This dissertation studies the impact of several different housing market features on the macroeconomy. Chapter 1 augments the New-Keynesian model with collateral constraints to incorporate long-term debt in order to examine the interaction between multi-period loans, leverage, and indeterminacy. Allowing firms to borrow heavily against commercial housing by increasing the loan-to-value ratio from 0.01 to 0.90 reduces the level of steady state output approximately 3.19% and decreases social welfare. In contrast, increasing the debt limit of households increases steady state output by 2.72%. Social welfare is maximized under a utilitiarian function when households can borrow at a loan-to-value ratio of about 0.49. An economy with long-term debt also makes stabilization much more difficult for monetary policymakers because determinacy is harder to attain. Instead of only having to satisfy the Taylor Principle (which implies that a more than one-to-one response to inflation), central bankers must either use a strict inflation target or aggressively respond to inflation and the output gap to ensure determinacy. Chapter 2 examine a New-Keynesian model with housing where default occurs if housing prices are sufficiently low, resulting in a loss of access to credit and housing markets. Default decreases aggregate and patient household consumption, increases impatient household consumption, and amplifies the decline in housing prices due to a misallocation of housing. The effects on consumption often peak immediately before default occurs. Policies that prevent underwater borrowing or raise interest rates along with housing prices are generally desirable because they increase utilitarian social welfare. This paper shows that default is not simply a symptom of economic downturns, but a cause. Chapter 3 explores the correlation between the home mortgage interest deduction (HMID) and state economic growth. The HMID was introduced to incentivize home purchases by distorting the after-tax price, resulting in an overinvestment in real estate. Previous empirical work has shown that investment in physical capital increases economic growth more so than investment in structures. Theoretically, the anticipated effect of the HMID would be lower subsequent economic growth. However, this paper finds that residential housing is actually beneficial for economic growth.

I have conducted a survey of journal articles that have examined the relationship between free trade and economic growth. In particular, I have carefully selected six empirical studies that were published over a ten-year period and critically reviewed, and evaluated these studies in depth. I have also extensively presented and discussed the issues as well as the controversies that are related to the various measures of openness. In a number of the trade-growth empirical studies researchers have made major attempt to identify the relationship between free trade and economic growth. Most of the trade-growth studies show that there is a positive relationship between free trade and economic growth. However, some of these influential studies have been subject to strong criticism, mainly due to a number of methodological shortcomings. As for the million-dollar question: Does free trade advance economic growth? My conclusion is that this question is not yet resolved, because although researchers have devoted considerable efforts to show a positive trade-growth relationship, nevertheless, the methodologies and the measurements applied in these studies have been fragile to the scrutiny of critics.

Tanzania is one of the world’s poorest countries. But it has a lot to offer and in recent years both tourists and companies have realised this. This thesis focuses on the companies and takes a closer look at the growth performance and the inflow of Foreign Direct Investments (FDI) to Tanzania. By presenting a case on the cement industry in Tanzania the thesis also provide some insight in the mechanisms of FDI on a more practical level. The findings conclude that the FDI and growth have both increased extensively since the 1990’s, but I refrain from comments on the causality of this relationship. The economic reforms that the country underwent in the 1990’s are thought to have played a key role in the development of the country. From the case presented we draw the conclusion that a FDI can affect the value chain as well as the whole country in numerous ways.

Throughout the latter half of the 20th century, many developing economies adopted a set of economic policies in order to transition to market economy. Reforms were introduced either simultaneously or gradually, fuelling the debate over whether the so-called shock-therapy reforms were more beneficial or less beneficial to growth than gradual reforms. This study focuses on the role of the mode of transition in determining the effectiveness of Foreign Direct Investment (FDI) on the growth of the Gross Domestic Product (GDP). FDI is valuable for development in transition economies since it has often been a main source of investment for these types of economies. An empirical analysis was conducted using sixty transitioning countries, examining the growth up to sixteen years after the initial reform. The results indicate that there is some evidence of a difference in the effects of FDI inflows on GDP growth between the shock-therapy and gradual reformers.

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To make profits in such a world, unit costs must be reduced to the minimum possible and consistent with acceptable quality. To do this firms are endeavouring to combine lean production with the maximisation of economies of scale, that is, to achieve the lowest possible long run average cost curve and the lowest point on that curve. The process of consolidation and globalisation can be seen as driven by the latter whilst initiatives such as internet procurement, tendering, and production systems, the former. The automotive industry of the early 21st century, barely one hundred years old, reaches into the lives of almost everybody on the planet. The business of making these vehicles is the largest manufacturing sector in the world, a core part of the leading industrial nations and of growing significance elsewhere. The automotive industry is huge by almost any measure, complex, and always rapidly changing. In recent years the environmental consequences of auto mobility have thrust the industry into the heart of the debate over wealth generation and sustainability. "An industry's key success factors are those things that most affect the industry members ability to prosper in the marketplace - the particular strategy elements, product attributes, resources, competencies, competitive capabilities, and business outcomes that spell the difference between profit and loss, and ultimately between competitiveness and failure" (Thompson and Strickland:2003). This paper examines the future strategic focus that a local South African automotive firm ought to adopt to ensure competitive success in the harsh global auto industry. Smiths Manufacturing is on its way to becoming a world class company, limited in terms of local market size and firm infrastructure, yet astute in terms of systems, products and technology. Although Smiths is currently experiencing success and plans for short term growth, indications are that the whole strategic focus is being diminished in retaining its competitiveness in lieu of expansion and operations. Throughout this research thesis it will be observed that Smiths is competitive, but its competitive advantage is not increasing relatively. Smiths has to do something unique, and this unique competitive differential advantage can be induced on the soft side, i.e. Smith's social capital-people. / Thesis (MBA)-University of Natal, Durban, 2003.

