Long-run water demand estimation: habits, adjustment dynamics and structural breaks

The Long-Run Demand for Labor and Adjustment Costs

In practice, it takes time—sometimes several years—for firms to increase their capital stocks (by investing in new plant and equipment) or reduce them (by selling off their capital at auction or not replacing it as it depreciates). Given that capital is such an important element of the production process, it is essential that economists understand the firm’s behavior both during the period when...

Adjustment Costs and Long Run Spatial Agglomerations1

We introduce knowledge spillovers as an externality in the production function of competitive firms operating in a finite spatial domain under adjustment costs. Spillovers are spatial as productive knowledge flows more easily among firms located nearby. When knowledge spillovers are not internalized by firms spatial agglomerations may emerge endogenously in a competitive equilibrium, however, t...

Household Water Demand Estimation

Learning, Structural Breaks, and Asset-Return Dynamics

This paper studies a representative-agent asset-pricing model of an endowment economy in which the agent has incomplete knowledge about exogenous stochastic endowment process and has incentive to learn about the process with adaptive learning rules. There is the well documented fact that when underlying economic environment is known and is common knowledge to investors, asset-pricing models und...

Trend Breaks, Long-Run Restrictions, and Contractionary Technology Improvements: Appendix

APPENDIX 1. DATA I follow Christiano, Eichenbaum, and Vigfusson (2003) and use BLS data on hours and labor productivity for the business economy. The BLS population data have occasional discrete jumps: When the BLS obtains new information on the population (e.g., at decennial censuses), it does not revise previous data. I use a series adjusted at the Federal Reserve Bank of Chicago that smoothe...