Economics Commons^™

Remittances And Economic Growth In Mexico: Long Term Implications, Sean Lambert

Empirical Economic Bulletin, An Undergraduate Journal

This paper examines the impact of remittances on economic growth by looking at time series data from 1960 to 2012 from the country of Mexico. Using the OLS method, these data will be analyzed to see what the long term impact of remittances have been on the growth rate of Mexico. Drawing from the heavily established literature in the field of growth economics, this paper attempts to show the relevance of such theory in the case of the well documented phenomenon of remittances. Mexico is the world’s fourth largest net recipient of remittance inflows and the third largest trading partner …

The Effect Of Income Inequality On Happiness Levels, Spencer Carlin

Empirical Economic Bulletin, An Undergraduate Journal

This paper investigates and presents the impact of income inequality upon general levels of happiness. The study will examine the influence of the income gap upon life satisfaction. Incorporating information from OECD databanks and the World Bank into a standard model in happiness studies, we will examine the effect on nations measured Happy Life Years (HLY). After careful examination this study provides a conclusion that reinforces past studies. Income inequality has a consistent significant and negative impact on subjective well-being and happiness levels. The study contributes to the inequality happiness literature, by examining the effects of inequality on happiness amongst …

Learning By Exporting In India, Stephanie Lizardi

Empirical Economic Bulletin, An Undergraduate Journal

This paper examines learning by exporting, in which a firm experiences growth in productivity after entering export markets. The results of existing studies show conflicting evidence regarding whether productivity gains result from learning by exporting or whether productivity gains lead to exporting. This paper discusses the relationship between entering exporting markets and subsequent product innovation. Using data from nearly 6,000 firms in India, the results suggest that learning by exporting occurs when firms enter export markets, but only during the first year.

The Predictive Power Of Commodity Futures Prices On South American Equity Markets, Aadithyan Manivannan

Empirical Economic Bulletin, An Undergraduate Journal

The purpose of this paper is to examine the relationship between the futures United States futures market the returns on the South American stock market. In particular the paper focuses on three key commodities—industrial sugar, copper, and coffee. The study looks into methods to isolate the effect of the United States commodity market from the returns of the equity exchanges in both the United States and South America. Once isolated, the relationship between the selected commodities and South American stock market returns can be estimated through quantitative analysis.

Determinants Of Health In South American Countries, Andres Pernia

Empirical Economic Bulletin, An Undergraduate Journal

This paper investigates, analyzes, and expands the relationship between under-five mortality and socioeconomic and health system factors. The study utilizes fixed effect panel data to estimate the determinants of under-five mortality in 12 counties across South America. As expected, the results show that GDP per capita is statistically significant and is robust in all of the estimated models. In addition, improved sanitation, gender equality, access to improved sanitation facilities, provision of primary education, and governance are also statistically significant and have positive effect on child mortality.

Institutions And Economic Growth In Bric Nations, Doug Flink

Empirical Economic Bulletin, An Undergraduate Journal

This paper looks at the impact of institutions on economic growth in the six largest countries in BRIC countries, Brazil, Russia, India, and China. The study will us OLS to examine the time period between the years 2002 and 2011. More specifically, it will measure the effect of institutions through a variety of measures including democracy and regulatory related variables. Through ordinary least squares regression analysis, the variables for democracy and regulation will be significant and have a positive effect on economic growth. This study will show that quality of institution does in fact support economic growth.

The Effect Of Extending Unemployment Insurance Benefits On Northeast State Unemployment Rates, Guillaume Sabourin

Empirical Economic Bulletin, An Undergraduate Journal

This paper investigates the effect of changes in the length of unemployment benefits on the unemployment rates of 10 northeast US states. This study includes the most likely variables that would influence the unemployment rate during the time span preceding and following the recent recession. The study observes various contributing factors to unemployment including median income, state GDP, demographics, education, and the construction, manufacturing, and financial services rate for each state. Using state-level data from government sources and a fixed effects empirical model, results suggest that unemployment benefit extensions result in a small but statistically significant increase in the unemployment …

The Stock Market Impact Of Bond Rating Changes, Michael Leonard

Honors Projects in Mathematics

This paper examines the impact of a downgrade of a company’s credit rating on its stock price in the days surrounding the downgrade. If we consider this downgrade new information, then a negative impact on the company’s stock price would be expected. However, if we assume that rating agencies use information that investors have already accounted for, then there would be no impact. There could also be an impact, at least temporarily, due to the fact that a ratings downgrade is bad news, even if the reasons for the downgrade have already been priced in. To perform this analysis I …