Neural networks have become very important tools in many areas including economic researches. The objectives of this thesis are to examine the fundamental components, concepts and theory of neural network methods from econometric and statistic perspective, with particular focus on econometrically and statistically relevant models. In order to evaluate the relative effectiveness of econometric and neural network methods, two empirical studies are conducted by applying neural network methods in a methodological comparison fashion with traditional econometric models.Both neural networks and econometrics have similar models, common problems of modeling and interference. Neural networks and econometrics/statistics, particularly their discriminant methods, are two sides of the same coin in terms of the nature of modeling statistic issues. On one side, econometric models are sampling paradigm oriented methods, which estimate the distribution of the predictor variable separately for each class and combine these with the prior probabilities of each class occurring; while neural networks are one of the techniques based on diagnostic paradigm, which use theinformation from the samples to estimate the conditional probability of an observation belonging to each class, based on predictor variables. Hence, neural network and econometric/statistical methods (particularly, discriminant models) have the same properties, except that the natural parameterizations differ.The empirical studies indicate that neural network methods outperform or are as good as traditional econometric models including Multiple Regression Analysis, Linear Probability Model (LPM), and Logit model, in terms of minimizing the errors of in-sample predictions and out-of-sample forecasts. Although neural networks have some advantages over econometric methods, they have some limitations too. Hence, neural networks are perhaps best viewed as supplements to econometric methods in studying economic issues, and not necessarily as substitutes.

This thesis is an empirical investigation examining the impact of state development and institutional flexibility on economic growth, across fifteen developed countries from 1880 to 2008. The development of the state, particularly since the late nineteenth century, has resulted in the exponential growth of institutional complexity and living standards. While there is evidence to suggest institutional flexibility may have increased for a time during this period, evidence also indicates a subsequently decline over the course of the twentieth century, resulting in ‘rise and decline’ explanations for economic growth. This ‘rise and decline’ hypothesis is tested in this thesis in an attempt to rehabilitate the works of Mancur Olson. This thesis presents a new framework for establishing years of peak institutional flexibility and creates new data for measuring state development and institutional flexibility. It finds both improvements in state development and institutional flexibility explain changes in cross-country growth over the long run. This should come as encouragement to those interested in institutional justifications for economic growth and all interested in revitalising Olsonion explanations for the economic performance of countries over the long run.

This dissertation consists of three essays. The first essay exploits a rich Longitudinal Survey on Immigrants to Canada (LSIC) dataset to determine the attributes that affect the probability of the incidence of remittances for a subsample of South East and Southern Asian immigrants. A logit regression model is used to address key motivations of the probability to remit by immigrants who live in Canada, with a particular focus on the immigrants' labour force participation and employment, education, housing, and living conditions. Results suggest that demographic, economic, and social factors are important for individuals in making decisions about remitting. Two questions are answered in the second essay. First, is there any significant impact of foreign financial flows on economic growth? Second, are remittances and grants more effective than loans in promoting growth? To answer these questions, the Generalized Method of Movements (GMM) technique is employed for a panel of 46 developing countries from all regions of the world during 1979 to 2011. Results suggest that remittances are most effective for all regions in promoting economic growth. Results reveal that grant-aid is also significantly associated with economic growth, while the impact of concessional loans is found to be insignificant. The varied performance of different types of financial flows is perhaps due to the fact that the obligation to repay loans made them less lucrative an option for investment mobilization. The third essay addresses the research question: “Does the exchange rate appreciate in the face of a voluminous remittances inflow?” To answer this question, the essay devises a mean group (MG) and pooled mean group (PMG) technique to investigate the exchange rate and remittance relationship for six South and South East Asian countries (Bangladesh, India, Pakistan, Philippines, Sri Lanka and Thailand). The essay reveals strong homogeneous currency appreciation that supports the ‘Dutch Disease’ theoretical framework. Remittances are also found to be significantly associated with the expansion of the non-tradable goods sector at the expense of the tradable goods sector (resource movement effect). The presence of ‘Dutch Disease’ calls for active policy intervention in the face of large increases in remittance receipts.