acase@tulane.edu

acase@tulane.edu

The empirical relations between the nominal money stock and output implied by two classes of equilibrium rational expecations business cycle models are examined. The two classes are the monetary business cycle (MBC) model, which relies on monetary shocks as the source of business cycles, and the real business cycle (RBC) model, which relies on real shocks The neutrality of monetary policy in the MBC model is a debated issue in the literature. It is demonstrated, however, that the MBC model implies that observed movements in money should be uncorrelated with output regardless of the neutrality issue. This result implies that the existing empirical studies that find a significant relation between observed money and output conclusively reject the MBC model Money and output are correlated in the RBC model because of the endogenous response of money to current and expected future real shocks that, in turn, are the fundamental causes of output fluctuations. The untested hypothesis of the RBC model is that money and output are uncorrelated once the effects of current and expected future real shocks have been controlled. Use of a vector of measurable real shocks and the rational expectations assumption allows tests of this hypothesis to be designed. Execution of these tests reveals that the vector of measurable real shocks can explain the majority of postwar U.S. output variation. However, money remains significant in explaining output variation after controlling for current and expected future real shocks. Therefore, the RBC model is also rejected as an explanation for the correlation between money and output / acase@tulane.edu

In the few last decades, liberalization of foreign trade has been a common factor of the reform processes in less developed countries. The effects of this reform on growth and wage distribution have been a central element of the debate in economics and politics In this dissertation, the author investigates the Chilean experience. Using time series analysis, Granger-causation from exports to growth, and from different liberalization measures to wage inequality is analyzed. Stationarity is analyzed performing unit root tests. If variables have unit root, 'Johansen Procedure' is applied to test for cointegration The results show that causation from exports to GDP is conditional on economic policy. When the country followed an inward-looking strategy, no causation was found. However, after the reforms, a positive causation from exports to GDP is found. This finding is explored further, analyzing the nexus between exports and GDP. Are exports working through capital accumulation or improving country's performance directly? Chilean data show that the positive effect from exports to GDP does not disappear when capital is including in the VAR system Finally, positive correlation between liberalization and wage inequality is found in the Chilean data. However, performing Granger-causality tests, the author does not find significant evidence that trade liberalization explains the growing wage gap / acase@tulane.edu

acase@tulane.edu

Foreign direct investment (FDI) plays an important role in the economic growth in China since the 1980s. Such rapid economic growth in China is not evenly spread across regions. Foreign direct investment is not distributed evenly across regions as well. The low level of technology in poor regions depresses inflow of foreign investments. Massive labor migration has flooded most Chinese cities and wealthy regions with the rapid growth of foreign direct investment in China. Institutional barriers are used to deter the migration. This study establishes three theoretical models. The first model explores the economic instrument that the Chinese government can use to alleviate the massive rural-urban migrants. It is found that city government may not use capital subsidy to achieve its goal of deterring rural labor migration. Instead, city government may be able to alleviate rural-urban migration by improving its local pubic goods. The second model explores foreign direct investment invested in poor region with interregional technology transfer from rich region to poor region. It is found that rich region would like to transfer technology to poor region because such transfer helps in improving living condition in poor region and discourage migration from poor region, but also benefits rich region as well. The third model is an extension of model one, with considering of technology spillover of foreign investment. It is found that with technology spillover, it is preferable for city government in China to use capital subsidy as an economic instrument to deter rural-urban labor migration / acase@tulane.edu

In the first three chapters, we examine situations under which a federal system characterized by decentralized leadership entails an efficient allocation of resources in the presence of interregional spillovers and household attachment. Regional governments, the central government and residents play a three-stage game, in which regional governments are Stackelberg leaders and the center is a common Stackelberg follower. Regional governments decide how much of the public goods they should provide and the center designs an income redistribution policy. Given those policies, residents select their residential location. In chapter 1, we show that the subgame perfect equilibrium for the decentralized leadership game is socially efficient despite the degree of labor mobility provided that regional preferences are quasilinear and the center's preferences over regional welfare levels are strictly convex. In chapter 2, we show that decentralized provision of public goods may be efficient if the center cares about regional welfare levels and views them as complements. The implied allocation is proportionally equitable. In chapter 3, we model transboundary externalities as correlated externalities and abatement technology as coarse. We demonstrate that decentralized control of acid rain may be efficient in the presence of correlated externalities and household attachment if the center views regional welfare levels as complements. When they are substitutes, the allocation is inefficient; it is efficient if externalities are not correlated in the sense that there is no regional pollution damage. In chapter 4, we examine non-cooperative provision of local public goods in an economy characterized by household attachment to regions. We assume that household psychic cost with the migration is a decreasing function of the number of migrants settled in the receiving country. We show that the subgame perfect equilibriums for the decentralized leadership in the presence of imperfectly mobile residents are socially inefficient while the decentralized leadership in the presence of perfectly mobile residents are socially efficient / acase@tulane.edu

acase@tulane.edu

acase@tulane.edu

The purpose of this dissertation is to demonstrate the role that standard risk-assessment techniques can play in increasing access to formal sector funding for micro-level entrepreneurs in developing countries. More specifically, it focuses on developing a tool that provides precise measurement of factors that differentiate between potentially 'good' and potentially 'bad' micro-level borrowers To begin the development of this tool, the credit applications from three microenterprise lending programs in Ecuador were examined. While Ecuador was chosen as a case study, the intent was to develop a technique for selecting potentially superior micro-level customers from non-traditional populations in other developing countries and regions as well Credit applications from each organization were standard and used uniformly in the application process, but the information requested from individual applicants varied dramatically among programs. In addition, the completeness of the applications varied within each program. Another data problem related to the fact that credit applications for 'rejected' applicants were not kept on file by two of the three lending programs For each of the two organizations unable to provide data for 'rejected' applicants, a univariate probit model was developed. These probability models can be used by credit officers to screen credit applicants. In addition, these models, if incorporated into the loan decision process, can improve repayment rates by more than 10% in each case. For the program that was able to produce 'rejected' applicant data, a bivariate probit with selection was estimated to take into account the potential correlation between disturbances of the credit and repayment equations. The results of the bivariate model suggest that there were no statistically identifiable determinants of repayment or loan issuance. This finding suggests that some variable outside the credit application may influence the decision processes more than those factors included This research extends previous research on the transformation of 'grant-driven' non-governmental organizations (NGOs) involved in microenterprise lending into the self-sufficient financial organizations required by the decreasing availability of donor funds. This research suggests a tool, adapted from the banking sector, that is a viable complement to guarantee funds in terms of securing more domestic funding for micro-level borrowers. Credit scoring models provide a mechanism for lowering the perceived risk through more reliable credit assessments of microenterprise borrowers. In fact, banks may be willing to work directly with microentrepreneurs rather than through intermediaries once a reliable risk-assessment tool exists. A second conclusion of this research is to suggest a cost-reducing tool for microenterprise lending programs. A credit scoring model can offer opportunities to streamline the lending process. It can decrease the need for extensive loan applications by providing a reliable means of assessing an applicant's repayment probability with a minimal amount of information. The ability to assess the creditworthiness of applicants through a more cost-efficient process not only lowers loan processing costs but also reinforces the status of these organizations as financial institutions. In addition, the current donor funds could be re-lent more often if the lending process were less expensive and more reliable. These conclusions suggest this study could become the basis for the development of a more sophisticated credit scoring tool unique to microenterprise borrowing groups and could result in the expansion of the domestic capital available to these micro-level lending programs. (Abstract shortened by UMI.) / acase@tulane.edu