Economics Commons^™

Opening Address, O. A. Demuren

Economic and Financial Review

The opening address at the 2007 CBN Executive Seminar the on monetary policy in a changing environment.

Keynote Address By S. O. Alade, Sarah O. Alade

Economic and Financial Review

Keynote Address by Dr Sarah Alade, the Deputy Governor (Economic Policy), Central Bank of Nigeria at the CBN Executive seminar on monetary policy in a changing environment for CBN Executive Staff.

Monetary Policy And Economic Growth: Theoretical And Conceptual Issues, D. G. Omotor

Economic and Financial Review

This article seeks to address the relationship between monetary policy and economic growth by enunciating the conceptual and theoretical issues that relate to monetary policy and economic growth. The paper is divided into five sections. Following the introduction in section 1, section 2 discusses the objectives of monetary policy. The monetary transmission mechanisms are schematically explained in section 3. Section 4 reviews the performance assessment of monetary policy and its framework in Nigeria. The constraints of monetary policy management in Nigeria are espoused in section 5. The final section concludes the paper.

Exchange Rate Versus Capital Account Liberalization In Nigeria: Some Important Issues, A. E. Akinlo, D. O. Yinusa

Economic and Financial Review

This article examines the relationship between exchange rate and account liberalization in Nigeria. It focuses on monetary policy design and management in a fast-changing world. It highlights that the need for continuous research into this subject is highlighted by the reliance on monetary policy as the principal tool for economic stabilisation in emerging market economies.

Monetary Policy Transmission Mechanism In Nigeria, M. Ajayi

Economic and Financial Review

This article reviews the monetary policy transmission mechanism in Nigeria and the various challenges of the transmission process. Also, it highlights the need to continuously examine the channels of monetary policy in the economy to enhance policy design and implementation in Nigeria. The paper is divided into five parts. Following the introduction as part I, Part II, discusses conceptual issues of monetary policy transmission mechanism, while Part III gives country experiences. Part IV x-rays monetary policy transmission mechanism in Nigeria and lessons from international experiences while Part V contains the concluding remarks.

Standing Facilities And Liquidity Management In Nigeria: Progress So Far And Challenges Under An It Environment, J. K. A. Olekah

Economic and Financial Review

This article discusses the Central Bank of Nigeria (CBN) standing facilities and their effectiveness in reducing interbank interest rate volatilities as well as the challenges that have been faced by both the CBN and market operators in the implementation. The paper is organized into six sections. Following this introduction in section II, the CBN indirect monetary policy instruments are discussed as a prelude to the introduction of the standing deposit/lending facilities in December 2006. The CBN standing facilities as instruments of liquidity management are discussed in section III. Some of the countries that have adopted the policy instruments are surveyed …

Welcome Address, C. E. Nkwonta

Economic and Financial Review

This is the welcome address for the seminar on "Monetary Policy in a Changing Environment" for CBN Executive Staff.

On The Total Duration Of Negative Surplus Of A Risk Process With Two-Step Premium Function, Pavlina Jordanova

Applications and Applied Mathematics: An International Journal (AAM)

We consider a risk reserve process whose premium rate reduces from c_d to c_u when the reserve comes above some critical value v. In the model of Cramer-Lundberg with initial capital u ≥ 0, we obtain the probability that ruin does not occur before the first up-crossing of level v. When u < v, following H. Gerber and E. Shiu (1997), we derive the probability that starting with initial capital u ruin occurs and the severity of ruin is not bigger than v. Further we express the probability of ruin in the two step premium function model - ψ (u,v), by the last two probabilities. Our assumptions imply that the surplus process will go to infinity almost surely. This entails that the process will stay below zero only temporarily. We derive the distribution of the total duration of negative surplus and obtain its Laplace transform and mean value. As a consequence of these results, under certain conditions in the Model of Cramer-Lundberg we obtain the expected value of the severity of ruin. In the end of the paper we give examples with exponential claim sizes.

(Wp 2007-03) Trade Openness, Capital Mobility, And The Sacrifice Ratio, Joseph P. Daniels, David D. Vanhoose

Economics Working Papers

This paper develops and evaluates empirically the implications of a theoretical model of an open economy in which variations in both trade openness and capital mobility can influence the sacrifice ratio. Key predictions forthcoming from the model are that both forms of globalization can independently affect the capital ratio, once the influences of the level of central bank independence and the degree of wage stickiness in nations‘ economies are taken into account. Examination of cross-country data encompassing 58 disinflations for 16 countries yields evidence consistent with these essential predictions of the theoretical framework.

