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Stock prices and monetary policy: Analysis of a Bayesian DSGE model
Get PDFThis study evaluates the reaction of stock prices to monetary policy in Japan during the 1980s. We employ Bayesian estimation of the dynamic stochastic general equilibrium model, revealing the presence of the wealth channel from increased stock prices in Japan. We argue that the Bank of Japan (BOJ) may have implemented its monetary policy by targeting stock price stability, inflation and the output gap. Our results indicate that, while the BOJ may have reacted to stock prices, a monetary contraction could not prevent deviations from their fundamental values
Did Slavery Impede the Growth of American Capitalism? Two Natural Experiments Using Farm Values per Acre
Get PDFTwo natural experiments challenge the view that slavery impeded the growth of American capitalism. An event study shows that farm values fell relative to the national average in slave states following abolition. A spatial regression discontinuity design (RDD) then suggests that any negative effects of slavery’s legality on farm values on the free-slave state border were counteracted by the institution’s practical utility. An explanation of these results can also be advanced: slavery provided a relatively cheap agricultural labor force in parts of the South where white Americans preferred not to settle. From this perspective, the growth of American capitalism was promoted rather than impeded by slavery
Absorptive Capacity of Türkiye’s Provinces vis-à-vis Refugee Influx from Syria
Get PDFThis paper quantitatively examines the refugee absorption/integration rates across Türkiye’s 81 provinces while considering the geographical and economic features of each of the 81 provinces. The study mainly focuses on the distribution of Syrian refugees under temporary protection in Türkiye after the 2011 Syrian Civil War and develops an array of econometric models to understand the spatial distribution of refugees. Subsequently, the over-absorbing provinces (the provinces that host more than their model-suggested ideal capacity) and under-absorbing provinces (the provinces that host less than their model-suggested ideal capacity) are highlighted along with a road map for future research venues
Determinants of Female Employment in Agriculture, Industry, and Service Sector: A cross country analysis
Get PDFGlobally, women are still less likely than men to enter the workforce. Since 1990, the gender gap in labour force participation has remained at 30% worldwide. Female employment is critical to economic stability and personal development, providing financial security, purpose, and societal contribution. However, technological advancements, R&D, and economic fluctuations constantly shape global employment opportunities, resulting in significant disparities across sectors. This study investigates the determinants of female employment separately for agriculture, industry, and service sectors, using data from the World Development Indicators (WDI) from 2004 to 2023. The Feasible Generalized Least Squares (FGLS) panel regression results show that different factors contribute to female employment in different sectors. Reducing the female contribution to family work and fertility ratio is important for reducing female employment in agriculture. Exports of goods and services and female self-employment are essential for increasing female employment in the industry sector. Additionally, domestic credit to the private sector, labour force participation rate, labour force with basic education, and life expectancy at birth need to be encouraged to increase female employment in the service sector. Finally, relevant policies are suggested to increase female employment for sustainable economic growth
A Decision-Theoretic Method for Analyzing Crossing Survival Curves in Healthcare
Get PDFThe problem of crossing Kaplan-Meier curves has not been solved in the medical research literature to date. This paper integrates survival curve comparisons into decision theory, providing a theoretical framework and a solution to the problem of crossing Kaplan-Meier curves. The application of decision theory allows us to apply stochastic dominance concepts and risk preference attributes to compare treatments even when standard Kaplan-Meier curves cross. The paper shows that as additional risk preference attributes are adopted, Kaplan-Meier curves can be ranked under weaker restrictions, namely with higher orders of stochastic dominance. Consequently, even Kaplan-Meier curves that cross may be ranked. The method we present allows us to extract all possible information from survival functions; hence, superior treatments that cannot be identified using standard Kaplan-Meier curves may become identifiable. Our methodology is applied to two examples of published empirical medical studies. We show that treatments deemed non-comparable because their Kaplan-Meier curves intersect can be compared using our method
Logistics Performance and ESG Outcomes: An Empirical Exploration Using IV Panel Models and Machine Learning
