83
3TS13 sia o'iLxsiow siaa YDIJOq HUA$IT DID3TA5IT brunH .A mEt OO .o14 qE ribhoW HD5IA335I DIMOMODH 1O uAasIua JAMOITAT4 unvA fluaM OOI 8FJO AM bhdmf$D QQI iizndI Iuiqbd iv irf io1 bn 1qBrb 2icli othw 01 rn rn1ivfli iol nJ$m22o10 nD 01 1u11i ms I bEH r1iiX AniI 'irnuM !qqzdD 3viID 01 bicfbni rl3um 'cxcv mi I jloiiibbE RI .aIIfflfno3 rLnivA An&I1 oath I .q1d iidi iol io1T flog bn ionq £isthiH i51 ndol Ew1id2I £1o1 QQI rknEM rLJ i Jnqi3iruq irLo bn (21naauo2ib owl m) 2IdBrIV noT brth iixiU i1crui $IEIH4 lo riq i iqq ifIT .'1i2vinU noinh i bbrl rI51&mnoD IoodbnEH lorllw3 11 lo or1i lB biqx noirriqo 'dnA .1nmlvnI bris biT thflo 1Efl11f1I Ri minoiq .ri5I 3irnonooH lo uiiH IBnoiiBM r1i 1o or1i Ion bnE owl 01 Ion 1xI 1o 2noii trot! 2 brni 21rfh hA .ibnsiH .A rn1 d QI © © nibuhni 4ib13 hun i&D bthivoiq nokirrrrq 1i3iIqx luoriliw b1oup d ni Lq1lilq .31UO2 rfl 01 flV! i ,3i1OfI

i noiiibnosiq - NBER

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Page 1: i noiiibnosiq - NBER

3TS13 sia o'iLxsiow siaa

YDIJOq HUA$IT DID3TA5IT

brunH .A mEt

OO .o14 qE ribhoW

HD5IA335I DIMOMODH 1O uAasIua JAMOITAT4 unvA fluaM OOI

8FJO AM bhdmf$D QQI iizndI

Iuiqbd iv irf io1 bn 1qBrb 2icli othw 01 rn rn1ivfli iol nJ$m22o10 nD 01 1u11i ms I bEH r1iiX AniI 'irnuM !qqzdD 3viID 01 bicfbni rl3um 'cxcv mi I jloiiibbE RI .aIIfflfno3

rLnivA An&I1 oath I .q1d iidi iol io1T flog bn ionq £isthiH i51 ndol Ew1id2I £1o1

QQI rknEM rLJ i Jnqi3iruq irLo bn (21naauo2ib owl m) 2IdBrIV noT brth iixiU i1crui $IEIH4 lo riq i iqq ifIT .'1i2vinU noinh i bbrl rI51&mnoD IoodbnEH

lorllw3 11 lo or1i lB biqx noirriqo 'dnA .1nmlvnI bris biT thflo 1Efl11f1I Ri minoiq .ri5I 3irnonooH lo uiiH IBnoiiBM r1i 1o or1i Ion bnE

owl 01 Ion 1xI 1o 2noii trot! 2 brni 21rfh hA .ibnsiH .A rn1 d QI © © nibuhni 4ib13 hun i&D bthivoiq nokirrrrq 1i3iIqx luoriliw b1oup d ni Lq1lilq

.31UO2 rfl 01 flV! i ,3i1OfI

Page 2: i noiiibnosiq - NBER

OO 1qB nthoW $IHHM QQ1 u$u1d&I

YDLIO IaA$rF DIOTA5IT

TDA$ITflA

i '9i1oq 3bfni iit .zi!oq btt oilBffU2 no 5IUlB1ii! f1j 2WiV51 qq ir1T

gni'Iqmi aimi1 nwld qifLnoiiB15I 3x3iffLl2 B il1.s io 2noiiibno3 i&fi '3iIoq bB1l s b3ni1b

rfT .'1oqoi1o lo zniq rfi ni 3i1oq 3bii no s1hBmhq 22u3o1 soiIoq thini 3ilEfl 313ff1

3bBll ioI vilom lirnoijibbB ouboiini rrnfl nwi3d qif12noiiJ315t 3inn1 3Eth 2i inioq 'L I .iuinrri hnm 1113 iii hB rIi ai3fl itho bnE bEi lo rml vodE bn13 1vo 3iloq

io[ifri rIi niq norli howmii1 3!i5Iorft 3dn olqmi2 i riiu inioq 113in 21th tnnornb

rhiriw ru jbom "lhErrr biicIi r1i :fbom owl niw 'oi1oq bB1J ilB1J lo lIU21

biirli oi 'Ivi2u13x noilup ni boos rb lIoqx noiii$n nir1oqx owl ni 2rmfl 3ii2i1oqoiIo

ff313 Iii iqrrIo3 hinuo owl ni 2rrrlil rbidw iii Iborn "lIism lio1qi31" r1i bnB ;'(Iru1Jo3

o1uJ3rni loborn iii o3noi11ib lrLiL fl3rLi lnioq nwonI-I1w r1i AEm iqq dT .lhBm 1fflo

th skErIqrn at oiB iud ,noii133i1qmi oiIoq b131i iniYiib 1nbLhi ol ii vi n 3111 moil og13fn3 113111 inioq !133ruo laudoi

l3bnBla .A 3mEL 33l3mmoD lo '1fuoB9

rndmuloD rIiiiiH lo 'i13vinU SI TÔV .D.H ivuorwV

AUAVIAD 5I1H11 brIE

Page 3: i noiiibnosiq - NBER

1noiisuborinI .1

insisThb bn insbivs-Ms lstslqmos ion i "'(3iIOq sbini 3istda" mist srli o ninssm silT

3iloq sbii 3igsifihi2 enfleb I istqstb 2idi nI insisThb lidgil2 ni nrisi silt bsau SvEd 2md31sss1

asilqmi noiiiniisb idT .miit nsswisd qir1anoi1lsi Qigsisna £ aisils io noiiibno3 istli s3iloq sba1i 3d oi

noitsilqqs silt iol noiiibnosiq i as3sn s i amift nsowisd qislanoiislsi 3igstslia £ to 3)n3taixs silt isili

.3iloq sbatt 3isiS1ta lo

isisiia bsingoasi ',llsuium £ svsd twm annit tsdt nssm I qidanoiislsi 3isisii2 £ fl sib d bsis1Is Iisiib sil laum unit sno lo (atfto1q) a1toisq scli llsirno1 sioM .s3nsbnsqsbistni

3igsis1i .asv!sarnsrli arinit silt d boomsbnx ed taum ir1t bus aunit isilto 10 ae3ioff3 staita Isubivibni

assinu Loqonom siuq isbnu ion noitiisqmo3 izshsq lsbnu saiia ton siolslsdi bluow asi3iloq sbsit

sisloqio3ni ion sm o am noiiiisqmo3 3iieiloqonoM .noiislsbiarlo3 insfloqmi us 313W vzins lsiinsioq

iol aa) ion seob ltsziqi iud bsllsbom bus beisiqisini ai Ii wod no nibnsqsb noii3smini 3igeislia

buia silt oi ainuorns sisii bsnlIsb as 3iloq sbsn 3isisiia lthbio33A .((08Q!) nsmuiX ni slqmsxs

.1oqoi!o lo s3nsasiq silt in 3xIoq sbsi 10

isv nssd asd isrti sbnss fl3lssasl isbsoid a 10 flsq ax '3ilOq sbsii 3i3i51i2 lo a'Isns silT

oi tiluoa svsil ajaimono3e sbsii lnoitanistni bohsq audi isvO .aO8QI sib lo ninnigsd silt sania eviias

lsnoiisrnstni lo aialsna Iamiol sib oini noiiiisqmoa iaehsqmi lo amiol isilio bus loqoilo slsIocpoani

.airIs3noa iailoq bus sithalusi lsaniqms insfloqmi diiw iasino3 siam oi as os aiIoq sbaii bus sbsit

-auth as sbua snsmonsilq nislqxs (I8vii3sT15 ion bib noiiiteqmoa iashsq no beasd uoedi ebsut InoiixbsuT

bIis1 aisbom zfaua suorrnsritiu .asninuo3 islimia nsewted ebsui lo smulov ilid silt bus ebsut uiaubni

niaasuani Isvsl-miit as ilaua anoxisusbianoa inavsIsi-3i1oq inafloqmi smoa sisuoqloani 1lii1aasaaua 01

luIqisil isv aid uol bus usiqaib audi stiuw 01 sm niiivni uol nsmaaouD susO ol liñsisug ma I siot basH dhis)I insiI snuM slqqsdD svilD ot bsidsbni ibum sv ma I noiiibbs iii .ainsmrnoa bus iixiU ilasnivA luau oats I .qlsd uisdi udt uolaT iioaZ bus isansq2 susdusa asi. ndot swsiidaI

sansIsInoD AoodbnsH 1QQI ibusM silt is ainsqiainsq isibo bus (atnsaauaaib owl rn) astdsnsV noT .iiausvinU notsann is bisil

I

Page 4: i noiiibnosiq - NBER

massiarn Isvsl-tirift as fI3IJ2 anoiiS1sbLanoa lnsvels1-(3ifOq tnsfloqmi smos siSlOqlOafii lIu aasaaua 01

33fl1!IO 3fI&fli8I1 ntanwnoD .esnlvn 3igs1siia rrnfl-isini bns niob i1d gniinssl slaa 01 amulsi

anoiisailqmi gni1asisrni lisluaitisq svsd ol luo bsmui loqogi!O .noii!isqmoa lashsqmi asüupei saiqol

silT .ss,uiainis b*um isillo iebrw insssIq Ion sloi lsnoiiibba as no slsi 01 atIoq sbsii wo11 ii ssusasd

aislsiis sili 15iIB 01 noiinsvislni :ai1oq sbsil aigsisiia to lcliani aitsioedi-ems kiinea sill o sbssl

.iailoq sbsii iol slasd lnstloqmi as sd Ilsali nsa smifl aiiailoqoiIo nsewiscf noitasisini

moil aisThb iai1oq sbsn aigslsds ansi sill lo ssu aimsbsas sill saimonoae ni sasa sill nsflo si sA

iaiiI .aninssm lanilaib isilio owl lassi is asil ii 31511W sisdsb IEailiIoq ni be€u si ansi sill sw sill

sill 1bnoas .anoiisailqmi vxsiilim iasiib asit isdi ai1oq sbsil 01 axs1si ssmilsmoa ai1oq sbsii aietsi1a

sbsii si ai1oq sbsi aisisiia audi ;insfloqmi ml mnoia s as (1qmia bsaii aemilsinos si aisisiia ansi

sasifi 10 isdllisM .noass smos ,ol inslmqmi sd 01 1duoilt sis isili asidwbni tnswot beisgisi ai1oq

iulim anoiiinltsb ascl1 lo sno cf aisisii si isdi i1subni as duodh1 rsifruR bsisbianoa si anoiiinilsb

.sisrl beau sanea aiis,oedi smsg sill ni aisisiis ed osis

ssimixsm 01 bsmusas ed 111w sinsminsvo isdi ni svilsmion sd 11kw islqsrla itfi ni wadl silT

5mm d bsnimislsb ioivsdsd iisiti nivsd nsrfi sdisi sis1Isw aimonoas lsnoiisri lo suassm smos

10 miqsdD ni beisvo si monoas Isaiiiloq .niddo1 io niiov as ilaiia anoilas Isubivibni lsinsmsbniiI

Ion seob ieiqsda audi svods nsvi iaitoq sbsii aisis1ia lo noiiinfteb sill d bsilqmi sA .smulov sill

sbsfl lo aia1sns sviiiaoq sll no nibliijfl .noiliisqmoa aiisiloqonom lo sarisasiq sill ni ai1oq sbsil xsvoa

smos lo aia1sns sisdwsa1s bns (8QI) nsmiriN bns nsmqlsH ni noiiiisqmoa aiiailoqonom isbnu

osls isiqsda skill' .(IQQI) isiasansJ bns (V8QI) ssldsnsV ni bnuol sd nsa asuaai ai1oq sbsil beisiaoaas

d betisis] sinsminsvo nsswisd anoiiassini aisisiis siuq no s,iflsisiil Isiinsiadua sili isvoa Ion asob

ilauM .1siins bsaasqqua io sviiiisqmoa 1iaóhsq isdiie si oivsdsd lsvsl-anil daidw ni [(.lQ1) noanilot

.(8Ql) nslliMaM ni bewsivsi si (aO8QI-bim sill 01 qu) seis idi ni lshsism sill lo

ai1 lIt/I s sbivoiq 01 iqmsns ion 111w I isdi bisil beevius livasd a thus si ai1oq sbsii aisisn

Page 5: i noiiibnosiq - NBER

dmiw 8di aivni 01 diw on evsd I bits eielqmo3ni sd Isius bluow iqmsns ibu '(nE zs svius xeilise b

nsniqlsH bits 1(V8!) nssngin)I (8Q1) iixiU ebubni 2wsivisvo iihs beib 1ebiW .ssodius bebubxe lo

esh lo ssmulov suoiveiq edl eisdw 3itoq ebsil 10 ssisvo3 21i snisd isiqsib aidT .(Q8QI) nsmin)I bits

bedsilduq iedio diiw qshevo emos si etsifi o 81 ni Ito fiel &imono lsnoiisznsinl lo foodbnsH

noiii2Oqxe nitseietni bits 83sw33s 1se13 £ 3 lqmsiis tsd m nim1bo 03 noilibba ni ievewoH .2viu2

noiisi3neieThb 3wboiq iasel is to bebbs eu1v 3ns1tini2 ebivrnq 03 ?iIees ieiqsrb sub assbi nism edt lo

.anoianemib Isieves ni

ieihse iii b8SSu3Sib si nsdi Isheism ine38l siom ebubni 01 3inutIoqqo woivdo edt vd I 3ii1

eveiled I Mow beclsilduq insvelei Ifs nuiia 0382013 eisdwns emo ion seob leiqsd3 sub IidW .sevius

beiqobs 3iqoi edt lo noilinileb wonsa his1 edi nidjiw 1eiuisielil 8(13 03 ebiu eisIqmo3 eiom £ 2131 isift

ems effi no aiasdqme eiom isdwemoa si esd3 '1bno .a8v1ua aIJoiveq flu eldsliavs 21 ff2111 eied

vwa gnuisixe elidw llsni .s'evwa iedio isom iii nszb 3i1oq ebaii 3ieis1i2 10 8Th331n32 31381o3d3

I3nei3ffliJa £ ebivoiq 0321 evil3ejdo (m evi3q113aeb iev 03 1sind3e3 Idgid mrnl aleve! lo egnsi £ 18V03

ioifi 81)213 lo egbelwonl 31u135q2 shill (131w inebuia s*ubsi 1s8-321ft £ isili insmlse,i 3i51d8fs belisieb

itoq ebsii 3igeislia lo aia1sns bus noiislurrnob Is3irnf3ei sib ni tibIa 8(1102 qoisvsb 11S3 iosif3 emsg to

.ievi3qi132eb Ie1iJq (111w Ihssb si Isiislsm smoa ievswod a3f1ia13af1o3 83S2 03 euU .sisboni

E ff013382 .vjifoq ebsii 3igeislsa 1o elul3Inia 3138108(13 erns 3122d 8(13 at beloveb si no13382

SSflinUO3 owl mOll aleiioqxe 3iiai1oqOiio 1svii tbidw ni jebom "ie*tsm-biiiti" 8111 SS o3 s1si I isiiw iuo

ixsino3 sub ni beqoleveb si Iebom asibiadus floqxe 3igeislia 312511 silT .ieiism blirli £ 111 ino eieqmo3

-Is3olqi3eI 8113 ainsaeiq . ff013382 .anoiznelxs bits anoiisoflulsup insfloqmi siom sib loemnoa (111w gnols

sub it! .asillfluO3 owl esodi ni eleqmo3 ashlnuo3 owl ni smut oi3ai1oqoi1o 113111w iii Isbom aJs*fsm

aweivei 11013382 .belebiano3 em a3nsmuuisii isilio bits seibiadus flhsi niftida-3nsi 3igslsna 3xeino3

anoii3sftsI Isitft 2(1153(103 ff013382 bits 3i1oq 81)513 3iels132 10 anoitslumia bslsudiis3 iojsm edt lo smos

.th&IISI gnibul3noo bits

Page 6: i noiiibnosiq - NBER

a11oq ebaT 3ietsii 10 sluj3InjZ 3üelosdT emaE) edT . vioedt em evitrieqoo3-non lo noiti1qqa n llinsmthnu1 ai iloq sbaii igeisIta 10 bifla edT

muhdiliupe Idne edt as [(OQ1) dasM d benfleb taifi as] muhdiliupe dasM edt aeau eio1eedt bns

ot Iuleau sit! [.(!QQ!) sloilT bus edaebu si ioedt ems no eneie1ei Isiene boos A] .iqeanoz

at3elea i iesIq ibse d3idw ni aiesIq n chiw emsg £ iebianoD .sisd muhdiliupe dSS14 edt enileb I1snno1

noii3nul 11osq eimixsm Ievi1s1sqoo3non bus Iinsbnsqebni ot as os '2 tea eisiia moil 'a etsfla

d358 d beieIea eno asigetsi1a lo otev eldiasel a sd (a k...

