Economics Commons^™

A Nonparametric Poolability Test For Panel Data Models With Cross Section Dependence, Sainan Jin, Liangjun Su

Research Collection School Of Economics

In this article we propose a nonparametric test for poolability in large dimensional semiparametric panel data models with cross-section dependence based on the sieve estimation technique. To construct the test statistic, we only need to estimate the model under the alternative. We establish the asymptotic normal distributions of our test statistic under the null hypothesis of poolability and a sequence of local alternatives, and prove the consistency of our test. We also suggest a bootstrap method as an alternative way to obtain the critical values. A small set of Monte Carlo simulations indicate the test performs reasonably well in finite …

The Curse Of Windfall Income: How Foreign Aid And Natural Resource Dependence Constrains Growth, Adams Bailey Nager

All Theses and Dissertations (ETDs)

Literature exists on two ‘curses,’ the natural resource curse and the curse of foreign aid, which limit growth in developing nations. At their core, both the natural resources curse and the curse of aid derive from the same root cause- the curse of windfall income. The windfall curse is a macroeconomic side-effect that negates the positive effects of unearned capital by raising domestic prices and lowering competitiveness. While windfall income creates growth in a countries service sector, it represses growth in the manufacturing sector. These trends help explain the inability of both foreign aid and natural resources to fuel sustained …

Dodd-Frank And The Future Of Banking, Gregory Burns

All Theses

The financial crisis of 2008-2009 set the globally economy into a free-fall, requiring massive government intervention in order to prevent the entire system from crashing down. The Dodd-Frank Act, the largest financial reform since the Great Depression, attempts to move the financial system towards a more stable foundation. Part 1 discusses the causes of the financial crisis and an overview of the Dodd-Frank Act. In part 2 explores the reform in the over-the-counter derivatives market with a focus on the impact to market participants, the impact on the systemic risk of the financial system, as well as the overall U.S. …

Effects Of Unemployment Insurance Extensions On Job Search Outcomes, Ailin He

All Theses

The purpose of this paper is to investigate how unemployment insurance (UI) extensions affect job finding probabilities and the length of unemployment spells in the most recent decade. Exploiting the panel structure of the Current Population Survey (CPS), I constructed a 16-month panel with the CPS basic monthly data from 2002 to 2012 and modeled the reemployment (unemployment-to-employment and not-in-labor-force-to-employment) hazard. Since unemployment policies in the US are subjected to change by the condition of the macro economy, this paper adopted different approaches to distinguish UI impacts on exit probability from other macro factors. Our results suggest that UI extensions …

Does A Banking Crisis Reduce Foreign Direct Investment?, Eunjeong Kim

All Theses

With as much importance as Foreign Direct Investment, an enormous amount of study on the factors which might hamper Foreign Direct Investment has been done with a lot of research. Also, the impact of a crisis on FDI has been especially appealing due to the recent economic depression. However, the literature about the linkage between one of the crises, a banking crisis and FDI is sparse even though a banking crisis is highly correlated with the overall economy's damage. With data collected for 60 countries for the years 1990-2010, this paper examines the relationship between Foreign Direct Investment and a …

Empirical Study On Stock's Capital Returns Distribution And Future Performance, Han Liu

All Theses

Investors subject to reference dependence and mental accounting tend to make decisions based on the unrealized losses and gains relative to a reference point, and behave consistently with the disposition effect. In this paper, I focus my study on stocks' capital returns distribution, which is a distribution of each stock that represents the relative capital gains/losses of all shareholders during a target time period. Empirical evidences show the mean value and the skewness of stock's capital returns distribution play significant roles in forecasting future performance. For stocks with a negative mean value of the distribution, the only significant parameter is …

Estimate The Effect Of Police On Crime Using Electoral Data And Updated Data, Yaqi Wang

All Theses

It is surprisingly difficult to isolate causal effects of police on crime empirically due to the simultaneous determination of crime and police presence. Instruments are used to address the simultaneity concerns in the previous crime literature. The 2SLS results provide evidence indicating that additional police reduce crime. However, we might suspect whether the same instruments can generate consistent results with previous studies by using datasets of more recent years instead of thirty years ago and considering the change of policies, crime situation, and other factors. This paper use electoral cycles as instrumental variable and updated data of the 1985-2010 period …

The Geographic Distribution Of The Mortgage Interest Deduction, Andrew R. Hanson, Ike Brannon, Zackary Hawley

Economics Faculty Research and Publications

The mortgage interest deduction is one of the largest tax expenditures in the U.S. tax code but the rate at which it is claimed and the average amount deducted vary widely across and within states.

With changes to tax expenditures under consideration, data showing the current distribution of the mortgage interest deduction are key to understanding how federal tax decisions would affect the states.

Seinfeld: A Show About Economics And Irrationality, Josh Sufilka

The Review: A Journal of Undergraduate Student Research

The show Seinfeld is much more than a show about nothing. In each episode, unnoticed by the average viewer, common principles of economics are being presented. However, these principles are being presented in a way that differs from the typical neoclassical economic view, which is every person makes rational decisions. This paper questions the view of the writers, Jerry Seinfeld and Larry David, on their understanding of human behavior. More importantly, by focusing on two episodes, this paper argues that people do not always make rational decisions and as a result, questions neoclassical economics as a whole.

