The capture theory of regulation concludes that regulatory agencies tend to be captured by the firms they are regulating, so that regulations benefit those regulated firms. This paper examines the cumulative effects of federal regulations on the oil and gas industry and finds that regulations have benefited the more powerful economic interests in that industry, consistent with the capture theory. Regulations have tended to narrow refiners' margins and are associated with positive return and negative volatility responses for stocks of vertically integrated firms, which are the largest players in the industry. This narrowing of margins is mostly a long-term effect, but has some short run effects more on input prices than output prices, further benefiting vertically integrated firms. Refining regulations affect input prices more than output prices primarily by affecting demand for certain types of crude oil. Effects of regulation on input prices and even relative quantities of different inputs are robust, whereas effects of regulation on output prices are far more tenuous. There is no clear evidence that consumers are worse off because of the regulatory environment, but the robust empirical evidence does indicate that the regulatory environment differentially benefits large vertically integrated producers. / A Dissertation submitted to the Department of Economics in partial fulfillment of the requirements for the degree of Doctor of Philosophy. / Spring Semester 2018. / February 2, 2018. / energy economics, political economy, regulation, regulatory capture / Includes bibliographical references. / Randall Holcombe, Professor Directing Dissertation; Richard Feiock, University Representative; Paul Beaumont, Committee Member; Stefan Norrbin, Committee Member.

This dissertation examines competitive issues among utility-type industries characterized by oligopolistic market structures with the potential for market power. These markets are characterized by geographically-constrained competition, from a sub-national region down to the neighborhood level. Insights from this research can be used to inform policy decisions that attempt to rectify negative consequences of concentrated market structure in essential industries. Chapter 1 analyzes the potential impact that entry by public (government-owned) Internet Service Providers (ISPs) might have on investment in quality by private incumbent ISPs in local markets. The estimates indicate that the presence of a public entry threat is associated with lower maximum upload and download speeds offered by private cable and DSL providers. However, the presence of a public threat encourages private firm entry, so it is not clear that negative effects on speed are due to crowding out. In states where municipal entry is made more difficult by regulation, these effects disappear. Therefore, restrictive regulation of municipal broadband has a non-trivial effect on competition. Chapter 2 estimates the minimum number of ISPs required to bring a local market to a competitive level. The estimates, while imprecise, suggest that ISP markets become competitive with three firms, which corroborates previous research in the literature. This suggests that inducing competitive outcomes through entry promotion policies might be a reasonable goal considering the natural tendency towards oligopoly in the industry. However, the technology mix of the local market might affect policy recommendations. Chapter 3 determines if asymmetric pass-through of costs to prices occurs in wholesale electricity markets, specifically in the pass-through of natural gas prices to natural gas fueled electricity generation. I find some preliminary evidence that suggests that generator output prices respond more strongly to positive changes in the natural gas price than negative changes, and that the size of the asymmetry is more pronounced for generators who have a greater potential to exercise market power. / A Dissertation submitted to the Department of Economics in partial fulfillment of the requirements for the degree of Doctor of Philosophy. / Summer Semester 2018. / July 3, 2018. / Includes bibliographical references. / R. Mark Isaac, Professor Co-Directing Thesis; Shawn Kantor, Professor Co-Directing Thesis; Steven Perfect, University Representative; Paul Beaumont, Committee Member; Carl Kitchens, Committee Member.

Randomized quasi-Monte Carlo methods have been shown to offer estimates with smaller variances compared with estimates obtained with Monte Carlo. This dissertation examines the application of randomized quasi-Monte Carlo methods in the context of value-at-risk and expected shortfall, two measures of downside risk associated with financial portfolios. It finds that while the randomized quasi-Monte Carlo estimates have the variance-reduction of estimates property when applied to the aforementioned risk measures of financial portfolios, the reduced standard errors have a rate of convergence much closer to 1/√M than the potential 1/M described by the theory for the 22-day time horizon of value-at-risk and expected shortfall. The rate of convergence increased for the 8-day horizon, suggesting that the advantages of randomized quasi-Monte Carlo estimation in terms of standard error of estimates and accuracy of estimates improve for shorter time horizons of the aforementioned risk measures and are no worse for longer time horizons. / A Dissertation submitted to the Department of Economics in partial fulfillment of the requirements for the degree of Doctor of Philosophy. / Fall Semester 2018. / November 1, 2018. / Includes bibliographical references. / Milton Marquis, Professor Directing Dissertation; Giray Okten, University Representative; Paul Beaumont, Committee Member; Gary Fournier, Committee Member.

