The estimation of profit efficiency

This article discusses a way of solving the ‘Greene Problem’ that has been termed for a technical difficulty in estimating a profit system with technical and allocative inefficiencies. As the ‘Greene Problem’ is due to the existence of unobserved technical inefficiency interactive in a nonlinear form, the article proposes a use of homogeneity in technology to untangle the nonlinear form, enabling the estimation of a profit system as well as the identification of the source of inefficiencies.     

Changes in the productive efficiency of U.S. flour mills in the late nineteenth century: an input-distance-function approach

Journal of Productivity Analysis - The productive efficiency of the U.S. flour milling industry increased substantially between 1850 and 1880. Specifically, a typical flour mill in 1880 was able to...     

Can the new open economy macroeconomic model explain exchange rate fluctuations?

This paper explores the successes and failures of the new open economy macroeconomics more critically by addressing the performance of the model at all frequencies along the line of Watson's [Watson, M.W., 1993. Measures of Fit for Calibrated Models, Journal of Political Economy 101, 1011-1041] measures of fit. This paper shows that the NOEM model with either PCP or PTM is not successful in generating the spectral density of the selected variables calculated from the data. In particular, the model cannot generate mass spectra of the exchange rates at low frequencies as in the data. It shows that the NOEM model with either separable preference or incomplete asset market cannot generate the typical hump-shaped spectra of exchange rates.     

Optimal Macroprudential Policies and House Prices in Korea

This article investigates the impacts of the macroprudential policy of limitation on credit growth in housing market on Korean economy to find empirical and theoretical implications. Empirical results based on VAR models show that macroprudential policies like LTV and DTI in Korea have significant and persistent effect on real household credit and real house price. This article further addresses implications of optimal macroprudential and monetary policy in Korea by employing a standard DSGE model. The results suggest that the time-varying macroprudential policy responding to the borrower’s debt to income ratio is most effective in stabilizing household debt among the macroprudential policy rules considered, but produces a moderate downturn of the economy.     

Is the learning community of economics and accounting effective? Empirical assessment of class achievements

Learning communities are increasingly used at colleges and universities, as one of the goals of a learning community is to increase interaction among students and teach them how to apply knowledge. The goal of this research is to assess the learning community of the economics and accounting students in their class performance measured by class grades. By controlling individual characteristics (e.g., gender, high school performance, First Year Experience program) and class-related characteristics (e.g., instructor and major), the authors found that the learning community of economics and accounting, which is organized into both economics and accounting classes on a back-to-back basis, is no more effective for class grades than for non–learning community students.     

Liquidity effects and habit formation in a sticky price model

This paper sets up a sticky price model with external habit formations. It shows that the cross-correlation between output and interest rates as well as prices match the data well when there is habit formation. Consumption as well as output display a hump-shaped response to a positive monetary shock when there is habit formation. The paper also shows that the sticky price model with Abel's (1990, 1999) external habit formation succeeds in generating liquidity effects.