Economic Theory Commons^™

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

Paul Krugman And The Illusion Of The Illusion Of Conflict In International Trade, Spencer J. Pack

Economics Faculty Publications

No abstract provided.

Nafta Integration: Unproductive Finance And Real Unemployment, Melvin Burke

School of Economics Faculty Scholarship

NAFTA did not begin on January 1, 1994, but rather, many years earlier in 1988 with the Canadian/USA Free Trade Agreement and with President Carlos Salinas de Gortari's economic reforms. The latest Mexican crisis is but the historic continuation of its 1982 debt crisis. Both are part of the larger global stagnation crisis which began in the 1970s and continues today. NAFTA is not a free trade agreement, but rather the creation of a North American trade block, designed and implemented by American multinational corporations to obtain a greater share of a stagnant global output. It is not a "win, …

La Economía Política Del Tlc, La Crisis Global Y México, Melvin Burke

School of Economics Faculty Scholarship

El Tratado de Libre Comercio (TLC)1 acordado entre Canadá, Estados Unidos y México es una extensión lógica y probablemente inevitable del Tratado de Libre Comercio entre Estados Unidos y Canadá. Ambos acuerdos son controvertidos y, con buena razón, existe una oposición pública masiva a ellos. Nunca se ha podido dar una explicación creíble sobre la necesidad del acuerdo a la población de estas tres democracias. Contrariamente a las afirma-ciones de los propulsores y de los gobiernos responsables de estos acuerdos, no existen garantías de que se consigan los beneficios netos señalados por ellos. Tampoco está claro quiénes saldrán beneficiados y …

Evaluating Mccallum's Rule For Monetary Policy, Dean D. Croushore, Tom Stark

Economics Faculty Publications

Some economists have proposed that the Federal Reserve follow a rigid rule for conducting monetary policy. A policy rule is a formula that tells the Fed how to set monetary policy. For example, in 1959 Milton Friedman argued that the Fed should increase the money supply a constant 4 percent each year to eliminate inflation and avoid destabilizing the economy. More recently, other economists have identified an additional benefit: a rule can eliminate the inflationary bias that could occur when discretionary monetary policy is used. Under a discretionary policy, decisions are made on a case-by-case basis.

But economists don't agree …

Capital Structure And Product-Market Rivalry: How Do We Reconcile Theory And Evidence?, Dan Kovenock, Gordon Phillips

Economics Faculty Articles and Research

This paper presents empirical evidence on the interaction of capital structure decisions and product market behavior. We examine when firms recapitalize and increase the proportion of debt in their capital structure. The evidence in this paper shows that firms with low productivity plants in highly concentrated industries are more likely to recapitalize and increase debt financing. This finding suggests that debt plays a role in highly concentrated industries where agency costs are not significantly reduced by product market competition. Following the empirical evidence we introduce the "strategic investment" effects of debt and argue that this effect, in conjunction with agency …

Regulatory Competition, Regulatory Capture, And Corporate Self-Regulation, William W. Bratton, Joseph A. Mccahery Prof

All Faculty Scholarship

No abstract provided.