Prior research using the ex ante real interest rate has led to mixed evidence about the validity of the Fisher relationship and for the Real Interest Parity hypothesis. In particular, authors have disagreed over whether the ex ante real rate of interest is stationary or not, and have therefore used different econometric methodologies to test the theories. Such a controversy may stem from the methods used in constructing the ex ante real interest rate since the measurement of the unobserved real interest rate required underlying assumptions of the forecasting behavior of agents. Our findings indicate that the time series properties of the constructed ex ante real interest rate appear to be sensitive not only to the method used, but also to the choice of inflation rate calculation used to construct the series. Therefore, we would anticipate that hypothesis testing that involves the ex ante real interest rate will provide a wide range of conclusions depending on the methodology used to construct the real rates. To examine whether different approaches of constructing the real interest rate series matter in real interest rate parity (RIP) hypothesis testings, different linear methods of testing real interest rate parity are employed to analyze the real interest rate linkages among a group of OECD countries. The stationarity conclusions of the real interest rates series are subject to the choice of methods of constructing the underlying real interest rates. Thus, this leads to problems of selecting the methodology of conducting RIP tests. If the real interest rates are assumed to be stationary, the standard linear regression tests of real rate equalization will be adequate. Otherwise, a cointegration technique will be more appropriate to test for the stationary relationship among the variables. By assuming nonstationary real interest rates, we investigate whether there exists a common trend among the real interest rates by using bivariate and multivariate cointegration tests. The findings indicates that the existence of RIP depends substantially on how the real rates are computed. The final essay deals with the effects of the choice of interest rate methodology on nonlinear tests of RIP. Research has found evidence supporting gradual regime-switching behavior of real interest rate adjustments due to the existence of transactions costs. There may be no response of domestic rate to foreign rate changes when the deviation between the real rates is small due to transactions costs. However, when shocks to both rates are large enough to make arbitrage profitable, this may evoke quick adjustments to restore the parity. We investigate nonlinear adjustments of real interest rates toward the long-run equilibrium using the smooth transition autoregressive (STAR) models. Both logistic (LSTAR) and exponential (ESTAR) smooth transition autoregressive models are considered. The findings indicate that there exists nonlinearities in OECD real interest rate adjustment. However, the types of models as well as the speed of reestablishing RIP depend on the approaches used in measuring the underlying real interest rates. / A Dissertation submitted to the Department of Economics in partial fulfillment of the requirements for the degree of Doctor of Philosophy. / Degree Awarded: Summer Semester, 2005. / Date of Defense: May 20, 2005. / Stationarity, Nonlinear Model, Real Interest Rate Parity / Includes bibliographical references. / Stefan Norrbin, Professor Directing Dissertation; Xu-Feng Niu, Outside Committee Member; Paul Beaumont, Committee Member; Milton Marquis, Committee Member.

