Economics Commons^™

Dynamic Analysis Of Money Supply, Unemployment And Inflation Rate In The Us, Guangyu Wang

Dissertations and Theses Collection (Open Access)

Price stability is not only an important indicator of the healthy and stability of macro-economy, but also one of the goals of macroeconomic policy. There are many factors affecting inflation. Different monetary policy instruments, such as money supply, liquidity and market expectations, have different effects on inflation. Meanwhile, monetary policy goals, such as inflation rate, employment rate and economic growth rate, also affect each other.

This paper provides an empirical study of money supply, inflation and unemployment in the US economy. Based on the existing theoretical and empirical analysis, this paper selects different research models and new data dimensions to …

When Running For Office Runs In The Family: Horizontal Dynasties, Policy And Development In The Philippines, Dean C. Dulay, Laurence Go

Research Collection School of Social Sciences

Political dynasties exist in practically every variant of democracy, but take different forms in different places. Yet the types of dynastic structures have remained unexplored. We argue that horizontal dynasties—multiple members from the same political family holding different political offices concurrently— affect policymaking by replacing potential political rivals, who may oppose an incumbent’s policy choices, with a member of the family. But in developing countries, the policy change that accrues from dynastic status may not lead to higher levels of economic development. We test this argument’s implications in the Philippines. Employing a close elections regression discontinuity design on a sample …

Entrepreneurship In Singapore, Jungho Lee

Research Collection School Of Economics

Singapore has completed its catch-up growth phase and needs to find a new growth engine. Entrepreneurship can contribute to a nation’s productivity growth. The purpose of this chapter is twofold. First, a theoretical framework is presented, along with empirical evidence, to understand government interventions aimed at boosting entrepreneurship. Second, using the framework, the chapter discusses whether Singapore’s current policies are suitable for helping entrepreneurship. The theory demonstrates four reasons why government intervention is needed: (1) resource misallocation, (2) positive externality, (3) entrepreneurial human capital, and (4) tax and default policies. Singapore’s government has implemented various policies that potentially fix market …

Equal-Quantile Rules In Resource Allocation With Uncertain Needs, Yan Long, Jay Sethuraman, Jingyi Xue

Research Collection School Of Economics

A group of agents have uncertain needs on a resource, which must be allocated before uncertainty re-solves. We propose a parametric class of division rules we call equal-quantile rules. The parameter lambda of an equal-quantile rule is the maximal probability of satiation imposed on agents - for each agent, the prob-ability that his assignment is no less than his realized need is at most lambda. It determines the extent to which the resource should be used to satiate agents. If the resource is no more than the sum of the agents' lambda-quantile assignments, it is fully allocated and the rule …

Towards Better Data Augmentation Using Wasserstein Distance In Variational Auto-Encoder, Zichuan Chen, Peng Liu

Research Collection Lee Kong Chian School Of Business

VAE, or variational auto-encoder, compresses data into latent attributes, and generates new data of different varieties. VAE based on KL divergence has been considered as an effective technique for data augmentation. In this paper, we propose the use of Wasserstein distance as a measure of distributional similarity for the latent attributes, and show its superior theoretical lower bound (ELBO) compared with that of KL divergence under mild conditions. Using multiple experiments, we demonstrate that the new loss function exhibits better convergence property and generates artificial images that could better aid the image classification tasks.

Challenges To Social Mobility In Singapore, Kong Weng Ho, Marcus Kheng Tat Tan

Research Collection School Of Economics

Singapore had achieved impressive economic growth together with a high level of upward mobility since her independence in 1965. However, the growth process might have become more uneven, in addition to diminishing growth for a matured economy like Singapore, which is also a highly open city state subject to competitive forces from other economies. Singapore has fared well recently,
evident from the 2020 social mobility findings reported by the World Economic Forum and the decline in Gini coefficients for the past decade. We discuss the education system in Singapore and the recently formed National Jobs Council, both important institutions for …

On The Market Failure Of “Missing Pioneers”, Shang-Jin Wei, Ziru Wei, Jianhuan Xu

Research Collection School Of Economics

An influential hypothesis states that export pioneers are too few relative to social optimum because the first exporter's action creates an informational public good for all subsequent exporters. The hypothesis has been invoked to justify certain types of government interventions. We note, however, that such market failure requires two inequalities to hold simultaneously: the discovery cost is neither too low nor too high. Neither has to hold in the data. We propose a structural estimation framework to evaluate the hypothesis, and estimate the parameters based on the customs data of Chinese electronics exports. Our key finding is that "missing pioneers" …

