skill premium has risen.
Variants of Solow's (1960) vintage-capital model can go a long way toward explaining these facts, as this paper shows. In brief, the explanations are:
- Productivity slowed down because the implementation of information technologies was both costly and slow.
- Technological advance in the capital goods sector has lead to a decline in equipment prices.
- The skill premium rose because the new, more efficient capital is complementary with skilled labor and/or because the use of skilled labor facilitates the adoption of new technologies.
Keywords: Investment-specific technological progress, vintage-capital models, learning by doing, diffusion lags.
JEL Classifications: O3, O4
Jeremy Greenwood, Nezih Guner and John Knowles (May 2000), "Woman on Welfare: A Macroeconomic Analysis," American Economic Review (Papers and Proceedings), v. 92, n. 2: 383-388.
Jeremy Greenwood, Zvi Hercowitz
and Per Krusell (January 2000), "The Role of
Investment-Specific Technological Change in the Business Cycle," European
Economic Review, v. 44, n. 1: 91-115.
This is a quantitative investigation of
the importance of technological change specific to new investment goods for
postwar U.S. aggregate fluctuations. A growth model that incorporates this form
of technological change is calibrated to U.S. data and simulated, using the
relative price of new equipment to identify the process driving
investment-specific technology shocks. The analysis suggests that this form of
technological change is the source of about 30 percent of output fluctuations.
Keywords: Investment-specific technological change;
business cycles
JEL Classification: E3, O3, O4
S. Rao Aiyagari, Jeremy Greenwood and Nezih
Guner (April 2000), "On the State of
the Union," Journal of Political Economy, v. 108, n. 2:
213-244.
An overlapping generations model of
marriage and divorce is constructed to analyze family structure and
intergenerational mobility. Agents differ by sex, marital status, and human
capital. Single agents meet in a marriage market and decide whether to accept
or reject proposals to wed. Married couples must decide whether to separate or
not. Parents invest in their children depending on their wherewithal. A
simulated version of the theoretical prototype can generate an equilibrium with
a significant number of female-headed families and a high degree of persistence
in income across generations. To illustrate the model's mechanics, the effects
of two anti-poverty policies, namely child support and welfare, are
investigated.
Keywords: Intergenerational mobility; marriage and divorce;
children; public policy
Jeremy Greenwood and Boyan
Jovanovic (May 1999), "The IT Revolution and the
Stock Market," American Economic Review (Papers and Proceedings) v.
89, n. 2: 116-122.
Discussion in The Wall Street Journal.
Michael Gort, Jeremy Greenwood, and Peter Rupert (January 1999), "Measuring the Rate of Technological Progress in Structures," Review of Economic Dynamics v. 2, n. 1: 207-230.
How much technological progress has there been in structures? An attempt is made to measure this using panel data on the age and rents for buildings. This data is interpreted through the eyes of a vintage capital model where buildings are replaced at some chosen periodicity. There appears to have been significant technological advance in structures that accounts for a major part of economic growth.
Keywords: Investment-specific technological progress;
economic growth; vintage capital; replacement problem; economic depreciation;
rent gradient.
Michael Gort,
Jeremy Greenwood, and Peter Rupert (1999), "How Much of Economic Growth is
Fueled by Investment-Specific Technological Progress?" Economic
Commentary.
Discovering how economies grow is vitally
important for economists and policymakers alike. This Commentary shows that
more than half of U.S. economic growth can be attributed to technological
advance in equipment and structures.
Thomas F. Cooley, Jeremy Greenwood, and Mehmet Yorukoglu (December 1997),
"The Replacement Problem," Journal of Monetary Economics v. 40, n. 3: 457-499.
A prototypical vintage capital model of
economic growth is developed, where the decision to replace old technologies
with new ones is modeled explicitly. Technological change is investment
specific. Depreciation in this environment is an economic, not a physical,
concept. The vintage capital economy's balanced-growth paths and transitional
dynamics are analyzed. The transitional dynamics are markedly different from
the standard neoclassical growth model.
Keywords: Investment-Specific Technological Change;
Vintage Capital; Economic Growth
Jeremy Greenwood (1997), The Third
Industrial Revolution: Technology, Productivity and Income Inequality, AEI
Studies on Understanding Inequality, Washington, DC. The AEI Press. Also
printed in the Economic Review, 1999, Federal Reserve Bank
of Cleveland.
Was 1974 a watershed? It was dawning of
the information age, a period of rapid technological advance associated with
the introduction of information technologies. It also was the start of a sharp
rise in income inequality and signaled the beginning of the productivity
slowdown. Were these phenomena related? Could they have been the result of an
Industrial Revolution associated with the introduction of information
technologies? The answer offered here is yes, and a simple theory connecting
the phenomena is outlined. Evidence is presented showing that the coincidence
of rapid technological change, widening inequality, and slowdowns in
productivity growth are not with out precedence in economic history. Just as
the steam engine shook 18th century England, and electricity rattled 19th
century America, it is argued that information technologies are rocking
the 20th century economy. (This paper is a nontechnical version of
"1974".)
Jeremy Greenwood, Zvi
Hercowitz, and Per Krusell
(June 1997), "Long-Run Implications of Investment-Specific Technological
Change," American Economic Review v. 87, n. 3: 342-362.
Jeremy Greenwood and Bruce D. Smith
(January 1997), "Financial Markets in Development, and the Development of
Financial Markets," Journal of Economic Dynamics and Control, v. 21, no. 1: 145-181.