The Changing Dynamics Of The Employment Gap And Its Macroeconomic Implications, William Brian Gowen

Honors Projects in Economics

There has been much discussion about the sluggish economic recovery out of the recent recession. However, the lag in employment growth is not unique to the most recent recovery. Jobless recoveries have plagued the U.S. economy over the last three business cycles. The reasons for this change have remained largely inconclusive, with several factors highlighted in the current literature. This paper uses Vector Autoregression (VAR) to analyze the employment gap in the United States over the past six decades. Unlike previous studies, it accounts for the most recent recession while also addressing alternative explanations - trade and globalization, government employment, …

Relationship Between Interest Rate And Bank Common Stock Return: Evidence From The Top 10 United States Banks And Financial Sector Index, Hieu Trung Tran

Honors Projects in Finance

This research paper investigates the effect of changes in long-term interest rates on the returns of the top 10 US banks included in the Financial Sector Index. There are three main parts of this paper.

The first part uses the Augmented Dickey-Fuller (ADF) test to test the “Random Walk” of banks’ common stock returns. Based on the test’s results, returns of banks’ common stock do not solely follow the “Random Walk”.

In the second part, the Two-Factor Arbitrage Pricing Theory is employed to test the effect of changes in long-term interest rate on the return of banks’ common stocks. The …

Private Student Loan Asset Backed Securities: A Default Curve Analysis, Nicholas Gentile

Honors Projects in Finance

Business and mainstream media devote significant attention to the student lending industry and its possible threat to the economy. While the private loan component of student lending may not be largest part of this one trillion dollar industry, it is likely to be the space where evidence supporting the media’s concerns are found. This paper examines the variation in cumulative default rates for private student loan asset backed securities issued between 2001 and 2007, revealing the dynamics of these opaque financial instruments. The study analyzes internal pool data and external economic data, uncovering the primary factors that shape the respective …

The Cost Of Culture The Impact Of National Culture On The Pass-Through Of Commodity Shocks, Christine Gerrity

Honors Projects in Finance

This study analyzes the impact of national culture on the pass-through of commodity price shocks to retail goods. In particular, this study explores the commodities of coffee, cotton and steel. Through the use of regression analysis, this study looks to determine the relationship between two key predictive variables: risk tolerance of a country and commodity shocks within a company’s associated commodity market, and their impact on the value of companies within that country. Additional factors are explored at the firm financial level and the firm country level. The purpose of this study is to examine if consumers of one country …

Has Government Tax Policy In Greece Led To A Large Shadow Economy?, Nils Thompson

Honors Projects in Economics

This capstone investigates the impact that tax policy has on the shadow economy in Greece. Greece has one of the largest shadow economies in the world and the largest in the European Union, with tax evasion being one of the main drivers. While previous research has provided measures of the shadow economy, none matches the shadow economy estimations with policies, laws, and agencies enacted by the government, specifically over the period in time of 1990-2012. This study contributes to the literature by connecting the policies implemented by the government with the size of the shadow economy in Greece, along with …

Initial Public Offerings In The Microfinance Industry: Does A Mission Drift Occur?, Sarah Segill

Honors Projects in Finance

This thesis analyzes whether or not there is a mission drift when microfinance organizations become publicly traded entities. One of the most debated criticisms of microfinance institutions (MFIs) today involves becoming for-profit organizations in attempt to raise more capital. Donor funding is limited for non-profit organizations and does not give an MFI much room to grow to serve a maximal number of people. The entry of for-profit microfinance institutions has a great deal of possibility in terms of generating scale, efficiency and innovation. Yet these for-profit institutions can easily lose track of their social mission to serve the poor and …

The Impact Of New Product Announcements On Quick Service Restaurant Companies’ Stock Returns, Tim Drechsler-Martell

Honors Projects in Finance

This study seeks to answer two main questions: 1) Do product announcements impact quick service restaurant stock returns? 2) Do economic conditions impact the degree which product announcements impact quick service restaurant stock returns? 159 total product announcements were collected for 6 quick service companies: McDonald’s Corp., YUM! Brands Inc., The Wendy’s Co., AFC Enterprises Inc., Jack in the Box Inc., and Sonic Corp. 84 of these announcements were from 2005-2007 (Labeled “Pre-Recession”), and 75 were from 2009-2011 (Labeled “Post-Recession”). Using historical stock price data, an analysis of the overall trends of the mean-adjusted excess returns was conducted to determine …

