Economics Commons^™

Structuring And Restructuring Sovereign Debt: The Role Of Seniority, Patrick Bolton, Olivier Jeanne

Center for Contract and Economic Organization

In an environment characterized by weak contractual enforcement, sovereign lenders can enhance the likelihood of repayment by making their claims more difficult to restructure ex post. We show, however, that competition for repayment between lenders may result in a sovereign debt that is excessively difficult to restructure in equilibrium. This inefficiency may be alleviated by a suitably designed bankruptcy regime that facilitates debt restructuring.

A Study On How Completion Of High School, Bachelor’S, And Master’S Degrees Affects Earnings - February 2005, Divya Ashok

Masters Culminating Experiences (1993-2011)

This project indicates that individuals who completed a high school degree, a bachelor’s degree or a master’s degree have substantial differences in earnings. Drawing data from the Current Population Survey for February 2005 and employing an Ordinary Least Square regression technique, this paper examines the determinants that significantly influence the logarithmic hourly earnings of an individual who completed a high school degree, a bachelor’s degree or a master’s degree. Overall, this project suggests that level of education, sex, age, gender, union membership, geographical region and race are the relevant factors that play an important role in determination of hourly earnings …

Monetary And Fiscal Policy In Poland During The Eu Accession, Lucjan Orlowski

WCBT Faculty Publications

The main objective of this chapter is to review the fiscal and monetary policies of Poland for EU accession and to extract their guiding precepts. Only the most essential aspects of fiscal and monetary convergence are examined, with some attention to institutional convergence. An in-depth analysis of institutional convergence falls beyond the boundaries of this study, as its main focus is on the systemic foundations of macroeconomic stabilization policies during the economic transition and in the course of preparations for EU accession. The chapter also examines policy options for the post-accession macroeconomic policy strategy which will focus on preparations for …

Gmm Estimation For Dynamic Panels With Fixed Effects And Strong Instruments At Unity, Chirok Han, Peter C.B. Phillips

Cowles Foundation Discussion Papers

This paper develops new estimation and inference procedures for dynamic panel data models with fixed effects and incidental trends. A simple consistent GMM estimation method is proposed that avoids the weak moment condition problem that is known to affect conventional GMM estimation when the autoregressive coefficient (rho) is near unity. In both panel and time series cases, the estimator has standard Gaussian asymptotics for all values of rho in (-1, 1] irrespective of how the composite cross section and time series sample sizes pass to infinity. Simulations reveal that the estimator has little bias even in very small samples. The …

Marx: Of Interest Rates, Anwar Shaikh Phd

Archives of Anwar Shaikh

This collection includes:

• Shaikh, A. (2007). Marx on the interest rate (Unpublished manuscript). New School for Social Research (2).
• Shaikh, A. (n.d.). Notes on bank deposits and loan supply (Handwritten notes) (2).

Anonymous Markets And Monetary Trading, C. D. Aliprantis, Gabriele Camera, D. Puzzello

Economics Faculty Articles and Research

We study infinite-horizon monetary economies characterized by trading frictions that originate from random pairwise meetings, and commitment and enforcement limitations. We prove that introducing occasional trade in 'centralized markets' opens the door to an informal enforcement scheme that sustains a non-monetary efficient allocation. All is required is that trading partners be patient and their actions be observable. We then present a matching environment in which trade may occur in large markets and yet agents' trading paths cross at most once. This allows the construction of models in which infinitely lived agents trade in competitive markets where money plays an essential …

Money, Credit, And Banking, Aleksander Berentsen, Gabriele Camera, Christopher Waller

Economics Faculty Articles and Research

In monetary models where agents are subject to trading shocks there is typically an ex-post inefficiency since some agents are holding idle balances while others are cash constrained. This problem creates a role for financial intermediaries, such as banks, who accept nominal deposits and make nominal loans. In general, financial intermediation improves the allocation. The gains in welfare come from the payment of interest on deposits and not from relaxing borrowers’ liquidity constraints. We also demonstrate that when credit rationing occurs increasing the rate of inflation can be welfare improving.

