GLOBAL TRANSFER OF ARMS TECHNOLOGY AND ITS IMPACT ON ECONOMIC GROWTH

The Malmquist index is used to measure the impact of military technology transfer on economic growth. This index can be decomposed into two components: efficiency change and technical change. Given the aggregate production function, the effect of technology diffusion on growth is measured by efficiency change. The shift in aggregate production function due to innovative activities is measured by technical change. An analysis of 16 American and European countries over the period 1978-1994 reveals that the total impact of arms trade on growth, measured in terms of the Malmquist index, varies across countries. Contrary to common belief the findings of this study do not suggest that industrial countries have more efficient utilization offoreign military technology than do developing countries. The evidence also shows that the difference in total impact among countries is primarily due to the differences in efficiency change, not technical change.     

Black Female Clerical Workers: Movement toward Equality with White Women?

This article examines the occupational mobility patterns of black and white female clerical workers from 1972 to 1980. Black women were initially concentrated in the lower-paying clerical positions and were less likely than white women to leave for better jobs in other areas. Those black women who had relatively good clerical jobs tended not to rise any further and even experienced some difficulty in maintaining their occupational status. Education and training aided occupational mobility less for black women than for white women.     

The Distribution of Foreign Exchange Price Changes: Trading Day Effects and Risk Measurement

This study investigates the nature of price changes in a variety of major and minor foreign exchange markets. The results suggest that the log of price changes over one (trading) day intervals seems to follow a non-normal stable distribution function. Different measures of location (and to lesser extent scale) are present for different days of the week. Dollar denominated price changes are high on Mondays and Wednesdays and low on Thursdays and Fridays for all currencies. The Wednesday-Thursday result is consistent with the settlement procedures used in foreign exchange transactions in the dollar. The Friday-Monday result is consistent with an increase in demand for the dollar prior to the weekend.     

The Collective Household, Household Production and Efficiency of Marginal Reforms

Most research on the welfare properties of taxes employs the unitary model of the household, ignoring household production. A simple model provides expressions for the changes in individual utility given marginal reforms to government policy. It is shown that the burden of a higher tax on household goods falls on the household member that consumes more than they produce or purchase. Numerical calculations show that price substitution (complementarity) between home and market labor increases (decreases) aggregate efficiency costs of a marginal redistribution of income without impacting the intra-household distribution of utility changes. Modeling household goods as public versus private can alter the distributional consequences of marginal reforms.     

Incorrect Inferences When Using Residuals as Dependent Variables

We analyze a procedure common in empirical accounting and finance research where researchers use ordinary least squares to decompose a dependent variable into its predicted and residual components and use the residuals as the dependent variable in a second regression. This two‐step procedure is used to examine determinants of constructs such as discretionary accruals, real activities management, discretionary book‐tax differences, and abnormal investment. We show that the typical implementation of this procedure generates biased coefficients and standard errors that can lead to incorrect inferences, with both Type I and Type II errors. We further show that the magnitude of the bias in coefficients and standard errors is a function of the correlations between model regressors. We illustrate the potential magnitude of the bias in accounting research in four commonly used settings. Our results indicate significant bias in many of these settings. We offer three solutions to avoid the bias.     

Credit Card Indebtedness and Psychological Well‐Being Over Time: Empirical Evidence from a Household Survey

While a number of studies have investigated the relationship between debt and psychological well‐being, none so far has explored if and how this relationship evolves over time. We seek to fill this gap in the literature by empirically analyzing the impact of household credit card debt on debt stress. Using cross‐sectional data collected by The Ohio State University's Consumer Finance Monthly survey between August 2008 and December 2010, we construct a debt stress index and categorize households into three groups based on the length of credit card indebtedness. Our empirical results provide statistical evidence of time‐varying impacts of credit card debt on stress levels. Specifically, we find that debt stress for short‐run debtors is more than twice that of long‐run debtors. The results are robust across a range of econometric specifications.     

Household Saving and The Rate of Interest*

This paper examines the relationship between the post-tax real interest rate and the Australian household saving ratio at the empirical level. Using alternative models of the consumption-saving decision and different estimation periods, it is shown that the post-tax real interest rate exerts a significant negative influence on the saving ratio. The estimates, therefore, imply that the fall in post-tax real interest rates during the 1970s contributed to the rise in the Australian saving ratio.