Economic Theory Commons^™

A New Approach To Robust Inference In Cointegration, Sainan Jin, Peter Phillips, Yixiao Sun

Research Collection School Of Economics

A new approach to robust testing in cointegrated systems is proposed using non-parametric HAC estimators without truncation. While such HAC estimates are inconsistent, they still produce asymptotically pivotal tests and, as in conventional regression settings, can improve testing and inference.

On Measuring The Efficiency Of The Social Security System Reforms. The Case Of Poland, Joanna Tyrowicz, Piotr Mularczyk

Joanna Tyrowicz

As other European countries, transition economies face the reform of the social security system. As one of the first, Poland has introduced a pension reform in 1999, which changed a standard pay-as-you-go system into a one constructed of three pillars and based on addressed contributions. The five years from the reform allow to take a first look at the reform, both in terms of assessing the legal implementation as well as the realization of main assumptions and aims. In this paper we consider the effectiveness of the reform. We find that in many aspects this reform should not be considered …

L S Penrose's Limit Theorem: Tests By Simulation, Pao-Li Chang, Vincent Chua, Moshe Machover

Research Collection School Of Economics

LS Penrose’s limit theorem (PLT) – which is implicit in Penrose [5, p. 72] and for which he gave no rigorous proof – says that, in simple weighted voting games, if the number of voters increases indefinitely while existing voters retain their weights and the relative quota is pegged, then – under certain conditions – the ratio between the voting powers of any two voters converges to the ratio between their weights. Lindner and Machover [3] prove some special cases of PLT; and conjecture that the theorem holds, under rather general conditions, for large classes of weighted voting games, various …

Determinantes Explícitos E Implícitos De La Deuda Externa Pública Peruana, José Manuel Martin Coronado

José-Manuel Martin Coronado

This research aims to prove that sound economic policies are nothing more that basic conditions for the foreign public debt problem. In fact, by studying the factors of public debt issues in Peru, Latin America and the emerging economies it’s clear that some implicit economic and non-economic factors have to be considered because of the social complexity and variable characteristics in emerging economies. This causes failures in economic policies assumptions, inefficiencies, distorted causality and nonrational behavior. This paper proposes, first, to perform a deep and comparative analysis of the foreign debt determinants in emerging economies, then, to allocate financial resources, …

Protecting Forests Through Farming: A Dynamic Model Of Nontimber Forest Extraction, Ujjayant N. Chakravorty, Herath Gunatileke

Ujjayant Chakravorty

Forest resource extraction by local communities has been cited as a major impediment to the efficient management of protected forests. This paper develops a two sector dynamic model for farming and forest resource extraction by communities living in the forest periphery. The model assumes that land under forestry is constant and households allocate their time to farming and forestry. Comparative dynamic results suggest that higher prices for agriculture output, lower input prices, better knowledge of farming techniques and a lower discount rate may result in a higher equilibrium stock of forest resources. Tobit analysis with primary data collected from the …

State Laws And The Independent Judiciary: An Analysis Of The Effects Of The Seventeenth Amendment On The Number Of Supreme Court Cases Holding State Laws Unconstitutional, Donald J. Kochan

Donald J. Kochan

In recent years, the Seventeenth Amendment has been the subject of legal scholarship, congressional hearings and debate, Supreme Court opinions, popular press articles and commentary, state legislative efforts aimed at repeal, and activist repeal movements. To date, the literature on the effects of the Seventeenth Amendment has focused almost exclusively on the effects on the political production of legislation and competition between legislative bodies. Very little attention has been given to the potential adverse effects of the Seventeenth Amendment on the relationship between state legislatures and the federal courts. This Article seeks to fill part of that literature gap, applying …

How Do Forecasts Respond To Changes In Monetary Policy?, Laurence Ball, Dean D. Croushore

Economics Faculty Publications

Just as changes in atmospheric conditions affect weather forecasts, changes in monetary policy affect economic forecasts. When monetary policy shifts, forecasters change their predictions about growth and inflation. But does the economy change to the same extent that forecasts do? In this article, Laurence Ball and Dean Croushore examine forecasts from the Survey of Professional Forecasters to determine if forecasts and the economy respond in tandem or if there are significant differences.

