This paper tests for downward nominal wage rigidity in markets for casual daily agricultural labor in a developing country context. I examine transitory shifts in labor demand, generated by rainfall shocks, in 600 Indian districts from 1956-2009. First, there is asymmetric adjustment: nominal wages rise in response to positive shocks but do not fall during droughts. Second, transitory positive shocks generate ratcheting: after they have dissipated, nominal wages do not adjust back down. Third, inflation moderates these effects, enabling downward real wage adjustments both during droughts and after positive shocks. Fourth, wage distortions generate employment distortions, creating boom and bust cycles: employment is 9% lower in the year after a transitory positive shock than if the positive shock had not occurred. Fifth, consistent with the misallocation of labor across farms, households with small landholdings increase labor supply to their own farms when they are rationed out of the external labor market. The results are not consistent with other transmission mechanisms, such as migration or capital accumulation. These findings indicate the presence of rigidities in a setting with few institutional constraints. Survey evidence suggests that workers and employers believe that nominal wage cuts are unfair and lead to effort reductions.I liek Tyler Cowen's comments and questions, too.
Vipul has already leaked this information, but: I've set up a Wordpress blog which automatically fetches my FB posts and saves them as draft blog posts. I'm trying this out as a way to (i) have a searchable archive of my FB posts, and (ii) occasionally review interesting posts and craft them into something more substantial.
Thanks to Vipul for letting me use his server space and setting up all the hosting stuff for me :)
Vipul on tying one's shoes on a moving walkway: "it's a zero-interest-rate non-expanding Ponzi scheme"- Michael Tontchev
Neat lil puzzle Julian likes to pose:
You’re at the airport, rushing toward your gate in hopes of catching your flight. You’re just reaching a moving walkway when you notice your shoe is untied. Assuming it is necessary for you to stop and spend around 20 seconds tying your shoe, which will get you to the gate faster:
a) Stopping before the moving walkway to tie your shoe, then resuming running from the beginning of the walkway, or
b) Stepping on the moving walkway, *then* stopping to tie your shoe, then resuming running from wherever you are on the walkway?
If, on the 1st of January 2016, the national currency of Greece is still the Euro, I will pay Alexander Biersack €3. Otherwise, Alexander will pay me €2.
The odds I've offered are as generous as they could have been given my low level of confidence :) I say this now and will not repeat it if and when I lose this bet, nor prior to it, especially if things are looking like I am going to lose.
Johnny Roccia’s amazing compliment giving proficiency is not just laudable in itself, but very likely reflects more fundamental, highly admirable and enviable qualities.
While I am yet to meet him in person (and boy do I look forward to that event), I am quite confident in my impression that Johnny is an extremely cheerful, nay, jovial character. I truly think this is one of the most desirable traits one can have, both in terms of ext- and int-ernalities. This bodes extremely well for his marriage, among other things, and I strongly congratulate all parties involved in it 🙂
Johnny is a great appreciater of good things. He is a great identifier and put-one’s-finger-on-er of the good in things 🙂 I also gather that he is extremely good at taking pleasure in things simple and complex, somber and naughty.
Might he be like a smart Andy Dwyer?
He is brilliant, of course, but I feel like this goes without saying 🙂 I am very lucky to have him among my inner Facebook circles. His posts and comments are a pleasure to read.
Not least because, as I have told him before, he is clearly one of the funniest people on my Facebook.