Economics Theses and Dissertations

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The Economic Development of Iran
(1948) Abbas, Ordoobadi; Ratzlaff, C.J.; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md)
In the machine age, with the advance of mass production, a new problem has occupied the minds of economists. This new problem is not the Malthusian doctrine of inadequate supplies but rather that of a rate of production too high to be sold continually at profitable prices. With periodic insufficiency of demand industrial countries have faced depressions of varying duration and intensity, which have continued until the rate of production and demand once more were in equilibrium. Despite increased industrial productivity a large part of the world subsists at a standard of living which provides insufficient food values and which does not yield a minimum amount of housing, medical care and education. In industrial countries from ten to fifty per cent of the working population is unemployed during depression periods although workers are willing and able to work in order to obtain goods. In the non-industrial countries, on the other hand, millions of workers are victims of what has been termed "disguised unemployment." They find themselves at tasks which are much below their potential productivity and consequently yield a standard of living substantially under that which they are capable of achieving. The solution to this problem in the undeveloped areas lies partly in spreading the gains of science, both pure and practical; in combining adequate doses of capital and management with the supplies of labor; and in using the excess of resources originating from technical advances in industrial countries . A program on this line would at the same time eliminate inadequate demand in the high-standard countries and depressing poverty in the low-standard countries. As far as Iran is concerned, it is necessary to know her economic background before the necessary measures for economic development can be discussed intelligently. In this respect, in spite of a few works by Iranian and foreign scholars, the materials on the economy of Iran, in English literature, are limited. The result of insufficient and first-hand information or "little knowledge" of some writers has been a distorted picture in which certain points are overemphasized, while the significance of others are under-estimated. Statistics, censuses and data in many aspects are lacking. The absence of statistics makes the study very difficult . Due to the scarcity of published data on many of the topics discussed in the present study, it has been necessary to secure the desired information and data directly from the Ministries of Iranian Government and/or offices concerned. The present economic situation of Iran is the product of an evolution, and can only be under stood by a study of its economic background. Therefore, the application of August Comte's adage that "no conception can be understood except through its history" seemed a logical approach in this study.
THE VOLUNTARY CREDIT RESTRAINT PROGRAM - A NEW EXPERIMENT WITH AN OLD PROBLEM
(1954) Singleton, Roy L.; Gurley, John G.; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md)
Economic Development in Southern Italy Since the Establishment of La Cassa per il Mezzogiorno
(1965) De Bone, Anthony Louis; Bennett, Robert L.; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md)
The study begins with a survey of the social and economic structure of the area. Attention is then focused on the nature of economic dualism in Italy by pointing out that the Northern economy yields to those employed in it a reasonably high income per capita, while the Southern economy provides for those working in it a low income per capita. In 1950 the Italian Government undertook to increase the level of public investments under a ten-year development plan for the South. It entrusted the execution of this plan to a new agency, La Cassa per il Mezzogiorno . Its life was soon extended to 1965 and more recently to 1980. The ultimate goal of the program was to reduce the differences in the consumption and income levels between the North and the South and to integrate the South into the national economy. Southern developments since 1950 and their effects on the economy are discussed, with emphasis on the Cassa programs and investments. It is discovered that many serious obstacles must be overcome in order to change the economic structure of a region such as Southern Italy. Despite the large transfer of resources to this area, The economic structure has changed little since 1950. However, whatever judgment may be passed on the Cassa at a later date, it is apparent that until now production has been concentrated in those sectors that offer relatively little possibility of rapid growth.
The State of Education in Afghanistan and the Application of a Linear Programming Model
(1969) Ulfat, Abderrahman; Bennett, Robert L.; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md)
In this study the role of education in economic development is briefly discussed; the state of education in Afghanistan is assessed and compared with a group of Asian countries. Through the application of a constrained maximization model the rate of return to primary education in Afghanistan is obtained. Discounted streams of income and cost, associated with different levels of education, were used as the coefficients of the equation which was set to maximize the return to education; the different categories of students and the needed teachers constrained the maximization of the afore-mentioned equation. The model thus described was also dynamic-given a group of youngsters it advanced them to higher levels of education and also generated the required number of teachers from those students. Education in the elementary level is found to be a profitable investment for Afghanistan to undertake. The rate of return to six years of education in this model is more than five percent and for the first three years it is more than ten percent.