"a 3I) = a teJ •(fl51••• a aYt

ieve bus i iesIq eve io1 1i muiidiliupe ifasM £ ed ot bsnflsb si aeietsiis lo iotev aidT .ies1q

ei0fI3 getsi1a eldiaaoq

(1) ('s (i-)'s)'i � (a)'w

inemetsia inelaviupe nA .i is'sIq iqeoxe ams1q us 1o aeigsisIia edt lo gnitaiano3 loi3ev a si (i-)'s eiedw

etsiia a'iesIq ibse tadt tbua aeigelsita esooda aiesIq ha nedw aeaiis muhdifiupe dasM edt isdt si

.aiesIq isdto d nsaofb aeietsiia edt nevig 11osq aies1q isdr aesimixsm

a ni lanoitsi £ ma I II .iqeanoa 1i1anoiisi £ 55 beweiv ed ns muiidiliilpe ilasM edT

bns 'sIq hliw s1vh m aeigetaia isdw etsqbiins ot d bluoda I ,eiana ',m gniiaelea ni emag aigetsits

ioivsded m elsqiaiins oignii1eis edt taut singoae oa1 bhioda I .lgnibioaas ge1aiia ised sm iaeles

I bus sidt eingoae I wod edt tufi .ioivsded iierfi sisqiaiins ot gnhit ma I Isdi womi edt isdt bus

aseigel etinilni aidt ot noituloa tnetaianoa £ 2131 eupinu 21 muhdihiupe clasM edt II .ate woml edt womi

geisna edt as1q ieslq ibse taut neqoiq "aeaiicpua on" edt sad muiidihiupe dasM edt aurfT .meldoiq

nsa aeigelsiia edt Jsdt eanea edt ni Isieneg iev si muiidiliupe riasM edT .aies1q iedto edt d beiaqiailns

noiaiaeb titusup io eaiiq toula-eno a as claus evom signia £ ed idgim sgeis1ia A .asw nsm ni benfleb ed

.ioivsdsd inegnitnoa b nba srnoa gnidiiaasb elm xelqmoa a ed tdgim ii io mill a d iilsnoiisi lo noiion edt eiuiqsa lM ot tneiai'flua ton si enols neqo1q anetaianoa chasM edT

ai mill lsnoiisnithmim A .ecnsg gniwohlol edt iebienoD .eiulauiia lsitneupea £ dtiw semsg ni llsiaeqas

Page 7: i noiiibnosiq - NBER

silt 101 ff0115301 sldisth1 isilto Ofi 1 sisilT .iiuuo3 tod lsitasioq £ ff1 tnslq visit s gnibliud *nhsbino3

.cbss 01 lo 3ilsnsd lsn svissi bluow viinuo3 laoil sill bus mill sill lns1q sib thliud itnit sib tI .lnslq

(1 ol) d illsusd a'nrilt sift fli2ls1 lnsminsvo silt moil to biadua £ sIil bluow unit sib isvswoH

biadua £ unit silt svi 01 isilisilw asbksb 3rismirtsvo iii iaii1 2 d sisllsw 3iiasmob nhswol bus

sifl' .unio1 svianstxs ni srns auth aslatraulli I siuil .inslq sib bliud or isrfisilw asblsb unit silt usd1

rinfl sill 01 bits tnsmrnsvo sill 01 ai1osq sill sts3ibni ssit sms sill to moflocl sill Is aisdmun

.anoit3s to noilsnidmo3 sldiaaoq tbse moit 3niwolloI levil3sqas1

tsill wonA bits merit aworrA isis1q ibse .s.i) sbe1wom1 nommo sd 01 bsmuaas sis a11osq silT

mill sib bus lnsmmsvo sill anoit3s iisift nbls1 lluts or ioFiq .(.31s rnsifl awomf iss1q isibo sib

tiasl4 sno a! .smsg silt ni siidhliups ilasM owl sis sisilT .asigslstis Ilrtsvo iisilt no sbbsb 1aijoeusl1umis

luslq sill bliud" :ai gsts11a z'rrnll sill bus ,

"biadua on isfto" :ai sisiia stneminsvog sill muhdi1iilps

:sd 01 gsisila a'insminsvo sill idt si mundiliupe ilasM isillo silT ".biadua sill is sw ion io isilisrfw

sill bliud ton ob bus biedua £ is sw Ii tnslq sib bliuid" sd 01 stsiIs s'rnuii sill ioI "bisdua s sbivotq"

"biadua £ is ton ob sw ti lnslq

to nsq sd inslq sill nib1iud Ion n& woH .bbo amsss thdiliups ilasM owl sasib to bno3ss sill'

airll iii isib si iewans sill' Vbliud ot islsiq a'sw1 bluow mill sill nsrlw sisila mijhdiliups a'nnit sill

smsg sill to risq di saijs3sd lnsIq sill ogsio1 01 noqu bslls3 (11sut3s isvsn si unit sill muiidiliups ilasM

tssiib "muFidhliups-to-luo" us sit! .muiidiliups silt to flsq as bssIq Ion si asaiis lssiifi sib l3iilw isbnu

.aissiilt ilous to SIIJISII sib asnilqi3aib 10513111551 tsib tqs3no3 miJndiliups ilasM silt ni niillon si sisib bits

gnbfsT .(1) noilibnoa taiIsa muiidiliijps suIt lot bsaoqoiq asislsila sill tsill awoil noiI3sqaiIi liitsisD

.sisivsb or svilns3ni as sail isa1q isdhisn nsv!g as iss1q isillo sill to slsita bssoqoiq sill

sill lsdl silsei bluorla lnsrnrnsvo sill as lxs1no3 audi ni lanoilsni amsea biadua a gnivi lufi

clasH sill bnosd sso Isnoitani si sill ilw tijocls noitiulni luo isvswoH .bliucl sw1s 111w miii

Page 8: i noiiibnosiq - NBER

E!äI1LG 4

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DO UO pniq

EIKIAI

1O 10

COAEI*IIAIEII.L

oo

DO UO Pfl!IC

vo 3np2q1

2a12

nqBn'Iq

np2qX

Page 9: i noiiibnosiq - NBER

88$2 31b ni s!dibel3 ed bluoda aisub muhdiffupe-Io-iuo nave mill ssbi sill asisloqlo3ni bits muiidhliups

insmeiiupei idT .o ob 01 noqu b1ls3 Ii issiili & iuo vns ot nilliw sd HsW3s bhjodz issIq £ isrb

d bssoqoiq 1iiI] noii3shsq smsdu 03 rnslsviups zi ii .iilsnoi1si lsiinsupsa iol isaszsn unssa

mdi tieqoiq sib svsd iaiim sms Hilt sill ioI gs1sii muhdiliups its isill nssm 113111w [(Q1) nsi1s

sdllsali laum (asntsgdua rnuhdiliups-Io-iuo nibubni) smsdua isvs ni sisiia sill lo lnsnoqmo3 11355

is gniflsl2 .noii3ubni blswl3sd d bsaoqmi ed ns noiiibno3 alilT .smsdij sili 111 muhdiliups dasM s

mill Ii ob bluow isslq ibss isdw gnblas abiswbsd tiow Sw ssii sms sill lo rbnsid 11355 lo bits sill

iswol lo asmosiuo sib sisqi3llns 1i3sno3 2isslq isihss Isril emuaas eW .bsil3ssl siew smsg sill lo nsq

.13s1isq emnsgdua sd 111w shdiliups dasM nivivtua nA .eefl emsg sift qu evom ew as asmsgdua lsvsl

3111 bits nevig Si biadua on tsdi si muiidiliups dasM ninismsi !no sill svods bsaauoaib sIqml3xs sill it!

.swns abliud unit

sis s11osq a'tnsmInsvo silT .rnsInfrlsvog 3itasmob s bits amiFt owl iliiw srns s lsbianoz) woM

ai1oq sbsii smos slstisbnu sm lnsmrnsvog silT .sisllsw 3ilasmob 01 Isups sd 01 nslsl siolsd as

isili smusas sldiaaoq as slqmia as lnioq sill sisijaulli oT .nsvieini 01 Ion 5500113 sm Ii IO nOilflsvisiffl

lnsrnfnsvog sill' .sldslisvs noilnsvislni lo assisb 1snoils13aib on 1131w 53io113 isnid sisi3aib £ Si alift

auoiisv sift moil niahs smut sill ol aT1osq sub asnsrb ii asnsvisini ii 1! .aiinit sdi siolsd asvom

nA .anoii3s usd1 ssooil3 lauosnslIumia nsrll arrnft silT .arnuit ecu cu anoiIs lo anoiisnidmo3 eldisaoq

03 Ion uo snevuslni 01 9500113 sm lnsmnusvo edT . siui1 ui beisuiaulli si sms £ d3IJa lo slqmsxs

sill bits anrii't sib 01 sTtosq sill awoda xiulsm bnsil ldh sill usd1 snsvistni Ion asob Ii 11 .snsvislni

ns3 unit bus x uo lx s1q sm x nni1 .amuil sill d ff350113 ssisIsulz sib to noil3rniIs as insmmnsvo

bno3sa sill x miii 01 Ttosq silai usdmun taut sdi xhism 11osq sib lo 1153 11355 it! . uo l slq

ni lq ldoM 4QQI dJ lo 1i'naaiH ndol 1131w nola anniw-o3 stew nelIe2 lndnie$1 bnn daal4 ndol. £

aaw noiludhlnoo main a'IIaaM .anoila3ilqqa 31monoie all bni tood3 maa th *iow nheenoiq usd3 tol a3IInonoo3 usilto bna noii3eheq smnagdua lo lnsmqolsveb cdl tol lsial betonod saw IISIISZ bits muhdiliupe dasM cdi

.aiqc3noo "liteinenitsi"

Page 10: i noiiibnosiq - NBER

3iJasmob .s.i) 3nsmrrisvo sift ot Ytoq sift i iedmun built sift bn2 unit 03 iloaq sift 21 isdmun

lI .xhism bnsd-flsl 8113 d nsvi sis aiiosq silt usd3 snsvisini o3 asaooda ftismnusvo silt U .(susilsw

"tuqflso wol" sd tdgim asigstsuia easdt usd3 unit ngisioI £ siew unit bus miii 3itasmob £ sisw x mull

. no Thusi £ 10 x unit 03 biadua £ sAil gniiftsmoe sif iifim noi3nsvis3ni silt bus "tuqiuo diif" bus

.i3shsq emsdua al noituloa silt isdt aniiuath noii3ubni Inswbsd d bsvloa ed ns emsg aicIT

(berw33o asd noitnsvisjni 3nsmrnsvo on sisdw .s.i) xhism bnaif-td3ii sift ni asvlsamsdt bull arinit ii

mill ii : mull id! s3suta tusnimob £ 21 as ussa liass al alilT .1153 3diu Isqqu sift sd 111w noiiuloa sib

usd3 x aeaooif3 x unit ii bus ; unit ot I usd3 iedtsi ab1eh io s3iofb edt usd3 lx asaooib x

saood ol at oh ns x mill iasd silt saoozb 1nist1e3 bluoda unit sA . unit 03 0 usili isilisu I ab1si

bluow flosq a'1nsmmnevo silT .x saoif3 31 ii isTlua bluow ii lo asol silt 1111mb usilisu 0 ninis3do ,

Ix

.noituloa edt ts 0 sd

x xhtsm TIosq busd-ftsl silt d betnszeiqsi smsgdua sift III 818W ammni't biisif usilto sift no 11

aao1 a biovs ot as os I saooif3 1nib1o33s bluow mill bus x mull udi gstsuia tnsnimob £ sif bluow

unit id! sif bluow aflosq sifT .noiiufoa silt as (Aaiusizs us d bsisaibni oals) 1183 ff51 uswol edt gnib1ei

tsift awollol usd311 , siui1 qu abuswA3sd gnbhoW .insminevo 3iiasmob silt ioI bus mill id! 0 x emsgdua £ 21 aiclT .0 usd3 isilisu sif bluow ilosq au as jioiinsvisini 5200113 bluow 1nsmmnsvo sib

noit3ljbni buswiosd silt isdi stoM .sms ussIq- sift iii mundifiups ifasM (Isnoitsi llsi3nsupea uo) t3ehsq

.28310113 au io if3113 ot 33681 bluow annit wod asuaqi3Iuns 1t3sTIo3 insmfnsvog silt usd3 asmuasuq aasoiq

Tlosq bnsd 11sf sift iii flea isvs tauiI .msigsib aidt tuods sism 03 atnioq ISIeVs2 ets sisilT

aidT .xiuism bnsd tilii silt ni 1153 gnibnoqasnoa edt usd3 11osq susllsw aitasmob iswol £ asif xiuism

noitsnidmoa (gsusuta nsvi ns no Isnoitibnoa :sansa tasuib £ ii f3aoa 211101332 3nsmnusvo tsdi anssm

tilsusif Isnoitsu silT .noii3s tnsmmnsvo lo 31usi a as iswof ed bfuow suslIsw Isnoitsu amult owt silt d owt sdt nsswtsd noit3sustni ais3suta edt isils 03 tilids a'3nenunsvo siftio sausaed 1sui3ns tuoda 28(1103

V

Page 11: i noiiibnosiq - NBER

E!anLe5

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Page 12: i noiiibnosiq - NBER

3nsmrnsvo 1o s3n82d sib ni bliiow srh zuuli asioib 3isii3 3nsisThb s1&n 03 msift nibieI anrxft

.(3iIoq sL13 10 3fl513ffl8fl! 33511b 5111 2382t10 LISIII 51001 523 21113 £11 3335 3i83E132 2u1T .3iIoq

11imi2 i smg 2idT .ninoa,si iib fo 3iIisnsg 1i3ns3oq sib 2i siasdqms 03 inioq bno3s2 silT

2sibiadua tioqxs ais3132 sib bnidsd ninoasi sib siiwIli ol bsnBi2sb (8Ql) nEmu1)I iii xiflsm sill 03

sib 3ziiiasi 36111 eIqi3nilq iii niibon 21 sisib isvswoH .R8QI) ls3nsqZ bits lsbnslfl iii bslsns

(V8QI) nsmgthX ni bsmuaaa 23ftbsqs isibo sill b ns 03 io 1oo3 3iIoq £ s 2sibiadu2 lloqxs 03 gotnoassi

aThis3 sri iifgim noiiasijp ni tool 3i1oq sill Isill snigsmi bluo3 snO .(8Ql) ls3nsqZ bits lsbnsifl io

isift atnsminiani ailoq lo sgnsi sbiw £10300 ns to asibiadua UI a3nisi3asi floqxs is3oulov as3oup

luods lsluQinsq ni gnidlon bemijaas svsf sw s1onnsdflhJI .annft 3naiIoqogito lo a11osq sill islis n&e

.ars sis sldshsv s3iod3 'uniIt lsdw msib anwo odw betso1 sis aririfi sill siedw

beau sq'3 sib lo siulainla I1osq £ 03 eth evig bluo3 anoiishsv sssdi lo ifs Isill auoivdo Ion ai I!

linufloqqo its aslse arrnfl nsswlsd noil3slsIni 3Jge3s132 l&ii rilgiaiii 31 asd sib isvswoH .slqmsxs eu ni

srti lo eiulsn saieiq silT .iaijdoi isv ai aoil3lnslni isdi lo amlel eu vjtibom 01 noii3s inslnlnsvog iol

.siulawiia Isbom gnilsbnii sib lo afli3sqa sili 03 eviliansa (I8V isvswod ai noi3s itoq beilqmi

slolsd s3iod3 3ilOq all 03 limmo3 (Idib513 063 lnsmnlsvog sill 15111 21 noilqmuaas (Isaas3sn enO

ai!oq all 0.3 11010103 loll bIIJo3 insmlrlsvog sib 1181311 nsvig emsg sib it! .23310(13 lisib sAsm annfl sill

5300 .oa ob 01 sviins3ni aoq xe its evsd bluow ii noi33s 3iIoq 211 no sgsne 03 noiliaoq s iii asw bits

bits 3i1oq all wsibibiw 03 sAil blijow lnsmfnsvog sill 1 nsao± asil croft bits x nsaoib asil x cmii

lo bsslani E al (flosq ati) s11sw lsnoitsmi sisdw xhism bosmi high sill lo sirio list iswol sib 03 leg

1x bslsa bluow x onit bits saooff3 fisfil bluow i nnil .aiib slsqi3iins bltiow 201111 lsnoils$L S

lo ssigsb smoa sliupsi ssiaitoq sbsil 3IgslsliZ .mijiiduliups iainoilnsvtslni-non sib 03 go iflevel

sill flu taut asvom lnsmmnsvog sib isili noitqmuaas sill d betaslisu as ainemmnsvog d lnsmhirnrnoaeuq

insmiimmoa lo floa smoa svsil neilo ainerrurxevog lsib sldiwslq Ii boil ausvisado laoM .8511 smsg

.noilaeuib usibo sill ni cnn sm ulsmmas sib ifaidw 01 25853 101 fists sri 03 Insfloqmi 8131 lud sgsinsvbs

8

Page 13: i noiiibnosiq - NBER

l8boM "isiiaM-biidT" a ni 2eibi2duZ noqx3 gniftiftZ-ifloi .F

'1oqouU JoirwoD l5bnU aibiadu2 floqxa 1.

ins nsvno as beilbsqe liisiiidis nssd vaii a1losq 'annll is1 oa nevig asfqmsxs edi a!

a! .a11osq sasib 03 sth asvi iadi e1uiinia gnhhsbmi sdt Isbom 03 iaaas3sn 82iU03 lo ai II .aisdmun

',1oqoi1o lo wsivsi slclsulsv A .llsati foqogi1o lo 5113 01 noiinslia smoa sq 03 bssn sw flork

.(88Q1) stouT ai 1oodixsi 1svs1-siaubai biabasia a baa (QBQI) ouiqad2 ni bnuol sd 1123 iosdi

IsboM ioinuoD sifT 1.1.

