A R&D Based Real Business Cycle Model

The New Keynesian Real Business Cycle model with staggered price adjustment is augmented with a R&D producing sector. Two sources of economic shocks are separately considered, namely random participation (perturbances to value of alternative investment opportunities in another sector) and financial intermediation (shocks to the cost of raising capital in the financial intermediation market). We find that, when comparing to the baseline model, both random participation and financial intermediation models can explain pro-cyclical R&D spending. Additionally the investment oversensitivity problem is corrected. However, only the financial intermediation model is consistent with the observed finding that the volatility of R&D is larger than that of investment and output

The Impact of Merger and Acquisition on Value at Risk (VaR): A Case Study of China Eastern Airline

This paper attempts to examine the impact of merger and acquisition on Value at Risk (VaR) of China Eastern Airline. The VaR is estimated for the whole sample and pre-merger periods by three methods: RiskMetrics , AR-GARCH and Generalized Extreme Value (GEV). The regression-based model reports the highest VaR followed by RiskMetrics and GEV. All models report a low VaR after the 11 June, 2009 merger, indicating a negative impact of merger and acquisition on VaR

The Effect of Social Fathers on the Cognitive Skills of Out-of-Wedlock Children

There are two competing views regarding the presence of social fathers on childrens’ cognitive ability: either the social father provides more financial need to the children or the mother with new partners may shift the focus away from the children. Previous research focused more on such effect on older children or adolescents and ignored the self-selection problem. We use data from the Fragile Families and Child Wellbeing Study (FFCWS), and a sample of younger children. Assuming that self-selection is based on observables and using ordinary least square, propensity score matching method (nonparametric methods), we find that children with social fathers scored around three points less in a cognitive ability test than children living only with biological mothers. The result remains the same when using a control-function analysis (parametric)

Capital Asset Pricing Model and Stochastic Volatility: A Case study of India

Bansal and Yaron (2004) demonstrate, by calibration, that the Consumption-Based Capital Asset Pricing Model (CCAPM) can be rescued by assuming that consumption growth rate follows a stochastic volatility model. They show that the conditional equity premium is a linear function of conditional consumption and market return volatilities, which can be estimated handily by various Generalized Autoregressive Conditonal Heterskedasticity (GARCH) and Stochastic Volatility (SV) models. Using the data from India, we find that conditional consumption and market volatilities are capable of explaining cross-sectional return differences. Also, the model prediction is consistent with observed declining equity premium

Financial Development, Econmic Growth and R&D Cyclical Movement

This paper builds up an endogenous growth model à la Aghion and Howitt (1992) and Boucekkine et al (2005). We assume that R&D firms use only investment good as input, instead of final good as hypothesized in the above two models. We show that investment price will be a negative function of aggregate quality index; and thus decline over time. In this model, subsidy on R&D has growth-enhancing effect. Moreover, this model predicts unambiguously that R&D is procyclical

Capital Asset Pricing Model and Stochastic Volatility: A Case study of India

Bansal and Yaron (2004) demonstrate, by calibration, that the Consumption-Based Capital Asset Pricing Model (CCAPM) can be rescued by assuming that consumption growth rate follows a stochastic volatility model. They show that the conditional equity premium is a linear function of conditional consumption and market return volatilities, which can be estimated handily by various Generalized Autoregressive Conditonal Heterskedasticity (GARCH) and Stochastic Volatility (SV) models. Using the data from India, we find that conditional consumption and market volatilities are capable of explaining cross-sectional return differences. Also, the model prediction is consistent with observed declining equity premium

Convergence in Health Care Expenditure of 14 EU Countries: New Evidence from Non-linear Panel Unit Root Test

This paper attempts to examine the convergence hypothesis of health care expenditure per capita of 14 European Union (EU) countries during the 1975–2008 period by applying the Cerrato et al., (2009) nonlinear panel unit root test. Although the conventional linear panel unit root tests reject the null uniformly, the Cerrato et al., (2009) test shows evidence that one cannot reject the null hypothesis of unit root for health care expenditures of each country relative to the EU average, after taking nonlinearity into account. Our results are robust using different reference countries. The empirical findings imply that the exisitng “ EU health policy reforms” and “ European law on health care provision” may not able to encourage greater health care convergence in EU