Achieving Price Stability, Hwee Kwan Chow, Taojun Xie

Research Collection School Of Economics

The aim of delivering medium-term price stability is the stated objective of the Monetary Authority of Singapore. To this end, the central bank adopted an unusual exchange rate–based monetary policy framework that has served the economy well over the past decades. However, the shift from the phase of catch-up growth to a mature economy raises the question of whether the current monetary policy framework needs reformulation. Moreover, as global financial integration deepens, surges in cross-border capital flows impact Singapore’s exchange rate and asset prices, which has implications for economic dynamism and inclusion. Since a large and persistent deviation of the …

Media Connection And Return Comovement, Zilin Chen, Li Guo, Jun Tu, Jun Tu

Research Collection Lee Kong Chian School Of Business

Media news may cover multiple firms in one article, which establishes a media connection across firms. We propose a media connection strength (MCS) measure between two given firms, which is defined as the number of news articles co-mentioning these two firms. We show that the MCS measure can significantly explain and forecast return comovement of media-connected firm-pairs. Further analyses show that our results are robust to various alternative explanations. We argue that the MCS measure can capture comprehensive and complex correlated fundamental information among media-connected firms and hence may provide a new mechanism for return comovement beyond the existing rational- …

Rationalizable Implementation In Finite Mechanisms, Y-C Chen, Takashi Kunimoto, Y Sun, S. Xiong

Research Collection School Of Economics

We prove that the Maskin monotonicity condition (proposed by Bergemann et al. (2011)) fully characterizes exact rationalizable implementation in an environment with lotteries and transfers. Different from previous papers, our approach possesses many appealing features simultaneously, e.g., finite mechanisms with no integer game or modulo game are used; no transfers are made in any rationalizable profile; the message space is small; the implementation is robust to information perturbations in the sense of Oury and Tercieux (2012).

Singapore As A Sustainable City: Past, Present And The Future, Tomoki Fujii, Rohan Ray

Research Collection School Of Economics

Singapore has achieved impressive economic growth over the last half-century. This chapter provides an overview of the major sustainability challenges Singapore has experienced and the policies that have been adopted to address them, particularly in the areas of land use, transportation, waste management, water, and energy. It argues that Singapore has been successful in addressing these challenges owing to sound long-term vision and planning as well as flexibility in the implementation of the policies to tackle them. The chapter provides some discussion on policy options, challenges, and opportunities for making Singapore more sustainable and liveable. Leaders of Singapore have recognised …

Singapore In The Global Value Chains, Pao-Li Chang, Tran Bao Phuong Nguyen

Research Collection School Of Economics

This chapter analyses the participation of Singapore in the global value chains (GVC): how much of its gross exports are GVC-related trade; how downstream it is; and which countries are its key upstream and downstream trade partners. The analysis is carried out both at the country aggregate level and at the sector level. New formulas are proposed in the gross export decomposition framework of Koopman, Wang and Wei (2014) and Borin and Mancini (2017), to characterise a country/industry’s downstreamness in the GVC and the importance of each trade partner in its backward/forward linkages. Singapore started off with a very high …

Providing Childcare, Christine Ho, Sunha Myong

Research Collection School Of Economics

Women’s economic empowerment has been hailed as one of the most remarkable revolutions in the past 50 years. Yet, women still face the lion’s share of the burden of childcare despite major progress in their education and earnings capacity. This is particularly salient in many Asian countries. This chapter proposes a synthesis of the state of knowledge on childcare and discusses policy-relevant issues applicable to the Singapore context. Selected policies are documented and lessons from the international landscape are discussed. Raising children incurs both direct costs in the form of childcare and opportunity costs in the form of career costs. …

Doubling Down On Asia, Olivier Lim, Arif P. Rachmat, David Su

Perspectives@SMU

COVID-19 has inflicted major pain on Asian economies but the effects on countries and sectors are not uniform. The tech sector in China could yet present investment opportunities

Innovating In The Digital Economy, Arnoud De Meyer

Perspectives@SMU

It is all about creating and capturing value, building networks, and scaling up quickly

Different Strokes For Different Folks: Long Memory And Roughness, Shuping Shi, Jun Yu