The Challenge Of Administration By Regulation: Preliminary Findings Regarding The U.S. Government's Venture Capital Funds, Jonathan G.S. Koppell

Publications from President Jonathan G.S. Koppell

This article assesses the ability of elected officials to control public policy as implemented by public/private hybrid organizations, specifically, government venture capital funds. The study reveals greater control over OPIC investment funds than Enterprise Funds despite the existence of more traditional administrative tools of control for Enterprise Funds. This finding suggests that the regulatory infrastructure for hybrid organizations is more determinative of control than the existence (or lack) of traditional administrative control tools. Thus the challenge of hybrid government centers on the development of regulation as a substitute for administration.

How Useful Are Forecasts Of Corporate Profits, Dean D. Croushore

Economics Faculty Publications

If forecasters predict higher earnings for corporations, the stock market will rise. Stock prices will drop with a forecast of lower earnings. But are such forecasts on the money? Dean Croushore uses data from the Survey of Professional Forecasters to check the accuracy of forecasts of corporate profits. The results show that, despite the volatility of corporate profits, the forecasts are rational.

Institutional Changes And Discretionary Value For Property Rights In Drylands’ Farming Of The Sudan, Professor Issam A.W. Mohamed

Professor Issam A.W. Mohamed

Research on land tenure and use control and the socioeconomic sets of regulations in the agricultural rainfed sub sector of Sudan, come to focus for many reasons. Anthropogenic pressure, expanding animal population and migration led to accelerated impacts on both the ecological systems and land yields. Conflicts between governmental regulations and indigenous rules contribute to generate inconsistencies on who have the right to till the land and hence own it. With such transformation logically, more intensive commercial farming took place and land intake exponentially increased. Private or collective property rights of land are procured through traditional tenure, prescription, settlement or …

Temporary Equilibrium Dynamics With Bayesian Learning, Shurojit Chatterji

Research Collection School Of Economics

This paper examines the stability of deterministic steady states in a class of economies where the state variable is one dimensional and where agents use Bayesian techniques to form expectations. The dynamics with learning are locally convergent if the prior mean is close to a stable perfect-foresight root having modulus less than 1 and if the prior beliefs are held with enough confidence. The dynamics are, however, divergent if the prior mean or the variance of the prior distribution is sufficiently large

The Role Of Equilibrium And Disequilibrium In Modeling Regional Growth And Decline: A Critical Reassessment, Philip E. Graves, Peter R. Mueser

PHILIP E GRAVES

The assumption of interregional equilibrium in migration research has recently been attacked. At issue is the motivation for on-going migration if rents and wages accurately compensate for spatial amenity variations; but if rents and wages fail to accurately compensate potential migrants, then amenity valuations must be flawed. We here show that arguments supporting substantial disequilibrium in the U.S. economy are unconvincing. The substantive issues are then clarified by a model which allows for both equilibrium and disequilibrium migration. We conclude that intertemporally systematic migration stems predominantly from equilibrium forces.

Inflation And Taxable Capacity: Some Recent Evidence, Barbara Allison Haney-Powell

Masters Theses

Colin Clark's theory of inflation has had a profound effect on present-day economic theory concerning taxation policy. While his belief that inflation occurred when all tax revenues exceeded 25 percent of national income was rejected by his contemporaries in the 1940's, supply-side economists incorporate Clark's theory into their proposals for curing the unemployment and inflation of the 1970's and 1980's. These proposals gained popular support and resulted in the election of President Ronald Reagan who implemented such proposals. The purpose of this study is to determine the veracity of Clark's theory.

Clark's theory was tested in this study with the …

Household Migration: Theoretical And Empirical Results, Philip E. Graves, Peter D. Linneman

PHILIP E GRAVES

See article for detailed abstract.

Polluters’ Profits And Political Response: Direct Control Versus Taxes: Comment, Robert S. Main, Charles W. Baird

Scholarship and Professional Work - Business

In a recent issue of this Review, James Buchanan and Gordon Tullock (B-T) presented a public choice analysis of the relative merits of direct controls and taxes in externality control. In Section IV of their paper, B-T consider the case of reciprocal external diseconomies of consumption. They ask whether "... persons in this sort of interaction, acting through the political processes of the community, will impose on themselves either a penalty tax or direct regulation" (p. 143). Their analysis is carried out within the context of a two-person model in which each person consumes the same quantity of a …

A General Solution For Linear Decision Rules: An Optimal Dynamic Strategy Applicable Under Uncertainty, George A. Hay, Charles C. Holt

Cornell Law Faculty Publications

Linear decision rules for controlling complex systems are often obtained by matrix inversion, but transform methods offer an alternative approach that yields insights into the structure of the decision problem of maximizing expected payoffs under constraints.