Thesis advisor: Matteo Iacoviello / Since its launch, the euro has successfully achieved the status of an international currency, and the prospect of its ability to challenge the dollar is increasingly credible. This paper supplements the ongoing academic discussion by reevaluating the characteristics necessary for such a position in light of the most recent information available on the euro area, and then providing econometric evidence as support. I regress the lags of shares of dollar and euro reserves on the current shares and predict steady state values for each currency. I then regress the same lags, as well as the exchange rate lag, on the change in the euro/dollar exchange rate. I find, first, that the share of euro reserves, while still not as high as the share of dollars, is nonetheless significant: about 26%. Second, the euro/dollar exchange rate is only slightly affected by changes in the share of either currency's reserves. I conclude that confidence in the euro as an alternative international currency is growing, and that the euro has become a real challenge to the dollar. / Thesis (BA) — Boston College, 2007. / Submitted to: Boston College. College of Arts and Sciences. / Discipline: Economics. / Discipline: College Honors Program.

Thesis advisor: Robert G. Murphy / Rule of law has recently emerged as a possible solution for the promotion of functioning market economies and economic growth in developing countries. It has been argued that an established legal system provides individuals with a clear understanding of the law and consequently, should be more influential on the behavior and decisions of those individuals. This study explores the effects of an established rule of law environment on the relationship between foreign direct investment and economic growth. Several previous studies have analyzed the direct relationship between foreign investment and economic growth. However, none of these studies control for varying levels of legal incentives and property protection. Established legal institutions provide the type of stability that makes investment in a given country more attractive to foreign companies. I also test whether the combination of rule of law and FDI affect the estimated rate of GDP growth. The combination of these two effects would imply that FDI is more likely to create positive economic growth when applied to an economy with established legal institutions. Although the analysis does not fully support the effect of this rule of law—FDI interaction on growth, my analysis does suggest that FDI inflows are most efficient at promoting growth in countries with less legal development. / Thesis (BA) — Boston College, 2008. / Submitted to: Boston College. College of Arts and Sciences. / Discipline: Economics. / Discipline: College Honors Program. / Discipline: Economics Honors Program.

Thesis advisor: James Anderson / National policy regarding parallel importation determines whether prices for a good protected by intellectual property rights are set in a segmented national market or in a larger international market. The innovative pharmaceutical industry has a cost structure which depends on patents and other intellectual property rights in order to recover the large sunk costs of research and development; parallel imports affect the ability of pharmaceutical firms to recover those costs. After discussing the international political context of parallel importation policy, international price differences, which create and are in turn affected by the possibility of parallel importation, are examined. Prices of name-brand pharmaceutical products are found to vary from the ideal of proportionality with income for several reasons, among them income inequality within a country. Applying simple theoretical assumptions about how prices are affected by the possibility of parallel importation, conditions are described under which allowing parallel importation can bring about price moderation. In other instances, parallel importation can have harmful external effects without bringing any benefit. / Thesis (BA) — Boston College, 2003. / Submitted to: Boston College. College of Arts and Sciences. / Discipline: Economics. / Discipline: College Honors Program.

Thesis advisor: Robert Murphy / Given the increasing proliferation of preferential trade agreements, this work seeks to investigate the economic, political, and cultural relationships that may be built from the common foundation of a trade agreement. It evaluates the experiences of the European Union and the North American Free Trade Agreement and makes predictions and suggestions for future preferential trading partners, as well as analyzing the potential impact that PTAs will have on globalization and international relations. / Thesis (BA) — Boston College, 2004. / Submitted to: Boston College. College of Arts and Sciences. / Discipline: International Studies. / Discipline: College Honors Program.