Simulation-Based Estimation Of Contingent-Claims Prices, Peter C.B. Phillips, Jun Yu

Cowles Foundation Discussion Papers

A new methodology is proposed to estimate theoretical prices of financial contingent-claims whose values are dependent on some other underlying financial assets. In the literature the preferred choice of estimator is usually maximum likelihood (ML). ML has strong asymptotic justification but is not necessarily the best method in finite samples. The present paper proposes instead a simulation-based method that improves the finite sample performance of the ML estimator while maintaining its good asymptotic properties. The methods are implemented and evaluated here in the Black-Scholes option pricing model and in the Vasicek bond pricing model, but have wider applicability. Monte Carlo …

Conditional Logit, Iia, And Alternatives For Estimating Models Of Interstate Migration, Christiadi, Brian Cushing

Regional Research Institute Working Papers

Many researchers have used the conditional logit model to examine migration. One common objection to this model is that it carries the independence from irrelevant alternatives (IIA) assumption, which may be too restrictive. This study compares the conditional logit with models that partially relax (nested logit) or fully relax (mixed logit) the IIA assumption. We will begin to learn whether assuming IIA holds poses serious estimation problems for migration modeling. Given the substantial computational cost of the more complex models, a finding that a well-specified, but computationally much simpler, conditional logit model may suffice would be useful.

Agricultural Land Development In The Northeast United States: A Spatial Simultaneous Growth Equilibrium Model, Yohannes G. Hailu, Cheryl Brown

Regional Research Institute Working Papers

This study introduces a spatial simultaneous growth model to examine the impact of regional growth on agricultural land development. County level data on growth factors, land values, farmland density and a set of exogenous variables are used from 12 Northeast states. Results indicate that regional growth, accessibility, and growth in neighboring counties may negatively impact agricultural land density. Farmland protection policies did not have a significant impact in reducing agricultural land development. Based on these results, cross-county and cross-state land use policy coordination may provide better land management outcomes than a county-level focus that disregards growth and land development interdependences.

The Role Of Institutions Of Private Property Rights And Money In Entrepreneurial Discovery, Odd Stalebrink, John Sacco, Gerald Bushee

Regional Research Institute Working Papers

This paper examines the influence of private property rights and monies on entrepreneurial discovery. A framework is presented and tested, which views these two institutions as key determinants of entrepreneurial discovery. Using several measures as proxies for their influence, two variables, minimum wage legislation and percentage government employment, support the idea that private property rights and monies are associated with entrepreneurial discovery as indicated by business starts, failures, patents and bankruptcy.

Modeling Small Business Growth, Migration Behavior, Local Public Services And Household Income In Appalachia: A Spatial Simultaneous Equations Approach, Gebremeskel H. Gebremariam

Regional Research Institute Working Papers

In this paper, a spatial simultaneous growth equilibrium model of small business growth, migration behavior, median household income and local public expenditures is developed. The model is empirically estimated by Generalized Spatial Three-Stage Least Squares estimator using count-level data from Appalachia for 1990-2000. The results suggest the existence of interdependence among the growth rates of small business, gross in-and out-migration, median household income and local public services in the form of feedback simultaneities, spatial autoregressive lag and spatial cross-regressive lag simultaneities. The findings also suggest the existence of conditional convergence with respect to endogenous variables of the model. The speeds …

An Empirical Analysis Of Employment, Migration, Local Public Services And Regional Income Growth In Appalachia, Gebremeskel H. Gebremariam, Tesfa Gebremedhin, Peter V. Schaeffer, Randall Jackson, Tim Phipps

Regional Research Institute Working Papers

This study develops a five-equation simultaneous system in a partial lagadjustment growth-equilibrium framework. It improved previous models in the growthequilibrium tradition by explicitly modeling local government and regional income in the growth process. It also explicitly modeled gross in-migration and gross out-migration separately in order to spell out the differential effects. The results show the existence of feedback simultaneities among the endogenous variables of the model. This finding is important from economic policy perspective because it indicates that sector specific policies should be integrated and harmonized in order to achieve the desirable outcome. Under this circumstance, looking at the direct …

A Spatial Model Of Regional Variations In Business Growth In Appalachian States, Gebremeskel H. Gebremariam, Tesfa Gebremedhin, Peter V. Schaeffer, Tim Phipps, Randall Jackson

Regional Research Institute Working Papers

In this study, a spatial growth equilibrium model of business growth is developed and empirically estimated by Generalized Spatial Two-Stage Least Squares (GS2SLS) estimator using cross-sectional data from Appalachian States counties for 1990-2000. Beside the existence of spatial spillover effects, the results suggest that agglomerative effects that arise from both the demand and the supply sides were active in contributing to business growth in the study area during the study period. The policy implications of these findings are: (1) Regional cooperation of counties and communities is advisable and may even in fact be necessary to design appropriate policies that encourage …

