This paper develops a monopolistic competition model with heterogeneous firms to study the interaction between technology adoption and trade in a world of two countries facing different technology adoption costs. It shows that a reduction in the technology adoption cost in one country increases the productivity, induces more firms to adopt advanced technology, and improves welfare in this count...

Applied economists often wish to measure the effects of policy changes (like trade liberalization) or managerial decisions (like R&D expenditures or exporting) on firmlevel productivity patterns. But firm-level data on physical quantities of output, capital, and intermediate inputs are typically unobservable. Therefore, when constructing productivity measures, most analysts proxy these variable...

Empirical work has drawn attention to the high degree of productivity differences within industries, and its role in resource allocation. This paper examines the allocational efficiency of such markets. Productivity differences introduce two new sources of potential inefficiency: selection of the right distribution of firms and allocation of the right quantities across firms. We show that these...

This paper analyzes the impact of indexed wage contracts on inflation and social welfare in a Barro–Gordon model with state contingent monetary policy. Wage indexation reduces the inflation bias but may raise the variance of inflation rates. In social optimum wages are fully indexed to the price level, but this requires optimal wage adjustments to productivity shocks. If wage adjustments to pro...

This research aimed to evaluate sow welfare and identify potential welfare compromise in specific group housing systems for sows in New Zealand. The relationship between overall welfare outcome on-farm and sow productivity was also investigated. Twenty commercial farms were chosen to represent the spectrum of layouts and management practices of New Zealand pork producers. During a farm visit, h...

This study documents the costs of heroin addiction in the United States, both to the addict and society at large. Using a cost-of-illness approach, costs were estimated in four broad areas: medical care, lost productivity, crime, and social welfare. We estimate that the cost of heroin addiction in the United States was US$21.9 billion in 1996. Of these costs, productivity losses accounted for a...