This study examines macroeconomic and industry-level factors (with particular emphasis on the business cycle) on industry-level merger activity. In a sample of US mergers from 1979 to 2006, we find that industry level mergers are highly pro-cyclical. The business cycle has a positive and significant impact on both horizontal and non-horizontal mergers, even after controlling for other macroeconomic and industry-level effects. Although macroeconomic variables have similar effects on both horizontal and non-horizontal mergers, industry-level factors vary significantly between the two types of mergers. Horizontal mergers are much more aligned with neo-classical theories, while non-horizontal mergers are more affected by financing constraints and overvaluation. We also find that the determinants and financing preferences of industry-level mergers vary greatly across the business cycle stages, which suggests that the motivation for mergers changes in different economic conditions.

This study examines macroeconomic and industry-level factors (with particular emphasis on the business cycle) on industry-level merger activity. In a sample of US mergers from 1979 to 2006, we find that industry level mergers are highly pro-cyclical. The business cycle has a positive and significant impact on both horizontal and non-horizontal mergers, even after controlling for other macroeconomic and industry-level effects. Although macroeconomic variables have similar effects on both horizontal and non-horizontal mergers, industry-level factors vary significantly between the two types of mergers. Horizontal mergers are much more aligned with neo-classical theories, while non-horizontal mergers are more affected by financing constraints and overvaluation. We also find that the determinants and financing preferences of industry-level mergers vary greatly across the business cycle stages, which suggests that the motivation for mergers changes in different economic conditions.

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Real Business Cycle (RBC) theory together with its applications is one of the most important studies in macroeconomics. Recently, Finn Kydland and Edward Prescott received Nobel Memorial Prize in Economics. RBC is deeply affected by New Keynesian School (NKS). For example, Solow model emphasizes using CES of production function in RBC. Recently, New Keynesian Economics gives microeconomic foundations of incomplete competition, and explains macroeconomic fluctuations by prices and wages sticky. RBC and NKE were generalized into a new brake through model called DSGE. DSGE combines RBC and NKE to be a microeconomics foundation model. They consider household and firm optimal choice and integrate real and nominal shocks to let theory in macroeconomic to be close to the real world situation. This paper adopts DSGE model in Schmidt and Zimmermann (2005) into Taiwan. From 1981 to 2006, we discuss fluctuaction of macroeconomic variables in a small open economy by national oil price shocks between effect of oil price fluctutaion relationship. There are two main contributions: First, to review and put related Taiwan¡¦s literatures together which supply important calibration values. These sources provide prior information to finish foundations of this thesis. Second, this is the first thesis based on importance of price of imported oil in Taiwan. We split time-series data from 1981 to 1997 and 1998 to 2006. In the period from 1981 to 1997 the oil price shocks can explain 47% of the Taiwan business cycle fluctuations. In the second period, from 1998 to 2006, the oil price shocks can explain 69% of the Taiwan business cycle fluctuations. The main result is that the oil price shocks have more significant influence on the business cycle in Taiwan.

Taiwan business indicators are announced by CEPD(Council For Economic Planning And Development) , and divided into three categories ¡V business monitoring indications, business expectation indicators and industrial business expectation survey. Business expectation indicators are further divided into the Composite Index of Leading Indicators and the Composite Index of Coincident Indicators. Leading indicators, which are expected to forecast business cycles, are widely used to monitor or even predict the fluctuations of economic activities. They are also used to provide early signals of economic trend and, therefore, considered as a tool to adjust the government¡¦s economic policy. CEPD use the compilation of the USA National Bureau of Economic Research as a reference for a long time, and has announced Taiwan¡¦s ex-business indicators since 1977 without making any revision in the past years, so they announced new business indicators in 2007. As we know, it is difficult to find the leading indicator to make the stable variable of predicting the business cycle, which raises doubts of whether the current leading indicators can done the work concisely. CEPD make the indicators a little bit subjective because of considering government¡¦s policy and the meaning of containing widely economic fields and the convenience of static, so this research try to examine the effect of current seven leading indicators. This thesis focuses on leading indicators to investigate how the seven components are related to the general economy. Composite Index of Leading Indicators is made up of seven indicators in order to predict the business cycle. The seven indicators include Index of export orders, Monetary aggregates, M1B, Stock prices index, Index of producer's inventory, Average monthly overtime in industry & services, Building permits, SEMI book ¡Vto¡Vbill ratio. In the purpose of getting more sample data, we take Industrial production index, one of coincident indicators announced by CEPD as the variable of current economy.