Beyond Foraging: Behavioral Science And The Future Of Institutional Economics, Alexander J. Field

Economics

Institutions affect economic outcomes, but variation in them cannot be directly linked to environmental factors such as geography, climate, or technological availabilities. Game theoretic approaches, based as they typically are on foraging only assumptions, do not provide an adequate foundation for understanding the intervening role of politics and ideology; nor does the view that culture and institutions are entirely socially constructed. Understanding what institutions are and how they influence behavior requires an approach that is in part biological, focusing on cognitive and behavioral adaptations for social interaction favored in the past by group selection. These adaptations, along with their effects …

Global Information Technology Report 2006-2007: Connecting To The Networked Economy, Priscilla Finley

Library Faculty Research

This World Economic Forum report by Dutta (INSEAD) and Mia (WEF) evaluates the penetration of information and communication technologies (ICT) in 122 economies across the globe.

The High-Tech Sector In Northeast Ohio: 2007 Update, Ziona Austrian, Jill S. Taylor

All Maxine Goodman Levin School of Urban Affairs Publications

This report describes trends in the high-tech sector in Northeast Ohio, focusing on the 2004-2006 time period. It is the first update to a baseline report released in February 2007 that analyzed trends between 2000 and 2005. This study follows the baseline report in that it examines the high-tech sector in Northeast Ohio from three perspectives — high-tech industries, high-tech occupations, and research and development activity. It assesses the strengths and weaknesses of high-tech industries in terms of employment, average wage, gross regional product (output), and productivity. High-tech occupations are analyzed in terms of employment levels. Research and development activity …

An Experiment In Joint Product Price Optimization: Price Elasticities And Substitution Decisions Of The Hungry Barfly, Jeffrey Coursen

All Theses

The subject of optimal pricing is consistently on the forefront of debate among firms in all market situations. Optimal pricing is further complicated when there are common resource inputs associated with the production of a multitude of different products. Economic theory has suggestions for pricing optimally in a variety of market conditions, from perfect competition, to perfect monopoly. This paper presents an experiment where a firm is attempting to optimally price multiple products with common cost inputs subject to monopolistic market conditions. The result supports the hypothesis of substitution amongst the product line relative to prices, as well as presents …

Parental Education Levels And Their Effect On First Year Retention And Grade Point Ratio, Jon Christiansen

All Theses

Background/Problem: Education is an important factor in economic success. This research explores how relevant parental education is to their children's education by studying first year college retention as well as first year cumulative grade point ratio. Purpose: By what probability is retention increased on average if a mother or father becomes a high school graduate or a college graduate? Also, by what amount is grade point ratio affected if a mother or father becomes a high school graduate or a college graduate? Design and Methods: A random sample of 844 students who filled out the FAFSA at a southern public …

Capping The Mortgage Interest Deduction, John E. Anderson, Jeffrey Clemens, Andrew R. Hanson

Economics Faculty Research and Publications

In this paper we examine the economic implications of several policy options for capping the mortgage interest deduction (MID). We extend the standard user–cost model of owner–occupied housing to include a cap on the mortgage size receiving tax–favored status. Our user–cost estimates for taxpayers with mortgages above the current–law cap are 4.41 percent higher than estimates from a model without the cap. We simulate the share of mortgage dollars that would be subject to three alternative cap policy variants and summarize the distributional impacts of each proposal, computing the share of mortgage dollars impacted across U.S. Metropolitan Areas.

Essays On Intrahousehold Allocation And The Family: Fertility, Child Education, And Nutrition, Alemayehu Azeze Ambel

Dissertations

Understanding the constraints that households face when making decisions on fertility, education, and health is beneficial for effective interventions aimed at enhancing investments in human capital, promoting gender equity, and reducing poverty. This dissertation consists of four essays that analyze the nature, performance, and determinants of fertility, child education, and nutritional status in a developing economy.

The first essay identifies peculiar constraints, including gender preference and income uncertainty that households face when making fertility and schooling choices. The underlying assumption in the theoretical analysis is that in the absence of formal risk and capital markets, households may revert to informal …

Estimating The Impact, Transmission Mechanism And Reaction Function Of Monetary Policy: A Factor-Augmented Vector Autoregressive (Favar) Approach, Dawit Legesse Senbet

Dissertations

This dissertation employs factor-augmented vector autoregressive (FAVAR) models to investigate the impact, transmission mechanism and reaction function of monetary policy. The recent development of augmenting dynamic factor analysis with the vector autoregressive (VAR) models, pioneered by Bernanke et al. (2005), has led to advances in monetary policy analysis. The new approach bases measurements of monetary policy on large data sets that approximate the true information set of policymakers. This is in contrast to low dimensional VAR models. The FAVAR model summarizes information from large data set by a few factors that are incorporated into VAR models.

