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published_or_final_version / Economics and Finance / Doctoral / Doctor of Philosophy

Chan Chung Yan. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2004. / Includes bibliographical references (leaves 57-59). / Abstracts in English and Chinese. / Abstract --- p.i / Acknowledgement --- p.iv / Table of Contents --- p.v / List of Figures --- p.vi / Chapter 1. --- Introduction --- p.1 / Chapter 2. --- An Illustration with a Small Open Economy Model / Chapter 2.1 --- Review of Obstfeld (1990) --- p.4 / Chapter 2.2 --- A Model with Socially-Determined Time Preference --- p.6 / Chapter 3. --- Small Open Economy Models with Socially-Determined Time Preference --- p.15 / Chapter 3.1 --- The Laursen-Metzler Effect --- p.16 / Chapter 3.2 --- Exchange-Rate Dynamics --- p.21 / Chapter 3.3 --- Capital Mobility and Devaluation --- p.28 / Chapter 4. --- Dynamics of a Small Open Economy Model with Non-Flat Bond Curves --- p.35 / Chapter 4.1 --- Downward-Sloping Bond Curve --- p.38 / Chapter 4.2 --- Upward-Sloping Bond Curve --- p.38 / Chapter 5. --- Investment and Saving in a Small Open Economy Model with Capital Accumulation / Chapter 5.1 --- The Model --- p.41 / Chapter 5.2 --- Productivity Shocks --- p.46 / Chapter 6. --- Saddle-Path Stability of a Closed Economy Growth Model --- p.49 / Chapter 7. --- Conclusion --- p.54 / References --- p.57 / Appendix --- p.60

Computable General Equilibrium (CGE) models are among the most influential tools in applied economics. In the past few years, however, some serious questions have been raised about the validity of these models. The core of the critique is that the parameter selection criteria and the functional forms used are at odds with contemporary standards of practice in econometrics. After surveying the relevant literature, which I refer to as the 'econometric critique', a formal summary of the case against standard CGE modeling is presented, as is an alternative econometric-based modeling strategy which answers the critique. I then work through a comparative CGE modeling experiment designed to assess the contrasting methods. It is found that the parameter selection rule influences model predictions in individual sectors, but industry- and economy-wide aggregates do not appear to be much affected by reparameterizing a CGE model according to econometric criteria. By contrast, the choice of functional forms affects not only industry-specific results, but aggregate results as well, even for small policy shocks. However flexible functional forms are difficult to implement in CGE models because global monotonicity must be maintained. In the second and third chapters, I adapt one of the models to analyze the effects of carbon taxes in Canada. I review an approach called 'double dividend' taxation, in which the revenues from carbon taxes are used to reduce the rates of other distortionary taxes, so an overall efficiency gain can potentially be realized whether or not the reduction in pollution improves welfare. This eliminates the need to measure benefits, and in an international context, would obviate the free-rider problem. I demonstrate the existence of a double dividend strategy for carbon taxation in Canada in the short run. In chapter three, however, a long run extension of the model shows that the double dividend does not persist over time. Nevertheless, choosing an efficient revenue-recycling option can significantly reduce the implementation cost of the carbon tax.

Computable General Equilibrium (CGE) models are among the most influential tools in applied economics. In the past few years, however, some serious questions have been raised about the validity of these models. The core of the critique is that the parameter selection criteria and the functional forms used are at odds with contemporary standards of practice in econometrics. After surveying the relevant literature, which I refer to as the 'econometric critique', a formal summary of the case against standard CGE modeling is presented, as is an alternative econometric-based modeling strategy which answers the critique. I then work through a comparative CGE modeling experiment designed to assess the contrasting methods. It is found that the parameter selection rule influences model predictions in individual sectors, but industry- and economy-wide aggregates do not appear to be much affected by reparameterizing a CGE model according to econometric criteria. By contrast, the choice of functional forms affects not only industry-specific results, but aggregate results as well, even for small policy shocks. However flexible functional forms are difficult to implement in CGE models because global monotonicity must be maintained. In the second and third chapters, I adapt one of the models to analyze the effects of carbon taxes in Canada. I review an approach called 'double dividend' taxation, in which the revenues from carbon taxes are used to reduce the rates of other distortionary taxes, so an overall efficiency gain can potentially be realized whether or not the reduction in pollution improves welfare. This eliminates the need to measure benefits, and in an international context, would obviate the free-rider problem. I demonstrate the existence of a double dividend strategy for carbon taxation in Canada in the short run. In chapter three, however, a long run extension of the model shows that the double dividend does not persist over time. Nevertheless, choosing an efficient revenue-recycling option can significantly reduce the implementation cost of the carbon tax. / Arts, Faculty of / Vancouver School of Economics / Graduate

Wong, Ching Chuen. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2009. / Includes bibliographical references (leaves 45-46). / Abstract also in Chinese. / Spatial Competition in Two-Dimensional Product Space --- p.1 / Chapter 1.1 --- Introduction --- p.1 / Chapter 1.2 --- First model: Ordinal characteristics --- p.5 / Chapter 1.3 --- Second model: Categorical characteristics --- p.14 / Chapter 1.4 --- Conclusion --- p.18 / Spatial Competition with Demand Uncertainty --- p.21 / Chapter 2.1 --- Introduction --- p.21 / Chapter 2.2 --- Model --- p.26 / Chapter 2.3 --- Revelation of market density before transportation --- p.29 / Chapter 2.4 --- Revelation of market density after transportation --- p.36 / Chapter 2.5 --- Perfectly informed consumers --- p.38 / Chapter 2.6 --- Application: Negative externality --- p.40 / Chapter 2.7 --- Conclusion --- p.42 / References --- p.45