A Monetary Base Analysis and Control Model for Turkey
(1976) Gursel, Haluk Ferden; Bennett, Robert L.; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md)
A monetary base analysis and control model is the focus of the paper. In the first chapter, the monetary base approach is presented and the links between monetary base, money supply and money income are shown. Further, the monetary policy problems of the developing countries are reviewed. The second chapter describes the institutional framework for Turkey. Here, as background information, the Central Bank, the Treasury and the State Economic Enterprises are examined from a monetary policy viewpoint. Also the stability of prices, the credit system, interest rates, money and security markets and foreign sector developments in recent decades are summarized. In the third chapter, the model which highlights the essentials of monetary base control is constituted. Here, the "direct" control of reserve money sources is suggested, and given the exogenously determined components of reserve money sources, the limits on the range of deliberate Central Bank-Treasury asset changes, through exchange rate, rediscount rate, open market interventions, etc., are estimated. The recommended use of the policy variable defined is explained in the last chapter.
An Empirical Analysis of the Determinants of Initial Occupational Choice by Male High School Graduates
(1986) Cox, Donald Francis; Brechling, Frank; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, MD)
This dissertation consisted of an empirical analysis of the determinants or initial occupational choice by male high school graduates. The approach used was based on the theory of random utility. According to this approach, the individual selects a particular outcome from a set of possible outcomes based on both observed and unobserved characteristics of the individual and the particular possible outcome. In this analysis, the occupational choice set contained three possible outcomes. These possibilities were civilian sector employment, military service and college enrollment. For empirical analysis, a sample of 1,748 male high school graduates was drawn from the National Longitudinal Survey of Youths (1979-1981). The empirical model consisted of a mixed discrete/continuous simultaneous 4 equation system. Three estimation strategies were used. The first was a sample two stage logit/ordinary least squares procedure. The second was a modified two stage logit/ordinary least squares procedure that corrected for self-selectivity bias. the third strategy consisted of a modified two stage logit/ordinary least squares procedure that corrected for both self-selectivity and choice-based sampling bias. The estimation results indicate that the decision to enlist is most sensitive to the net income of the individual's family and the predicted civilian sector wage. The military experience of the individual's father and the desire to acquire additional training are also important in this decision. In addition, the differences in the estimates across the three estimation procedures illustrate the importance of correcting for sample biases.
Fiscal Illusion in Public Finance: A Theoretical and Empirical Study
(1989) Marshall, Frances Louise Lightsey; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md)
This study of fiscal illusion begins by surveying existing studies of its nature and consequences: finding no consensus upon its definition proposes a comprehensive one: "the misperception by one or more individuals of the value of one or more fiscal parameters." No specifications of source, locus, nature, duration, variables affected, or direction of bias are presumed, and none are precluded. The issue of aggregation of individual perceptions, often preempted as definitional, is found to be crucial in interpreting the existing literature. The theoretical portion of the study uses the standard consumer choice model and the median voter model, again finding that the method of aggregating individual choices is crucial. It demonstrates that high average and total levels of fiscal illusion can be consistent with efficient social outcomes and that survey evidence is inappropriate for assessing the importance of fiscal illusion. It further finds that the impact of fiscal illusion on individual welfare provides a source of potential gain for agents who can dispel that illusion in individuals who may be decisive for the outcome of the collective choice process. An examination of the incentives of various agents to dispel illusion concludes that, though the existing literature evinces a recurrent concern that fiscal illusion results in misallocation of resources to and within the public sector, especially through the public officials' manipulation of citizens' perceptions, there exists a considerable array of forces that have significant power to limit the ability of such illusion to impose important burdens upon the electorate. The work concludes with an empirical study of the fiscal illusion hypothesis, in which estimates of the dollar magnitudes of the state tax "windfalls" resulting from the federal Tax Reform Act of 1986 are calculated and, in the estimated model, are found to exert no significant impact upon either the levels of state expenditures or changes in those levels. Because the windfalls are exogenous, this finding is free from the simultaneity issues that have compromised existing empirical studies of fiscal illusion. The results are consistent with the proposition that existing forces effectively limit the sway of fiscal illusion.
