We review recent evidence on price rigidity from themacroeconomics literature and discuss how this evidence is used to inform macroeconomic modeling. Sluggish price adjustment is a leading explanation for the large effects of demand shocks on output and, in particular, the effects of monetary policy on output. A recent influx of data on individual prices has greatly deepenedmacroeconomists’ und...

Entrepreneurship in Advanced and Developing Countries: A Microeconomic Perspective The purpose of this paper is to provide a contribution to the identification of the role of entrepreneurship in economic growth by mapping out: 1) alternative ways of looking at entrepreneurship, distinguishing ‘creative destruction’ from simple ‘turbulence’; 2) the different microeconomic determinants of new fir...

This paper offers a framework for analysing the economic drivers and effects of agrobiodiversity loss, focusing on in-situ conservation at both farm and landscape levels. We distinguish between the proximate and fundamental causes of biodiversity loss in terms of the decentralised (microeconomic) behaviour of farming households. Special attention is paid to the interplay between microeconomic d...

Microeconomic reforms were introduced from the mid-1980s to stem the slippage in growth in Australia’s productivity and living standards. Productivity growth more than doubled in the 1990s to reach a record high. A range of possible explanations for the productivity surge are examined in the paper. The three most plausible are microeconomic reforms; education and skills in the workforce; and th...

In recent years demographic aging and its consequences have been recognized and discussed on macroeconomic levels, such as health care system, infrastructure, housing and labour market. However, the consequences are not only present on the macroeconomic level but also affect microeconomic issues such as a firm's growth and workforce. This exploratory study realises a microeconomic issue and inv...

This paper proposes a novel model for the prediction of bank failures, on the basis of both macroeconomic and bank-specific microeconomic factors. As bank failures are rare, in the paper we apply a regression method based on extreme value theory, which turns out to be more effective than classical logistic regression models, as it better leverages the information in the tail of the default dist...

This chapter is a simple, rigorous, practically-oriented exposition of computable general equilibrium (CGE) modeling. The general algebraic framework of a CGE model is developed from microeconomic fundamentals, and employed to illustrate (i) how a model may be calibrated using the economic data in a social accounting matrix, (ii) how the resulting system of numerical equations may be solved for...

RAND Acknowledgements Banks acknowledges the financial support of the Leverhulme Trust through the research program 'The Changing Distribution of consumption, economic resources and the welfare of households'. Blundell would like to thank the ESRC Centre for the Microeconomic Analysis of Fiscal Policy. Smith's research was supported by a grant from the National Institute on Aging. This paper be...

The growth of electronic commerce is dependent upon the emergence of effective electronic payment systems. Whilst payments for large purchases can be made relatively easily using credit/debit cards, small-scale electronic commerce is constrained by the limited nature of existing e-cash (or ‘micropayments’) systems. This paper outlines the evolution of electronic payment systems, leading to an a...