Edited by David Cass and Lionel W. McKenzie. / Includes 1 article in French. / Includes bibliographies.

This thesis consists of three essays. In essay 1, we examine the optimal contract design in the venture capital (VC) industry when a general partner (GP) cannot commit to putting effort into an existing partnership. We show that the first-best contract, a layered debt issued to investors, induces the GP's efficient investment decision and prevents him from diverting effort from the partnership, but its feasibility depends on economic conditions and on whether the GP's ability is observed. The model suggests a procyclical pattern of investment funding and a countercyclical pattern of industrial performance. Moreover, new GPs' fundraising and performance are more sensitive to business cycles than those of established ones. In essay 2, we study investment duration of a VC fund based on a simple agency conflict between a GP and investors. A short duration financing arrangement can minimize agency conflicts but may offer investors rents. When the rents offered to investors are too large, which may occur when the rate of return of a successful investment is high, the GP has an incentive to use less efficient but rent-saving financing arrangements. We show that there can be cases in which the GP uses a long investment duration financing arrangement or is willing to have the fund capital-constrained. In essay 3, we study contests where, subject only to a capacity constraint on mean performance, contestants, facing a rank-dependent payoff function, choose arbitrary performance distributions. In the case of symmetric capacity, we derive closed-form solutions for equilibrium performance distributions and analyze the effect of contest structure on equilibrium behavior. We show that equilibrium performance distributions are never dispersion-maximizing and are always right-skewed when the contest is selective. When contestants' capacities are private information, contests serve as a selection mechanism. We analyze the effect of changing contest parameters on strategies, payoffs, and contest selection efficiency and study the selection properties of different contest designs.

M.Com. (Business Management) / Until mid-1997, South East Asia was regarded as among the most economically successful regions of all time. Growth forecasts were very positive and current account deficits were equally satisfying, Then, on July 2, 1997, the Thai Baht suffered severe devaluation and subsequently sparked the "East Asian crisis" (Zaaiman & King, 3). The crisis started in Thailand and soon spread to Indonesia, the Philippines, South Korea and eventually Malaysia. Everyone was still measuring the spill-over effects that the Asian crisis had on other emerging markets when another piece of alarming news made the headlines. Russia's. Rouble suffered devaluation during October 1998 - slightly more than a year after the East Asian crisis first emerged. Suddenly emerging market economies became a major cause of concern and banks, like many other industries, within emerging markets were viewed with equal pessimism. The above two crises were unfortunately not the end of what was perceived to be a world-wide emerging market crisis. During December 1998, Brazil's Minister of Finance and the country's Central Banker both resigned within a short period, again sending shock waves throughout emerging markets. This situation was reminiscent of the' Mexican Peso devaluation and the crisis that followed accordingly in emerging markets in the early 1990's.

Compared to the previous twenty years, residential investments in the US appear more stable after the mid-1980s. Chapter 2 explores key hypotheses regarding the underlying causes. In particular, it uses estimated DSGE models to examine whether a more responsive interest rate policy stabilizes the housing market by keeping inflation in check. These estimations indeed found a policy that has become more responsive over time. Counter-factual analysis confirms that the change stabilizes inflation as well as nominal interest rate. It does not, however, find the change in policy to have stabilizing effect on real economic activity including housing investment. It finds that smaller TFP shocks make modest contributions, while the biggest contributing factor to the fall in the housing volatility is a reduction in the sensitivity of the investment to demand variations. Chapter 3 constructs a richly specified model for the housing market to examine the empirical relevance of various costs and frictions, including the investment adjustment cost, sticky construction costs, search frictions, and sluggish adjustment of house prices. Using the US national-level quarterly data from 1985 and 2007, we find that the gradual adjustment of house prices is the most important and irreplaceable feature of the model. The key to developing an optimization-based empirical housing model, therefore, is to provide a structural interpretation for the slow adjustment in house prices. Chapter 4 uses US national-level time series of residential investment, price index of new houses, consumption and interest rate to explore whether the US, as a nation, experienced a drop in the price elasticity of supply of new housing. Maximum likelihood estimations with a simple stock-and-flow model found a statistically significant drop of the elasticity from 10 to 2.2, when the quarterly data between 1971 and 2007 are split at 1985. A richer model with mechanisms of gradual adjustment also indicates such a reduction, when existing knowledge about the adjustment parameters is incorporated in the analysis. For the Federal Reserve, an inelastic supply can be a source of concern, because policy-driven demand in housing market is more likely to trigger undesirable swings in prices. / Arts, Faculty of / Vancouver School of Economics / Graduate

