Dynamic coordination games

Summary Gains from coordination provide incentives for delay. In this paper, the extent of delay is studied in a dynamic,N-person, coordination game. There is no social gain from delay, so an equilibrium with delay is always inefficient. For fixedN, there is no coordination failure when the period length is short: all equilibrium outcomes converge to the Pareto efficient outcome as the period length converges to zero. On the other hand, holding period length fixed, there exist equilibria in which delay is proportional toN, for arbitrarily large values ofN. In addition, it can be shown that the possibility of delay depends on the timing of strategic complementarities. However, under certain conditions, delay is shown to be a robust phenomenon, in the sense that well-behaved equilibria exhibit infinite delay forN sufficiently large.This paper grew out of discussions with Christophe Chamley. While writing it I benefited from discussions with Ken Binmore, Russell Cooper, Bob Rosenthal and Michael Manove. Joe Farrell, Drew Fudenberg, Martin Hellwig and Sawoong Kang made very useful comments on an earlier version that led to substantial improvements. Helpful comments were also made by seminar participants at the London School of Economics, the SUNY at Stoney Brook, the NBER Summer Institute, Northwestern University, and the University of Chicago. I would like to thank Nick Yannelis and an anonymous referee for their editorial advice. Financial support for this research was provided by the National Science Foundation under Grant No. SES 9196061.     

Commitment and coordination in a dynamic game model of international economic policy-making

In this paper, we consider a dynamic game model of two identical countries. Policy-makers of both countries have quadratic intertemporal objective functions and want to stabilize domestic output, domestic inflation, and the real rate of exchange. We present different analytical and numerical solutions for this policy game. Noncooperative open-loop equilibria are interpreted as requiring unilateral commitment and policy-makers' credibility. Potential gains from cooperation are present, as the noncooperative equilibrium solutions are not Pareto-optimal. Under an information pattern that admits memory strategies, the possibility of obtaining cooperative results without coordination and commitment arises.     

“营改增”的减税效应——基于DSGE模型的分析

在新凯恩斯的分析框架下,根据中国经济的实际发展情况,构建了包括家庭、中间品厂商、最终品厂商、中央银行以及财政部门在内的动态随机一般均衡（DSGE）模型,评估了“营改增”的减税效应。对“营改增”减税效应的评估从两个维度进行：首先,把流转税领域税负减轻作为一个外生冲击,分析了社会总产出、消费水平、政府支出、劳动水平、工资水平、投资和资本存量等宏观经济变量的变动趋势;其次,构建了“营改增”前后两个不同的政策环境,并模拟了投资下降的经济下行冲击,对比分析了减税前后总产出对外生冲击的反应程度。研究发现：“营改增”虽然降低了政府部门的税收收入,但其减税效应能促进产出和消费的增加,激发整个经济的增长潜力;目前的改革力度在应对经济下行压力时尚没有发挥出预期的效果。     

Why doesn’t downsizing deliver? A multi-level model integrating downsizing,social capital,dynamic capabilities,and firm performance

Firms downsize to improve their bottom line results often in reactive response to negative external shocks, such as economic downturns, but even in proactive efforts to enhance organizational performance when they are financially ‘healthy’, such as restructuring. Research reveals, however, that not only does downsizing generally fail to improve a firm’s financial performance, but that it may even lead to reduced financial performance. To investigate this puzzling outcome, we build on previous research and integrate the concepts of downsizing, social capital, dynamic capabilities and performance in a multi-level model as well as discuss how social capital mediates the relationship between downsizing and dynamic capabilities. Thereafter, we develop (a) four propositions to elucidate how changes to the structural dimension of social capital due to downsizing, i.e. the removal of three key social network positions and changes to the firm’s network structure, negatively mediate the relationship between downsizing and a firm’s dynamic capabilities, and (b) two propositions incorporating internal (knowledge intensity) and external (institutional pressures) contextual variables in our model. We conclude by discussing how our research contributes to the downsizing and SHRM literature as well as the resource-based view and social capital literature before providing suggestions for future research and practitioners.     