Thesis advisor: Robert Murphy / In order for the Euro to be successful over time, certain conditions must be satisfied. First, the economies of the countries need to be similar so that a policy change does not cripple certain economies when it attempts to help others. Therefore, convergence among the interest rates of the different countries will be tested. Also, since the Euro has removed the individual monetary policies, the countries only have fiscal policy to use for stabilization of their economies. Provisions have been in place to prevent countries from overspending, which creates pressure for devaluation of the Euro. This paper will provide evidence that these countries have shown convergence in their economies since the inception of the Euro. It will also explore the literature surrounding the opinions about the role of fiscal policy. Together, these two topics will be used to support the belief that the Euro will be sustained in the future. / Thesis (BA) — Boston College, 2007. / Submitted to: Boston College. College of Arts and Sciences. / Discipline: Economics Honors Program.

This research is an attempt to clarify the confusion and controversy concerning the content and meaning of Islamic economics. The objective of this dissertation is two fold. The primary objective is to attain a definition for the term "Islamic economic system" based on a thorough investigation of the origin and the evolution of Islamic economic thought. The second objective is to examine the extent to which early Islamic economic thought or its ideological concepts compares to the medieval economic thought of the West. / In order to identify what might be termed an "Islamic economy," this dissertation uses a Schumpeterian approach--that in order to understand the present, one needs to know the past. Apart from the importance of the Schumpeterian approach in economic analysis, the argument for pursuing the primary objective of this research is to recognize a neglected area in the field of economic thought. / The dissertation reveals a basic continuity of ideas on various economic subjects by Islamic scholars during the ascendancy of Islamic civilization. This provides the basis necessary to refute the thesis propounded by Meyer that the "Arabic, Turkish and Persian speaking East has experienced no continuity of economic ideas such as those which come from the Judeo-Christian West." The study further points to a certain unity of economic thought between the medieval West and the Muslim East. Both systems were primarily concerned with the quality of life, which in turn depended on the moral and ethical character of the individual. Both also traced their origins to Greek philosophy, in particular Neo-Platonism. / The study concludes with a discussion of the reasons for the divergence in economic growth observed in the Islamic East as compared to the Christian West in the period after the Renaissance. These reasons include a number of factors relating to socioeconomic and political institutions in the East, but do not arise from restrictions imposed by Islamic religious ideology. / Source: Dissertation Abstracts International, Volume: 52-10, Section: A, page: 3666. / Major Professor: Philip Sorensen. / Thesis (Ph.D.)--The Florida State University, 1991.

In addition to a review of the literatures on the gravity equation, and on how foreign aid and trade are related, the purposes of this dissertation are (1) to develop an asymmetric version of the Anderson and van Wincoop (2003) model appropriate to applications explicitly involving developed and less developed countries, such as foreign aid; and (2) use this model to obtain empirical evidence of the positive effect of foreign aid on trade. Anderson and van Wincoop's (2003) model is extended to a dual context, where the developed North trades heterogeneous goods in a monopolistic competition framework and the less developed South trades homogeneous goods. In addition, the linearization technique that Baier and Bergstrand (2006) apply to Anderson and van Wincoop's (2003) model is extended to the present North-South dual context. This extension permits a better interpretation of the proposed model and increases the efficiency of the estimation. The result is an empirical model that is better suited to the analysis of North-South trade issues like the link between trade and aid. The empirical results are strongly significant and robust since they survive a series of sensibility analysis. Foreign aid explains 2% of the predicted increase in trade from 1966 to 2000 / acase@tulane.edu