Issues In The Implementation Of Interregional Commodity By Industry Input-Output Models, Randall Jackson, Walter R. Schwarm

Regional Research Institute Working Papers

A number of procedures for generating interregional social accounting matrices have been developed recently (Canning and Wang 2005, Robinson and Liu 2006, Jackson et al. 2006, Lindall, Olson and Alward 2006). While each approach shares the fundamental structure of the resulting accounting framework, very little attention has been devoted to the use of these accounts in impacts assessment application. This paper presents the common framework for organization of the data, addresses a number of issues surrounding such applications and demonstrates the implications of adopting different assumptions.

A Spatial Panel Simultaneous-Equations Model Of Business Growth, Migration Behavior, Local Public Services And Household Income In Appalachia, Gebremeskel H. Gebremariam, Tesfa Gebremedhin, Peter V. Schaeffer, Tim Phipps, Randall Jackson

Regional Research Institute Working Papers

In this paper we develop a spatial panel simultaneous-equations model of business growth, migration behavior, local public services and median household income in a partial lag-adjustment growth-equilibrium framework and utilizing a one-way error component model for the disturbances. This model is an extension of the “jobs follow people or people follow jobs” literature and it improved previous models in the growth-equilibrium tradition by: (1) explicitly modeling local government and regional income in the growth process; (2) explicitly modeling gross in-migration and gross out-migration separately in order to spell out the differential effects, which used to be glossed over under net …

Impacts Of Regional Growth On Farmland Development In The Northeast U.S., Yohannes G. Hailu, Cheryl Brown

Regional Research Institute Working Papers

This study models the relationship between regional growth and agricultural land development in the Northeast United States. A system of simultaneous equations is estimated using three-stage-least squares on county-level data. Results indicate that regional growth puts upward pressure on agricultural land values and downward pressure on the stock of agricultural land. Farm performance and some farmland protection policies were not effective in limiting farmland development.

The Extended Heckscher-Ohlin Model: Patterns Of Trade Between The U.S. And China, Mark Clements

Undergraduate Economic Review

Though there have been many attempts to extend the Heckscher-Ohlin model in order to account for empirical data, I intend to examine John Romalis’ model of factor proportions and commodity structure. The purpose of this paper is to examine Romalis’ model to see if it is supported by empirical data on trade between China and the United States. In order to do this, I will use data from the 2000 and 2005 U.S. Census trade data CD-ROM to determine if Romalis’ extended Hecksher-Ohlin model of international trade can explain the U.S.-China pattern of trade.

Is Selling Sex Good Business? : Prostitution In Nineteenth Century New York City, Ida Bastiaens

Undergraduate Economic Review

This study examines the impact of red light districts on the New York City’s land values for the years 1867 to 1870 using the monocentric model and bid-rent function as the foundation for the analysis. The results suggest that the Tenderloin red light district is a positive amenity, while the Bleecker and Washington Square red light district is a disamenity. The history of prostitution in New York City provides valuable insight into causes for the differences in the marginal impacts of prostitution on Manhattan’s urban environment. In the end, despite prostitution’s ongoing profitability well into the twentieth century, the strong …

The Cfe Decision: A Cautionary Tale About The Use Of Numbers, John Yinger

Center for Policy Research

It’s Elementary is a series of essays on topics in education and education policy. The main focus is on education finance in New York State, but general research findings in education and education policy issues in several other states are also discussed. John Yinger, Professor of Economics and Public Administration at the Maxwell School, Syracuse University is the author of most of these essays, although a few are written by or co-authored with other scholars.

A Monte Carlo Study Of Efficiency Estimates From Frontier Models, William Clinton Horrace, Seth O. Richards

Center for Policy Research

Parametric stochastic frontier models yield firm-level conditional distributions of inefficiency that are truncated normal. Given these distributions, how should one assess and rank firm-level efficiency? This study compares the techniques of estimated (a) the conditional means of inefficiency and (b) probabilities that firms are most or least efficient. Monte Carlo experiments suggest that the efficiency probabilities are more reliable in terms of mean absolute percent error when inefficiency has large variation across firms. Along the way we tackle some interesting problems associated with simulating and assessing estimator performance in the stochastic frontier environment.