The Causal Effect Of Market Priming On Trust: An Experimental Investigation Using Randomized Control, Omar Al-Ubaydli, Daniel E. Houser, John Nye, Maria Pia Paganelli, Xiaofei Pan

Economics Faculty Journal Articles

We report data from laboratory experiments where participants were primed using phrases related to markets and trade. Participants then participated in trust games with anonymous strangers. The decisions of primed participants are compared to those of a control group. We find evidence that priming for market participation affects positively the beliefs regarding the trustworthiness of anonymous strangers and increases trusting decisions.

The Relationship Between Inequality And Economic Growth: Evidence From Latin America, Amanda Gallagher

Empirical Economic Bulletin, An Undergraduate Journal

This paper investigates the complex relationship between income inequality and economic growth in the Latin American region. This study conducts an empirical analysis using economic growth as the dependent variable, to determine the impact inequality has on economic growth. This study uses panel data from countries in Latin America over the time period of 1994-2009. The empirical results show a negative relationship between inequality and economic growth in the Latin American region. In addition, the level of government expenditure and taxation in the countries impact economic growth.

The Relationship Between The Stock Market And Economic Indicators: Evidence From Singapore And Hong Kong, Kahini Dalal

Empirical Economic Bulletin, An Undergraduate Journal

This paper examines the relationship between the stock markets and economic variables of the selected countries: Singapore and Hong Kong. The quarterly data collected for Gross Domestic Product, Foreign Exchange Rates, Inflation and Current Account Balance, as well as Stock Prices ranges from January 2002 to December 2012. The analysis is focused on the results of the Cointegration and Granger Causality tests to estimate the relationship of the various economic indicators and the stock market indices. This estimation enables to assess whether the stock market index of the respective country is a good representation of the economic health of the …

Carbon Emissions And Economic Growth: A Granger Causality Analysis Across 18 Countries, Rohan Vakil

Empirical Economic Bulletin, An Undergraduate Journal

In this paper, an analysis of the relationship between Economic Growth and Carbon Emissions will be done using data from 9 Developed Countries, and 9 Less Developed Countries, as determined by the World Bank and United Nations. The countries analyzed will be Canada, France, Germany, Italy, Japan, Korea (South), Spain, United Kingdom, United States of America (9 Developed Countries); and India, Indonesia, Iran, Malaysia, Mexico, Brazil, Russian Federation, Saudi Arabia, and South Africa (9 Less Developed Countries). This research expands on the research done by Barassi and Spagnolo (2012), and Coondoo and Dinda (2003).

Determinants Of Fdi Inflows Into South America, Dario Castro

Empirical Economic Bulletin, An Undergraduate Journal

This study provides a panel data analysis of the key determinants of FDI as determined by the market such as market size, economic stability, trade liberalization, population, growth prospects, and exchange rates. Additionally, other variables such as physical infrastructure, quality of institutions and central bank exchange rate regimes. This paper seeks to show the major policy implications of variables that can be influenced through government intervention. The empirical research is conducted with focus on South American FDI inflows over the last three decades, due to the great presence of natural resources and cheap labor in the region which have contributed …

State Government Revenue: The Effects Of Legalized Gambling, Nicholas S. Malz

Empirical Economic Bulletin, An Undergraduate Journal

When facing financial constrictions, legalized gambling is an attractive alternative for state governments. Most empirical evidence on this topic only examines a single industry in a particular state. This study involves a general analysis of three different forms of gambling across all 50 states. The data is comprised of the gambling volume and state government revenues for all 50 states from 2000 to 2010. From the research, lotteries and horse racing typically increase state revenues, while casinos tend to decrease state revenues.

The Causality Between Budget Deficits And Interest Rates In Asean Countries, Janhavi Nerurkar

Empirical Economic Bulletin, An Undergraduate Journal

This paper investigates the correlation between budget deficits and interest rates across countries of varying income levels across Southeast Asia using the Granger-causality econometric model. It consists of a time series analysis of budget deficits (local currency unit) and real interest rates in Indonesia, Malaysia, Thailand, the Philippines and Singapore from 1990 to 2011.This analysis concludes that budget deficits and interest rates do not cause one another in the countries under consideration.

