James M. Holmes


James Holmes.

James M. Holmes


James M. Holmes


Research Interests

Macroeconomic/Monetary Theory; Applied Econometrics

Contact Information

431 Fronczak

Buffalo NY, 14260-1520

Phone: (716) 645-8680



  • PhD, University of Chicago
  • MA, University of Chicago
  • BA, Wabash College

Recent Papers

Firm Type, Technology, and Growth

Corporations, as separate legal entities with transferable equity ownership, can make decisions and carryout contracts that extend beyond the lifetime of any proprietor.  This matters when the relevant production function(s) allow delays between inputs and when output results.  A corporation can transfer the value of increased productivity in the far distant future into present equity owner income, independent of the corporation’s ability to accumulate capital or reduce risk or transactions costs.  We demonstrate they can adopt, and more efficiently use, technological advances that are irrational for finite-lived proprietors.  Corporations by using complex production functions with delays cause higher economic growth.

Was Milton Friedman’s Hope for Monetarism Reasonable? Optimal Wage Indexation Re-examined

Gray and Benassy analysed the optimal wage indexation choice for representative agents and labor unions when monetary or/and real shocks are generated by a symmetric distribution.  Here their analysis is extended to the more relevant choice for firm owners.  In general, the probability of contractionary monetary and real shocks, either alone or simultaneously, can make any degree of indexation optimal.  If restricted to plausible values, a firm’s optimal choice is usually the opposite of that for representative/self-employed agents or labor unions, because it can increase the owner’s profit at the expense of worker’s income.  Indexation is arguably non-optimal for firms.

In the paper, “The Minimum Wage, Teenage Employment and the Business Cycle,” the effect of increases in the federal minimum wage on monthly black and white teenage employment is examined based upon our new disequilibrium theory at the level of the firm that predicts changing regimes between the demand and supply of labor associated with the business cycle phase.  Both simple, exploratory data analysis and more sophisticated econometrics are consistent with past findings when the data is pooled, but finds large, significant, negative employment effects in contractions and positive or zero, insignificant effects in expansions.  These effects apparently offset each other in the pooled data. This is consistent with a disequilibrium theory and suggests that minimum wage policy should depend upon the phase of the business cycle.

Selected Publications

  • “A Stochastic Monopsony Theory of the Business Cycle” (with P.A. Hutton), Economic Inquiry, (2005). [Reader’s Guide to Stochastic Monopsony, Mathcad files A, B, and C.]
  • “Savings Education: Learning the Value of Self-Control”(with P.A. Hutton), Education Policy Analysis Archives, (2005), lead article.
  • “Keynesian Involuntary Unemployment and Sticky Nominal Wages,” (with P.A. Hutton.) The Economic Journal (1996)
  • “A New Test of Money/Income Causality,” (with P.A. Hutton) Journal of Money, Credit and Banking (1992)
  • “The Specification of the Transaction Demand for Money and the Tax Multiplier,” (with D. J. Smyth) Journal of Political Economy (1972)
  • “A Functional-Form, Distribution-Free Alternative to Parametric Analysis of Granger Causal Models,” (with P.A. Hutton) Advances in Econometrics (1988)
  • “Memory and Market Stability: The Case of the Cobweb,” (with R. Manning) Economics Letters (1988)

Other Contributions and Distinctions

  • Board of Editors, Journal of Macroeconomics.
  • Recipient of Milton Pleasure Excellence in Teaching Award, 1996, 2003, 2017.
  • Who’s Who in America. (61th Edition, 2001, 60th Diamond Edition, 2005, and prior years). (They note that I discovered the “Holmes-Smyth Effect” and a new non-parametric test for causality in a non-experimental science.)
  • Who’s Who in American Education. (7th Edition, 2006,).
  • Who’s Who Among America’s (Best) Teachers (Who’s Who Among America‘s Teachers. (1998, 2000, 2001, 2003, 8th Edition, 2005, and 9th Edition, 2006).
  • Who’s Who in Social Sciences Higher Education. (2004-6).
  • 2000 Outstanding Intellectuals of the 21st Century – 1st Edition and 2nd Edition.
  • Leading Educators of the World. (2005).