Economics Commons^™

Education Policy And Intergenerational Transfers In Equilibrium, Brant Abbott, Giovanni Gallipoli, Costas Meghir, Giovanni L. Violante

Cowles Foundation Discussion Papers

This paper compares partial and general equilibrium effects of alternative financial aid policies intended to promote college participation. We build an overlapping generations life-cycle, heterogeneous-agent, incomplete-markets model with education, labor supply, and consumption/saving decisions. Altruistic parents make inter vivos transfers to their children. Labor supply during college, government grants and loans, as well as private loans, complement parental transfers as sources of funding for college education. We find that the current financial aid system in the U.S. improves welfare, and removing it would reduce GDP by two percentage points in the long-run. Any further relaxation of government-sponsored loan limits would …

Education Policy And Intergenerational Transfers In Equilibrium, Brant Abbott, Giovanni Gallipoli, Costas Meghir, Giovanni L. Violante

Cowles Foundation Discussion Papers

This paper examines the equilibrium effects of alternative financial aid policies intended to promote college participation. We build an overlapping generations life-cycle, heterogeneous-agent, incomplete-markets model with education, labor supply, and consumption/saving decisions. Driven by both altruism and paternalism, parents make inter vivos transfers to their children. Both cognitive and non-cognitive skills determine the non-pecuniary cost of schooling. Labor supply during college, government grants and loans, as well as private loans, complement parental resources as means of funding college education. We find that the current financial aid system in the U.S. improves welfare, and removing it would reduce GDP by 4-5 …

Relational Contracting, Repeated Negotiations, And Hold-Up, Sebastian Kranz

Cowles Foundation Discussion Papers

We propose a unified framework to study relational contracting and hold-up problems in infinite horizon stochastic games. We first illustrate that with respect to long run decisions, the common formulation of relational contracts as Pareto-optimal public perfect equilibria is in stark contrast to fundamental assumptions of hold-up models. We develop a model in which relational contracts are repeatedly newly negotiated during relationships. Negotiations take place with positive probability and cause bygones to be bygones. Traditional relational contracting and hold-up formulations are nested as opposite corner cases. Allowing for intermediate cases yields very intuitive results and sheds light on many plausible …

Buyer's Equilibrium With Capacity Constraints And Restricted Mobility: A Recursive Approach, Gabriele Camera, Jaehong Kim

Economics Faculty Articles and Research

We study a decentralized trading model as in Peters (1984), where heterogeneous market participants face a trade-off between price and trade probability. We present a novel proof of existence of a unique demand vector in Nash equilibrium, based on a recursive approach that exploits the monotonicity of matching functions.

Physical Infrastructure And Economic Growth In El Paso: 1976-2009, Thomas M. Fullerton Jr., Azucena González Monzón, Adam G. Walke

Border Region Modeling Project

Prior research on the impacts of public capital stocks on economic growth has generally employed either national macroeconomic or multi-jurisdictional regional data. This study attempts to contribute to this area of the discipline by utilizing time series data for a single metropolitan economy. To allow for both short-run and long-run effects, an error correction modeling framework is used for the empirical analysis. Because comprehensive public infrastructure stocks are not published for El Paso, Texas, estimates for those variables are calculated using information regarding annual public capital investment data. Estimation results indicate that physical infrastructure investment may disrupt short-run economic growth, …

Expected Efficiency Ranks From Parametric Stochastic Frontier Models, William C. Horrace, Seth Richards-Shubik

Center for Policy Research

In the stochastic frontier model we extend the multivariate probability statements of Horrace (2005) to calculate the conditional probability that a firm is any particular efficiency rank in the sample. From this we construct the conditional expected efficiency rank for each firm. Compared to the traditional ranked efficiency point estimates, firm-level conditional expected ranks are more informative about the degree of uncertainty of the ranking. The conditional expect ranks may be useful for empiricists. A Monte Carlo study and an empirical example are provided.