CES and Translog parameter estimates in a SAM-based regional general equilibrium framework

The computation of General Equilibrium models crucially depends on Social Accounting Matrix (SAM)-based calibration and on how estimation/imputation are performed to reproduce the benchmark dataset as an equilibrium solution. In this paper, theoretical contributions are provided by suggesting a new procedure in which the production function parameters and the elasticity of substitution are estimated by resorting to the data contained in the SAM. To this aim, the Generalized Cross-Entropy estimator is used. Application of this self-contained procedure to the regional SAM for the Italian region Tuscany leads to empirical results consisting of the estimates of the elasticities of substitution of Constant Elasticity of Substitution and Translog production functions consistent with the theoretical background. This yields a more efficient and effective solution of Computable General Equilibrium models.     

Macroeconomic Drivers of Loan Quality in Turkey

We analyze the drivers of nonperforming loans in the Turkish banking system after the 2000–01 Turkish banking crisis. By constructing a vector autoregression model, we perform dynamic out-of-sample forecasts, which yield quite accurate results compared to the actual data. Since forecasting is a very crucial tool for both policy makers and market players, these results are some of the main strengths and contributions of this study. This article shows various patterns between the economic and financial indicators and the nonperforming loans. One important message obtained from the results is that policy makers should be concerned about the status of the economy and the market expectations to maintain stability in the banking system.     

Comparison of Cramer–Rao lower bounds of variances for at least equal protection of respondents

In this paper, a new randomized response model is proposed, which is shown to have a Cramer–Rao lower bound of variance that is lower than the Cramer–Rao lower bound of variance suggested by Singh and Sedory at equal protection or greater protection of respondents. A new measure of protection of respondents in the setup of the efficient use of two decks of cards, because of Odumade and Singh, is also suggested. The developed Cramer–Rao lower bounds of variances are compared under different situations through exact numerical illustrations. Survey data to estimate the proportion of students who have sometimes driven a vehicle after drinking alcohol and feeling over the legal limit are collected by using the proposed randomization device and then analyzed. The proposed randomized response technique is also compared with a black box technique within the same survey. A method to determine minimum sample size in randomized response sampling based on a small pilot survey is also given.     

Sampling method for monitoring the alternative accommodation market

Tourism is an extremely competitive industry where effective destination management is necessary to compete. One of the main destination management stakeholders is the hotel industry. Since the advent of the Internet websites that facilitate the sharing economy, the hotel industry has had to compete with an alternative accommodation market. This alternative market is difficult to monitor as there is no official data. Current research works on developing methods for calculating tourism metrics for a destination based on digital footprint with the objective of offering figures to complement official statistics. The objective of our research is to develop a method to monitor the alternative accommodation market based on data collected from Airbnb. This paper reports the results of the first step: the design of a sampling method for data scraping from this website that provides a representative sample of the accommodation offer of the Basque Country distributed through it and its prices. The results show that the length-of-stay (LOS) parameter of the queries to the website is key to obtaining a representative sample of the accommodation offered through this channel. A sampling method based on the representative values of LOS inferred from a data sample is proposed.     

The Comovements of Capital Inflows in the Frequency Domain: Evidence from Emerging Countries

Abstract:

This paper analyzes the correlations between capital inflows and business cycles in emerging countries, and also investigates the comovements of capital inflows, by capital types, within and across regions (Asia, Latin America, and Europe) in the frequency domain. In general, bank loans show positive correlations with business cycles at all frequencies across emerging countries. In addition, I find that the dynamic correlations between capital types are high at low frequencies and become lower at the higher frequency domains. The cohesion (comovements within a region) and cross-cohesion (comovements across regions) differ in accordance with the capital types and frequency domains.     

Gauging exchange rate targeting

In this paper, we examine whether a monetary authority targets the exchange rate, per se, or instead simply appears to do so as it responds to the exchange rate and other variables in service to inflation and output targets. We combine data-rich estimation with a system of forward-looking equations in order to disentangle the possibilities. The combined approach reveals the potentially misleading nature of standard estimates of the extent of exchange rate and inflation targeting. We illustrate the approach by applying it to two de jure inflation targetters, Canada and Korea. In contrast to standard methods and much past work, we find that neither country targets its exchange rate; and, both are bona fide inflation targetters.