The Aftermath of Anti-Dumping: Are Temporary Trade Barriers Really Temporary?

A consistent finding in the literature is that anti-dumping (AD) acts as a significant barrier to bilateral trade, in particular, during the time such measures are in force. Adding to a relatively scarce empirical literature, however, we identify adverse impacts of AD which survive well beyond its revocation. More specifically, while we cannot rule out a slight post-revocation recovery, we find empirical evidence that once affected bilateral trade does not fully recover on average following revocation. We use panel data at the Harmonized System four-digit (HS4) level of aggregation to produce these results and show that they are robust to the duration of AD cases, the time of their imposition and revocation, differentiation by economic sector and the nature of imposing countries. Several explanations for our observed empirical results seem plausible, and we provide a theoretical framework which suggests our results could be driven by market exit or underinvestment of targeted firms.

     

What Are the Determinants of Public Spending? An Overview of the Literature

Atlantic Economic Journal - The purpose of this paper is to present and assess the literature about the determinants of public spending. Its originality is the adoption of a methodological...     

Who Are the Potential Smokers of Smuggled Cigarettes?

Although smuggled cigarettes have been a prevalent problem and a severe challenge to public health and welfare around the world, little is known about the behavior associated with smoking smuggled cigarettes and the issue is difficult to study due to data limitations. By means of a population‐based tobacco survey conducted in Taiwan, the present paper applies a latent class model to identify potential smokers who are either currently or will at some point in the future be consuming smuggled cigarettes. This methodology, in contrast to the traditional discrete models, allows potential smokers who are more inclined to smoke smuggled cigarettes to be endogenously classified. The empirical results indicate that socio‐demographic factors do increase the inclination to smoke smuggled cigarettes after unobserved heterogeneity has been accounted for.     

Are the Bailouts of Wall Street Complements or Substitutes?

The Term Securities Lending Facility (TSLF) lent $2.3 trillion worth of general collateral to 18 investment houses in exchange for riskier securities. Treasury collateral was in high demand in 2008 and 2009 as repo markets shunned lower quality collateral. This paper finds a negative and significant relationship between participating in the TSLF and having funds from the Troubled Asset Relief Program (TARP) and other Federal Reserve lending programs. Thus, it appears that the TSLF was a substitute for other bailouts. In addition, dealers with higher paid CEOs were more likely to borrow in the next TSLF auction cycle.     

Are the degree of trade openness and the degree of wage centralisation negatively correlated?

This paper presents evidence of a negative correlation between the degree of wage centralisation and the degree of trade openness, which is taken as a proxy measures of international trade integration. The sample data cover a macro-panel of 17 OECD countries over the 1975?C2000 period. The results are robust to alternative estimation methods and after controlling for the endogeneity of the degree of openness. This contrasts with the existing empirical evidence, based on cross-country macroeconomic data, suggesting that more open economies have more centralised wage bargaining institutions on average.     

Real Exchange Rates and the Balance of Trade: Does the J-curve Effect Really Hold?

Open Economies Review - In this paper, we re-examine the relationship between trade flows, real effective exchange rates, and incomes by using the bilateral trade flows of 33 countries that form...     

On the Quality and Ability of Modern Professional Managers

Modern enterprises are in the environment changed rapidly and with keen competition. Employing professional managers to operate enterprise is an important tendency for modern＇ management. This article first reviews the background and the development course of professional manager and defines professional manager. On the base of analysis of modern professional manager＇s occupation characteristics, this paper elaborates the quality and ability that modern professional manager should possess.     

Are the actual and intended sources of financial knowledge the same? Evidence from Japan

The recent prolonged period of low economic growth and low interest rates in Japan demands that Japanese households invest in risky assets to accumulate sufficient retirement savings. In so doing, they acquire financial knowledge on these risky assets, typically from financial experts or salespersons in financial institutions. However, they may not necessarily be content with their current sources of financial knowledge because depending on their stage in the life cycle, they require different types of financial knowledge, usually from a variety of sources. Unfortunately, because of limitations in the data available, few studies have investigated whether the actual and intended sources of financial knowledge are the same. To address this research gap, this paper uses a Japanese household survey from 2010 to 2017, which provides unique information on the actual and intended sources of financial knowledge, and obtains two interesting results. First, a household’s actual sources of financial knowledge typically differ from its intended sources. More specifically, 33 % of households choosing financial institutions and experts and 52 % of households choosing financial institutions as their actual sources have a different intended source. Second, the discrepancy between actual and intended sources appears to relate to household demographic characteristics. Among those households choosing financial institutions and experts as their actual source of financial knowledge, 14 % choosing financial institutions as their intended source tend to have a lower level of financial knowledge and educational attainment. These results suggest that they have some difficulty understanding the advice of financial advisers. Among households choosing financial institutions as their actual source of financial knowledge, 26 % choosing financial institutions and experts as their intended source tend to have a larger amount of financial assets, better financial knowledge, and a preference for investing in risky assets; however, they also tend to be younger. This suggests they might want to obtain financial knowledge from financial experts to purchase risky financial assets as they age. While the study does not provide any causal evidence, the results suggest that understanding the reasons for any discrepancy in the actual and intended sources of financial knowledge may help financial institutions provide better services to these customers.     

Financial Globalization and the Increase in the Size of Government: Are They Related?

Open Economies Review - We employ a stochastic growth model to study the impact of international financial liberalization and changes in volatility on the share of government consumption in GDP....     

Reexamining Growth Effects: Are All Types of Asset Growth the Same?