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 …

Analysis Of The Temporary Immigrant Labor Market On Information Technology Occupations, Katelyn Rowley

Honors Projects

An important recent labor market trend is the rapid increase in the number of immigrants employed in the information technology sector who have temporary worker status. The dual labor market theory suggests that temporary immigrant workers will be affected more adversely than native workers during a recession. This study uses OLS regression models to predict wages and employment levels (through usual hours worked) in information technology (IT) occupations as a function of immigration status, education level, age, gender, the recession and a set of interactive terms. The results from this study unexpectedly show that employment of native workers in IT …

The Value Of Public Health Financial Data, Glen P. Mays

Health Management and Policy Presentations

Effective policy and administrative decision-making in public health requires reliable information on the amount of resources invested in governmental public health programs and how these resouces are allocated and used across the U.S. public health system. This session examines current and potential uses of public health financial data in the U.S., and considers expanded roles for research in informing policy and administrative decisions.

An Efficient Contracting Approach To Rural Electric Cooperatives And The Development Of Upper Midwest (U.S.) Wind Resources, Bart D. Finzel, Arne Kildegaard

Economics & Management Publications

Many factors support the likelihood of major wind power deployment in the Upper Midwest of the U.S. over the next two decades. This paper specifically considers the dilemma faced by the existing rural electric co-ops (RECs), to whom wind development poses simultaneously a threat and an opportunity. We argue that the threat can be ameliorated through more appropriate tariff strategies, and that there is an efficient-contracting rationale for RECs to take the lead in future development of the wind resource.

Organized Crime And Retail Activity Along The Northern Border In Mexico, Adam G. Walke, Thomas M. Fullerton

Departmental Papers (E & F)

The impacts of homicides committed by organized crime have affected northern Mexico in a high profile manner between 2008 and 2011. This article examines the impacts of those crime waves on retail activity in the six largest northern border metropolitan economies of Mexico. Retail losses due to violence of this nature are quantified forall six cities. Potential gains related due reductions in organized crime homicides are also calculated.

Essays On Applied Economic Theory, Haibo Xu

All Theses and Dissertations (ETDs)

Essay 1: A Model of Dynamic Information Disclosure

We study a dynamic game in which a financial expert seeks to optimize the utilization of her private information either by information disclosure to an investor or by self-using. The investor may be aligned or biased: an aligned investor always cooperates on the disclosed information, whereas a biased investor may strategically betray the expert. We characterize the joint dynamics of the expert's information disclosure and the investor's type revelation and show that, by the process of gradual information disclosure, the expert can significantly alleviate the hold-up effect exerted by the biased investor. …

Economic And Fiscal Impact Of The Proposed South Haven Community Event Center, George A. Erickcek

Reports

No abstract provided.

Talent 2025 Update Brief: Regional Workforce Demand And System Flows, George A. Erickcek, Brian Pittelko, Bridget Timmeney, Brad R. Watts

Reports

No abstract provided.

Essays On Price Dynamics And Market Selection, Filippo Massari

All Theses and Dissertations (ETDs)

This paper analyzes and characterizes the dynamics of wealth-share and equilibrium price in a stochastic general equilibrium model with heterogeneous consumers. The characterization enables a comparison between probabilistic learning and price evolution, revealing that prices incorporate "sparse" information efficiently. Results on wealth-share are obtained by comparing traders' optimal investment-consumption plans against their prices. This novel approach extends recent results in the literature by providing a condition that is necessary as well as sufficient for a trader to vanish. The results are applied to survival in iid, survival in large economies, and survival of traders that follow strategies commonly observed in …

Measuring Determinants Of Investor Confidence Through Time: A Regression Analysis, Paul Yox

Symposium on Research and Creative Expression (SORCE)

This project explores variables that may affect investor confidence in the stock market. Understanding what drives investor confidence in markets can be useful for both institutions and individuals when considering how to react to and cope with the increasing financial volatility of modern financial markets. The hypothesis that economic variables are determinants of investor confidence is tested using a multivariate regression model spanning 1989-present. The measure of investor confidence employed is based on a survey conducted by Yale professor Dr. Robert Shiller. This paper demonstrates that at a basic level, measures such as company earnings and P/E ratio are more …

A Linear Regression Analysis For Understanding High School Grade Point Average (Gpa), Christine Warner

Symposium on Research and Creative Expression (SORCE)

This project analyzes different aspects that may contribute to the grade point average (GPA) of high school students. GPA is important because it is one of the fundamental measures of student success. I gathered data on 206 individuals from the Bureau of Labor Statistics’ National Longitudinal Survey of Youth 1997-2010. I selected variables for the regression analysis from categories including general motivation for success and optimism; use of time; other academic measures; and health habits and lifestyle. Using SPSS to run the regressions, I found that variables that I believed most related to GPA – such as amount of sleep, …

Essays On Political Economy, Gustavo Federico Torrens

All Theses and Dissertations (ETDs)

“Essays on Political Economy” explores the connections between politics and economics in several different contexts. By politics, or more precisely the political game, I mean the social procedures through which collective decisions are made. By economics I mean the economic game once collective decisions have already been selected. Of particular interest are the preferences about collective decisions among agents induced by the economic game. Some of the political institutions for selecting public policies can be easily changed and, hence, should be treated themselves as endogenous collective decisions. Others are very robust. I will refer to the later group as the …

Tobin In Europe: A Case For The Financial Transaction Tax, Stephanie I. Schneider

Claremont-UC Undergraduate Research Conference on the European Union

No abstract provided.

“La Generación Ni Ni” And The Exodus Of Spanish Youth, Stephanie Lester

Claremont-UC Undergraduate Research Conference on the European Union

No abstract provided.