SMU Economics and Statistics Working Paper Series

The log realized volatility of financial assets is often modeled as an autoregressive fractionally integrated moving average model (ARFIMA) process, denoted by ARFIMA(p, d, q), with p = 1 and q = 0. Two conflicting results have been found in the literature regarding the dynamics. One stream shows that the data series has a long memory (i.e., the fractional parameter d > 0) with strong mean reversion (i.e., the autoregressive coefficient |α1| ≈ 0). The other stream suggests that the volatil-ity is rough (i.e., d < 0) with highly persistent dynamic (i.e., α1 → 1). To consolidate the findings, this paper first examines the finite sample properties of alternative estimation methods employed in the literature for the ARFIMA(1, d, 0) model and then applies the outperforming techniques to a wide range of financial assets. The candidate methods include two parametric maximum likeli-hood (ML) methods (the maximum time-domain modified profile likelihood (MPL) and maximum frequency-domain likelihood) and two semiparametric methods (the local Whittle method and log periodogram estimation method). The two parametric methods work well across all parameter set-tings, with the MPL method outperforming. In contrast, the two semiparametric methods have a very large upward bias for d and an equally large downward bias for α1 when α1 is close to unity. The poor performance of the semiparametric methods in the presence of a highly persistent dynamic might lead to a false conclusion of long memory. In the empirical applications, we find that the log realized volatilities of exchange rate futures over the past decade have a long memory, where the point estimate of d is between 0.4 and 0.5 and the estimate of α1 is near zero. For other finan-cial assets considered (including stock indices and industry indices), we find that they have rough volatility, with the point estimate of d being negative and the point estimates of α1 close to unity.

Efficient Bilateral Trade Via Two-Stage Mechanisms Under One-Sided Asymmetric Information, Takashi Kunimoto, Cuiling Zhang

SMU Economics and Statistics Working Paper Series

This paper considers a bilateral-trade model with one-sided asymmetric information in which one agent (seller) initially owns an indivisible object and is fully informed of its value, while the other agent (buyer) intends to obtain the object whose value is unknown to himself. As Jehiel and Pauzner (2006) show that no mechanisms can generally result in efficient, voluntary bilateral trades, we aim to overturn this impossibility result by employing two-stage mechanisms (Mezzetti (2004)) in which first, the outcome (e.g., allocation of the goods) is determined, then the agents observe their own outcome-decision payoffs, and finally, transfers are made. We show …

Skbi Big 5 Survey 2021 August, Singapore Management University

Sim Kee Boon Institute for Financial Economics

The latest survey results convey an upshift in growth projections of the five largest economies in aggregate accompanied by higher inflation, especially this year and to a lesser extent next year. The aggregate “Big5” median real GDP growth projections for 2021 and 2022 were raised to 6.7% (up in US, CN and EA but down in IN and JP) and 4.9% (all except US), respectively. The overall “Big5” median CPI inflation forecasts were nudged up to 2.6% (higher in US, IN and EA but lower in CN) and 2.4% (in US, IN and EA some), respectively, for this year and …

Monetary Policy Surprises, Stock Returns, And Financial And Liquidity Constraints, In An Exchange Rate Monetary Policy System, John M. Sequeira

Research Collection Lee Kong Chian School Of Business

This study examines the impact of monetary policy surprises on the stock price behaviour of a small developed economy, whose monetary policy is based on the exchange rate. We find that monetary policy surprises associated with all contractionary policy levers and a neutral policy lever, have a consistently significant and negative impact on stock returns. In comparison, only monetary policy surprises associated with a downward re-centering policy lever, has a significantly positive effect on stock returns. Using a recalibrated classification system, we also find that monetary policy surprises differ across sectors of the economy. Our results show how monetary policy …

Financing Singapore’S Smes And The Crowdfunding Industry In Singapore, Swee Liang Tan, Yoke Wang Tok, Chansriniyom Thitipat

Research Collection School Of Economics

As new digital technologies emerge that make the provision of financial services more efficient, they hold the potential to address barriers that SMEs face in accessing credit. This paper finds empirical evidence that crowdfunding for SMEs improved SMEs’ timeliness to pay debt in Singapore. Anecdotal evidence from growing SMEs suggests that getting crowdfunding loans also induced financing from banks, leading to more efficient allocation of credit. In just four years, Singapore’s crowdfunding volume has grown rapidly making it one of the top crowdfunding hubs in Southeast Asia in 2018. The rapid development of Singapore’s crowdfunding industry can be attributed to …

Volatility Coupling, Jean Jacod, Jia Li, Zhipeng Liao

Research Collection School Of Economics

This paper provides a strong approximation, or coupling, theory for spot volatility estimators formed using high-frequency data. We show that the t-statistic process associated with the nonparametric spot volatility estimator can be strongly approximated by a growing-dimensional vector of independent variables defined as functions of Brownian increments. We use this coupling theory to study the uniform inference for the volatility process in an infill asymptotic setting. Specifically, we propose uniform confidence bands for spot volatility, beta, idiosyncratic variance processes, and their nonlinear transforms. The theory is also applied to address an open question concerning the inference of monotone nonsmooth integrated …

Wild Bootstrap For Instrumental Variable Regressions With Weak And Few Clusters, Wenjie Wang, Yichong Zhang

Research Collection School Of Economics

We study the wild bootstrap inference for instrumental variable (quantile) regressions in the framework of a small number of large clusters, in which the number of clusters is viewed as fixed and the number of observations for each cluster diverges to infinity. For subvector inference, we show that the wild bootstrap Wald test with or without using the cluster-robust covariance matrix controls size asymptotically up to a small error as long as the parameters of endogenous variables are strongly identified in at least one of the clusters. We further develop a wild bootstrap Anderson-Rubin (AR) test for full-vector inference and …

