SIRE
Not a member yet
655 research outputs found
Sort by
Work Hours, Social Value of Leisure and Globalisation
Get PDFWe examine how openness interacts with the coordination of consumption-leisure decisions in determining the equilibrium working hours and wage rate when there are leisure externalities (e.g., due to social interactions). The latter are modelled by allowing a worker’s marginal utility of leisure to be increasing in the leisure time taken by other workers. Coordination takes the form of internalising the leisure externality and other relevant constraints (e.g., labour demand). The extent of openness is measured by the degree of capital mobility. We find that: coordination lowers equilibrium work hours
and raises the wage rate; there is a U-shaped (inverse-U-shaped) relationship between work hours (wages) and the degree of coordination; coordination is welfare improving; and, the gap between the
coordinated and uncoordinated work hours (and the corresponding wage rates) is affected by the extent and nature of openness
Time Varying Dimension Models
Get PDFTime varying parameter (TVP) models have enjoyed an increasing popularity in empirical macroeconomics. However, TVP models are parameter-rich and risk over-fitting unless the dimension of the model is small. Motivated by this worry, this paper proposes several Time Varying dimension (TVD) models where the dimension of the model can change over time, allowing for the model to automatically choose a more parsimonious TVP representation, or to switch between different parsimonious representations. Our TVD models all fall in the category of dynamic mixture models. We discuss the properties of these models and present methods for Bayesian inference. An application involving US inflation forecasting illustrates and compares the different TVD models. We find our TVD approaches exhibit better forecasting performance than several standard benchmarks and shrink towards parsimonious specifications
Off-the-Record Target Zones: Theory with an Application to Hong Kongs Currency Board
Get PDFThis paper provides a modelling framework for evaluating the exchange rate dynamics of a target zone regime with undisclosed bands. We generalize the literature to allow for asymmetric one-sided regimes. Market participants' beliefs concerning an undisclosed band change as they learn more about central bank intervention policy. We apply the model to Hong Kong's
one-sided currency board mechanism. In autumn 2003, the Hong Kong dollar appreciated
from close to 7.80 per US dollar to 7.70, as investors feared that the currency board would be abandoned. In the wake of this appreciation, the monetary authorities finally revamped the regime as a symmetric two-sided system with a narrow exchange rate band
Colonialism, Elite Formation and Corruption
Get PDFThis paper argues that corruption in developing countries has deep
historical roots; going all the way back to the characteristics of their
colonial experience. The degree of European settlement during colonial
times is used to dfferentiate between types of colonial experience, and
is found to be a powerful explanatory factor of present-day corruption levels. The relationship is non-linear, as higher levels of European settlement resulted in more powerful elites (and more corruption) only as long as Europeans remained a minority group in the total population
Does Ricardian Equivalence Hold When Expectations are not Rational?
Get PDFThis paper considers the Ricardian Equivalence proposition when
expectations are not rational and are instead formed using adaptive learning
rules. We show that Ricardian Equivalence continues to hold provided suitable
additional conditions on learning dynamics are satisfied. However, new cases of
failure can also emerge under learning. In particular, for Ricardian Equivalence to
obtain, agents’ expectations must not depend on government’s financial
variables under deficit financing
First-and second-best allocations under economic and environmental uncertainty
Get PDFThis paper uses a micro-founded DSGE model to compare second-best optimal environmental policy and the resulting allocation to first-best allocation. The focus is on the source and size of uncertainty, and how this affects optimal choices and the inferiority of second best vis-à-vis first best
On monetary policy and stock market anomalies
Get PDFThis study utilizes a macro-based VAR framework to investigate whether stock portfolios formedon the basis of their value, size and past performance characteristics are affected in a differentialmanner by unexpected US monetary policy actions during the period 1967-2007. Full sample results show that value, small capitalization and past loser stocks are more exposed to monetary policy shocks in comparison to growth, big capitalization and past winner stocks. Subsample
analysis, motivated by variation in the realized premia and parameter instability, reveals that monetary policy shocks’ impact on these portfolios is significant and pronounced only during the pre-1983 period
Taxation and Total Government Take from the UK Continental Shelf (UKCS) Following Phase 3 of the European Emissions Trading Scheme (EU ETS)
Get PDFNORTH SEA STUDY OCCASIONAL PAPER
No. 11
Poor and Sick: Estimating the relationship between Household Income and Health
Get PDFThis study evaluates the effect of the individual‘s household income on their health at the later stages of working life. A structural equation model is utilised in order to derive a composite and continuous index of the latent health status from qualitative health status indicators. The endogenous relationship between health status and household income status is taken into account by using IV estimators. The findings reveal a significant effect of individual household income on health before and after endogeneity is taken into account and after a host of other factors which is known to influence health, including hereditary factors and the individual‘s locus of control. Importantly, it is also shown that the childhood socioeconomic position of the individual has long lasting effects on health as it appears to play a significant role in determining health during the later stages of working life