Thesis advisor: Ryan Chahrour / Thesis advisor: Fabio Schiantarelli / This dissertation consists of three chapters. The first chapter, "The Supply-Side Effects of India's Demonetization", investigates the supply-side effects of a unique monetary shock – the 2016 Indian demonetization – that made 86% of currency in circulation illegal overnight. Exploiting cross-sectional variation in firm and industry characteristics that correlate with cash usage and exposure to the informal sector, I find that firms that use cash more and obtain larger shares of labor or material inputs from the informal sector, experienced declines in their labor and material shares after demonetization. I also show that casual laborers were more likely to report being unemployed in the months following demonetization. These findings document a supply channel for demonetization and also show that cash plays an essential role in India's informal sector. Crucially, given that India's formal sector is highly dependent on the informal sector for labor and materials, any shock to the supply of cash is likely to have affected the economy as a whole. In the second chapter, "Directed Lending and Misallocation: Evidence from India", joint with Deeksha Kale, we leverage a natural experiment to study whether targeted credit policy can help reduce misallocation. In 2006, the Government of India modified the definition of small firms thereby expanding eligibility to a directed credit program. We show that the credit policy changed eligible firms' input wedges and thereby reduced misallocation. For firms with initially higher MRPK, the policy resulted in relatively larger increases in physical capital and decreased the MRPK. This policy moderately reduced within-industry dispersion of MRPK and increased aggregate productivity. Finally, in the third chapter, "Victims of Consequence: Evidence on Child Outcomes using Microdata from a Civil War", joint with Sajala Pandey, we study the short-run impacts of violent events on child time allocation, curative health-care, and education. Exploiting spatial and temporal variation in exposure to local-level armed conflict, we find that an increase in violent events: (i) leads to an increase in contemporaneous hours worked by children, with the effect being substantial for agricultural work; (ii) decreases the likelihood of parents taking their children to visit a health-care facility to seek curative care; and (iii) results in a reduced likelihood of attending school, along with a decline in years of education. Overall, the results indicate that the war affected schooling and time allocation of boys whereas girls were less likely to get curative health-care. / Thesis (PhD) — Boston College, 2020. / Submitted to: Boston College. Graduate School of Arts and Sciences. / Discipline: Economics.

No description available.

Thesis advisor: Theodore Papageorgiou / Thesis advisor: Robert Ulbricht / This thesis contains three independent essays on topics in macroeconomics and labor economics. In the first chapter, I investigate the implications of the increasing share of older businesses in the United States economy for labor market outcomes across workers in different age groups. I find that over the period 1994-2019, employment and wages fall by more for younger cohorts, driven by a ``firm competition” channel. Moreover, workers are better sorted, but receive a lower share of the match surplus, on average. In the second chapter, my co-author Div Bhagia and I ask whether broad sectoral shifts in labor demand account for the divergence of employment outcomes between Black and White men after 1970. We find that they explain no more than one-fifth of the increase in the employment-to-population ratio gap, and that the widening of this gap is primarily driven by differential responses to labor demand shocks across groups. In the third chapter, I quantify the roles of increases in job separations and decreases in job finding in recessionary increases in unemployment. I find that while job separations lead job finding, both margins contribute significantly to unemployment fluctuations. I conclude that future research should not ignore the interaction between unemployment inflows and unemployment outflows in explaining the cyclical behavior of the labor market. / Thesis (PhD) — Boston College, 2023. / Submitted to: Boston College. Graduate School of Arts and Sciences. / Discipline: Economics.

No description available.

The purpose of this paper is the examination of whether a strategy of using forecasts to stabilise the Nominal Gross Domestic Product (NGDP) growth rate as a nominal anchor, through a rules-based approach to monetary policy is viable in the Eurozone. The paper uses a modified Taylor rule, that uses NGDP forecasts as a variable to generate a prescribed interest rate from which the interest rate set by the European Central Bank (ECB) is subtracted to create a variable we call the Rate Gap. The Rate Gap is a measure of deviation that actual monetary policy had from a country’s optimal rate at a given moment in time according to the Taylor rule.  Under the hypothesis that a strategy of using forecasts to stabilise the NGDP growth rate as a nominal anchor is viable, we should expect to see countries with larger positive (negative) rate gaps have macroeconomic outcomes associated with monetary contraction (expansion). The empirical results in this paper contradict the former hypothesis as different countries have dissimilar rate gaps at the same time period which is affirmation of the Eurozone being a suboptimal currency area. However, they are supportive of the latter hypothesis, as countries with larger positive (negative) rate gaps tended to have macroeconomic outcomes associated with monetary contraction (expansion). This paper also discusses the impact of different monetary transmission mechanisms and their relationship to fiscal policy. It also contributes to the field of macroeconomics through its examination of the problem of finding viable policy strategies for a suboptimal currency area.

The effectiveness of monetary policy moving forward from the subprime mortgage crisis has come into question by academics and economists from around the world. The unconventional monetary policy tools implemented have left central banks in a tough spot in terms of an exit from these policies in an environment where economic growth and inflation targets still have not been reached ten years after the onset of the recession. One of the main criticisms by economists is the prolonged easy monetary policy implemented by central banks, which have left interest rates at near zero levels since the recession and are just now beginning to cautiously consider raising rates. In this paper, I examined the relationship between GDP growth and economic variables that could possibly affect it, including interest rates, unemployment, labor force participation rates, shadow interest rates, stock market performance, and bond market performance. I studied the relationship by running regressions on time series data collected from the economies and central banks of the United States, European Union, and Japan. I found no statistically significant relationship between interest rates and GDP growth as well as positive values for the interest rate coefficients for two out of three of my regressions. However, I did conclude that the unemployment rate, and bond market performance did have a positive relationship with GDP growth in Europe and Japan. This warrants further study and usage of policy tools that affect these variables to lessen the severity of future recessions and have a positive effect on economic growth.