Addressing the education puzzle : the distribution of education and economic reform

No country has achieved sustained economic development without substantially investing in human capital. Previous studies have shown the handsome returns to various forms of basic education, research, training, learning-by-doing, and capacity-building. But education by itself does not guarantee successful development, as history has shown in the former Soviet bloc, Sri Lanka, the Philippines, and the Indian states of Kerala and West Bengal. The question is, when and how does education bring high payoffs? Although theory has suggested a strong causal link between education and growth, the empirical evidence has not been unanimous and conclusive. The authors examine two explanatory factors. First, who gets educated matters a good deal, but the distribution of education is complex and not much has been written about it. They construct an asset allocation model that elucidates the importance of the distribution of education to economic development. Second, how education affects growth is greatly affected by the economic policy environment. Policies determine what people can do with their education. Reform of trade, investment, and labor policies can increase the returns from education. Using panel data from 12 Asian and Latin American countries for 1970-94, they investigate the relationship between education, policy reform, and economic growth. Their empirical results are promising. First, the distribution of education matters. Unequal distribution of education tends to have a negative impact on per capita income in most countries. Moreover, controlling for human capital distribution and the use of appropriate functional form specifications consistent with the asset allocation model makes a difference for the effect of average schooling on per capita income. Controlling for education distribution leads to positive and significant effects of average schooling on per capita income, while failure to do so leads to insignificant, even negative effects, of average education. Second, the policy environment matters a great deal. Our results indicate that economic policies that suppress market forces tend to dramatically reduce the impact of human capital on economic growth. Investment in human capital can have little impact on growth unless people can use education in competitive and open markets. The larger and more competitive these markets are, the greater are the prospects for using education and skills.Curriculum&Instruction,Economic Theory&Research,Decentralization,Public Health Promotion,Health Monitoring&Evaluation,Health Monitoring&Evaluation,Teaching and Learning,Curriculum&Instruction,Economic Theory&Research,Gender and Education

Profitability of technical trading rules in the Brazilian stock market

Objetivo: El objetivo de este trabajo ha sido analizar las diferentes estrategias comerciales para el mercado de valores brasileño. Este análisis se centra en la comparación y combinación de diferentes reglas activas contra la regla pasiva de compra y retención. Antecedentes: El papel de líder regional del mercado de valores brasileño ha atraído la atención de los inversores, que ahora lo consideran una alternativa válida cuando buscan diversificar sus carteras. Por consiguiente, un uso adecuado de las Reglas Técnicas de Comercio (RTC) podría ayudar a los inversores a obtener los beneficios deseados de sus inversiones. Método: Se compara el rendimiento de las estrategias activas basadas en las TTR clásicas con una propuesta basada en el indicador de momentum, y luego todas ellas con las obtenidas de la estrategia pasiva de compra y retención. Se emplean pruebas de comprobación de la realidad y de capacidad de predicción superior para tener en cuenta el posible sesgo de fisgoneo de los datos. Los resultados: Se muestra que las reglas clásicas tienen un peor rendimiento que una regla propuesta basada en la Tasa de Cambio. Además, cuando empleamos una ETF que rastrea las compañías más pequeñas, obtenemos rendimientos más altos que los obtenidos para las compañías más grandes. Contribuciones: Este análisis es especialmente interesante porque, hasta donde sabemos, no hay evidencia empírica en ese sentido para el mercado de valores brasileño. Además, ampliamos la evidencia anterior centrándonos en tres ETF que rastrean las empresas grandes, medianas y pequeñas del mercado de valores brasileño y, por lo tanto, los resultados obtenidos de nuestro análisis proporcionarán una mejor visión de las oportunidades de inversión que la evidencia empírica anterior ha mostrado.Objective: The objective of this paper has been to analyze different trading strategies for the Brazilian stock market. This analysis is focused on the comparison and combination of different active rules against the passive rule of buy-and-hold. Background: The role of regional leader of the Brazilian stock market has attracted the attention of the investors, who now consider it a valid alternative when seeking to diversify their portfolios. Consequently, an adequate use of the Technical Trading Rules (TTR) could help investors obtain the desired profits on their investments. Method: We compare the performance of active strategies based on classical TTRs with a proposal based on the momentum indicator, and then all of them with those obtained from the passive strategy of buy-and-hold. Reality Check and Superior Predictive Ability tests are employed to account for possible data snooping bias. Results: It is shown that the classical rules perform worse than a proposed rule based on the Rate of Change. Additionally, when we employ an ETF which tracks the smaller companies, we obtain higher performances than those obtained for larger companies. Contributions: This analysis is especially interesting because, to our knowledge, there is no empirical evidence in that sense for the Brazilian stock market. Additionally, we extend the previous evidence by focusing on three ETFs that track large, medium and small companies of the Brazilian stock market and, therefore, the results obtained from our analysis will provide a better vision of the investment opportunities than what the previous empirical evidence has shown.• Junta de Extremadura. V Plan Regional de Investigación y Desarrollo. Ayuda GR15027peerReviewe

Ethics and taxation : a cross-national comparison of UK and Turkish firms

This paper investigates responses to tax related ethical issues facing busines

Measuring financial asset return and volatilty spillovers, with application to global equity markets

We provide a simple and intuitive measure of interdependence of asset returns and/or volatilities. In particular, we formulate and examine precise and separate measures of return spillovers and volatility spillovers. Our framework facilitates study of both non-crisis and crisis episodes, including trends and bursts in spillovers, and both turn out to be empirically important. In particular, in an analysis of nineteen global equity markets from the early 1990s to the present, we find striking evidence of divergent behavior in the dynamics of return spillovers vs. volatility spillovers: Return spillovers display a gently increasing trend but no bursts, whereas volatility spillovers display no trend but clear bursts

The Impact of Latin American Debt Crisis on U.S., U.K., and Canadian Bank Stocks.

The 1980s have been a decade of crisis for banks engaged in international lending. This dissertation examines the impact of twelve events related to the Latin American debt crisis on the market value of the U.S., U.K., and Canadian bank stocks. The existing literature is extended in several directions. First, different types of events and several events of the same type are analyzed to enhance the generality of the conclusions. Second, a general theoretical framework involving two testable hypotheses is utilized to interpret the economic significance of the events. Third, the capital regulation hypothesis is tested extensively and it helped to clarify some of the ambiguities presented by earlier literature on the Mexican moratorium event. Fourth, the Generalized Autoregressive Conditional Heteroscedasticity (GARCH) model is used to address some of the problems associated with the Ordinary Least Squares (OLS) market model. These include nonnormalities, nonlinearities, and heteroscedasticity, and Cornell and Shapiro\u27s criticism against use of event study methods for studying the impact of the debt crisis. Finally, the international dimension of the Latin American problem is recognized by extending the analysis to the British and the Canadian banks. Most of the events produced significant event-day excess returns for the U.S. banks with Latin American loans. The market distinguished high-, medium-, and zero-exposure groups among banks. The four moratoria (Mexican, Argentinean, Bolivian, and Brazilian) as a class, produced strong and consistent results, although the underlying dynamics of the moratoria differed. This study provides perspective on the economic impact of capital regulation and demonstrates a link between external exogenous events and bank value. The analysis suggests that the GARCH model does not make a significant difference to event study results. The results for the British and the Canadian banks differ somewhat from those for the U.S. banks. Differences in capital regulation in the three countries may explain the differential reaction of the three markets for the same set of events related to the Latin American debt crisis