10 Iebom (8XI) iomuoD sth lo sau aslsm niiThfa-illoiq 3igsialra 10 aia1ans sift 10 Il3uM

a gniaiibouq arinil a sia susili smuaaA .awollol as iuo Isa sd 1153 ibidw ioivasbd 3iiailoqogilo

baa bstonsb ai illouq eodw x mull b51153 mifl sviiatnsasiqsi £ isbiar!o3 baa i3ubouq aioensomod

isifto sviiainsasiqsu £ baa Y iuqiuo aeua s3ubouq arinfl 1-n usrlio silT .x bsionsb 21 iuqiuo saoifw

21 x mill lo ffiouq sifT . iuqiuo asoubouq mill

() - (Y + x)qx = (Y;x)w

arirn .32o3 21 D baa (niqo1a-buswnwob sif ol bsmuaaa) noii3nlil bnsmsb eausvni uo s3iq sifi 21 q susdw

all simixam 03 aissa mull 11353 .alsvsl iuqluo usvo anoiabsb ioila-siio wosnsllumia insbnsqsbni siam

noiiibno3 ustno tauft sift x ot t3sqasu ffiiw nsiai svitavhsb a sionsb ol x tqiu3adua a niaU .iflouq nwo

at () lo noilaximixam rftiw beiai3oaaa

(E) O= D-q+'qx=w noiiibnoz usbuo bno3sa bsiai3oaaa 1131w

(4)

ioiriuoD a tadi useb ii asiam () noiiibnoz usbuo lauH D - "qx + 'q = T 8aS3 itfi flu sisdw

a'usa1q cbae 113111w iii sasa sift uol (1) d bsilqmi ei () as aiuqiuo ni muiuditiups rfaaM a at muiudiliups

-wosnailumia ioda-siio £ ni saubouq idim ii asiiitnsup iuqluo sldiaaoq lo isa sifi 1qmia at isa s3au1a

ns iadi neqouq iilanoilai "asaiiquua on" smaa sift asif suolsusdi muiudi1iips loinuoD sifT .sma svom

Page 14: i noiiibnosiq - NBER

rnNimixm-tflo1q 81ft io1 Iqi3nhq ni bvIo sd blilo3 () noiiibno3 isbo iiiq .a&f miiiidiliupe rkM

sdi ai noii3ntft li3ilqmi ni1Iui 2idT .arrnfl ierfio 5di d 233i0d3 iIJqJuo 10 182 nsvig io1 x lo eeiocb

anoil3nuI sznoqasi-taed it scfi lo noieisrni nommo edT t.noirnu1 noq2s-xed to noii3nu1 noi1e1

.muiidiIiipe iotrwoD edi i (nniI ibe ioI sno)

eiuti1du2 3ieiwIiZ .! .€

sill lo noi,!he3aIEfb edt 01 1i1ins3 ed 01 liio rnui isilt noilibno3 1hs1uei Isnoiiibbs nA

.niwollo1 eu ei mijhdiliupe 1oniuoD

() O >

issnif nibu13ni) aevw bnsmeb xevnonon ils iol thlod uoivdo noitibno3 21ff!' .

"qx + 'q = eisdw

lo eineqoiq 'nsm ol beinil 21 () noitibnoD .xsvnO3 18V 21 basmeb Ii bsisloiv ed flS3 ii lud (bnsmsb

mill isillo ns lo iuqtlJo edt s enuI3eb eunevei Isniism 2'mlIt rbse isili nsem II .lebom lornuoD sill

.2mainsd3em lnerniwjbs oimsnb be2oqoiq nisflea iol noilibno3 iitidsi2 ndsH be!Ise—o2 sill 21 II .ash

nA .a3imSnl(b emi1-fei on dtiw sm 3i1s12 ioil-sno i Isbom lornuoD siuq sill isili isvswod s1oM)

sis 2noiflbno3 iebio bnos2 lsth nimusi'I (.lsbom silt oi noi2netxe ns i tnsmi2ulbs 3imsnb be2oqoiq

io'1 noiiibno3 obisliM-elsD silt 0215 i ixsinoo 21111 iii () lo noit3s12its Isdolg bsft2i1s2 1Isdolg

3i1532 svilsisqmoa wonsv IsdI siune o215 () noiiibnoD .muiidiliupe iocnuoD edt 'io 22SflSUPUW

.[(ÔSQ!) jixia se2] ."bevsdsd-Ifsw" sis febom sill lo aeitIsqolq

s sslulit2dus 3igelsiis sis bits x 2elclshsv geisi1a Isdi nsem () noiiibno3 11nstioqmi i2oM

eulsv Isnigism sill snsem situ O > II .(8Q1) ieisqmel)I bits suoloqo1snssZ) woIu8 cf benfleb

sniT .sszseiznii lsvFi £ lo eldsiisv gs1aiis edt ntlw aessweb eldthsv ge1siis S'X mill gnisseini lo

noitasi silT .lanoiloa '15wq i noLI3mft eanoqsi-3sd edt ni beibodme noiiasi io eenoqri5l sift taili sloM5

emiqa3 1isvewod 1Ion asob 1! .noibelee gsiait2 au "ifguotdl dniift" mill a wod gni-zsbianoo iol hilsau ai noit3mft 01 tthutioqqo na svad Jon ob aisalq emag loda-eno evom woenatfumia a it! .noibasr bna noiJQa emit-Iast na

luqJuo sill gnivisado sto1ed ,as3iod3 tuqluo ajjoenaulumia siam aunli lsbom JomuoD silt nI .asvom a1nvh 01

sia aftoaq Jsiwn silt 1a31301 taulba asohq bs1asvsi 1auosn&t1umia sia alevel Iuqluo sasdi neilt a1nvn lo 85310113

.abns smag sill boa sbarn

0!

Page 15: i noiiibnosiq - NBER

noil3mñ s2noqs-tsd sift .s.i) x lo suIv noqsi-1sd sift subsi bluow Di SZ13D1 n 1zdi siIqmi

bhiow bnz x askMiisv nsdi ,O < bnsii zstho sill no 1I .(niqol2-b1Ewnwob 21 X unit ioI

eanoqaei-tasd eu s8i1 bluow ni saasz3ni n iai11 52fl52 sill ni x urift iol "1iIem5lqffIo3 3igstSli2" 3d

.32 £ ibu2 Di niqol2-bmwqu sd bluow x mill iol noibnul sanoqasi-1sd sifT .x lo sulsv

IsboM shsM-biidT silT .1.E

"lsiism-biidi" £ oini loqoub loinijoD Isnoilsinsini its belsloqlo3ni (8Ql) isansq bits isbnsia

daidw Di sno al lsbom isiism-Inidl A .3itoq sbsii 3islsila lo noilsilanomeb nbIiila £ ebivoiq 01 lsbom

lno sisqmo3 iimJoa nieid1 s moft arinit siom iO sf0 bits (IlnuO3 3ilasmob £ moil arinil siom io sno

iisv sd 01 luo ainul noiis3fltlqrrna silT .floqxe idl !no s3ubolq sioleisill amill sasilT .iskism bull £ Dl

istism-buidl bits rniol siuq 111 11352 3d 01 asi3ilOq sbsi ff151153 lo 2135T15 3i5i51l2 sill niwolls lii liitsaii

ailasmob £ 1lsbom lsiusm-buill £ nI .siulauelil eli ni beau 1svianslxs nssd suolsusill svd alebom

uo aIIhsl iloqmi uol sqoas on si sueli .s.i) nrill nisuo1 s usbniil I1aeuib ol gnirfton ob nsa lnsminevo

ailasmob £ qled 01 si laelle taeuib 52011W biadua luoqxs us si lsbiano3 01 iai1oq lsu01sn sill bits (asloup

.lsvii niio1 au aiv-s-aiv unit

lnsmfrisvo aasmob sill! ssla it! .assla owl 10 auaisnoa Isbom sill lo suulainla Isilnsupea sIT

liJqluo ssooib iIwoensiIijmis annit nisio1 bits aiiesmob sill es1a ii! .linu usq a lo lsvsl biadua £ aisa

dasM lnoilsu Hsi1nsupea no aijaol 03 noi1ubni buswlasd gniaTi .ls*zsm bull sill uol lsvsl (rioqxs uo)

.tauft sms sill 10 ssla bnoasa sill usbianoa sw sms IILII sift uol shdlliupe

aailsl2 svilsisqmoD bits aluqluO muiudiliijp3 sgsi

beau ed nsa uodsJ .,odsl 2S 01 berislsi ulnuo3 11355 iii noiiauboiq lo uol3sl signia £ al susilT

sift ni ausmuanoD .1 saiuq iftiw boos suistemun £ saubcnq 01 beau ed nsa ii to tolasa 1oqoilo sift ni

usbrn bsaubouq si boos suisusmun sill' .boog stistsmun sift lno smuanoa ashlnio ailasmob bits nisuo1

suisismun sill ni iivil3IJbo1q smsa sill asil toils! bits elsaa 01 ainulsu lnslanoa ifliw anoilibnoa sviliieqmoa

euistsmuii sill lo linzi silo ssaubouq uodsl lo lirw eno Isili Os bslaelss em atinU .asiulnuoa Ifs ni lolasa

II

Page 16: i noiiibnosiq - NBER

iodsl vflnuo3 aiia8mob 8di it! .no si esw 8113 1auboiq Isnigism au bisq si iodsl iscit gnimijaaA .boog

a3nemeiiupei iuqni 8ldsilsv bits boog loqogiLo sift 10 noiiauboiq io1 iuqni bsxfl s as bsiiupsi si 1 tuqni

sdi io1 3aoa sldshsv bits bsxft i1qmie sio1siscft sis a bits ! .iuqiiJo 1o iinu isq iuqni iodsl 1o aiinu a

vIinuo3 ngisiot sift (131w bs3sbosas asldshsv (3aom) slonsb oi Ian33as na gniaU .iailoqogilo aitasmob

bits rrnfl aijasmob SitO si eirIT .a betonsb al ieoz 1snigism ngisioI bits *j beioneb si taoa bexfl ngisiol

iflo1 . iiinaup asauboiq rrnil ngisroI sñi bits x ui3nsup asauboiq mill aiiasmob silT .milt ugisiol sno

as 1eviuasqasi nsnhw sd sio1sisc1i nsa aririfl ngisiol bits ai3asmob 8111 iol -i bits anoiiarwl

() 1 - xs ÷ xa - (+x)qx = (a;x)1c

(V) - a - (+x)qa = (S;X)*T

anoiiibnoa isbo isift bsisiaoaas iftiw

(8) .0= *aq+%q=*. ; 0=a+a-q+'qx=w nssd sail a biadua sgsia EI .mi1 class blod 01 bsmuaas osis sis () bits (l) anoiiibnoD

isbio iaft ecu 01 noiiuloa sill wilT .

wonsgoxe as beisen siolsiedh si bits 1 egsia cii benimisiebeiq

nsa ab\b bits ab\xb siasile ailsia sviislsqmoa silT .a biadua 10 anoiianul as bits x b1si 111w anoiiibnoa

.awollol as a bits x 01 iasqaei dhiw (8) anoiiibnoa isbio iaifl gnuisiineieThb 1lsioi 4 benisido ed

(Q) .0 = abjii + + xbT

(01) .0 = 2b8*,c + + xb*.w

ablsi noiislon xhi&n gniau bits ab d rlguoidi (Q) bits (8) gnibivia

- ?k c&3t t

( )

sun aismsiD gniau bevios sd nsa anoilaups sasili [(8) mo11] 0 = bits I = isib gnuuoM

blsi 03

Page 17: i noiiibnosiq - NBER

(1) O > = b\b ; 0< = thxb

moil - 21 1nninns3sb 2irlT .(1 1) iii xii1m bnd-flsl sill lo 1nninnsisb sill i U sisclw

twill sulw, slulo2ds ni isul bna sviigsn oal ai ("qx+q=) oc 0 > ('qx+'q=) w .sviiieoq sd teum U isiit gnilqmi bns *T 01 asi!qq znsnq w1imie A

sib esau mill 3iicsmob sift 03 biadue hoqxs fiB fli2B5i3fli io nbubonni iluons 11w1BM

E siui1 ni nwodz cA .HEI 03 mill nisioi sift lo luqiuo bnB 5211 03 mill 3iiesmob sill lo luqiuo

iswol cii scimzsd rrnfi 3ilcsmob sib lo noiinu1 senoqcsi-iesd sib iuo chine biedue floqxs n flI2S513flI

sw bnB x scu&s8 .lcvh sift d lsvsl noqxs nsvig flB iol siom hioqxs ol lnBw ii esLBm lcoa svil3eTIs

ngisiol sift isib 332 sw cnoi3niñ senoqasi-asd gniqok-biswnwob sib iii bslzsftsi as es3Wh3edue 3i31si3e

ciitoiq ells1 saiiq aeeh 3i3nsup Isiol lsdi ewollol ocis 3! .luqluo rnuiidiliups all s3ubsl 03 bs3ubni ci imfi

.2325313111 biadue noqxs 3iiasmob sib as IIsI mill nisio1 sib 10 ciftoiq bns seii miii 3iiesmob sib lo

biedu IsmilqO sill' :1 sstZ .!.E

lo sisws 1M biedue £ cisc 3nsnnunevo 3iicsmob sib neniw sgsia taufi sib isbicnoa won sW

ss.imixsm 03 asdaiw 3nemfrisvo silT . bns x lo asulsv sgsie-bno3se sill 3s1ls 111w bicdua isib woil

niu) ni 113Mw boo siisismun sill 1o noilqmuanoa 01 Inshiviups 21 5253 cub iii 113111w sillsw 3ilasmob

ils isib bns J ci iodsl 1o lnsmwobns Isilini 2'13nuo3 sib Isib smuecA .smo3ni 3iiesmob lsn 03 Isups ci

-sib-bnidsd" sill) .xe - w + J lqmic ci smo3ni lsn nsnlT .ainebias, 3ilcsmob 03 sirns dftoiq 3iiasmob

y1irnJo3 3ilesmob sib 01 tshsm bilib 5113 moil benoqxs ci booB sisismun sib Isill ci woft sbsil "csnsae

beionsb sis11sw 3iicsmob Isinsmsl3ni 02 bsioni fls3 Isib tnsmwobns bexil s ci J (.x iol snisfl3x3 ni

.cliloiq lsn icuj ci W

(El) .(c)xe - (a;(a)'(e)x)ir = (e)W

as d3ue anoil3flul slqmic ni1sbiano3 nsilW .noilslon smoc '1hBI3 01 isceeaen ciii inioq cub IA

1o sviisviisb Isitisq sill sionsb 01 1dss3nEd31s3ni bsau sis bits xb\sb anoieasiqxs sill (x)s =

El

Page 18: i noiiibnosiq - NBER

E!änle 3

x

1 11

Npee-Le2bou2G tnuc!ouEOLG!äU UIW1Ø

2

tflUC!OU2DOWG2!C !LW12 pG2-LG2bOU26

Page 19: i noiiibnosiq - NBER

s d3u 211011311111 sii2oqmo3 1o es silt ni isvswoH .bszu ion 21 x6\6 noiision silT .x ot tsqsi 1131w

iqn32clua 82$3 s fbu2 nI .sviisviisb Isiot bns lsiflsq nsewied ff2iunut2ib or isssn 2111 (a(2) (2)x)w

silt arnswlqsl ab\Tb slidw a6\6 sviisviisb lsiflsq siuq sill 3211j inS2slqsl or b82u 21 as rl3ua noiisioii