Sun, Wu. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2008. / Includes bibliographical references (leaves 43-45). / Abstracts in English and Chinese. / Abstract --- p.I / 摘要 --- p.II / Acknowledgments --- p.III / Chapter Essay 1. --- The Effect of Impatience on Determinacy --- p.1 / Chapter 1.1 --- Introduction --- p.1 / Chapter 1.2 --- The model --- p.2 / Chapter 1.3 --- Conclusion --- p.8 / Chapter Essay 2. --- Determinacy under Non-separable Utility --- p.9 / Chapter 2.1 --- Introduction --- p.9 / Chapter 2.2 --- The basic model --- p.10 / Chapter 2.3 --- Conclusion --- p.21 / Chapter Essay 3. --- Determinacy under Calvo-Style Sticky Price Model --- p.23 / Chapter 3.1 --- Introduction --- p.23 / Chapter 3.2 --- The model --- p.24 / Chapter 3.2.1 --- With staggered price only --- p.24 / Chapter 3.2.2 --- Incorporating firm-specific capital --- p.30 / Chapter 3.2.3 --- Incorporating staggered wages --- p.35 / Chapter 3.3 --- Conclusion --- p.41 / Reference --- p.43 / Appendix --- p.46 / Table 1: Baseline Calibration --- p.46 / Table 2: Baseline Calibration --- p.46

In explaining why service prices differ across countries (both developed and developing countries), most studies have paid attention to the role of structural variables such as population, trade balance, resource abundance etc., by using a full employment assumption. Due to the existence of high urban unemployment in developing countries, the assumption of full employment is not suitable. The objective of this study is to build general equilibrium models that can be used to explain the service price differences across developing countries by incorporating rural-urban migration and urban unemployment. Internal migration from rural to urban areas is allowed because of distortions in labor market. The current work includes structural variables that are used in the literature, such as agricultural land, mineral resources, labor endowment, trade deficit, population, and tourism, along with 2 new variables, manufacturing capital and services capital. This study also considers the effects of macroeconomic policies (fiscal and monetary policies) on service prices which are neglected in the literature. The theoretical models suggest that, ceteris paribus, larger land area, mineral resources, higher trade deficits, tourist receipts, and money supply increase service prices, but larger populations reduce service prices. The effects of services capital, labor force, the terms of trade, and government spending are ambiguous from the theoretical models. An empirical study is performed to test the theoretical implications. The empirical results suggest that larger endowments of land, mineral resources, manufacturing capital, labor force, and services capital, as well as higher trade deficits, tourist receipts, government spending, and money supply increase the service prices. Conversely, larger populations reduce service prices as predicted. / Graduation date: 1993

This dissertation is a collection of essays on bids and offer matching in a labor market for new entrants to white-collar jobs. The papers compare some of the different institutions for determining wages and conducting the hiring process in the market for new entrants to white collar jobs. The first essay analyzes how does a firm announce and commit to a wage prior to deriving specific information about applicants' productivity and the consequences of following this hiring process. In the model there are two firms and at least as many applicants as the number of firms. All applicants apply simultaneously to both firms in response to the job advertisement which also mentions a wage. Each firm derives the firm-specific productivity of the applicants from their applications which is private information to each firm. None of the applicants have any information about the firms' evaluation. There are four pure strategy Nash Equilibria in wage announcements. Both firms announce a high wage, both firms announce a low wage, both firms announce a high or a low wage, and one firm announces a high wage and the other firm announces a low wage. In the latter case there also exists a unique mixed strategy equilibrium reflecting a firm's uncertainty about the choice of the other firm. In equilibrium one or both firms may not hire and the equilibrium may not exhibit wage dispersion. The second essay analyzes the question; which is better, to announce and commit to a particular wage prior to deriving specific information about applicants' productivity or to offer wages privately after deriving the firm-specific productivity. The equilibrium policy, to be followed by the firms in the first place, is determined endogenously by comparing the ex ante expected profits associated with the equilibria under the different policies. Lack of prior information and the uncertainty about the possible match results in "offer wages privately" as always an equilibrium policy. However, if a low wage is the equilibrium strategy under all the policies, then "any pair of policies" is an equilibrium. This justifies one of the circumstances in which different policies might coexist. In equilibrium a firm's position is always filled and the equilibrium outcome may not exhibit wage dispersion. The third essay analyses the question, if "announcing a wage" is the strategy rule to be followed by the firms, then what should be the equilibrium timing of wage announcement, before or after receiving specific information about applicants' productivity. Two policies are compared. Under the first policy a firm announces and commits to a particular wage prior to deriving the match-specific productivity. Under the second policy a firm solicits applications, derives the firm-specific productivity, and then announces and commits to a wage. The equilibrium timing of wage, to be followed by the firms in the first place, is determined endogenously by comparing the ex ante expected profits associated with the equilibrium strategy under the different timings. It turns out that announcing and committing to a particular wage after deriving specific information is always an equilibrium timing because of the informational advantage. However, if a low wage is the equilibrium strategy under all the policies then any pair of policies is an equilibrium. In equilibrium one of the firm's position may remain unfilled. The equilibrium outcome may not exhibit wage dispersion. / Ph. D.