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The Interest Rate Effect On Private Saving: Alternative Perspectives, Joshua Aizenman, Yin-Wong Cheung, Hiro Ito Nov 2016

The Interest Rate Effect On Private Saving: Alternative Perspectives, Joshua Aizenman, Yin-Wong Cheung, Hiro Ito

Economics Faculty Publications and Presentations

Using an uneven panel of 135 countries from 1995 to 2014, we investigate the link between interest rates and private saving, and focus on whether the interest rate effect is dominated by the income (i.e., negative) or the substitution (i.e., positive) effect. With the baseline estimation, we find that the real interest rate has the substitution effect on private saving only for a full-country sample and a group of Asian economies. We also examine if low real - or nominal - interest rates have any impact on the link between the real interest rate and the private saving rate. We …


The Role Of Inflation Targeting In Debt Denomination In Developing Countries, Olena Ogrokhina, Cesar M. Rodriguez Sep 2016

The Role Of Inflation Targeting In Debt Denomination In Developing Countries, Olena Ogrokhina, Cesar M. Rodriguez

Economics Faculty Publications and Presentations

This paper analyzes the inflation targeting experience of developing countries as an effective monetary policy framework to promote changes in the currency composition of their international debt. Using matching with difference-in-differences to address the self-selection bias, we find that in inflation targeting has led to a 3-6 percentage point reduction in the foreign currency share of international debt in targeting countries when compared to non-targeting countries. Furthermore, from the analysis of the individual currency shares, we find that inflation targeting has contributed to a 10 percentage points lower US dollar share in international debt in targeting countries compared to non-targeting …


Trade Invoicing In Major Currencies In The 1970s-1990s: Lessons For Renminbi Internationalization, Hiro Ito, Kawai Masahiro Sep 2016

Trade Invoicing In Major Currencies In The 1970s-1990s: Lessons For Renminbi Internationalization, Hiro Ito, Kawai Masahiro

Economics Faculty Publications and Presentations

In this paper, we investigate how much a major currency is used for trade invoicing by focusing primarily on the experiences of the U.S. dollar, the Japanese yen, and the Deutsche mark (DM) in the 1970s through the 1990s. We then attempt to draw lessons for China’s renminbi (RMB) internationalization. Our data on the shares of the three major currencies in export invoicing show that the dollar was unequivocally a global invoicing currency, and that the DM was the most important regional currency in Europe while the yen was never a global or a regional currency. DM invoicing was driven …


The Economic Value Of Forest Park Ecosystem Services: Results Of Five Focus Groups Conducted In Spring 2016, Randall A. Bluffstone, Pablo Barreyro, Jenny Dempsey Stein, Cody Kent, Antonia Machado Sep 2016

The Economic Value Of Forest Park Ecosystem Services: Results Of Five Focus Groups Conducted In Spring 2016, Randall A. Bluffstone, Pablo Barreyro, Jenny Dempsey Stein, Cody Kent, Antonia Machado

Economics Faculty Publications and Presentations

Objective: This initial phase of research lays the foundation for a survey using contingent valuation (CV) and choice experiment (CE) methods. We asked select Portland residents what they care about most in Forest Park, their willingness to pay (WTP) for improving ecosystem services and how they generally think about the value of those goods and services. These results will help us narrow the experimental design of the forthcoming CV/CE study.

Approach: We conducted a focus group in each of Portland’s 5 “quadrants.” We chose each location - Skyline, St. John’s, Cully, Foster-Powell and Hillsdale - based on either its proximity …


Bertrand Competition With Asymmetric Marginal Costs, Subhasish Dugar, Arnab Mitra Jul 2016

Bertrand Competition With Asymmetric Marginal Costs, Subhasish Dugar, Arnab Mitra

Economics Faculty Publications and Presentations

This paper tests the prediction of three discrete asymmetric duopoly price competition games in the laboratory. The games differ from each other in terms of the size of the cost asymmetry that induces a systematic variation in the difference between the firms’ marginal costs. While the standard theory requires the low-cost firm to set a price just equal to the high cost firm's marginal cost, which is identical across all three games, and win the entire market; intuition suggests that market price may increase with a decrease in the absolute difference between the two marginal costs. We develop a quantal …


East Asian Economies And Financial Globalization In The Post-Crisis World, Joshua Aizenman, Hiro Ito May 2016

East Asian Economies And Financial Globalization In The Post-Crisis World, Joshua Aizenman, Hiro Ito

Economics Faculty Publications and Presentations

This paper assesses the East Asian Economies’ openness to cross-border capital flows and exchange rate arrangements in the past decades, with the main focus on emerging market economies. Using Mundell’s trilemma indexes, we note that the convergence of the three policy goals in East Asia toward a “middle ground” pre-dates the convergence of these indices in other regions. Another more recent development involves the high level of international reserve (IR) holdings–a feature that is known as the most distinct characteristic of Asian EMEs. Financial globalization seems to have made asset prices and interest rates in Asian EMEs more vulnerable to …


An Evaluation Of The Federal Legal Services Program: Evidence From Crime Rates And Property Values, Jamein P. Cunningham Apr 2016

An Evaluation Of The Federal Legal Services Program: Evidence From Crime Rates And Property Values, Jamein P. Cunningham

Economics Faculty Publications and Presentations

This paper uses the city level roll-out of legal service grants to evaluate their effects on crime. Using Uniform Crime Reports from 1960 to 1985, the results show that there is a short run increase of 7 percent in crimes reported and also a 13 percent increase in crimes cleared by arrest. Results show an increase in the staffing of police officers in cities that received legal services. These cities are also associated with having higher median property values 10 years later. This supports the narrative that legal services changed police behavior through litigation or threats of litigation.