Effects Of Terms Of Trade Gains And Tariff Changes On The Measurement Of Us Productivity Growth, Robert C. Feenstra, Benjamin R. Mandel, Marshall B. Reinsdorf, Matthew J. Slaughter

Dartmouth Scholarship

The acceleration in US productivity growth since 1995 is often attributed to declining prices for information technology (IT ) goods, and therefore enhanced productivity growth in that sector. We investigate an alternative explanation for these IT price movements: gains in the US terms of trade and tariff reductions, especially for IT products, which led to greater gains than shown by official indexes. We do not, however, investigate the indexes used to deflate the domestic absorption components of GDP, and if upward biases are present in those indexes that could offset some of the effects of mismeasured export and import indexes. …

China And Global Imbalances From A View Of Sectorial Reforms, Hiro Ito, Ulrich Volz

Economics Faculty Publications and Presentations

This paper examines the impact of sectorial reforms on current account imbalances, with a special focus on China. In particular, we investigate to what extent reforms pertaining to the financial sector, social protection, and healthcare may contribute to a rebalancing of China’s persistent current account imbalances. Our forecasting results suggest that reforming the financial sector would be a significant contributor to the country’s rebalancing with an effect much larger than that of capital account liberalization. Strengthened provisions of social protection and publicly-funded healthcare are also found to contribute to a rebalancing of the Chinese economy.

The Impact Of Financialization On Management And Employment Outcomes, Rosemary L. Batt, Eileen Appelbaum

Upjohn Institute Working Papers

This paper examines three questions: 1) How and why have financial models of doing business emerged in the last three decades? 2) What new forms of financial capitalism have become important in the current period? 3) How do new financial intermediaries, such as private equity, and the financial strategies of nonfinancial corporations affect the management of companies and employment outcomes? The paper describes how deregulation and institutional change created the conditions for a new, more powerful role for finance capital in the governance of U.S. companies, and it synthesizes the empirical evidence on the process and outcomes of financialization in …

An Activity-Generating Theory Of Regulation, Joshua Schwartzstein, Andrei Shleifer

Dartmouth Scholarship

We propose an activity-generating theory of regulation. When courts make errors, tort litigation becomes unpredictable and as such imposes risk on firms, thereby discouraging entry, innovation, and other socially desirable activity. When social returns to activity are higher than private returns, it may pay the society to generate some information ex ante about how risky firms are and to impose safety standards based on that information. In some situations, compliance with such standards should entirely preempt tort liability; in others, it should merely reduce penalties. By reducing litigation risk, this type of regulation can raise welfare.

Why It’S A High-Speed Game Changer, Tan K. B. Eugene

Research Collection Yong Pung How School Of Law

SMU Assistant Professor of Law Eugene Tan said that the agreement to build a high-speed rail (HSR) link between Kuala Lumpur and Singapore marks a milestone in bilateral relations. He noted that the HSR project is a manifestation of the imperative for Singapore and Malaysia to collaborate closely, leveraging on each other’s complementarities and strengths. Ideally, the HSR link would have a knock-on effect in engendering confidence and momentum in bilateral ties. In the meantime, with the HSR in the making, both governments should work resolutely on other existing plans, such as the Rapid Transit System (RTS) link between Singapore …

Understanding And Teaching Within-Cluster Correlation In Complex Surveys, Humberto Barreto, Manu Raghav

School of Business and Leadership Working Papers

This econometrics pedagogy paper demonstrates the importance of using cluster standard errors with data generated from complex surveys. Simulation is used to show that both classic ordinary least squares and robust standard errors perform poorly in the presence of within-cluster correlated errors, while cluster standard errors are much better. We take advantage of Excel’s spreadsheet interface to produce clear, strong visuals of the data generation process and intuitively explain key results. Stata and R implementations are also provided. We conclude with suggestions for how to use these files in the classroom.