The first essay investigates …

Three Essays On The Impacts Of Risk And Uncertainty On Foreign Direct Investment (Fdi) And Remittances Flows Into Developing Countries, Blen Solomon

Dissertations

This three-essay dissertation focuses on the two most important and most stable sources of finance to developing countries, namely Foreign Direct Investment (FDI) and remittances. The first essay examines the roles of exchange rate uncertainty and political risk in determining FDI inflows into African economies. The past few decades have witnessed a surge of FDI inflows to developing regions. However, FDI inflows to Africa still remain relatively small and investor surveys show political risk and macroeconomic uncertainty to be strong deterrents of FDI inflows into Africa. In this essay, I use a sample of 12 African countries and employ Fixed …

Nonstationary Discrete Choice: A Corrigendum And Addendum, Peter C. B. Phillips, Sainan Jin, Ling Hu

Research Collection School Of Economics

We correct the limit theory presented in an earlier paper by Hu and Phillips [2004a. Nonstationary discrete choice. Journal of Econometrics 120, 103-138] for nonstationary time series discrete choice models with multiple choices and thresholds. The new limit theory shows that, in contrast to the binary choice model with nonstationary regressors and a zero threshold where there are dual rates of convergence (n1/4 and n3/4), all parameters including the thresholds converge at the rate n3/4. The presence of nonzero thresholds therefore materially affects rates of convergence. Dual rates of convergence reappear when stationary variables are present in the system. Some …

Incidental Trends And The Power Of Panel Unit Root Tests, Hyungsik Roger Moon, Benoit Perrron, Peter C. B. Phillips

Research Collection School Of Economics

The asymptotic local power of various panel unit root tests is investigated. The (Gaussian) power envelope is obtained under homogeneous and heterogeneous alternatives. The envelope is compared with the asymptotic power functions for the pooled t-test, the Ploberger and Phillips [2002. Optimal testing for unit roots in panel data. Mimeo] test, and a point optimal test in neighborhoods of unity that are of order n-1/4T-1 and n-1/2T-1, depending on whether or not incidental trends are extracted from the panel data. In the latter case, when the alternative hypothesis is homogeneous across individuals, it is shown that the point optimal test …

Building Social Trust: A Human Capital Approach, Fali Huang

Research Collection School Of Economics

Much evidence suggests individuals differ in their predisposition to cooperate, which is essentially a component of human capital. This paper examines the role of individual cooperative tendencies and their interactions with institutions in generating social trust; it also endogenizes cooperative tendencies using a human-capital investment model. Multiple equilibria and inefficiencies exist due to positive externalities. An innovative finding is that, when institutions are more effective in punishing defecting behaviors, more people invest in cooperative tendencies and hence the endogenous social trust is higher, though the equilibrium cooperative tendencies are lower. This paper provides a plausible explanation for many empirical and …

Building Social Trust: A Human Capital Approach, Fali Huang

Research Collection School Of Economics

Much evidence suggests individuals di¤er in their predisposition to cooperate, which is essentially a component of human capital. This paper examines the role of individual cooperative tendencies and their interactions with institutions in generating social trust; it also endogenizes cooperative tendencies using a human capital investment model. Multiple equilibria and ine¢ ciencies exist due to positive externalities. An innovative …nding is that, when institutions are more e¤ective in punishing defecting behaviors, more people invest in cooperative tendencies and hence the endogenous social trust is higher, though the equilibrium cooperative tendencies are lower. This paper provides a plausible explanation for many …

A Consistent Characteristic Function-Based Test For Conditional Independence, Liangjun Su, Halbert White

Research Collection School Of Economics

Y is conditionally independent of Z given X if Pr{f(y|X,Z)=f(y|X)}=1 for all y on its support, where f(·|·) denotes the conditional density of Y given (X,Z) or X. This paper proposes a nonparametric test of conditional independence based on the notion that two conditional distributions are equal if and only if the corresponding conditional characteristic functions are equal. We extend the test of Su and White (2005. A Hellinger-metric nonparametric test for conditional independence. Discussion Paper, Department of Economics, UCSD) in two directions: (1) our test is less sensitive to the choice of bandwidth sequences; (2) our test has power …