MULTINATIONAL CORPORATIONS AND DEVELOPING COUNTRIES: ENTRY MODE, TECHNOLOGY TRANSFER AND PERFORMANCE REQUIREMENTS
(2002) Anderson, Gary Wayne; Betancourt, Roger; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)
This dissertation develops and tests a theoretical model of multinational corporation technology transfer to affiliates in developing countries. A bi-lateral moral hazard model is used to analyze a multinational corporation's decision to enter a new market via a wholly owned subsidiary, a joint equity venture or an arm's length contract. The model demonstrates that governments can enact Pareto improving policies that increase technology transfer from foreign investors. However, frequently employed and recommended interventions such as export promotion policies and local content regulation lower joint venture profits and decrease the incentive to transfer technology. Empirical testing is conducted using a simultaneous equation limited dependent variable model. The results indicate that the determination of foreign ownership shares at the plant-level is consistent with the bi-lateral moral hazard model. Further, there is little if any indication that ownership is shared in international joint ventures as a means of sharing risk.
EXPLAINING REFORM REVERSALS: THE ROLE OF EXTERNAL CONSTRAINTS IN TRANSITION AND LATIN AMERICAN COUNTRIES
(2003-11-06) Martin, Facundo Santiago; Murrell, Peter; Reinhart, Carmen; Economics
Why were ex-communists returned to power in many transition countries so soon after they were vanquished in popular revolutions? Why didn't these ex-communists immediately reverse the previous policies, but in fact in many cases continue market-oriented reforms? Using a political economy model, the first half of the thesis provides new answers to these questions and shows that they are linked. The model analyzes the interaction between voters and political parties over two electoral terms. In one prominent equilibrium, right wing parties are elected for the first term and implement radical market-oriented reforms, but the second elections are won by ex-communists, who continue with the reforms. This equilibrium occurs in countries with somewhat low levels of corruption, high uncertainty, and moderate distance between political parties. Differences in conditions that lead to other types of equilibria are analyzed, for example the delayed reforms in Russia or the gradual but consistent reforms in Slovenia. The second half of the thesis empirically analyzes the causes of policy reversals in both transition and Latin American countries. Indexes of reforms are used to identify those time periods in which reversals occur. Using the political economy model of the first half of the thesis plus other theories of political behavior, variables are identified that could affect the decisions of politicians on whether to reverse reforms or to move forward. The estimated relationships show that external constraints from international financial markets or supranational organizations are important factors preventing policy reversals. Macroeconomic crises, usually thought to lead to more market reforms, do not necessarily do so. More corruption leads to more policy reversals, as does less democratic government. This first attempt to capture the basic causes of reversals shows that they are the same in both regions, for example very low or very high debt service obligations, or the absence of an external disciplining force, such as the promise of future entry into the European Union.
DOES THE EXCHANGE RATE MATTER FOR MONETARY POLICY UNDER INFLATION TARGETING? EVIDENCE FROM MEXICO, NEW ZEALAND AND CANADA
(2003-11-13) Trevino, Juan Pedro; Reinhart, Carmen M; Economics
Recently, many developed and developing countries have adopted inflation targeting as the monetary policy framework. There is large debate regarding the importance of external variables, such as the exchange rate, for monetary policy decisions under this framework, particularly in small open economies. In the first chapter I explore the extent to which the adoption of an explicit inflation target in Mexico can be associated to a de facto change in the behavior of the central bank in terms of how it responds to changes in the exchange rate and other external variables, along with conventional variables considered relevant for monetary policy. The results indicate the presence of a change in the behavior of the central bank in Mexico associated to the adoption of an explicit inflation target in January of 1999. Variables such as policy credibility and the output gap tend to become more important for monetary policy, while the exchange rate becomes relatively less relevant when the inflation target is in operation. As compared to the cases of New Zealand and Canada -two small open economies that have successfully followed this policy prescription- the results suggest that monetary policy implementation in Mexico has become much more like in those countries. In the second chapter I present a modified version of Drazen and Masson (1994), where instead of assuming exogenous unemployment persistence, an endogenous externality from choosing positive inflation is imposed on unemployment. In face of an adverse shock to unemployment, a policymaker that generates surprise inflation to offset such shock will generate a negative spillover that will translate into future higher unemployment. The result is that this constitutes an additional channel for commitment to zero inflation other than the signaling/reputation channel. This modification may contribute to explain, on the one hand, why a policymaker that is highly committed to lower inflation may still inflate under extreme circumstances, and, on the other, why the central bank in countries like Mexico, where credibility may still be an issue, continue to follow a stringent monetary policy at a cost of "sluggish" economic growth.
