Postwar Slowdowns and Long-Run Growth: A Bayesian Analysis of Structural-Break Models

Using Bayesian methods, we re-examine the empirical evidence from Ben-David, Lumsdaine and Pappell (“Unit Roots, Postwar Slowdowns and Long-Run Growth: Evidence from Two Structural Breaks”, Empirical Economics, 28, 2003) regarding structural breaks in the long-run growth path of real output series for a number of OECD countries. Our Bayesian framework allows the number and pattern of structural changes in trend and variance to be endogenously determined. We find little evidence of postwar growth slowdowns across countries, and we find smaller output volatility for most of the developed countries after the end of World War II. Our empirical findings are consistent with neoclassical growth models, which predict increasing growth over the long run. The majority of the countries we analyze have grown faster in the postwar era as opposed to the period before the first break.

Structural change in the forward discount: a Bayesian analysis of forward rate unbiasedness hypothesis

Using Bayesian methods, we reexamine the empirical evidence from Sakoulis et al. (2010) regarding structural breaks in the forward discount for G-7 countries. Our Bayesian framework allows the number and pattern of structural changes in level and variance to be endogenously determined. We find different locations of breakpoints for each currency; mostly, fewer breaks are present. We find little evidence of moving toward stationarity in the forward discount after accounting for structural change. Our findings suggest that the existence of structural change is not a viable justification for the forward discount anomaly.Bayesian method, structural change, forward discount anomaly, Gibbs-sampling

Threshold Effects in Cigarette Addiction: An Application of the Threshold Model in Dynamic Panels

We adopt the threshold model of myopic cigarette addiction to US state-level panel data. The threshold model is used to identify the structural effects of cigarette demand determinants across the income stratification. Furthermore, we apply a bootstrap approach to correct for the small-sample bias that arises in the dynamic panel threshold model with fixed effects. Our empirical results indicate that there exists the heterogeneity of smoking dynamics across consumers.Cigarettes demand, price elasticity, threshold regression model, dynamic panel model, bias correction, bootstrap

Scalar Gravity and Higgs Mechanism

The role that the auxiliary scalar field $\phi$ played in Brans-Dicke cosmology is discussed. If a constant vacuum energy is assumed to be the origin of dark energy, then the corresponding density parameter would be a quantity varying with $\phi$; and almost all of the fundamental components of our universe can be unified into the dynamical equation for $\phi$. As a generalization of Brans-Dicke theory, we propose a new gravity theory with a complex scalar field $\phi$ which is coupled to the cosmological curvature scalar. Through such a coupling, the Higgs mechanism is naturally incorporated into the evolution of the universe, and a running density of the field vacuum energy is obtained which may release the particle standard model from the rigorous cosmological constant problem in some sense. Our model predicts a running mass scale of the fundamental particles in which the gauge symmetry breaks spontaneously. The running speed of the mass scale in our case could survive all existing experiments.Comment: 6 page