Jobs For Justice(S): Corruption In The Supreme Court Of India, Madhav S. Aney, Shubhankar Dam, Giovanni Ko

Research Collection School Of Economics

We investigate whether judicial decisions are affected by career concerns of judges by analyzing two questions: Do judges respond to incentives to pander by ruling in favor of the government in the hope of receiving jobs after retiring from the Supreme Court? Does the government reward judges who rule in its favor with prestigious jobs? We construct a data set of Supreme Court of India cases involving the government for 1999–2014. We find that incentives to pander have a causal effect on judicial decision-making, and they are jointly determined by the importance of the case and whether the judge retires …

Glivenko-Cantelli Theorems For Integrated Functionals Of Stochastic Processes, Jia Li, Congshan Zhang, Yunxiao Liu

Research Collection School Of Economics

We prove a Glivenko-Cantelli theorem for integrated functionals of latent continuous-time stochastic processes. Based on a bracketing condition via random brackets, the theorem establishes the uniform convergence of a sequence of empirical occupation measures towards the occupation measure induced by underlying processes over large classes of test functions, including indicator functions, bounded monotone functions, Lipschitz-in-parameter functions, and Hölder classes as special cases. The general Glivenko-Cantelli theorem is then applied in more concrete high-frequency statistical settings to establish uniform convergence results for general integrated functionals of the volatility of efficient price and local moments of microstructure noise.

Efficient Estimation Of Integrated Volatility Functionals Under General Volatility Dynamics, Jia Li, Yunxiao Liu

Research Collection School Of Economics

We provide an asymptotic theory for the estimation of a general class of smooth nonlinear integrated volatility functionals. Such functionals are broadly useful for measuring financial risk and estimating economic models using high-frequency transaction data. The theory is valid under general volatility dynamics, which accommodates both Itô semimartingales (e.g., jump-diffusions) and long-memory processes (e.g., fractional Brownian motions). We establish the semiparametric efficiency bound under a nonstandard nonergodic setting with infill asymptotics, and show that the proposed estimator attains this efficiency bound. These results on efficient estimation are further extended to a setting with irregularly sampled data.

The Impact Of Temperature On Labor Quality: Umpire Accuracy In Major League Baseball, Eric Fesselmeyer

Research Collection College of Integrative Studies

Using data from Major League Baseball, I compute an objective measure of the home plate umpire's work quality-the accuracy of his ball and strike calls during a game-and measure how it varies with temperature. I find that an increase in game-time temperature from between 70 and 80 degrees F to above 95 degrees F decreases an umpire's accuracy by a little less than a percentage point, which is a 5.5% increase in the pitch-calling error rate when evaluated at the mean error rate of 13.3%. Restricting the sample to borderline pitches increases the magnitude of the hot-weather effect on accuracy …

The Unique Role Of The State Press In The Chinese Economy, Singapore Management University

Perspectives@SMU

CUHK research investigates the role played by China’s state-owned media in supplying information vital to the functioning of China’s capital markets

Squawking About Persistently Higher Inflation?, Thomas Lam

Sim Kee Boon Institute for Financial Economics

All signs point to an uncertain path for inflation in the future. While inflation is set to stay prospectively higher in the US in the near-term, it's unlikely to remain so.

Forecast Pooling Or Information Pooling During Crises? Midas Forecasting Of Gdp In A Small Open Economy, Hwee Kwan Chow-Tan, Daniel Han

SMU Economics and Statistics Working Paper Series

This study compares two distinct approaches, pooling forecasts from single indicator MIDAS models versus pooling information from indicators into factor MIDAS models, for short-term Singapore GDP growth forecasting with a large ragged-edge mixed frequency dataset. We investigate their relative predictive performance in a pseudo-out-of-sample forecasting exercise from 2007Q4 to 2020Q3. In the stable growth non-crisis period, no substantial difference in predictive performance is found across forecast models. We find factor MIDAS models dominate both the quarterly benchmark model and the forecast pooling strategy by wide margins in the Global Financial Crisis and the Covid-19 crisis. Reflecting the small open nature …

Preparing Accountants Of The Future: A Programme In Accounting Data And Analytics, Poh Sun Seow, Clarence Goh, Gary Pan

Research Collection School Of Accountancy

The accounting profession is rapidly evolving due to technological innovations. Technologies such as the Internet of things, smart sensors, cloud computing, robotics, and artificial intelligence are combining to disrupt the way that businesses operate. It is predicted that, over the next decade, information technology (IT) will significantly transform the accounting profession.