.svitsviib lsioi

(.11) + abb .(w + ab\xb j =

.ab\xba - x - = ab\Wb d nsvig al a or 135qas illiw [(U) moñJ W lo sviisviisb silT

ablsP x = (a6\6 =) isili gnhlon bns noiaaslqxs iiIi olni (1) niiuiiidu

(I) .ab\xb a - ab\b w + ab\xb = ab\Wb

ab1si (8) noiiibno3 isbio laIft cf 0 = iv isili isrtrizit niloM

@1) .ab\xba - ab\bw = ab\Wb

'qx = (ô) moi1 snia 0 = a is sviliaoq '1wouidmsnu at ab\Wb isifi (I) moil 16813 213!

n68 biadua Ismitqo sifT .8viis3n oafS 21 ab\'b I) mon bns (svirsgsn a' 'q isili nilon) sviissn at

.nignsnssi bits oisx 03 ab\Wb nit3sa d benisido sd

(VI) .0 < (ab\xb)\(th\b) = 02

asluiildii aigsisia sift 01 biadua Ismiiqo sth 101 (VI) d nsvi slumiol sill mu oi 1u1au 211!

ab1si (VI) 03111 (SI) mo,1 ab\'b bus ab\xb 101 niflflitadii .(?.) d nsvig itoiiibiioo

(81) = 02

3vii5sn 2! ('qx=) jw bus anoilibno3 Isblo bno35a d sviisgsn sd tatim (81) lo oisnimonsb silT

5215V111 sill ni iu1iidu 22O (Ii1522338n 815 ai3uboiq auosnsomoif as bus X 8211635(1 I1itnsas

bus x sisil bsmuaas as 1I .<ii 1o nia silt d bsilqmi 21 02 lo ni2 sill 2IJfIT .noil3nul bnsmsb

3!sts1ia sisw bus x II .sviiiaoq 21 biadua lsmiiqo silt bus sviissn al usd1 siuiiiadii 3!sls1t2

bluow xsi sill 5253 £ £13112 nI .arloqxs xsi 03 ed bluow 3iIoq Isiniiqo sill usd1 (0 <*1) ainsmslqmo3

.s3ivSb nit1ii1a-iñoiq s usd3 154151 (smo3iuo 8vi2111103 siom s niisii1i3s1 .s.i) s3ivsb gnhlstili3sl s sd

21 11013311111 bnsmsb 1ui35qa £ 11 miol 535131103 siom ni bewsiv ed uso biadua Ismiiqo sifT

Page 20: i noiiibnosiq - NBER

oJ (VI) nokzsiqxe + x = 9 isdw Q - = q miol sib lo bn&nsb isniI lo saa sdl it! .bsmu

03 asaubsi [(81)

(QI) 4\* + \a - =

lo nobnidmoD] .sviiioq ed iaum O oa siuiiradua aigs1sia sis bits x isift asilqmi bnsmsb issniJ

[iuqiuo aijasmob sviliaoq ibiw ins1aianoni sis (QI) in sviisgsn O sJ.sm 1insisqqs bluow 35(1) *3 bits 3

isdi arrniI .mifl aflasmob silt 10 s insvbs iaoa eviisIi sill iii 3niasslaiti ai biacIija Ismiiqo sib isdi sioI4

£ moil sansjaiaas 3igstsii2 io1 aisis3 svii3sifls lass! sib sis alsvh nisxo1 ibiw slsqmoa 03 qlsil "bssn'

aigslsIia 3d) it! asinsminas finfi lo aia'Isns ist1fluIJ .WSIV lo inioq a3nemfrtsvo gnisimixsrn-sis1Isw

[.(4QQI) issl4 bits (8QI) ssM sQ ni bnijol ed nsa Isbom asibiadua

ndtid2-jfloiq .i . sib niis11o iol sisnoilsi ailasmob s ai sisdi isift lIijaei niAhia sib asilqmi (VI) noiaasiqx3

)sdl a! inioq s)I silT .isIansii £ lauj ai Ilsali biadija sift duoili nsvs biadua tloqxs its rfnfl ajiasmob

3iiasmob sill 03 nis lsn £ nh,Iqmi biadua 811310 inuorns sib nsift siom d sali ririfl sift 01 alfIoiq aaoi

rrnn aiiaemob sill niflimmoa lo bells sib asd biadua edi saijsasd )uods asmoo tftsnsd isn silT .monooe

cinfl ngisio1 sib asoijbni nwi ni ibidw ( siuiq iii nwoRa as) noiianijl sanoqasi-iasd sviaasigs siom 5 03

tuqluo isbssl isd1s1asi2 sift 03 unIt aitasmob silt aevom biadua ailasmob Ismiiqo silT 2251 saiJboiq 01

suds ai insmnlsvog sill tas11e it! .luqiuo iswollol isd1sfasi2 sib asauboiq mifl nisio1 sib slidw jsvsl

.uniI ajiasmob sib iol ssinsvbs iaslsviups its oifii szinsvbs isvom-iaiut au 1isvnoa 03

£ sisi 03 svitns3ni its asif 3nsmrnsvo aitasmob silT . siui1 lo siuiairfla sill alIt Isborn aidT

z>iloq biadija silt sasa aid) it! .smiIt nsswtsd noilasisini aigsusiia silt aislis isib noibs ai1oq ioiiq

nsdi sIom 35113 taslIs nifiida-lfloiq £ a! sisib hid vi3nuoa aitasmob sift iol aaol sbsiu lo amisi £ asi!qmi

aiuasmob sib 03 unIt ngiso1 sib moi1 alfloiq flida 03 alas biadua silT .taslls sbsii lo arinsu aiift alsallo

s)iijp a! tsdt noiunsvisuni ai!oq sbsii tol sisnoilsi £ as bswsiv sd siolsisib nsa niffida-jfloiq .urth

.ataells (slsaa to) noi35ilsnoitst bits alaslls sbsit 1o amist moil lanitaib

Page 21: i noiiibnosiq - NBER

IsbOM a&bi2du2 3isid iorrwoD di 10 anoi2n8ix3

.agniih rufloqmi nsm mo1I isiiadE I.E noiiz ni binesiq I8bom sibi2du2 3i8rn112 811T

.bed2iIdas Iibs, 8d n anoiii1iIiup bn anoitsiIsisnsg anoiansixs w&1 £ etiup ievewoH

£rnrnIiQ ienoth A :2tneuurl5voO 8vii3A owT I ..E

d ot insmmsvog nisid1 sh iiwoi1 issIi zi nedo ot tnioq tifl silt aq&bs

s lbu2 ii! .aia'In sdfIo slutzlrli2 silt te11s ion sob insmrnsvo ailasmob sift iltiw l8uoenEtlumi2

.sbi2du2 ngi3iol sill 21 e sisilw ti ot bsbbB svil twm (V) d nsvig noitanul liIcnq B'mlft ngisiol sill

syBil ab\b bns ab\xb atasils aii&ia sviisisqmoa lud bns iliod no bnsqsb nsilt bns x BlsvsI iuqluO

sms I el silt iii .8sui3ul2 aiiisrnrn svsrl *th\sb bns *2b\xb 2135113 .(I) ni nsvi moI sill 1l3BX5

lo W noiianift sis1lsw silT . bits 2 2Isvsl bi2du2 saoorla (lauosnEllumi2 01 lnsminsvo wolls sw

svitsviisb silT .(EI) cl nsvi noitanul sislIew aiismob sill lb oIsns silt i insmnlsvog nisio1 sift

owl silt 10 noitulo2 2iiosnsjlumiZ .mio1 wogolsns its asil *2b\Wb bn (I) ni nsvig mio1 silt if 2b\Wb

ilaiilw bits a lb asulsv noituIo silt ab!si nsili 0 = *ab\*Wb bits 0 = ab\Wb anoitibnoa isbio iaII1

sis noifljloa sift lo asirisqolq svitstilsup sill aunT .a ml noiaasiqxs auogolsns its bits (VI) sd nsvi ss ,sbnU .asibiadua svitiaoq sbivoiq ainsmrrtsvo illod ,astuiitadua ai tsita sis bits x bsbivrnq .s,olsd as

niauboiq iliod as smmslib 'aisnoahq £ lb nnol 1sisns sill asil smsg Isvsl-tnsminsvog aith itemma

il3ss tuct sbs,i ssil iebrnj sd bluow sill nsilt muhdhliups biadua 3isiBil2 sill is fib eaiow s asiilnuoa

.snsvistni 01 sviinsan I&islslinu £ asil

abiiuI ailduq lb iaoD iinutioqqO sill' E aA .tnslsviups as bstssii nssct svsrf aisilob tfloiq bns aisliob bi4ij iIns nibsasiq sill it!

aitasmob sill moft alsiansil suq tuods inssThbni ai insmirisvo silt (El) noilanill sisllsw d bsilqmi

asaoqmz sunsvsi biedua niaisi isvswoil saiiasiq it! .(sasv saiv io) aisbloilsisila 2'mlit sift ol iuaseIi

bhjow abrnit 3iIdhJq lo isliob £ lb 1203 linui1oqqo silt isib niIqmi rnonoas silt no ataoa sisnoifloiaib

snsi silt ni 1203 tinutioqqo its ala5gzJa (8QI) .ls .is bislls8 slqrnsxs iol ni noiaauaaib sill') .1 besaxs

Page 22: i noiiibnosiq - NBER

a nenliw sd bluow noinut si1Isw di es idi ii! (.beii zf lob isq ô.I ot VI .1 lo

('SI) - = W

ubqaneznD d *iow iIimi niwoHo1 (IQQI) viaoM d bexsbn nsed vd sasz 2idT .1 <

.noiasiqx8 niwolloI sih abIsh ('SI) mon gnibes3oi'I .(88Q1)

('ôI) - x(I-) - th\b'qx = th\Wb

ifh uoivdo isnoI on i ii iid ieqqsib nnei biidi edi O = i th\Wb 1o sulv 3d1 ibiano3 sw II

iom vm bus sviissn si rinsi bnoz sub iud I) ni s sviiioq si nnst tift suiT .sviiiaoq ai ab\Wb

isdisi xsi £ al 3iloq bsilqmi sub did 1insi3fflu2 si Ii bsbsqxs as audT .rnisi izifl sdi isa1o nsdi

.biadu s usd1

sill Ii iaiiI .noiis!urinth smsz sub Ilsiineass 01 bssl Iilssi ol anoiaasno3 inslIoqmi isilto owT

ioI i1sw 'aissqxsi no nail sisI1sw 'aisbioulsisik no idgisw sasi siuq lqmis insmnlsvo3 3iissmob

s'nnfl 3ilssmob sd1o smosli ,noiiibba nI .Iqqs bluow ('SI) neilt ,snosasi isdio io lsnoiiudiiisib smooni

d bsviszsi atftoiq 1o sisds sdi Idsmussiq nsdt ,zlnebias, iiasmob nail isubsi nisiot sis sisblodsiack

sasi 54 bhuods aiiIoiq no idisw svilsi sill saa thfi ni .siillsw 3itasmob flu lrwo3 ion bluow sisnisio1

ssJ d bsnimsxs si lnioq suiT .('I) d beilqmi as ,a&bisdus (bsbniñ ll63iiasmob) no udisw sili usd1

.aissLsns 1s3iiiqms bsislsi smos iuo ssIns3 (fQI) l3iU bns (OQQI)

arniil nisioI bns 3tlasmoU slqiilijM

sahs ano(13sisJni 3i5ta1is sisuiw ,loqoub b $583 sub 101 luo bsins3 nssd sail isi Os sis'lsns silT

sub Ii belulib sd iilim Ioqoub £ idI bsnisido si1usi tsdi 1fl53n03 smos aawls si sisdi iud bhsis isom

nssd sail smifl bo isdmun sub niaasi3ni Isuonsoxs to i3sfts silT .525513fl1 ol sisw aririfi 1o isdmun

as) Isbom siiam-Jsoiqiei £ ni sis1sna sill iuo ssina I1sui3s iixiQ .(t8Q1) iixiU 4 beninisxs

tounijoD 3ilasmob n duiW .Isbom ts*iam-biiub £ ui iaslqmis si lnsmuis sit md ,(4 ff013382 ui bsdn3asb

si ifloiq s'rrn11 3iiasmob ''i sub no bizdua ailasmob a b lasils sill ,aumft lounuoD nisio1 bus siunfi

(Or) + (bV.wb)*n + L (LxbVb)(In) + 81x( 'xbV-wb) = bVwb

Page 23: i noiiibnosiq - NBER

.Ivh nieio1 1aiqi lo iuqiuo sdi ai bus Ivh 3ismob sviisinsssiqsi sb iuqflio edi ai x

bnoes di oi nibnoqssno3 noiWi8bisno3 wsn £ 83153ibm (M) noisiqx ifiiw SifLi giihsqmoD

lo iuqiuo edi gnissei3th bo belle edi asd won bidu2 3112$mob £ Ifs3fli)sq2 .(O) noisseiqxe bo nriei

iso Isnoilibbs us ai bus miii aiismob dii sift bo iftoiq edi subsi oi abnel is1ls aidT .alsvii 3itasmob

ed Inisfls3 bluow biadua s usdi s1diiten siew n bus sis1 sisw n II .biadua ailasmob £ bo

inioq !snoiisn edi moil !sviaae3xs slsqmoa bluow aunt aiiasmob as lasislni lsnoirsn sift oi gnigsmsb

iaoIa amift aitasmob gifivom xsi tloqxs us gniaoqmi d bsansdns ed bluow sisllsw lsnoilsM .wsiv bo

as IsaisvnoD (.noiinsvlerni iol lnsmugis sbsii bo amie1 bisbnsla sift lauj ai airli) .luqflJo Isiisa sift oi

aiiaemob sift ot ibiadua £ arrnft ailasmob bo isdmun sib 01 svi1als awo smut ngisuob bo usdmun sili

.svitasufls siom asmoasd smut

aeiloqoi!O slqifluM

noiiasuiads insmqqs uisift si ai1oq sbsii 3iSiiiS bo aslqmaxs hss edt bo lasqas niAiuia ertO

beinsseuq need iIinsupeib svsd asebi aiasct edt beebnl .anoiisisbianoa muiudiliupe lsusns Isnoilibsui moub

ailnofloas sill tsdi beoiton svsd Iliw aisbssi usfs clguoduls niuisa muhdiliiipe lsiuisq 1ewq £ m

silT .!sbom muhdiliups Isieneg bsftilqmia lcfid liedis 1W1 s ai I .F noiiae2 iii beusbianoa lnsmnouivris

bslsgsus 5(1 nsa monoas sift bo las, sill Isdft noilaubouq bo uotab eInis s si eusill Isdi anoiiqmuaas

bo fISm sismmils 03 usvswod sVisS srnoani ni isenif si ili1ilu isth bus uolaea snsusmun s1nis £ Olin

.noitsisbianoa moul asussi muiudiliupe Isusneg 1suu sift

saiwisifto us iii 1oqoiIo Sf10 lno si susift Isiti noiiqmuaas ult xslsu (ô8Q1) nsmaaouE) bus lixiU

dhiw aeiulaubni (Ioqogilo loinuoD !sisVsS sis sisift isill smuaas sIIT .m0fl038 suisusmun beflolaibnu

owl emuaas osis (sflT .ate*ism bull ni 1no aslsa ittiw Ifs dass unit nisio1 Sf10 bus ailasmob Sf10

sill 01 ailiasqa sus aiaiinsia2 .sno tauj fish usdisu ,

"aiaitnsiaa" bus "aushow" noiiaubouq bo auoiasb

bexit £ 555U ioi3sa IoqoiIo silt ni noiiaubouq jsborn sift bo noiaisv smsuixs sift nI .,otasa ailailoqogif 0

(bexft) silt 03 lsnoiluoqouq ed oi bsnisuianoa si uolasa silt ni luqiuo stssus os oIondaei anoitioqouq

81

Page 24: i noiiibnosiq - NBER

asibisdus 31*515135 b sulsv ns ilsinimib 1iss1* 111w e1uinnis £ ibua istft issb sill .atsiinsia bo 1qqua

lo isoo sill is smog lsum llbsnsd nifiids-lfloiq bslsbosss sill bits unit 1oqoub sno lo noiansqxs its iol

moiI 1no smoa ns snisO .asol niflids-iitoiq bsisbosss its bits unit 1oqoub isilions d noit3slino3

mol sws bits ssilinufloqqo niJtitk-illoiq svii3silis isom sill ilhiw smut ssodi buswoi ti.tqiuo *nifiids