The Effect Of Macroeconomic Variables On Domestic Homeownership Rates, Patrick Graydon

Empirical Economic Bulletin, An Undergraduate Journal

This paper investigates how various macroeconomic variables affect homeownership rates in the United States. Some of the variables explored in this study include interest rates, unemployment rate, average household income, inflation rate, GDP, population, and residential construction. The paper uses quarterly data from quarter one of 2000 to quarter three of 2012. The results show the economic indicators that are closely correlated with the rate of homeownership.

An Empirical Study Of Salary Discrimination In Professional Basketball, Joshua Reynolds

Empirical Economic Bulletin, An Undergraduate Journal

This paper investigates the racial differences in salaries amongst professional basketball players during the 2011-2012 season. Prior studies from the 1980s and 1990s show that white and black players have earned a comparable mean salary, based on performance variables and other player characteristics. However these studies have shown, that taking race in as a factor when running regressions of the data, preference exists towards white player salaries. This paper looks to see if the recent shift in demographic makeup of the NBA prevalent during the late 1990s and 2000s has led to a more equitable distribution of salaries based on …

Education And Wellbeing Of A Country, Michael Arons

Empirical Economic Bulletin, An Undergraduate Journal

This paper examines education, employment sectors and GDP per capita. The study examines which aspects of education math, reading, or science is more important to an economy, and how they affect different employment sectors. The model will attempt to show if educational subject scores have an impact in different sectors of the economy. The main function of this model is to decipher how education affects the wellbeing of a country. The results will attempt to discern whether education impacts employment in various sectors, and conversely GDP per capita.

Institutional Quality, Income Inequality, And Economic Growth In Latin American Countries, Courtney Pomer

Empirical Economic Bulletin, An Undergraduate Journal

This paper investigates the possibility of the institutional quality of a country having an effect on income inequality and economic growth in Latin American Countries. The study incorporates the gini variable and growth rates of GDP in each country to examine the influence of corruption on the various countries throughout Latin America. Looking at previous research it has been found that corruption is positively correlated with income inequality and negatively correlated with economic growth. The variable for corruption in this study however measures the control of corruption in each country, so we will be looking at the institutional quality and …

The Politics Of Economics: A Study On The Effect Of Political Affiliation On Economic Aptitude, Anthony Nader

Honors Projects in Economics

This research is based on a June 2010 Wall Street Journal article outlining a study conducted on the economic literacy of adults versus their political affiliation (Klein, 2010). Adults were surveyed on eight questions regarding simple economic knowledge and then asked their political affiliation. The study found that people who consider themselves very conservative on average answered 1.3 questions wrong, versus an average of 5.26 questions wrong for people who consider themselves very liberal. This same effect was to be measured in the classroom as to whether or not conservatives tended to fare better in economics classes than liberals. The …

The Evolution Of The “Southwest Effect”, Daniel Webb

Honors Projects in Finance

The “Southwest effect” - a large decrease in fares paired with an increase in traffic - has been discussed around the airline industry since the term was first coined in a government study in the early 1990s. But the airline industry has drastically changed since then - Southwest has become the largest domestic airline, and many of its competitors have had the chance to restructure through bankruptcy.

This study examines some of Southwest's latest city additions, as well as a few of the airline’s intra-California routes where it is now a dominant player. Using publically-available government data, the change in …

The Influence Of Childhood Poverty On Life Chances- The Case Of Academic Performance, Katherine Mccabe

Honors Projects in History and Social Sciences

The purpose of this research is to explore, identify, and address how children who grow up in poverty face greater challenges in adulthood than those who grow up nonpoor. The two main areas of interest are the differentials of child well-being and school achievement. The daily hardships that poor children face include inadequate nutrition, fewer learning experiences, instability of residence, lower quality schools, exposure to environmental toxins, family violence, homelessness, dangerous streets, and less access to friends, services, and jobs. Through a literature review and analyses of a national probability data set on high school students, I demonstrate how growing …

Gender Discrimination Across U.S. States: What Has Changed Over The Past Thirty Years?, Joshua Ballance

Honors Projects in Economics

This study examines changes in the gender wage gap and level of gender discrimination in the United States over the period1980-2010 at the national and state levels. Using data from the U.S. Current Population Survey, this study applies the Blinder-Oaxaca Decomposition to separate the explained and unexplained variations in the gender pay gap. The unexplained variation proxies the level of gender discrimination faced by U.S. workers. The wage equation estimated utilizes the Heckman methodology to control for sample selection bias. Results with and without sample selectivity controls are included in this paper.

This study reports the gender pay gap in …