Singapore's Exchange Rate Policy: Some Implementation Issues, Hwee Kwan Chow

Research Collection School Of Economics

Reflecting the small open nature of its economy, Singapore has adopted an exchange rate-centered monetary policy framework since 1981. The exchange rate regime in Singapore is an intermediate regime that follows the basket-band-crawl system. With this managed float system, the MAS has successfully deterred speculators from attacking the domestic currency for most of the past three decades. At the same time, the flexibility accorded by the managed float system aided Singapore in escaping from the 1997–1998 Asian crisis relatively unscathed. In order to advance our understanding of the hitherto successful operation of Singapore's exchange rate policy, we examine the following …

Long Run Covariance Matrices For Fractionally Integrated Processes, Peter C. B. Phillips, Sik Kim Chang

Research Collection School Of Economics

An asymptotic expansion is given for the autocovariance matrix of a vector of stationary long-memory processes with memory parameters d ∈ [0,½). The theory is then applied to deliver formulas for the long-run covariance matrices of multivariate time series with long memory.Phillips acknowledges partial support from a Kelly Fellowship and from the NSF under grant SES 04-142254. This may be proved directly using a Fourier integral asymptotic expansion when the spectrum of the short-memory component is analytic.

Geographic Decomposition Of Inequality In Health And Wealth: Evidence From Cambodia, Tomoki Fujii

Research Collection School Of Economics

The small-area estimation developed by Elbers, Lanjouw and Lanjouw (2002, 2003), in which a census and a survey are combined to produce the estimates of welfare measures for small geographic areas, has become a standard tool for poverty analysis in developing countries. The small-area estimates are typically plotted on a map, which are commonly called a poverty map. Poverty maps proved useful for policy analysis and formulation, and have become increasingly popular among policy-makers and researchers. In Cambodia, poverty maps have been used by various international organizations, ministries and non-governmental organizations for analyzing the poverty situations for their operation areas, …

Global Analysis Of An Expectations Augmented Evolutionary Dynamics, Angelo Antoci, Antonio Gay, Massimiliano Landi, Pier Luigi Sacco

Research Collection School Of Economics

We consider a deterministic evolutionary model where players form expectations about future play. Players are not fully rational and have expectations that change over time in response to current payoffs and feedback from the past. We provide a complete characterization of the qualitative dynamics so induced for a two strategies population game, and relate our findings to standard evolutionary dynamics and equilibrium selection when agents have rational forward looking expectations.

Chinese Loyalty To Supervisor Questionnaire Development, Ding-Yu Jiang, Bor-Shuian Cheng, Chi-Ying Cheng, Li-Fang Chou

Research Collection School of Social Sciences

Loyalty to supervisor is a prevalent but under-investigated phenomenon in Chinese organizations. One plausible reason for this is the lack of a reliable and valid measure of loyalty in the Chinese context. This study aims to develop a valid measure of Chinese loyalty to supervisor. In Study 1, we identify a four-dimension construct of loyalty to supervisor that consists of 11 sub-dimensions (factors) on the basis of loyalty literature. The four dimensions are: identification with supervisor, task assistance, obedience, and sacrifice for supervisor. In Study 2, a 40-item Chinese loyalty to supervisor scale was developed and examined by three independent …

A Structural Analysis Of Higher Education Government Relations Organizations And Their Relationship To State Funding, Randall Brumfield

Graduate Theses and Dissertations

Competing interests for state government funding have affected the status of public higher education as a budget priority. State legislators and executive officeholders are increasing appropriations to areas such as public K-12 education, health care, infrastructure, and social services programs at the expense of state colleges and universities. As such the higher education community must effectively utilize its government relations organizations to communicate with elected officials the importance of state funding. The purpose of the study was to identify the functional and personnel trends existing within government relations offices, and, to determine the extent a relationship may exist between organizational …

Paying To Save: Tax Withholding And Asset Allocation Among Low- And Moderate-Income Taxpayers, Michael S. Barr, Jane Dokko

Law & Economics Working Papers Archive: 2003-2009

We analyze the phenomenon that low- and moderate-income (LMI) tax filers exhibit a “preference for over-withholding” their taxes, a measure we derive from a unique set of questions administered in a dataset of 1,003 households, which we collected through the Survey Research Center at the University of Michigan. We argue that the relationship between their withholding preference and portfolio allocation across liquid and illiquid assets is consistent with models with present-biased preferences, and that individuals exhibit self-control problems when making their consumption and saving decisions. Our results support a model in which individuals use commitment devices to constrain their consumption. …