Using samples of Integrated Public Use Micro-data Series (IPUMS) from the 1980, 1990 and 2000 U.S. Census, this dissertation focus on two main objectives: the first objective is to examine the labor market assimilation and changes in cohort quality of Arab immigrants (as a homogeneous group) in the United States during the period 1980-2000. The second objective is to examine the labor market assimilation and changes in cohort quality of different Arab immigrant groups (Arab immigrants from Egypt, Iraq, Jordan, Lebanon, Syria, the Gulf and North Africa) in the United States during the period 1980-2000. Two models, Cross-section and quasi-panel, are used in order to achieve these main objectives. The empirical analysis of the first objective of this dissertation reveals that Arab immigrants in the labor market of the United States experienced substantial assimilation rates between 1980 and 2000. Also, the results show that within-cohort growth is insignificantly smaller than the cross-section growth for most Arab immigrant cohorts during the 1980s, whereas the within-cohort growth is significantly smaller than the cross-section growth for most Arab immigrant cohorts during the 1990s. Therefore, I can argue that the quality of Arab Immigrant cohorts has not changed much during the 1980s and has declined during the 1990s. The analysis regarding the assimilation and changes in quality of Arab immigrants by their country of origin shows that there is a significant difference in the assimilation profiles among the seven Arab countries. Again, there are evidences that the quality of Arab Immigrant groups had not showed much change during the 1980s and 1990s. There are exceptions to this result, the case of Arab immigrants from Egypt and Arab immigrants from North Africa who may experience a quality decline during the 1990s because of their positive and significant (in most cases) across-cohort growths. Another exception is the case of Arab immigrants from Lebanon who may have been of increasing quality during the period of 1990s. Finally, the investigation of the sensitivity of estimates of assimilation shows that rates of assimilation of Arab immigrants are largely sensitive to the choice of base group which used to normalize for secular earnings growth. Estimates of assimilation are showed to be indifference to the selection of U.S. natives or Arab Americans as the base group. / A Dissertation submitted to the Department of Economics in partial fulfillment of the requirements for the degree of Doctor of Philosophy. / Degree Awarded: Fall Semester, 2007. / Date of Defense: October 24, 2007. / Labor Market Assimilation, Arab Immigrants, Cohort Quality, Quasi-Panel Approach / Includes bibliographical references. / David Macpherson, Professor Directing Dissertation; Elwood Carlson, Outside Committee Member; Carl P. Schmertmann, Committee Member; Frank Heiland, Committee Member.

This dissertation is a contribution to the taxable income literature. This literature attempts to assess how personal income changes when personal income taxes do. The pioneering studies of Lindsay (1987) and Feldstein (1995) argued that taxpayers may respond to tax changes by working less hard (not necessarily fewer hours), through evasion, and making a smart use of the tax code. Their main conclusion is that the income elasticity to tax changes is much higher than that suggested by the labor literature (above 1). Later studies attempted to improve Lindsay and Feldstein's estimates arguing that income retiming, income shifting, and an unrelated widening of the income were yielding upward biased estimates. Papers such as Gruber and Saez (2002) and Caroll (1998) estimated elasticity in the vicinity of 0.4. Auten Goolsbee is skeptical to the magnitude of this elasticity and suggests the "high elasticities" found by this literature is related with the outlier condition of the eighties (Goolsbee, 1999). Furthermore, Goolsbee (2000) claimed that much of the income response from top taxpayers is due to income retiming, not to structural responses. Saez (2004) analyzes four decades from 1960 to 2000 and concludes than only high-income people would be responsive to tax changes and this would be true only after 1980 with no income response for the Kennedy's tax cuts. In this dissertation we take the contributions of the taxable income literature in the sense that personal income as a whole is a good indicator to survey how tax changes may affect taxpayers' behavior. Nevertheless, we propose two important changes to the underlined model used by this literature. First, this literature assumes that taxes affect only the individuals on whom the statutory tax is levied. Furthermore, this literature assumes that those receiving higher tax changes should be more responsive. This second assumption allows them to use the diff-in-diff method and income share analysis. These assumptions are not supported by the incidence literature which points out that the tax burden is borne by taxpayers according to the elasticity of the suppliers and demanders. Thus, we argue that using its underlined model the taxable income literature is not able to properly capture structural responses to tax changes but it is able to capture non-structural responses such as income retiming, income shifting, evasion, fringe benefits, and charitable contributions and so on. These non-structural responses are just income transferring from some individuals to others but they do not necessarily have income creation effects. Structural responses have income creation effects. Chapter 4 uses more that 40 years of data and shows that income of high-income taxpayers is affected both by the rates they face and by the rates faced by non-high-income taxpayers. The income of high-income taxpayers rises when they face lower tax rates, but also rises in response to lower tax rates imposed on non-high-income taxpayers. While high-income responses to own statutory tax changes may be explained – at least partially – by their making a "smart use of the tax code," high-income responses to tax changes on non-high income individuals indicate the presence of structural effects of tax changes. This evidence rejects Goolsbees (2000) claim that taxes are just a smart use of the tax code and Saez (2004) claim that high income individual respond to tax changes only after 1980. Second, another assumption of the underlined model is that tax changes affect the level of income but not the rate of income growth. While the Solow model may back such an assumption, later research such as that of Kenneth Arrow, Douglas North, Robert Lucas, Robert Barro seems to show that institution, especially government, may affect the rate of income growth. Douglas North argues that the permanent income growth shows by countries like the USA, is the result of the implementation of property rights protecting and rewarding individuals' innovation. From a microeconomics perspective individuals may see taxes as a factor working in the opposite direction as property right. In this sense, having a tax of 100% is equivalent to not having property rights. More generally speaking, the higher the tax the less incentive have individuals to innovate and this way the level of the tax may affect the rate of income growth. In chapter 5, we modified the critical assumptions made by the taxable income literature presented above and we provide evidence that taxpayers as a whole are responsive to tax changes and not only the top1% as Saez (2004) argued. We find a negative correlation between income marginal tax rates and adjusted gross income (AGI) growth. The empirical work in this chapter estimates that the elasticity of AGI growth to marginal income tax rate is -0.4. The consequence of this elasticity for public policy purposes is remarkable and suggests that average marginal taxes around 26% (such as the seventies) yield less revenue in the long run for the government than taxes around 23% (as those of the sixties). / A Dissertation submitted to the Department of Economics in partial fulfillment of the requirements for the degree of Doctor of Philosophy. / Degree Awarded: Fall Semester, 2009. / Date of Defense: October 12, 2009. / Taxable income, Tax effects / Includes bibliographical references. / Randall Holcombe, Professor Directing Dissertation; Charles Barrileaux, University Representative; Thomas McCaleb, Committee Member; Thomas Zuehlke, Committee Member.