.eisi1io udi xst s bits amilt smos uol bisdiia £ nv1qmi asiiinufloqqo svii3anfls sssf iliiw ssoufi

ioiss 1oqoi1o silt bits bisdus unolinu s uslbo 01 benisuiano3 ssw lnsmfrlsvog 3itssmob silt 11

suom II .lsmiiqo sd bluow sbsui seib bits ilbsnsd on svsil bluow bisdus £ nsdi hlsmms susw

1oqoi1o silt iii sus:*Iow bits aisitnsks nsswisd ssiiilidissoq noiiiflitsdus smos sis suscfi 11sxiiis11ssi

-lsinsq £ udT .miob bsnsisew ni d*uodils beuoisst si bisdus £ uol svitns3ni stsgsugs sift nstft iotass

weiv sldsiovsl (1svi2Ss3xs its svig tfI*im emit a is tiaubni sno isuj no 885u3ol lilt siaIsns muhdiliijps

.noiirivusini 31*3IS11S bo

Isitnsisdim si susrit s3it3suq it! .33UJOSOI 331S3S silt sd 01 "Sisiins!35" usbiano3 nsmssoiO bits iixiU

"nisub nisud" sill ilhiw nisno gnibnsis-*nol £ 01 bsl asif 113111w s3hinuo3 SSOiOS sisilnshs lo iilidom

10 snsaeiq sift ni ii1oq sbsit lo nolisudilsa bits ai1sns *nuissusini its iol .msldcnq

Ch$l isifi sgniilt usillo *noms bnit oilw (tQQ!) ausiniW bits ilqIU sss atsitnsias slidom 1Isnoihsnisini

molt sissni*ns bits ahsitnsiaa hasuils sdt swsaed fssbeuq sviiasutis sus uoiass dast-ilgiil sift 01 esibisdus

.aiaells sbsui bo srinsi bits gnfflids-iltouq 1sialtsnsd 11snoiisn sstf rlaidw asiuinuo3 usdlo

laubitoD utsubnl bits asibisdu2 3i*stsui LF

sisiemsisq iaibnoD bits znoiisiusV lsiuiaeLnoD t.E.

snoilsaltilsup bits anoianstxs sldiauslq 1sviiiWni bits sliilwifiuow suoilsv beusbisnoa .E noii3s

usbianoa oh si noisnsixs 10 55513 lnsfloqmi isiltonA .lsbom is*ism-buidi sift 1o noisisv loinuoD sift lo

nsisnsbnu asw sql ii1t lo sis1sns lsiinsuftni usv A .Isbom toirwoD sill nsdl isillo slsbom 1oqoi1o

noiisiisv 151uJ1351n03 1)51153-os sill rfliw Isbom toinuoD silt bsaslqsi oilw 8Q!) nsmssoiO bits nois3 cl

Isaigol bslsbosss nisflsa lo ssusasd iovsl lo tuo asilsi sstf sgsu*nsl noiihsv Isulfl3slno3 silT Isbom

Page 25: i noiiibnosiq - NBER

iuqiuo edi bni Q i iuqiuo iiwbnI .liñsw znimsi Isbom sf11 Io wIwisqqs 13inu13et sdt flJd sii1u3ffl!b

sw soqquZ .Y + x = 9 o Y ai arniit isifto ils lo iuqiuO .x i (x unit b31153) noilasup ni unit sf13 lo

svssl sw 2io3 bexit io sibidu2 lo sansds sf11 nI .iuqflio nwo lo noit3nul a as luqiuo iiaubni lo inidi

(!) .x3 - ((x)Q)qx = (x)T

ab1sh (0€) 1 noi3simixsm moft gniahs noilibno3 isbio laifl £ nwob nithw llsainaibeM

() 0 = - xb\9b'qx + q = xb\Tb

+ xMxb = xb\Qb sliIw ns sW .luqiuo nwo ifiiw lIJqiuo itaubni lo noiishsvo3 srli ai xb\9b sisc1w

1511J13&1n03" sf13 as 03 bsiislsi saw [xb\YbI misi silT .,[xb\Yb] = A ssi1w X + I = [xb\Yb]

bluow iuqiuo 'annit isdio woil gnin1sno3 ssLsm x nnft lsili siui3sLno3 sf13 sieftsi Ii swssd "noiishsv

as nsflhw sd fisdi ns3 () noiiibno3 iebio ia1iI .luqiuO nwo au filiw '1sv-oa

(ii) .0 = 3 - (A + I)'qx + q = xb\b

sf13 sis atiiquuo fl3idw 111 srnsg loila-sizo svom-aiiosnsilijmia £ Si sms loirtuoD A

iuqiuo au 3200113 izum rrnit 11355 ladi anssrn 1auosns31umia siuqluo saootb smut isili ss oT .asldshsv

sf11 uebfano3 11S3 mull £ 3uqiuo 531 gnis1q I1u1s suols8 .alsvh aul lo iuqluo sili gnivisado suolsd

nsvs isili usvswod sxino35u iaum II .Isvsl lolnuoD sill nsili usifio luqiuo smoa niaoocfa lo 83fl51J55flO3

21113 bsvisado annit isillo smii sili d noiisivb d3ua smos nislq d annit usdio bsahquua ii Ii

noiisisucpslni 111832151103 A .sanoqasu iii alijqluo usd3 sgnstb msfli uol sisl 003 sd bluow ii noi3sivsb

.ishsm sf13 ussb 03 iau1b nsdi ssnq bns aIsvsl iuqluo 03 limmo3 aunil isril si Isbom iornuoD sili lo

iaulbs bluow ss3iuq isili snLzmi bluow levsl fliqiuo loinuoD sf13 moul noiisivsb a nuis1qmsino3 mull A

"i3sno3" sill ai 0 = A suo1susilT .3011 bluow ssithnsiip lud 3e*iam sill 03 fllguoud susw aiuqiiJo neilw

.bsuiijpsu as (€) ibiw asbbnkx) (€) O = A iftiw isñl sloi4 .lsbom ioiriuoD sili uol noiisiusv Isw3sj11o3

s3auia sili sus as3iuq 113111w iii smsg iode-sno svom-woensllumia £ 21 sms bnsurisfl A

01 iimmo3 '1woensi1umis annit 113111w 111 Isbom £ as lo iduoc13 Sd 1153 Isbom bitsilusfi silT .asldsiisv

usdio &luq £ gniaooff3 asislqmsinoo mull eno II .35*isrn sf13 is513 01 isulba si3i3nsijp nsdi levs1 eq

Page 26: i noiiibnosiq - NBER

1o nsq 3i as s3sia insivsb audI bss1q ii ki iadi s3rngor laum ii s3hq muiidiliijps bnstt,sfl all nsdi

noiiinItsb sill cJ lon bIuo3 arrnft isibo neil annft ils d sbsm alnemsaiwolma sahq woensfiumia sill

isilto sib bns nnft tnsivsb sill diod ko alevel iuqiuo silt Isib asilqmi silT .ssahq iledb twjbs emg sift 10

s,o1sisdl sasa sill iii .15*1&n sill iseb 03 as os alsvsl mzjhdiliupe bnsifle8 iisib mon laujbs laum smifl

bnsmsfl s zoI .nwo all bns tuqiuo 'annft isillo neewied noilaiisvoa oies-non £ slsqiairns bluoda miñ sift

ifliw jasI ill .oie nail isdio niiltsmoa ai asitbnsup ni noilthsv lsiutasjnoa "lasrioa" sill smag

as a = q sb1ei silt lair (t) moit sea nsa sw baa 1- eulsv sift no seist A alauboiq auoneomorl

.Iebom bnainea lauboiq auonsomod eli d beiiupei

a as bsbisei sd ',sm bns "isisntsisq iaubnoa" £ be1la ed sm A ninoasei sill moi1

eldissoq lo ensi sill sexebni A .flsubni sill ni aaensviiilsqmoa lo eeieb evilasile silt 10 noitslnsssiqsi

neil annil Isaitnsbi a eis eieib II) .noiwlloa hill 03 noilileqmoa loiuiflua moil Vlaiibni sill ni taubnoa

(noilshsv lsiulasjnoa io) lstsmaisq Iaubnoa silT (.emooluo 1oqonom 10 lensa sill blsi 111w I-n = A

lud A lb su1sv Ha iol beflulnebi hae1a ion sis seasqa siaiis as arrol ems sirfl a ion ai noilalurniol

belsidilsa io botsmiiae hibssi ed nsa A sausasd anoiiaailqqs Isahiqms ni Isbom Mew isv £ ed nsa ii

2 noiiae iii beasijasib as

noiisiineisThU lauboi1 . E.

aiaubcnq (bslsilneieThb nail isilisi) auoeneomod lb noilqmusas sill Isbom locrrnoD sib io(

isi os snob need sad Isili niiThCievs isdl isvewoif stoM .lhs1a bevoiqmi baa noitsion ielqmis awolla

(x)q tel noiisitneisThb tauboiq dhiW .atauboiq bsisiinsisThb lb sasa sift 03 bsbnslxe 1ibsei ed nsa

nwo ni 3ninilaeb ai sailq tail smussA . boog lb eaiiq sib ed (x)i Is! has x boog lb saiiq sill lneasiqei

edt io .0 > (qx = ) sioleisilT .(aeluiiladua sis aboog tall .e.i) Iuqluo 'Isvii eli ni baa luqiuo

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Page 27: i noiiibnosiq - NBER

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Page 28: i noiiibnosiq - NBER

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Page 30: i noiiibnosiq - NBER

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s floi2i3eb ssi 'lsvh sli no 11nsfloqmi

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Page 36: i noiiibnosiq - NBER

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Page 37: i noiiibnosiq - NBER

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Page 38: i noiiibnosiq - NBER

sifT .muhdiliupe dasM ieq-smsdua £ oaI saiuo lo ai aeibiadua dtiw noiiiiloa ioda-sno bsiseqsi

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Page 39: i noiiibnosiq - NBER

nOi3fln01flI 3rrismrn2A ô. oot 2smuasiq ii iidi 21 (3il0q sbii 3isi1l2 lo ioedi sill 03 2noiisLdo iojm sill 1 sf10

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islgim sW .t12ubni eu ni bubno3 1o siulsn eu bns bnamsb 03 lo sebi boos S svsil 320m

nsdl nidl 11302 luods bsmiolni-llew s1 sd bluow ainemlrlevo* isdi isvswoil svsi1sd Idsnossi

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biadua rioqxe 3ilsmob lsmilqo sift iol (Q!) d nevia slumlol sift llss5( .bluo3 sf(j Ii ainsmirisvog

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(Ql) \*3 + - tAS = 2

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Page 40: i noiiibnosiq - NBER

silt ot sqi ati nk mill 3itasmob silt tsrli sans sib iii 2iu330 o2lL (nsq bsmiolni sib d noit ns)

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io arnsioiq bicdim insisThb iol iqo bluow mill 3itesmob lo asq'i ineisThb tbidw ni muildiliups

ses cub iii .mslgoiq sinsc sift scood3 bluow csqt us ibislw ni muiidiliups gnilooq £ ciii isibsilw

'bieduc lo unsm £ scooib (sa& ifoqoub toirwoD sib icft) 111w insminsvo itcsmob £ isib ewoifc uiQ

sift as smsc sift ci noiisaolls nithjcsi sib siomzsithu1 .arnilI d noitsisqec cs3ubth isib cmsioiq

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.mijhdiliipe gnilooq £ ot nibssl msioiq biedue rinolinu s isleiq nsdi bluow insrrunsvo 3iiasmob

.noiis3olls noiismicilni ilul sift moil aisThb sas cub ni ff011530115 sill'

sansiisv ieissi csoubni muiidiliups nhismqsc A .cwollol as ci ciluesi sasift 10 noiliutni silT

noilsisqec isbnU .muhdiliups ni1ooq £ nsdi (saiiq io iuqiuo) sldsiisv siaiic cmiii nBisiol sift ni

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Page 41: i noiiibnosiq - NBER

sasz iao3 tight edt in smog nohsisqsa moi1 aniag cdi ievewod noiiiteqmoa bnsinsfl zsbnU

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nsdw asaaol sib bus wol sis assia sib nsilw smoa noiisisqsa moil anisg sift nointsqmoa bnsinsfl

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.(lsbom bnsiflsfl sib

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sib asvissdo mill ngisioI sib isib smusas flomiflM bus bisnisifi .os ob ot suosgsiusvbs si ii nsdw

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-wol £ Si rinfl attasmob sill Isift miii nisio1 sill oX alsngia biadua £ 52U oX zasngnilliw &inemnlsvog

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Page 42: i noiiibnosiq - NBER

au m lifia ai 3!1oq sb&ii ii3a no ash3smrnvaa 1&ioi1unoni Io a1s edt lo aiaIsna edT

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s ai inemnievo 3itaemob edt eaneaas nI) .alebom inegs-Isqi3nhq no *iow lo bod nilixs eis1 edt

ol iiowemslt negs edt lo floiis3ilqqs edt eiorinedfl&1 (.tnes na ai mill 3ilasmob edt bna Isql3rniq

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Page 43: i noiiibnosiq - NBER

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6 Ii nsilT .amifl nom 13smm lo noilqmua22 sift 1111w bsnidmo3 nello 21 noitqmu22s wIT

gnifluil2-iflolq 31gs38112 bbom £ 113112 nI .2ffiolq oies ine annil Its atfloiq oie aniss rinfi 1Wi1Em

audi nssm 01 neAst ai "1ine esil" mist 8111 neilO .fIida 01 atitoiq on 812 eisih 26 ssqqsaib a13e11

116 21 21111 15111 ievewod sthngo3ei 03 ln6noqmi al II .3nead 1eiimas sis a3foiq rbidw ni 8263

(1evi:qr13a8b eioM .flouiqmuaaS viismmva sf13 lo 23611116 ed zm 21111281 If3ifiw flu 8223 enwiixe

niss 1rIim annfl Isnigism-siIni Isdb 02 aunfl gnome 28h1emrnyz iol wolls bluow atebom 812111336

ion bluow iine 5511 a1sborii (13112 nI .aifloiq OI8S 1sai3s1q b81fl68 aniiil Isrtigism Ii fleVs aiIlolq siuq

wi alsbom Uns seil 1floiq-oie lo 2iaIsn6 sill lo 1aoM .a1sTts nifluila-1i1oiq eliunimils tn6aae3en

.i biuu 211013382 ni bedil3asb 26 lsbom 218*Ism-ls3oIqiDel sift lo ixelno3 sift 111100 bsins3 11554

IsboM 23s*ISM-ls3oiqi3s$1 8111 111 3i1o1 sbsiT 3igs1s1i .4

IeboM 21 IlsM-ts3olqbs$1 silt 1)112 noiisineme2 leiuuM I .4

iol 8iUi3tJita Iebom liISi3ffle 13V £ 21 E 11011382 (Ii bSisbi2flO3 lebom ietism-biidi 3111'

8flU81 16111 181)121103 01 2811221 Isnoiiibb 18V8Wod 812 818111' .2811221 3i10q 3i81S112 (nsm grnnim6xs

26(1 isdI tnsmnolivne 15(110 silt jsborn ieh2m-b1i1fi edt moil sbiaA .slul3Inia nib61i eistqmoa siom £

3113 26 03 18181 I tsilw ai (3itOq 31)611 3i83s1i2 1o aiIsns 8113 111 1)8211 1evianetxe maom need

.(18Q1) ,ebnsi8 111100 Isa 21 (131(1W 1o 51111311132 3(254 8113 jebom "aiehsm-Isaoiqi3ef

1203 bn6 bnsmeb ts3itnebi 1131w (ti1622e33n ion lud 1Is3iqt aeh3mioa owl 816 sieifT

.13f1uO3 iiieio1 3113 26 15(130 8113 1)118 (13fl1JO3 aulasmob edi 26 03 bsnslsi a! '(1111003 enO .anoiiibnoa

d bo3ubOlq ai aboog 828111 1o 3fl0 lasel IA .bemuanoa sis aboog (eiom io) owl '(1mnuo3 11358 nirIjiW

21e)hsm-1saoIqiasl edt lo noilqmIJaas e( A .nis1o1 smoa bns aitasmob emoa amift au1au1oqouIo

Page 44: i noiiibnosiq - NBER

s3s1aqs siam annfl 3i1i1oqogiIo laift sans ih cci bsinemea sd 03 bemua sia is*iam isdi ai Isbom

nsdt s1daiiav s3iod3 sdi i iuqiuo II .alsIiam 3ilasmob bna nieio't nimsno3 noiabeb aisiail

bsflinu a no iuqluo nedl 1k n1woicIl nadi isd1ai ls*ism cbae ,o1 1sveI lIJqiuo 33niiib soorb arnifi

s*isM .anoits3ol insisThb ol Ii eiudhiaib ol esfliths no gni1si bns leham bhow bs3aipini io

isbnij as as1dthsv insbnsqsbni as bslasii sis aShifluo3 owl sf11 cci as3iiq isfil asilqmi noitsinsrnpa

scli sd Iliw asnq iiismma sis asninuo3 ngisio1 bits 3iiasmob isvswod 11 .noiisnimil3aib s3rlq