What is the relationship between markets
and development? It is argued that markets promote growth, and that growth in
turn encourages the formation of markets. Two models with endogenous market
formation are presented to analyze this issue. The first examines the role that
financial markets - banks and stockmarkets - play in
allocating funds to the highest valued use in the economic system. It is shown
that intermediation will arise under weak conditions. The second focuses on the
role that markets play in supporting specialization in economic activity. The
consequences of perfect competition in market formation are highlighted.
Jeremy Greenwood and Mehmet
Yorukoglu (June 1997), "1974," Carnegie-Rochester
Conference Series on Public Policy, v. 46: 49-95.
Was 1974 a watershed? It saw an increase
in the rate of technological change in the production of new equipment. It was
the start of a sharp rise in income inequality. It signaled the beginning of
the productivity slowdown. Were these phenomena related? Could they have been
the result of an Industrial Revolution associated with the introduction of
information technologies?
Jeremy Greenwood, Glenn M. MacDonald,
and Guang-Jia Zhang (February 1996), "The
Cyclical Behavior of Job Creation and Job Destruction: A Sectoral
Model," Economic Theory, v. 7, no. 1: 95-112.
Three key features of the employment
process in the U.S. economy are that job creation is procyclical,
job destruction is countercyclical, and job creation is less volatile than job
destruction. These features are also found at the sectoral
(goods and services) level. The paper develops, calibrates and simulates a
two-sector general equilibrium model that includes both aggregate and sectoral shocks. The behavior of the model economy mimics
the job creation and destruction facts. A non-negligible amount of unemployment
arises due to the presence of aggregate and sectoral
shocks.
Jeremy Greenwood, Richard Rogerson, and Randall Wright (1995), "Household
Production in Real Business Cycle Theory," Frontiers of Business Cycle
Research (Editor, Thomas F. Cooley) Princeton University Press: 157-174.
This paper surveys the role of household
production in modern business cycle analysis.
Abridged version of the Paper
Jeremy Greenwood and Gregory W. Huffman
(April 1995), "On the Existence of Nonoptimal Equilibria," Journal of Economic Theory, v. 65,
no. 2: 611-623.
The question of the existence of a
stationary equilibrium for distorted versions of the standard neoclassical
growth model is addressed in this paper. The conditions presented guaranteeing
the existence of nontrivial equilibrium for the class of economies under study
are simple and intuitively appealing, while the existence proof developed is
elementary. Examples are given illustrating that economies with distortional
taxation, endogenous growth with externalities, and monopolistic competition
can all fit into the framework developed.
Paul Gomme and
Jeremy Greenwood (January-February 1995), "On the Cyclical Allocation of
Risk," Journal of Economic Dynamics and Control, v. 19, no. 1-2:
91-124.
A real business cycle model with two
types of agents, workers and entrepreneurs, is simulated to see if it can
account for some stylized facts characterizing postwar U.S. business cycle
fluctuations, such as the countercyclical movement of labor's share of income,
and the acyclical behavior of real wages. It can.
There exists an economy- wide market for contingent claims. On this market
workers purchase insurance from entrepreneurs, through optimal labor contracts,
against losses in income due to business cycle fluctuations. Insurance flows
protecting workers against aggregate cyclical risk are calculated to be less
than one percent of labor income.
Jeremy Greenwood and R. Preston McAfee
(February 1991), "Externalities and
Asymmetric Information," Quarterly Journal of Economics, v. CVI,
no. 1: 103-121.
Jeremy Greenwood and Zvi
Hercowitz (December 1991), "The Allocation of
Capital and Time Over the Business Cycle," Journal of Political
Economy, v. 99, no. 6: 1188-1214.
Jeremy Greenwood and Gregory W. Huffman
(April 1991), "Tax Analysis in a Real Business Cycle Model: On Measuring Harberger Triangles and Okun
Gaps," Journal of Monetary Economics, v. 27, n. 2: 167-190.
Jeremy Greenwood and Boyan Jovanovic (October 1990), "Financial Development, Growth, and the Distribution of Income," Journal of Political Economy, v. 98, n. 5: 1076-1107.
Jeremy Greenwood and Stephen D.
Williamson (May 1989), "International Financial Intermediation and
Aggregate Fluctuations under Alternative Exchange Rate Regimes," Journal
of Monetary Economics, v. 23, n. 3: 401-431.
Jeremy Greenwood, Zvi
Hercowitz and Gregory W. Huffman (June 1988),
"Investment, Capacity Utilization, and the Real Business Cycle," American
Economic Review, v. 78, n. 3: 402-417.
Jeremy Greenwood and Gregory W. Huffman
(March 1987), "A Dynamic Equilibrium Model of Inflation and
Unemployment," Journal of Monetary Economics.
Jeremy Greenwood and Kent P. Kimbrough
(June 1987), "Foreign Exchange Controls in a Black Market Economy," Journal
of Development Economics. v. 26, n. 1: 129-143.
Jeremy Greenwood (November 1983),
"Expectations, the Exchange Rate, and the Current Account,"
Journal of Monetary Economics, v. 12, n. 4: 543-569.
David Aschauer
and Jeremy Greenwood (October 1983), "A Further Exploration in the Theory
of Exchange Rate Regimes," Journal of Political Economy, v. 91, n.
5: 868-875.
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