(Wp 2013-01) Economics Imperialism Under The Impact Of Psychology: The Case Of Behavioral Development Economics, John B. Davis

Economics Working Papers

Economics imperialism is broadly explained as economics having an impact on other disciplines. But how should economics imperialism be understood when it is in some sense the product of other disciplines having an impact on economics? The paper examines psychology’s impact on economics in connection with the emergence of behavioral development economics, and then discusses the nature of behavioral development economics imperialism associated with development economists’ explanations of non-market dimensions of life in developing economies in behavioral economics terms. The paper argues that this new form of economics imperialism reflects economics’ selective appropriation from psychology of the Kahneman-Tversky heuristics and …

A Nonparametric Goodness-Of-Fit-Based Test For Conditional Heteroskedasticity, Liangjun Su, Aman Ullah

Research Collection School Of Economics

In this paper we propose a new nonparametric test for conditional heteroskedasticity based on a measure of nonparametric goodness-of-fit (R2) that is obtained from the local polynomial regression of the residuals from a parametric regression on some covariates. We show that after being appropriately standardized, the nonparametric R2 is asymptotically normally distributed under the null hypothesis and a sequence of Pitman local alternatives. We also prove the consistency of the test and propose a bootstrap method to obtain the bootstrap p-values. We conduct a small set of simulations and compare our test with some popular parametric and nonparametric tests in …

Schemes Work Hand In Hand To Boost Wages, Hian Teck Hoon

Research Collection School Of Economics

Professor Hoon Hian Teck discussed how this year's Budget helps both workers and companies push for higher productivity. The Workfare Income Supplement (WIS) scheme in 2007 provided one answer to boost the earnings of low-wage workers. The Wage Credit Scheme (WCS) introduced in Budget 2013 is another innovative policy instrument that works in tandem with the Productivity and Innovation Credit (PIC) scheme to help SMEs on their journey to becoming more productive. Under WCS, the Government covers 40 per cent of the wage increase from increased productivity (obtained through the PIC scheme), leaving the firm with a higher profit. Since …

Host Country Financial Development And Mnc Activity, L. Kamran Bilir, Davin Chor, Manova Kalina

Research Collection School Of Economics

Multinational corporations (MNCs) manage complex operations, often blending features of three modes of FDI that are well understood in isolation but not in tandem, namely: horizontal, vertical and export-platform FDI. We develop a three-country model with heterogeneous firms, in order to analyze how financing constraints in the FDI host country affect the relative strength of these three motives for FDI. In our model, financial development in the host country fosters entry by domestic firms, making the local market more competitive for MNC products. This leads MNCs to orient their affiliate sales away from the local market toward other markets instead. …

The Future Of Wages In Singapore, Hian Teck Hoon

Research Collection School Of Economics

Prof Hoon discussed the future of wages in Singapore and identified major trends affecting Singapore's labour market over the past decade. He noted that in the future, SMEs that are unable to raise workers' productivity to match the higher labour costs will exit the industry, thus leading to job destruction. Also, for there to be a steady supply of jobs with good pay for Singaporeans, the country would need to continue to attract MNCs by harnessing its relative strength in institutional quality and the availability of a highly skilled workforce. Success in helping SMEs to raise their productivity levels and …

Standardized Lm Tests For Spatial Error Dependence In Linear Or Panel Regressions, Badi H. Baltagi, Zhenlin Yang

Research Collection School Of Economics

The robustness of the Lagrange Multiplier (LM) tests for spatial error dependence of Burridge (1980) and Born and Breitung (2011) for the linear regression model, and Anselin (1988) and Debarsy and Etur (2010) for the panel regression model with random or fixed effects are examined. While all tests are asymptotically robust against distributional mis‐specification, their finite sample behaviour may be sensitive to the spatial layout. To overcome this shortcoming, standardized LM tests are suggested. Monte Carlo results show that the new tests possess good finite sample properties. An important observation made throughout this study is that the LM tests for …

Physical Activity And Modernization Among Bolivian Amerindians, Michael Gurven, Adrian V. Jaeggi, Hillard Kaplan, Daniel Cummings

ESI Publications

Background: Physical inactivity is a growing public health problem, and the fourth leading risk factor for global mortality. Conversely, indigenous populations living traditional lifestyles reportedly engage in vigorous daily activity that is protective against non-communicable diseases. Here we analyze physical activity patterns among the Tsimane, forager-horticulturalists of Amazonian Bolivia with minimal heart disease and diabetes. We assess age patterns of adult activity among men and women, test whether modernization affects activity levels, and examine whether nascent obesity is associated with reduced activity.