I develop a two-country dynamic stochastic general equilibrium model of the European Union (EU) and use this model throughout the chapters of my dissertation. The model incorporates some realistic features of the European Union members. I calibrate the model and it matches the dvnamics of the data well. In the first chapter I study the need for fiscal policy cooperation between the new EU members (a small country) and the European Economic and Monetary Union (EMU) (a large country). I find that both countries are better off when they do not cooperate their fiscal policies. This result depends on the assumption about the presence of foreign ownership in the smaller country. When there is no foreign ownership in the smaller country, the large economy is indifferent between cooperating and not cooperating but the smaller country still prefers not to cooperate its fiscal policy with the EMU. The new EU members are expected to join the monetary union. In the second chapter I analyze the welfare consequences of different monetary arrangements for the new EU members and investigate whether their participation in the EMU is welfare-improving. Based on households' utility the results show that a flexible exchange rate regime is preferred to a monetary union and a monetary union is preferred to a fixed exchange rate regime. In the third chapter I investigate whether there are welfare gains from fiscal policy cooperation in the EMU. I assume that the EMU consists of countries that are currently its members as well as the countries that will join the EMU in the near future. I find that the incumbent EMU members are better off under fiscal policy cooperation and the new members are as well of under fiscal cooperation as they are in a non-cooperative equilibrium. Under fiscal policy cooperation in my model, all policymakers have the same objective by construction. Therefore, the results in my study differ from some previous findings in the literature. / Thesis (PhD) — Boston College, 2005. / Submitted to: Boston College. Graduate School of Arts and Sciences. / Discipline: Economics.

