FDI and human capital in the USA: is FDI in different industries created equal?

We use data in the USA to study the effect of inward Foreign Direct Investment (FDI) in different sectors/industries on the state-level human capital, measured by the average years of tertiary schooling. We find that inward manufacturing FDI tends to lower the tertiary schooling in a host state while information FDI increases the tertiary schooling in a host state

Manufacturing FDI and Economic Growth: Evidence from Asian Economies

Previous empirical studies on inward foreign direct investment (FDI) and economic growth generate mixed results. This article suggests that the ambiguous results might be caused by the use of total FDI. We study the heterogeneous effects of different sector-level FDI inflows on host country’s economic growth. Data from 12 Asian economies over the period of 1987 to 1997 are employed. Strong evidence shows that FDI in manufacturing sector has a significant and positive effect on economic growth in the host economies. FDI inflows in nonmanufacturing sectors do not play a significant role in enhancing economic growth. Furthermore, without the decomposition of total FDI inflows, the effect of manufacturing FDI on host country’s economic growth is understated by at least 48%

General Single Field Inflation with Large Positive Non-Gaussianity

Recent analysis of the WMAP three year data suggests $f_{NL}^{local}\simeq86.8$ in the WMAP convention. It is necessary to make sure whether general single field inflation can produce a large positive $f_{NL}$ before turning to other scenarios. We give some examples to generate a large positive $f_{NL}^{equil}$ in general single field inflation. Our models are different from ghost inflation. Due to the appearance of non-conventional kinetic terms, $f_{NL}^{equil}\gg1$ can be realized in single field inflation.Comment: 27 pages, 3 figure; final version published in JCA

Multi-Stream Inflation

We propose a "multi-stream" inflation model, which is a double field model with spontaneous breaking and restoration of an approximate symmetry. We calculate the density perturbation and non-Gaussianity in this model. We find that this model can have large, scale dependent, and probably oscillating non-Gaussianity. We also note that our model can produce features in the CMB power spectrum and hemispherical power asymmetry.Comment: 14 pages, 2 figures; v2: references added; v3: final version to appear on JCA

Asset bubbles and credit constraints

We provide a theory of rational stock price bubbles in production economies with infinitely lived agents. Firms meet stochastic investment opportunities and face endogenous credit constraints. They are not fully committed to repaying debt. Credit constraints are derived from incentive constraints in optimal contracts which ensure default never occurs in equilibrium. Stock price bubbles can emerge through a positive feedback loop mechanism and cannot be ruled out by transversality conditions. These bubbles command a liquidity premium and raise investment by raising the debt limit. Their collapse leads to a recession and a stock market crash.Published versio

Rational Speculative Bubbles in the US Stock Market and Political Cycles

This paper tests the existence of rational speculative bubbles during Democratic and Republican presidential terms, which has not been systematically researched in existing studies. With monthly real returns on equally-weighted and value-weighted portfolios in the U.S. from January 1927 to December 2012, we find that there are rational speculative bubbles under Republican Presidents but not under Democratic Presidents. Our results are robust to different specifications