Four Decades of Change in U.S. Public Education: Essays on Teacher Quality and School Finance
(2003-11-24) Corcoran, Sean Patrick; Evans, William N; Schwab, Robert S; Oates, Wallace E; Rice, Jennifer K; Economics
Several decades of research in the economics of education have shown that both the quality and quantity of school resources are important for student outcomes. In this dissertation, I present two essays that address changes in both the quality and quantity of resources available to public schools over the past four decades (1960 2000). First, in chapter two I examine how the propensity for high test-scoring females to enter the teaching profession has changed over a forty-year period of occupational desegregation. While it has long been presumed that improved labor market opportunities for women have adversely affected the quality of teachers (over three quarters of whom are female), there is surprisingly little evidence measuring the extent to which this is true. In this essay, I combine data from five longitudinal surveys of high school graduates spanning the years 1957 to 2000 to evaluate this claim. I find that while the test score ranking of the average new female teacher has fallen only slightly over this period, the likelihood that a female in the top decile of her high school class entered teaching has plummeted. Next, in chapter three I examine the impact of rising within school district population heterogeneity and income inequality on local per-pupil expenditure and public school participation rates. Like the nation at large, the populations of school districts in the United States have become significantly more diverse, in (among other dimensions) racial and ethnic background, schooling, and income. Using a merged panel of school district demographics and financial data for 8,700 unified school districts over the 1970 to 2000 period, I look at the effects of this rising heterogeneity on the support for local public schools. I find that rising within-district income inequality is associated with greater per-pupil expenditure, a result consistent with a median voter model in which a lower tax price to the median voter results in greater per-pupil spending. Greater fractionalization in race and educational attainment appears to reduce per-pupil expenditure and increase enrollment in private schools.
CURRENCY MISMATCHES IN EMERGING MARKETS: CAUSES AND IMPLICATIONS FOR FIRMS' INVESTMENT DURING CURRENCY CRISES
(2003-11-24) Rodriguez Martinez, Pedro Cesar Jesus; Reinhart, Carmen; Broner, Fernando; Haltiwanger, John; Shea, John; Economics
This thesis studies two related issues that have gained relevance as a consequence of several of the major currency crises of the 1990s. The first is the impact that devaluations have on investment when domestic firms have currency mismatches, i.e., debt denominated in foreign currency and assets and revenues in domestic currency. The second has to do with the causes behind the widespread presence of currency mismatches in many economies of the world. Chapter 2 analyzes the first issue using firm level data for Thailand to test for the impact of currency mismatches on firms' investment during the Asian crisis. A key feature of the analysis is that it exploits the heterogeneity that exists in the degree of currency mismatch across firms in order to identify the mentioned impact.The results of this chapter suggest that currency mismatches played a statistically significant role in explaining the investment decline observed in Thailand during and after the Asian crisis, and, as a result, that a balance sheet channel may have operated during the crisis. The results also suggest that omitting complementary explanations of the Asian crisis, in particular the presence of over-investment prior to the crisis, produces an artificially high impact of currency mismatches on investment. This result occurs due to the co-movement that investment and currency mismatches have in the period preceding the crisis. Chapter 3 assesses the generality of the results of the previous chapter by analyzing other three countries that were involved in the Asian crisis: Indonesia, Malaysia, and South Korea. Although less robust due to data limitations, the analysis is still very insightful. Chapter 4 deals with the second issue mentioned in the first paragraph. The chapter proposes a model that emphasizes the incentives of domestic governments to generate opportunistic devaluations in order to transfer resources from foreign lenders to domestic borrowers in case debt contracts were denominated in domestic currency. The model is not only able to explain why firms end up having currency mismatches, but it is also consistent with several of the stylized facts associated with international capital movements.
