Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2013. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 141-145). / This thesis examines three topics in the political economy of global oil markets and the development of resource-rich countries. The first chapter examines the effect of Saudi Arabia's crude pricing policies on the political behavior of U.S. firms. Between 1991 and 2003, Saudi Aramco sold its crude to U.S. refineries at a substantial discount relative to Asian refineries at a total cost of approximately 8.5 billion dollars. Using variation in discount receipts across refineries over time, I find that the discount rents were entirely captured by refiners as profits and were not passed through to consumers in the form of lower retail gasoline prices. There is also evidence that the discount policy affected refiners' political action. In particular, I find that discount receipts are associated with an increase in refiners' overall political donations, and that other types of profit shocks were not associated with changes in political giving. This suggests that the effect of the discount was not simply a consequence of the increase in refining profits. Finally, I show that the discount resulted in a reallocation of contributions toward members of congressional committees that reviewed bills of interest to Saudi Arabia and away from those who received donations from pro-Israel interest groups. In the second chapter, I assess the impact of a nationalization quota policy in Saudi Arabia on workers and private-sector firms. In the past two years, Saudi Arabia has dramatically extended its active labor market policies in order to address the issue of growing youth unemployment and low Saudi participation in the private sector workforce. This paper studies the 2011 introduction of the Nitaqat program, which imposed a quota system for Saudi hiring at private firms. The analysis uses a unique dataset from the Saudi Ministry of Labor on the full universe of Saudi private-sector firms and exploits kinks in firm incentives generated by the program to examine the effects of this quota policy on nationalization, firm size, and firm exit. I complement the regression kink results with a differences-in-differences approach to estimate the overall effects of the program. The analysis finds that the program succeeded in increasing native employment but also had significant negative effects on firms. Program compliance rates were high, with firms increasing their Saudization rate by 0.2 percentage points on average for every percentage point increase required by the quota. Quota compliance was primarily accomplished by hiring Saudis, and Nitaqat was responsible for the addition of an estimated 52,000 Saudi workers to the private sector workforce over the 16 month period. There were also significant costs, however, and the program caused approximately 11,000 firms to shut down, raising exit rates by nearly 50%. Among surviving firms, the program decreased total employment by 198,000 workers. The third chapter investigates the direct effect of conflict-related supply disruptions on the downstream U.S. oil industry. The security of petroleum supplies is a major issue in U.S. domestic and foreign policy. Although conflict in oil-exporting countries affects the entire global downstream industry, supply disruptions may also have an additional effect on refiners who are dependent on these crude streams. This study uses variation in the sources of oil supplies across refineries to estimate the effect of conflict-related supply disruptions on refiner profits and local retail gasoline prices. The analysis shows that while conflicts do cause supply interruptions, these shortfalls have little effect on the refiners and markets exposed to these disruptions. On average, then, refineries appear to adjust quickly to unexpected changes in their supplies without significant increases in their input costs. / by Jennifer Randolph Peck. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1995. / Includes bibliographical references (leaves 101-102). / by Benjamin R. Page. / Ph.D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2016. / Cataloged from PDF version of thesis. / Includes bibliographical references. / This thesis consists of three chapters on savings, investment, and monetary policy. The first chapter studies optimal monetary policy in an environment where negative nominal interest rates are possible, as demonstrated by recent central bank actions worldwide. I identify the central tradeoff: negative rates help stabilize aggregate demand, but at the cost of an inefficient subsidy to paper currency. Near 0%, the first side of this tradeoff dominates, and negative rates are generically optimal whenever output averages below its efficient level. In a benchmark scenario, negative rates are sufficient to undo most welfare losses relative to the first best. Credible commitment by the central bank is essential to implementing optimal policy, which backloads the most negative rates. The option to set negative nominal rates lowers the optimal long-run inflation target, and abolishing paper currency is only optimal when currency demand is highly elastic. The second chapter documents and interprets new facts about the functional distribution of income. It shows that the net capital share of income initially fell in the postwar era, before rising from the 1970s onward, with the entire net increase coming from the housing sector. Accounts of the capital share that emphasize capital accumulation are not consistent with the data: they require empirically improbable elasticities of substitution, and they presume a correlation between the capital-income ratio and capital share that is not visible in the data. A more limited narrative that stresses