Psychometric properties of the Chinese version of the fatigue scale-adolescent

© 2015 Ho et al. Background: The availability of a valid and reliable instrument that accurately assesses the level of fatigue among adolescent cancer survivors is crucial before any appropriate interventions to reduce their fatigue can be appropriately planned and evaluated. The study aimed to test the psychometric properties of the Chinese version of the Fatigue Scale for Adolescents. In particular, confirmatory factor analysis was conducted to examine its factorial structure. Methods: A cross-sectional study was employed. Adolescents (13- to 18-year-olds) who had survived cancer and attended medical follow-up at the outpatient clinic in Hong Kong were invited to participate. The internal consistency, content validity and construct validity and test-retest reliability of the Chinese version of the Fatigue Scale for Adolescents were assessed. Results: The content validity index was 0.92. There was a strong positive correlation between adolescents' levels of fatigue and depressive symptoms (r=0.53) and a strong negative correlation between adolescents' levels of fatigue and quality of life (r=-0.58). The mean levels of fatigue of the survivors group was significantly lower than that of those still receiving treatment in hospital, but significantly higher than that of their healthy counterparts. Confirmatory factor analysis indicated that there were 4 factors underlying the Chinese version of the Cancer Module. Conclusions: The findings of the study add further evidence that the Chinese version of the Fatigue Scale for Adolescents (12-item) can be used as a reliable and valid tool in assessing cancer-related fatigue among Hong Kong Chinese adolescents who have survived cancer.published_or_final_versio

Predation Due to Bargaining Power Difference in Financial Contracting

Previous literature presented a predation model based on agency problems in financial contracting. In that model, predation reduced prey’s cash flow through breaking the relationship between the prey and its investors as the prey is financially constrained. This paper presents a different model in which both the predator and the prey are financially constrained and in need of external funding. The only dissimilarity between the predator and the prey is their corresponding level of bargaining power in financial contracting over their respective investors. The asymmetry of bargaining power is the unique source of predatory behavior. Financial contract between firm with less bargaining power (prey) and its investor can deter predation if the predator cannot renegotiate the contract with its own investor. If renegotiation is available for the predator, no financial contract can successfully deter predation

Spatiotemporal dipole source localization of face processing ERPs in adolescents: a preliminary study

<p>Abstract</p> <p>Background</p> <p>Despite extensive investigation of the neural systems for face perception and emotion recognition in adults and young children in the past, the precise temporal activation of brain sources specific to the processing of emotional facial expressions in older children and adolescents is not well known. This preliminary study aims to trace the spatiotemporal dynamics of facial emotion processing during adolescence and provide a basis for future developmental studies and comparisons with patient populations that have social-emotional deficits such as autism.</p> <p>Methods</p> <p>We presented pictures showing happy, angry, fearful, or neutral facial expressions to healthy adolescents (aged 10–16 years) and recorded 128-channel event-related potentials (ERPs) while they performed an emotion discrimination task. ERP components were analyzed for effects of age and emotion on amplitude and latency. The underlying cortical sources of scalp ERP activity were modeled as multiple equivalent current dipoles using Brain Electrical Source Analysis (BESA).</p> <p>Results</p> <p>Initial global/holistic processing of faces (P1) took place in the visual association cortex (lingual gyrus) around 120 ms post-stimulus. Next, structural encoding of facial features (N170) occurred between 160–200 ms in the inferior temporal/fusiform region, and perhaps early emotion processing (Vertex Positive Potential or VPP) in the amygdala and orbitofrontal cortex. Finally, cognitive analysis of facial expressions (P2) in the prefrontal cortex and emotional reactions in somatosensory areas were observed from about 230 ms onwards. The temporal sequence of cortical source activation in response to facial emotion processing was occipital, prefrontal, fusiform, parietal for young adolescents and occipital, limbic, inferior temporal, and prefrontal for older adolescents.</p> <p>Conclusion</p> <p>This is a first report of high-density ERP dipole source analysis in healthy adolescents which traces the sequence of neural activity within the first 500 ms of categorizing emotion from faces. Our spatio-temporal brain source models showed the presence of adult-like cortical networks for face processing in adolescents, whose functional specificity to different emotions appear to be not yet fully mature. Age-related differences in brain activation patterns illustrate the continued development and maturation of distinct neural systems for processing facial expressions during adolescence and possible changes in emotion perception, experience, and reaction with age.</p