An evaluation of the Connected Nation broadband adoption program

Closing the digital divide and increasing broadband adoption within households and communities continues to be a target for government and nonprofit groups. While a large number of studies have examined policies and programs aimed at improving broadband infrastructure availability, little analysis to date has focused on evaluating efforts to increase adoption. One of the most well-known programs focused on adoption is Connected Nation, which partnered with 14 states to provide local curricula aimed at raising residential connection rates. This analysis uses a generalized difference-in-difference methodology to evaluate the effectiveness of the Connected Nation program in 5 states during 2012 and 2013. The results indicate that participation in the Connected Nation program had no significant impact on broadband adoption rates. This paper represents a rigorous evaluation of one of the most well-known adoption-oriented programs and emphasizes that measurable impacts of such efforts may not accrue over the short term.     

Open economy and financial burden of corruption: theory and application to Asia

We discuss why corruption remains high and show that corruption contributes to the Banking distress and to the rapid transmission across international stock and currency markets. Undeveloped ‘derivative securities’ markets make the risk from stress-induced volatility difficult to manage. Vinod’s (1999) closed economy model is extended to indicate the asymmetry of ‘home bias’ and the effect of corruption on the value at risk (VaR). Our theory predicts that capital flight controls will be many, foreign direct investment (FDI) will be low and cost of capital will be high in corrupt developing countries, which is supported by Asian data. We include some policy recommendations regarding financial institutions and markets.     

The generalized Stackelberg equilibrium of the all-pay auction with complete information

We characterize the equilibrium of the all-pay auction with general convex cost of effort and sequential effort choices. We consider a set of n players who are arbitrarily partitioned into a group of players who choose their efforts ‘early’ and a group of players who choose ‘late’. Only the player with the lowest cost of effort has a positive payoff in any equilibrium. This payoff depends on his own timing vis-a-vis the timing of others. We also show that the choice of timing can be endogenized, in which case the strongest player typically chooses ‘late’, whereas all other players are indifferent with respect to their choice of timing. In the most prominent equilibrium the player with the lowest cost of effort wins the auction at zero aggregate cost. We thank Dan Kovenock and Luis C. Corchón for discussion and helpful comments. The usual caveat applies. Wolfgang Leininger likes to express his gratitude to Wissenschaftszentrum Berlin (WZB) for its generous hospitality and financial support.     

World Oil Depletion Models: Price effects compared with strategic or technological interventions

World oil depletion, including natural gas liquids, was modelled in the past by many authors. Recently, Guseo and Dalla Valle have introduced and Guidolin has applied a new approach following perturbed life-cycle diffusion models. Here we examine joint effects of economic and strategic or technological interventions using a Generalized Bass Model (GBM). Statistical analysis takes into account three different hierarchical levels: natural diffusion, long memory interventions and stochastic components. The main results confirm the statistical significance of historical 1970s shocks and highlight a strong long memory effect due to an increase in oil production after World War II. The estimated peak-date, 2007, and the 90% depletion time, 2019, are determined under an equilibrium intervention hypothesis.     

投资与通货膨胀-紧缩的联系:来自中国的经验证据

基于Toda-Yamamoto长期因果检验程序和广义脉冲反应技术,本文首先研究了全社会实际固定资产投资与零售价格水平变动之间的长期因果及其冲击-动态反应关系,然后进一步考察了货币供给量M1和贸易依存度在促成上述关系中所扮演的角色.其研究结论为:(1)货币供给量M1是唯一的外生变量,其增长不是价格水平变动的直接因,而是通过全社会实际固定资产投资间接地成为价格水平变动的因;(2)贸易依存度和全社会实际固定资产投资之间存在双向因果联系,前者只能通过后者间接地成为价格水平变动的因;(3)中国对外开放既消化又强化了中国生产能力过剩,但消化胜于强化;(4)投资一个单位正向冲击在开始的2-4年左右导致相对温和的通货膨胀,但后五年左右将导致相对严重的通货紧缩.     