Chapters one and two of the dissertation investigate the effects of political disagreement on macroeconomic outcomes. I introduce a model of governments with heterogeneous preferences over the composition of consumption between private and public goods alternating in power. Unable to commit to future policies, the party in power has incentive not only to shape consumption according to their preferences but also to manipulate the future state faced by successive governments to influence the decisions of future policy makers. Alternating governments give rise to political business cycles; fluctuations in economy-wide variables due to the political system. Political business cycles help explain the divergence in outcomes of economic variables across countries with different levels of political disagreement and political stability. The first chapter adapts a real business cycle model to include political shocks in addition to the productivity shocks. This is motivated by a key puzzle in the business cycle literature: for emerging economies the volatility of consumption is higher than the volatility of output, a feature of the data that is not explained by standard theory. The goal of this chapter is not only to replicate the data but to understand how consumption responds to political shocks differently than shocks to productivity. This model is also able to recreate endogenously the high level of volatility in government expenditure observed in the data. The model can explain up to 29% of the variation in the relative volatility of consumption across countries. Chapter two focuses on a similar model in the presence of debt instead of capital to develop a positive theory for fiscal policy (debt, expenditure, and deficits) over the business cycle to compare to historical observation. I find that political shocks are important to understand observed U.S. data moments. Chapter three investigates the welfare effects of tax-deferred retirement accounts (similar to Traditional IRAs in the US). I find that such accounts increase aggregate welfare as well as increasing economy-wide inequality. I find from an aggregate welfare perspective the optimal contribution limit for IRAs is to not have a contribution limit. / text

This thesis contains four chapters. Each chapter constitutes an empirical exercise in which I apply econometric ideas on studying the dynamics of large cross sections of data (Random Fields). Three of them concern the empirics of convergence and the fourth analyses business cycle fluctuations. The first, "Notes on Convergence Empirics: Some Calculations for Spanish Regions," describes the econometric methods for studying the dynamics of the distributions and how to characterise convergence in this framework, explains why the standard cross-section regression analysis is misleading when testing for convergence and then performs some calculations for regions in Spain. The second chapter, "Dynamics of the Income Distribution Across OECD Countries", considers its baseline hypotheses to be those generated by the Solow growth model. Using sequential conditioning, it studies whether the convergence hypothesis implications can be shown to hold for the OECD economies. It finds that neither absolute nor conditional convergence, in the sense of economies approaching the OECD average, has taken place. The third chapter, "Cross Sectional Firm Dynamics: Theory and Empirical Results", extends ideas of distribution dynamics to a discrete choice setting, and extends the reasoning of Galton's Fallacy to the logit model. It provides evidence of the tendency of firm sizes to converge for the US chemicals sector by analysing dynamically evolving cross-section distributions. Finally, the fourth chapter, "Unemployment in Europe and Regional Labour Fluctuations" applies distribution dynamics ideas to a business cycle setting. It analyses the dynamics of employment for 51 European regions from 1960 to 1990, addressing the issue of whether regional shocks have aggregate effects on unemployment or the opposite. It uses a model for non-stationary evolving distributions to identify idiosyncratic and aggregate disturbances.

This thesis extends Kim and Nelson's (1999) plucking model for real GDP to include correlated innovations. The resulting correlated innovations unobserved components (UC) model allows for both asymmetric transitory movements and correlation between the permanent and transitory innovations. Applying the extended model to U.S., Canadian and Australian GDP, I show that the GDP series can be usefully decomposed into a permanent component, a symmetric transitory component, and an additional occasional asymmetric transitory shock. Incorporating correlated innovations in the model changes the allocation of volatility between the permanent and transitory components. For the U.S., correlated innovations were found to be significant and the permanent component accounted for a larger share of the volatility in GDP. For Canada and Australia, correlated innovations were not significant and the fitted model produced smooth permanent component and volatile transitory component estimates. / Graduate

By examining the influence of tax and economic changes on the financing decisions of a sample of companies from Australia, Germany, Indonesia, Malaysia and South Africa from 1996 to 2005, this thesis provides new evidence which extends beyond the finance and economics literature that is dominated by studies of the US. / PhD Doctorate

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