.noitainemsa 3s*Iam eliqasb taixs 111w asiiinulioqqo ssiliths on bits als*iam diod cci smsa

1oqoiIO loirwoD 1111w IsboM ais*isM-Ia3olqbsSL 5 fl niflid2-ii1oiq

01 alsbom a1stIsm-1a3oqi381 bslslsi bits 1oqoub locrwoD sw (cLs.t8Ql) ls3nsq2 bits isbnsiH

3itasmob 01 (airnfl io) mfft nisio1 a moil aiftrnq flick 01 aThisi lo sw sldiaaoq scil slsWlasvnf

nisio1 a bits arcnfl 3iiasmob cc 1111w 5253 1oqogilo ioniuoD sdJ alnsasiq noi1ea aiciT .ainsmiala

cci aluqluo saoOff3 amiit bits I ssla cci aThisi Isa alnemrnsvo 15111 ai alnsvs lo S3IISUpsa ecu' .annfl

auosnsomorf £ gni3uboq atai1oqoi1o lolrIIJoD d bs3uboiq sno aboo owl sis eceilT . sa1a

cci 31532 01 afniflsi lnsiano3 1111w be3uboiq boog eiisismun eviiiisqmo3 £ 21 boog iecfio silT .luqluo

svilarneaeiqel £ 'd aelsa 3it2sifiob sioneb x isJ .noil3uboiq lo iois1 Ino sill ai 113111w iods1

03 aAaiieias gniau 1gnibnoqaenoD .rrnil ngisioI a d aelsa 3ilaemob asloneb 81111W miuI 3ilasmob

11ndJo3 ngisiol sill cci crnfl 3iJaemob a IC) aelsa eC1I11IJ03 ngisioI sill 111kw belsi3oaas asldahsv stoneb

3itasmob cc silT . beloneb sis 13nuo3 ngisioI sf1 cci rircil ngisiol a 1o asisa bits bsionsb sis

*9 bits 9 ecs asiilnuoa owl sill cci asisa IsloT .arinit ccisio1 n sill em as 1s3i1nsbi em annul

(E€) ** + * = *9 ; + = 9

bits 1 21203 bexfl eldiaaoq sis esdt bits 1ns1ano3 815 *3 bits 3 21203 Isnigism noi13e cci aA

sill d isa afluisi noqmi 3fli3sqa bits *q bits q beloneb em asiiq isrnzuano ngisuol bits ailasmoU .I ngiso1 bits smonl evitsInsasiqel lo aiftoi •1 bits I bsloneb em 21nsmnnevog ngisioI bits 3flasmob

nslthw ed neil its arcriil

8

Page 45: i noiiibnosiq - NBER

() - x(i + 3) - (*Q)*q*x + x3 - (Q)qx =

() *q **3 - (*Q)*q*i + (t + *3) - (Q)q =

ns SW 3O3 1ni*iam lo 3nino3 sill to saus3sd bits noiisinsmps 3shsm b sausefl

idt anoiiibno3 isbio lath i1oqogi1o loinuoD silT .lsAism lEnolisfi sno lwj ninimsxs d bssao1q

03 () anoiiibnoa mbio iaihI lo noi3sai1qq sill 1qmia s arrnfl ngisioI bits aiismob sviisinsasiqsl

.ixsinoa isluainsq situ

(ô€) O=a-q+'qx=w bluow bits x hs1imi .snoiiibnoa isbio isiht 555111 ni issqqs ion ob bits * Isdi sioM

tIw si idi 1ev1 Isainilasi £ IA .ls*ism nisio1 sifi 1111w bsisiaoaas anoiiibnoa isbio lath sill teine ion

() bits (anoiiibnoa tebto bnoass) (4) anoiiibnoD .lslsisqsa aishm Isnoilsn owl sill tsbianoa nsa sw

.amift !1 toI blot! 01 bemusas sis (asiuiiiadua aielstia)

idT .i bits i 1o snoiiangñ as bits x blsi Iliw anoiiibnoa tsbto lath eu lo noiluloa silT

sishsm noqxs bits smotl diod ni 1ls 111w annft isifi t15qotq sill svsif 'tlsrinon 111w noiiulo

.(18Q1) isbnstff d nwods 2S 21U33O sbsti iiaubni-sflni isili ni1qmi

i(llsiOi d benisido ed nsa ib\b bits ib\xb alasTis ailsis evils tsqmoa I . !2 flOii33 iii sA

aunh HE Isrli noilqmuaas 8th ol euU .artnit ils lo sluqiuo sill bits 1 01 lasqaet riliw (ô€) niisiineeThb

.awollob as nsiihw sd nsa msiss lsiinsteThb aidi ahismma ets i1nuoa nevig £ ni

(Vs) .0 = 1bjT + b 1*n + xb('q + ('q + "qx)n)

(8) .0 = + b('q + ('q + flqv)*n) + xb

ab1sh mto1 xitism it! mslaa sill gniaastqxs bits lb d tfguoufi gnibiviU

Page 46: i noiiibnosiq - NBER

- '+ ( q+ x)n () ',_ tt

-fist silt lo tnsniunstsb silt tassiqs1 U gniltsl bnB [(€) moñ] I- = bits 0 = Jsdt nitoi4

ed ns 3eTts 3i3&Th svitsisqmo3 gniwollcft sift ) bits (1) d sviriaoq i ibidw (Q) ni ithism bnsd

.bsnisido

(0.t) 0 > U\q+(q+"qx)n) = tb\b ; 0 < U\jrcn = tb\xb

noiiqmuas silt niw .e.i) () noilibno3 niau bsni2 sis noisiqxs ssift 10 ioisismun sift smtfw

o eIs 3iiasmob s3ubs1 anoqmi no Thisi s beisqxs aA .(stu3iidu 3i3isi3a is aiuqluo isili

.20n11 3itpemob lo s1s 3i1smob e.ssr3ni bits &nift nisot

s iii nwotl2 sd b!uo3 areT1s ssf1j rnifl 3ii2smob sno bits itnil nisici1 sno iw sisw sisdi II

noit3rniI sanoq2si-tsd niso silt i ii riufi rqs3xs E smiI ot islimia mwigsib noii3rnft sanoqasi-lasci

ot insw bluow mill nisio1 silt mifl 3iiasmob silt d ruqruo nsvi ns ioI .bsflida sd bluow isrit

noijzssi nisio silt sio1sisdT .i203 fsfiigi&n svirs11s sri asaisi Tlhsi sift sauszsd sasi s3uboiq

.ni ftutla bluow noij3nIiI

ot ali'toiq nisio1 ssws Thisi 3ilasmob a tacit liaas awolfdl ii arcnft 1o aisilmun 1sisns iltiW

= rb\Qb) Wit or titnsIJp bits (0 < tb\qb) sth 01 53fl flsisvo bits saii ot aifioiq 3iJasmob JIsI

stasigs taut gnhtqmi )ntemma si vitnuo3 iigisiol sift ni noilsutis silT .(0 > jb\b*n + ib\xbn

issnit lo saa sift io1 .ainsmunsvo iftod d isa alsvsl Thial sift no bnsqsb mill ibse lo aiilrnq

"q sass sitU it! .bStslu3la3 Iibssi isv sd ns 5138118 3itsia sviislaqmo3 Q - a = q d nsvi bnsmsb

zsmo3sd (01) noiaasiqx3 .1- = = bits 1 + ii + it = U l- = 'q 0 =

('0) (! +*n+n)\(1 +n)- = tb\b ; (1 +*n+n)\*n = ib\xb

.(1 +*n+n)\*n = tb\Qb sisciw ib\Qb- = tb\qb bits

Page 47: i noiiibnosiq - NBER

1i1itu 3iiasmob isill srnuaaA .tn8mfnsvog 3iia8mob sdt d beost mslcloiq noiabsb sill 01 wwl won sW

flOit3flift ii1iiu mo asvhsb

(!1) .m + (9)u

j "s1f1iisi" zo "iseni!-izsup" as 01 bsrzslsi asmijsmoa noind1 1iLi1u silT

3ilasmob sill m bemiiaflo3 won sis aboog owl as E noij3ea ni bsau noth)nfR 1ililu sill nadi lrtsnsg

iii issnil sansil bns boog s1i1smun sill ni Issni! Si Dililu Isili sluissi si sill anisisi ii fliI Liinuo3

d liasxs bslnessiqsi ed noiias2 ni as nsa sisMsw ailasmob ni asnsda isili asilqmi silT .smoani

isa I mnievog bns au1qiua ismuanoa l1'toiq ui aegnaula d .s.i) aswassm aijlqiua Inoiiasvnoa

Si j Thisi ngisioI bns 1 ThisI aziasmob ihiw belaiaosas W stal!sw aitasmob 1gnibioaaA .(esunsvsi

(*jj)n + (i)Sl + (l)Qq —

((i)9)u = (*il)W

dguouii lno Thisi ngisidt sill no abnsqsb siiulsw ailasmoU .n sunsvsi Thial zlnsasiqsi (r)$L sisuiw

ui lIu1 irnoa ol b&nuaas sis ibidw amiit ailasmob o aiftoiq sift ff0 Thisi ngisioI silt lo iafts sill

.OIS 01 ib\Wb sviisvizeb eli guilisa d besimixsm si sisllsw aileernoa .sist1ew ailasmob

(E4) .0 = Th\ib a + ib\5Ib + ib\qb 9 - ib\Qb q - lb\Qb 'ii = ib\Wb

ablsi n = xn - 9 isdi bus ibqbx + lb\xb (a-a) = ib\b lath q = 'U Isdi gniioM

(44) .0 = lb\slb + ib\xb(a-q)n + ib\qb n- = ib\Wb

sill afloqmi iol smm gnisq illiw belaiaoaas wlqwa ismiianoa ni asol sf11 si misi lift sifT

sf13 bus noilauboiq aiiasrnob 1o noiansqxs sf13 111w bslsiaoaas wlcpua Isnigism sift si mzsi bnoasa

sib molt beutitla alfloiq nialnoa armsl bill baa bnoasa sift iliofi .sunsvex Thisi bssasiani si Imsi bull

bus l uoI gnivloa (44) olni 1b\b*m + n = ib\2b gni1utiladu .alnsmisla aiiasmob 03 fnIft ngisioI

.Thual lsmiiqo sill ioI noiassIqxs as aevig asvilsviisb ailsia svilslsqmoa sionsb alqiiaadua gaifls!

() (q)(*j) - ,\((1 - ,q)) = 01

I = 0 = a ifaitiw ni Ioqonom ngisioI siuq to sasa eli si isbkanoa 01 sasa iaslqmia sill'

(bnsmsb to 1ixsvnoa sviilsi sill) 'q\"q = V isi ew fl .*w\I = lb\Qb sasa sill uI . = 9 baa

Page 48: i noiiibnosiq - NBER

s no) Thisi Imiiqo eu ethw ns ew bus (V+)\! = = oa (V+)'q = Isdi bnft ew

as (loqonom nisio1

(b1') .(1 + '/)'q... = mo

sviiiaoq io oie svi3sgsn ed sm This mumiiqo sib Ioqonom ngieioI slqmia isbnu awf1'

bus O = V bnsmsb suiI lo sass sill nI .1- abssxe to Isijps nsdi aasl ai V isiftsdw no gnibnsqsb

.(QVQI) iedbev2 bus (VVQI) (siis)1 d benisido as sviiiaoq hseI3 ai Thial nfflida-ifloiq fsmiiqo edt

sunsvei Isnigism sift iad noiiibno3 sift 03 insfsviipe si 0 < I + V noilibno3 sib llsiensg soM

al ii mvswoH .ea&i bisbnsta sill hiistis a! tbhlw sviu bnsmsb eaisvni sib usill isqeela sd s'nua

busmsb (saisvni) usdi qeela aas sil vsm sunsvsi Isnism Jail xsvno3 IiIgud a! busmeb Ii sIdiaaoq

nI [.(a48QI) isaneq bus isbnsfl eeZJ .Ismilqo ed idim biadua hoqmi us tarti 1nibnoqas11o3 bns

sill 03 befluda ed ns alftoiq nieio1 tsdi ausem 1vii 3ilaemob 10 snsasxq silt 3aS3 1oqogi1o sift

sd bIuo3 "Ttiisf lsmiiqo sill isili shdiaaoq alt! .vzuasetl 3ilasmob edt ol as flew as aurifi 3ilasmob

.beilqmi Ifsiqi a! Thiat niftirla-lfloiq a lud X8VEI03 isv al busmeb Ii (biadua a) eviiagsn

sill d be3s1 saorfi as sirIsa silt l33EX5 sxa :nemlnsvog ngisiol sift d bsaI asvitns3ni silT

noii3ndt sviiejdo at! iii beizsftsi as insmn1svog 3xiasmob

(V1) •(*33)* + *x*i + *Q*q - (*Q)*u = (*t3) *W

.(E) noilibno3 ot iafimia noilibno3 ,sbio iarft a ablei i 03 lasqasi tliiw *W niimixsM

iftod iiaiiiw iii mijiidiliijpe r1SM £ 03 21)551 (1lS3iqi (tt) bus () b noii1its aijosnailijmi

ax aThisi sau zinsrnlnsvog diod daidw iii muidiliups sviia1sqoo3-non aidT .aThisl 5211 atnsmtnsvog

.fIhs3 asau isiftisn iedw smisi sbsil seft sill ol iohsni-sis'1fsw l1smion

asibiaduZ bus aThiaT €A

mua) Thisi tioqmi us ol belimit ai ailoq 3nemmsvo ibidw ni sasa sib aisbianoa noitaeZ

iixiCE ni as beisbianoa sd oafs bluoa aslsa lsao! ,ó1 asibiadua 10 asibiadua noqx3 .tnsmjniani (ibidua

no asibiadua sd * bus t is! bus eibiadua floqxs nisiot bus aiiasmob eionsb a bus a isJ .(t8Q1)

Page 49: i noiiibnosiq - NBER

5v1333118 silT (. = 2 11 bsilqmi ai mift 3iizsmob sib io1 bi2du2 noibubolq I6mns A) .28162 163o1

1o 1203 I6ni*wn svii3slIs 211 bn6 - sd bluow le*ism smod 231 111 rinfi 3il28mob £ lo 1203 1szi1gm

(Q) noilsup3 .12o3 16niism nisidi ot Iqq6 2no11631'uibom 1imi • - *3 + 3 3d bluow noqxs

smo38d bluow

It- =

(81) *th •- t- '(

eu ioI 2311632 svii6lsqmo3 gnibnoqasno3 bn6 23i3sia evii6lSqmO3 828(11 b noiiEsnst3wIsd3 niwol1&I

16ol bna sibi2du2 floqxs 2Th161 tzoqmi lsmiiqo 1Enoitsri ethsl3wtEfl3 (18(11 1163 sno tsfi&n ngisio1

23162 16301 no bi2du2 s 101 gniwollA .(d88Q1 8Q1) tixia 111 26 1nsffln18vo (1363 o1 asibi2du2 23162

01 sVilfl83lH 116 2611 3n3mfr13vo £ 8211638(1 3i1oq ebsn moi1 sw 2i216fl6 3111 lo 212611qm8 8113 2111112

10 snsd 8(13 ni nev3 .1oqoi1o lo 138118 nu13FI3ae1-llJqiuo sill 182110 01 1qmia bi2du2 £ 113U2 8211

ff1882 2813110(1 d3u .21ix3 26W1S 2ei1oqoi1o 1)116 2eitoqonom 85ibiEdU2 oX svxlns3ni lnelEqqE 21113 sbsii

816 28162 16301 no 2Sibi2dIJ2 1131(1W (Il 3263 3111 16(13 nu32su2 83fl63flini2 1s313361q belimil lo

.123181111 810(11 lo 2qsthsq 21 018N sd 01 benisiiano3

21Jo8n6113Jm12 lo noiisviib iol zwoH6 81u331n12 21(11 asibi2du2 16301 luodliw 10 ilhiW

1nsrninsvo nisidt sdi 'd beiqobs bi2du2 rioqxs (16 s1qm6xs iol W11T .2138118 "gfluIUlV183n1103"

Ii bflit 6ffl 181)681 8111' .Tlhsi tloqmi 3ii2emob 11820113 1auosnsj1umi2 6 d "bekBvlslnuo3" ed blu03

828(11 luods lnioq nul2s181ni silT .bnsmsb 168(111 lo 8223 sill io1 anoilslu3Is3 323113 3110 (1163 01 Msau

1)116 3i1oq 8b1l 3ig316112 8v1136 8211 01 28vilns3ni slEniInhIs Ion ob 'sIU 16(11 2i 2133118 gnili6vIsinuo3

.2111181 bns asibi2du2 svili2oq 23ifqmi 116rrnon muhdiliups 3i1oq sill

1)116 2811)124112 110q lo (101338182 2IJOSfIBllUffli2 84fl328b or "gni1isvis1nuo" rrnsi sib r1I2U

sf11 2811183 nu1isv181nu03 misl sill 33i1361q ni .gnibzsI2im 2qsthsq 21 2111181 rnfl32T1o 1di22oq

Page 50: i noiiibnosiq - NBER

b3iIqqs zi idi Thisi s d isaflo 1dioq nsdl 1iift b&lqqa ai bi&Iu noqx3 sfil lsiLt noilqmueiq

io1 .(d88Q!) tixiU ol islimi isv esivrisdio i isdi sqi idi to Isbom £ 15bizno3 (IQQI) silloD mis!