scarcity and the increased cost of housing better fits the data, as I clarify using a new multisector model of factor shares. The third chapter, joint with Adrien Auclert, studies the possibility that feedbacks between sovereign bond spreads and governments' desire to default may lead to multiple equilibria in sovereign debt markets. We show that such multiplicity does not exist in the infinite-horizon model of Eaton and Gersovitz (1981), a widely adopted benchmark for quantitative analyses of these markets. Our proof may be important to understand Euro government bond markets, and calls for renewed attention on the theoretical conditions that are needed for sovereign debt models to generate multiple equilibria. / by Matthew Rognlie. / Ph. D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1995. / Includes bibliographical references. / by Jerónimo Zettelmeyer. / Ph.D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2017. / Cataloged from PDF version of thesis. "Joint with Abhijit Banerjee, Amy Finkelstein, Rema Hanna, Benjamin Olken, and Sudarno Sumarto"--Page 115, Chapter 3. / Includes bibliographical references (pages 151-156). / This thesis consists of three chapters. The first two chapters explore how different organizational forms, and in particular different hiring and firing practices, affect bureaucracies. In the first chapter, I study how the introduction of merit systems reducing politicians' control over police officers' hiring and firing affected police performance in the 1970s. I exploit population-based mandates for police department merit systems in a regression discontinuity design. Merit systems improved performance: in the first ten years after the reform, the property crime rate was lower and the violent crime clearance rate was higher in departments operating under a merit system than in departments operating under a spoils system. I explore three possible channels: resources, police officers' characteristics and police officers' incentive structure. Employment and expenditures were not affected and there is limited evidence of selection changing pre-1940. Instead, I provide indirect evidence that changes in the incentive structure faced by police officers were likely important. In the second chapter, I study how the introduction of civil service boards in charge of meritocratic hiring affected the demographic composition and the performance of police officers, fire fighters and other municipal employees 1900-1940. Identification exploits the staggered timing of the reform in large municipalities using a differences-in-differences design. I find that civil service boards decreased the probability that police officers were first or second generation immigrants but mixed evidence on how the demographic characteristics of other workers were affected. Finally, I find that no effect on police performance. The third chapter, joint with with Abhijit Banerjee, Amy Finkelstein, Rema Hanna, Benjamin Olken, and Sudarno Sumarto, analyzes a large-scale experiment in Indonesia. In particular, we study how a national governmental health insurance program characterized by flexible coverage responds to subsidies and assisted registration through a website. Lowering prices and reducing hassle costs increase enrollment but households often let their coverage lapse. Subsidies attract healthier households in the short run, but over time the average value of claims equalizes because of differential claim dynamics. Overall, we find that, when dynamic adjustments to coverage are possible, subsidies do not improve the financial sustainability of health insurance programs. / by Arianna Ornaghi. / Ph. D.

Massachusetts Institute of Technology. Dept. of Economics and Social Science. Thesis. 1965. Ph.D. / Ph.D.

Thesis (Ph.D.)--Massachusetts Institute of Technology, Dept. of Economics, 1999. / Includes bibliographical references. / This paper carries out an empirical analysis of Japanese labor markets with special attention paid on the comparison with the US labor markets. Chapter 1 studies how employment stability changed by measuring historical five-year retention rates for male regular workers grouped by education level and firm size. It was found that the overall retention rates began to decrease at the current recession after the long period of stability. Owing to the law prohibiting the mandatory retirement before the age of 60, the retention rate from 50-54 years old to 55-59 years old increased. However, the retention rates decreased for younger workers. A comparative study of retention rates between Japan and the US is also carries out. Chapter 2 shows how wage structure changed from 1974 to 93 by a great increase of old and more-educated male workers. Three kinds of wage differential - by age, by education level and by firm size - were examined. It was found that the young and less educated lost the ground most compared with the more educated and old. This finding is qualitatively the same with what happened in the US. The important difference is that the change of wage structure was much smaller in Japan than in the US. A simple supply-demand framework was applied to see how the wage and employment level were determined in the labor market. It was found that demand increase took place favoring senior and more educated workers and it raised the relative wage of more educated and more experienced like in the US. Chapter 3 shows that unemployment rate has been low and stable in Japan for a long time. One reason of this is that employment fluctuation is small. The second important reason is that larger part of employment fluctuation is shared by those who move between employment and out of the labor force without experiencing unemployment compared with the US. Women, teenagers and old share larger part of employment fluctuation, and they are more prone to be discouraged workers than other demographic groups. The unemployment rate is estimated when these discouraged workers are counted as unemployed. / by Keiko Ueda. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2012. / Cataloged from PDF version of thesis. / Includes bibliographical references (p. 141-148). / This thesis studies how information imperfections affect financial markets and the macroeconomy. Chapter 1 considers an economy where investors delegate their investment decisions to financial institutions that choose across multiple investment opportunities featuring different levels of idiosyncratic risk and different degrees of correlation with the aggregate of the economy. Investors solve an optimal contracting problem to induce financial institutions to allocate their investment optimally. We then study how investment decisions are affected when financial securities are introduced that allow agents to trade their risks. Investors do not have the necessary information to understand these securities, but give incentives to financial institutions to hedge certain risks. We show that hedging idiosyncratic risks ameliorates the agency problem between investors and financial institutions and reduces aggregate volatility. On the contrary, when aggregate risk can be hedged the agency problem worsens and aggregate volatility increases. Finally, we study the efficiency properties of the equilibrium and the potential role for financial regulation. Chapter 2 studies the welfare effects of the information contained in macroeconomic statistics, central-bank communications, or news in the media? We address this question in a business-cycle framework that nests the neoclassical core of modem DSGE models. Earlier lessons that were based on "beauty contests" (Morris and Shin, 2002) are found to be inapplicable. Instead, the social value of information is shown to hinge on essentially the same conditions as the optimality of output stabilization policies. More precise information is unambiguously welfare-improving as long as the business cycle is driven primarily by technology and preference shocks-but can be detrimental when shocks to markups and wedges cause sufficient volatility in "output gaps". Finally, chapter 3 studies how market signals-such as stock prices-can help alleviate the severity of the asymmetric information problem in credit and liquidity management. Asymmetric information hinders the ability of borrowers (firms, investment banks, etc) to undertake profitable investment opportunities and to insure themselves against liquidity shocks. On the equilibrium path, creditors need not learn anything from market signals because they can use a menu of contracts to screen the different types of borrowers. Nevertheless, by conditioning liquidity insurance on ex post price signals, creditors are able to provide the borrowers with better incentives for truth-telling. At the same time, prices depend on the liquidity that creditors offer to the borrowers. This two-way feedback impacts the design of the optimal contract and potentially generates multiple equilibria in financial markets. / by Luigi Iovino. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2001. / Includes bibliographical references (p. 114-116). / This thesis examines three environmental issues in developing countries. The first essay examines land fires in Indonesia that inflict severe air pollution-related damage on Southeast Asia annually. Conservative estimates of losses in 1997 alone were US$667 million for Indonesia (0.67% of GDP) and an additional US$12 million for Singapore. Fire incidence on various landholdings is examined using a new author-compiled database on satellite-based fire and rainfall data, land use maps, socioeconomic and geographical information. The essay finds that estates, large-scale industrial plantations that are rapidly expanding in the tropics, raise fire incidence beyond the 'natural' level (the fire incidence on conservation areas serves as a benchmark). In contrast, it finds no evidence that small landholdings, which are often blamed for fires, raise fire incidence. The government's ban on the use of clearance fires, as a result of weak enforcement, did not reduce fire incidence on estates. Alternative policy-levers that could potentially reduce these fires, such as lengthening the estates' leases to improve their property security, are found to be ineffective. The second essay examines whether education can potentially reduce households' agricultural-related forest clearance by increasing the returns to wage labor. It analyzes a unique survey of 649 indigenous households in protected areas in Bolivia's lowland forests. It finds that an additional year of education among household heads is associated with a reduction of 0.05 hectares or 4.3% of the annual mean household forest clearance, increased returns of 2.6% in wage labor and a 21 % increase in days worked in wage labor. Thus the 3-year average increase in education among the youngest cohorts is associated with potentially significant reduction in forest clearance in the study site, though further work is needed to establish causality. The third essay examines the pollution intensity of the NAFTA-related expansion in USMexican trade using new detailed measures of air, water, metal and toxic pollution intensities and injury rates at the 4-digit Standard Industrial Classification level. Based on pollution measures at this resolution, it does not find strong evidence of greater growth in the share of US net imports from Mexico in the more polluting or injurious industries. / by Shanti Rabindran Gamper. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1998. / Includes bibliographical references (p. 146-149). / by Larina Frances Muecke. / Ph.D.