Using Scale Mixtures Of Normals To Model Continuously Compounded Returns

A new method for estimating the parameters of scale mixtures of normals (SMN) is introduced and evaluated. The new method is called UNMIX and is based on minimizing the weighted square distance between exact values of the density of the scale mixture and estimated values using kernel smoothing techniques over a specified grid of x-values and a grid of potential scale values. Applications of the method are made in modeling the continuously compounded return, CCR, of stock prices. Modeling this ratio with UNMIX proves promising in comparison with other existing techniques that use only one normal component, or those that use more than one component based on the EM algorithm as the method of estimation

THE REGIONAL ECONOMIC EFFECTS OF MILITARY BASE REALIGNMENTS AND CLOSURES IN GERMANY

We identify the causal effect of a reduction in military personnel on a number of socioeconomic indicators within the peripheries of military bases. The base realignments and closures in Germany are used as an exogenous source of variation that allows us to identify the effect of a demand shock on household income, output, unemployment, and tax revenue within a specified buffer zone around each base. The analysis covers 298 communities for the period 2003-2007. Consistent with evidence found elsewhere, we find that these base adjustments have only a marginal impact on the local community in which the bases are located.Armed forces, Base closure, Defense drawdown, Demand shock, Geographic information system, Regional adjustment,