This study investigates the international adjustment process for monetary policy in a two-country, two-asset, Walrasian model with diversified currency holdings. It is assumed that both countries consume both commodities and desire to hold both currencies in order to maximize a money services function. The investigation of the flexible exchange rate regime concludes that the relative rate of change of each currency supply is responsible for determining the rate of change of the exchange rate and prices and that the distribution of currencies between countries is responsible for determining the balance of trade and the terms of trade. The investigation of the fixed exchange rate regime demonstrates that even with the gross substitute assumption, a devaluation will no longer guarantee an improvement in the balance of trade, and that the terms of trade is influenced by the relative rate of change of each currency as well as by the exchange rate. The investigation of the inflationary pressures from a devaluation concludes that as long as the home country's consumption patterns are highly sensitive to changes in the exchange rate, then a devaluation will be more inflationary to the home country in a world with diversified currency holdings than in a world without diversified currency holdings. This study shows that regardless of the exchange rate regime, the introduction of positive cross currency holdings tends to force the effectiveness of changes in monetary policy on changes in prices, balance of trade and the terms of trade to yield results that fall between the traditional flexible exchange rate regime and the traditional fixed exchange rate regime. In addition, the longrun analysis concludes that the familiar Monetarist Theorems are appropriate in explaining longrun monetary adjustment. / Thesis (PhD) — Boston College, 1982. / Submitted to: Boston College. Graduate School of Arts and Sciences. / Discipline: Economics.

Thesis advisor: Fabio Ghironi / Thesis advisor: Peter N. Ireland / Thesis advisor: Fabio Schiarrtarelli / My doctoral dissertation studies the effects of countercyclical bank markups on macroeconomic performance. The countercyclical pattern of bank markups constitutes a bank-supply channel that extends the credit channel to reinforce the same vicious circle: Credit is more expensive during recessions, so that firms and households postpone investment and work decisions, thereby deepening the recmsion. In the first chapter, I construct a bank balancesheet data set across I24 countries for 1991-2000. I show that ex-post bank markups are strongly countercyclical, even after controlling for financial development, bank concentration, operational costs, inflation, and reverse causation. The countercyclical pattern is explained by the highly procyclical entry of foreign banks that occurs mostly at the wholesale level, and signals the intention to spread to the retail level. My hypothesis is that wholesale entry triggers incumbents'limit-pricing strategies aimed at deterring entry in retail niches that in turn reduce bank markups. In the second chapter, I develop a DSGE setup in which the modeling of the banking system captures several of the features of the data. I find that market power in the fina.ncial system increases the volatility of all real variables, amplifies the business cycle, and reduces welfare. In the third chapter, I use a riariant of the New Keynesia,n model for a SOE and add the bank-supply ctrannel to the standard balancesheet channel, which links the condition of the borrower balance sheets to the default risk and the external finance premium. I show that bank markup increments, as a consequence of sudden capital outflows, end up increasing borrowing costs for firms, as well as damaging the financial position of firms. The bank-supply channel helps to explain the relatively large investment volatility typically exrperienced in emerging economies. These conclusions are robust to different monetary regimes. Results hold even with floating exchange rates, slow passthrough, and liabilities fully denominated in local currency. / Thesis (PhD) — Boston College, 2006. / Submitted to: Boston College. Graduate School of Arts and Sciences. / Discipline: Economics.

The importance of risk-sharing in agricultural economies has been extensively analyzed through the principal-agent framework, which predicts that sharecropping should be observed more frequently than fixed rent contracts when output uncertainty is higher. Empirical studies, however, provide mixed support for this prediction, since often fixed rent contracts are found to be prevalent in more risky environments. The first chapter provides a model where the relative incidence of share tenancy over fixed rent contracts may be negative depending, among other things, on the relative average degree of risk aversion of tenants and landlords. The second chapter explores the empirical validity of the theoretical framework using Indian data. After paying special attention to the measure of uncertainty used to identify farming risk, a parameterized version of the theoretical model is structurally estimated. The econometric results support the proposed model. The third chapter studies the offset effect of pension wealth on private wealth when individuals are misinformed about their future retirement benefits. We show that if individuals have expectational errors correlated with their actual pension wealth, and update over time their expectations, then the canonical econometric specification used so far to estimate the offset effect gives biased estimates. An alternative econometric specification is proposed and used to estimate the offset effect on Italian data. The estimates obtained are higher than the ones previously found in the literature. / Thesis (PhD) — Boston College, 2003. / Submitted to: Boston College. Graduate School of Arts and Sciences. / Discipline: Economics.