Are USDA reports still news to changing crop markets?

This study investigates whether major USDA reports still provide important news to changing crop markets. The news component of each report, or market “surprise,” is measured as a difference between the USDA estimate and its private expectation in corn, soybeans, and wheat markets. Changes in the relevance of USDA information are assessed by examining changes in the magnitude of market surprises and shifts in the futures price reaction to these surprises, which isolates the impact of each report. The stable size of market surprises over time suggests that competition from alternative data sources has not reduced the news component of USDA crop reports. Increasing price reaction to most reports, including those facing competition from alternative information sources, suggests that value of public information may be enhanced in uncertain markets affected by structural changes.     

Commemorating the 50‐Year Anniversary of Ball and Brown (1968): The Evolution of Capital Market Research over the Past 50 Years

We commemorate the 50th anniversary of Ball and Brown [1968] by chronicling its impact on capital market research in accounting. We trace the evolution of various research paths that post–Ball and Brown [1968] researchers took as they sought to build on the foundation laid by Ball and Brown [1968] to create a body of research on the usefulness, timeliness, and other properties of accounting numbers. We discuss how those paths often link back to the groundwork laid and questions originally posed in Ball and Brown [1968].     

Sources of Productivity Growth Dynamics: Is Japan Suffering From Baumol's Growth Disease?

This study examines the sources of labor productivity growth dynamics in Japan (1970–2010) and investigates the extent to which Japanese economic performance has been affected by Baumol's growth disease (BGD). We find that BGD silently undermines Japanese economic growth. However, the magnitude is miniscule, and consequently the aggregate labor productivity growth rate has not been decreasing monotonically. We also explore how BGD is arising and why it is small in the Japanese economy. BGD is weak because (1) the positive Baumol growth effect is also working in certain services sectors and (2) BGD is not a durable phenomenon: even if a sector begins to suffer from BGD, it is likely to recover quickly.     

Impact of modern communication infrastructure on productivity,production structure and factor demands of US industries: Impact revisited

This study investigates the contribution of modern communication infrastructure characterized by high speed broadband access network on the productivity growth, production structure and factor demands for US industries and for the aggregate economy. To evaluate such contribution, we modify the traditional cost function by incorporating communication infrastructure as input in production process in conjunction with other public infrastructures. The network externality and spillover effect of broadband access technology are captured by introducing broadband penetration rate as a shift factor in industry level production function. Empirical results show that the increased use of modern communications infrastructure increases the productivity of all industries with wide variations across industries. Estimated impacts on input demands show that increase in use of communications infrastructure service saves labor and materials and increase the demand for private capital. Finally, aggregate social rate of return on such investment has been estimated for policy implications.     

Does corruption slow down innovation? Evidence from a cointegrated panel of U.S. states

I investigate the long-run relationship between corruption and innovative activity using annual data from 48 contiguous U.S. states between 1977 and 2006. Using U.S. data allows me to work with a panel long enough to exploit time series properties of the data. I use two different measures of innovative activity: one measuring the quantity and the other measuring the quality of the patents granted. I also use two different measures of corruption: one based on the number of corruption convictions, the other based on number of corruption stories covered in Associated Press news wires. Following Pedroni (1999, 2000), I estimate the cointegrating relationship between corruption and innovative activity with Fully Modified Ordinary Least Squares (FMOLS). The results indicate that corruption indeed slows down innovation in the long-run.     

Terror per Capita

Studies on the correlates of terrorism usually analyze total numbers of attacks or victims per country. However, what we may ultimately care about in terms of policy recommendations is the likelihood of any individual being subject to the respective phenomenon. Thus, we propose and explore a simple alternative measure of terrorism: terror per capita. Studying terror per capita across 162 countries from 1970–2015, the associated correlates differ substantially in terms of sign, levels of statistical significance, and magnitude from those when analyzing total terror. We illustrate two cases in point, serving as proof of concept. First, democracy, often associated with more total terror, emerges as a marginally negative predictor of terror per capita. Second, a larger share of Muslims in society is associated with a positive and statistically significant link to total terror, but emerges as a negative predictor of terror per capita. We find similar changes in sign and statistical relevance for GDP per capita and language fractionalization as correlates of terrorism. Depending on the policy question, studying terror per capita can greatly enhance our understanding of terrorism drivers, especially when analyzing data across countries with vastly differing population sizes.     

Are China’s regional agricultural productivities converging: How and why?

This article tests the hypotheses of convergence to a single level of total factor productivity (TFP), and a steady state of TFP growth rate in China’s agricultural sector. Based on multilateral TFP estimates we found that China’s agricultural sector has rebounded in recent years from a slower TFP growth in the 2005–2007 period. While convergence test results confirm a “catch-up” effect that provinces with lower TFP levels tend to grow faster than others, estimated rates of β convergence are conditional on how we capture the heterogeneity effect across regions. The rates of β convergence range from 0.016 to 0.039 under different model specifications. Estimates show that higher growth rates of educational attainment, R&D, and intermediate goods density (per unit of labor) can enhance TFP growth. Unfortunately, there is no evidence of an overall σ convergence, indicating that TFP levels are not converging except in the South region. It implies that to catch up with leading provinces, it would require extra efforts for those lagging behind by increasing their region-specific research investment, promoting rural educational attainment, and enhancing embodied technical change.     

Stochastic growth: a duality approach

We re-examine the representative agent's optimal consumption and savings under uncertainty in the presence of investment constraints using martingale representation and convex analysis techniques. This framework allows us to explicitly quantify precautionary savings which induces a higher average growth rate than in a certainty setup. We provide a closed form solution for a Cobb-Douglas economy. The effect of uncertainty on portfolio selection is analyzed. Consumption growth rate and risk free interest rate exhibit a U-shaped relationship. Uncertainty negatively affects expected consumption growth rate; such a result seems to be supported by empirical evidence.     

Macroeconomic News and Stock Returns in the United States and Germany

Abstract. Using daily data for the January 1997 to June 2002 period, we analyze similarities and differences in the impact of macroeconomic news on stock returns in the United States and Germany. We consider 27 different types of news for the United States and 12 different types of news for Germany. For the United States, we present evidence for asymmetric reactions of stock prices to news. In a boom (recession) period, bad (good) news on GDP growth and unemployment or lower (higher) than expected interest rates may be good news for stock prices. In the period under consideration there is little evidence for asymmetric effects in Germany. However, in the case of Germany, international news appears at least as important as domestic news. There is no evidence that US stock prices are influenced by German news. The analysis of bi-hourly data for Germany confirms these results.     

The costs of non-tariff barriers to trade: Evidence from New Zealand

The Costs of Non-Tariff Barriers to Trade: Evidence from New Zealand. — Recent work on trade policy with imperfect competition indicates that the adverse effects of non-tariff barriers to trade exceed those suggested by traditional theory. With market power in foreign supply, setting a restrictive non-tariff barrier will induce foreign exporters to raise their supply prices. The authors use the experiment provided by the comprehensive New Zealand economic reforms of the mid-1980s. Using panel data on export unit values from Germany and the United States to several destinations including New Zealand, they find some evidence for decreased export prices to New Zealand as a result of the dismantling of non-tariff barriers to trade.