This dissertation examines the time series properties of floating exchange rates during the 1920s. This study benefits from the use of high frequency daily data of spot and forward exchange rates and the application of recently developed econometric techniques. The currencies examined are the U.S. dollar, French franc, Belgian franc, Italian lira and the German mark, all quoted with respect to the Pound sterling. The data set covers a period of thirty-seven months from May 1, 1922 to May 30, 1925 for all the exchange rates except the German mark, for which observations end on July 24, 1923 A detailed analysis of the behavior of spot exchange rates is carried out by testing for three, two and one unit roots. There is evidence that all the spot exchange rates are characterized by a unit root and the German mark is characterized by a unit root with a drift. Further, diagnostic tests indicate that all the exchange rate series are heteroskedastic and exhibit high kurtosis. Therefore, there is evidence against the hypothesis that spot exchange rates follow a random walk. The analysis is extended by fitting ARCH and GARCH models to explain the volatility of the market at that time The forward market efficiency is examined by testing the simple unbiasedness hypothesis, i.e., the forward rate is an optimal predictor of the future spot rate under rational expectations and risk neutrality. This is followed with tests of orthogonality of the forecast errors to different information sets. In the above tests corrections are made for serial correlation and heteroskedasticity. A VAR model is also estimated and the cross equation restrictions tested using a Wald statistic. All the tests reject the null hypothesis of an efficient market We also test for cointegration of spot and forward rates of a country. In three of the five currencies we find that the spot and forward rates of a country are cointegrated, indicating that those markets were weakly efficient. Finally, cointegration across markets is examined using a multivariate test. In general we find that the markets were not integrated across countries except in the neighboring economies of France and Belgium / acase@tulane.edu

The first purpose of this research is to build a Cobb-Douglas Production Model considering capital, labor, and energy as the main inputs, in order to identify the role of energy, investment, and new technology in Mexico's economic growth. The estimation of this model shows that energy stands as a source of growth independent of capital and new technology. As a conclusion, Mexico must either develop its domestic sources of natural gas or substantially increase imports. The second purpose of this research it to build a complete oil and gas supply model for Mexico in order to identify the financial variables that could affect future oil and gas drilling, reserves, and production in order to secure the hydrocarbon supplies required for future generations The results of this research will be of vital interest to the staff of President Vicente Fox and to top-level officials at PEMEX. Energy in Mexico is of highest-order importance, stressed by both President Vicente Fox and PEMEX. The main issues debated in the Mexican political scenario are: (1) PEMEX could generate a huge economic surplus, but it is not possible because it plays an important role as a source of economic resources for Federal Government projects through a high Tax Burden. This statement is supported with econometrics. (2) PEMEX's challenge is to increase oil and gas exploratory and development drilling activities. There has been a lack of investment for these activities during the last years. The Secretary of Energy designed the Multiple Service Contracts (MSC) to invite foreign companies to invest in a state-owned company. This sounds as a probable promising alternative supported by the results of this research; however, there is still great debate about the MSC and the Energy Reform needed to let the energy sector support a successful Sustainable Development Growth Policy The analysis of the oil and gas supply model in this study leads to important economic policy recommendations that could support future debates on these issues / acase@tulane.edu

This dissertation comprises two essays in the field of public finance and urban development. The first essay, 'Interdependence among Municipality, Firms and Households', tackles a contentious issue in local taxation and urban development--whether business development increases the residential tax burden. The second essay, 'Does Tax Competition Exist at the Municipality Level?', examines existence of tax competition at the municipality level Community planners and development officials tend to believe that business development would lower residential property tax burdens by drawing taxes from nonresident business owners. However, these beliefs have recently been challenged by some urban planners and other analysts of the suburban growth process. The first essay provides the first effort to assess relations between residential property tax rate and urban development in a simultaneous framework. It examines not only the impact of business and residential development on the residential tax burden, but also the effect of local fiscal decisions on the intra-metropolitan location of firms and households. Using the data collected from suburb Chicago, business development, especially manufacturing projects, is found decreasing the residential property tax burden while taxes are found detrimental to business development. The diagnostic testing results confirm that taxes, firm and household location decisions are simultaneously determined. That is, empirical studies without modeling them simultaneously would generate biased results It has long been recognized that local governments engage in fiscal competition either for resource or for political support. However, while we observe many cases of fiscal competition, we also notice that some seemingly highly-profit development projects are rejected by locals due to environment concerns. So far, few empirical efforts have been made to address the issue of fiscal competition and none of these studies used the data collected at the municipality level. Using the significance of Moran's I spatial autocorrelation coefficient as an indication of tax competition, the second essay examines property tax rate increases over last 10 years in 109 Chicago suburban municipalities. We find that, although tax rate movements among neighboring communities do cluster, the sources of the observed clustering are not physical proximity. That is, tax competition does not exist / acase@tulane.edu