A new assessment of economic integration in East Asia: Application of an industry-specific G-PPP model

It is well known that intra-industry trade and cross-border production networks have promoted economic growth and regional integration in East Asia. However, regional supply and production chains may have been formed differently across industries, reflecting different degrees and a different scope of regional economic linkages at an industry level. This paper makes a threefold contribution. First, to assess industry-level differences, this study adopts the generalized purchasing power parity (G-PPP) model using industry-specific producer prices. Second, the momentum threshold autoregressive (M-TAR) model is employed to allow for possible nonlinearity arising from the dynamic nature of regional economic growth and development. Third, the Granger causality test is also conducted to assess whether regional economies have autonomously integrated. The empirical results reveal that economic integration has progressed more autonomously in the electrical industry, as well as in the transportation equipment industry, as China and the ASEAN countries have become the final destination markets for finished products in these two industries.     

Heterogeneous returns to chemical fertilizer at the intensive margins: Insights from Nepal

Increased fertilizer use is considered important for agricultural development in low-income countries. Promoting increased use of chemical fertilizer by lowering its price may be ineffective if demand is price inelastic. In theory, the price elasticity of demand depends on the returns to its use, but the evidence is scarce. Furthermore, while returns are often estimated for small changes in chemical fertilizer use, returns to larger changes in its use (intensive margins) are less understood. Through the inter-zonal comparisons in Nepal, we provide indicative evidence that greater returns to chemical fertilizer are associated with greater price elasticities of demand. Moreover, the evidence suggests that returns at the intensive margins, rather than returns to small changes, may largely account for inter-zonal differences in returns to chemical fertilizer within Nepal. The results suggest that better understanding the returns at the intensive margins is critical for effective agricultural inputs policies in developing countries.     

Remittance,Institutions and Investment Volatility Interactions: An Intercontinental Analysis

Generating massive investment for growth and development has been one of the main policy goals of most economies around the globe. Countries, most especially developing ones, are highly susceptible to investment volatility owing largely to the fragile nature of their economies as well as weaknesses in terms of dysfunctional institutions. Therefore, sound economic management suggests the need to better understand possible sources for mitigating the adverse effects of investment volatility. Remittances have been identified as important capital flows which do a good job of dousing macroeconomic volatilities. It is on this basis that the study sought to uncover the causal relationship between remittances and investment volatility via the intermediating role of institutions. Using a panel of 70 countries and the system Generalized Method of Moments (GMM) estimator, three insightful outcomes come to the fore. First, remittances played countercyclical roles across the estimated regressions. Second, institutional quality had no significant role in mitigating investment volatility and lastly, the interactive terms of both remittances and institutions significantly mitigated the negative impacts of investment volatility with the exception of the political component of the institutional architecture. Policy suggestions are drawn based on our results.     

Generalized runs tests to detect randomness in hedge funds returns

The major contribution of this paper is to make use of generalized runs tests (Cho and White, 2011) to analyze the randomness, i.e. the lack of persistence, in both absolute and relative returns of hedge funds. We find that about 42% of the HFR universe exhibit iid absolute returns over the period spanning 2000 to 2012. These funds are mainly found in proportions within the Macro and Equity Hedge strategies. A similar result holds for relative returns. We also find that funds having non-iid returns often exhibit ARCH effects and structural breaks, with largest breaks located within financial crises. Also, only a small percentage displays persistence in their relative performance, 8.2% to 16.7% of the universe, mainly found in proportions within the Relative Value and Event-Driven strategies. The robustness of results is challenged by implementing the tests on a crisis-free period. We find similar results for absolute returns. For relative ones, differences appear across strategies and benchmarks, but still both ARCH and breaks are present. Our work contributes to the hedge fund literature in terms of methodology, portfolio allocation, and performance measurement.     

Time-varying inter-urban housing price spillovers in China: Causes and consequences

The spatial spillovers of housing prices across regions are well documented by a large body of previous studies. This paper tries to investigate the dynamic (time-varying) evolution of spatial interactions and their underlying driving factors intensively. Using a recently developed Generalized Autoregressive Score (GAS) model, this paper examines the time-varying spatial spillovers of housing prices in 70 major and median cities of China from 2006 to 2019. We find that the GAS model can well capture the impact of time-varying critical events of Chinese real estate market on the whole. However, different regions display heterogeneous variation patterns over time. Further investigation shows that inter-regional labor mobility and trades are two major channels, accounting for 1.25% and 2.58% of the monthly standard deviations of spatial spillover effects from one city to another, respectively. We also characterize and distinguish between three time-varying patterns of spatial spillovers within different regions of China. Our results shed lights on the understanding of spatial spillovers across regional real estate markets across different city network structures within China.