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Full-Text Articles in Social and Behavioral Sciences

Policy Challenges In A Dual Exchange Rate Regime, Sven W. Arndt Aug 2012

Policy Challenges In A Dual Exchange Rate Regime, Sven W. Arndt

CMC Faculty Publications and Research

It is known that the effectiveness of macro policies depends on the exchange-rate regime. Pertinent models have typically considered either fixed or floating rates rather than mixed regimes. In recent years, however, the dollar has floated against most currencies, while being fixed against the yuan. This paper argues that a flex-price, dual-rate model consisting of the U.S., China and the Eurozone, combined with distinct adjustment patterns in tradables and non-tradables sectors and a tendency for policy makers to treat inflation in housing as pure asset inflation, provides a plausible explanation of the great moderation and its aftermath.


A Story Of Four Revolutions: Mechanisms Of Change In India, Aseema Sinha Jul 2012

A Story Of Four Revolutions: Mechanisms Of Change In India, Aseema Sinha

CMC Faculty Publications and Research

Sumit Ganguly and Rahul Mukherji’s India Since 1980 presents a bold and ambitious argument about change across and within India. Its unique contribution lies in its description of four distinct revolutions: social-political, economic, foreign policy, and religious. While many recent books have noted changes in India’s economy and foreign policy, India Since 1980 will be known for its juxtaposition of four different themes in one short, pithy volume. Even if one may disagree with the authors’ choice of the four dimensions of change, the book’s dominant message is that India is changing across a whole range of ...


The Early Decision Option In College Admission And Its Impact On Student Diversity, Heather Antecol, Janet Kiholm Smith Jan 2012

The Early Decision Option In College Admission And Its Impact On Student Diversity, Heather Antecol, Janet Kiholm Smith

CMC Faculty Publications and Research

Colleges and universities that adopt early decision (ED) as an admission practice can generate additional resources by attracting wealthier students who make binding commitments to attend and forgo shopping for competing aid offers. An unanswered question is whether the resources generated from price discrimination are used by schools during the regular admission process to attract more diverse students. Using a sample of private national universities and liberal arts colleges, we model the choice to adopt an ED program and its impact on students’ racial and geographic diversity. We find that schools facing more competition for students are more likely to ...


Book Review: Modeling The Composition Of Government Expenditure, Cameron A. Shelton Jan 2012

Book Review: Modeling The Composition Of Government Expenditure, Cameron A. Shelton

CMC Faculty Publications and Research

Throughout the developed world, public finances dominate headlines. Given the widespread unsustainability of budget plans and the bitter attrition of retrenchment, they are like to do so for the next decade or more. As they have long done, different polities are likely to make different choices for how to spend dwindling public moneys. Understanding the sources of past heterogeneity—why countries have differed in their public spending—is thus of interest as we enter an age of fiscal adjustment. Messieurs Creedy and Moslehi offer us a technical primer laying the groundwork for modeling efforts.


Stabilization Policy In An Economy With Two Exchange Rate Regimes, Sven W. Arndt Jan 2012

Stabilization Policy In An Economy With Two Exchange Rate Regimes, Sven W. Arndt

CMC Faculty Publications and Research

This paper uses a flex-price open economy macro model to examine the effectiveness of U.S. monetary and fiscal policies when the dollar floats freely against the euro, but is fixed against the Chinese yuan. It is assumed that capital mobility is high between the U.S. and the Eurozone, but low between the U.S. and China. The model allows for short-run price flexibility and imperfect substitutability between domestic and foreign financial assets. The focus is on the implications for the efficacy of U.S. macro stabilization policies of China’s fixed-rate strategy. While many countries have pegged their ...


Scaling Down And Up: Can Subnational Analysis Contribute To A Better Understanding Of Micro-Level And National Level Phenomena?, Aseema Sinha Jan 2012

Scaling Down And Up: Can Subnational Analysis Contribute To A Better Understanding Of Micro-Level And National Level Phenomena?, Aseema Sinha

CMC Faculty Publications and Research

While cross-national analysis dominates comparative politics, many scholars have moved to the subnational level to test hypotheses generated at the national level. Subnational studies allow researchers to control for variation in a way that even the most sophisticated cross-national statistical studies are unable to.


Caught In A Poverty Trap? Testing For Single Vs. Multiple Equilibrium Models Of Growth, Cameron Shelton, Francisco R. Rodriguez Jan 2012

Caught In A Poverty Trap? Testing For Single Vs. Multiple Equilibrium Models Of Growth, Cameron Shelton, Francisco R. Rodriguez

CMC Faculty Publications and Research

We look for permanent effects to per capita GDP from exogenous, temporary shocks. Our shocks are temporary changes to the export revenues of small, open economies. We find no evidence that even the largest of these temporary shocks, in excess of 9.7% of GDP, produce permanent effects to the growth path of per capita GDP. The inability to reject a single-equilibrium world with shocks of this magnitude suggests that multiple-equilibria, if they exist, are too widely separated to be policy-relevant. Current aid initiatives, which are of a similar magnitude, are not likely to deliver transition to a higher growth ...


The "Great Moderation" In A Dual Exchange Rate Regime, Sven W. Arndt Jan 2012

The "Great Moderation" In A Dual Exchange Rate Regime, Sven W. Arndt

CMC Faculty Publications and Research

In the early nineties, the U.S. economy was emerging from a brief slump, monetary policy was easy, and economic activity recovered quickly during the decade, with GDP eventually reaching and then passing the consensus full employment level. Yet aggregate inflation remained surprisingly subdued. This moderation in prices at the aggregate level persuaded policy makers to allow the easy-money stance to continue in spite of the presence of inflation in non-tradables and in housing and construction in particular. This paper uses a flex-price, mixed-exchange rate model to examine some of the major contributing factors to economic developments in the two-decade ...