Get PDFThis study investigates the complex relationship between the performance of logistics and Environmental, Social, and Governance (ESG) performance drawing upon the multi-methodological framework of combining econometric with state-of-the-art machine learning approaches. Employing IV panel data regressions, viz. 2SLS and G2SLS, with data from a balanced panel of 163 countries covering the period from 2007 to 2023, the research thoroughly investigates how the performance of the Logistics Performance Index (LPI) is correlated with a variety of ESG indicators. To enrich the analysis, machine learning models—models based upon regression, viz. Random Forest, k-Nearest Neighbors, Support Vector Machines, Boosting Regression, Decision Tree Regression, and Linear Regressions, and clustering, viz. Density-Based, Neighborhood-Based, and Hierarchical clustering, Fuzzy c-Means, Model Based, and Random Forest—were applied to uncover unknown structures and predict the behaviour of LPI. Empirical evidence suggests that higher improvements in the performance of logistics are systematically correlated with nascent developments in all three dimensions of the environment (E), the social (S), and the governance (G). The evidence from econometrics suggests that higher LPI goes with environmental trade-offs such as higher emissions of greenhouse gases but cleaner air and usage of resources. On the S dimension, better performance in terms of logistics is correlated with better education performance and reducing child labour, but also demonstrates potential problems such as social imbalances. For G, better governance of logistics goes with better governance, voice and public participation, science productivity, and rule of law. Through both regression and cluster methods, each of the respective parts of ESG were analyzed in isolation, allowing to study in-depth how the infrastructure of logistics is interacting with sustainability research goals. Overall, the study emphasizes that while modernization is facilitated by the performance of the infrastructure of logistics, this must go hand in hand with policy intervention to make it socially inclusive, environmentally friendly, and institutionally robust
Cultural Difference, Social Identity, and Redistribution
Get PDFEconomic disparity between different ethnic groups is substantial in many countries. In developing countries, ethnic inequality appears to significantly impede economic development. In developed countries, the economic and cultural integration of increasing numbers of immigrants into society is a major concern. Income redistribution in a broader sense is a natural candidate for addressing ethnic inequality. Empilical study suggests that it also seems to contribute to development by reducing inequality and increasing educational investment among the poor.
However, the scale of redistribution limited in many countries. Empirical findings suggest two potential explanations: the presence of culturally diverse ethnic groups and weak national identity.
These findings raise various questions. Under what conditions do inter-ethnic cultural differences diminish over time? Is cultural convergence necessary to expand redistribution and reduce inter-ethnic income disparity? Does it always lead to such outcomes? Under what circumstances do large segments of the population share national identity? Is national identity necessary to increase redistribution? Does it always result in increased redistribution? How do cultural differences and national identity interact?
To address these questions, this paper develops and examines a dynamic model of income redistribution and educational investment augmented with cultural change and social identification
Profit-enhancing emissions taxes in near-zero-emissions industries
Get PDFMotivated by the recent global trend of net-zero-emissions environmental regulations, we investigate the relationship between emissions tax rates and firm profits in oligopolies. Our result indicates that when the resulting emission levels are approximately zero, a marginal increase in the tax rate enhances firms' profits except in monopoly markets. This finding suggests that firms might not resist a further increase in environmental tax if the target emissions level is sufficiently low. Moreover, we present parametric numerical examples suggesting that the profit-enhancing range is large and not limited to near-zero emissions
Negative rates, demographics and fiscal policy: Heterogeneous tilting taxation in the Euro Area
Get PDFThis paper estimates time-varying tax-tilting parameters for eleven EMU member states from 1970 to 2024 using a panel time-varying parameter state-space model that extends the traditional tax-smoothing framework to capture both common and country-specific dynamics. Core countries such as Austria, Belgium, Germany, the
Netherlands, France, Ireland, and Finland display a more prudent fiscal stance, while peripheral countries, including Greece, Italy, Portugal, and Spain, shift taxation toward the future, generating current deficits. These patterns are driven by differences between government discounting of future revenues and market rates, and are further influenced by structural factors such as aging populations and unemployment. Periods of negative real interest rates relax fiscal constraints, encouraging governments to delay tax adjustments. The results underscore the need to reduce cross-country fiscal heterogeneity to strengthen long-term sustainability and advance fiscal integration in the Euro Area
An Analysis of Agricultural Crop Residue Burning and Urban Air Pollution in New Delhi, India
Get PDFA farmer in Haryana, a state neighboring the capital city of New Delhi, India, burns agricultural crop residue which leads to an increase in air pollution and gives rise to extra costs for a small business owning representative citizen in New Delhi. We theoretically analyze this farmer/citizen interaction. We first determine the optimal amount of crop produced when the farmer disregards the negative externality he imposes on the representative New Delhi citizen. Second, we study the equilibrium that emerges when the farmer must pay a fine to compensate the New Delhi citizen for the negative externality he causes. Finally, we compare the outcomes in the preceding two cases and then explain the differences that arise