ESSAYS ON REGIONAL INTEGRATION AND DEVELOPMENT ECONOMICS
(2003-12-04) Berthelon, Matias Enrique; Betancourt, Roger; Economics
The first chapter of this dissertation studies the growth effects of regional integration agreements. During the 1990's the world experienced a new wave of regional integration agreements (RIAs) that reached unprecedented proportions. In the presence of economies of scale or extent-of-the market effects RIAs may have positive growth effects. I introduce a new measure of regional integration by interacting country membership to an RIA and the partners' share of world GDP, which allows capturing differentiated effects depending on the size of the partners. Results indicate that RIAs have exerted positive effects on growth. In addition, I find that North-North agreements have significant growth effects; South-South agreements have ambiguous effects depending on the size of the countries joining them, and that there is no clear answer for North-South agreements. The second chapter studies the impacts of Social Infrastructure Investments in Education focusing in the case of Nicaragua during the 1990's. This chapter assesses the impact of investments in primary school infrastructure carried by Nicaragua's Social Investment Fund (FISE) during the 1993-1997 period on several education outcomes in the primary school population, such as: enrollment, grade repetition, absenteeism, age at which students enroll in first grade, and education gap. I propose to use two different approaches that assume selection on observables to deal with possible selection bias in order to estimate the impact of FISE investments: a regression based estimation and a propensity score matching technique. With these two approaches I do not find any effects of FISE's investments on the selected educational outcomes. One possible explanation of the lack of significance might be that FISE investments actually had no impact on the outcomes because infrastructure is not a relevant determinant of those used here. If this is the case, then investing in setting up and maintaining Social Funds cannot be justified by appealing to the alleged positive impact of their investments on education. Since the impacts are simply not present in the Nicaraguan case, the reasons to keep Social Funds must be revisited.
TWO ESSAYS ON SPATIAL ECONOMETRICS
(2003-12-08) Yuzefovich, Yevgeniy A; Kelejian, Harry; Prucha, Ingmar; Economics
The first part of the dissertation is a Monte-Carlo study of the small sample properties of various estimators of the parameters of single equation model with a spatially lagged dependent variable and a spatially lagged disturbance term. We focus on the small sample behavior of the maximum likelihood estimator (MLE) and spatial instrumental variable (IV) estimators. These IV estimators are feasible spatial two-stage least squares (FGS2SLS) and series estimators which were suggested by Kelejian and Prucha (1998, 2001), the best GS2SLS estimator which was suggested by Lee (2000). The findings indicate that the finite sample properties of the IV estimators are almost identical. Furthermore, the advantage of the ML estimator over the spatial IV estimators is very limited or nonexistent in most of the cases considered. These results have important implications in terms of e.ciency and computational feasibility of these estimators. The second part analyses the importance of alternative channels of contagion during the Asian, Russian and Brazilian crisis episodes. We consider four contagion channels relating to the extent of trade, financial links through common lenders (bank lending channel), similarity in risk, and neighborhood e.ects. In order to assess the significance of each we apply a spatial modeling technique to weekly stock market returns of a cross-section of countries. The paper improves upon previous contagion studies with similar methodology in two aspects. First, the parameters of the model are estimated by a consistent procedure. This clearly leads to more reliable inferences. Second, we use a data set involving a larger sample of countries. This should alleviate some of the potential sample selection biases inherent in previous studies. The results indicate that (a) the bank lending channel was important in all three crisis episodes, (b) the trade channel was relevant in the Russian and Brazilian crisis episodes, but not in the Asian crisis, (c) there is some evidence of the risk similarity channel during the Asian crises, but not in the Russian and Brazilian crises, (d) neighborhood e.ects were important in all three crisis episodes. Furthermore, there is an evidence of negative trade spillovers from Japan during the Asian crisis.