Copula-Based Tests For Cross-Sectional Independence In Panel Models, Chihwa Kao, Giovanni Urga

Center for Policy Research

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

Testing For Instability In Factor Structure Of Yield Curves, Dennis Philip, Chihwa Kao, Giovanni Urga

Center for Policy Research

A widely relied upon but a formally untested consideration is the issue of stability in actors underlying the term structure of interest rates. In testing for stability, practitioners as well as academics have employed ad hoc techniques such as splitting the sample into a few sub-periods and determining whether the factor loadings have appeared to be similar over all sub-periods. Various authors have found mixed evidence on stability in the actors. In this paper we develop a formal testing procedure to evaluate the factor structure stability of the US zero coupon yield term structure. We find the factor structure of …

[Introduction To] Teaching The Ethical Foundations Of Economics, Jonathan B. Wight, John S. Morton

Bookshelf

Teaching the Ethical Foundations of Economics contains 10 lessons that reintroduce an ethical dimension to economics in the tradition of Adam Smith, who believed ethical considerations were central to life. Utilizing these innovative instructional materials your students will learn about the important role ethics and character play in a market economy and how, in turn, markets influence ethical behavior.

The lessons do more than illustrate how ethical conduct improves an economy. They actively involve the students through simulations, group decision making, problem solving, classroom demonstrations and role playing. The lessons encourage students to think critically about ethical dilemmas.

Monetary Perspective On Underground Economic Activity In The United States, R. D. Porter, Amanda Bayer

Economics Faculty Works

There are widespread reports of a growing underground, or unobserved, economy in the United States and in other countries. The unobserved economy seems to develop principally from efforts to evade taxes and government regulation. Although no single definition of such activity has been universally accepted, the term generally refers to activity – whether legal or illegal – generating income that either is underreported or not reported at all (see Chapter 1 in this volume). Some authors narrow the definition to cover income produced in legal activity that is not set down in the recorded national income statistics.

Recent discussion of …

Income Inequality And The Probability Of Violent Revolt, Noah Cecil

Honors Papers

This paper examines the effect of income inequality on the impetus of an organized dissident group to initiate a "revolt" in an attempt to wrest power from the government regionally or countrywide. After suggesting alterations and extensions of a mathematical framework developed by Blomberg, Hess, and Weerapana (2004) income inequality, economic growth, urbanization, and political rights data from 102 countries from 1972-1999 are used to determine their respective influences on the likelihood of a revolt being initiated in a given year. Income inequality as measured by the Gini coefficient is found to be statistically significant in determining the likelihood of …

On The Relation Between Pay And Performance: Presidents Of Liberal Arts Colleges, Imran Lalani

Honors Papers

This paper uses panel data on the salaries and benefits of liberal arts college presidents during the period 2001-02 to 2003-04 to understand what presidents are rewarded for. We try and develop a basic framework in which to understand the president's role in the institution, and attempt to explain what some claim is a combination of high wages and relatively weak pay for performance.

The rising income inequality in America has been the subject of much heated debate in the recent past. 'Excessive' executive pay has been a recurrent theme during 2007 so far, with the Senate gearing up to …

Premium Risk And Healthcare Policy, Matthew Coffina

Honors Papers

In this paper, I analyze four alternative policies that address "premium risk": the risk that health insurance premiums will increase if an individual acquires a chronic condition. They are: premium risk insurance, community rating, anti-discrimination laws for large firms, and government subsidies. I show that community rating and anti-discrimination laws provide incomplete protection, and have the potential to create welfare-reducing distortions in incentives, while subsidies can be designed that mimic the efficiency of premium risk insurance. While the economic concepts behind these conclusions are well-documented and well-understood, I believe my own model adds value in the form of simplicity and …

The Two Faces Of Emergence In Economics, Mark Kuperberg

Economics Faculty Works

No abstract provided.

Coastal Empire Economic Monitor, 2nd Quarter, 2007, Armstrong Atlantic State University Center For Regional Analysis

Coastal Empire Economic Monitor

The Coastal Empire Economic Indicators are designed to provide continuously updating quarterly snapshots of the Savannah Metropolitan Statistical Area economy. The coincident index measures the current economic heartbeat of the region. The leading index provides a short term forecast of the region’s economic activity in six to nine months.