3ilaernob sifT .biadua noqxs its nil3sb tift svom 1nsmnmvo nisio1 sifi isdi ss snsis13noo

inuo3 3iissmob sdi isril abnfl siltoD iixiU siiJ .Thzsi Ismiiqo its sieIss 'bnsupeadu dnuo3

(d88Q1) IixiU 01 tasiino3 it! .TIhsl nh1isvminuo3 i1ift ion lud I1siflsq s Iqobs llsunon bluow

sill sisnimils ol asas iaom iii lnsi3ffhJa a! nili5vstnuo3 lo Insixs sill Isib abnfl silloD 1isvewosf

.biadua floqxs its sw ol svilnsni a'vlinuo3 ngisioI

ni bsazijaib atasiinoa sill ol islimia Isv si bits gnimir no 1siuq bsasd ai lasflno3 aiilT

sill rn 1auosnslIumia svom alnsmrrisvo isdi noilqmuaas sili ,sdisdw issl3 ton a! II noii3s

wsn saoofi3 33ii3s1q ni n53 ainsmrnsvog as s!dsislsiq al isdio sdi siolsil asvom sno lsili noitqmuaas

bits asibiadua lnsmiasvni o lsiiqz3 lo gnifis'rlslnuo3 as Isas (881) s3nsq2 .smii ns Is asi3iloq

ioI bsAovni sd fl53 ajnsmss,s sbsfl isdio bits TTAO lo swi3ulla Isnoilulilani eu isili asiasifqms

anoils3i lqqs isIlJ3insq ni gaimil gni1i35qa

IsboM lsAisM-bihtT sdl bits IsboM eis*rsM-Is3oqi3e$1 sifi to nothsqmoD 4A

gnimbiano3 nsdw bemuadua sis lebom ie*ism-biidi silt d beaasbbs aeuaai sill lo laoM

bIuow sisifT .thsI3 aasl isdwsmoa ifiiw lisdis Isbom ais*tsm-!53o1q1)s1 eu ni asibiadua Iioqx8

iinuo3 ssu1i £ olni a!sbom owl sift gninidmoa a! lasmini lo zlnioq !snoilibbs smoa 5(1 isvswod

bluo3 snO .ssidj Ifs ni bemuano3 bits shinijoo owl ni bs3ubolq gnisd boos IoqogiIo sifi dhiw Isbom

ibua a! aInsmsnsris sbwil fsnoigsi bits 3iIoq sbsil 3is1siia lo noii3sIslni sill aasthbs slqrnsxs io1

.lsIqsrI3 aitfl lo sqoa silt briosd au aslsi Isdi lud Isbom s

ilsaflbsq .smd bsilqqs sd oafs zis Isbom lsiism-biidl sill 01 beilqqs anoiaasixs sifT

ai (.E noil3e ni as) I nibss3xs lao3 iinutioqqo as sVsd 01 abnül 3ifduq iol niwoils

aael Isviisls asibiadua bits evii3silis eiom lsvils!si smo3sd aThisi 15(11 asilqmi bits lxtsvno1ii1isiia

ii1io l3ubno3 i9*rsm io1 niwoils bits inemiasvni bits th2$I lo noiismbiano3 iol gniwoilA .svii3siiis

Page 51: i noiiibnosiq - NBER

islimia isV .asnsupano3 niiaeie1ni islimia vd (nobi3sqmo3 bnwifl8fl as &wa) oirujoD nsdi

easdi duod3I sahs oals asiiismmas Isnolismiolni boa oimsw(b sldiaaoq nimii oi niia!ei asuaai

siom d3um svsd istfi auui nisiis 1isvoein ei sisdT .bsiolqxs 'IM moiI isI StE assia

lo slot edi ai asuasi aasdi 10 snO .lsbom ie*ism-bthft s ni nadi aistiam loiqbsi 411w ssnasftingia

noilaidilas £ as qu nsAai ai ibidw niobid-nuinsel lo esneasiq sdi ni noiiseioiq ieiism smod

beiaisini bits bsinsmsa lo noaiisqmoa sib zins sbubni asuasi zsdiO .2 noii3s ni $513i8X8

.aithsi boa asiolip hshisiiisq ainsminiani siIoq sbsti insisThb lo noahsqmoa sili boa 33*tam

1in3

ol sanoqasI lii ilas selt lo absTis sili tsbianos 03 lnsfloqmi ai ii noilsea flu benoilnem aA

sia asiiilidiaivibni sisdw anoiiawia 03 asilqqs beqolsvsb bssils aialsns silT .asiiinulloqqo s!dsifloiq

.(Uns tsdfliit nuinsvsIq slidw ainsdmusni ioI aiiIoiq sviiiaoq wolls as oa stsI Iinei3fflua

unift Isnigism lo Iitotq $43 asviib iins esil dsidw ni 8553 841 isbianos sm8iixs isillo sill IA

lo noiiqmuaas sill isbrni iuo bsinas nssd sad lo sislans b3iai3osaa sill 1o isoM .oiss Isaiasiq 01

£ isbiano3 (8Ql) iismgin)l boa isbnsifl .siIIoiq ois lsai3siq inas zonhi Ha didw 01 iiernma

bsxIt £ molt niaiis 53503 ssisvs ninibsb svsrf annit doulw iii lsbom iotnuoD arsfiam-!ssoiqissi

affioiq oiss nias asnth ila llurw asitinijos diod ni atuaso vnn3 .51203 lsniiam insianos boa laos

sill siiqasCI .aiaos tioqansli sviiiaoq lo ssnsasiq sill iii neve asaits sbsii Li2ubni-alini 03 san nivi silT .çhsius 01 lolIsqus siallsw ai shail seiu benuani eta tail aisos lioqanali Isaas3snnu linstsqqs

ilsulw) sisllsw Os oiss is siilqum issuboiq bIod noiiqmusaa 3floiq-ois sib isdi si ldiani latin&

ebsiT .s3nq 03 betsbi 1satsvni bits l1ssinoionom si (aulqwa ismuanos molt lswq asaits nedi

annil gnivivIua luau 111330 01 ii boa Hal 03 ssiiq niaio1 noiiilsqmo3 sviis1ts lo level sib asassisni

sift is asasol biova ot l3neis1fiua 5$vtIJS 3203 esieva tisili owob bsvom baa iucpuo beassiani evail

.noiiauboiq lo noiisilsnoiisr molt smos aiftsrisd siallsw auciT .sahq iswol wsn

Page 52: i noiiibnosiq - NBER

(aio3 noqansi vitioq dtiw) Isbom i8hsm-I3o1qi31 iIimi £ 8bianO3 (8Q1) aeld&n3V

-liIo1q 10 eansd 8di 8iiqa8b idt 2bnft as1dsnV .asibidua bn a1thi 10 noitebiano3 rn3ubotIni

isbianoD .sibidua tioqxs bns 2Ttiii tioqmi sw 01 asviinsni svd 2tnsminsvo diod a1zsTIs BnufHth

bn (!1ns on Ii bsuboiith al Thist sift s t3sqmi nO .itnuo3 3iiemob edt d bsoqmi Thisi s tifl

sah bh.row anoqmi lo eizq 3itsmob sift stuqiuo twjbs ton bib mifI Isubivibni bns 5351q Aoot tixe

10 e3hq sift qu bid bluow idT .iuqluo be3uboiq lIs3itsmob ot d3tiw bluow iemuno bns

bits thoqmi nisio1 litnu tiJqiuo nieio1 lo s3hq edt awob eno1 bits iuqtuo be3uboiq lls3itsmob

eAsm bluow vniit 3itzsmob noit5wl1no3 2idt IA .s3hq ems edt tol !Is bluow tuqtuo 3itemob

bluow 2rfniI beioiaei ed ot muiidiliups iol tebto it! .so! eAsm bluow arinhl nisto bits atiloiq

ni tuo bluow lixe bits monoos 3i1ernob sift iii iuo bluow flns noiiibbs iii bns aiuqluo Iautbs

.bsdai!dsias-ei asw noitibno3 iftotq-ote edt lilnu (IinIJo3 nisto1 sift

ai vitnuo 3itasmob sift ot (1tnuo3 nieio1 edt mon arniiI lo inemevom sviteTh aidT

rrnft thse ataO3 noqansti evitiaoq lo s3neasiq silt ni eausesd Itnuo3 3iiasmob silt 01 auoestnsvbs

ismuano3 Isdi nilqmi eth Ie*Ism aitasmob sift iii aelsa IsioT .aflOqxe ii nadi ernod Is stom allea

tnstanoa ai aulcpua ieauborq bits aeaii aulqiua temuanoa eani2 .Ifsl iaum tshsm aiiaemob edt iii saiiq

edt iii eviiiieqmoa-otq ai "noiiaetotq" aaemob lo taeTle edt wriT .anis iInuoa aiiaemob edt oies Is

lo tsnoqxs ten £ asmoasif itnuoa aitasmob edt 4noitibbs iii .(ilns asaubiti ii sausaed Ietisrn aitesmob

Thtsi edt 01 sub tnemevoIqmi ebsti-lo-annet s asaneheqxs bits boog svititsqmoa 1tae1teqmi sift

gaibsel ataefle eiiaoqqo 1iasxe aeaneizeqxs t1nuo3 ngierol silT .anisg lo eatuos bnoasa £ ai daidw

edt tol anisg ot absel oats biadua rloqxe neaorfa Itsmitqo as tgniaitqiua sioM .2w! sisllew a 01

edT .Thrsi £ lo taeTte sift 01 talimia taeffe noilsaolst a asif sbiedija noqxe nA .(IirnJo3 aitasmob

aiiasmob edt dguodi neve anisg swans ol tnsiafflua ai monoae ailasmob edt ot ifisned gnitfuasi

.bsotds noitqmuanoa assibiadua baa sunevet Thisi on anise imonoae

ate*isM beisigein! baa betnemge lo noshaqmoD ô.4

Page 53: i noiiibnosiq - NBER

£ niw pine 3811 (3ftrnq-ois) lo ai38fl silt siiisvni (ô8Q1) nsau*uiM bits nnsmisioH

sd oi bsmus& sis 3sAwn InoiicnsJni lsdi 3q38x8 (8Q!) aeldsneV o islimi2 sw13ini Isbom

fljd aisi,m owi 843 luodB anoizbsb sisisqsa sism ton ob arcniI .bs1nems2 usd3 isdtsi be3srsith

wohsv sis sisili szs sidt ni1sns uI .tsiisrn bliow beflinu edt 01 iuqiuo usd3 Its niid Iqmis

al ateTle woiIsv lo s3nsnOqmi evitsisi sift bus (bisdu2 £ 10 ThIsi 5 isiftis molt 82115 IBdI 2138118

nnsmi2IoH c1 b Isbisno3 28253 isom idI isvswoH .tso bus bnsmeb iol amiol IBnoij3nul 01 sviiiana

msdt nh1qmsns 11nuo3 sdi ml nbubsi-sisuIsw sis anoiinsvrslni biadua 10 Thisi nsaU*ISM bus

.28'flu3 iaoa sgsisvs usd3 qu amth nivitb i(u1ffs lasbifisni saubni szfi saussd

sill 0.1 anoiis3iIqmi 3iIoq sbsut 3i3tsIj2 mu I1s3itsmsiae (88Q!) asldsnsV bns nsau*isM

woivsiq di diiw insiaieno3 ai aA .b&limJ 10 bsiitsmsa 515 a3s)hsm 15111811W 03 bitS (Iifl8 to siUlsil

rn allitsi isril awoda aiasclin aidi 8Qt) uisij.hsM bits nitsmi2xoH bits (8Q1) aslclsiisV d aisqsq

bus bsiuinu usilt isdist betnsmsa sis ate*ism 11(228131 s3ubsI to) srnm sisllsw svotqmi asibiadua

.noiinsvis3ni biadua to Thisi lo aasnsvii3sms silt 33Ub81 03 21)1151 (I3113 3811 15113

3111 lo i3eqas Isitnea 5 21 be3sis3ni nsrfi isulisi betnsmss 515 ats)hsm 35113 noiiqmuaas siLT

-sitni lo noitsiianomsb (18Q1) a'isbnsua 01 iasilnoa ff1 sIqmsxs ioI .Isbom 233 sm-Isaotqiast

18V siwistho ns asau (18Q1) nsau*isM 1sbom ats*ism-lsaoiqiasi iounuoD slqmia s iii sbsii (uiaubm

on Isril 1Iiiei sdi anisido bits be1nsmsa nsdt istIisi bstsisJni 315 alshsm 15113 tqsaXs Isbom uslimia

.2111330 81)511 u1aubni-si3ni

£ itO sbsm 54 3dim anoiaiaeb smos tsdi sldiaaoq aili ioivsdsd unit lo aisbom isdazi nI

s no sbsm sd Idgim 2151110 1idw (noiiqsausq 2is*iSm be3sis3ni ns isbnu .s.i) aissd sbiw-bhow

aiiaiIOqoiIo ibidw in Isbom £ dana atbiaxio (OQQI) asldsnsV .aiasd bsinsmsa 10 ishsm-c1-is1tsm

arrnil .noiilasl buisinsfi 10 iontuoD isrilis iii usillo dass iLliw slsqmoa sm asninuoa owl ui arnIft

sill nI .1bsqsa sbiw-bhow no ebiaeb Izuosnsi1umia am,ft I sS12 nI .noiaiasb ssia-owl s sism

s lo noiisusbianoa aiaIsns aid nI .asaiiq io asililnsup aftiaeqa-teiism no sbbsb annit ss3a bnoea

Page 54: i noiiibnosiq - NBER

sift t33n1 eveI tud zemulov eMit beilqm! egnib Iinzftini e&t tisq© sbiwbhow iohq

,viiirisiI isvswod eis sisifT .atioqmi xi bna floqxs sibiedu ot svitnezni 3iIoq eMit 3isint€

-itlijm £ ni anoii3eb tiinup io\bns e3q bus Qi3sqs3 neewied nozi3nhiib edt eii8i3swb ot asw

.(QQ1) nsmqlsH bus ivS-n8 1EIu3iflsq iii ee .nhiis 1s*ism

atneminianl lIoq ebsiT 10 831010 V.

lo at3eIIs evitsisi sift 2fl183fl03 3ilOq ebsit I&IOitsffleifIi lo (iOeIIi sift ni flOiiaelJp 31aas13 A

nI .atneminiani i3i1oq sldiasoq 10 ieiisv £ lo ateelle edt I1siens siom io asioup bus aTthst

sift isdt eansa sift iii inslsviupe I1sunon sis astoup bus allhsi sbsii 1o alebom eviiiteqmoa 1i3ehsq

beioa (Q!) iiswsdfl sA .stoup ussoib 1sisiiqoiqqs us d bstsiIqub ed ns Thisi s lo 333115

smoa t3sqxs idim ew tgnibio33A .noitilsqmo3 t3&hsqmi isbnu suit ed ton been aidi ievewod

Isnoiisirietni iii .s.i) afoot 3iIoq sbsii 3isisiia as asioup bus aThisi neewied anoaiisqmoa gnutasisini

sitxs isflo ot Ioqogifo isbnu asioup lo aiaIsns sift i3eqxs ew Lsisns sioM .(aniflsa Ioqogi1o

wel £ eiiuQ .asibiadua bus aIIhst lo ai Isus edt motI bemsido atdiani edt evods bus isvo aidiani

nswH (8Q!) ainsH (18Q1) onO bus dot! gnibubth noitasup alili lo ai3sqas beaaetbbs svsif aisqsq

(Q8I) ndoaniveJ (Q81) sndali)I (4QQt) swalisfal 8Q1) nmxsi51 bus isqooD (88Q1) isM bus