Panel Data Models with Spatial Correlation: Estimation Theory and Empirical Investigation of the US Wholesale Gasoline Industry
(2003-12-08) Kapoor, Mudit; Betancourt, Roger; Prucha, Ingmar R; Kelejian, Harry H; Evans, William; Economics
The first part of my dissertation considers the estimation of a panel data model with error components that are both spatially and time-wise correlated. The dissertation combines widely used model for spatial correlation (Cliff and Ord (1973, 1981)) with the classical error component panel data model. I introduce generalizations of the generalized moments (GM) procedure suggested in Kelejian and Prucha (1999) for estimating the spatial autoregressive parameter in case of a single cross section. I then use those estimators to define feasible generalized least squares (GLS) procedures for the regression parameters. I give formal large sample results concerning the consistency of the proposed GM procedures, as well as the consistency and asymptotic normality of the proposed feasible GLS procedures. The new estimators remain computationally feasible even in large samples. The second part of my dissertation employs a Cliff-Ord-type model to empirically estimate the nature and extent of price competition in the US wholesale gasoline industry. I use data on average weekly wholesale gasoline price for 289 terminals (distribution facilities) in the US. Data on demand factors, cost factors and market structure that affect price are also used. I consider two time periods, a high demand period (August 1999) and a low demand period (January 2000). I find a high level of competition in prices between neighboring terminals. In particular, price in one terminal is significantly and positively correlated to the price of its neighboring terminal. Moreover, I find this to be much higher during the low demand period, as compared to the high demand period. In contrast to previous work, I include for each terminal the characteristics of the marginal customer by controlling for demand factors in the neighboring location. I find these demand factors to be important during period of high demand and insignificant during the low demand period. Furthermore, I have also considered spatial correlation in unobserved factors that affect price. I find it to be high and significant only during the low demand period. Not correcting for it leads to incorrect inferences regarding exogenous explanatory variables.
Decentralization and Education: an empirical investigation
(2003-12-18) Barrera-Osorio, Felipe; Schwab, Robert; Gelbach, Jonah; Economics
This thesis analyses, using a quasi-experimental approach, the relationship between decentralization and education in Colombia, where in 1991 decentralization of the State was implemented. The thesis focuses on two relationships: first, the relationship between decentralization and quality of education; and second, this relationship across individuals with different incomes. Theoretically, decentralization may increase the efficiency in the provision of education, and therefore, we would expect an increment in educational quality in schools affected by decentralization. Furthermore, decentralization may create a more unequal distribution of educational quality, and therefore, we expect that the impact of decentralization is asymmetric with respect to income. The thesis makes use of a new dataset that comes from two sources. First, data from the Ministry of Education provide an important array of school characteristics. Second, data from the ICFES, the institute in charge of administering standardized tests in Colombia, provide test scores and characteristics of individuals. We present three types of quasi-experimental models based on different control and treatment groups. First, we estimate the effect of decentralization on public schools, using private ones as a comparison group. Second, we restrict the estimation to public schools, but now the treatment group is comprised of schools in initially highly dependent departments, and the control group of schools in departments with initially highly independent relationship with the central government. Finally, the third model is a nested model of the first two. It is a more flexible model allowing nationwide effects and public school effects. The empirical results are mixed. We find a positive impact of decentralization in the first two models. However, the third model presents a negative result. The results from the tests on an asymmetrical impact of decentralization, depending on income, are mixed as well. In the last two models, the results are symmetric. However, in the first model the results are asymmetric, and interestingly, in favour of low-income individuals. That is, decentralization increases the test scores for individuals at the left tail of the income distribution.
Essays on Anti-dumping
(2004-02-10) Malhotra, Nisha; Panagariya, Arvind; Limao, Nuno; Lyon, Andrew; Straszheim, Mahlon; Economics
This dissertation studies the use of the US antidumping (AD) legislation. In the first chapter, I use panel data on AD petitions filed by US industries from 1980 to1995 to study the determinants of antidumping filings. I argue that a negative binomial model is better suited to study the industry's decision to petition than the poisson model employed in the previous literature. I find that contrary to the past findings, import penetration, one of the International Trade Commission's material injury criteria, is not an important factor. I also find that a larger workforce, lower price cost margin, and a higher capital intensity increases an industry's probability of petitioning. In the second chapter I study the stock market response to AD petitions filed by US firms. The main question I study is why so few firms petition for import relief. It is known that at lest in the short run, petition itself can restrain imports, lead to higher prices and hence higher profits. Given this fact, what restrains more firms from filing for protection? I use an event study to analyze the impact of petitioning on the market value of a firm to analyze the puzzle. For some industries, firms experience a decline in their market value at the time of petition. Therefore, it is possible that firms fear that petitioning would signal cost inefficiency on their part. In turn, this concern may act as a deterrent to filing AD petitions. I test the hypothesis of a negative signal by comparing the market response of an AD petition for petitioning firms and non-petitioning firms producing the same product. The main aim of third chapter, based on joint work with Sumeet Gulati, is to evaluate whether the Softwood Lumber Agreement (SLA), signed between US and Canada in May 1996, had a significant economic impact on the industrial users (rather than producers) of lumber in the US. Firm's daily stock prices are used in an event study to analyze market's response to the signing of SLA. I find that the SLA imposed significant economic costs on the users of lumber. The fourth chapter is a case study of the chemical industry. Restricting imports by imposing antidumping duties protects domestic firms from predatory pricing by foreign firms, and reduces competition in the domestic market. I look at the cases filed by the chemical industry to illustrate this possibility.