Leadership Positioning Among U.S. Firms Investing In China, Rossitza B. Wooster, Donna L. Paul Jan 2016

Leadership Positioning Among U.S. Firms Investing In China, Rossitza B. Wooster, Donna L. Paul

Economics Faculty Publications and Presentations

This study investigates leadership positioning by U.S. firms in China using the awareness, motivation, capability (AMC) perspective. We define leadership as first in industry to invest in China, and find that leaders have characteristics associated with higher AMC, evidenced by pre-existing multinational experience, higher product market orientation, smaller scale of operations, and higher input cost structure. Notably, the motivation to lower input costs and the prior capability in multinational operations mattered only for the first wave of firms leading industry investment earlier in time, while firms with smaller scale of operations exhibited a preference to lead investment in less popular …


Subreption, Radical Institutionalism, And Evolutionary Economics, John B. Hall, Alexander Dunlap, Joe Mitchell-Nelson Jan 2016

Subreption, Radical Institutionalism, And Evolutionary Economics, John B. Hall, Alexander Dunlap, Joe Mitchell-Nelson

Economics Faculty Publications and Presentations

This inquiry seeks to establish the importance of subreption as an approach to economic and social evolution that also proves integral to the tradition of radical institutionalism. We relate subreption’s etymology and appearances in Roman, Canon and Scots Law, as well as in Philosophy, to its applications found in writings advanced by Thorstein Veblen and carried on later as William Dugger details the rise of corporate hegemony. Understood as an approach derivable from selected philosophical writings of Immanuel Kant, in social science subreption is suggested to occur through the introduction of an outside value that sets off a form of …


Optimal Design Of Compact And Functionally Contiguous Conservation Management Areas, Hayri Önal, Yicheng Wang, Sahan T.M. Dissanayake, James D. Westervelt Jan 2016

Optimal Design Of Compact And Functionally Contiguous Conservation Management Areas, Hayri Önal, Yicheng Wang, Sahan T.M. Dissanayake, James D. Westervelt

Economics Faculty Publications and Presentations

Compactness and landscape connectivity are essential properties for effective functioning of conservation reserves. In this article we introduce a linear integer programming model to determine optimal configuration of a conservation reserve with such properties. Connectivity can be defined either as structural (physical) connectivity or functional connectivity; the model developed here addresses both properties. We apply the model to identify the optimal conservation management areas for protection of Gopher Tortoise (GT) in a military installation, Ft. Benning, Georgia, which serves as a safe refuge for this ‘at risk’ species. The recent expansion in the military mission of the installation increases the …


A Dynamic Simulation/Optimization Model For Scheduling Restoration Of Degraded Military Training Lands, Hayri Önal, Philip Woodford, Scott A. Tweddale, James D. Westervelt, Mengye Chen, Sahan T.M. Dissanayake, Gauthier Pitois Jan 2016

A Dynamic Simulation/Optimization Model For Scheduling Restoration Of Degraded Military Training Lands, Hayri Önal, Philip Woodford, Scott A. Tweddale, James D. Westervelt, Mengye Chen, Sahan T.M. Dissanayake, Gauthier Pitois

Economics Faculty Publications and Presentations

Intensive use of military vehicles on Department of Defense training installations causes deterioration in ground surface quality. Degraded lands restrict the scheduled training activities and jeopardize personnel and equipment safety. We present a simulation-optimization approach and develop a discrete dynamic optimization model to determine an optimum land restoration for a given training schedule and availability of financial resources to minimize the adverse effects of training on military lands. The model considers weather forecasts, scheduled maneuver exercises, and unique qualities and importance of the maneuver areas. An application of this approach to Fort Riley, Kansas, shows that: i) starting with natural …


Equity Commitment Under Uncertainty: A Hierarchical Model Of Real Option Entry Mode Choices, Rossitza B. Wooster, Luisa Blanco, W. Charles Sawyer Jan 2016

Equity Commitment Under Uncertainty: A Hierarchical Model Of Real Option Entry Mode Choices, Rossitza B. Wooster, Luisa Blanco, W. Charles Sawyer

Economics Faculty Publications and Presentations

We develop a real option hierarchical model of entry mode choice and test predictions using a sample of US companies in Latin America and the Caribbean between 1980 and 2005. Probit results indicate that the choice between a real option non-equity mode and equity commitment is influenced by previous acquisition experience, R&D and advertising intensities, and country risk. The choice of the more flexible real option JV mode over WOEs is positively related to greater firm size and market-to-book ratio in countries with better infrastructure. In contrast, greater marketing intensity and lower country risk encourage WOEs.