Asset growth has been shown to be negatively associated with future returns. Cooper, Gulen, and Schill (2008) argue that an aggregation of all asset growth components as total asset (TA) growth leads to the strongest association with future negative returns. Based on their study, the literature now employs TA growth as an umbrella proxy for “the growth effect.” I hypothesize that not all types of growth imply negative future returns. Specifically, I show that growth financed by suppliers is positively associated with future performance and returns. Removing this growth component from TA growth makes it evident that the TA growth anomaly is simply a noisy manifestation of the net operating asset growth anomaly. Consequently, I suggest caution when using TA growth to control for the growth effect.     

Does Central Bank Financial Strength Really Matter for Inflation? The Key Role of the Fiscal Support

This paper examines whether weak central bank finances affect inflation by scrutinizing the key rationale for such a relationship: that the absence of Treasury support makes central bank finances relevant for price stability. Specifically, I ask whether central banks which are not likely to enjoy fiscal support when needed experience higher inflation as their financial situation deteriorates. I find this to be true among a large sample of 82 countries between 1998 and 2008. De facto potential fiscal support appears relevant, while de jure fiscal support, which I survey analyzing 82 central bank laws, does not appear to matter. The results also bring forward an explanation for the conflicting results of the previous empirical studies, which neglected this key component.     

Are Illegal Drugs Inferior Goods in the US?

Using data from the National Survey on Drug Use and Health, evidence of income inferiority in illegal drug consumption is presented. This is done by estimation of binary choice probit models with endogenous regressors. The endogeneity of income with regard to drug consumption is considered and the more efficient three-stage least squares procedures have been implemented. In general, the results indicate that accounting for endogeneity improves results on income inferiority with regard to drug consumption. An implication of this study is that some form of income distribution policies towards the poor might be more effective in controlling substance abuse. It also points out the regressive nature of the government’s substance abuse program.

Modern Monetary Theory: A Solid Theoretical Foundation of Economic Policy?

Atlantic Economic Journal - This paper shows that so-called modern monetary theory (MMT) lacks a sound economic foundation for its far-reaching policy recommendations. This paper’s main...     

Are the Responses of the U.S. Economy Asymmetric to Positive and Negative Money Supply Shocks?

We investigate whether the United States economy responds asymmetrically to positive and negative money supply shocks of different magnitude, using a test recently introduced by Kilian and Vigfusson (Quant Econ 2:419–453, 2011) based on impulse response functions. We use quarterly data, over the period from 1967:1 to 2014:1, and the new CFS Divisia monetary aggregates, making a comparison among the narrower monetary aggregates, M1, M2M, MZM, M2, and ALL, and the broad monetary aggregates, M4+, M4-, and M3. We show that there is no statistically significant evidence of asymmetry in the response of the U.S. economy to positive and negative money supply shocks of different magnitude.     

Are capital inflows expansionary or contractionary in the Philippines?

This paper assesses whether gross capital inflows to the Philippines are expansionary or contractionary in view of the model predictions and multi-country empirical analysis of Blanchard, Ostry, Ghosh, and Chamon (BOGC, 2015). We make use of data for the period 1977–2017, and apply both ordinary least squares and vector autoregressive techniques. The results indicate that total gross inflows are expansionary for both output and credit growth. At a more disaggregated level, we find, consistent with BOGC (2015), that non-bond inflows are expansionary. But contrary to BOGC (2015), we find that bond inflows to the Philippines are also expansionary. Using the Philippine case illustrates the importance of country specific factors in characterizing the macroeconomic effects of capital inflows.     

Leading Indicators of Currency Crises: Are They the Same in Different Exchange Rate Regimes?

We investigate whether leading indicators of currency crises differ across exchange rate regimes using data for 88 countries in the period 1981–2010. Our estimates suggest that in fixed exchange rate regimes external indicators, such as deviations of the real exchange rate from trend and the growth of international reserves, have the strongest predictive power. In contrast, in floating exchange rate regimes monetary policy and credibility indicators, such as domestic credit growth and inflation, are the best leading indicators of currency crises. Both credibility and external economic indicators have predictive power in intermediate exchange rate regimes.     

Are Charters the Best Alternative? A Cost Frontier Analysis of Alternative Education Campuses in Texas

Previous research on the relative efficiency of charter schools focused on schools that serve a general student population. In Texas, as in many other states, some charter schools have been designed specifically to serve students who are at risk of dropping out of school. Such “alternative education campuses” may have very different cost and efficiency profiles than schools designed to serve students in regular education programs. In this article, we estimate a translog stochastic cost frontier model using panel data for alternative public high school campuses in Texas over the five‐year period 2007–2011, and find that alternative education high school campuses operated by charter schools are systematically more efficient than alternative education high school campuses operated by traditional public school districts. Policies that encourage the formation of alternative education charter campuses may thus be a sensible component of strategies to combat the pervasive and pernicious problem of high school dropouts.     

Endogeneity and the Dynamics of Voluntary Disclosure Quality: Is there Really an Effect on the Cost of Equity Capital?*

Research on the effects of voluntary disclosure quality on the cost of equity capital is often plagued by endogeneity concerns. In this paper, I use a dynamic panel system GMM estimator, which provides internal instruments from the firm's history that directly address endogeneity arising from unobserved heterogeneity and simultaneity. By using hand-collected voluntary disclosure scores for firms listed in the Swiss stock exchange, I examine the dynamic relation between voluntary disclosure quality and the cost of equity capital in a panel over a period of 10 years. The results suggest that the relation between voluntary disclosure quality and the cost of equity capital becomes insignificant after controlling adequately for potential dynamic endogeneity, simultaneity, and unobserved heterogeneity.