Output structure, debt denomination, and exchange rate regimes
(2004-04-20) Magud, Nicolas Ernesto; Reinhart, Carmen; Economics
The dissertation analyzes the choice of an exchange rate regime for a small open economy indebted in foreign currency, incorporating the financial accelerator. Conventional wisdom suggests that floating regimes should insulate the economy from real shocks. I show that this result depends on the degrees of openness of the economy and foreign currency indebtedness and, in fact, does not hold for relatively closed economies. The transmission mechanism relies on nonlinearities in the impact of unanticipated real price changes on the external finance premium, similar to Fisher (1933). To test this, a VAR with exogenous terms of trade shocks is performed: a 32 country sample for the period 1980-2001 is split according to the degree of openness of the economy. The results confirm the theoretical conclusions.
Elderly Parents' Expectations and Realizations of Informal Care from Adult Children: An Economic Perspective
(2004-04-27) Godwin, Jennifer Woodard; Evans, William N; Economics
Over the next 50 years, the U.S. will see a tremendous growth in the elderly population due to the aging baby boomers and rising life expectancies. Currently, forty-five percent of seniors need assistance with activities of daily living. Medicare and Medicaid provide little coverage for these services, leaving the elderly to rely on informal care. While previous research has examined who provides care and the process by which children and parents arrange care, I use the Study of Assets and Health Dynamics among the Oldest Old (AHEAD) to examine parents' expectations about future care from children and the implications of those predictions after the onset of a disability. Using a probit framework, I examine who anticipates care from children among non-disabled households and who actually receives care among disabled households. The household characteristics correlated with anticipating future care differ from those correlated with the true probability of receiving care. For example, an additional daughter increases the probability that an elderly household expects future care, however an additional daughter is not statistically significantly related to the true probability of receiving care. Conversely, parents' socioeconomic status is not statistically significantly related to the probability of expecting future care, but lower socioeconomic households are more likely to receive care. I directly evaluate the accuracy of parents' predictions using the panel nature of the data. Among households that expect future care from children, over 60 percent do not receive care after the initial onset of a disability and nearly 50 percent still do not receive care after living with disabilities for five years. Among households that do not anticipate care from children, approximately 25 percent unexpectedly receive care after the initial onset of a disability, while slightly more than 50 percent receive care after needing help for five years. Further analysis reveals that inaccurately predicting care from children is associated with some economic and psychological costs, whereas unexpectedly receiving care is correlated with some economic and psychological benefits.
Essays on Labor Market Effects of Integration in Unionized Economies
(2004-04-27) Narain, Ashish; Panagariya, Arvind; Limao, Nuno; Murrell, Peter; Vincent, Daniel R.; Economics
This thesis examines the effect of integration on wages when the economy is partially unionized. The first part sets up a general equilibrium model where wages in one sector are set by a monopoly union. The unionized sector of the economy also utilizes a factor (capital) which is internationally mobile. Capital mobility is explicitly modeled in terms of mobility costs. The model is characterized by inter-industry wage differentials and a possibility of temporary unemployment in the unionized sector. Integration is modeled in terms of reduced barriers to product trade, or easier factor (capital) mobility. I show that though capital mobility weakens unions, the net effect on workers may not be negative if this either raises domestic investment, or if the union distortion is large enough. In general the impact of trade liberalization on real wages is ambiguous. However workers bear a larger burden from trade liberalization when capital is more footloose. This second half of the thesis empirically examines whether unions face a threat from outward foreign direct investment by their industry, and whether this changes their response to tariff protection. I combine worker level data for the US, with industry level data on openness and other industry characteristics for the years 1990-1996. The results suggest that unions do face a threat from FDI, though this threat effect is not large in comparison to other industry characteristics. I also find evidence that union response to tariff changes vary with the level of the threat effect. Our results suggest that unions use protection to raise employment probability in low threat industries, and to raise premiums in high threat industries.