Methods and Findings: A factorial method based on a large sample of behavioral observations was employed …

U.S. Employment Outlook For 2013, Randall W. Eberts

Periodical Articles

No abstract provided.

Virtual Water, Marianna Khachaturyan, E. Wesley F. Peterson

Cornhusker Economics

Life on earth depends on water. Unfortunately, water resources are not evenly distributed. There are countries with abundant water supplies, such as Brazil or Canada, and countries that lack water resources, such as Egypt or Jordan. Because water is critical for the production of food and other goods, as well as for human consumption, recreation and ecosystem support, competition among the various users for available supplies is often intense. The problem is compounded by the fact that water markets often work imperfectly or are lacking altogether.

What can countries with limited water resources do? In rare cases, it may be …

Evaluating The Economic Assumptions Of Dayton’S Budget, Louis D. Johnston

Economics Faculty Publications

No abstract provided.

Free Markets With Caritas: A Transformational Concept Of Efficiency, Bruce D. Baker

SPU Works

The logic of caritas transforms conventional concepts of economic efficiency in a direction conducive to the health and sustainability of a market system, by distinguishing between economic activities which are additive or extractive toward the common good. The beneficent power of the market to serve human flourishing is based not in a morally tacit concept of economic efficiency as a cardinal good, but rather in a gift-bearing efficiency aligned with caritas. This thesis is explored through three business case studies: (1) patents related to pharmaceutical drug design and marketing; (2) “monetization” strategies in recent internet-based business models; and (3) …

Lessons To Learn From Dayton Brothers’ Fateful Decision In St. Paul, Louis D. Johnston

Economics Faculty Publications

No abstract provided.

Public Health Expenditures, Public Health Delivery Systems, And Population Health, Glen P. Mays

Health Management and Policy Presentations

This seminar examines a series of approaches for estimating the health and economic effects attributable to public health expenditures in the U.S., along with a novel method for estimating economies of scale and scope in the delivery of public health services. The use of instrumental-variables techniques and network analytic methods are described in these research approaches.

Barking Louder: Interest Groups In The 2012 Election, Jeff Smith, David Kimball

Political Science Faculty Works

No abstract provided.

Bowling Green Industrial Foundation - Bowling Green, Kentucky (Sc 787), Manuscripts & Folklife Archives

Manuscript Collection Finding Aids

Finding aid only for Manuscripts Small Collection 787. Promissory note, signed 1 April 1940, by Emmons O. Pearson, Jr., and stock certificate issued by Bowling Green Industrial Foundation, 13 May 1943, to Pearson (1 share). Also included are newspaper clippings about the Bowling Green Industrial Foundation and its plans
concerning building and highway constructions.

Pearce, John Ed., 1917-2006 (Sc 786), Manuscripts & Folklife Archives

Manuscript Collection Finding Aids

Finding aid only for Manuscripts Small Collection 786. Photocopy of Louisville Courier-Journal columnist John Ed Pearce’s speech given to the Chamber of
Commerce, Bowling Green, Kentucky on 7 January 1986. He discusses chiefly economic development and public education in Kentucky. Also letter of Pearce
concerning the copy of the speech.

Should We Strive For Zero Risk?, Olga Yakusheva

Economics Faculty Research and Publications

No abstract provided.

Retired National Football League Players' Perceptions Of Financial Decisions Made: A Phenomenological Study, John Karaffa

Faculty Dissertations

The purpose of this qualitative phenomenological research study was to examine the lived experiences and perceptions of 25 former National Football League (“NFL”) players regarding the financial decisions they made when active as players for information that could lead to an appropriate model for making good financial decisions. Determined in the qualitative phenomenological study were the influential factors identified by the participants in the study that focused on financial decisions made by former NFL players. The study revealed five themes: (1) wealth enablers, (2) wealth killers, (3) challenges, (4) attitudes, and (5) wealth weak spots. The results of the study …