.a,edto bus QQ!) aao$I bus amA bus (dsQQ1) asi$I 8QI) blelnsnnoU bus asU

iiedt ot asislet atnsuuniani 3iIoq as asioup bus allitsi neswtsd s3nelsThb Istinso edt aqsifte

iiasmob 03 biadua ns bus ailloiq iiedt as3ube, annft ngisio1 no Ilhsl nA .amiut ngisiol no at35118

daum s ai etedi busd iedio sift no asioup dtiW .amtut ugisiol lo aifIotq edt asaubet oafs arnift

s as beinsmslqmi ai siolJp edt ii hs1uaiflsq tflensd tiIim annft nieio1 sift isifi ti1idiaaoq ietsei

3rnvsd nsdt iedtsi ainet sioup ns qseL anrift nieio1 isdi ninsem ($13V) tnisiiast tioqxs psinulov

tol smoaiiio sviaijlloa siom £ asisliliasl isdi saiveb s as atas $13V s iaeTb nI .asaneai! sioup ud ot

-siuillsw aiiaemob £ 10 tasisini sift ni ed 03 tsi1 ass! ai 13V £ tsdt aeilqmi aidT .annfl nisio1

.inemntsvo gniimixsm

84

Page 55: i noiiibnosiq - NBER

edt woled ie atoup s lsth iseb hisl i Ii arrnii nieiol lieve sis eiedt eieulw es sf11 ni

bnioj sdi ot issob amill nieiol edt nivom lo iee1e ismhq edt asd anoqmi lo level ebsii ee1t

evlidi3aei iev A .noiaulloa ioI e3iveb gnulslili3it £ eioleiedt al bus 1evel tuqilio (eviwIlo3) lsrnilqo

annit nieio1 edt isdi level flJqtiJo lsmiiqo linioj edt woled isi linei3fflus liJqiuo e3ubsi bluoo sioup

ngieiol dtod ibidw nidtiw sioup sill iol ensi Isilusiadus £ 51 eiedt lud ailloiq beaubei ie1lu bluo3

.ths ns (annit io) mill aileemob edt bus smut

essa edt siebianoa odw (Q8QI) sndth)I d bsisuianomeb si lasfie nilslilias1 niaiiqius eiom A

bdlIs niaubouq unit ajisemob eno bus ngisuol sno dhiw 'ioqoub bnsflusfl lsnoitsineini us 10

£ nI .level ebsui eeil edt Is besoqmi $1IV s lo laslis edt asnirnsxe ed .abuboiq belsiineueThb

bnsthea aidt nI .taelle on evsd bluow level ebsul eeul edt Is $IHV s 1elusm eviiiieqmoa liaeheq

vsm audi bus annll owl edt nsewled qizfanoilslei aigsisfla edt suells $1V eiIi uevewod easa Ioqoub

.aemoaiuo Ie*ism no lasTle insnoqmi us evsd

edt uefls mubdiliupe ilasM £ etiniianoa lifts aeaiuq ebsn eeul edt uedterfw sea 01 uebuo flu

ii ised edt Bniob Ilila si mull ilase iedledw las Iwm ew jevel ebsut eeul edt Is $13V £ lo noiIiaoqmi

nieuo1 bus aitsemob edt uol Ou bus Oq beioneb eus aeaiuq ebsul eeul edT .eaiiq 'lsviu all nevi nsa

ailsemob edt nevi as Oi eaiuq a'lsviu edt nblT .lauit mull emod edt iebianoD .1evitaeqaeu unit

mill aitsemob edt $13V sill 01 uoh .suoled nsdt sanq au saisu 03 evilasufls suom Ii abnil WOfi unit

(unit aiiaemob edt) ii nedi bexi1 saiuq bled lsvh edt eliifw eaiuq all besisu Ii Ii lsdt snigsmi bluow

nieuo1 edt ,easlq ni $13V edt dtiw uevswoH .eiom lies bluow mull nieuo1 sill bus asel lisa bluow

ii nsdt esseuani eariq all moul aelsa isol uewel ue1luz mill aiiaemob sill os euom lIes ionnsa unit

Iq niJisJ .eahq all saisu 01 evitneani a'muit oilaemob sill assseuani SIV edt wilT .bluow eaiwuedto

.Oq < lq isdt awollol Ii O'i eaiuq nieuo1 01 eanoqseu-ised sIaV-laoq smill ailsemob edt lneseuqeu

511 SSIS1 bluow mill aitsemob edt jevel ebsui eeil sill is sailq au lqel mull nieuo1 silt Ii udT

Ii Ii elqmsxs uoI .uevewod jevel ebsul seul edt is eaiuq all qeel ion 111w unit nieio1 silT .saiuq

Page 56: i noiiibnosiq - NBER

bliiow eanoqasi Izsd nibnoqasrro3 au nsdi ,s3hq au saisi bliow miii 3iiasmob sill :sdu bsusqiaiins

ssz ns ew wilT .niqo1a-biswqu al noiiamñ noqasi-Iasd 8311q all ioI s3q isdid s svlovni oals

.as3hq eaisi 03 amifl diod iol asvilns3ni 2816813 1vI lIoqmi sbsiu 8811 edits bsaoqmi $13V s usd3

noit3nul noqasi-tasd a'rrnhl 3iuaemob sill eaused bs3s311qmo3 'his1 al noiiutoa Isutas silT

noitassi 513V-iaoq awoda daidw smiq ni betsiiaulli ai noiiuloa silT .auouniino3aib Sd ol iuo ainifl

as bsfniA iud auountnoa 21 noiiamñ sanoqasi-iasd a'unll nisio1 silT .anni'l owi silt lol anoiranul

alili bnosd 35(11 tasl sift nuiasftsi sanq muhilhliups sbsd ssil Isiuini silt is aiuaao Anii silT .nwoda

al noitamil sanoqasi-tasd a'miII aiuasmob silT .513V sift d bsriisiianoa si mill nis1o1 silt inioq

21 8311(4 21ff!' .Iq saiiq 21 sanoqasi lasd ailasmob sift Oi sanq nis1o1 sbsii-ssil sill iA .auoirni:noaaib

,ol sang nieio1 ns iol smsa sili anlsmsi bns uitnsup bsxft $!HV sill 03 sanoqasi tasd a laul llssi

sill sailq smoa is ,sanq niio1 sill iii asassiani isbianoa sw as isvswoH .nibnid ax 23V sill ilaidw

blo all cl nsvi ax miii ailasmob sift 10 sanoqasi-lasd sift 1nioq audi IA .gnibnid sd 03 asassa M3V

situ sanq nisio1 lstoviq audi IA .sahq all ni IIsI steiaaib s nitqmi noilaniñ sanoqasi-iasd 513V-siq

.sanoqasi sahq sviaasis fiS 03 ioisitianoa £ moil asibliwa mill ai:asmob

-iasd a'lsvh situ sisdw iaut aiuaao noilanul sanoqasi-iasd amilt ailasmob sift ni 'sloil" silT

io) asahq lo iisq sInia on ai sisdi wilT .rnsigsib sill ni nwoda as dguoiifi asaasq noiianilt sanoqasi

"stsiia bexim" £ 21 rzwhdhliups ilasM lno silT .mijhdiliups dasM £ asiuiilanoa Isili ("sls1ia srnq"

smoa duiw q sahq bas uilidsdoiq smoa (131w lq sahq asisda mill ailasmob siti 1131(1w ni

gnibnoqasnoa silt bssaxs asalig easilt lo ssidi (IA .!i sahq sgisda iaum miii ntsio1 silT .tilic1sdoiq

Ioqoub bnsitisfl sfqmia audi th usdi iluasi nb(i1ia situ anisido (Q8QI) ndah)1 wilT .asahq sbsii ss11

'aiemuanoa Is allloiq bns asaniq asaisi usd3 wsaivsb niis3i1ias1" a Iauoiiidmsnu ai 513V s bbom

sill 01 iasiinoa ni ai idl'] .aiioqmi 1o Isvst sbsii seil sdi is bsaoqmi al $13V sill Ii nsvs saiisqxs

beaauaaib as (Q8QI) isnola2 bns isdmstoSI d bsxIsns noiaulloa tiasi lsbnu asioup 1o lasils aimsnb

o

Page 57: i noiiibnosiq - NBER

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Page 58: i noiiibnosiq - NBER

sgsisvs no dguod1 nsvs le1s innoqmi asd $1311 sili 8Q1) sclth)1 ni isdi eioL4 [2.E noite2 ni

.noiluIo2 eu is nibnid ion si 2311 sill

ns lo noiiqi13sb Isisiil £ ed ol 1siiI i ii isili ibum oa ion ai (Q8QI) sdah)1 Io sulsv silT

$13V s isrli sebi sill no noilnsns 25211301 Ii Isfil ai noiiudhlnoa insfloqmi 2'leqsq silT .emoaluo ls01as

no 2135113 sir dguoudi 2138113 lnsfloqmi svsd nsa (insmlrliani ailoq sbst ins noianelxe d fmna)

bsel udim $13V s lscli ai 1iIidi22oq bslslei lsob A .amifl nsewisd asiilsvh sviiiieqmoa (I1ae11sqmi

sift isili smus oilw 8Q1) ainsH ni as aurii1 neewled ilsvii lo sbom sill ni ensda £ 01

sift ibidw ill siuiainia £ 01 ilsvii bnsthsfl £ alisvnoa level sbwii-seil silt is WV £ 10 noiliaoqmi

.saivsb rii1slilias1 £ as alas $IHV s t1u nisA .iebssl eailq iedlsasi £ aemooed miff ailasmob

beisisi (lsaol3 isifio nsm sis eieili asioIJp bns 11ii1 neewied saiocia sffi 01 noilibbs nI

io msiolsv bs ieilisilw lo noilasup ecfi ai sisdi Thisi 01 lauj bsiaiiiasi ai noiinefls Ii nsv3 .aeiiaai

iaeheqmi isbnu (d8Qf) isarisq2 bits iebnsifl iii itwoila aA .nsaorb Sd bluozla aIInsi aiIiaeqa

abnsqsb aaensviiasifls sviislsi ilsili bits insliviupe Ion sis aThisi msiolsv bs bits aiIiaeqa noiii1sqmo3

ew 1lsisns sioM .lebom sift lo alaeqas aftiosqa iev ierlio bits basmob 1o midI lsnoiinu1 eu no

.(aThisi issnil-non 1siene siom io) ainenoqmoa meiolsv bs bits afliasqa iMw aIliisi iebianoa iilim

eanq nibulani loqoi1o isbnu alnel flida 01 beau ed oaEs bluoa aeiailoq eldiaaoq isilio auoiisV

noiiasloiq lnslnoa j(QQ1) sairi] asiailoq niqmub-iins isnoiisiaaib [(VQ1) sssM sU] aloiuiioa

beisisi ebsil aeve bits [(.QQ1) oansifl] aeiailoq lnemsiuaoiq lnsrnnievo j(88Q1) doll bits sndah)11

as ilaua aeiailoq ailasmob aiieneg sioM .[(€QQI) ioIsT] 2ll$1T io aiilgn tisqoiq lsuiaellslni

01 beau ed oals nsa abisbnsia lsii1ubni lo niflea sill bits ai1oq lsinsmnoiivns adoq noiliieqmoa

.ashlsvii lsnoilsmslni lo eiuiiainia aigsisila sill sansuflni

01 woif daildsias oi niieea iosir ebsil Isnoilsinsini iii siulsielil nibnsia-no1 s at eisilT

)leea (IQQI) daiujdT bits sndah)1 .((!VQI) ilswsi18 ni as) anoituolaib ol ainemiruiani leisi Iineiarne

.loqoiIo iebnu anoiflolaib 01 ainsrnuflani ni1qqs ni aelqiannq lsiens srnoa daildsiae 01

R

Page 59: i noiiibnosiq - NBER

auaaI !noiiibbA 8. sd bluoda iadi 3i!oq sbsii 3igsialla cii a3iqol elidwdflow moa asioni Iansl&n nib&siq 8dT

3balJ 3i3ada no how dt lo dauM .aini iehwn ,odsL asnanoa aiqol daua 8n0 .bebIwociIaa

ianisgs lluau aishim iauboiq 5viiiisqmoa Iiaehsqmi ni acinft d bcna aiftoiq no asauaol ai1oq

moil anoiiaiveb isdi ni bsas1qwn ed idim aiasdqme aidT .2Jshlam ocJsf beflotaibnu lo bniioihasd a

is*iam iauboq oi sansai1inia cii sldaisqmoa tassi is mssa aie*iam iods! ni noinieqmoa iaehsq

ysdt "noiiauboiq bsbba su1v dgid" saiuoans asisaovbs aifoq lsiiiwbni cisriw oa!A .anoiisivsb

bsinsasiq eansbiva .aisbIodsiada emoani-c1id no narli adoj saw-rfid no icfisw siom saalq oi mesa

aiIoq ebsii Isnoiisnieini cii ehaia is inez sift lo ibum rail aiaeua (Q8QI) aiemmu2 baa is)I cf

al anoinu evitas lo sansasiq eu cii aiIoq sbaii 3i51flta lo aiaIsnA .aiehiow ol asirnaa aemag

.(.tQQ1) nu1 baa (lQQ!) auo!oqoniU baa iiisseM (88Q1) eansq baa iebnsifl iii bsnisinoa

a evaci aunit fleciW aeiailoq ebsil aisisxj2 10 ais11s sift ebianoa 01 insfloqmi oals ai ii

baa hhbo$I bns (QQ1 1QQf) asnot baa isansq2 ni as sw1ainia Isnoilanullum beiseith llsitiev

-rftozq elqmia ion eta aunil nsdw asiailoq ebsil lo alasile sift bnsiaiebnu ol baa (Q8QI) nooY

-t" beltsa-oa eu no asiailoq ebsil lo aiaslle sill aisbianoa (QQl) gnui1 e1qmaxs 1Oi .aieximixam

tilim eW .azshiow baa aieblodetada lo rxoiiilsoa £ as bsweiv ai mill sili cbidw ni (naqa'L ioI) "mill

ebsii aieisiia wod has baa auoneoxe al annit lo eiuiainla eu Isdi noilqmuaas eu xa!si ol daiw oats

aaamiaioH 8Ql) ndoaaiveJ cii as anoilsisqo mill lo siuiainla lsnoiianiilum sib iaella iilgim ai1oq

lo noiisiaagio Isineini sift iaeTla oats iilim 3il0q sbaiT .(QI) maFi baa (Ql) neau*isM baa

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aleboM i3jf0q ebsiT 3eisii 10 noiisidilsD 2

Page 60: i noiiibnosiq - NBER

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Page 61: i noiiibnosiq - NBER

sift no asi3iloq sbii 3igsiElta lo at3e'fls Silt 25B 03 supinil3si fl0itE1dil3 £ P52U (a88Q1) IIXIU

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Page 62: i noiiibnosiq - NBER

£ lo noiiibno3 sbio iaiit srft 3thw n sw lud 13xe 1qqs ion ob (0) ai3ubo1q biiinThb

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.1qmi bluow Isbomn bnthsfl £ nifi

£ ñiod ibMw lii saga sib llsw sldslisvs i Thisi s 1no rkidw ni ss3 sill aiebiano3 iixiCl

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Page 63: i noiiibnosiq - NBER

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Page 64: i noiiibnosiq - NBER

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a iiwbni .2.U sdi ni 33ubrnq wonsomod diiW .nislqxs o iIu3fflib ion i iluwi aiñT

sq Io $3X8 sioisisñT .gni3hq io3 1niism siIqmi ioiv&Isd bniiisfl iixiU d bsmuz

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Page 65: i noiiibnosiq - NBER

siszlw is*iam a iii noiialdils3 3iIOq sbsii 3isia,3a £ sAatisbnu (88Q1) namzn)I bna niwbiafi

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Page 66: i noiiibnosiq - NBER

() [(i))1J3(1)X = (r)D

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Page 67: i noiiibnosiq - NBER

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ai daidw •

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asviua taoa egsievs eviislumua iiesft qu annft asvhb tbidw Ioqonom Isiuisn £ llsilneass ai lilw

.ean oi aeaiiq aeausa bits

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)18 .sbsii seft cfiiw (e sd sill) noitetrnq ssnqt 10 nothqmo3 sill ai nitsistni 1oM

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(Isbom usd1 iii) bsisms evad bluow Uubni easnsqst on tail ni noil3slolq bhow lo nieflaq sill no

tiidoi £ bewolla ii tail 52fl82 silt iii "lueus" saw ailoq essnaqat silt wilT .sbaij setI isbnu

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Page 70: i noiiibnosiq - NBER

sia tsift ailuasi nsswied ctaiunilaib 03 skla siolsisili sis bns (agniih isclio nam bna) ilvh ririfi

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sisl ania bsilqmi silt sis ion cluons iwdoi ion si o1oboilism noiiaidila3 sili (QQl) asldansV d .asi3iloq 1au13s gnilnsmslqmi iol siasd £ 25 28513isxs noiialdilE3 niaij tasggus 01 iluons

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Page 71: i noiiibnosiq - NBER

ploq sbsiT 3i31s1i lo siln! silT I.ô

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